<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
December 11, 1996 (November 26, 1996)
(Date of Report (Date of earliest event reported))
ADVANCED MEDICAL, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware
--------------------------------------------------
(State or other jurisdiction of incorporation)
33-26398
--------------------------------------------------
(Commission File Number)
13-3492624
--------------------------------------------------
(IRS Employer Identification No.)
9775 Businesspark Avenue
San Diego, CA 92131
--------------------------------------------------
(Address of principal executive officers)
(619) 566-0426
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- ------ ------------------------------------
On November 26, 1996, the Registrant acquired the outstanding shares
of common stock of IVAC Holdings, Inc., a Delaware corporation ("Holding Co.").
The acquisition was effected through the merger (the "Merger") of IMED
Merger Sub, Inc., a wholly-owned subsidiary of IMED Corporation ("IMED"), which
is a wholly-owned subsidiary of the Registrant, into Holding Co. pursuant to an
Agreement and Plan of Merger (the "Merger Agreement") by and among IMED, IMED
Merger Sub, Inc., Holding Co., IVAC Medical Systems, Inc., a wholly-owned
subsidiary of Holding Co. ("Operating Co.) and certain stockholders of Holding
Co. (the "Participating Stockholders") The Merger Agreement is filed as Exhibit
2 to this Form 8-K. As a result of such merger transactions, Holding Co. became
a wholly-owned subsidiary of the Registrant.
The Merger consideration of approximately $400 million consisted of
cash and was determined by arms-length negotiations between the Registrant, IMED
and IMED Merger Sub, Inc., on the one hand, and Holding Co., Operating Co. and
the Participating Stockholders on the other. The source for the
funds used to finance the Merger was: (i) a $250 million bank credit facility (a
copy of the credit agreement entered into which evidences the bank credit
facility is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by
reference), (ii) $200 million from a private offering of 9-3/4% senior
subordinated notes due 2006 of IMED (a copy of the indenture which governs the
senior subordinated notes is filed as Exhibit 10.2 to this Form 8-K and is
incorporated herein by reference), and (iii) $40 million of cash derived from
the sale of 13,333,333 shares of the Registrant's common stock to the
Registrant's chairman and principal stockholder, Jeffry M. Picower. In
connection with the transactions, affiliates of Mr. Picower surrendered
promissory notes having an aggregate principal amount of $37.5 million in
exchange for an aggregate of 29,416,086 shares of the Registrant's common stock
(The agreement of stock purchase and plan of recapitalization pursuant to which
such common equity financing was provided is filed as Exhibit 10.3 to this Form
8-K and is incorporated herein by reference).
Holding Co. develops and manufactures infusion systems and vital signs
measurement products. Holding Co.'s manufacturing facilities are located at
plants in San Diego, California; Creedmoor, North Carolina; Tijuana, Mexico; and
Hampshire, England. Holding Co. intends to continue to use the facilities owned
or leased by it and its subsidiaries for the purposes which they are
<PAGE>
currently applied, subject to applicable consolidation of facilities as
determined from time to time.
In connection with the transactions, the Registrant entered into
employment agreements dated August 23, 1996, which became effective upon the
Merger, with each of: (i) William J. Mercer (the "Mercer Agreement") pursuant to
which Mr. Mercer serves as President and Chief Executive Officer of the
Registrant; and (ii) Joseph W. Kuhn (the "Kuhn Agreement") pursuant to which Mr.
Kuhn serves as Executive Vice President, Chief Financial Officer, Treasurer and
Secretary of the Registrant. The Mercer Agreement and the Kuhn Agreement are
filed as Exhibits 10.4 and 10.5, respectively, to this Form 8-K and are
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) The required financial statements are filed hereto.
(b) The required pro forma financial information is not presently
available and will be filed as soon as practicable and not later than sixty (60)
days after the due date of this Report.
-C- Exhibits.
Exhibit 2 Agreement and Plan of Merger dated August 23, 1996 by
and among IMED, IMED Merger Sub, Inc., IVAC Holdings,
Inc., IVAC Medical Systems, Inc. and the Participating
Stockholders (incorporated by reference to the Form 8-K
of the Registrant filed with the Securities and
Exchange Commission on August 27, 1996).
Exhibit 10.1 Credit Agreement among the Registrant, IMED, Various
Lending Institutions, Bankers Trust Company, as
Administrative Agent and Syndication Agent, Banque
Paribas, as Documentation Agent and Syndication Agent,
and Donaldson, Lufkin & Jenrette Securities
Corporation, as Syndication Agent, dated as of November
26, 1996.
Exhibit 10.2 Indenture dated as of November 26, 1996 among IMED,
IMED International Trading Corp. and the United States
Trust Company of New York, as trustee.
<PAGE>
Exhibit 10.3 Agreement of Stock Purchase and Plan of
Recapitalization dated November 26, 1996, by and among
the Registrant, Decisions Incorporated and Jeffry M.
Picower.
Exhibit 10.4 Employment Agreement dated as of August 23, 1996, by
and among Registrant, IMED and William J. Mercer
Exhibit 10.5 Employment Agreement dated as of August 23, 1996, by
and among Registrant, IMED and Joseph W. Kuhn
<PAGE>
IVAC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1996
------------ --------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents........................................................ $ 18,308 $ 10,447
Accounts receivable, net......................................................... 54,133 46,435
Current portion of contract receivables, net..................................... 5,414 6,034
Inventories, net................................................................. 34,625 39,646
Prepaid expenses and other assets................................................ 3,143 2,490
------------ --------------
Total current assets....................................................... 115,623 105,052
Long-term contract receivables, net................................................ 19,957 18,232
Property, plant and equipment, net................................................. 48,277 44,966
Intangible assets, net............................................................. 30,893 21,105
Other long-term assets............................................................. 1,245 1,626
------------ --------------
$ 215,995 $ 190,981
------------ --------------
------------ --------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued warranty............................................ $ 21,355 $ 20,565
Accrued employee liabilities..................................................... 9,528 8,182
Current portion of long-term debt................................................ 8,091 17,534
Other current liabilities........................................................ 34,799 34,599
------------ --------------
Total current liabilities.................................................. 73,773 80,880
Long-term debt..................................................................... 157,694 142,955
Other non-current liabilities...................................................... 5,043 2,737
Shareholders' equity (deficit):
Common stock:
Class A, $.01 par value; 60,000,000 shares authorized; 20,000,938 and 20,017,627
issued and outstanding at December 31, 1995 and September 30, 1996,
respectively................................................................... 200 200
Class B, $.01 par value; 20,000,000 shares authorized; 19,532,630 and 19,654,744
issued and outstanding at December 31, 1995 and September 30, 1996,
respectively................................................................... 195 197
Additional paid-in capital....................................................... 33,308 33,458
Note receivable from stockholder................................................. (8) (6)
Deferred compensation............................................................ -- (64)
Accumulated deficit.............................................................. (56,057) (70,166)
Foreign currency translation adjustment.......................................... 1,847 790
------------ --------------
Total shareholders' equity (deficit)....................................... (20,515) (35,591)
------------ --------------
$ 215,995 $ 190,981
------------ --------------
------------ --------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-1
<PAGE>
IVAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1995 1996
---------- ----------
<S> <C> <C>
Net sales.................................................................... $ 174,663 $ 170,155
Cost of sales................................................................ 118,255 98,836
---------- ----------
Gross profit......................................................... 56,408 71,319
Sales and marketing.......................................................... 32,470 28,872
General and administrative................................................... 18,529 17,479
Research and development..................................................... 10,111 7,663
Restructuring and special items.............................................. 4,460 17,396
Purchased research and development........................................... 19,883 --
---------- ----------
Loss from operations................................................. (29,045) (91)
Interest income (expense):
Contract interest income................................................... 2,130 1,812
Interest expense, net...................................................... (19,686) (13,396)
---------- ----------
Loss before income taxes............................................. (46,601) (11,675)
Provision for (benefit from) income taxes.................................... (3,270) 2,434
---------- ----------
Net loss............................................................. $ (43,331) $ (14,109)
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-2
<PAGE>
IVAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1995 1996
----------- ----------
<S> <C> <C>
Net cash provided by operating activities................................... $ 28,544 $ 15,485
Cash flows from investing activities:
Acquisitions, net of cash and cash equivalents acquired................... (185,955) --
Capital expenditures, net................................................. (7,738) (12,957)
----------- ----------
Net cash used by investing activities....................................... (193,693) (12,957)
----------- ----------
Cash flows from financing activities:
Capital contributions..................................................... 20,000 --
Borrowings under term loan and revolving credit arrangements.............. 68,500 3,000
Exercise of stock options................................................. -- 37
Payment on note receivable from stockholder............................... -- 2
Proceeds from bridge notes................................................ 80,000 --
Proceeds from junior notes................................................ 30,000 --
Repayment of term loan and revolving debt................................. (10,500) (7,500)
Payment of other debt obligations......................................... -- (4,533)
Debt issue costs.......................................................... (6,566) (39)
Capital lease payments.................................................... (260) (299)
----------- ----------
Net cash (used) provided by financing activities............................ 181,674 (9,332)
----------- ----------
Effect of exchange rate changes on cash..................................... 1,401 (1,057)
----------- ----------
Net (decrease) increase in cash and cash equivalents........................ 17,926 (7,861)
Cash and cash equivalents at the beginning of the period.................... 0 18,308
----------- ----------
Cash and cash equivalents at the end of the period.......................... $ 17,926 $ 10,447
Supplemental disclosure of non-cash financing activities:
Contribution of River capital stock....................................... $ 13,333 --
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-3
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 1--BUSINESS
IVAC Holdings, Inc. ("Holdings" or the "Company"), through its wholly owned
subsidiaries, designs, manufactures, distributes and services intravenous
infusion therapy and vital signs measurement instruments and related disposables
and accessories. The Company sells a full range of products to hospitals and
alternate site facilities in the United States, Canada and Europe.
In management's opinion, the accompanying unaudited condensed consolidated
financial statements of the Company for the nine months ended September 30, 1996
and 1995 have been prepared in accordance with generally accepted accounting
principles for interim financial statements and include all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial position, results of operations and cash flows for all periods
presented. All such financial statements are unaudited except for the December
31, 1995 balance sheet. The unaudited condensed consolidated financial
statements include the accounts and results of operations of the Company and its
subsidiaries, all of which are wholly owned. All significant intercompany
balances and transactions have been eliminated. Interim operating results are
not necessarily indicative of operating results for the full year. These
financial statements should be read in conjunction with the financial statements
and notes thereto for the year ended December 31, 1995.
NOTE 2--INVENTORIES
Inventories at December 31, 1995 and September 30, 1996 consisted of:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Finished products............................................... $ 14,998 $ 16,464
Work-in-process................................................. 3,472 7,237
Raw materials................................................... 17,867 19,254
------------ -------------
36,337 42,955
Less reserves................................................... (1,712) (3,309)
------------ -------------
$ 34,625 $ 39,646
------------ -------------
------------ -------------
</TABLE>
NOTE 3--LONG-TERM DEBT
On March 29, 1996, the Company amended and restated its Bank Credit
Facility. The amended and restated senior credit facility (the "Facility") is
available through March 29, 1999, provides for borrowings of up to $40,000 and
is secured by substantially all of the Company's domestic assets. Borrowings
under the Facility bear interest at a rate equal to the Alternate Base Rate (as
defined in the Facility) plus 0.25% or Adjusted LIBOR plus 1.50%, at the option
of the Company. The interest rate is also subject to change quarterly based upon
certain debt and interest coverage ratios.
NOTE 4--LITIGATION
The Company is a party to various other legal actions which have occurred in
the normal course of business. Management believes the Company has meritorious
defenses and intends to defend vigorously against these allegations and claims.
In management's opinion, liabilities arising from the above matters, if
F-4
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 4--LITIGATION (CONTINUED)
any, will not have a material adverse effect on the Company's consolidated
financial position or results of operations.
NOTE 5--RIVER MEDICAL, INC. DIVESTITURE
The Company has closed River and is divesting the subsidiary's assets.
River's primary assets include patents, technologies, trade secrets, inventories
and manufacturing equipment. The Company has recorded a restructuring charge of
$17,396 during the three months ended June 30, 1996, including an accrual of
$7,808. At September 30, 1996, the related accrual balance was $6,159.
NOTE 6--MERGER AGREEMENT
On August 23, 1996, the Company entered into an Agreement and Plan of Merger
among the Company; IVAC Medical Systems, Inc.; IMED Corporation ("IMED"), a
subsidiary of Advanced Medical, Inc.; a wholly owned subsidary of IMED and the
holders of Common Stock of Holdings named therein, pursuant to which IMED will
acquire, directly or indirectly through a wholly owned subsidiary, 100% of the
capital stock of Holdings for approximately $400,000 less certain
indebtedness.The proposed transaction received regulatory approval in October
1996 and is subject to certain other closing conditions, including the
completion of the financing necessary to consummate the merger (the "Merger").
NOTE 7--GUARANTOR SUBSIDIARY
Following the consummation of the Merger, the operations of IMED and IVAC
Medical Systems, Inc. will be transferred to Holdings and Holdings will become
the successor obligor under the Senior Subordinated Notes due 2006 of IMED (the
"IMED Notes") that will be issued in connection with the Merger. In addition,
certain subsidiaries of Holdings will guarantee the IMED Notes. Accordingly,
condensed combining financial information for Holdings and its guarantor and
non-guarantor subsidiaries at September 30, 1996 and for the nine months ended
September 30, 1996 is as follows:
<TABLE>
<CAPTION>
NON
PARENT GUARANTOR GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
CONDENSED BALANCE SHEET
SEPTEMBER 30, 1996
- ----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Current assets...................................... $ 64,367 $ 41,178 -- $ (493) $ 105,052
Non-current assets.................................. 101,102 9,146 $ 13,741 (38,060) 85,929
---------- ----------- ----------- ------------ ------------
$ 165,469 $ 50,324 $ 13,741 $ (38,553) $ 190,981
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
Current liabilities................................. $ 60,431 $ 29,486 $ 5,465 $ (14,502) $ 80,880
Long-term debt and other liabilities................ 145,692 -- -- -- 145,692
---------- ----------- ----------- ------------ ------------
206,123 29,486 5,465 (14,502) 226,572
Common stock and other shareholders' equity......... (40,654) 20,838 8,276 (24,051) (35,591)
---------- ----------- ----------- ------------ ------------
$ 165,469 $ 50,324 $ 13,741 $ (38,553) $ 190,981
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-5
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 7--GUARANTOR SUBSIDIARY (CONTINUED)
<TABLE>
<CAPTION>
NON
CONDENSED STATEMENT OF OPERATIONS PARENT GUARANTOR GUARANTOR
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPANY SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
- ---------------------------------------------------- ---------- ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales........................................... $ 141,066 $ 63,703 -- $ (34,614) $ 170,155
Cost of sales....................................... 88,494 45,561 -- (35,219) 98,836
---------- ----------- ----- ------------ ------------
52,572 18,142 -- 605 71,319
Operating expenses.................................. 38,275 33,894 -- (759) 71,410
Interest (income) expense, net...................... 10,097 1,487 -- 11,584
---------- ----------- ----- ------------ ------------
Income (loss) before income taxes and equity
interest in subsidiary income...................... 4,200 (17,239) -- 1,364 (11,675)
Equity interest in subsidiary income................ -- -- $ 166 (166) --
Provision for (benefit from) income taxes........... 3,230 (796) 58 (58) 2,434
---------- ----------- ----- ------------ ------------
Net income (loss)................................... $ 970 $ (16,443) $ 108 $ 1,256 $ (14,109)
---------- ----------- ----- ------------ ------------
---------- ----------- ----- ------------ ------------
</TABLE>
F-6
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 7--GUARANTOR SUBSIDIARY (CONTINUED)
<TABLE>
<CAPTION>
NON
CONDENSED STATEMENT OF CASH FLOWS PARENT GUARANTOR GUARANTOR
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPANY SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
- ---------------------------------------------------- ---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash (used) provided by operating activities.... $ 30,818 $ (14,896) -- $ (437) $ 15,485
Cash flows from investing activities:
Intercompany advances to River Medical............ (9,165) -- 9,165 --
Intercompany advances from Parent................. 9,165 (9,165) --
Capital expenditures, net......................... (9,493) (4,480) 1,016 (12,957)
---------- ----------- ----------- ------------ ------------
Net cash (used) provided by investing activities.... (18,658) 4,685 -- 1,016 (12,957)
---------- ----------- ----------- ------------ ------------
Cash flows from financing activities:
Borrowings under term loan and revolving credit
arrangements.................................... 3,000 -- 3,000
Exercise of stock options......................... 37 -- 37
Payment on note receivable from stockholder....... 2 -- 2
Repayment of term loan and revolving debt......... (7,500) -- (7,500)
Payment of other debt obligations................. (4,533) -- (4,533)
Debt issue costs.................................. (39) -- (39)
Capital lease payments............................ -- (299) (299)
---------- ----------- ----------- ------------ ------------
Net cash (used) provided by financing activities.... (9,033) (299) -- -- (9,332)
---------- ----------- ----------- ------------ ------------
Effect of exchange rate changes on cash............. (478) (579) (1,057)
---------- ----------- ----------- ------------ ------------
Net (decrease) increase in cash and cash
equivalents........................................ 3,127 (10,988) -- -- (7,861)
Cash and cash equivalents at the beginning of the
period............................................. 2,203 16,105 -- -- 18,308
---------- ----------- ----------- ------------ ------------
Cash and cash equivalents at the end of the
period............................................. $ 5,330 $ 5,117 -- -- $ 10,447
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
IVAC Holdings, Inc.
In our opinion, the, accompanying consolidated balance sheet and the related
consolidated statements of operations, of cash flows and of shareholders' equity
(deficit) present fairly, in all material respects, the financial position of
IVAC Holdings, Inc. and its subsidiaries at December 31, 1995, and the results
of their operations and their cash flows for the year in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
San Diego, California
March 29, 1996
F-8
<PAGE>
IVAC HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
1995
------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................................................... $ 18,308
Accounts receivable, net.......................................................................... 54,133
Current portion of contract receivables, net...................................................... 5,414
Inventories....................................................................................... 34,625
Prepaid expenses and other assets................................................................. 3,143
------------
Total current assets.......................................................................... 115,623
Long-term contract receivables, net................................................................. 19,957
Property, plant and equipment, net.................................................................. 48,277
Intangible assets, net.............................................................................. 30,893
Other long-term assets.............................................................................. 1,245
------------
$ 215,995
------------
------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.................................................................................. $ 14,407
Accrued warranty.................................................................................. 6,948
Accrued employee liabilities...................................................................... 9,528
Current portion of long-term debt................................................................. 8,091
Other current liabilities......................................................................... 34,799
------------
Total current liabilities..................................................................... 73,773
Long-term debt...................................................................................... 157,694
Other non-current liabilities....................................................................... 5,043
Commitments and contingencies (Note 11)
Shareholders' equity (deficit):
Common stock:
Class A, $.01 par value; 60,000,000 shares authorized; 20,000,938 issued and outstanding.......... 200
Class B, $.01 par value; 20,000,000 shares authorized; 19,532,630 issued and outstanding.......... 195
Additional paid-in capital.......................................................................... 33,308
Note receivable from shareholder.................................................................... (8)
Accumulated deficit................................................................................. (56,057)
Foreign currency translation adjustment............................................................. 1,847
------------
Total shareholders' equity (deficit).......................................................... (20,515)
------------
$ 215,995
------------
------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-9
<PAGE>
IVAC HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
Net sales........................................................................................... $ 240,971
Cost of sales................................................................................... 157,869
------------
Gross profit........................................................................................ 83,102
Sales and marketing................................................................................. 43,994
General and administrative.......................................................................... 28,381
Research and development............................................................................ 12,083
Purchased research and development.................................................................. 22,883
Restructuring and special items..................................................................... 5,944
Other expense, net.................................................................................. 1,497
------------
Loss from operations............................................................................ (31,680)
Interest income (expense):
Contract interest income.......................................................................... 3,013
Interest expense, net............................................................................. (27,476)
------------
Loss before income taxes........................................................................ (56,143)
Benefit from income taxes........................................................................... 378
------------
Net loss........................................................................................ $ (55,765)
------------
------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-10
<PAGE>
IVAC HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
-----------------
<S> <C>
Cash flows from operating activities:
Net loss....................................................................................... $ (55,765)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization................................................................ 23,736
Debt issuance cost amortization.............................................................. 5,902
Purchased research and development........................................................... 22,883
Deferred income taxes........................................................................ (1,898)
Gain on disposal of property, plant and equipment............................................ (55)
Accretion of discount........................................................................ 4,664
Changes in assets and liabilities:
Receivables................................................................................ (11,837)
Inventories................................................................................ 23,176
Prepaid expenses and other assets.......................................................... 223
Accounts payable........................................................................... 4,975
Accrued warranty........................................................................... (557)
Accrued employee liabilities............................................................... (900)
Other current liabilities.................................................................. 9,265
Other non-current liabilities.............................................................. (829)
Payables to and receivables from Lilly, net................................................ 15,160
--------
Net cash provided by operating activities.............................................. 38,143
--------
Cash flows from investing activities:
Acquisitions, net of cash and cash equivalents acquired...................................... (190,793)
Capital expenditures, net.................................................................... (13,752)
Proceeds from sale of facility, net.......................................................... 25,258
--------
Net cash used by investing activities.................................................. (179,287)
--------
Cash flows from financing activities:
Capital contributions........................................................................ 20,000
Exercise of stock options.................................................................... 70
Borrowings under term loan and revolving credit arrangements................................. 68,500
Proceeds from bridge notes................................................................... 80,000
Proceeds from senior notes................................................................... 100,000
Proceeds from junior subordinated notes...................................................... 30,000
Repayment of term loan and revolving debt.................................................... (49,000)
Repayment of bridge notes.................................................................... (80,000)
Debt issue costs............................................................................. (11,486)
Capital lease payments....................................................................... (479)
--------
Net cash provided by financing activities.............................................. 157,605
--------
Effect of exchange rate changes on cash........................................................ 1,847
--------
Net increase in cash and cash equivalents...................................................... 18,308
Cash and cash equivalents at the beginning of the year......................................... 0
--------
Cash and cash equivalents at the end of the year............................................... $ 18,308
--------
--------
Supplemental disclosure of cash flow information:
Cash paid for interest....................................................................... $ 15,380
Cash paid for income taxes................................................................... $ 12
Supplemental disclosure of non-cash financing activities:
Contribution of River capital stock.......................................................... $ 13,333
Stock dividend (3 for 1)..................................................................... $ 292
Capital lease financing...................................................................... $ 1,200
</TABLE>
See accompanying notes to consolidated financial statements.
F-11
<PAGE>
IVAC HOLDINGS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------------------------------------
CLASS A CLASS B
COMMON STOCK COMMON STOCK ADDITIONAL SHAREHOLDER
------------------------ ------------------------ PAID-IN NOTE ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL RECEIVABLE DEFICIT
----------- ----------- ----------- ----------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Contribution of capital:
Cash.................... $ 20,000
River capital stock..... 5,000,000 $ 50 4,740,388 $ 47 13,236
Foreign currency
translation adjustment..
Stock dividend (3 for 1).. 15,000,000 150 14,221,164 142 $ (292)
Exercise of stock
options................. 938 571,078 6 72 $ (8)
Net loss.................. (55,765)
--
----------- ----- ----------- ----- ----------- ------------
Balance at December 31,
1995.................... 20,000,938 $ 200 19,532,630 $ 195 $ 33,308 $ (8) $ (56,057)
----------- ----- ----------- ----- ----------- -- ------------
----------- ----- ----------- ----- ----------- -- ------------
<CAPTION>
FOREIGN TOTAL
CURRENCY SHAREHOLDERS'
TRANSLATION EQUITY
ADJUSTMENT (DEFICIT)
----------- --------------
<S> <C> <C>
Contribution of capital:
Cash.................... $ 20,000
River capital stock..... 13,333
Foreign currency
translation adjustment.. $ 1,847 1,847
Stock dividend (3 for 1)..
Exercise of stock
options................. 70
Net loss.................. (55,765)
----------- --------------
Balance at December 31,
1995.................... $ 1,847 $ (20,515)
----------- --------------
----------- --------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-12
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
NOTE 1--DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
IVAC Holdings, Inc. ("Holdings" or the "Company"), through its wholly owned
subsidiaries, designs, manufactures, distributes and services intravenous
infusion therapy and vital signs measurement instruments and related disposables
and accessories. The Company sells a full range of products to hospitals and
alternate site facilities in the United States, Canada and Europe.
All outstanding common stock of IVAC Medical Systems, Inc. ("IVAC") is owned
by Holdings. Holdings was formed through the contribution of $20,000 cash from
an investor group, including DLJ Merchant Banking Partners, L.P. ("DLJMB") and
investors in River ("the River Group"), and other investors in exchange for
20,000,000 shares of Class A Common Stock, and the issuance of 18,961,552 shares
of Class B Common Stock in exchange for the outstanding capital stock of River
Medical, Inc. (the "River Transaction"). In connection with the formation of
Holdings, after the close of business on December 31, 1994, the Company acquired
the outstanding capital stock of IVAC from Eli Lilly and Company ("Lilly") for
approximately $195,000, including transaction costs (the "Acquisition"). Through
a series of subsequent transactions, River became a wholly owned subsidiary of
IVAC. The proceeds received from the investor group were contributed as capital
to IVAC Medical Systems, Inc.
In connection with the Acquisition, Holdings issued Junior Subordinated
Notes due 2006 (the "Subordinated Notes") to DLJMB, the River Group and others
for an aggregate of $30,000. Interest accrues to principal annually at an
effective fixed rate of 13.2%. IVAC does not guarantee repayment of the notes on
behalf of Holdings nor are these notes secured by IVAC's assets. The proceeds
from the Subordinated Notes were contributed as capital to IVAC Medical Systems,
Inc.
The consolidated financial statements includes the accounts of the Company
and its subsidiaries, all of which are wholly owned. All significant
intercompany balances and transactions have been eliminated.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments with maturities of 90
days or less at date purchased.
REVENUE RECOGNITION
Revenue is recorded upon product shipment, net of an allowance for estimated
returns, or service delivery. The Company also sells instruments via long-term
financing arrangements to a number of hospitals under No Capital Agreements
("NCA's"). These agreements allow hospitals to acquire instruments with no
initial payment. The sales price for the instruments is recovered via surcharges
applied to minimum purchase commitments of related disposables. The term of the
financing is generally three to five years, with interest at rates of 9% to 15%.
The related contract receivables at December 31, 1995 are presented net of
unearned finance revenue of $6,813 which reflects the remaining interest to be
earned on unshipped disposables. Unearned finance revenue is calculated using
the inherent rate of interest on each NCA, the expected disposable shipment
period and the principal balance financed. Finance revenue is recognized as
disposables are shipped using a reducing principal balance method which
approximates the interest method. Contract provisions include liquidated damage
clauses which are sufficient to recover the sales price of the instruments in
the event of customer cancellation.
F-13
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables. Credit
risk associated with this concentration is limited due to the large number and
geographic dispersion of the accounts and the overall stability of the hospital
industry. Management believes that adequate provision has been made for such
credit risk.
INVENTORIES
Inventories are stated at the lower of cost, determined by the first-in,
first-out (FIFO) method, or market. Cost of inventories at the beginning of the
year was determined based on an allocation of the purchase price to all assets
and liabilities including inventory, as determined by an independent appraisal,
at the date of acquisition.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of cost. Cost of
acquired assets (see Note 3) was determined based on an allocation of the
purchase price to all assets and liabilities, as determined by an independent
appraisal, at the date of acquisition. Additions to property, plant and
equipment, including significant betterments and renewals, are capitalized.
Maintenance and repair costs are charged to expense as incurred. Depreciation is
computed using the straight-line method over estimated useful lives of 3 to 20
years. Depreciation expense amounted to $15,076 for the year ended December 31,
1995.
INCOME TAXES
Current income tax expense is the amount of income taxes expected to be
payable for the current year. A deferred tax asset or liability is computed for
the expected future impact of differences between the financial reporting and
tax basis of assets and liabilities as well as the expected future tax benefit
to be derived from tax loss and tax credit carryforwards. Deferred income tax
expense (benefit) is determined as the net change during the year in the
deferred income tax asset or liability. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount "more likely than
not" to be realized in future tax returns. Tax rate changes are reflected in
income during the period such changes are enacted.
FOREIGN CURRENCY TRANSLATION
The financial statements of the Company's foreign subsidiaries are
translated into U.S. dollars using period-end exchange rates for assets and
liabilities and weighted average exchange rates during the period for revenues
and expenses. Gains and losses from translation are excluded from results of
operations and accumulated as a separate component of shareholders' equity.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the
F-14
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of the Company's financial instruments, including cash
and cash equivalents, trade receivables and payables, approximates their fair
value due to their short term maturities. The fair values of the Company's
long-term contract receivables are estimated by discounting future cash flows
using discount rates that reflect the risk associated with similar types of
loans. The fair value of the Company's long-term debt is estimated based on
comparison with similar issues or current rates offered to the Company for debt
of the same remaining maturities. The estimated fair values of both the
Company's long-term contract receivables and long-term debt approximate their
carrying values.
STOCK OPTIONS
In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting
for Stock-Based Compensation," which establishes a fair value based method of
accounting for compensation costs related to stock option plans and other forms
of stock based compensation plans as an alternative to the intrinsic value based
method of accounting defined under Accounting Principles Board Opinion No. 25.
Companies that do not elect the new method of accounting beginning in 1996 will
be required to provide pro forma disclosures as if the fair value based method
had been applied. The Company anticipates that it will not elect the fair value
based method of accounting and will provide pro forma disclosure as required.
INTANGIBLE ASSETS
Intangible assets are amortized as follows:
<TABLE>
<S> <C> <C>
Supply agreements............................. Straight-line 3 years
Trademarks.................................... Straight-line 10 years
Patents....................................... Straight-line 10 years
Interest Terms of related
Debt acquisition costs........................ method debt
Excess purchase price......................... Straight-line 10 years
</TABLE>
Intangibles are presented net of accumulated amortization of $11,776. In
connection with the acquisition of IVAC, Lilly agreed to continue providing
certain administrative services on behalf of IVAC for a period of six months.
The amount capitalized as service support agreement ($2,786) has been fully
amortized as of December 31, 1995.
IMPAIRMENT OF LONG-LIVED ASSETS
During 1995, the FASB issued Statement of Financial Accounting Standards No.
121 ("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," which establishes accounting standards for
the impairment of long-lived assets, certain identifiable intangibles and excess
purchase price related to those assets to be held and used and for long-lived
assets and certain intangible assets to be disposed of. In the fourth quarter of
1995, the Company elected to early
F-15
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
adopt the new accounting pronouncement. Based upon an analysis performed in
accordance with SFAS 121, the Company believes that no material impairments
exist at December 31, 1995.
NOTE 3--THE ACQUISITION AND THE RIVER TRANSACTION
The Acquisition and the River Transaction have been accounted for under the
purchase method; accordingly, the purchased assets and liabilities have been
recorded at their estimated fair value at the date of acquisition. The purchase
price of River of $13,333 was determined based on the fair value of the River
assets contributed to Holdings relative to the purchase price paid by the DLJMB
led investor group for their initial equity in Holdings. The application of the
purchase method to the Acquisition and the River Transaction resulted in an
excess of cost over net assets acquired of approximately $90,804. The excess
purchase price has been allocated to property, plant and equipment ($20,315),
inventory ($14,774), intangibles ($23,356) and in-process research and
development ($22,883) with a remaining excess purchase price over net assets
acquired of $9,476. The in-process research and development of River and IVAC
were charged to earnings in 1995. The purchase price allocations reflect the
resolution of certain purchase contingencies including the arbitration
settlement of a dispute with Lilly over the final IVAC purchase price subsequent
to December 31, 1995, the resolution of certain contingent liabilities, and the
ultimate realization of certain acquired receivables and property, plant and
equipment. Additionally, the Company and Lilly jointly elected to make an
Internal Revenue Code Section 338(h)(10) election for Federal and state tax
purposes in the third quarter of 1995. This election resulted in treatment of
the acquisition as if Lilly sold assets in a taxable transaction and resulted in
adjustments to reflect the fair value of the acquired tax assets and liabilities
as of the date of purchase.
In conjunction with purchase accounting, the Company recorded a severance
liability in the amount of $5,659 pursuant to a plan in place as of the purchase
date to subsequently terminate employees. The liability was determined based on
the expected employee resources to be terminated at an estimated cost of
severance benefits as provided for in the purchase agreement at the time of the
Acquisition to include separation payments based on years of service, continued
medical benefits and outplacement assistance for a specified time. These costs
were paid to employees terminated during the six month period following the
Acquisition and did not materially differ from the amount initially accrued.
In connection with the Acquisition and the River Transaction, certain
stockholders of Holdings received approximately $3,650 in connection with the
exchange of their capital stock or services rendered. These amounts have been
capitalized as a component of the purchase price.
F-16
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 4--COMPOSITION OF CERTAIN CONSOLIDATED FINANCIAL STATEMENT CAPTIONS
<TABLE>
<CAPTION>
DECEMBER 31,
1995
------------
<S> <C>
Accounts receivable:
Trade......................................................................... $ 58,677
Less allowance for doubtful accounts.......................................... (4,544)
------------
$ 54,133
------------
------------
Inventories:
Finished products............................................................. $ 14,998
Work-in-process............................................................... 3,472
Raw materials................................................................. 17,867
------------
36,337
Less reserves................................................................. (1,712)
------------
$ 34,625
------------
------------
Property, plant and equipment:
Land.......................................................................... $ 640
Buildings..................................................................... 4,554
Equipment..................................................................... 50,179
Construction in process....................................................... 6,341
------------
61,714
Less accumulated depreciation................................................. (13,437)
------------
$ 48,277
------------
------------
Intangibles:
Excess purchase price......................................................... $ 9,476
Supply agreements............................................................. 10,296
Trademarks.................................................................... 5,140
Patents....................................................................... 5,186
Debt acquisition costs........................................................ 11,486
Other......................................................................... 1,085
------------
42,669
Less accumulated amortization................................................. (11,776)
------------
$ 30,893
------------
------------
Other current liabilities:
Accrued expense reimbursement to former parent................................ $ 12,212
Other......................................................................... 22,587
------------
$ 34,799
------------
------------
</TABLE>
F-17
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 5--LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1995
------------
<S> <C>
Senior notes.................................................................... $ 100,000
Term loan borrowings under the Bank Credit Facility............................. 19,500
Junior subordinated notes....................................................... 33,961
Other........................................................................... 12,324
------------
165,785
Less current portion............................................................ (8,091)
------------
Long-term debt.................................................................. $ 157,694
------------
------------
</TABLE>
In connection with the acquisition of IVAC, the Company entered into an
$80,000 credit facility (the "Bank Credit Facility") with a syndicate of
financial institutions which consists of $60,000 of term loans and a $20,000
revolving credit facility, each of which matures on December 30, 1999. Available
funds under the revolving credit facility are limited to the difference between
$20,000 and the amount of letters of credit issued under the Bank Credit
Facility, which cannot exceed $15,000. Borrowings under the Bank Credit Facility
bear interest at a rate equal to the Alternate Base Rate plus 1.75% or Adjusted
LIBOR plus 3.00%, at the option of the Company, payable quarterly (10.25% and
8.69%, respectively, at December 31, 1995). The Bank Credit Facility is secured
by the stock of IVAC and all of its subsidiaries and substantially all of the
assets of Holdings, IVAC and IVAC's domestic subsidiaries. The Bank Credit
Facility is guaranteed by Holdings and substantially all of the Company's
subsidiaries. As more fully discussed in Note 13, subsequent to December 31,
1995, the Company amended and restated certain terms of the Bank Credit
Facility.
Immediately following the Acquisition, the Company entered into an interest
rate swap agreement to fix the rate of interest payable on a portion of the term
loan principal borrowed under the Bank Credit Facility. The swap has a three
year term and an initial notional amount of $30,000, which amortizes at a rate
equal to 50% of the original term loan principal paydown schedule, with
quarterly payments at a fixed rate of 11.05% of the outstanding notional amount
and quarterly receipts at a LlBOR-based floating rate plus 3.00%.
The Bank Credit Facility contains covenants which, among other matters,
restrict or limit the ability of the Company to pay dividends, incur
indebtedness, and make capital expenditures. The Company must also maintain
certain ratios regarding interest coverage and leverage, among other
restrictions.
On November 8, 1995, the Company issued $100,000 of senior unsecured public
notes (the "Notes") due December 1, 2002. The Notes bear interest at the rate of
9.25% annually, which is payable semi-annually in arrears on June 1 and December
1 of each year, commencing June 1, 1996. The Company is not required to make any
mandatory redemption or sinking fund payments with respect to the Notes prior to
maturity. The Notes are redeemable at the option of the Company, in whole or in
part, at any time on or after December 1, 1998 at the redemption prices set
forth in the indenture plus accrued and unpaid interest to the date of
redemption. In addition, at any time prior to December 1, 1998, the Company may
redeem the Notes with the proceeds of one or more public offerings of common
stock at a redemption price equal to 108.25% of the principal amount plus
accrued and unpaid interest; provided that at least
F-18
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 5--LONG-TERM DEBT (CONTINUED)
$65,000 in aggregate principal amount of the Notes remain outstanding
immediately after the occurrence of each such redemption. In the event of a
Change of Control (as defined in the indenture), holders of the Notes will have
the right to require the Company to purchase their Notes, in whole or in part,
at a price equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest to the date of purchase. The Notes are senior unsecured
obligations of the Company and rank senior in right of payment to all
subordinated indebtedness of the Company.
The indenture contains covenants which, among other matters, restrict or
limit the ability of the Company to pay dividends, incur indebtedness, make
asset sales, create liens and restrict the ability of the Company to enter into
mergers, consolidations or sales of all or substantially all of its assets.
The Company also issued $30,000 of Junior Subordinated Notes due 2006. The
notes accrue interest at 13.2% per annum, compounded annually.
The net proceeds from the bridge notes, Junior Subordinated Notes, and term
loan were used to pay the cash purchase price in connection with the Acquisition
and to pay fees and expenses related to the Acquisition. The proceeds of the
revolving loan will be used for general corporate purposes in the ordinary
course of the business.
Other debt consists of consideration owed to Siemens Infusion Systems, Ltd.
("SIS") resulting from IVAC's acquisition of the MiniMed product line from SIS
in 1993. In accordance with the acquisition agreement, IVAC is obligated to pay
SIS $1,571 in 1996 based on 1994 product sales and the greater of $3,000 per
year or 8% of the prior year's product sales in 1996 through 1999. The minimum
$12,000 liability was discounted at an imputed interest rate of 7% and recorded
as debt. The unamortized discount, which is amortized using the interest method
over the term of the payments, is $1,247 at December 31, 1995.
The aggregate minimum annual maturities on long-term debt are as follows:
<TABLE>
<S> <C>
1996.............................................................. $ 8,091
1997.............................................................. 7,375
1998.............................................................. 7,901
1999.............................................................. 8,457
2000.............................................................. --
Thereafter........................................................ 133,961
---------
$ 165,785
---------
---------
</TABLE>
NOTE 6--LEASES
Leases are generally for buildings, computers and office equipment. The
leases for the Company's San Diego corporate headquarters and manufacturing
facilities provide for scheduled rent increases. Total rent expense amounted to
approximately $2,035 for the year ended December 31, 1995.
The Company maintains a lease line of credit with a leasing company for
acquisitions of equipment under capital lease arrangements.
F-19
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 6--LEASES (CONTINUED)
Future minimum payments are as follows:
<TABLE>
<CAPTION>
NONCANCELLABLE
CAPITAL OPERATING
LEASES LEASES
--------- --------------
<S> <C> <C>
1996........................................................................ $ 770 $ 3,413
1997........................................................................ 722 2,931
1998........................................................................ 425 2,990
1999........................................................................ 241 2,916
2000........................................................................ -- 2,803
Thereafter.................................................................. -- 11,298
--------- -------
2,158 $ 26,351
-------
-------
Less amounts representing interest.......................................... (304)
---------
Capital lease obligations................................................... 1,854
Less current portion........................................................ (595)
---------
$ 1,259
---------
---------
</TABLE>
NOTE 7--INCOME TAXES
The benefit from income taxes is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
-------------
<S> <C>
Current:
Federal....................................................................... $ --
Foreign....................................................................... 3,307
State......................................................................... 5
------
3,312
------
Deferred:
Federal....................................................................... (3,192)
Foreign....................................................................... 142
State......................................................................... (640)
------
(3,690)
------
Total........................................................................... $ (378)
------
------
</TABLE>
F-20
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 7--INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets and liabilities
are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1995
------------
<S> <C>
Deferred tax assets:
Net operating loss and research and development credit carryforwards.......... $ 5,742
Intangibles................................................................... 3,666
State income taxes............................................................ 2,987
Product return/warranty reserves.............................................. 1,895
Rebate reserve................................................................ 1,479
Other......................................................................... 5,430
------------
Total deferred tax assets....................................................... 21,199
Valuation allowance........................................................... (21,199)
------------
Net deferred tax assets......................................................... 0
------------
Deferred tax liabilities:
Foreign taxes................................................................. (142)
------------
Total deferred tax liabilities.................................................. (142)
------------
Net deferred taxes.............................................................. $ (142)
------------
------------
</TABLE>
The Company has recorded a valuation allowance against deferred tax assets
since it is more likely than not that the deferred tax assets will not be
realized.
As of December 31, 1994, River net operating loss carryforwards for Federal
and state tax purposes totaled approximately $4,156 and $1,513, respectively. As
specified in the Internal Revenue Code, a more than 50% ownership change by a
combination of significant shareholders during any three year period would
result in certain limitations on the Company's ability to utilize net operating
loss carryforwards and research and development credit carryforwards. Such a
change is likely to have occurred in connection with the acquisition transaction
discussed in Note 3. These net operating loss and research and development
credit carryforwards expire from 2008 to 2009 for Federal tax purposes and from
1998 and 1999 for state tax purposes.
During 1995, net operating loss carryforwards for Federal and state tax
purposes totaling approximately $4,245 and $236, respectively, were generated by
the consolidated group. These net operating loss carryforwards expire in 2010
for Federal tax purposes and in 2000 for state tax purposes.
F-21
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 7--INCOME TAXES (CONTINUED)
Following is a reconciliation of the effective income tax rate:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
---------------
<S> <C>
Tax benefit at statutory rate................................................... (35.0)%
Add (deduct):
Foreign taxes................................................................. 6.2
State taxes................................................................... (5.8)
Other......................................................................... (.2)
-----
(34.8)
Valuation allowance........................................................... 34.1
-----
(.7)%
-----
-----
</TABLE>
NOTE 8--BENEFITS
Effective December 30, 1994, in connection with the purchase of IVAC
discussed in Note 1, the Company's U.S. noncontributory defined benefit plan was
terminated and the assets and liabilities of the IVAC Retirement Plan were
merged into The Lilly Retirement Plan. All eligible participants in the IVAC
Retirement Plan became participants in The Lilly Retirement Plan, and all
benefits previously earned will be paid by The Lilly Retirement Plan.
In connection with the River Transaction, all outstanding stock options
issued under the River Medical Stock Option Plan were assumed by Holdings
subject to the same terms, vesting, duration and cancellation existing prior to
the acquisition. On a converted basis, there were 467,370 options exercisable
into Holdings Class B common stock outstanding at December 31, 1995 at exercise
prices ranging from $.13 to $.52. The options expire not more than ten years
from the date of grant and were fully vested at December 31, 1995.
A summary of Class B stock option transactions follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
OPTIONS OUTSTANDING
-----------------------------------
NUMBER OF NUMBER OF
SHARES SHARES
AT $.52 AT $.13
PER SHARE PER SHARE TOTAL
----------- ---------- ----------
<S> <C> <C> <C>
Converted from River Plan................................................... 24,611 1,013,837 1,038,448
Options exercised........................................................... (8,204) (562,874) (571,078)
----------- ---------- ----------
Balance at December 31, 1995................................................ 16,407 450,963 467,370
----------- ---------- ----------
----------- ---------- ----------
</TABLE>
The 1995 Stock Option/Stock Issuance Plan (the "Plan") of Holdings
authorizes up to 4,000,000 shares of Holdings Class A common stock to be granted
no later than February 2005. Under the Plan, the Board of Directors of Holdings
may grant options to selected key employees, directors and consultants to the
Company to purchase shares of Holdings common stock, at a price not less than
85% of the fair market
F-22
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 8--BENEFITS (CONTINUED)
value of the stock at the date of grant. The Plan provides for the grant of both
incentive stock options and non-qualified stock options. Generally, options
outstanding vest over a four to eight year period and are exercisable for up to
ten years from the grant date. At December 31, 1995, 633,343 options were
exercisable at $1.00 for an aggregate exercise price of $633.
A summary of Class A stock option transactions follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
OPTIONS OUTSTANDING
OPTIONS -----------------------
AVAILABLE NUMBER OF PRICE PER
FOR GRANT SHARES SHARE
----------- ---------- -----------
<S> <C> <C> <C>
Options authorized.......................................................... 4,000,000 -- --
Options granted............................................................. (3,668,656) 3,668,656 $ 1.00
Options exercised........................................................... -- (938) --
Options forfeited on termination of employment.............................. 360,516 (360,516) --
----------- ---------- -----
Balance at December 31, 1995................................................ 691,860 3,307,202 $ 1.00
----------- ---------- -----
----------- ---------- -----
</TABLE>
During 1995, the Company issued a 3 for 1 stock dividend to all holders of
record of Class A and Class B common stock held at the close of business on
February 1, 1995.
The Company maintains a defined contribution savings plan which covers
substantially all of its U.S. employees. Contributions under the plan amounted
to $757 for the year ended December 31, 1995.
The Company was self-insured for medical benefits through June 30, 1995.
Effective July 1, 1995, the Company transitioned its medical and dental
insurance to coverage under a health maintenance organization.
F-23
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 9--GEOGRAPHIC INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
Net sales to unaffiliated customers:
United States................................................................. $ 163,323
United Kingdom................................................................ 18,217
Germany....................................................................... 18,516
Spain......................................................................... 10,248
Other......................................................................... 30,667
------------
$ 240,971
------------
------------
Income (loss) before income taxes:
United States................................................................. $ (61,462)
United Kingdom................................................................ 3,869
Germany....................................................................... 127
Spain......................................................................... 587
Other......................................................................... 1,398
Eliminations and adjustments.................................................. (662)
------------
$ (56,143)
------------
------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
1995
------------
<S> <C>
Total assets:
United States................................................................. $ 190,640
United Kingdom................................................................ 17,384
Germany....................................................................... 7,230
Spain......................................................................... 11,860
Other......................................................................... 17,216
Eliminations and adjustments.................................................. (28,335)
------------
$ 215,995
------------
------------
</TABLE>
Transfers between geographic areas are made at prices calculated to reflect
a profit attributable to manufacturing operations.
Remittances to the United States are subject to various regulations of the
respective governments as well as to fluctuations in exchange rates.
NOTE 10--LITIGATION
River is a defendant in an action alleging misappropriation of trade secrets
and other proprietary information of the plaintiff. The Company believes the
allegations to be without merit and has filed a countersuit with respect to this
matter. In addition, the Company is a party to various other legal actions which
have occurred in the normal course of business. Management believes the Company
has meritorious
F-24
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 10--LITIGATION (CONTINUED)
defenses and intends to defend vigorously against these allegations and claims.
In management's opinion, liabilities arising from the above matters, if any,
will not have a material adverse effect on the Company's consolidated financial
position or results of operations.
NOTE 11--COMMITMENTS AND CONTINGENCIES
In connection with the Acquisition, Lilly agreed to perform certain
administrative functions for the Company's foreign subsidiaries including the
collection of receivables and the payment of certain direct expenses incurred by
Lilly on behalf of the Company. The Company agreed to reimburse Lilly for such
direct expenses and anticipates that a payment of less than $8,000 will be made
to Lilly in 1996. The Company is currently waiting for notification from Lilly
of the amount owed under this arrangement. Management does not believe that this
amount will be materially different from the amount accrued at December 31,
1995.
The Company is obligated to pay additional purchase consideration related to
previous acquisitions. As discussed in Note 5, the Company is obligated to pay
additional consideration to SIS. In connection with another acquisition, the
Company is contingently liable to certain prior shareholders of the acquiree for
up to approximately $1,850 for additional purchase consideration through 1996,
based upon the acquired entity achieving certain sales and pre-tax performance
in each year subsequent to such acquisition. Any additional consideration paid
will be treated as additional cost of the acquired entity.
NOTE 12--RESTRUCTURING
In 1995, management approved and committed the Company to a non-voluntary
termination plan in compliance with the terms of the Acquisition purchase
agreement in an effort to reduce operating expenses. The terminations were not
concentrated in one particular area of the Company's operations and the plan
does not contemplate any significant changes to the operations or product lines
that the Company offers. In connection with these terminations the Company
charged severance and related costs of $5,319 to earnings. As of December 31,
1995, the remaining accrual related to these terminations totaled $1,510.
NOTE 13--SUBSEQUENT EVENT
On March 29, 1996, the Company amended and restated its Bank Credit
Facility. The amended and restated senior credit facility (the "Facility")
matures on March 29, 1999 and provides for borrowings of up to $40,000, secured
by substantially all U.S. domestic assets. Borrowings under the Facility bear
interest at a rate equal to the Alternate Base Rate ("ABR") plus 0.25% or
Adjusted LIBOR plus 1.50%, at the option of the Company. The pricing is subject
to change quarterly based upon certain debt and interest coverage ratios.
NOTE 14--GUARANTOR SUBSIDIARY
On August 23, 1996, the Company entered into an Agreement and Plan of Merger
among the Company; IVAC Medical Systems, Inc.; IMED Corporation ("IMED"), a
subsidiary of Advanced Medical, Inc.; a wholly owned subsidary of IMED and the
holders of Common Stock of Holdings named therein, pursuant to which IMED will
acquire, directly or indirectly through a wholly owned subsidiary, 100% of
F-25
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 14--GUARANTOR SUBSIDIARY (CONTINUED)
the capital stock of Holdings for approximately $400,000 less certain
indebtedness. The proposed transaction received regulatory approval in October
1996 and is subject to certain other closing conditions, including the
completion of the financing necessary to consummate the merger (the "Merger").
Following the consummation of the Merger, the operations of IMED and IVAC
Medical Systems, Inc. will be transferred to Holdings and Holdings will become
the successor obligor under the Senior Subordinated Notes due 2006 of IMED (the
"IMED Notes") that will be issued in connection with the Merger. In addition,
certain subsidiaries of Holdings will guarantee the IMED Notes. Accordingly,
condensed combining financial information for Holdings and its guarantor and
non-guarantor subsidiaries at December 31, 1995 and for the year ended December
31, 1995 is as follows:
<TABLE>
<CAPTION>
NON
CONDENSED BALANCE SHEET PARENT GUARANTOR GUARANTOR
DECEMBER 31, 1995 COMPANY SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
- ----------------------------------------------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets................................. $ 71,181 $ 45,683 -- $ (1,241) $ 115,623
Non-current assets............................. 120,431 20,368 $ 16,027 (56,454) 100,372
----------- ----------- ----------- ------------ ------------
$ 191,612 $ 66,051 $ 16,027 $ (57,695) $ 215,995
----------- ----------- ----------- ------------ ------------
----------- ----------- ----------- ------------ ------------
Current liabilities............................ $ 44,327 $ 38,872 $ 7,859 $ (17,285) $ 73,773
Long-term debt and other liabilities........... 161,052 1,685 -- -- 162,737
----------- ----------- ----------- ------------ ------------
205,379 40,557 7,859 (17,285) 236,510
Common stock and other shareholders' equity.... (13,767) 25,494 8,168 (40,410) (20,515)
----------- ----------- ----------- ------------ ------------
$ 191,612 $ 66,051 $ 16,027 $ (57,695) $ 215,995
----------- ----------- ----------- ------------ ------------
----------- ----------- ----------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
NON
CONDENSED STATEMENT OF OPERATIONS PARENT GUARANTOR GUARANTOR
FOR THE YEAR ENDED DECEMBER 31, 1995 COMPANY SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
- ------------------------------------------------ ---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales....................................... $ 203,767 $ 78,442 -- $ (41,238) $ 240,971
Cost of sales................................... 144,089 55,350 -- (41,570) 157,869
---------- ----------- ----------- ------------ ------------
59,678 23,092 -- 332 83,102
Operating expenses.............................. 73,114 40,674 -- 994 114,782
Interest (income) expense, net.................. 23,168 1,295 -- -- 24,463
---------- ----------- ----------- ------------ ------------
Income (loss) before income taxes and equity
interest in subsidiary income................. (36,604) (18,877) -- (662) (56,143)
Equity interest in subsidiary income............ -- -- $ 730 (730) --
Provision for (benefit from) income taxes....... 4 (382) 256 (256) (378)
---------- ----------- ----------- ------------ ------------
Net income (loss)............................... $ (36,608) $ (18,495) $ 474 $ (1,136) $ (55,765)
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-26
<PAGE>
IVAC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 14--GUARANTOR SUBSIDIARY (CONTINUED)
<TABLE>
<CAPTION>
NON
CONDENSED STATEMENT OF CASH FLOWS PARENT GUARANTOR GUARANTOR
FOR THE YEAR ENDED DECEMBER 31, 1995 COMPANY SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
- ------------------------------------------------ ---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash (used) provided by operating
activities.................................... $ 31,580 $ 7,625 -- $ (1,062) $ 38,143
Cash flows from investing activities:
Acquisitons, net of cash and cash equivalents
acquired.................................... (192,652) 1,859 $ (15,297) 15,297 (190,793)
Intercompany advances to River Medical........ (12,389) -- -- 12,389 --
Intercompany advances from Parent............. 12,389 15,297 (27,686) --
Capital expenditures, net..................... (7,678) (6,342) -- 268 (13,752)
Proceeds from sale of facility, net........... 25,258 -- -- -- 25,258
---------- ----------- ----------- ------------ ------------
Net cash (used) provided by investing
activities.................................... (187,461) 7,906 -- 268 (179,287)
---------- ----------- ----------- ------------ ------------
Cash flows from financing activities:
Capital contributions......................... 20,000 -- -- -- 20,000
Exercise of stock options..................... 70 -- -- -- 70
Borrowings under term loan and revolving
credit arrangements......................... 68,500 -- -- -- 68,500
Proceeds from bridge notes.................... 80,000 -- -- -- 80,000
Proceeds from senior notes.................... 100,000 -- -- -- 100,000
Proceeds from junior subordinated notes....... 30,000 -- -- -- 30,000
Repayment of term loan and revolving debt..... (49,000) -- -- -- (49,000)
Repayment of bridge notes..................... (80,000) -- -- -- (80,000)
Debt issue costs.............................. (11,486) -- -- -- (11,486)
Capital lease payments........................ -- (479) -- -- (479)
---------- ----------- ----------- ------------ ------------
Net cash (used) provided by financing
activities.................................... 158,084 (479) -- -- 157,605
---------- ----------- ----------- ------------ ------------
Effect of exchange rate changes on cash......... -- 1,053 -- 794 1,847
---------- ----------- ----------- ------------ ------------
Net increase in cash and cash equivalents....... 2,203 16,105 -- -- 18,308
Cash and cash equivalents at the beginning of
the period.................................... -- -- -- -- --
---------- ----------- ----------- ------------ ------------
Cash and cash equivalents at the end of the
period........................................ $ 2,203 $ 16,105 -- -- $ 18,308
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-27
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
IVAC Corporation
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of cash flows and of shareholder's equity
present fairly, in all material respects, the financial position of IVAC
Corporation and its subsidiaries at December 31, 1994, and the results of their
operations and their cash flows for the year in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
San Diego, California
June 29, 1995
F-28
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
IVAC Corporation
We have audited the accompanying consolidated balance sheet of IVAC
Corporation and subsidiaries and certain IVAC related entities as of December
31, 1993 and the related consolidated statements of operations, shareholder's
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of IVAC
Corporation and subsidiaries and certain IVAC related entities at December 31,
1993 and the consolidated results of their operations and their cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
San Diego, California
February 28, 1994
F-29
<PAGE>
IVAC CORPORATION
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------------
1993 1994
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................... $ 4,683 $ 3,226
Accounts receivable, net................................................................ 45,516 43,324
Receivable from Lilly................................................................... 43,963 1,581
Current portion of contract receivables, net............................................ 6,753 7,014
Inventories............................................................................. 49,696 43,828
Prepaid expenses and other current assets............................................... 7,874 3,333
---------- ----------
Total current assets................................................................ 158,485 102,306
Long-term contract receivables, net....................................................... 15,965 18,164
Property, plant and equipment, net........................................................ 54,087 50,095
Intangible assets, net.................................................................... 20,372 3,579
---------- ----------
$ 248,909 $ 174,144
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable........................................................................ $ 9,330 $ 7,950
Accrued warranty........................................................................ 6,502 7,339
Accrued employee liabilities............................................................ 7,354 4,715
Current portion of long-term debt....................................................... -- 1,571
Other current liabilities............................................................... 15,842 6,607
---------- ----------
Total current liabilities........................................................... 39,028 28,182
Long-term debt............................................................................ 12,000 10,050
Other non-current liabilities............................................................. 5,370 5,931
Commitments and contingencies (Note 14)
Shareholder's equity:
Common stock, no par value; 100 shares authorized, issued and outstanding............... 162 --
Additional paid-in capital.............................................................. 37,200 58,343
Retained earnings....................................................................... 158,126 73,574
Foreign currency translation adjustment................................................. (2,977) (1,936)
---------- ----------
Total shareholder's equity.......................................................... 192,511 129,981
---------- ----------
$ 248,909 $ 174,144
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-30
<PAGE>
IVAC CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------------
1993 1994
---------- ----------
<S> <C> <C>
Net Sales................................................................................. $ 214,244 $ 223,227
Cost of sales............................................................................. 125,542 146,659
---------- ----------
Gross profit.......................................................................... 88,702 76,568
Sales and marketing....................................................................... 40,190 45,055
General and administrative................................................................ 16,032 21,586
Research and development.................................................................. 18,742 18,504
Excess purchase price write-down.......................................................... -- 13,143
Expense allocation from Lilly............................................................. 6,416 7,480
Restructuring and special items........................................................... 3,967 --
Other expense, net........................................................................ 269 3,560
---------- ----------
Income (loss) from operations......................................................... 3,086 (32,760)
Interest income (expense):
Contract interest income................................................................ 2,724 2,927
Interest income (expense), net.......................................................... 1,316 (2,227)
---------- ----------
Income (loss) before income taxes..................................................... 7,126 (32,060)
Provision for income taxes................................................................ 1,710 3,793
---------- ----------
Net income (loss)..................................................................... $ 5,416 $ (35,853)
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-31
<PAGE>
IVAC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------
1993 1994
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................................................... $ 5,416 $ (35,853)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization........................................................... 10,249 15,119
Excess purchase price write-down........................................................ -- 13,143
Lilly allocated expenses contributed as paid-in-capital................................. 4,300 7,480
Loss on disposal of fixed assets........................................................ 181 1,363
Changes in assets and liabilities:
Receivables........................................................................... (1,828) 766
Inventories........................................................................... (2,548) 5,481
Prepaid expenses and other assets..................................................... 112 3,864
Accounts payable...................................................................... 3,383 (1,744)
Accrued warranty...................................................................... 100 1,584
Accrued employee liabilities.......................................................... (589) (2,514)
Other liabilities..................................................................... 2,398 2,523
Payables to and receivables from Lilly, net........................................... (13,059) (4,710)
--------- ----------
Net cash provided by operating activities........................................... 8,115 6,502
Cash flows from investing activities:
Capital expenditures, net................................................................. (9,920) (9,000)
Acquisitions.............................................................................. (26,801) --
--------- ----------
Net cash used by investing activities............................................... (36,721) (9,000)
--------- ----------
Cash flows from financing activities:
Acquisition funding borrowed from Lilly................................................... 26,469 --
Line of credit advances................................................................... 3,748 --
--------- ----------
Net cash provided by financing activities........................................... 30,217 --
--------- ----------
Effect of exchange rate changes on cash..................................................... (2,328) 1,041
--------- ----------
Net decrease in cash and cash equivalents................................................... (717) (1,457)
Cash and cash equivalents at the beginning of the year...................................... 5,400 4,683
--------- ----------
Cash and cash equivalents at the end of the year............................................ $ 4,683 $ 3,226
--------- ----------
--------- ----------
Supplemental disclosure of cash flow information:
Cash paid for income taxes................................................................ $ 10,000 $ 1,854
Supplemental non-cash financing activities:
Dividends paid through forgiveness of intercompany receivable from Lilly.................. -- $ 48,699
Net liabilities assumed by Lilly credited to paid-in-capital.............................. -- $ 13,663
Supplemental non-cash investing activities:
Acquisition financed through forgiveness of intercompany receivable from Lilly............ $ 1,071 --
</TABLE>
See accompanying notes to consolidated financial statements.
F-32
<PAGE>
IVAC CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOREIGN TOTAL
COMMON STOCK ADDITIONAL CURRENCY SHARE-
-------------------- PAID-IN ACCUMULATED TRANSLATION HOLDERS'
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT EQUITY
--------- --------- ----------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992...................... 100 $ 162 $ 32,900 $ 152,710 $ (646) $ 185,126
Transactions with Lilly:
Lilly corporate expense allocation............ -- -- 4,300 -- -- 4,300
Foreign currency translation adjustment......... -- -- -- -- (2,331) (2,331)
Net income...................................... -- -- -- 5,416 -- 5,416
--------- --------- ----------- ------------ ----------- ----------
Balance at December 31, 1993...................... 100 162 37,200 158,126 (2,977) 192,511
Transactions with Lilly:
Lilly corporate expense allocation............ -- -- 7,480 -- -- 7,480
Assumption of net liabilities................. -- -- 13,663 -- -- 13,663
Non-cash dividend............................. -- -- -- (48,699) -- (48,699)
Other......................................... -- (162) -- -- -- (162)
Foreign currency translation adjustment......... -- -- -- -- 1,041 1,041
Net income...................................... -- -- -- (35,853) -- (35,853)
--------- --------- ----------- ------------ ----------- ----------
Balance at December 31, 1994...................... 100 $ -- $ 58,343 $ 73,574 $ (1,936) $ 129,981
--------- --------- ----------- ------------ ----------- ----------
--------- --------- ----------- ------------ ----------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-33
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
NOTE 1--DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
IVAC Corporation ("IVAC" or the "Company") designs, manufactures,
distributes and services intravenous infusion therapy and vital signs
measurement instruments and related disposables and accessories. Prior to and
during fiscal 1994, the Company operated as a wholly owned subsidiary of Eli
Lilly and Company ("Lilly"). As more fully discussed in Note 15, after the close
of business on December 31, 1994, the outstanding capital stock of IVAC was
acquired by IVAC Holdings, Inc. ("Holdings"). The accompanying consolidated
financial statements do not reflect adjustments resulting from this subsequent
purchase transaction.
The consolidated financial statements include the accounts and results of
operations of the Company, its wholly owned subsidiary MIS Scandinavia A.B., and
affiliate activities conducted through subsidiaries or divisions of Lilly. Where
activities were conducted through a subsidiary or division of Lilly or related
to the joint venture in Spain, productive assets such as accounts receivable,
inventory and equipment specifically related to IVAC operations are included in
the accompanying consolidated balance sheets. With respect to the operations of
Germany, there are certain assets and liabilities included in the accompanying
consolidated balance sheets prior to 1994 which related to affiliated companies.
Management believes the value of these net assets is not material. All
significant intercompany accounts and transactions have been eliminated in
consolidation. These statements reflect the financial position, results of
operations, and cash flows of the Company as a component of Lilly and may not be
indicative of the actual results of operations and financial position of the
Company under new ownership.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments with maturities of 90
days or less at date purchased.
REVENUE RECOGNITION
Revenue is recorded upon product shipment, net of an allowance for estimated
returns, or service delivery. The Company also sells instruments via long-term
financing arrangements to a number of hospitals under No Capital Agreements
("NCA's"). These agreements allow hospitals to acquire instruments with no
initial payment. The sales price for the instruments is recovered via surcharges
applied to minimum purchase commitments of related disposables. The term of the
financing is generally three to five years, with interest at rates of 9% to 15%.
The related contract receivables at December 31, 1994 and 1993 are presented net
of unearned finance revenue of $6,468 and $5,315, respectively which reflects
the remaining interest to be earned on unshipped disposable. Unearned finance
revenue is calculated using the inherent rate of interest on each NCA, the
expected disposable shipment period and the principal balance financed. Finance
revenue is recognized as disposables are shipped using a reducing principal
balance method which approximates the interest method. Contract provisions
include liquidated damage clauses which are sufficient to recover the sales
price of the instruments in the event of customer cancellation.
F-34
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables. Credit
risk associated with this concentration is limited due to the large number and
geographic dispersion of the accounts and the overall stability of the hospital
industry. Management believes that adequate provision has been made for such
credit risk.
INVENTORIES
Inventories are stated at the lower of cost, determined by the first-in,
first-out (FIFO) method, or market.
EXCESS PURCHASE PRICE
Excess purchase price arising from acquisitions is amortized over estimated
useful lives, ranging from 5 to 7 years, using the straight-line method. At
December 31, 1994 and 1993, excess purchase price is presented net of
accumulated amortization of $1,186 and $1,562, respectively.
At each balance sheet date, the Company evaluates the realizability of
excess purchase price based upon management's best estimations of future
discounted cash flows. If future discounted cash flows are less than the
carrying amount of the excess purchase price, an adjustment is recorded to
reduce the excess purchase price to its fair value. Based on its most recent
analysis, the Company believes that no material impairment existed at December
31, 1994 (Notes 3 and 4).
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of cost. Additions to
property, plant and equipment, including significant betterments and renewals
are capitalized. Maintenance and repair costs are charged to expense as
incurred. Depreciation is computed using the straight-line method over estimated
useful lives of 3 to 50 years. Depreciation expense amounted to $12,274 and
$9,257 during fiscal 1994 and 1993, respectively.
INCOME TAXES
The Company's operations have historically been included in consolidated
income tax returns filed by Lilly. Income tax expense in the accompanying
consolidated financial statements has been determined on a separate return
basis, in accordance with the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109").
Differences between income tax expense computed on a separate return basis
and the amount actually charged to IVAC by Lilly has been reflected on the
consolidated balance sheet as an adjustment to paid-in capital.
FOREIGN CURRENCY TRANSLATION
The financial statements of the Company's foreign subsidiary and affiliates
are translated into U.S. dollars using period-end exchange rates for assets and
liabilities and weighted average exchange rates
F-35
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
during the period for revenues and expenses. Gains and losses from translation
are excluded from results of operations and accumulated as a separate component
of shareholder's equity.
FAIR VALUE OF FINANCIAL INSTRUMENTS
At December 31, 1994 and 1993, the carrying amount of the Company's
financial instruments including cash and cash equivalents, trade receivables and
payables, approximated their fair value due to their short term maturities. The
fair value of the Company's long-term contract receivables are estimated by
discounting future cash flows using discount rates that reflect the risk
associated with similar types of loans. At December 31, 1994 and 1993, the
estimated fair values of both the Company's long-term contract receivables and
long-term debt approximate their carrying values.
EARNINGS PER SHARE
The ownership change of IVAC Corporation that occurred after the close of
business on December 31, 1994 (Note 15) has resulted in the historical earnings
per share calculations becoming irrelevant for purposes of comparability with
future periods. As such, historical earnings per share calculations have not
been presented.
NOTE 3--ACQUISITIONS
In September 1993, IVAC completed the acquisitions of certain of the assets
of the MiniMed product line, a three-channel infusion pump system, from Siemens
Infusion Systems, Ltd. ("SIS"). The acquisition was accounted for as a purchase.
The purchase price was $38,206 and included guaranteed minimum royalties payable
annually from 1996 through 1999. The purchase price was allocated to assets and
liabilities as follows; inventory ($19,173); property and equipment ($2,675);
other assets ($314); accounts payable ($154); accrued minimum royalty liability
($12,000) and accrued warranty ($1,802), with the remaining excess purchase
price over net assets acquired of ($18,000). Under provisions of the acquisition
agreement, the Company is required to pay royalties to SIS in 1995 based on 1994
product sales and will pay in 1996 through 1999 based on the greater of 8% of
the prior year product sales or a guaranteed minimum of $3,000 per year. Excess
purchase price and other intangibles associated with this acquisition are being
amortized on a straight-line basis over 7 years (Note 4).
The following unaudited pro forma summary reflects IVAC's consolidated
results of operations as if the MiniMed product line had been acquired from SIS
as of the beginning of 1993. This summary includes the impact of adjustments for
related income tax effects and the amortization of intangibles associated with
the acquisition.
<TABLE>
<CAPTION>
1993
(UNAUDITED)
-----------
<S> <C>
Sales............................................................................ $ 239,700
Net loss......................................................................... (13,500)
</TABLE>
The pro forma results are not necessarily indicative of what actually would
have occurred if the acquisition had been in effect for the entire year, nor are
they intended to be a projection of future results.
F-36
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 4--EXCESS PURCHASE PRICE ADJUSTMENT
Since the Company's acquisition of the MiniMed product line from SIS in
September 1993, the Company discovered design and other defects of the product
line and evaluated market conditions. Upon the discontinuance of production in
the fourth quarter of 1994, the Company determined that sales and earnings of
the product line acquired from SIS were significantly below that projected at
the time of acquisition. Accordingly, the Company recorded a write-down of
excess purchase price of $13,143 to reduce the carrying value of the excess
purchase price to its estimated fair value.
The methodology used to assess the recoverability of the excess purchase
price recorded in connection with the acquisition was to discount future
projected cash flows over the remaining estimated useful life of the product
line. The projected cash flows represent management's best estimate of the
Company's future results of operations related to this product line. The Company
discounted the resulting projected cash flows using a discount rate of 12% which
is considered a reasonable approximation of the Company's cost of capital at the
time of impairment. Based on the estimated discounted cash flows, the Company
determined that approximately $1,100 of the remaining unamortized excess
purchase price would be recoverable.
NOTE 5--RESTRUCTURING AND SPECIAL ITEMS
In 1993, Lilly took actions designed to enhance its competitiveness in the
health care markets, to reduce expenses and improve efficiencies. As a result of
these actions, IVAC recognized restructuring and special charges amounting to
$4,000 in 1993, respectively. Restructuring costs include those amounts that
arose as a direct result of management's commitment to revise strategic actions.
Special charges represent unusual, nonrecurring expense items.
The 1993 restructuring actions relate to decisions by the Company to
reorganize certain of its operations outside the U.S. ($3,700) and to realign
its U.S. field sales force ($300).
F-37
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 6--COMPOSITION OF CERTAIN CONSOLIDATED FINANCIAL STATEMENT CAPTIONS
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------
1993 1994
--------- ---------
<S> <C> <C>
Accounts Receivable:
Trade................................................................. $ 47,667 $ 47,064
Less allowance for doubtful accounts.................................. (2,151) (3,740)
--------- ---------
$ 45,516 $ 43,324
--------- ---------
--------- ---------
Inventories:
Finished products..................................................... $ 19,863 $ 18,974
Work-in-process....................................................... 10,665 5,985
Raw materials......................................................... 22,827 22,129
--------- ---------
53,355 47,088
Less reserve.......................................................... (3,659) (3,260)
--------- ---------
$ 49,696 $ 43,828
--------- ---------
--------- ---------
Property, plant and equipment:
Land.................................................................. $ 1,788 $ 1,788
Buildings............................................................. 38,970 42,421
Equipment............................................................. 75,902 68,031
Construction in process............................................... 7,210 5,112
--------- ---------
123,870 117,352
Less accumulated depreciation......................................... (69,783) (67,257)
--------- ---------
$ 54,087 $ 50,095
--------- ---------
--------- ---------
Other current liabilities:
Line of credit........................................................ $ 3,700 $ --
Restructuring charges................................................. 3,720 --
Accrued contract termination costs.................................... -- 1,500
Deferred revenue...................................................... 1,300 1,057
Other miscellaneous accruals.......................................... 7,122 4,050
--------- ---------
$ 15,842 $ 6,607
--------- ---------
--------- ---------
Other non-current liabilities:
Minority interest..................................................... $ 2,767 $ 3,625
Other................................................................. 2,603 2,306
--------- ---------
$ 5,370 $ 5,931
--------- ---------
--------- ---------
</TABLE>
NOTE 7--DEBT
In 1993, the Company obtained a line of credit with Hypo Bank in Germany to
fund the working capital needs of Lilly's medical device companies located
there. Borrowings under the line of credit, which
F-38
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 7--DEBT (CONTINUED)
amounted to $3,700 at December 31, 1993 and were guaranteed by Lilly, became due
August 1994. The borrowings were repaid at maturity.
In connection with the acquisition of the MiniMed product line, the Company
is obligated to pay additional consideration to SIS of $1,571 based on 1994
product sales and the greater of $3,000 per year or 8% of the prior year's
product sales in 1996 through 1999. In 1994, the minimum $12,000 liability was
discounted at an imputed interest rate of 7% with a corresponding reduction in
excess purchase price. The unamortized discount, which is amortized using the
interest method over the term of the payments, is $1,950 at December 31, 1994.
NOTE 8--TRANSACTIONS WITH LILLY
Operating expenses include certain services performed by Lilly or its
affiliates and billed directly to IVAC and certain corporate expenses which have
been allocated to the Company based on established allocation methods which in
the opinion of management reflect IVAC's proportionate share of such expenses.
Other transactions include intercompany purchases and sales, service fees and
interest.
A summary of significant actual expenditures charged by or (billed to) Lilly
follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1993 1994
--------- ---------
<S> <C> <C>
Personnel and benefits..................................................... $ 8,193 $ 8,321
Insurance.................................................................. 1,455 1,265
Information systems........................................................ (2,808) (2,589)
Interest................................................................... (1,666) 1,088
Service charges from Physio-Control Corporation............................ 1,275 --
Miscellaneous.............................................................. (540) (3,099)
--------- ---------
$ 5,909 $ 4,986
--------- ---------
--------- ---------
</TABLE>
A summary of corporate expense allocations follows:
<TABLE>
<S> <C> <C>
Business planning........................................... $ 1,614 $ 1,902
Corporate expenses.......................................... 3,690 3,676
International expenses...................................... 1,093 1,103
Other....................................................... 19 799
--------- ---------
$ 6,416 $ 7,480
--------- ---------
--------- ---------
</TABLE>
Lilly did not require the intercompany payable resulting from corporate
expense allocations to be paid. Accordingly, these amounts have been reflected
as an increase to additional paid-in capital.
In addition, other intercompany balances due to and from Lilly during 1994
were settled in contemplation of and pursuant to the sale of IVAC. In May 1994,
IVAC forgave a net receivable due from Lilly in
the amount of $48,699. This transaction has been reflected as a dividend to
Lilly in the accompanying
F-39
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 8--TRANSACTIONS WITH LILLY (CONTINUED)
financial statements. In December 1994, Lilly forgave a net intercompany
receivable from IVAC amounting to $19,689. This transaction has been reflected
as an increase to additional paid-in capital in the accompanying financial
statements.
In accordance with the terms of the sale of IVAC, Lilly also assumed
responsibility for employee-related and certain other liabilities existing prior
to December 31, 1994 and IVAC forgave certain additional intercompany balances
due from Lilly. The net effect of this transaction was a reduction in additional
paid-in capital of $6,026.
NOTE 9--LEASES
Total rental expense amounted to approximately $2,368 and $2,403 for the
years ended December 31, 1994 and 1993, respectively. Leases are generally for
computer and office equipment. Future minimum rental commitments as of December
31, 1994 for noncancellable leases are not material.
NOTE 10--INCOME TAXES
The Company accounts for income taxes on the liability method under SFAS
109. The following is the composition of income taxes:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1993 1994
--------- ---------
<S> <C> <C>
Current:
Federal................................................................. $ (228) $ (1,208)
Foreign................................................................. 1,830 748
State................................................................... 245 495
--------- ---------
1,847 35
Deferred:
Federal................................................................. (137) (8,369)
State................................................................... -- (1,937)
--------- ---------
Total before valuation allowance.......................................... 1,710 (10,271)
Valuation allowance....................................................... -- 14,064
--------- ---------
Total..................................................................... $ 1,710 $ 3,793
--------- ---------
--------- ---------
</TABLE>
F-40
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 10--INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets and liabilities
are as follows:
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------
1993 1994
--------- ----------
<S> <C> <C>
Deferred tax assets:
Excess purchase price write-down...................................... $ -- $ 5,187
Restructuring and other related charges............................... 2,778 --
Inventory............................................................. 3,082 2,484
Product return/warranty reserves...................................... -- 2,937
State income tax...................................................... 655 2,017
Rebate reserve........................................................ -- 1,649
Allowance for doubtful accounts....................................... -- 1,311
Other................................................................. 2,367 1,794
--------- ----------
Total deferred tax assets............................................... 8,882 17,379
--------- ----------
Deferred tax liabilities:
Property and equipment................................................ (3,881) (3,315)
Prepaid employer benefits............................................. (1,545) --
--------- ----------
Total deferred tax liabilities.......................................... (5,426) (3,315)
--------- ----------
Net deferred tax assets................................................. 3,456 14,064
--------- ----------
Valuation allowance..................................................... -- (14,064)
--------- ----------
Net deferred taxes...................................................... $ 3,456 $ 0
--------- ----------
--------- ----------
</TABLE>
SFAS 109 specifies that deferred tax assets are to be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Based on uncertainty as to whether IVAC will
generate adequate future income to recover its deferred tax assets at December
31, 1994, management recorded a valuation allowance against such net deferred
tax assets.
F-41
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 10--INCOME TAXES (CONTINUED)
Following is a reconciliation of the effective income tax rate:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1993 1994
--------- ---------
<S> <C> <C>
Tax benefit at statutory rate.......................................... 35.0% (34.0)%
Add (deduct):
State taxes, net of federal tax benefit.............................. 1.7 (1.7)
Benefit from foreign sales corporation............................... (8.5) (.5)
Research tax credit.................................................. (4.4) (1.1)
Effect of international operations................................... (.5) 3.6
Revisions of prior year estimates.................................... .6 (2.2)
Lilly's assumption of net liabilities................................ -- 3.9
--------- ---------
23.9 (32.0)
Valuation allowance.................................................. -- 43.9
--------- ---------
23.9% 11.9%
--------- ---------
--------- ---------
</TABLE>
NOTE 11--BENEFITS
Effective December 30, 1994, in connection with the subsequent sale of IVAC
discussed in Note 15, the Company's U.S. noncontributory defined benefit
retirement plan was terminated and the assets and liabilities of the IVAC
Retirement Plan were merged into The Lilly Retirement Plan. All eligible
participants in the IVAC Retirement Plan became participants in The Lilly
Retirement Plan, and all benefits previously earned will be paid by The Lilly
Retirement Plan.
The Company's U.S. noncontributory defined benefit retirement plan covered
substantially all United States employees. Benefits under the domestic plan were
calculated by using one of several formulas. These formulas were based on a
combination of the following: (1) years of service; (2) final average earnings;
(3) primary social security benefit; and (4) age.
The Company's funding policy was consistent with local governmental and tax
funding regulations. Generally, pension costs accrued were funded. Plan assets,
which were maintained in a trust with Lilly and other Lilly affiliate plan
assets, consisted primarily of equity and fixed income instruments.
F-42
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 11--BENEFITS (CONTINUED)
Net pension expense for the Company's U.S. noncontributory defined benefit
retirement plan included the following components:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1993 1994
--------- ---------
<S> <C> <C>
Service cost--benefits earned during the year........................... $ 1,290 $ 1,743
Interest cost on projected benefit obligations.......................... 1,172 1,394
Actual return on assets (gain).......................................... (1,595) (1,492)
Net amortization and deferral........................................... 973 466
--------- ---------
$ 1,840 $ 2,111
--------- ---------
--------- ---------
</TABLE>
The funded status and amounts recognized in the consolidated balance sheets
for the Company's U.S. defined benefit retirement plan at December 31 were as
follows:
<TABLE>
<CAPTION>
1993
---------
<S> <C>
Plan assets at fair value.......................................................... $ 13,189
Actuarial present value of benefit obligations:
Vested benefits.................................................................. 7,993
Nonvested benefits............................................................... 1,901
---------
Accumulated benefit obligation..................................................... 9,894
Effect of projected future salary increase....................................... 8,792
---------
Projected benefit obligation....................................................... 18,686
---------
Funded status...................................................................... (5,497)
Unrecognized net gain.............................................................. 683
Unrecognized prior service cost.................................................... 7,057
---------
Prepaid pension cost............................................................... $ 2,243
---------
---------
</TABLE>
The assumptions used to develop net periodic pension expense and the
actuarial present value of projected benefit obligations are shown below:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1993 1994
--------- ---------
<S> <C> <C>
Discount rate.......................................................... 7.5% 7.5%
Rate of increase in future compensation levels......................... 4.5-8.0% 4.5-8.0%
Expected long-term return on assets.................................... 11.0% 11.0%
</TABLE>
The reduction of the discount rate at December 31, 1993, increased the
projected benefit obligation approximately $3,934.
In addition to employees covered by the above U.S. noncontributory defined
benefit retirement plan, the Company also had employees outside the U.S. who
were covered by retirement plans maintained by
F-43
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 11--BENEFITS (CONTINUED)
Lilly or its affiliates. No allocation of expenses for the Company's employees
participating in these plans has been included in the above information.
However, expenses attributable to the Company's employees at these locations are
included in the consolidated statements of operations.
The Company was self-insured for medical and dental benefits. Medical and
dental expense recorded in 1994 and 1993 was $6,884 and $4,216.
Lilly has assumed responsibility for all employee benefit related
liabilities as of December 31, 1994.
The Company's employees are eligible to contribute to the Company's defined
contribution savings plan, which may be matched by the Company. The Company's
expense under the plan totaled $1,215 and $1,800 for the years ended December
31, 1994 and 1993.
NOTE 12--GEOGRAPHIC INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------------
1993 1994
---------- ----------
<S> <C> <C>
Net sales to unaffiliated customers:
United States....................................................... $ 151,728 $ 153,383
United Kingdom...................................................... 14,308 17,332
Germany............................................................. 14,001 14,960
Spain............................................................... 8,715 9,146
Other............................................................... 25,492 28,406
---------- ----------
$ 214,244 $ 223,227
---------- ----------
---------- ----------
Income (loss) before income taxes:
United States....................................................... $ 9,208 $ (35,218)
United Kingdom...................................................... 1,418 3,576
Germany............................................................. (1,103) 423
Spain............................................................... 2,597 983
Other............................................................... (2,276) (500)
Eliminations and adjustments........................................ (2,718) (1,324)
---------- ----------
$ 7,126 $ (32,060)
---------- ----------
---------- ----------
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------------
1993 1994
---------- ----------
<S> <C> <C>
Total assets:
United States....................................................... $ 203,186 $ 140,706
United Kingdom...................................................... 16,266 9,345
Germany............................................................. 7,940 3,827
Spain............................................................... 7,526 7,766
Other............................................................... 15,402 14,949
Eliminations and adjustments........................................ (1,411) (2,449)
---------- ----------
$ 248,909 $ 174,144
---------- ----------
---------- ----------
</TABLE>
F-44
<PAGE>
IVAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 12--GEOGRAPHIC INFORMATION (CONTINUED)
Transfers between geographic areas are made at prices calculated to reflect
a profit attributable to manufacturing operations.
Remittances to the United States are subject to various regulations of the
respective governments as well as to fluctuations in exchange rates.
NOTE 13--LITIGATION
Prior to and in connection with the sale of IVAC, Lilly assumed
responsibility for the anticipated cost of resolution of certain legal claims
existing at December 31, 1994. Consequently, the related accrual is not
reflected within the accompanying financial statements. In addition, the Company
is a party to various other legal actions which have occurred in the normal
course of business. Management believes the Company has meritorious defenses and
intends to defend vigorously against these allegations and claims. As the
ultimate outcome of the matters is uncertain, no loss provisions have been
recorded in the accompanying financial statements. In management's opinion,
liabilities arising from these matters, if any, will not have a material adverse
effect on the Company's consolidated financial position or results of
operations.
NOTE 14--COMMITMENTS AND CONTINGENCIES
The Company is obligated to pay additional purchase consideration related to
two previous acquisitions. As discussed in Note 7, the Company is obligated to
pay additional consideration to SIS. In connection with another acquisition, the
Company is contingently liable for up to approximately $3,050 for additional
purchase consideration through 1996 based upon the acquired entity achieving
certain sales and pre-tax performance in each year.
NOTE 15--SUBSEQUENT EVENTS
After the close of business on December 31, 1994, Lilly sold the outstanding
stock of lVAC to Holdings, which was formed through the contribution of the
outstanding capital stock of River Medical, Inc. and cash from an investor group
including DLJ Merchant Banking Partners, L.P. and related investors, and other
investors. Through a series of subsequent transactions, River Medical, Inc.
became a wholly owned subsidiary of IVAC.
F-45
<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.
ADVANCED MEDICAL, INC.
(Registrant)
Date: December 10, 1996 By: /s/ Joseph W. Kuhn
Joseph W. Kuhn
Executive Vice President
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit 2 Agreement and Plan of Merger dated August 23, 1996 by
and among IMED, IMED Merger Sub, Inc., IVAC Holdings,
Inc., IVAC Medical Systems, Inc. and the Participating
Stockholders (incorporated by reference to the Form 8-K
of the Registrant filed with the Securities and
Exchange Commission on August 27, 1996).
Exhibit 10.1 Credit Agreement among the Registrant, IMED, Various
Lending Institutions, Bankers Trust Company, as
Administrative Agent and Syndication Agent, Banque
Paribas, as Documentation Agent and Syndication Agent,
and Donaldson, Lufkin & Jenrette Securities
Corporation, as Syndication Agent, dated as of November
26, 1996.
Exhibit 10.2 Indenture dated as of November 26, 1996 among IMED,
IMED International Trading Corp. and the United States
Trust Company of New York, as trustee.
Exhibit 10.3 Agreement of Stock Purchase and Plan of
Recapitalization dated November 26, 1996, by and among
the Registrant, Decisions Incorporated and Jeffry M.
Picower.
Exhibit 10.4 Employment Agreement dated as of August 23, 1996, by
and among Registrant, IMED and William J. Mercer
Exhibit 10.5 Employment Agreement dated as of August 23, 1996, by
and among Registrant, IMED and Joseph W. Kuhn
<PAGE>
EXHIBIT 10.1
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
among
ADVANCED MEDICAL, INC.,
IMED CORPORATION,
VARIOUS LENDING INSTITUTIONS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT AND
SYNDICATION AGENT,
BANQUE PARIBAS,
AS DOCUMENTATION AGENT AND
SYNDICATION AGENT
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION,
AS SYNDICATION AGENT
________________________________
Dated as of November 26, 1996
________________________________
$250,000,000
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . 1
1.01 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Borrowing Amounts, etc. . . . . . . . . . . . . . . . . . 5
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . 5
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . 6
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . 9
1.08 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.09 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . . . 10
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . . . 11
1.11 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.12 Change of Lending Office. . . . . . . . . . . . . . . . . . . . . 14
1.13 Replacement of Banks. . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . 15
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 15
2.02 Letter of Credit Requests; Notices of Issuance. . . . . . . . . . 17
2.03 Agreement to Repay Letter of Credit Drawings. . . . . . . . . . . 17
2.04 Letter of Credit Participations . . . . . . . . . . . . . . . . . 18
2.05 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3. Fees; Commitments. . . . . . . . . . . . . . . . . . . . . . . . 21
3.01 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.02 Voluntary Termination or Reduction of Commitments . . . . . . . . 22
3.03 Mandatory Adjustments of Commitments, etc.. . . . . . . . . . . . 23
SECTION 4. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . 24
4.02 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . 25
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . . . 35
4.04 Net Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . 38
5.01 Execution of Agreement; Notes . . . . . . . . . . . . . . . . . . 38
5.02 No Default; Representations and Warranties. . . . . . . . . . . . 38
5.03 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . 38
5.04 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . 38
(i)
<PAGE>
Page
----
5.05 Corporate Proceedings . . . . . . . . . . . . . . . . . . . . . . 39
5.06 Adverse Change, etc.. . . . . . . . . . . . . . . . . . . . . . . 39
5.07 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.08 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.09 Consummation of the Transaction . . . . . . . . . . . . . . . . . 40
5.10 Pledge Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 43
5.11 Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . 43
5.12 Mortgages; Title Insurance; Surveys, etc. . . . . . . . . . . . . 44
5.13 Plans; Collective Bargaining Agreements; Existing Indebtedness
Agreements; Shareholders' Agreements; Management Agreements;
Employment Agreements; Non-Compete Agreements; Tax Sharing
Agreements; Material Contracts . . . . . . . . . . . . . . . . . 45
5.14 Solvency Opinion; Environmental Analyses; Evidence of Insurance . 47
5.15 Pro Forma Balance Sheets. . . . . . . . . . . . . . . . . . . . . 47
5.16 Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.17 Indebtedness to Remain Outstanding. . . . . . . . . . . . . . . 48
5.18 Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.19 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . 48
5.20 Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . 48
5.21 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6. Representations, Warranties and Agreements . . . . . . . . . . . 49
6.01 Corporate Status. . . . . . . . . . . . . . . . . . . . . . . . . 49
6.02 Corporate Power and Authority . . . . . . . . . . . . . . . . . . 49
6.03 No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.04 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.05 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . 50
6.06 Governmental Approvals. . . . . . . . . . . . . . . . . . . . . . 51
6.07 Investment Company Act. . . . . . . . . . . . . . . . . . . . . . 51
6.08 Public Utility Holding Company Act. . . . . . . . . . . . . . . . 51
6.09 True and Complete Disclosure. . . . . . . . . . . . . . . . . . . 51
6.10 Financial Condition; Financial Statements . . . . . . . . . . . . 51
6.11 Security Interests. . . . . . . . . . . . . . . . . . . . . . . . 53
6.12 Representations and Warranties in Other Documents . . . . . . . . 53
6.13 Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.14 Compliance with ERISA in Connection with Domestic Pension Plans . 54
6.15 Compliance with Applicable Laws in Connection with Foreign
Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.16 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.17 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.18 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . 56
6.19 Compliance with Statutes, etc.. . . . . . . . . . . . . . . . . . 56
6.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . 56
(ii)
<PAGE>
Page
----
6.21 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.22 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.23 Tax Returns and Payments. . . . . . . . . . . . . . . . . . . . . 58
6.24 Indebtedness to Remain Outstanding. . . . . . . . . . . . . . . . 58
6.25 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.26 FDA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . 59
7.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . 60
7.02 Books, Records and Inspections. . . . . . . . . . . . . . . . . . 63
7.03 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.04 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 64
7.05 Corporate Franchises. . . . . . . . . . . . . . . . . . . . . . . 64
7.06 Compliance with Statutes, etc.. . . . . . . . . . . . . . . . . . 64
7.07 Compliance with Environmental Laws. . . . . . . . . . . . . . . . 64
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.09 Good Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.10 End of Fiscal Years; Fiscal Quarters. . . . . . . . . . . . . . . 66
7.11 Additional Security; Further Assurances . . . . . . . . . . . . . 67
7.12 Registry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.13 Contributions; Payments . . . . . . . . . . . . . . . . . . . . . 68
7.14 Foreign Subsidiaries Security . . . . . . . . . . . . . . . . . . 69
7.15 Interest Rate Protection. . . . . . . . . . . . . . . . . . . . . 69
7.16 Debentures Redemption . . . . . . . . . . . . . . . . . . . . . . 70
7.17 Holdings Preferred Stock Redemption . . . . . . . . . . . . . . . 70
7.18 Senior Notes Tender Offer/Defeasance. . . . . . . . . . . . . . . 70
7.19 Maintenance of Corporate Separateness . . . . . . . . . . . . . . 70
7.20 IVAC Merger and IMED Merger . . . . . . . . . . . . . . . . . . . 70
7.21 FDA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.22 Further Opinions of Counsel . . . . . . . . . . . . . . . . . . . 71
7.23 Liquidation of IMED B.V.I . . . . . . . . . . . . . . . . . . . . 72
7.24 Wind-Down of River Medical. . . . . . . . . . . . . . . . . . . . 72
SECTION 8. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 72
8.01 Changes in Business . . . . . . . . . . . . . . . . . . . . . . . 72
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc. . . . . . 72
8.03 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
8.04 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
8.05 Advances, Investments and Loans . . . . . . . . . . . . . . . . . 82
8.06 Dividends, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 85
8.07 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 88
8.08 Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . 89
8.09 Minimum Consolidated EBITDA. . . . . . . . . . . . . . . . . . . . 90
(iii)
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8.10 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . 91
8.11 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . 92
8.12 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . 93
8.13 Minimum Consolidated Net Worth. . . . . . . . . . . . . . . . . . 94
8.14 Designated Senior Debt. . . . . . . . . . . . . . . . . . . . . . 94
8.15 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-
Laws and Certain Other Agreements; etc.. . . . . . . . . . . . . . 94
8.16 Limitation on Certain Restrictions on Subsidiaries. . . . . . . . 95
8.17 Limitation on the Creation of Subsidiaries. . . . . . . . . . . . 96
SECTION 9. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 96
9.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
9.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . . . 96
9.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.04 Default Under Other Agreements. . . . . . . . . . . . . . . . . . 97
9.05 Bankruptcy, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 97
9.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.07 Security Documents. . . . . . . . . . . . . . . . . . . . . . . . 98
9.08 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
9.10 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 10. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 11. The Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . 133
11.01 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . 133
11.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . 133
11.03 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . 133
11.04 Reliance by Agents . . . . . . . . . . . . . . . . . . . . . . . 134
11.05 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . 134
11.06 Non-Reliance on Agent, and Other Banks . . . . . . . . . . . . . 135
11.07 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 135
11.08 Agents in their Individual Capacities. . . . . . . . . . . . . . 136
11.09 Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
11.10 Resignation of an Agent; Successor Agent . . . . . . . . . . . . 136
SECTION 12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 137
12.01 Payment of Expenses, etc.. . . . . . . . . . . . . . . . . . . . 137
12.02 Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . . . 138
12.03 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
12.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . 138
12.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . 140
(iv)
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12.06 Payments Pro Rata. . . . . . . . . . . . . . . . . . . . . . . . 140
12.07 Calculations; Computations . . . . . . . . . . . . . . . . . . . 141
12.08 Governing Law; Submission to Jurisdiction; Venue . . . . . . . . 141
12.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 142
12.10 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . 142
12.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . 142
12.12 Amendment or Waiver; etc.. . . . . . . . . . . . . . . . . . . . 142
12.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
12.14 Domicile of Loans. . . . . . . . . . . . . . . . . . . . . . . . 144
12.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . 144
12.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . 145
12.17 IMED Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 145
12.18 German Pledge Agreement. . . . . . . . . . . . . . . . . . . . . 147
SECTION 13. Holding Company Guaranty. . . . . . . . . . . . . . . . . . . . 148
13.01 The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 148
13.02 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
13.03 Nature of Liability. . . . . . . . . . . . . . . . . . . . . . . 148
13.04 Independent Obligation . . . . . . . . . . . . . . . . . . . . . 149
13.05 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . 149
13.06 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
13.07 Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . 150
13.08 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
13.09 Nature of Liability. . . . . . . . . . . . . . . . . . . . . . . 152
ANNEX I List of Banks
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Projections
ANNEX V Subsidiaries
ANNEX VI Plans
ANNEX VII Insurance
ANNEX VIII Indebtedness to Remain Outstanding
ANNEX IX Recalled Products
ANNEX X Medical Device Report Policy
ANNEX XI Tax Matters
ANNEX XII Projected Consolidated EBITDA
ANNEX XIII Existing Liens
ANNEX XIV Existing Investments
ANNEX XV Permitted Holdings Investments
(v)
<PAGE>
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B-1 -- Form of A Term Note
EXHIBIT B-2 -- Form of B Term Note
EXHIBIT B-3 -- Form of C Term Note
EXHIBIT B-4 -- Form of D Term Note
EXHIBIT B-5 -- Form of Revolving Note
EXHIBIT B-6 -- Form of Swingline Note
EXHIBIT C -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT D -- Form of Opinion of Counsel to the Credit Parties
EXHIBIT E -- Form of Officers' Certificate
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- Form of Subsidiary Guaranty
EXHIBIT I -- Form of Subordination Provisions
EXHIBIT J -- Form of Assignment and Assumption Agreement
EXHIBIT K -- Form of Intercompany Note
EXHIBIT L -- Form of Shareholder Subordinated Note
EXHIBIT M -- Assumption Acknowledgment
EXHIBIT N -- Subsidiary Assumption Agreement
EXHIBIT O -- Form of Further Opinion of Counsel
(vi)
<PAGE>
CREDIT AGREEMENT, dated as of November 26, 1996, among ADVANCED MEDICAL,
INC., a Delaware corporation ("Holdings"), IMED CORPORATION, a Delaware
corporation (the "Borrower"), the lenders from time to time party hereto (each,
a "Bank" and, collectively, the "Banks"), BANKERS TRUST COMPANY ("BTCo"), as
administrative agent (in such capacity, the "Administrative Agent") and as a
syndication agent (in such capacity, a "Syndication Agent"), BANQUE PARIBAS
("Paribas"), as documentation agent (in such capacity, the "Documentation Agent"
and together with BTCo in its capacity as Administrative Agent, the "Agents")
and as a syndication agent (in such capacity a "Syndication Agent") and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION ("DLJ"), as a syndication
agent (in such capacity, a "Syndication Agent" and together with BTCo and
Paribas in their capacity as Syndication Agents, the "Syndication Agents").
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 10 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Banks are willing to make available the credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENTS. (A) Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make a loan or loans to the
Borrower, which loans shall be drawn, to the extent such Bank has a commitment
under such Facility, under the A Term Loan Facility, the B Term Loan Facility,
the C Term Loan Facility, the D Term Loan Facility and the Revolving Loan
Facility, as set forth below:
(a) Loans under the A Term Loan Facility (each, an "A Term Loan" and,
collectively, the "A Term Loans"), (i) shall be incurred by the Borrower
pursuant to a single drawing, which shall be on the Initial Borrowing Date,
(ii) shall be denominated in U.S. Dollars, (iii) shall be made as Base Rate
Loans and, except as hereinafter provided, may, at the option of the
Borrower, be maintained as and/or converted into Base Rate Loans or
Eurodollar Loans, PROVIDED, that (x) all A Term Loans made by all Banks
pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of A Term Loans of the same Type and (y)
no incurrences of, or conversions into, A Term Loans maintained as
Eurodollar Loans may be effected prior to the earlier of (1) the 30th day
after the Initial Borrowing Date and (2) that date (the "Syndication Date")
upon which the Agents determine in their sole discretion (and
<PAGE>
notifies the Borrower) that the primary syndication (and resultant
additions of institutions as Banks pursuant to Section 12.04) has been
completed and (iv) shall not exceed for any Bank at the time of incurrence
thereof on the Initial Borrowing Date that aggregate principal amount which
equals the A Term Loan Commitment, if any, of such Bank at such time. Once
repaid, A Term Loans may not be reborrowed.
(b) Each loan under the B Term Loan Facility (each, a "B Term Loan"
and, collectively, the "B Term Loans"), (i) shall be incurred by the
Borrower pursuant to a single drawing, which shall be on the Initial
Borrowing Date, (ii) shall be denominated in U.S. Dollars, (iii) shall be
made as Base Rate Loans and, except as hereinafter provided, may, at the
option of the Borrower, be maintained as and/or converted into Base Rate
Loans or Eurodollar Loans, PROVIDED, that (x) all B Term Loans made by all
Banks pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of B Term Loans of the same Type and (y)
no B Term Loans maintained as Eurodollar Loans may be incurred prior to the
earlier of (1) the 30th day after the Initial Borrowing Date and (2) the
Syndication Date and (iv) shall not exceed for any Bank at the time of
incurrence thereof on the Initial Borrowing Date that aggregate principal
amount which equals the B Term Loan Commitment, if any, of such Bank at
such time. Once repaid, B Term Loans may not be reborrowed.
(c) Each loan under the C Term Loan Facility (each, a "C Term Loan"
and, collectively, the "C Term Loans"), (i) shall be incurred by the
Borrower pursuant to a single drawing, which shall be on the Initial
Borrowing Date, (ii) shall be denominated in U.S. Dollars, (iii) shall be
made as Base Rate Loans and, except as hereinafter provided, may, at the
option of the Borrower, be maintained as and/or converted into Base Rate
Loans or Eurodollar Loans, PROVIDED, that (x) all C Term Loans made by all
Banks pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of C Term Loans of the same Type and (y)
no C Term Loans maintained as Eurodollar Loans may be incurred prior to the
earlier of (1) the 30th day after the Initial Borrowing Date and (2) the
Syndication Date and (iv) shall not exceed for any Bank at the time of
incurrence thereof on the Initial Borrowing Date that aggregate principal
amount which equals the C Term Loan Commitment, if any, of such Bank at
such time. Once repaid, C Term Loans may not be reborrowed.
(d) Each loan under the D Term Loan Facility (each, a "D Term Loan"
and, collectively, the "D Term Loans"), (i) shall be incurred by the
Borrower pursuant to a single drawing, which shall be on the Initial
Borrowing Date, (ii) shall be denominated in U.S. Dollars, (iii) shall be
made as Base Rate Loans and, except as hereinafter provided, may, at the
option of the Borrower, be maintained as and/or converted into Base Rate
Loans or Eurodollar Loans, PROVIDED, that (x) all D Term Loans made by all
Banks pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of D Term Loans of the same Type and
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<PAGE>
(y) no D Term Loans maintained as Eurodollar Loans may be incurred prior to
the earlier of (1) the 30th day after the Initial Borrowing Date and (2)
the Syndication Date and (iv) shall not exceed for any Bank at the time of
incurrence thereof on the Initial Borrowing Date that aggregate principal
amount which equals the D Term Loan Commitment, if any, of such Bank at
such time. Once repaid, D Term Loans may not be reborrowed.
(e) Each loan under the Revolving Loan Facility (each, a "Revolving
Loan" and, collectively, the "Revolving Loans"), (i) may be incurred by the
Borrower at any time and from time to time on or after the Initial
Borrowing Date and prior to the Revolving Loan Maturity Date, (ii) shall be
denominated in U.S. Dollars, (iii) except as hereinafter provided, may, at
the option of the Borrower, be incurred and maintained as and/or converted
into Base Rate Loans or Eurodollar Loans, PROVIDED, that (x) all Revolving
Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type
and (y) no incurrences of, or conversions into, Revolving Loans maintained
as Eurodollar Loans may be effected prior to the earlier of (1) the 30th
day after the Initial Borrowing Date and (2) the Syndication Date, (iv) may
be repaid and reborrowed in accordance with the provisions hereof and (v)
shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when combined with (I) the aggregate principal
amount of all other then outstanding Revolving Loans made by such Bank and
(II) such Bank's RL Percentage, if any, of the Swingline Loans then
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid
Drawings relating to Letters of Credit which are repaid with the proceeds
of, and simultaneously with the incurrence of, Revolving Loans or Swingline
Loans) at such time, equals the Revolving Loan Commitment, if any, of such
Bank at such time. Notwithstanding anything to the contrary contained
herein, the aggregate amount of Revolving Loans incurred on the Initial
Borrowing Date may not exceed $10,000,000.
(B) Subject to and upon the terms and conditions herein set forth, BTCo in
its individual capacity agrees to make at any time and from time to time after
the Initial Borrowing Date and prior to the Swingline Expiry Date, a loan or
loans to the Borrower (each, a "Swingline Loan" and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) shall be denominated in U.S. Dollars, (iii) may be repaid
and reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to Letters
of Credit which are repaid with the proceeds of, and simultaneously with the
incurrence of, Revolving Loans or Swingline Loans) at such time, an amount equal
to the Total Revolving Loan Commitment then in effect and (v) shall not exceed
in aggregate principal amount at any time outstanding the Maximum Swingline
Amount. BTCo shall not be obligated to make any Swingline Loans at a time when
a Bank Default exists unless BTCo has entered into arrangements satisfactory to
it and the Borrower to eliminate BTCo's risk with respect to the Defaulting
Bank's or Banks' participation in such Swingline
-3-
<PAGE>
Loans, including by cash collateralizing such Defaulting Bank's or Banks' RL
Percentage of the outstanding Swingline Loans. BTCo will not make a Swingline
Loan after it has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists until such time as
BTCo shall have received a written notice of (i) rescission of such notice from
the party or parties originally delivering the same or (ii) a waiver of such
Default or Event of Default from the Required Banks (or all the Banks to the
extent required by Section 12.12).
(C) On any Business Day, BTCo may, in its sole discretion, give notice to
the RL Banks that its outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (PROVIDED, that each such notice shall be deemed to
have been automatically given upon the occurrence of a Default or an Event of
Default under Section 9.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 9), in which case a Borrowing of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all RL
Banks PRO RATA based on each RL Bank's RL Percentage, and the proceeds thereof
shall be applied directly to repay BTCo for such outstanding Swingline Loans.
Each RL Bank hereby irrevocably agrees to make Base Rate Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in writing
by BTCo notwithstanding (i) that the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 5 are then satisfied, (iii) whether
a Default or an Event of Default has occurred and is continuing, (iv) the date
of such Mandatory Borrowing and (v) any reduction in the Total Revolving Loan
Commitment after any such Swingline Loans were made. 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 in respect of the Borrower), each RL Bank
(other than BTCo) hereby agrees that it shall forthwith purchase from BTCo
(without recourse or warranty) such assignment of the outstanding Swingline
Loans as shall be necessary to cause the RL Banks to share in such Swingline
Loans ratably based upon their respective RL Percentages, PROVIDED that all
interest payable on the Swingline Loans shall be for the account of BTCo until
the date the respective assignment is purchased and, to the extent attributable
to the purchased assignment, shall be payable to the RL Bank purchasing same
from and after such date of purchase.
1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of
each Borrowing under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility. More than one Borrowing may be incurred on any day;
PROVIDED, that at no time shall there be outstanding more than eight Borrowings
of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans under any Facility (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office, prior
to 1:00 P.M. (New York time), at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in
-4-
<PAGE>
writing) of each Borrowing of Base Rate Loans to be made hereunder. Each such
notice (each, a "Notice of Borrowing") shall, except as provided in Section
1.10, be irrevocable, and, in the case of each written notice and each
confirmation of telephonic notice, shall be in the form of Exhibit A-1,
appropriately completed to specify (i) the Facility pursuant to which such
Borrowing is to be made, (ii) the aggregate principal amount of the Loans to be
made pursuant to such Borrowing, (iii) the date of such Borrowing (which shall
be a Business Day) and (iv) whether the respective Borrowing shall consist of
Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Bank written notice (or telephonic
notice promptly confirmed in writing) of each proposed Borrowing, of such Bank's
proportionate share thereof, if any, and of the other matters covered by the
Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of Swingline
Loans hereunder, it shall give BTCo not later than 1:00 P.M. (New York time) on
the day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made hereunder.
Each such notice shall be irrevocable and shall specify in each case (x) the
date of such Borrowing (which shall be a Business Day) and (y) the aggregate
principal amount of the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(C), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(c) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or BTCo (in the case of a Borrowing of Swingline Loans) or
the respective Letter of Credit Issuer (in the case of Letters of Credit), as
the case may be, may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent, BTCo or such Letter of Credit Issuer, as the case may be,
in good faith to be from an Authorized Officer of the Borrower. In each such
case, the Borrower hereby waives the right to dispute the Administrative
Agent's, BTCo's or such Letter of Credit Issuer's record of the terms of such
telephonic notice.
1.04 DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M. (New York time)
on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later than 3:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(C)), each Bank
with a Commitment under the respective Facility will make available its pro rata
share, if any, of each Borrowing requested to be made on such date (or in the
case of Swingline Loans, BTCo shall make available the full amount thereof) in
the manner provided below. All amounts shall be made available to the
Administrative Agent in U.S.
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Dollars and immediately available funds at the Payment Office and the
Administrative Agent promptly will make available to the Borrower by depositing
to its account at the Payment Office the aggregate of the amounts so made
available in the type of funds received. Unless the Administrative Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative Agent
on such date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and 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 such Bank
and the Administrative Agent has made available same to the Borrower, 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 shall
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 the 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 rate per annum equal to (x) if paid by such Bank, the
overnight Federal Funds rate or (y) if paid by the Borrower, the then applicable
rate of interest, calculated in accordance with Section 1.08, for the respective
Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its obligation
to fulfill its commitments hereunder or to prejudice any rights which the
Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 NOTES. (a) The Borrower's obligation to pay the principal of, and
interest on, all the Loans made to it by each Bank shall be evidenced (i) if A
Term Loans, by a promissory note substantially in the form of Exhibit B-1 with
blanks appropriately completed in conformity herewith (each, an "A Term Note"
and, collectively, the "A Term Notes"), (ii) if B Term Loans, by a promissory
note substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each, a "B Term Note" and, collectively, the
"B Term Notes"), (iii) if C Term Loans, by a promissory note substantially in
the form of Exhibit B-3 with blanks appropriately completed in conformity
herewith (each, a "C Term Note" and, collectively, the "C Term Notes"), (iv) if
D Term Loans, by a promissory note substantially in the form of Exhibit B-4 with
blanks appropriately completed in conformity herewith (each, a "D Term Note"
and, collectively, the "D Term Notes"), (v) if Revolving Loans, by a promissory
note substantially in the form of Exhibit B-5 with blanks appropriately
completed in conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes") and (vi) if Swingline Loans, by a promissory note
substantially in the form of Exhibit B-6 with blanks appropriately completed in
conformity herewith (the "Swingline Note").
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(b) The A Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the A Term Loans made by such Bank, (iv) mature on the A Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The B Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the B Term Loans made by such Bank, (iv) mature on the B Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(d) The C Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the C Term Loans made by such Bank, (iv) mature on the C Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(e) The D Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the D Term Loans made by such Bank, (iv) mature on the D Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(f) The Revolving Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such Bank and be payable in the
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01 and
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mandatory repayment as provided in Section 4.02, and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(g) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo or its registered assigns and be
dated the Initial Borrowing Date, (iii) be in a stated principal amount equal to
the Maximum Swingline Amount and be payable in the principal amount of the
Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v)
bear interest as provided in Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(h) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation shall not
affect the Borrower's obligations in respect of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert on any
Business Day occurring on or after the earlier of (x) the 30th day after the
Initial Borrowing Date and (y) the Syndication Date, all or a portion at least
equal to the applicable Minimum Borrowing Amount of the outstanding principal
amount of the Loans (other than Swingline Loans which at all times shall be
maintained as Base Rate Loans) owing by the Borrower pursuant to a single
Facility into a Borrowing or Borrowings of another Type of Loan under such
Facility; PROVIDED, that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable thereto and no partial conversion of a Borrowing
of Eurodollar Loans shall reduce the outstanding principal amount of the
Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion and (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in Section 1.02. Each
such conversion shall be effected by the Borrower by giving the Administrative
Agent at its Notice Office, prior to 1:00 P.M. (New York time), at least three
Business Days' (or one Business Day's in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly confirmed in writing)
(each a "Notice of Conversion") specifying the Loans to be so converted, the
Type of Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans.
1.07 PRO RATA BORROWINGS. All Borrowings of Loans (other than Swingline
Loans) under this Agreement shall be made by the Banks PRO RATA on the basis of
their A Term Loan Commitments, B Term Loan Commitments, C Term Loan Commitments,
D Term Loan Commitments or Revolving Loan Commitments, as the case may be. It
is understood that no Bank shall be responsible for any default by any other
Bank of its obligation to make Loans
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hereunder and that each Bank shall be obligated to make the Loans to be made by
it hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until the earlier of
(i) the maturity (whether by acceleration or otherwise) of such Base Rate Loan
and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
Section 1.06, at a rate per annum which shall at all times be the Applicable
Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all
times be the Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the greater of (i) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans of such Facility from time to time and (ii) the
rate which is 2% in excess of the rate then borne by such Loan; PROVIDED, that
principal in respect of Eurodollar Loans shall bear interest after the same
becomes due (whether by acceleration or otherwise) until the end of the
applicable Interest Period for such Eurodollar Loan at a per annum rate equal to
2% in excess of the rate of interest applicable on the due date therefor.
Interest which accrues under this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any Borrowing to
but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on (x) the date of any prepayment
or repayment thereof (on the amount prepaid or repaid) and (y) the last day of
each Interest Period applicable thereto and, in the case of an Interest Period
in excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) All computations of interest hereunder shall be made in accordance
with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the
Borrower and the Banks thereof.
1.09 INTEREST PERIODS. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 1:00 P.M. (New York
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time) on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect
by giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of the Interest Period applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six month period or, to the extent approved by all the Banks with a Commitment
and/or outstanding Loans, as the case may be, of the respective Facility, a nine
or twelve-month period. Notwithstanding anything to the contrary contained
above:
(i) all Eurodollar Loans comprising a Borrowing shall have the same
Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED, that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Facility may be
elected if it would extend beyond the respective Maturity Date for such
Facility;
(vi) no Interest Period may be elected at any time when a Default or
an Event of Default is then in existence; and
(vii) no Interest Period with respect to any Borrowing of Term Loans
shall extend beyond any date upon which a mandatory prepayment of such Term
Loans is required to be made under Section 4.02(A)(b)(i), (ii), (iii) or
(iv), as the case may be, if, after giving effect to the selection of such
Interest Period, the aggregate principal amount of such Term Loans
maintained as Eurodollar Loans with Interest Periods ending after such date
of mandatory repayment would exceed the aggregate principal amount of such
Term Loans permitted to be outstanding after such mandatory prepayment.
If upon the expiration of any Interest Period, the Borrower has failed to elect,
or is not permitted to elect by virtue of the application of clause (vi) above,
a new Interest Period to be
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applicable to the respective Borrowing of Eurodollar Loans as provided above,
the Borrower shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such current
Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Bank, shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period, that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) 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 (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of net income taxes or similar charges) because of (x) any
change since the date of this Agreement in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline, order or request (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 Eurodollar Rate) and/or (y) other circumstances
affecting such Bank, the interbank Eurodollar market or the position of
such Bank in such market; or
(iii) at any time since the date of this 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 but with which
such Bank customarily complies even though the failure to comply therewith
would not be unlawful), or has become impracticable as a result of a
contingency occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within 10 Business Days of
the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and (except in the case of clause (i)) to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the
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Administrative Agent notifies the Borrower and the Banks that the circumstances
giving rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with respect
to Eurodollar Loans which have not yet been incurred shall be deemed rescinded
by the Borrower, (y) in the case of clause (ii) above, the Borrower agrees to
pay to such Bank, upon written demand therefor (accompanied by the written
notice referred to below), such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing the basis for the calculation thereof, submitted to the Borrower
by such Bank shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the Borrower may (and, in the case of
a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the Borrower shall)
either (i) if the affected Eurodollar Loan is then being made pursuant to a
Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Administrative Agent, require the affected Bank to
convert each such Eurodollar Loan into a Base Rate Loan (which conversion, in
the case of the circumstances described in Section 1.10(a)(iii), shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan (or such earlier date as shall be required by applicable law));
PROVIDED, that if more than one Bank is affected at any time, then all affected
Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date hereof, 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, upon written demand by such Bank (with a copy to the
Administrative Agent), accompanied by the notice referred to in the last
sentence of this clause (c), the Borrower agrees to pay to such Bank such
additional amount or amounts as will compensate such Bank for such reduction.
Each Bank, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
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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 the Borrower's obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt
of such notice.
1.11 COMPENSATION. The Borrower agrees to 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 such Bank to
fund its Eurodollar Loans but excluding loss of anticipated profit with respect
to any Loans) which such Bank may sustain: (i) if for any reason (other than a
default by such Bank or the Administrative Agent) a Borrowing of Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including any
repayment made pursuant to Section 4.01 or 4.02 or as a result of an
acceleration of the Loans pursuant to Section 9) or conversion of any Eurodollar
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any Eurodollar Loans 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
Eurodollar Loans when required by the terms of this Agreement or (y) an election
made pursuant to Section 1.10(b). Calculation of all amounts payable to a Bank
under this Section 1.11 shall be made as though that Bank had actually funded
its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the 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 1.11. It is further understood and agreed
that if any repayment of Eurodollar Loans pursuant to Section 4.01 or any
conversion of Eurodollar Loans pursuant to Section 1.06 in either case occurs on
a date which is not the last day of an Interest Period applicable thereto, such
repayment or conversion shall be accompanied by any amounts owing to any Bank
pursuant to this Section 1.11.
1.12 CHANGE OF LENDING OFFICE. Each Bank agrees that, upon the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
1.10(c), 2.05 or 4.04 with respect to such Bank, 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 or Letters of
Credit affected by such event; PROVIDED, that such designation is made on such
terms that, in the sole judgment of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
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1.13 REPLACEMENT OF BANKS. (x) If any Bank becomes a Defaulting Bank,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in excess of those being generally charged by the other Banks or (z) in the case
of a refusal by a Bank to consent to a proposed change, waiver, discharge or
termination with respect to this Agreement which has been approved by the
Required Banks as provided in Section 12.12(b), the Borrower shall have the
right, if no Default or Event of Default then exists or, in the case of clause
(z) above, would exist after giving effect to such replacement, to replace such
Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") reasonably acceptable to the
Administrative Agent, PROVIDED, that (i) at the time of any replacement pursuant
to this Section 1.13, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 12.04(b) (and with all
fees payable pursuant to said Section 12.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Bank, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 3.01, (y) the respective Letter of Credit Issuer an amount equal to such
Replaced Bank's RL Percentage of any Unpaid Drawing (which at such time remains
an Unpaid Drawing) with respect to a Letter of Credit issued by it to the extent
such amount was not theretofore funded by such Replaced Bank and (z) BTCo an
amount equal to such Replaced Bank's RL Percentage of any Mandatory Borrowing to
the extent such amount was not theretofore funded by such Replaced Bank and (ii)
all obligations (including, without limitation, all such amounts, if any, owing
under Section 1.11) of the Borrower owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution of
the respective Assignment and Assumption Agreements, the payment of amounts
referred to in clauses (i) and (ii) above, recordation of the assignment on the
Register by the Administrative Agent pursuant to Section 7.12 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the Borrower, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Bank.
SECTION 2. LETTERS OF CREDIT.
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2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and conditions
herein set forth, the Borrower may request a Letter of Credit Issuer at any time
and from time to time after the Initial Borrowing Date and prior to the Business
Day (or the 30th day in the case of trade Letters of Credit) preceding the
Revolving Loan Maturity Date to issue, for the account of the Borrower and in
support of, (A) trade obligations of the Borrower or any of its Subsidiaries
that arise in the ordinary course of business and are in respect of general
corporate purposes of the Borrower or its Subsidiaries, as the case may be,
and/or (B) on a standby basis, L/C Supportable Indebtedness, and subject to and
upon the terms and conditions herein set forth each Letter of Credit Issuer
agrees to issue from time to time, irrevocable letters of credit in such form as
may be approved by such Letter of Credit Issuer (each such letter of credit, a
"Letter of Credit" and, collectively, the "Letters of Credit"). Notwithstanding
the foregoing, no Letter of Credit Issuer shall be under any obligation to issue
any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit Issuer shall prohibit, or
request that such Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which such
Letter of Credit Issuer is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Letter of Credit Issuer as of the
date hereof and which such Letter of Credit Issuer in good faith deems
material to it; or
(ii) such Letter of Credit Issuer shall have received notice from the
Required Banks prior to the issuance of such Letter of Credit of the type
described in clause (vi) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings relating to Letters of Credit
which are repaid on the date of, and prior to the issuance of, the respective
Letter of Credit) at such time, would exceed either (x) $15,000,000 or (y)
when added to the aggregate principal amount of all Revolving Loans and
Swingline Loans then outstanding, the Total Revolving Loan Commitment at such
time; (ii) (x) each standby Letter of Credit shall have an expiry date
occurring not later than one year after such standby Letter of Credit's date
of issuance, PROVIDED, that any standby Letter of Credit may be automatically
extendable for periods of up to one year so long as such standby Letter of
Credit provides that the respective Letter of Credit Issuer retains an
option, satisfactory to such Letter of Credit Issuer, to terminate such
standby Letter of Credit within a specified period of time prior to each
scheduled extension date and (y) each trade Letter of Credit shall have an
expiry
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date occurring not later than 180 days after such trade Letter of Credit's
date of issuance; (iii) (x) no standby Letter of Credit shall have an expiry
date occurring later than the Business Day next preceding the Revolving Loan
Maturity Date and (y) no trade Letter of Credit shall have an expiry date
occurring later than 30 days prior to the Revolving Loan Maturity Date; (iv)
each Letter of Credit shall be denominated in U.S. Dollars and be payable on
a sight basis; (v) the Stated Amount of each Letter of Credit shall not be
less than $100,000 or such lesser amount as is acceptable to the Letter of
Credit Issuer; and (vi) no Letter of Credit Issuer will issue any Letter of
Credit after it has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists until such time as
such Letter of Credit Issuer shall have received a written notice of (i)
rescission of such notice from the party or parties originally delivering the
same or (ii) a waiver of such Default or Event of Default by the Required
Banks (or all the Banks to the extent required by Section 12.12).
(c) Notwithstanding the foregoing, in the event a Bank Default exists, no
Letter of Credit Issuer shall be required to issue any Letter of Credit unless
the respective Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Bank or Banks, including by cash collateralizing such Defaulting Bank's or
Banks' applicable RL Percentage of the applicable Letter of Credit Outstandings.
2.02 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the respective Letter of Credit Issuer written notice
thereof prior to 1:00 P.M. (New York time) at least five Business Days (or such
shorter period as may be acceptable to such Letter of Credit Issuer) prior to
the proposed date of issuance (which shall be a Business Day) which written
notice shall be in the form of Exhibit A-2 (each, a "Letter of Credit Request").
Each Letter of Credit Request shall include any other documents as the
respective Letter of Credit Issuer customarily requires in connection therewith.
(b) (i) In the case of standby Letters of Credit, each Letter of Credit
Issuer shall, on the date of each issuance of or amendment or modification to a
standby Letter of Credit by it, give the Administrative Agent, each RL Bank and
the Borrower written notice of the issuance of or amendment or modification to
such Letter of Credit, accompanied by a copy to the Administrative Agent and
each RL Bank of the Letter of Credit or Letters of Credit issued by it and each
such amendment or modification thereto.
(ii) As to any Letters of Credit issued by a Letter of Credit Issuer
other than BTCo, the respective Letter of Credit Issuer shall send to the
Administrative Agent, on the first Business Day of each week, by telefax, its
outstanding trade Letter of Credit daily balances for the previous week. The
Administrative Agent shall deliver to each RL Bank by the end of each calendar
month and upon each Letter of Credit fee payment date a report setting forth for
such period the aggregate daily amount available to be drawn under trade Letters
of Credit issued by all Letter of Credit Issuers that were outstanding during
such period.
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2.03 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse each respective Letter of Credit Issuer, by making
payment to the Administrative Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by such Letter of Credit
Issuer under any Letter of Credit issued by it (each such amount so paid or
disbursed until reimbursed, an "Unpaid Drawing") no later than one Business Day
following the date of such payment or disbursement, with interest on the amount
so paid or disbursed by such Letter of Credit Issuer, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not including
the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Applicable Base Rate Margin plus the Base Rate as in effect
from time to time for Revolving Loans (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand. Each Letter of
Credit Issuer shall provide the Borrower prompt notice of any payment or
disbursement made by it under any Letter of Credit issued by it, although the
failure of, or delay in, giving any such notice shall not release or diminish
the obligations of the Borrower under this Section 2.03(a) or under any other
Section of this Agreement.
(b) The Borrower's obligation under this Section 2.03 to reimburse the
respective Letter of Credit Issuer with respect to Unpaid Drawings (including,
in each case, interest thereon) shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against such Letter of Credit
Issuer, the Administrative Agent or any Bank, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit issued by
it to substantially conform to the terms of the Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of such
drawing; PROVIDED, HOWEVER, that the Borrower shall not be obligated to
reimburse such Letter of Credit Issuer for any wrongful payment made by such
Letter of Credit Issuer under a Letter of Credit issued by it as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance
by a Letter of Credit Issuer of any Letter of Credit, such Letter of Credit
Issuer shall be deemed to have sold and transferred to each other RL Bank, and
each such RL Bank (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such RL Bank's RL Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although Letter of
Credit Fees shall be payable directly to the Administrative Agent for the
account of the RL Banks as provided in Section 3.01(b) and the Participants
shall have no right to receive any portion of any Facing Fees) and any security
therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan
Commitments of the RL Banks pursuant to Section 1.13 or 12.04(b) or otherwise,
it is hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings relating to Letters of
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Credit, there shall be an automatic adjustment to the participations pursuant to
this Section 2.04(a) to reflect the new RL Percentages of the assigning and
assignee Banks.
(b) In determining whether to pay under any Letter of Credit, the
respective Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Letter of Credit Issuer
under or in connection with any Letter of Credit issued by it if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for such Letter of Credit Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any payment under
any Letter of Credit issued by it and the Borrower shall not have reimbursed
such amount in full to such Letter of Credit Issuer pursuant to Section 2.03(a),
such Letter of Credit Issuer shall promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify each Participant of such failure,
and each such Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of such Letter of Credit Issuer, the amount
of such Participant's applicable RL Percentage of such payment in U.S. Dollars
and in same day funds; PROVIDED, HOWEVER, that no Participant shall be obligated
to pay to the Administrative Agent its applicable RL Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer. If the Administrative Agent so notifies any Participant
required to fund a payment under a Letter of Credit prior to 11:00 A.M. (New
York time) on any Business Day, such Participant shall make available to the
Administrative Agent for the account of the respective Letter of Credit Issuer
such Participant's applicable RL Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant
shall not have so made its applicable RL Percentage of the amount of such
payment available to the Administrative Agent for the account of the respective
Letter of Credit Issuer, such Participant agrees to pay to the Administrative
Agent for the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Administrative Agent for the account of such
Letter of Credit Issuer at the overnight Federal Funds rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
respective Letter of Credit Issuer its applicable RL Percentage of any payment
under any Letter of Credit issued by it shall not relieve any other Participant
of its obligation hereunder to make available to the Administrative Agent for
the account of such Letter of Credit Issuer its applicable RL Percentage of any
payment under any such Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Administrative Agent for the account of
such Letter of Credit Issuer such other Participant's applicable RL Percentage
of any such payment.
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(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
applicable Participant which has paid its applicable RL Percentage thereof, in
U.S. Dollars and in same day funds, an amount equal to such Participant's
applicable RL Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of each respective Participant to make payments to the
Administrative Agent for the account of each respective Letter of Credit Issuer
with respect to Letters of Credit issued by it which such Participant has a
participation in shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Administrative Agent, any
Letter of Credit Issuer, any Bank, any Participant or other Person, whether
in connection with this Agreement, any Letter of Credit, the transactions
contemplated herein (including the Transaction) or any unrelated
transactions (including any underlying transaction between the Borrower or
any of its Subsidiaries and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 INCREASED COSTS. If after the date hereof, the adoption or
effectiveness of any applicable law, rule or regulation, 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 any Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters
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of Credit issued by such Letter of Credit Issuer or such Participant's
participation therein, or (ii) impose on any Letter of Credit Issuer or any
Participant any other conditions affecting this Agreement, any Letter of Credit
or such Participant's participation therein; and the result of any of the
foregoing is to increase the cost to such Letter of Credit Issuer or such
Participant of issuing, maintaining or participating in any Letter of Credit, or
to reduce the amount of any sum received or receivable by such Letter of Credit
Issuer or such Participant hereunder, then, upon written demand to the Borrower
by such Letter of Credit Issuer or such Participant (a copy of which notice
shall be sent by such Letter of Credit Issuer or such Participant to the
Administrative Agent), accompanied by the certificate described in the last
sentence of this Section 2.05, the Borrower shall pay to such Letter of Credit
Issuer or such Participant such additional amount or amounts as will compensate
such Letter of Credit Issuer or such Participant for such increased cost or
reduction. A certificate submitted to the Borrower by such Letter of Credit
Issuer or such Participant, as the case may be (a copy of which certificate
shall be sent by such Letter of Credit Issuer or such Participant to the
Administrative Agent), setting forth the basis for the determination of such
additional amount or amounts necessary to compensate such Letter of Credit
Issuer or such Participant as aforesaid shall be final and conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 2.05 upon subsequent receipt of
such certificate.
SECTION 3. FEES; COMMITMENTS.
3.01 FEES. (a) The Borrower shall pay to the Administrative Agent for
distribution to each Bank a commitment fee (the "Commitment Fee") for the period
from the Effective Date to and including the date the Total Commitment has been
terminated, computed at a per annum rate equal to the Applicable Commitment Fee
Percentage on the daily Aggregate Unutilized Commitment of such Bank. Accrued
Commitment Fees shall be due and payable in arrears on the Initial Borrowing
Date and thereafter, in arrears on each Quarterly Payment Date and the date upon
which the Total Commitment is terminated.
(b) The Borrower shall pay to the Administrative Agent for the account of
the RL Banks PRO RATA on the basis of their RL Percentages, a fee in respect of
each Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum
equal to the Applicable Eurodollar Margin then in effect with respect to
Revolving Loans on the daily Stated Amount of such Letter of Credit. Accrued
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to the Administrative Agent for the account of
the respective Letter of Credit Issuer a fee in respect of each Letter of Credit
issued by such Letter of Credit Issuer (the "Facing Fee") computed at the rate
of 1/4 of 1% per annum on the daily Stated Amount of such Letter of Credit;
PROVIDED, that in no event shall the annual Facing Fee with respect to each
Letter of Credit be less than $500; it being agreed that, on the date of
issuance of any Letter of Credit and on each anniversary thereof prior to the
termination of such
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Letter of Credit, if $500 will exceed the amount of Facing Fees that will accrue
with respect to such Letter of Credit for the immediately succeeding 12-month
period, the full $500 shall be payable on the date of issuance of such Letter of
Credit and on each such anniversary thereof prior to the termination of such
Letter of Credit. Except as provided in the immediately preceding sentence,
accrued Facing Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower hereby agrees to pay directly to the respective Letter of
Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit issued by it such amount as shall at the time of such issuance,
payment or amendment be the administrative charge which such Letter of Credit
Issuer is customarily charging for issuances of, payments under or amendments
of, letters of credit issued by it.
(e) The Borrower shall pay to the Administrative Agent, the Documentation
Agent and each Syndication Agent, for their own account, such fees as may be
agreed to from time to time between the Borrower and the Administrative Agent,
the Documentation Agent or the Syndication Agents, when and as due.
(f) All computations of Fees shall be made in accordance with Section
12.07(b).
3.02 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. (a) Upon at
least two Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
the Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Loan Commitment; PROVIDED, that
(x) any such termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment of each of the RL Banks and (y)
any partial reduction pursuant to this Section 3.02 shall be in the amount of at
least $1,000,000.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Administrative Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks), to
terminate the entire Revolving Loan Commitment of such Bank, so long as all
Loans, together with accrued and unpaid interest, Fees and all other amounts,
owing to such Bank are repaid concurrently with the effectiveness of such
termination pursuant to Section 4.01(b), and the Borrower shall pay to the
Administrative Agent at such time an amount in cash and/or Cash Equivalents
equal to such Bank's applicable RL Percentages of the outstanding Letters of
Credit which it has a participation in (which cash and/or Cash Equivalents shall
be held by the Administrative Agent as security for the obligations of the
Borrower hereunder in respect of such outstanding Letters of Credit pursuant to
a cash collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent, which shall permit certain investments
in
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Cash Equivalents reasonably satisfactory to the Administrative Agent until the
proceeds are applied to the secured obligations) (at which time Annex I shall be
deemed modified to reflect such changed amounts), and at such time, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except with
respect to indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 12.01 and 12.06), which shall survive as to
such repaid Bank.
3.03 MANDATORY ADJUSTMENTS OF COMMITMENTS, ETC. (a) The Total Commitment
(and the A Term Loan Commitment, B Term Loan Commitment, C Term Loan Commitment,
D Term Loan Commitment and Revolving Loan Commitment of each Bank) shall
terminate on November 30, 1996 unless the Initial Borrowing Date has occurred on
or before such date.
(b) Each of the Total A Term Loan Commitment, the Total B Term Loan
Commitment, the Total C Term Loan Commitment and the Total D Term Loan
Commitment shall terminate on the Initial Borrowing Date, after giving effect to
the making of the Term Loans on such date.
(c) The Total Revolving Loan Commitment (and the Revolving Loan Commitment
of each Bank) shall terminate on the earlier of (i) the date on which a Change
of Control Event occurs and (ii) the Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date upon which a mandatory repayment of Term Loans
pursuant to Section 4.02(A)(c), (d), (e), (f), (g) and (h) is required (and
exceeds in amount the aggregate principal amount of Term Loans then outstanding)
or would be required if Term Loans were then outstanding, the Total Revolving
Loan Commitment shall be permanently reduced by the amount, if any, by which the
amount required to be applied pursuant to said Sections (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of Term Loans then outstanding.
(e) Each reduction or adjustment of the Total A Term Loan Commitment, the
Total B Term Loan Commitment, the Total C Term Loan Commitment, the Total D Term
Loan Commitment or the Total Revolving Loan Commitment pursuant to this
Section 3.03 shall apply proportionately to the A Term Loan Commitment, the B
Term Loan Commitment, the C Term Loan Commitment, the Total D Term Loan
Commitment or the Revolving Loan Commitment, as the case may be, of each Bank.
SECTION 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the right to
prepay the Loans made to it, in whole or in part, without premium or penalty
except as otherwise provided in this Agreement, from time to time on the
following terms and conditions: (i) the Borrower shall give the Administrative
Agent at its Notice Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay such Loans, whether such Loans are
A
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Term Loans, B Term Loans, C Term Loans, D Term Loans, Revolving Loans or
Swingline Loans, the amount of such prepayment and (in the case of Eurodollar
Loans) the specific Borrowing(s) pursuant to which made, which notice shall be
given by the Borrower prior to 1:00 P.M. (New York time) (x) at least one
Business Day prior to the date of such prepayment in the case of Term Loans or
Revolving Loans maintained as Base Rate Loans, (y) on the date of such
prepayment in the case of Swingline Loans and (z) at least three Business Days
prior to the date of such prepayment in the case of Eurodollar Loans, which
notice shall, except in the case of Swingline Loans, promptly be transmitted by
the Administrative Agent to each of the Banks; (ii) each prepayment shall be in
an aggregate principal amount of at least $1,000,000 (or $500,000 in the case of
Swingline Loans); PROVIDED, that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iii) Eurodollar Loans may only be prepaid
pursuant to this Section 4.01(a) on the last day of an Interest Period
applicable thereto, unless the Borrower pays all amounts owing under Section
1.11 as a result of repaying such Eurodollar Loans on a day other than the last
day of the Interest Period applicable thereto; (iv) each prepayment in respect
of any Loans made pursuant to a Borrowing shall be applied PRO RATA among such
Loans; PROVIDED, that at the Borrower's election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01(a), such prepayment
shall not be applied to any Revolving Loans of a Defaulting Bank at any time
when the aggregate amount of Revolving Loans of any Non-Defaulting Bank exceeds
such Non-Defaulting Bank's RL Percentage of all Revolving Loans then
outstanding; (v) each prepayment of Term Loans pursuant to this Section 4.01(a)
must consist of a prepayment of A Term Loans (in an amount equal to the A TL
Percentage of such prepayment), B Term Loans (in an amount equal to the B TL
Percentage of such prepayment), C Term Loans (in an amount equal to the C TL
Percentage of such prepayment) and D Term Loans (in an amount equal to the D TL
Percentage of such prepayment); (vi) each prepayment of A Term Loans pursuant to
this Section 4.01(a) shall be applied (x) first, to reduce the next two
Scheduled A Repayments to occur after the date of such prepayment in direct
order of maturity and (y) thereafter, to reduce the then remaining Scheduled A
Repayments on a PRO RATA basis (based upon the then remaining principal amount
of each such Scheduled A Repayment); (vii) each prepayment of B Term Loans
pursuant to this Section 4.01(a) shall be applied (x) first, to reduce the next
two Scheduled B Repayments to occur after the date of such prepayment in direct
order of maturity and (y) thereafter, to reduce the then remaining Scheduled B
Repayments on a PRO RATA basis (based upon the then remaining principal amount
of each such Scheduled B Repayment); (viii) each prepayment of C Term Loans
pursuant to this Section 4.01(a) shall be applied (x) first, to reduce the next
two Scheduled C Repayments to occur after the date of such prepayment in direct
order of maturity and (y) thereafter, to reduce the then remaining Scheduled C
Repayments on a PRO RATA basis (based upon the then remaining principal amount
of each such Scheduled C Repayment); and (ix) each prepayment of D Term Loans
pursuant to this Section 4.01(a) shall be applied (x) first to reduce the next
two Scheduled D Repayments to occur after the date of such prepayment in direct
order of maturity and (y) thereafter, to reduce the then remaining Scheduled D
Repayments on a PRO RATA basis (based upon the then remaining principal amount
of each such Scheduled D Repayment).
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(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in
Section 12.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks)
to repay all Loans, together with accrued and unpaid interest, Fees and all
other amounts owing to such Bank in accordance with said Section 12.12(b) so
long as (A) in the case of the repayment of Revolving Loans of any RL Bank
pursuant to this clause (b) the Revolving Loan Commitment of such RL Bank is
terminated concurrently with such repayment pursuant to Section 3.02(b) (at
which time Annex I shall be deemed modified to reflect the changed Revolving
Loan Commitments) and (B) in the case of the repayment of Loans of any Bank,
the consents required by Section 12.12(b) in connection with the repayment
pursuant to this clause (b) shall have been obtained.
4.02 MANDATORY PREPAYMENTS.
(A) REQUIREMENTS:
(a) If on any date the sum of (i) the aggregate outstanding principal
amount of Revolving Loans and Swingline Loans (after giving effect to all other
repayments thereof on such date) plus (ii) the Letter of Credit Outstandings on
such date exceeds the Total Revolving Loan Commitment as then in effect, the
Borrower shall repay on such date the principal of Swingline Loans, and if no
Swingline Loans are or remain outstanding, Revolving Loans, in an aggregate
amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans, the aggregate amount of Letter
of Credit Outstandings exceeds the Total Revolving Loan Commitment as then in
effect, the Borrower agrees to pay to the Administrative Agent an amount in cash
and/or Cash Equivalents equal to such excess (up to the aggregate amount of
Letter of Credit Outstandings at such time) and the Administrative Agent shall
hold such payment as security for the obligations of the Borrower hereunder
pursuant to a cash collateral agreement to be entered into in form and substance
satisfactory to the Administrative Agent (which shall permit certain investments
in Cash Equivalents satisfactory to the Administrative Agent until the proceeds
are applied to the secured obligations).
(b) (i) The Borrower shall be required to repay the principal amount of A
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled A Repayment"):
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SCHEDULED A REPAYMENT DATE AMOUNT
the first Business Day in February, 1998 $ 2,600,000
the first Business Day in May, 1998 $ 2,600,000
the first Business Day in August, 1998 $ 2,600,000
the first Business Day in November, 1998 $ 2,600,000
the first Business Day in February, 1999 $ 2,800,000
the first Business Day in May, 1999 $ 2,800,000
the first Business Day in August, 1999 $ 2,800,000
the first Business Day in November, 1999 $ 2,800,000
the first Business Day in February, 2000 $ 3,100,000
the first Business Day in May, 2000 $ 3,100,000
the first Business Day in August, 2000 $ 3,100,000
the first Business Day in November, 2000 $ 3,100,000
the first Business Day in February, 2001 $ 5,100,000
the first Business Day in May, 2001 $ 5,100,000
the first Business Day in August, 2001 $ 5,100,000
the first Business Day in November, 2001 $ 5,100,000
the first Business Day in February, 2002 $ 6,900,000
the first Business Day in May, 2002 $ 6,900,000
A Term Loan Maturity Date $ 6,800,000
(ii) The Borrower shall be required to repay the principal amount of B
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled B Repayment"):
SCHEDULED B REPAYMENT DATE AMOUNT
the first Business Day in February, 1997 $ 106,250
the first Business Day in May, 1997 $ 106,250
the first Business Day in August, 1997 $ 106,250
the first Business Day in November, 1997 $ 106,250
the first Business Day in February, 1998 $ 106,250
the first Business Day in May, 1998 $ 106,250
the first Business Day in August, 1998 $ 106,250
the first Business Day in November, 1998 $ 106,250
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the first Business Day in February, 1999 $ 106,250
the first Business Day in May, 1999 $ 106,250
the first Business Day in August, 1999 $ 106,250
the first Business Day in November, 1999 $ 106,250
the first Business Day in February, 2000 $ 106,250
the first Business Day in May, 2000 $ 106,250
the first Business Day in August, 2000 $ 106,250
the first Business Day in November, 2000 $ 106,250
the first Business Day in February, 2001 $ 106,250
the first Business Day in May, 2001 $ 106,250
the first Business Day in August, 2001 $ 106,250
the first Business Day in November, 2001 $ 106,250
the first Business Day in February, 2002 $ 1,900,000
the first Business Day in May, 2002 $ 1,900,000
the first Business Day in August, 2002 $ 1,900,000
the first Business Day in November, 2002 $ 1,900,000
the first Business Day in February, 2003 $ 8,193,750
the first Business Day in May, 2003 $ 8,193,750
the first Business Day in August, 2003 $ 8,193,750
B Term Loan Maturity Date $ 8,193,750
(iii) The Borrower shall be required to repay the principal amount of C
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled C Repayment"):
SCHEDULED C REPAYMENT DATE AMOUNT
the first Business Day in February, 1997 $ 106,250
the first Business Day in May, 1997 $ 106,250
the first Business Day in August, 1997 $ 106,250
the first Business Day in November, 1997 $ 106,250
the first Business Day in February, 1998 $ 106,250
the first Business Day in May, 1998 $ 106,250
the first Business Day in August, 1998 $ 106,250
the first Business Day in November, 1998 $ 106,250
the first Business Day in February, 1999 $ 106,250
the first Business Day in May, 1999 $ 106,250
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the first Business Day in August, 1999 $ 106,250
the first Business Day in November, 1999 $ 106,250
the first Business Day in February, 2000 $ 106,250
the first Business Day in May, 2000 $ 106,250
the first Business Day in August, 2000 $ 106,250
the first Business Day in November, 2000 $ 106,250
the first Business Day in February, 2001 $ 106,250
the first Business Day in May, 2001 $ 106,250
the first Business Day in August, 2001 $ 106,250
the first Business Day in November, 2001 $ 106,250
the first Business Day in February, 2002 $ 106,250
the first Business Day in May, 2002 $ 106,250
the first Business Day in August, 2002 $ 106,250
the first Business Day in November, 2002 $ 106,250
the first Business Day in February, 2003 $ 106,250
the first Business Day in May, 2003 $ 106,250
the first Business Day in August, 2003 $ 106,250
the first Business Day in November, 2003 $ 106,250
the first Business Day in February, 2004 $ 9,881,250
the first Business Day in May, 2004 $ 9,881,250
the first Business Day in August, 2004 $ 9,881,250
C Term Loan Maturity Date $ 9,881,250
(iv) The Borrower shall be required to repay the principal amount of D
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled D Repayment"):
SCHEDULED D REPAYMENT DATE AMOUNT
the first Business Day in February, 1997 $ 100,000
the first Business Day in May, 1997 $ 100,000
the first Business Day in August, 1997 $ 100,000
the first Business Day in November, 1997 $ 100,000
the first Business Day in February, 1998 $ 100,000
the first Business Day in May, 1998 $ 100,000
the first Business Day in August, 1998 $ 100,000
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the first Business Day in November, 1998 $ 100,000
the first Business Day in February, 1999 $ 100,000
the first Business Day in May, 1999 $ 100,000
the first Business Day in August, 1999 $ 100,000
the first Business Day in November, 1999 $ 100,000
the first Business Day in February, 2000 $ 100,000
the first Business Day in May, 2000 $ 100,000
the first Business Day in August, 2000 $ 100,000
the first Business Day in November, 2000 $ 100,000
the first Business Day in February, 2001 $ 100,000
the first Business Day in May, 2001 $ 100,000
the first Business Day in August, 2001 $ 100,000
the first Business Day in November, 2001 $ 100,000
the first Business Day in February, 2002 $ 100,000
the first Business Day in May, 2002 $ 100,000
the first Business Day in August, 2002 $ 100,000
the first Business Day in November, 2002 $ 100,000
the first Business Day in February, 2003 $ 100,000
the first Business Day in May, 2003 $ 100,000
the first Business Day in August, 2003 $ 100,000
the first Business Day in November, 2003 $ 100,000
the first Business Day in February, 2004 $ 100,000
the first Business Day in May, 2004 $ 100,000
the first Business Day in August, 2004 $ 100,000
the first Business Day in November, 2004 $ 100,000
the first Business Day in February, 2005 $18,400,000
D Term Loan Maturity Date $18,400,000
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(c) On the third Business Day after the date of receipt thereof by
Holdings and/or any of its Subsidiaries (other than Fidata) of Proceeds from
any Asset Sale, an amount equal to 100% of the Net Proceeds from such Asset
Sale shall be applied as a mandatory repayment of principal of the Term Loans
(with the A TL Percentage of such amount to be applied as a repayment of the
A Term Loans, the B TL Percentage of such amount to be applied as a repayment of
the B Term Loans, the C TL Percentage of such amount to be applied as a
repayment of the C Term Loans and the D TL Percentage of such amount to be
applied as a repayment of the D Term Loans, in each case subject to modification
of such application as set forth in Section 4.02(C)), PROVIDED, that with
respect to no more than $5,000,000 in the aggregate of such Proceeds in any
fiscal year of the Borrower, the Net Proceeds therefrom shall not be required
to be so applied on such date to the extent that no Default or Event of Default
then exists and the Borrower delivers a certificate to the Administrative Agent
on or prior to such date stating that such Net Proceeds shall be (1) used to
purchase assets used or to be used in the businesses referred to in
Section 8.01(a) (including, without limitation (but only to the extent permitted
by Section 8.02), capital stock of a corporation engaged in any such business)
within 367 days following the date of such Asset Sale (which certificate shall
set forth the estimates of the proceeds to be so expended) and (2) deposited in
an escrow account with the Collateral Agent for the benefit of the Secured
Creditors (the "Asset Sale Escrow Account"), to the extent such Net Proceeds
have not been reinvested as provided in clause (1) of this proviso within 180
days, during which time such proceeds may be only withdrawn to repay the Loans
or to be used for purposes described in clause (1) of this proviso, PROVIDED,
FURTHER, that (1) if all or any portion of such Net Proceeds not so applied to
the repayment of Term Loans are not so used (or contractually committed to be
used) within such 367 day period or, if after such 180 day period, have not been
placed in the Asset Sale Escrow Account, as provided above, such remaining
portion shall be applied on the last day of the respective period as a mandatory
repayment of principal of outstanding Term Loans as provided above in this
Section 4.02(A)(c) and (2) if all or any portion of such Net Proceeds are not
required to be applied on the 367th day referred to in clause (1) above because
such amount is contractually committed to be used and subsequent to such date
such contract is terminated or expires without such portion being so used, then
such remaining portion shall be applied on the date of such termination or
expiration as a mandatory repayment of principal of outstanding Term Loans as
provided in this Section 4.02(A)(c).
(d) On the third Business Day after the receipt thereof by Holdings and/or
any of its Subsidiaries (other than Fidata), an amount equal to 100% of the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) of the sale or issuance of preferred or common
equity of (or cash capital contributions to) Holdings or any of its Subsidiaries
(other than (t) issuances of Holdings Common Stock by Holdings as consideration
in connection with any Permitted Acquisitions, (u) issuances of Holdings Common
Stock by Holdings on or prior to the Initial Borrowing Date as consideration in
connection with the Equity Exchange, (v) equity contributions received by
Holdings on or prior to the Initial Borrowing Date as part of the Equity
Financing, (w) issuances of Holdings Common Stock (including as a result of
the exercise of any options with regard thereto) to management or other
employees of Holdings and its Subsidiaries, (x) equity contributions to
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the Borrower or any of its Subsidiaries made by Holdings or any of its
Subsidiaries, (y) the first $20,000,000 of net cash proceeds received by
Holdings after the Initial Borrowing Date from the issuance of preferred or
common equity other than as provided in clauses (t) through (x) above or clause
(z) below, and (z) up to $16,800,000 net cash proceeds received by Holdings
(1) from a capital contribution by Picower and/or any of his Affiliates,
(2) from the issuance of Holdings Common Stock to Picower and/or any of his
Affiliates or (3) from the issuance of Holdings Common Stock in any public
offering which occurs after June 30, 2001, to the extent used to repay,
repurchase or acquire the 7-1/4% Debentures pursuant to Section 8.15(i)), shall
be applied as a mandatory repayment of principal of the Term Loans (with the A
TL Percentage of such amount to be applied as a repayment of the A Term Loans,
the B TL Percentage of such amount to be applied as a repayment of the B Term
Loans, the C TL Percentage of such amount to be applied as a repayment of the
C Term Loans and the D TL Percentage of such amount to be applied as a repayment
of the D Term Loans, in each case subject to modification of such application as
set forth in Section 4.02(C)).
(e) On the third Business Day after the receipt thereof by Holdings and/or
any of its Subsidiaries (other than Fidata), an amount equal to 100% of the
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) of the incurrence of Indebtedness by Holdings and/or
any of its Subsidiaries (other than Indebtedness permitted to be incurred by
Section 8.04 as in effect on the Effective Date) shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of such
amount to be applied as a repayment of the A Term Loans, the B TL Percentage of
such amount to be applied as a repayment of the B Term Loans, the C TL
Percentage of such amount to applied as a repayment of the C Term Loans and the
D TL Percentage of such amount to be applied as a repayment of the D Term Loans,
in each case subject to modification of such application as set forth in
Section 4.02(C)).
(f) On each Excess Cash Payment Date, an amount equal to 75% of Excess
Cash Flow of the Borrower and its Subsidiaries for the most recent Excess Cash
Flow Period ending prior to such Excess Cash Payment Date shall be applied as
a mandatory repayment of principal of the Term Loans (with the A TL Percentage
of such amount to be applied as a repayment of the A Term Loans, the B TL
Percentage of such amount to be applied as a repayment of the B Term Loans, the
C TL Percentage of such amount to be applied as a repayment of the C Term Loans
and the D TL Percentage of such amount to be applied as a repayment of the
D Term Loans, in each case subject to modification of such application as set
forth in Section 4.02(C)); PROVIDED, that so long as no Default or Event of
Default then exists, if the Leverage Ratio as of the last day of such most
recent Excess Cash Flow Period is less than 3.0:1.0, then, instead of 75%, an
amount equal to 50% of Excess Cash Flow of the Borrower and its Subsidiaries for
such Excess Cash Flow Period shall be applied as a mandatory repayment of Term
Loans as provided above in this Section 4.02(A)(f)).
(g) Within 10 days following each date on which Holdings or any of its
Subsidiaries (other than Fidata) receives any proceeds from any Recovery Event,
an amount equal to 100% of the proceeds of such Recovery Event (net of
reasonable costs and taxes incurred in connec-
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tion with such Recovery Event) shall be applied as a mandatory repayment of
principal of the Term Loans (with the A TL Percentage of such amount to be
applied as a repayment of the A Term Loans, the B TL Percentage of such amount
to be applied as a repayment of the B Term Loans, the C TL Percentage of such
amount to be applied as a repayment of the C Term Loans and the D TL Percentage
of such amount to be applied as a repayment of the D Term Loans, in each case,
subject to modification of such application as set forth in Section 4.02(C)),
PROVIDED that (1) so long as no Default or Event of Default then exists, if the
net proceeds from any Recovery Event are less than $500,000, then no prepayment
shall be required pursuant to this Section 4.02(A)(g), and (2) so long as no
Default or Event of Default then exists, with respect to any single or series of
related Recovery Events the net proceeds from which are equal to or greater than
$500,000 but less than $5,000,000, such proceeds shall not be required to be so
applied on such date to the extent that (x) the Borrower has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such proceeds shall be used to replace or restore any properties or assets in
respect of which such proceeds were paid within 367 days following the date of
the receipt of such proceeds (which certificate shall set forth the estimates
of the proceeds to be so expended) and (y) such proceeds are deposited in an
escrow account with the Collateral Agent for the benefit of the Secured
Creditors (the "Recovery Event Escrow Account"), from which escrow account
amounts may be withdrawn only to repay the Loans or to be used for the purposes
described in clause (x) above, PROVIDED, FURTHER, that (i) if the amount of such
proceeds from any single or series of related Recovery Events exceeds
$5,000,000, then the entire amount and not just the portion in excess of
$5,000,000 shall be applied as a mandatory repayment of Term Loans as provided
above in this Section 4.02(A)(g), (ii) if all or any portion of such proceeds
not required to be applied to the repayment of Term Loans pursuant to the first
proviso of this Section 4.02(A)(g) are not so used (or contractually committed
to be used) within 367 days after the date of the receipt of such proceeds, such
remaining portion shall be applied on the last day of such period as a
mandatory repayment of principal of the Term Loans as provided in this
Section 4.02(A)(g) and (iii) if all or any portion of such proceeds are not
required to be applied on the 367th day referred to in clause (ii) above because
such amount is contractually committed to be used and subsequent to such date
such contract is terminated or expires without such portion being so used, then
such remaining portion shall be applied on the date of such termination or
expiration as a mandatory repayment of principal of outstanding Term Loans as
provided in this Section 4.02(A)(g).
(h) On the third Business Day after the receipt thereof by Holdings and/or
any of its Subsidiaries (other than Fidata) of a Pension Plan Refund, an amount
equal to 100% of such Pension Plan Refund shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of such
amount to be applied as a repayment of the A Term Loans, the B TL Percentage of
such amount to be applied as a repayment of the B Term Loans, the C TL
Percentage of such amount to be applied as a repayment of the C Term Loans and
the D TL Percentage of such amount to be applied as a repayment of the D Term
Loans, in each case subject to modification of such application as set forth in
Section 4.02(C)).
(i) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Swingline Loans shall be repaid in full on
the Swingline Expiry Date
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and (ii) all other then outstanding Loans of the respective Facility shall be
repaid in full on the Maturity Date for such Facility.
(j) On the date upon which any Change of Control Event occurs, the
outstanding amount of all Term Loans shall become due and payable in full.
(B) APPLICATION:
(a) All repayments of A Term Loans, B Term Loans, C Term Loans and D Term
Loans shall be applied, if required pursuant to Section 4.02(A)(c),(d),(e),(f),
(g) or (h), to reduce the then remaining Scheduled Repayments of the respective
Facility PRO RATA based on the then remaining Scheduled Repayments of the
respective Facility.
(b) With respect to each repayment of Loans required by this Section 4.02,
the Borrower may designate the Types of Loans which are to be repaid and the
specific Borrowing(s) under the affected Facility pursuant to which made;
PROVIDED, that (i) Eurodollar Loans made pursuant to a specific Facility may be
designated for repayment pursuant to this Section 4.02 only on the last day of
an Interest Period applicable thereto unless all Eurodollar Loans made pursuant
to such Facility with Interest Periods ending on such date of required
prepayment and all Base Rate Loans made pursuant to such Facility have been paid
in full; (ii) if any repayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to
an amount less than the Minimum Borrowing Amount, such Borrowing shall be
immediately converted into Base Rate Loans; and (iii) each repayment of any
Loans made pursuant to a Borrowing shall be applied PRO RATA among such Loans;
PROVIDED, that no repayment pursuant to Section 4.02(A) (a) shall be applied
to any Revolving Loans of a Defaulting Bank at any time when the aggregate
amount of the Revolving Loans of any Non-Defaulting Bank exceeds such
Non-Defaulting Bank's RL Percentage of Revolving Loans then outstanding. In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to minimize
breakage costs owing under Section 1.11. Notwithstanding the foregoing
provisions of this Section 4.02(B)(b), if at any time the mandatory prepayment
of Loans pursuant to Section 4.02(A)(c), (d), (e), (g) or (h) would result,
after giving effect to the procedures set forth above in this clause (b), in
the Borrower incurring breakage costs under Section 1.11 as a result of
Eurodollar Loans being repaid other than on the last day of an Interest Period
applicable thereto (the "Affected Eurodollar Loans"), then the Borrower may in
its sole discretion initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the Administrative Agent to be held as security for the obligations of the
Borrower hereunder pursuant to a cash collateral agreement to be entered into in
form and substance satisfactory to the Administrative Agent, with such cash
collateral to be released from such cash collateral account upon the first
occurrence (or occurrences) thereafter of the last day of an Interest Period
applicable to the relevant Loans that are Eurodollar Loans (or such earlier date
or dates as shall be requested by the Borrower), to repay an aggregate
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principal amount of such Loans equal to the Affected Eurodollar Loans not
initially repaid pursuant to this sentence.
(C) WAIVER OF CERTAIN MANDATORY
REPAYMENTS BY B, C AND D BANKS:
Notwithstanding anything to the contrary contained in this Section 4.02 or
elsewhere in this Agreement (including, without limitation, in Section 12.12),
the Borrower shall have the option, in its sole discretion, to give the Banks
with outstanding B Terms Loans (the "B Banks"), C Term Loans (the "C Banks")
and D Term Loans (the "D Banks") the option to (i) waive the voluntary repayment
application requirements of such Loans pursuant to Section 4.01(a)(vii), (viii)
or (ix) (each such repayment, a "Waivable Voluntary Repayment") or (ii) waive
a mandatory repayment of such Loans pursuant to Section 4.02(A)(c), (d), (e),
(f), (g) and/or (h) (each such repayment, a "Waivable Mandatory Repayment"), in
each case, upon the terms and provisions set forth in this Section 4.02(C). If
the Borrower elects to exercise either option referred to in the preceding
sentence, the Borrower shall give to the Administrative Agent written notice of
its intention to give the B Banks, the C Banks and the D Banks the right to
waive a Waivable Mandatory Repayment and/or Waivable Voluntary Repayment, as
the case may be, at least five Business Days prior to such repayment, which
notice the Administrative Agent shall promptly forward to all B Banks, C Banks
and D Banks (indicating in such notice the amount of such repayment to be
applied to each such Bank's outstanding Term Loans under such Facilities). The
Borrower's offer to permit such Banks to waive any such Waivable Mandatory
Repayment and/or Waivable Voluntary Repayment, as the case may be, may apply to
all or part of such repayment, PROVIDED, that any offer to waive part of such
repayment must be made ratably to such Banks on the basis of their outstanding
B Term Loans, C Term Loans and D Term Loans. In the event any such B Bank,
C Bank or D Bank desires to waive such Bank's right to receive any such Waivable
Mandatory Repayment and/or Waivable Voluntary Repayment, as the case may be, in
whole or in part, such Bank shall so advise the Administrative Agent no later
than the close of business two Business Days after the date of such notice from
the Administrative Agent, which notice shall also include the amount such Bank
desires to receive in respect of such repayment. If any Bank does not reply to
the Administrative Agent within the two Business Days, it will be deemed not to
have waived any part of such repayment. If any Bank does not specify an amount
it wishes to receive, it will be deemed to have accepted 100% of the total
payment. In the event that any such Bank waives all or part of such right to
receive any such Waivable Mandatory Repayment, and/or Waivable Voluntary
Repayment, as the case may be, the Administrative Agent shall apply 100% of the
amount so waived by such Bank to the A Term Loans in accordance with
Section 4.02(B).
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Banks entitled thereto, not
later than 12:00 Noon (New York time) on the date when due and shall be made in
immediately available funds and in U.S. Dollars at the Payment Office, it being
understood that written, telex or facsimile transmission notice by the Borrower
to the Administrative Agent to make a payment from the funds in the Borrower's
account at the
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Payment Office shall constitute the making of such payment to the extent of
such funds held in such account. Any payments under this Agreement which are
made later than 12:00 Noon (New York time) shall be deemed to have been made on
the next succeeding Business Day. Whenever any payment to be made 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 and, with respect
to payments of principal, interest shall be payable during such extension at
the applicable rate in effect immediately prior to such extension.
4.04 NET PAYMENTS. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence,
the Borrower agrees to reimburse each Bank, upon the written request of such
Bank, for taxes imposed on or measured by the net income or net profits of
such Bank pursuant to the laws of the jurisdiction in which such Bank is
organized or in which the principal office or applicable lending office of such
Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Bank is organized or in which
the principal office or applicable lending office of such Bank is located and
for any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank, in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment
of any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Bank, and reimburse such Bank upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees
to deliver to the Borrower and the Administrative Agent on or prior to the
Effective Date, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section
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<PAGE>
1.13 or 12.04(b) (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit C (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest (including any original
issue discount) to be made under this Agreement and under any Note. Each Bank
that is a United States person (as such term is defined in Section 7701(a)(30)
of the Code) and is a party hereto on the Initial Borrowing Date (and each Bank
that is a United States person (as such term is defined in Section 7701(a)(30)
of the Code) and becomes a party hereto after the Initial Borrowing Date), in
each case, that is not a corporation (as such term is defined in
Section 7701(a)(3) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the first interest payment date on the Loans
(or in the case of an assignee or transferee Bank, promptly after becoming a
party hereto) two accurate and complete original signed copies of Internal
Revenue Service Form W-9 (or a substitute form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note. In
addition, each Bank agrees that from time to time after the Effective Date, when
a lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect or otherwise renders the previous
certification ineffective in establishing such Bank's complete exemption from
United States withholding tax, such Bank will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Administrative Agent of its inability to deliver
any such Form or Certificate, in which case such Bank shall not be required to
deliver any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest
(including any original issue discount), Fees or other amounts payable hereunder
for the account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
and any Bank which is a United States person (as such term is defined in Section
7701(a)(30) of the Code) that is not a corporation as such term is defined in
Section 7701(a)(3) of the Code, to the extent that such Bank has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish (to the
reasonable satisfaction of the
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Borrower) a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 4.04(a) hereof to
gross-up payments to be made to a Bank in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment,
other than interest, to a Bank described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding of
such taxes. Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 12.04(b), the Borrower agrees to pay any additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the
deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this Section
4.04 to a Bank and such Bank determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to
the taxable year in which the additional amount is paid, such Bank shall pay
to the Borrower an amount that such Bank shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by such
Bank in such year as a consequence of such refund, reduction or credit.
SECTION 5. CONDITIONS PRECEDENT. The obligation of each Bank to make
each Loan to the Borrower hereunder, and the obligation of any Letter of
Credit Issuer to issue each Letter of Credit hereunder, is subject, at the
time of each such Credit Event (except as otherwise hereinafter indicated),
to the satisfaction of the following conditions:
5.01 EXECUTION OF AGREEMENT; NOTES. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there
shall have been delivered to the Administrative Agent for the account of each
Bank the appropriate A Term Note, B Term Note, C Term Note, D Term Note and
Revolving Note, if any, and to BTCo the Swingline Note, in each case executed
by the Borrower and in the amount, maturity and as otherwise provided herein.
5.02 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each
Credit Event and also 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 in effect at such time
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the
date of such Credit Event, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.
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5.03 OFFICER'S CERTIFICATE. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated such date signed
by an appropriate officer of the Borrower stating that all of the applicable
conditions set forth in Sections 5.02, 5.06, 5.07, 5.08 and 5.09 exist as of
such date.
5.04 OPINIONS OF COUNSEL. On the Initial Borrowing Date, the Agents
shall have received opinions, addressed to the Agents and each of the Banks
and dated the Initial Borrowing Date, from (i) Gordon Altman Butowsky Weitzen
Shalov & Wein, counsel to the Credit Parties, which opinion shall cover the
matters contained in Exhibit D and such other matters incident to the
transactions contemplated herein as the Agents or the Required Banks may
reasonably request and (ii) local counsel to the Credit Parties reasonably
satisfactory to the Agents, which opinions shall cover such matters incident
to the transactions contemplated herein and in the other Credit Documents as
the Agents or the Required Banks may reasonably request and shall be in form
and substance reasonably satisfactory to the Agents or the Required Banks.
5.05 CORPORATE PROCEEDINGS. (a) On the Initial Borrowing Date, the
Administrative Agent shall have received from each Credit Party a
certificate, dated the Initial Borrowing Date, signed by the chairman, a vice
chairman, the president or any vice-president of such Credit Party, and
attested to by the secretary or any assistant secretary of such Credit Party,
in the form of Exhibit E with appropriate insertions, together with copies of
the Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate and all of
the foregoing (including each such Certificate of Incorporation and By-Laws)
shall be satisfactory to the Agents or the Required Banks.
(b) On the Initial Borrowing Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Documents shall be reasonably
satisfactory in form and substance to the Agents or the Required Banks, and
the Agents or the Required Banks shall have received all information and
copies of all certificates, documents and papers, including good standing
certificates, bring-down certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Agents or the
Required Banks reasonably may have requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper corporate
or governmental authorities.
(c) On the Initial Borrowing Date, the ownership and capital structure
(including, without limitation, the terms of any capital stock, options,
warrants or other securities issued by Holdings or any of its Subsidiaries)
and management of Holdings and its Subsidiaries and the Borrower and its
Subsidiaries shall be in form and substance reasonably satisfactory to the
Agents or the Required Banks.
5.06 ADVERSE CHANGE, ETC. On or prior to the Initial Borrowing Date,
nothing shall have occurred since December 31, 1995 (and neither the Banks
nor the Agents shall have become aware of any facts or conditions not
previously known) which the Agents or the
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Required Banks shall determine (a) has, or could reasonably be expected to
have, a material adverse effect on the rights or remedies of the Banks or the
Agents and Required Banks, or on the ability of any Credit Party to perform
its obligations to them hereunder or under any other Credit Document or (b)
has, or could reasonably be expected to have, a Material Adverse Effect.
5.07 LITIGATION. On the Initial Borrowing Date, there shall be no
actions, suits or proceedings pending or threatened (a) with respect to the
Transaction, this Agreement or any other Document or (b) which the Agents or
the Required Banks shall determine could reasonably be expected to (i) have a
Material Adverse Effect or (ii) have a material adverse effect on the
Transaction, the rights or remedies of the Banks or the Agents hereunder or
under any other Credit Document or on the ability of any Credit Party to
perform its respective obligations to the Banks or the Agents hereunder or
under any other Credit Document.
5.08 APPROVALS. On or prior to the Initial Borrowing Date, all
necessary governmental (domestic and foreign) and third party approvals in
connection with the Transaction, the transactions contemplated by the
Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, except those approvals required in connection
with the Acquisition, the IMED Merger and the IVAC Merger, the failure to
obtain which is not reasonably likely to have a Material Adverse Effect, and
all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the Transaction, the
transactions contemplated by the Documents and otherwise referred to herein
or therein. Additionally, there shall not exist any judgment, order,
injunction or other restraint issued or filed or a hearing seeking injunctive
relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the consummation of the Transaction or the
making of Loans or the issuance of Letters of Credit.
5.09 CONSUMMATION OF THE TRANSACTION. (a) On the Initial Borrowing
Date, concurrently with the incurrence of Loans on such date, the Acquisition
shall have been consummated in accordance with the Acquisition Documents and
all applicable laws, and each of the conditions precedent to the consummation
of the Acquisition (other than the incurrence of Loans under this Agreement
but including, without limitation, the accuracy in all material respects of
the representations and warranties contained in the Acquisition Agreement)
shall have been satisfied and not waived except with the consent of the
Agents and the Required Banks to the satisfaction of the Agents and the
Required Banks.
(b) On or prior to the Initial Borrowing Date, (i) Holdings shall have
received proceeds of at least $87,500,000 from the Equity Financing,
consisting of (x) $40,000,000 in cash in connection with the Cash Equity
Issuance, (y) conversion to equity in connection with the Equity Exchange
valued at $37,500,000 and (z) the equity issuance valued at $10,000,000 in
connection with the Picower Payment, (ii) Holdings shall have used (x) such
cash proceeds received in respect of the Cash Equity Issuance and (y) the
available cash on its books, to make certain payments owing in connection
with the Transaction (including payments to fund the
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Debentures Escrow Account referred to in Section 5.09(f) below and to fund
the Preferred Stock Escrow Account referred to in Section 5.09(g) below) and
after making such payments, shall have contributed the full amount of the
remaining net cash proceeds and the available cash (other than an amount
equal to the Permitted Fidata Amount) to the common equity of the Borrower
and (iii) the Borrower shall have utilized the full amount of such common
capital contribution to make payments owing in connection with the
Transaction prior to or concurrently with utilizing any proceeds of the Loans.
(c) On or prior to the Initial Borrowing Date, (i) the Borrower shall
have received gross cash proceeds of at least $200,000,000 from the issuance
of the Senior Subordinated Notes (it being understood that such cash proceeds
shall include all amounts directly applied to pay underwriting and placement
commissions and discounts and related fees) and (ii) the Borrower shall have
utilized the full amount of such cash proceeds to make payments owing in
connection with the Transaction prior to or concurrently with utilizing any
proceeds of the Loans for such purpose.
(d)(i) On the Initial Borrowing Date, the total commitments in respect
of the Indebtedness to be Refinanced shall have been terminated, and all
loans and notes with respect thereto shall have been repaid in full, together
with interest thereon, all letters of credit issued thereunder shall have
been terminated and all other amounts (including premiums) owing pursuant to
the Indebtedness to be Refinanced shall have been repaid in full and all
documents in respect of the Indebtedness to be Refinanced and all guarantees
with respect thereto shall have been terminated (except as to indemnification
provisions, which may survive) and be of no further force and effect.
(ii) On the Initial Borrowing Date, the creditors in respect of the
Indebtedness to be Refinanced shall have terminated and released all security
interests and Liens on the assets owned by Holdings and its Subsidiaries and
IVAC Holdings and its Subsidiaries. The Administrative Agent shall have
received such releases of security interests in and Liens on the assets owned
by Holdings and its Subsidiaries and IVAC Holdings and its Subsidiaries as
may have been requested by the Administrative Agent, which releases shall be
in form and substance reasonably satisfactory to the Agents and Required
Banks. Without limiting the foregoing, there shall have been delivered (i)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the appropriate equivalent) was filed with respect to Holdings or
any of its Subsidiaries or IVAC Holdings or any of its Subsidiaries in
connection with the security interests created with respect to the
Indebtedness to be Refinanced and the documentation related thereto, (ii)
termination or reassignment of any security interest in, or Lien on, any
patents, trademarks, copyrights, or similar interests of Holdings or any of
its Subsidiaries or IVAC Holdings or any of its Subsidiaries on which filings
have been made, (iii) terminations of all mortgages, leasehold mortgages,
deeds of trust and leasehold deeds of trust created with respect to property
of Holdings or any of its Subsidiaries or IVAC Holdings or any of its
Subsidiaries, in each case, to secure the obligations in respect of the
Indebtedness to be Refinanced, all of which shall be in form and substance
reasonably satisfactory to the Agents
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and Required Banks, and (iv) all collateral owned by Holdings or any of its
Subsidiaries or IVAC Holdings or any of its Subsidiaries in the possession of
any of the creditors in respect of the Indebtedness to be Refinanced or any
collateral agent or trustee under any related security document shall have
been returned to Holdings or such Subsidiary or IVAC Holdings or any of its
Subsidiaries, as the case may be.
(e) On or prior to the Initial Borrowing Date, IVAC shall have
commenced the Existing Senior Notes Tender Offer/Consent Solicitation,
pursuant to which IVAC shall have offered to repurchase all Existing Senior
Notes, such repurchase to take place on the Initial Borrowing Date,
immediately following the Acquisition, pursuant to Section 7.18. On or prior
to the Initial Borrowing Date, IVAC shall have received sufficient Existing
Senior Notes Consents pursuant to the Existing Senior Notes Tender
Offer/Consent Solicitation to permit the Acquisition, the IMED Merger, the
IVAC Merger and all other elements of the Transaction.
(f) On or prior to the Initial Borrowing Date, Holdings shall have
initiated the redemption of the 15% Debentures in the principal amount of
$21,924,000 (the "Debentures Redemption"), whereby (a) Holdings shall have
created an escrow account with the Administrative Agent the terms and
conditions of which shall be satisfactory to the Agents (the "Debentures
Escrow Account") into which Holdings shall have deposited $24,116,400 plus
accrued but unpaid interest on the 15% Debentures through the respective
redemption date for the purpose of consummating the Debentures Redemption and
(b) on the Initial Borrowing Date, notices of redemption in accordance with
the terms of the indentures governing the 15% Debentures (the "Notice of
Debentures Redemption") shall have been delivered to the trustee relating
thereto and the holders of such 15% Debentures, notifying such trustee and
holders of the Debentures Redemption to take place 30 days after the Notices
of Debentures Redemption have been delivered to the holders of such 15%
Debentures.
(g) On or prior to the Initial Borrowing Date, Holdings shall have
initiated the redemption of all of its outstanding Holdings Preferred Stock
(the "Holdings Preferred Stock Redemption") for consideration equal to
$7,349,561.21 whereby (a) Holdings shall have created an escrow account with
the Administrative Agent the terms and conditions of which shall be
satisfactory to the Agents (the "Preferred Stock Escrow Account") into which
Holdings shall have deposited $7,349,561.21 for the purpose of consummating
the Holdings Preferred Stock Redemption and (b) on or prior to the Initial
Borrowing Date, notices of redemption in accordance with the terms of the
Holdings Preferred Stock (the "Notice of Preferred Stock Redemption") shall
have been delivered to the holders of the Holdings Preferred Stock notifying
such holders of the Holdings Preferred Stock Redemption to take place no
later than December 16, 1996.
(h) On the Initial Borrowing Date, all applicable laws, and each of the
conditions precedent to the consummation of the IVAC Merger (other than the
incurrence of Loans under this Agreement, to the extent a condition precedent
thereunder but including, without limitation, the accuracy in all material
respects of the representations and warranties contained in the
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IVAC Merger Documents) shall have been satisfied and not waived except with
the consent of the Agents and the Required Banks to the satisfaction of the
Agents and the Required Banks.
(i) On the Initial Borrowing Date, all applicable laws, and each of the
conditions precedent to the consummation of the IMED Merger (other than the
incurrence of Loans under this Agreement, to the extent a condition precedent
thereunder but including, without limitation, the accuracy in all material
respects of the representations and warranties contained in the IMED Merger
Documents) shall have been satisfied and not waived except with the consent
of the Agents and the Required Banks to the satisfaction of the Agents and
the Required Banks.
(j) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Banks true and correct copies of all Documents entered into
in connection with the Transaction (including, without limitation,
Acquisition Documents, the Existing Senior Notes Tender Offer/Consent
Solicitation Documents, the Refinancing Documents, the Senior Subordinated
Notes Documents, the Equity Financing Documents, the IVAC Merger Documents,
the IMED Merger Documents and the documents relating to the Debentures
Redemption and the Holdings Preferred Stock Redemption), and all of the terms
and conditions of such Documents (including, without limitation, with respect
to the Senior Subordinated Notes Documents, amortization, maturities,
interest rates, covenants, defaults, remedies, sinking fund provisions, and
subordination provisions), as well as the structure of the Transaction, shall
be in form and substance satisfactory to the Agents and the Required Banks.
(k) All conditions precedent to the consummation of the Transaction as
set forth in the documentation related thereto shall have been satisfied
(except as otherwise provided in this Section 5.09).
5.10 PLEDGE AGREEMENT. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered a Pledge Agreement
in the form of Exhibit F, together with such changes (or with such other
documents) as may be requested by the Collateral Agent in connection with
local law (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Pledge Agreement") and
shall have delivered to the Collateral Agent, as pledgee thereunder, all of
the Pledged Securities referred to therein, endorsed in blank in the case of
promissory notes or accompanied by executed and undated stock powers in the
case of capital stock, and the Pledge Agreement and such other documents
shall be in full force and effect.
5.11 SECURITY AGREEMENT. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered a Security Agreement
in the form of Exhibit G, together with such changes (or with such other
documents) as may be requested by the Collateral Agent in connection with
local law (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Security Agreement")
covering all of the Security Agreement Collateral, together with:
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(A) executed copies of Financing Statements (Form UCC-1 and/or
UCC-3) or appropriate local equivalent in appropriate form for filing
under the UCC or appropriate local equivalent of each jurisdiction as
may be necessary to perfect the security interests purported to be
created by the Security Agreement;
(B) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of a recent date listing all
effective financing statements that name Holdings, the Borrower or any
of their respective Subsidiaries or a division or operating unit of any
such Person, as debtor, and that are filed in the jurisdictions
referred to in clause (A) above, together with copies of such financing
statements (none of which shall cover the Collateral except (x) those
with respect to which appropriate termination statements executed by
the secured lender thereunder have been delivered to the Administrative
Agent and (y) to the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests intended to be created by the Security
Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security Agreement
have been taken;
and the Security Agreement and such other documents shall be in full force
and effect.
5.12 MORTGAGES; TITLE INSURANCE; SURVEYS, ETC. (a) On the Initial
Borrowing Date, the Collateral Agent shall have received fully executed
counterparts of deeds of trust, mortgages and similar documents in each case
in form and substance satisfactory to the Collateral Agent (as amended,
modified or supplemented from time to time in accordance with the terms
hereof and thereof, each a "Mortgage" and collectively, the "Mortgages") with
respect to each of the Mortgaged Properties located in the United States, and
arrangements reasonably satisfactory to the Collateral Agent shall be in
place to provide that counterparts of such Mortgages shall be recorded on the
Initial Borrowing Date in all places to the extent necessary or desirable, in
the judgment of the Collateral Agent, effectively to create a valid and
enforceable first priority Lien, subject only to Permitted Encumbrances, on
each such Mortgaged Property in favor of the Collateral Agent (or such other
trustee as may be required or desired under local law) for the benefit of the
Secured Creditors.
(b) On the Initial Borrowing Date, the Collateral Agent shall have
received mortgagee title insurance policies (or binding commitments to issue
such title insurance policies) issued by title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
reasonably satisfactory to the Collateral Agent and assuring the Collateral
Agent that the Mortgages are valid and enforceable first priority mortgage
Liens on the respective Mortgaged Properties, free and clear of all defects
and encumbrances except Permitted Encum-
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brances. Such Mortgage Policies shall be in form and substance reasonably
satisfactory to the Collateral Agent and (i) shall include an endorsement for
future advances under this Agreement, the Notes and the Mortgages and for any
other matter that the Collateral Agent in its discretion may reasonably
request (to the extent available in the respective jurisdiction of each
Mortgaged Property), (ii) shall not include an exception for mechanics'
liens, and (iii) shall provide for affirmative insurance and such reinsurance
(including direct access agreements) as the Collateral Agent in its
discretion may reasonably request.
(c) On the Initial Borrowing Date, the Collateral Agent shall have also
received surveys in form and substance reasonably satisfactory to the
Collateral Agent of each Mortgaged Property designated as "owned" on Annex
III hereto, dated a recent date reasonably acceptable to the Collateral
Agent, certified in a manner reasonably satisfactory to the Collateral Agent
by a licensed professional surveyor reasonably satisfactory to the Collateral
Agent. The Collateral Agent shall also have received such estoppel letters,
landlord waiver letters, non-disturbance letters and similar assurances as
may have been requested by the Collateral Agent, which letters shall be in
form and substance reasonably satisfactory to the Collateral Agent.
5.13 PLANS; COLLECTIVE BARGAINING AGREEMENTS; EXISTING INDEBTEDNESS
AGREEMENTS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT AGREEMENTS; EMPLOYMENT
AGREEMENTS; NON-COMPETE AGREEMENTS; TAX SHARING AGREEMENTS; MATERIAL
CONTRACTS. On or prior to the Initial Borrowing Date, there shall have been
delivered to the Banks copies, certified as true and correct by an
appropriate officer of the Borrower, of:
(a) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in Section
3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of
the Borrower or any of its Subsidiaries or IVAC Holdings or any of its
Subsidiaries or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any multiemployer plan, as defined in 4001(a)(3)
of ERISA, only to the extent that any document described therein is in
the possession of the Borrower or any Subsidiary of the Borrower or
IVAC Holdings or any Subsidiary of IVAC Holdings or any ERISA Affiliate
or reasonably available thereto from the sponsor or trustee of any such
plan);
(b) any collective bargaining agreements or any other similar
agreement or arrangement covering the employees of Holdings or any of
its Subsidiaries or IVAC Holdings or any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
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(c) all agreements evidencing or relating to the Indebtedness to
Remain Outstanding that are to remain in effect after giving effect to
the consummation of the Transaction (collectively, the "Existing
Indebtedness Agreements");
(d) all other agreements entered into by Holdings or any of
its Subsidiaries or IVAC Holdings or any of its Subsidiaries governing
the terms and relative rights of its capital stock, and any agreements
entered into by shareholders relating to any such entity with respect
to their capital stock, in each case that are to remain in effect after
giving effect to the consummation of the Transaction (collectively, the
"Shareholders' Agreements");
(e) any material agreements (or the forms thereof) with members
of, or with respect to, the management of Holdings or any of its
Subsidiaries or IVAC Holdings or any of its Subsidiaries that are to
remain in effect after giving effect to the consummation of the
Transaction, (collectively, the "Management Agreements");
(f) any employment agreements entered into by Holdings or any of
its Subsidiaries or IVAC Holdings or any of its Subsidiaries
(collectively, the "Employment Agreements");
(g) any non-compete agreement entered into by Holdings or any of
its Subsidiaries or IVAC Holdings or any of its Subsidiaries
(collectively, the "Non-Compete Agreements");
(h) any tax sharing, tax allocation agreements or similar
agreements entered into by Holdings or any of its Subsidiaries or IVAC
Holdings or any of its Subsidiaries (collectively, the "Tax Sharing
Agreements"); and
(i) all material contracts and licenses of Holdings or any of its
Subsidiaries or IVAC Holdings or any of its Subsidiaries that are to
remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Material Contracts");
all of which Plans, Collective Bargaining Agreements, Existing Indebtedness
Agreements, Shareholders' Agreements, Management Agreements, Employment
Agreements, Non-Compete Agreements, Tax Sharing Agreements and Material
Contracts shall be in form and substance reasonably satisfactory to the
Agents and Required Banks and shall be in full force and effect on the
Initial Borrowing Date.
5.14 SOLVENCY OPINION; ENVIRONMENTAL ANALYSES; EVIDENCE OF INSURANCE.
On the Initial Borrowing Date, the Banks shall have received:
(a) a solvency opinion from Houlihan Lokey Howard & Zukin,
addressed to the Agents and each of the Banks and dated the Initial
Borrowing Date and supporting the conclusions, that, after giving
effect to the Transaction and the incurrence of all
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financings contemplated herein, each of Holdings and its Subsidiaries
(including, without limitation, IVAC Holdings and its Subsidiaries) (on
a consolidated basis), the Borrower and its Subsidiaries (including,
without limitation, IVAC Holdings and its Subsidiaries) (on a
consolidated basis) and the Borrower (on a stand-alone-basis) are not
insolvent and will not be rendered insolvent by the indebtedness
incurred in connection herewith, will not be left with unreasonably
small capital with which to engage in their respective businesses and
will not have incurred debts beyond their ability to pay such debts as
they mature and become due;
(b) environmental assessments from Weiss Associates, the results
of which shall be in form and substance reasonably satisfactory to the
Agents and the Required Banks; and
(c) evidence of insurance complying with the requirements of
Section 7.03 for the business and properties of Holdings and its
Subsidiaries (including, without limitation, IVAC Holdings and its
Subsidiaries), in scope, form and substance reasonably satisfactory to
the Agents and the Required Banks and naming the Collateral Agent as an
additional insured, mortgagee and/or loss payee, and stating that such
insurance shall not be cancelled or revised without 30 days prior
written notice by the insurer to the Collateral Agent.
5.15 PRO FORMA BALANCE SHEETS. On or prior to the Initial Borrowing
Date, there shall have been delivered to the Agents and the Required Banks,
an unaudited PRO FORMA consolidated balance sheet of each of Holdings and its
Subsidiaries and the Borrower and its Subsidiaries after giving effect to the
Transaction, prepared in accordance with Regulation S-X, together with a
related funds flow statement, which PRO FORMA balance sheets and funds flow
statement shall be reasonably satisfactory in form and substance to the
Agents and the Required Banks.
5.16 PROJECTIONS. On or prior to the Initial Borrowing Date, the Banks
shall have received the financial projections (the "Projections") set forth
on Annex IV hereto, for the eight fiscal years ended after the Initial
Borrowing Date.
5.17 INDEBTEDNESS TO REMAIN OUTSTANDING. On the Initial Borrowing Date
and after giving effect to the Transaction and the Loans incurred on the
Initial Borrowing Date, neither Holdings nor any of its Subsidiaries shall
have any preferred stock or Indebtedness outstanding except for the Loans,
the Senior Subordinated Notes, the 15% Debentures (but only for 30 days
following the Initial Borrowing Date), the Indebtedness to Remain
Outstanding, the Holdings Preferred Stock (but only until December 16, 1996)
and Indebtedness permitted pursuant to Sections 8.04(d), (f), (g), (h), (i),
(j), (k) and (o). On and as of the Initial Borrowing Date, all of the
Indebtedness to Remain Outstanding shall remain outstanding after giving
effect to the Transaction and the other transactions contemplated hereby
without any default or events of default existing thereunder or arising as a
result of the Transaction and the other transactions contemplated hereby
(except to the extent amended or waived by the parties thereto on terms and
conditions satisfactory to the Agents and the Required Banks), and there
shall not be any
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amendments or modifications to the Existing Indebtedness Agreements other
than as requested or approved by the Agents or the Required Banks. On and as
of the Initial Borrowing Date, the Agents and the Required Banks shall be
satisfied with the amount of and the terms and conditions of all Indebtedness
to Remain Outstanding.
5.18 PAYMENT OF FEES. On the Initial Borrowing Date, all costs, fees
and expenses, and all other compensation contemplated by this Agreement, due
to the Administrative Agent, the Documentation Agent, the Syndication Agents
or the Banks (including, without limitation, legal fees and expenses) shall
have been paid to the extent due.
5.19 NOTICE OF BORROWING. The Administrative Agent shall have received
a Notice of Borrowing satisfying the requirements of Section 1.03 with
respect to each incurrence of Loans, and the Administrative Agent and the
respective Letter of Credit Issuer shall have received a Letter of Credit
Request satisfying the requirements of Section 2.02 with respect to each
issuance of a Letter of Credit.
5.20 SUBSIDIARY GUARANTY. On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiary Guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time in accordance with the terms hereof and
thereof, the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in
full force and effect.
5.21 FINANCIAL STATEMENTS. On or prior to the Initial Borrowing Date,
the Agents shall have received audited consolidated financial statements for
IVAC Holdings (excluding River Medical) for the fiscal year ending December
31, 1995, which shall be in form and substance satisfactory to the Agents.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Banks that
all of the applicable conditions specified above exist as of the date of such
Credit Event. All of the certificates, legal opinions and other documents
and papers referred to in this Section 5, unless otherwise specified, shall
be delivered to the Administrative Agent at its Notice Office for the account
of each of the Banks and, except for the Notes, in sufficient counterparts
for each of the Banks and shall be satisfactory in form and substance to the
Administrative Agent and the Required Banks.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in the Letters of Credit provided for herein, each of
Holdings and the Borrower makes the following representations, warranties and
agreements with the Banks in each case after giving effect to the
Transaction, all of which shall survive the execution and delivery of this
Agreement, the making of the Loans and the issuance of the Letters of Credit
(with the occurrence of each Credit Event being deemed to constitute a
representation and warranty that the matters specified in this Section 6 are
true and correct in all material respects on and as of the date of each such
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Credit Event, unless stated to relate to a specific earlier date in which all
representations and warranties shall be true and correct in all material
respects as of such earlier date):
6.01 CORPORATE STATUS. Holdings and each of its Subsidiaries (i) is a
duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified and where the failure
to be so qualified would have a Material Adverse Effect.
6.02 CORPORATE POWER AND AUTHORITY. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance of the Documents to which it is a party. Each Credit Party has
duly executed and delivered each Document to which it is a party and each
such Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
6.03 NO VIOLATION. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party nor compliance by
them with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein, (i) will contravene any
applicable provision of any law, statute, rule or regulation (other than
those restricting the transfer of government contracts, the non-compliance
with which is not reasonably likely to have a Material Adverse Effect), or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security
Documents) result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of Holdings or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, loan agreement, credit agreement or any other material
agreement or instrument to which Holdings or any of its Subsidiaries is a
party (except agreements breached as a result of the IMED Merger, which
breaches are not reasonably likely to have a Material Adverse Effect) or by
which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws of Holdings or any of its Subsidiaries.
6.04 LITIGATION. There are no actions, suits or proceedings pending
or, to the knowledge of Holdings or any of its Subsidiaries, threatened, with
respect to Holdings or any of its Subsidiaries (i) that are likely to have a
Material Adverse Effect or (ii) that could reasonably be expected to have a
material adverse effect on the rights or remedies of the Banks
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or on the ability of any Credit Party to perform its respective obligations
to the Banks hereunder and under the other Credit Documents to which it is,
or will be, a party. Additionally, there does not exist any judgment, order
or injunction prohibiting or imposing material adverse conditions upon the
occurrence of any Credit Event.
6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all
Term Loans shall be utilized (i) to finance the Transaction and (ii) to pay
fees and expenses incurred in connection therewith.
(b) The proceeds of Revolving Loans may be utilized (i) in amounts of
up to $10,000,000 on the Initial Borrowing Date (x) to finance the
Transaction and (y) to pay fees and expenses incurred in connection therewith
and (ii) after the Initial Borrowing Date, for the general corporate and
working capital purposes of the Borrower and its Subsidiaries.
(c) The proceeds of all Swingline Loans shall be utilized for the
general corporate and working capital purposes of the Borrower and its
Subsidiaries.
(d) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
6.06 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with,
or exemption by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, is required to authorize or is
required in connection with (i) the execution, delivery and performance of
any Document or (ii) the legality, validity, binding effect or enforceability
of any Document (except those consents and approvals required in connection
with the IMED Merger, the failure to obtain which is not reasonably like to
have a Material Adverse Effect).
6.07 INVESTMENT COMPANY ACT. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
6.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither Holdings nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.09 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of Holdings
or any of its Subsidiaries in writing to the Agents or any Bank (including,
without limitation, all information contained in the Documents) for purposes
of or in connection with this Agreement or any transaction contemplated
herein is, and all other such factual information (taken as a whole)
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hereafter furnished by or on behalf of any such Persons in writing to either
Agent or any Bank will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken
as a whole) not misleading at such time in light of the circumstances under
which such information was provided.
6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the
Initial Borrowing Date, on a PRO FORMA basis after giving effect to the
Transaction and to all Indebtedness incurred, and to be incurred (including,
without limitation, the Loans and the Senior Subordinated Notes), and Liens
created, and to be created, by each Credit Party in connection therewith,
with respect to the Borrower (on a stand-alone basis) and each of Holdings
and its Subsidiaries and of the Borrower and its Subsidiaries (each on a
consolidated basis), (x) the sum of the assets, at a fair valuation, of the
Borrower (on a stand-alone basis) and each of Holdings and its Subsidiaries
and of the Borrower and its Subsidiaries (each on a consolidated basis), will
exceed its debts, (y) it has not incurred nor intended to, nor believes that
it will, incur debts beyond its ability to pay such debts as such debts
mature and (z) it will have sufficient capital with which to conduct its
business. For purposes of this Section 6.10, "debt" means any liability on a
claim, and "claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(ii) right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) The audited consolidated balance sheet of the Borrower for the
fiscal year ended December 31, 1995, and the unaudited consolidated balance
sheet of the Borrower at September 30, 1996, and the related consolidated
statements of operations and cash flows of the Borrower for the fiscal year
or nine-month period, as the case may be, ended as of said dates, which
annual financial statements have been examined by Price Waterhouse LLP,
certified public accountants, who delivered an unqualified opinion with
respect thereto and copies of which have heretofore been delivered to each
Bank, present fairly in all material respects the financial position of the
Borrower and its Subsidiaries on a consolidated basis at the date of said
statements and the results for the periods covered thereby. All such
financial statements have been prepared in accordance with GAAP consistently
applied except to the extent provided in the notes to said financial
statements and subject, in the case of the September 30, 1996 statements, to
normal year-end audit adjustments and the absence of footnotes.
(c) The audited consolidated balance sheet of IVAC Holdings for the
fiscal year ended December 31, 1995, and the unaudited consolidated balance
sheet of IVAC Holdings at September 30, 1996, and the related consolidated
statements of operations and cash flows of IVAC Holdings for the fiscal year
or nine-month period, as the case may be, ended as of said dates, which
annual financial statements have been examined by Price Waterhouse LLP,
certified public accountants, who delivered an unqualified opinion with
respect thereto and copies of which have heretofore been delivered to each
Bank, present fairly in all material
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respects the financial position of IVAC Holdings and its Subsidiaries on a
consolidated basis at the date of said statements and the results for the
periods covered thereby. All such financial statements have been prepared in
accordance with GAAP consistently applied except to the extent provided in
the notes to said financial statements and subject, in the case of the
September 30, 1996 statements, to normal year-end audit adjustments and the
absence of footnotes.
(d) The audited consolidated balance sheet of IVAC Holdings (excluding
River Medical) for the fiscal year ended December 31, 1995, and the related
consolidated statements of operations and cash flows of IVAC Holdings
(excluding River Medical) for the fiscal year ended as of said date, which
annual financial statements have been examined by Price Waterhouse LLP,
certified public accountants, who delivered an unqualified opinion with
respect thereto and copies of which have heretofore been delivered to each
Bank pursuant to Section 5.21 of this Agreement, present fairly in all
material respects the financial position of IVAC Holdings and its
Subsidiaries (excluding River Medical) on a consolidated basis at the date of
said statements and the results for the period covered thereby. All such
financial statements have been prepared in accordance with GAAP consistently
applied except to the extent provided in the notes to said financial
statements.
(e) Since December 31, 1995, nothing has occurred that has had or could
reasonably be expected to have a Material Adverse Effect.
(f) Except as fully reflected in the financial statements described in
Sections 6.10(b) and (c) and the Indebtedness incurred under this Agreement
and the Senior Subordinated Notes, there were as of the Initial Borrowing
Date (and after giving effect to any Loans made on such date), no liabilities
or obligations (excluding current obligations incurred in the ordinary course
of business) with respect to Holdings or any of its Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due), and neither Holdings nor the Borrower know of any basis
for the assertion against Holdings or any of its Subsidiaries of any such
liability or obligation which, either individually or in the aggregate, are
or would be reasonably likely to have, a Material Adverse Effect.
(g) The Projections are based on good faith estimates and assumptions
made by the management of the Borrower, and on the Initial Borrowing Date
such management believed that the Projections were reasonable and attainable,
it being recognized by the Banks, however, that projections as to future
events are not to be viewed as facts and that the actual results during the
period or periods covered by the Projections may differ from the projected
results and that the differences may be material. There is no fact known to
Holdings or any of its Subsidiaries which would have a Material Adverse
Effect, which has not been disclosed herein or in such other documents,
certificates and statements furnished to the Banks for use in connection with
the transactions contemplated hereby.
6.11 SECURITY INTERESTS. On and after the Initial Borrowing Date, each
of the Security Documents creates (or after the execution and delivery
thereof will create), as security for the
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Obligations, a valid and enforceable perfected security interest in and Lien
on all of the Collateral subject thereto, superior to and prior to the rights
of all third Persons and subject to no other Liens (except that the Security
Agreement Collateral, the Mortgaged Properties and the collateral covered by
the Additional Security Documents may be subject to Permitted Liens relating
thereto), in favor of the Collateral Agent. No filings or recordings are
required in order to perfect the security interests created under any
Security Document except for filings or recordings required in connection
with any such Security Document which shall have been made as contemplated by
Section 5.11 or on or prior to the execution and delivery thereof as
contemplated by Sections 7.11, 7.14 and 8.17.
6.12 REPRESENTATIONS AND WARRANTIES IN OTHER DOCUMENTS. All
representations and warranties set forth in the other Documents were true and
correct in all material respects as of the time such representations and
warranties were made and shall be true and correct in all material respects
as of the Initial Borrowing Date as if such representations and warranties
were made on and as of such date, unless stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date.
6.13 TRANSACTION. At the time of consummation thereof, the Transaction
shall have been consummated in accordance with the terms of the respective
Documents and all applicable laws. At the time of consummation thereof, all
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction
have been obtained, given, filed or taken or waived and are or will be in
full force and effect (or effective judicial relief with respect thereto has
been obtained) except where the failure to obtain, give, file, or take would
not reasonably be expected to have a Material Adverse Effect. All applicable
waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being
taken by any competent authority which restrains, prevents, or imposes
material adverse conditions upon the Transaction. Additionally, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the Transaction, or the performance by Holdings and
its Subsidiaries of their obligations under the Documents and all applicable
laws. Notwithstanding the foregoing provisions of this Section 6.13, in
accordance with customary government practices certain government contracts
which are being transferred as part of the Transaction will be novated after
the Initial Borrowing Date.
6.14 COMPLIANCE WITH ERISA IN CONNECTION WITH DOMESTIC PENSION PLANS.
Annex VI sets forth each Plan; each Plan (and each related trust, insurance
contract or fund) is in substantial compliance with its terms and with all
applicable laws, including without limitation ERISA and the Code; each Plan
(and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received or applied for a determination letter
from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event
has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a) (3) of ERISA) is insolvent or in reorganization; no Plan has
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an Unfunded Current Liability; no Plan which is subject to Section 412 of the
Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made; neither Holdings nor any Subsidiary of Holdings
nor any ERISA Affiliate has incurred any material liability (including any
indirect, contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201,
4204, or 4212 of ERISA or Section 401(a) (29), 4971 or 4975 of the Code or
expects to incur any such liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to
Holdings or any Subsidiary of Holdings or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan which is subject to Title IV of
ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened; using actuarial assumptions and computation methods consistent
with Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of
Holdings and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a) (3) of ERISA) in the event
of a complete withdrawal therefrom, as of the close of the most recent fiscal
year of each such Plan ended prior to the date of the most recent Credit
Event, would not exceed $500,000; no group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has
covered employees or former employees of Holdings, any Subsidiary of
Holdings, or any ERISA Affiliate has incurred any material liability under
the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B
of the Code; no lien imposed under the Code or ERISA on the assets of
Holdings or any Subsidiary of Holdings or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and Holdings and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by
any of them without incurring any material liability.
6.15 COMPLIANCE WITH APPLICABLE LAWS IN CONNECTION WITH FOREIGN PENSION
PLANS. Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Holdings nor any of its Subsidiaries has incurred
any obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. No Foreign Pension Plan has a material unfunded
liability.
6.16 CAPITALIZATION. (a) On the Initial Borrowing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, the
authorized capital stock of Holdings shall consist of: (i) 75,000,000 shares
of common stock, $.01 par value per share (such authorized shares of common
stock, together with any subsequently authorized shares of
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common stock of Holdings, the "Holdings Common Stock"), of which 58,979,650
shares shall be issued and outstanding ; (ii) 3,000,000 shares of preferred
stock, $.01 par value per share, of which (x) 1,800,000 shares are designated
as 10% cumulative preferred stock (the "10% Preferred Stock"), of which
329,928 shares shall be issued and outstanding and will be redeemed on
December 16, 1996, and (y) 333,000 shares are designated as convertible
preferred stock, of which 333,000 shares shall be issued and outstanding and
will be redeemed on December 17, 1996, immediately after redemption of the
10% Preferred Stock; and (iii) 6,000,000 shares of preferred stock, $.01 par
value per share, of which there shall be no shares issued and outstanding.
(b) On the Initial Borrowing Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of 3,000 shares of common stock,
$0.01 par value per share, and all of the issued and outstanding shares of
such common stock are owned by Holdings. All such outstanding shares have
been duly and validly issued, are fully paid and nonassessable. The Borrower
does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase,
or any options for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its capital stock.
6.17 SUBSIDIARIES. On and as of the Initial Borrowing Date and after
giving effect to the consummation of the Transaction, Holdings has no
Subsidiaries other than the Borrower and its Subsidiaries, and the Borrower
has no Subsidiaries other than those Subsidiaries listed on Annex V. Annex V
correctly sets forth, as of the Initial Borrowing Date and after giving
effect to the Transaction, the percentage ownership (direct and indirect) of
Holdings in each class of capital stock of each of its Subsidiaries and also
identifies the direct owner thereof.
6.18 INTELLECTUAL PROPERTY. Holdings and each of its Subsidiaries owns
or holds a valid license to use all the material patents, trademarks,
permits, service marks, trade names, technology, know-how and formulas or
other rights with respect to the foregoing, free from restrictions that are
materially adverse to the use thereof, that are used in the operation of the
business of Holdings and each of its Subsidiaries as presently conducted.
6.19 COMPLIANCE WITH STATUTES, ETC. Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including compliance with all applicable
Environmental Laws with respect to any Real Property or governing its
business and the requirements of any permits issued under such Environmental
Laws with respect to any such Real Property or the operations of Holdings or
any of its Subsidiaries), except such non-compliance as is not likely to,
individually or in the aggregate, have a Material Adverse Effect.
6.20 ENVIRONMENTAL MATTERS. (a) Each of Holdings and each of its
Subsidiaries has complied with, and on the date of each Credit Event are in
compliance with, all applicable
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Environmental Laws and the requirements of any permits issued under such
Environmental Laws. There are no pending, past or, to the best knowledge of
Holdings and its Subsidiaries, threatened Environmental Claims against
Holdings or any of its Subsidiaries or any Real Property owned or operated by
Holdings or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences regarding Holdings or its Subsidiaries, their
operations or any Real Property at any time owned or operated by Holdings or
any of its Subsidiaries or on any property adjoining or in the vicinity of
any such Real Property that would reasonably be expected (i) to form the
basis of an Environmental Claim against Holdings or any of its Subsidiaries
or any such Real Property or (ii) to cause any such Real Property to be
subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property by Holdings or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings or any of its Subsidiaries except in amounts necessary
for the operation of the business of Holdings and its Subsidiaries, in
compliance with applicable Environmental Laws and so as not to give rise to
an Environmental Claim. Hazardous Materials have not at any time been
Released on or from any Real Property owned or operated by Holdings or any of
its Subsidiaries. There are not now any underground storage tanks located on
any Real Property owned or operated by Holdings or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 6.20, the
representations made in this Section 6.20 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of underground storage tanks, in each case of
the types described above, would reasonably be expected to have a Material
Adverse Effect.
6.21 PROPERTIES. All Real Property owned by Holdings or any of its
Subsidiaries and all material Leaseholds leased by Holdings or any of its
Subsidiaries, in each case as of the Initial Borrowing Date and after giving
effect to the Transaction, and the nature of the interest therein, is
correctly set forth in Annex III. Holdings and each of its Subsidiaries has
good and marketable title to, or a validly subsisting leasehold interest in,
all material properties owned or leased by it, including all Real Property
reflected in Annex III or in the financial statements referred to in Section
6.10(b) or (c), free and clear of all Liens, other than Permitted Liens.
6.22 LABOR RELATIONS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice
complaint pending against Holdings or any of its Subsidiaries or before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending or
threatened against Holdings or any of its Subsidiaries, (ii) no strike, labor
dispute, slowdown or stoppage pending against Holdings or any of its
Subsidiaries and (iii) no union representation question existing with respect
to the employees of Holdings or any of its Subsidiaries and no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i),
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(ii) or (iii) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.
6.23 TAX RETURNS AND PAYMENTS. Each of Holdings and each of its
Subsidiaries has filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it and has paid
all material taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of Holdings and its Subsidiaries in
accordance with generally accepted accounting principles. Holdings and each
of its Subsidiaries have at all times paid, or have provided adequate
reserves (in the good faith judgment of the management of Holdings) for the
payment of, all federal, state and foreign income taxes applicable for all
prior fiscal years and for the current fiscal year to date. Except as
provided on Annex XI, there is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Holdings
or any of its Subsidiaries, threatened by any authority regarding any taxes
relating to Holdings or any of its Subsidiaries. Except as provided on Annex
XI, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of Holdings or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of
Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.
6.24 INDEBTEDNESS TO REMAIN OUTSTANDING. Annex VIII sets forth a true
and complete list of all Indebtedness of Holdings and its Subsidiaries as of
the Initial Borrowing Date and which is to remain outstanding after giving
effect to the Transaction and the incurrence of Loans on such date (excluding
the Loans, the Letters of Credit, the Senior Subordinated Notes, the 15%
Debentures and Indebtedness permitted pursuant to Sections 8.04(d), (f), (g),
(h), (i), (j), (k) and (o), the "Indebtedness to Remain Outstanding" in each
case showing the aggregate principal amount thereof and the name of the
respective borrower and any other entity which directly or indirectly
guaranteed such debt.
6.25 SUBORDINATION. The subordination provisions contained in the
Senior Subordinated Note Documents are enforceable against the Borrower and
the holders thereof, and all Obligations are within the definition of "Senior
Debt" included in such subordination provisions.
6.26 FDA MATTERS. (a) Holdings and each of its Subsidiaries is, and
the products sold by Holdings and each of its Subsidiaries are, in compliance
in all material respects with all current applicable statutes, rules,
regulations, standards, guides, policies or orders administered or issued by
the FDA.
(b) Neither Holdings nor any of its Subsidiaries has received, or has
knowledge of any facts which furnish any reasonable basis for, any Notice of
Adverse Findings, Warning Letters, Regulatory Letters, Section 305 Notices,
or other similar communications, and there have been
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no recalls, field notifications, alerts or seizures requested or threatened
relating to the products sold by Borrower and each of its Subsidiaries.
(c) The premarket approval ("PMA") and premarket notification ("510(k)")
documents and related documents and information for each of the products of
Holdings and each of its Subsidiaries are in compliance in all material
respects with the applicable federal statutes, rules, regulations, standards,
guides, policies or orders administered or promulgated by the FDA and
Holdings has no reason to believe that the FDA is considering limiting,
suspending or revoking any such approvals or clearances. All preclinical and
clinical studies have been conducted with recognized good clinical and good
laboratory practices in all material respects.
(d) Neither Holdings nor any of its Subsidiaries is aware of any facts
which are reasonably likely to cause (i) the denial, withdrawal, recall or
suspension of any product sold or intended to be sold by Holdings or any of
its Subsidiaries, or (ii) a change in the marketing classification or
labeling of any such products, or (iii) a termination or suspension of
marketing of any such products.
(e) Annex IX hereto contains an accurate and complete list of (i) all
products currently manufactured, marketed or sold by Holdings and each of its
Subsidiaries which have been recalled or subject to a field notification
(whether voluntarily or otherwise); and (ii) all proceedings of which
Holdings or any of its Subsidiaries has received notice (whether completed or
pending) at any time seeking recall, suspension or seizure of any product
sold or proposed to be sold by Holdings or any of its Subsidiaries.
(f) Holdings has conducted all internal audits, has prepared all
internal audit reports, has conducted all management reviews of such audit
reports and has taken all such follow up corrective action indicated by such
audit reports as are required by 21 C.F.R. Section 820.20.
(g) Holdings and each of its Subsidiaries has timely filed all medical
device reports (the "Medical Device Report Policy") required to be filed by
21 C.F.R. Section 803.24. Annex X hereto sets forth Holdings' and each of
its Subsidiary's corporate policy for filing such reports.
(h) Holdings has obtained all necessary regulatory approvals from any
foreign regulatory agencies related to the products distributed and sold by
Holdings or any of its Subsidiaries.
(i) Holdings reasonably believes that it will be able to obtain
authorization from the FDA to market all products proposed as of the Initial
Borrowing Date to be introduced by it under a 510(k) clearance, and will not
be required to file a PMA application with the FDA with respect to any such
products.
SECTION 7. AFFIRMATIVE COVENANTS. Holdings and the Borrower hereby
covenant and agree that on the Effective Date and thereafter for so long as
this Agreement is in effect and until the Commitments have terminated, no
Letters of Credit or Notes are outstanding and the
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Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 12.13 hereof
which are not then due and payable) incurred hereunder, are paid in full:
7.01 INFORMATION COVENANTS. Holdings will furnish to each Bank:
(a) MONTHLY REPORTS. Within 30 days after the end of each fiscal
month of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such month and the
related consolidated statements of income and retained earnings and of
cash flows for such month and for the elapsed portion of the fiscal year
ended with the last day of such month, in each case setting forth
comparative figures for the corresponding month in the prior fiscal
year, all of which shall be certified by the chief financial officer or
other Authorized Officer of the Borrower, subject to normal year-end
audit adjustments and the absence of footnotes.
(b) QUARTERLY FINANCIAL STATEMENTS. Within 55 days after the close
of each quarterly accounting period in each fiscal year of each of
Holdings and the Borrower, the consolidated and consolidating balance
sheets of each of Holdings and its Subsidiaries and the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated and consolidating statements of income and retained
earnings and of cash flows for such quarterly accounting period and for
the elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period; all of which shall be in reasonable detail
and certified by the chief financial officer or other Authorized Officer
of Holdings or the Borrower, as the case may be, that they fairly
present the financial condition of Holdings and its Subsidiaries or the
Borrower and its Subsidiaries, as the case may be, as of the dates
indicated and the results of their operations and changes in their cash
flows for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes.
(c) ANNUAL FINANCIAL STATEMENTS. Within 100 days after the close of
each fiscal year of each of Holdings and the Borrower, the consolidated
and consolidating balance sheets of each of Holdings and its
Subsidiaries and the Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for such fiscal year and,
in the case of such consolidated financial statements, setting forth
comparative figures for the preceding fiscal year and comparable
budgeted figures for such fiscal year and certified by Price Waterhouse
LLP or such other independent certified public accountants of recognized
national standing as shall be reasonably acceptable to the
Administrative Agent, in each case to the effect that such statements
fairly present in all material respects the financial condition of
Holdings and its Subsidiaries and the Borrower and its Subsidiaries, as
the case may be, as of the dates indicated and the results of their
operations and changes, together with a certificate of such accounting
firm stating that in the course of its regular audit of the business of
Holdings and its Subsidiaries and the Borrower and its Subsidiaries,
which audit was conducted in accordance
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with generally accepted auditing standards, no Default or Event of
Default which has occurred and is continuing has come to their attention
or, if such a Default or Event of Default has come to their attention a
statement as to the nature thereof.
(d) BUDGETS, ETC. Not more than 30 days after the commencement of
each fiscal year of Holdings (90 days in the case of the fiscal year
commencing January 1, 1997), budgets of the Borrower and its
Subsidiaries in reasonable detail for each of the four fiscal quarters
of such fiscal year, in each case as customarily prepared by management
for its internal use setting forth, with appropriate discussion, the
principal assumptions upon which such budgets are based. Together with
each delivery of financial statements pursuant to Section 7.01(b) and
(c), a comparison of the current year to date financial results (other
than in respect of the balance sheets included therein) against the
budgets required to be submitted pursuant to this clause (d) shall be
presented.
(e) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Section 7.01(b) and (c), a
certificate of the chief financial officer or other Authorized Officer
of Holdings 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, which certificate shall set forth the calculations
required to establish whether Holdings and its Subsidiaries were in
compliance with the provisions of Sections 8.04 and 8.08 through and
including 8.13, as at the end of such fiscal quarter or year, as the
case may be. In addition, at the time of the delivery of the financial
statements provided for in Section 7.01(c), a certificate of the chief
financial officer or other Authorized Officer of Holdings setting forth
the amount of, and calculations required to establish the amount of,
Excess Cash Flow for the Excess Cash Flow Period ending on the last day
of the respective fiscal year.
(f) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within three Business Days after any officer of Holdings or any of its
Subsidiaries obtains knowledge thereof, notice of (x) the occurrence of
any event which constitutes a Default or an Event of Default, which
notice shall specify the nature thereof, the period of existence thereof
and what action Holdings or the Borrower proposes to take with respect
thereto and (y) the commencement of, or threat of, any litigation or
governmental proceeding pending against Holdings or any of its
Subsidiaries which is likely to have a Material Adverse Effect, or a
material adverse effect on the ability of any Credit Party to perform
its respective obligations hereunder or under any other Credit Document.
(g) AUDITORS' REPORTS. Promptly upon receipt thereof, a copy of each
report or "management letter" submitted to Holdings or any of its
Subsidiaries by its independent accountants in connection with any
annual, interim or special audit made by them of the books of Holdings
or any of its Subsidiaries.
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(h) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of
any of the following, written notice of any of the following
environmental matters which could reasonably be expected to result in a
cost to Holdings or any of its Subsidiaries in excess of $500,000:
(i) any pending or threatened material Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property
owned or operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property at any
time owned or operated by Holdings or any of its Subsidiaries that
(x) results in a material noncompliance by Holdings or any of its
Subsidiaries with any applicable Environmental Law or (y) could
reasonably be anticipated to form the basis of a material
Environmental Claim against Holdings or any of its Subsidiaries or
any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject
to any material restrictions on the ownership, occupancy, use or
transferability by Holdings or its Subsidiary, as the case may be,
of its interest in such Real Property under any Environmental Law;
and
(iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by Holdings or any
of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and Holdings' or the Borrower's response thereto. In addition,
Holdings agrees to provide the Banks with copies of all material written
communications by Holdings or any of its Subsidiaries with any Person,
government or governmental agency relating to any of the matters set
forth in clauses (i)-(iv) above, and such detailed reports relating to
any of the matters set forth in clauses (i)-(iv) above as may reasonably
be requested by the Administrative Agent or the Required Banks.
(i) OTHER INFORMATION. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by Holdings
or any of its Subsidiaries and copies of all financial statements, proxy
statements, notices and reports as Holdings or any of its Subsidiaries
shall generally send to analysts or the holders of their capital stock
or of the Senior Subordinated Notes in their capacity as such holders
(in each case to the extent not theretofore delivered to the Banks
pursuant to this Agreement) and, with reasonable promptness, such other
information or documents
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(financial or otherwise) as the Administrative Agent on its own behalf
or on behalf of any Bank may reasonably request from time to time.
7.02 BOOKS, RECORDS AND INSPECTIONS. Holdings will, and will cause
each of its Subsidiaries to, permit, upon notice to the chief financial
officer or other Authorized Officer of Holdings or the Borrower, (x) officers
and designated representatives of the Administrative Agent or any Bank to
visit and inspect any of the properties or assets of Holdings and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account
of Holdings and any of its Subsidiaries and discuss the affairs, finances and
accounts of Holdings and of any of its Subsidiaries with, and be advised as
to the same by, their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any Bank may desire and (y) the Administrative Agent,
at the request of the Required Banks, to conduct, at Holdings' and the
Borrower's expense, an audit of the accounts receivable and/or inventories of
Holdings and its Subsidiaries at such times (but no more frequently than once
a year unless an Event of Default has occurred and is continuing) as the
Required Banks shall reasonably require.
7.03 INSURANCE. Holdings will, and will cause each of its Subsidiaries
to, at all times from and after the Effective Date maintain in full force and
effect insurance with reputable and solvent insurance carriers in such
amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice.
At any time that insurance at the levels described in Annex VII is not being
maintained by Holdings and its Subsidiaries, Holdings will notify the Banks
in writing thereof and, if thereafter notified by the Administrative Agent to
do so (it being understood and agreed that in determining whether to give any
such notice the Administrative Agent will take into account applicable
premium levels at such time), Holdings will obtain insurance at such levels
to the extent then generally available (but in any event within the
deductible or self-insured retention limitations set forth in the preceding
sentence) or otherwise as are reasonably acceptable to the Administrative
Agent. Holdings will furnish to the Administrative Agent on the Initial
Borrowing Date and on each date on which financial statements are delivered
pursuant to Section 7.01(c) a summary of the insurance carried in respect of
Holdings and its Subsidiaries and the assets of Holdings and its Subsidiaries
together with certificates of insurance and other evidence of such insurance,
if any, naming the Collateral Agent as mortgagee with respect to real
property, lenders loss payee with respect to personal property, additional
insured with respect to general liability and umbrella liability coverage and
certificate holder with respect to workers' compensation insurance.
7.04 PAYMENT OF TAXES. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any properties belonging to it, prior to the date on which penalties
attach thereto, and all lawful claims for sums that have become due and
payable which, if unpaid, might become a Lien not otherwise permitted under
Section 8.03(a); PROVIDED, that neither Holdings nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim
which is being contested in good faith and by
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proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with GAAP.
7.05 CORPORATE FRANCHISES. Holdings will do, and will cause each of its
Subsidiaries to do, or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights,
franchises and authority to do business; PROVIDED, HOWEVER, that any
transaction permitted by Section 8.02 will not constitute a breach of this
Section 7.05.
7.06 COMPLIANCE WITH STATUTES, ETC. Holdings will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls)
except for such non-compliance as would not have a Material Adverse Effect or
a material adverse effect on the ability of any Credit Party to perform its
obligations under any Credit Document to which it is a party.
7.07 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) Holdings will, and will
cause each of its Subsidiaries to, comply in all material respects with all
Environmental Laws applicable to the operation of its business and the
ownership or use of all Real Property now or hereafter owned or operated by
Holdings or any of its Subsidiaries, and Holdings promptly will pay, and will
cause each of its Subsidiaries to pay, all costs and expenses incurred in
keeping in material compliance with all Environmental Laws, and will keep or
cause to be kept all Real Properties owned or operated by Holdings or any of
its Subsidiaries free and clear of any Liens imposed pursuant to such
Environmental Laws; and neither Holdings nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of, Hazardous Materials on any
Real Property owned or operated by Holdings or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except in amounts necessary for the operation of the
business, in compliance with all applicable Environmental Laws and so as not
to give rise to an Environmental Claim.
(b) If Holdings or any of its Subsidiaries, or any tenant or occupant of
any Real Property owned or operated by Holdings or any of its Subsidiaries,
cause or permit any intentional or unintentional act or omission resulting in
the Release or threatened Release of any Hazardous Material, each of Holdings
and the Borrower agrees to undertake, and/or to cause any of its
Subsidiaries, tenants or occupants to undertake, at their sole expense, any
clean up, removal, remedial or other action required pursuant to
Environmental Laws to remove and clean up any Hazardous Materials from any
Real Property; PROVIDED, that neither Holdings nor any of its Subsidiaries
shall be required to comply with any such order or directive issued by any
governmental authority which is being contested in good faith and by proper
proceedings so long as it has maintained adequate reserves with respect to
such compliance to the extent required in accordance with GAAP.
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(c) At the written request of the Agents or the Required Banks, which
request shall specify in reasonable detail the basis therefor, at any time
and from time to time, the Borrower will provide, at the sole expense of the
Borrower, an environmental site assessment report concerning any Real
Property owned or operated by the Borrower or any of its Subsidiaries or
joint ventures, prepared by an environmental consulting firm reasonably
approved by the Agents, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in
connection with such Hazardous Materials on such Real Property, PROVIDED that
unless a Default or Event of Default exists at such time, such request may
only be made if the Agents or Required Banks have a reasonable basis for
requesting same. If the Borrower fails to provide the same within 90 days
after such request was made, the Agents may order the same, the cost of which
shall be borne by the Borrower, and the Borrower shall grant and hereby
grants to the Agents and the Banks and their agents access to such Real
Property and specifically grants the Agents and the Banks an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time upon reasonable notice to the Borrower, all
at the sole and reasonable expense of the Borrower.
7.08 ERISA. As soon as possible and, in any event, within 10 days after
Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, Holdings will
deliver to each of the Banks a certificate of the chief financial officer of
Holdings setting forth the full details as to such occurrence and the action,
if any, that Holdings, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given
to or filed with or by Holdings, the Subsidiary, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect thereto:
that a Reportable Event has occurred; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has
been incurred or an application may be or has been made for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a
Plan; that any contribution required to be made with respect to a Plan or
Foreign Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability which, when added to the
aggregate amount of Unfunded Current Liabilities with respect to all other
Plans, exceeds $500,000; that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan which is subject to Title
IV of ERISA; that a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan; that Holdings, any
Subsidiary of Holdings or any ERISA Affiliate will or may incur any material
liability (including any indirect, contingent, or secondary liability) to or
on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or
502(i) or 502(l) of ERISA or with respect to a group health plan (as defined
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section
4980B of the Code; or that Holdings or any Subsidiary of Holdings may incur
any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees
or other former
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employees (other than as required by Section 601 of ERISA) or any Plan or any
Foreign Pension Plan. At the request of any Bank, Holdings will deliver to
such Bank a complete copy of the annual report (on Internal Revenue Service
Form 5500-series) of each Plan (including, to the extent required, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof, copies
of any material notices received by Holdings, any Subsidiary of Holdings or
any ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to the Banks no later than 10 days after the date such notice has
been received by Holdings, the Subsidiary or the ERISA Affiliate, as
applicable.
7.09 GOOD REPAIR. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in
its business are kept in good repair, working order and condition, normal
wear and tear excepted, and, subject to Section 8.08, that from time to time
there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
7.10 END OF FISCAL YEARS; FISCAL QUARTERS. Holdings will, for financial
reporting purposes, cause (i) each of its, and each of its Subsidiaries',
fiscal years to end on December 31 of each year, provided that Foreign
Subsidiaries may have fiscal years ending on November 30 of each year, and
(ii) each of its, and each of its Subsidiaries', fiscal quarters to end on
March 31, June 30, September 30 and December 31 of each year, provided that
Foreign Subsidiaries may have fiscal quarters ending on February 28 (or
February 29, as the case may be), May 31, August 31 and November 30 of each
year.
7.11 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) Holdings will, and
will cause each of its Domestic Subsidiaries (other than Fidata and River
Medical) (and, subject to Section 7.14, each of its Foreign Subsidiaries) to,
grant to the Collateral Agent security interests and mortgages in such assets
and properties of Holdings and such Subsidiaries as are not covered by the
original Security Documents and as may be requested from time to time by the
Administrative Agent or the Required Banks (collectively, the "Additional
Security Documents") provided that neither Holdings nor any such Subsidiary
shall be required to grant any security interest or mortgage in any asset
subject to a Lien permitted under Section 8.03(k), (m), (n) or (p). All such
security interests and mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
shall constitute valid and enforceable perfected security interests and
mortgages superior to and prior to the rights of all third Persons and
subject to no other Liens except for Permitted Liens. The Additional Security
Documents or instruments related thereto shall have been duly recorded or
filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent
required to be granted pursuant to the Additional Security Documents, and all
taxes, fees and other charges payable in connection therewith shall have been
paid in full.
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(b) Holdings will, and will cause each of its Subsidiaries (other than
Fidata and River Medical) to, at the expense of Holdings and the Borrower,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers
of attorney, certificates, real property surveys, reports and other
assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents as the Collateral Agent
may reasonably require. Furthermore, Holdings shall cause to be delivered to
the Collateral Agent such opinions of counsel, title insurance and other
related documents as may be reasonably requested by the Administrative Agent
to assure themselves that this Section 7.11 has been complied with.
(c) If the Collateral Agent or the Required Banks determine that they
are required by law or regulation to have appraisals prepared in respect of
the Real Property of Holdings and its Subsidiaries (other than Fidata and
River Medical) constituting Collateral, the Borrower shall provide to the
Administrative Agent appraisals which satisfy the applicable requirements of
the Real Estate Appraisal Reform Amendments of the Financial Institution
Reform, Recovery and Enforcement Act of 1989, as amended, and which shall be
in form and substance reasonably satisfactory to the Administrative Agent.
(d) Holdings and the Borrower agree that each action required above by
this Section 7.11 shall be completed as soon as possible, but in no event
later than 180 days after such action is either requested to be taken by the
Administrative Agent or the Required Banks or required to be taken by
Holdings and its Subsidiaries pursuant to the terms of this Section 7.11;
PROVIDED, that in no event shall Holdings or the Borrower be required to take
any action, other than using its reasonable efforts, to obtain consents from
third parties with respect to its compliance with this Section 7.11.
7.12 REGISTRY. The Borrower hereby designates the Administrative Agent
to serve as the Borrower's agent, solely for purposes of this Section 7.12,
to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans
of each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such
Bank and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect
to ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or
transfer of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the Administrative
Agent for acceptance and registration of assignment or transfer of all or
part of a Loan, or as soon thereafter as practicable, the
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assigning or transferor Bank shall surrender the Note evidencing such Loan,
and thereupon one or more new Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or the new Bank. The
Borrower agrees to indemnify the Administrative Agent from and against any
and all losses, claims, damages and liabilities of whatsoever nature which
may be imposed on, asserted against or incurred by the Administrative Agent
in performing its duties under this Section 7.12.
7.13 CONTRIBUTIONS; PAYMENTS. (a) Holdings will contribute as an
equity contribution to the capital of the Borrower upon its receipt thereof,
any net cash proceeds received by Holdings after the Initial Borrowing Date
from any sale or issuance of its equity or any cash capital contributions
received by Holdings after the Initial Borrowing Date (other than the net
proceeds received from any cash capital contributions from Picower and/or any
of his Affiliates or the sale or issuance of any Holdings Common Stock to the
extent that (i) such net proceeds are not required to be applied to prepay
the Loans pursuant to clause (z) of Section 4.02(A)(d) and (ii) such net
proceeds are applied to redeem, repurchase or prepay the 7-1/4% Debentures
pursuant to Section 8.15(i)).
(b) the Borrower will use the proceeds of all equity contributions
received by it from Holdings as provided in clause (a) above toward the
repayment of Term Loans to the extent required by Section 4.02.
7.14 FOREIGN SUBSIDIARIES SECURITY. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for
the Borrower acceptable to the Administrative Agent and the Required Banks
does not within 30 days after a request from the Administrative Agent or the
Required Banks deliver evidence, in form and substance mutually satisfactory
to the Administrative Agent and the Borrower, with respect to any Foreign
Subsidiary which has not already had all of its stock pledged pursuant to the
Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the total
combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote, and (y) of any promissory note issued by such
Foreign Subsidiary to Holdings or any of its Domestic Subsidiaries, (ii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement and (iii) the entering into
by such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiary Guaranty, in any such case would cause the undistributed earnings
of such Foreign Subsidiary as determined for Federal income tax purposes to
be treated as a deemed dividend to such Foreign Subsidiary's United States
parent for Federal income tax purposes, then in the case of a failure to
deliver the evidence described in clause (i) above, that portion of such
Foreign Subsidiary's outstanding capital stock or any promissory notes so
issued by such Foreign Subsidiary, in each case not theretofore pledged
pursuant to the Pledge Agreement shall be pledged to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement (or
another pledge agreement in substantially similar form, if needed), and in
the case of a failure to deliver the evidence described in clause (ii) above,
such Foreign Subsidiary shall execute and deliver the Security Agreement (or
another security agreement in substantially similar form, if needed),
granting the Secured Creditors a security interest in all
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of such Foreign Subsidiary's assets and securing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement and, in the event the Subsidiary
Guaranty shall have been executed by such Foreign Subsidiary, the obligations
of such Foreign Subsidiary thereunder, and in the case of a failure to
deliver the evidence described in clause (iii) above, such Foreign Subsidiary
shall execute and deliver the Subsidiary Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement, in each case to the extent that the
entering into such Security Agreement or Subsidiary Guaranty is permitted by
the laws of the respective foreign jurisdiction and with all documents
delivered pursuant to this Section 7.14 to be in form and substance
reasonably satisfactory to the Administrative Agent and the Required Banks.
7.15 INTEREST RATE PROTECTION. The Borrower shall no later than 100
days following the Initial Borrowing Date enter into Interest Rate Protection
Agreements, satisfactory to the Agents, with a term of at least three years,
establishing a fixed or maximum interest rate acceptable to the Agents in
respect of at least 50% of the then outstanding Term Loans.
7.16 DEBENTURES REDEMPTION. No later than the 30th day after the
Initial Borrowing Date, Holdings shall redeem in full all of its outstanding
15% Debentures, and shall pay all accrued interest thereon and other amounts
owing in respect thereof.
7.17 HOLDINGS PREFERRED STOCK REDEMPTION. No later than December 16,
1996, Holdings shall redeem in full all of its outstanding Holdings Preferred
Stock, and shall pay all accrued but unpaid regularly scheduled dividends
thereon and other amounts owing in respect thereof.
7.18 SENIOR NOTES TENDER OFFER/DEFEASANCE. Immediately following the
Acquisition, and in any event on the Initial Borrowing Date, IVAC shall
consummate the Existing Senior Notes Tender Offer/Consent Solicitation
pursuant to which IVAC shall repurchase all Existing Senior Notes, to the
extent tendered and not withdrawn pursuant to the Existing Senior Notes
Tender Offer/Consent Solicitation and shall duly cancel all Existing Senior
Notes so purchased. The Existing Senior Notes Tender Offer/Consent
Solicitation shall be consummated in accordance with all applicable law and
in accordance with the Existing Senior Notes Tender Offer/Consent
Solicitation Documents. In the event that 100% of the Existing Senior Notes
are not accepted for payment by IVAC pursuant to the Existing Senior Notes
Tender Offer/Consent Solicitation, all Existing Senior Notes which have not
been tendered shall be defeased on the Initial Borrowing Date, immediately
following the Acquisition, in a manner satisfactory to the Agents and the
Required Banks.
7.19 MAINTENANCE OF CORPORATE SEPARATENESS. Holdings will, and will
cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the maintenance of corporate records. Neither Holdings nor any
Subsidiary of Holdings (other than Fidata and River Medical) shall make any
payment to a creditor of Fidata or River Medical in respect of
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any liability of Fidata or River Medical, as the case may be, and no bank
account of Fidata or River Medical shall be commingled with any bank account
of Holdings or any such Subsidiary of Holdings. Any financial statements
distributed to any creditors of Fidata or River Medical shall clearly
establish the corporate separateness of Fidata or River Medical, as the case
may be, from Holdings and each of Holdings' Subsidiaries. Finally, neither
Holdings nor any of its Subsidiaries shall take any action, or conduct its
affairs in a manner, which is likely to result in the corporate existence of
Fidata or River Medical on the one hand and of Holdings or any such
Subsidiary of Holdings on the other hand being ignored, or in the assets and
liabilities of Holdings or any such Subsidiary of Holdings being
substantively consolidated with those of Fidata or River Medical in a
bankruptcy, reorganization or other insolvency proceeding.
7.20 IVAC MERGER AND IMED MERGER. On the Initial Borrowing Date,
immediately following the consummation of the Acquisition, Holdings and the
Borrower shall cause the IVAC Merger and the IMED Merger to be consummated
(in the case of the IMED Merger, in accordance with Section 12.17), and all
aspects thereof (including, without limitation, regulatory, financial,
accounting and tax aspects) shall be satisfactory to the Required Banks and
in compliance with the terms of this Agreement and the IVAC Merger Documents
or the IMED Merger Documents, as the case may be, and all applicable laws.
No later than the Initial Borrowing Date, the Articles of Merger with respect
to the IVAC Merger and the IMED Merger shall have been filed to the
satisfaction of the Administrative Agent with the Secretary of State of the
State of Delaware.
7.21 FDA MATTERS. (a) Without limiting the generality of Section
7.06, Holdings and each of its Subsidiaries shall comply in all material
respects with all applicable statutes, rules, regulations, standards, guides,
policies or orders administered or issued by the FDA, and shall take all such
actions as shall reasonably be necessary to assure such compliance on an
ongoing basis, including, without limitation (A) retaining an independent
manufacturing practices consultant (should Holdings or any of its
Subsidiaries believe it prudent to do so) to audit Holdings' and each of its
Subsidiaries' manufacturing practices, and taking all such reasonable
remedial actions as any such consultant retained by Holdings or any of its
Subsidiaries shall recommend with respect to any significant deviations from
the FDA's Good Manufacturing Practices Regulations; (B) retaining experienced
FDA counsel to advise Holdings and its Subsidiaries on legal issues affecting
such compliance; and (C) requesting such FDA counsel (should Holdings or any
of its Subsidiaries believe it prudent to do so) to audit Holdings' and each
of its Subsidiaries' complaint and medical device reporting files, or other
areas regulated by the FDA, on a periodic basis and taking all such remedial
actions with respect thereto as such FDA counsel shall recommend.
(b) Holdings will, and will cause each of its Subsidiaries to, report
to the FDA all events that Holdings, any of its Subsidiaries or its counsel
conclude are required to be reported to the FDA under the FDA's medical
device reporting regulations and shall furnish promptly to the Agents copies
of all notices of adverse findings (including 485 observations and
establishment inspection reports), regulatory letters, Section 305 Notices,
recalls and FDA regulatory actions filed or threatened, relating to Holdings'
or any of its Subsidiaries' medical
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device products. Holdings agrees to provide quarterly summaries to the
Agents regarding the regulatory status of Holdings' and each of its
Subsidiaries' medical device products. Such summaries will contain
information regarding the status of PMA and 510(k) submissions; the status of
agency actions regarding such submissions (denial, withdrawal, etc.); the
termination or suspension of marketing of any of Holdings' or any of its
Subsidiaries' medical device products; the results of FDA inspections of
Holdings' and each of its Subsidiaries' manufacturing facilities; and the
results of any internal inspections and audits conducted by Holdings or any
of its Subsidiaries regarding its medical device products. Holdings will,
and will cause each of its Subsidiaries to, provide the Agents timely access
to all available documentation relating to any of the foregoing information.
7.22 FURTHER OPINIONS OF COUNSEL. On the Initial Borrowing Date,
Holdings and the Borrower shall deliver to the Agents opinions, addressed to
the Agents and each of the Banks and dated the Initial Borrowing Date, from
(i) Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to the Credit
Parties, which opinion shall cover such matters incident to the IVAC Merger
and the IMED Merger and as contained in Exhibit O and (ii) local counsel to
the Credit Parties reasonably satisfactory to the Agents, which opinions
shall cover such matters incident to the IVAC Merger and the IMED Merger and
as the Agents or Required Banks may reasonably request and shall be in form
and substance reasonably satisfactory to the Agents and the Required Banks.
7.23 LIQUIDATION OF IMED B.V.I. No later than December 1, 1996,
Holdings shall cause IMED B.V.I. to liquidate with and into its parent
corporation (which shall be the Borrower or a Wholly-Owned Subsidiary of the
Borrower).
7.24 WIND-DOWN OF RIVER MEDICAL. As soon as practicable after the
Initial Borrowing Date, Holdings shall cause River Medical to wind-down its
operations and, in any event, shall not permit River Medical to engage in any
business or operations other than those engaged in by it on the Initial
Borrowing Date and those related to winding down its operations.
SECTION 8. NEGATIVE COVENANTS. Holdings and the Borrower hereby
covenant and agree that as of the Effective Date and thereafter for so long
as this Agreement is in effect and until the Commitments have terminated, no
Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 12.13 hereof which are not then due and
payable) incurred hereunder, are paid in full:
8.01 CHANGES IN BUSINESS. (a) Holdings and its Subsidiaries will not
engage in any business other than the same or similar lines of business
engaged in by Holdings and its Subsidiaries as of the Initial Borrowing Date
after giving effect to the Transaction, and such activities as are
complimentary to or are incidental, ancillary or related to the foregoing.
(b) Holdings will engage in no business other than (i) its ownership of
the capital stock of the Borrower, IMED Nominee, Fidata and those obligations
of officers and employees of
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Holdings and its Subsidiaries to the extent permitted by Section 8.05(e) and
having those liabilities which it is responsible for under this Agreement and
the other Documents to which it is a party, (ii) the issuance of shares of
Holdings Common Stock to the extent permitted by Section 8.15(iv),
(iii) holding the Permitted Holdings Investments and (iv) activities associated
with expenses paid with dividends made by the Borrower pursuant to
Section 8.06(iv). Notwithstanding the foregoing, Holdings may engage in those
activities that are incidental to (a) the maintenance of its corporate
existence in compliance with applicable law, (b) legal, tax and accounting
matters in connection with any of the foregoing activities and (c) the
entering into, and performing its obligations under, this Agreement and the
other Documents to which it is a party.
8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. Holdings
will not, and will not permit any of its Subsidiaries to, wind up, liquidate
or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than inventory in the ordinary course of business), or enter
into any partnerships, joint ventures or sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions)
any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person, except that the following shall be permitted:
(a) the Transaction;
(b) the Borrower and its Subsidiaries may lease as lessee or license
as licensee real or personal property (including, without limitation,
intellectual property) in the ordinary course of business and otherwise in
compliance with this Agreement;
(c) Capital Expenditures by the Borrower and its Subsidiaries to the
extent not in violation of Section 8.08;
(d) the advances, investments and loans permitted pursuant to
Section 8.05;
(e) each of the Borrower and its Subsidiaries may sell assets,
PROVIDED, that (i) each such sale shall be for an amount at least equal to
the fair market value thereof (as determined in good faith by senior
management of the Borrower), (ii) each such sale results in consideration
at least 80% of which (taking the amount of cash, the principal amount of
any promissory notes and the fair market value, as determined in good faith
by senior management of the Borrower, of any other consideration) shall be
in the form of cash or cash equivalents (it being understood that any
assumed debt shall be considered cash for this purpose), (iii) the
aggregate sale proceeds from all assets subject to such sales pursuant to
this clause (e), when combined with the value of the assets exchanged
pursuant to Section 8.02(j)(y), shall not exceed $5,000,000 in any fiscal
year of the Borrower and (iv) the Net Proceeds from assets sold pursuant to
this
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clause (e) are either applied to repay Term Loans as provided in
Section 4.02(A)(c) or reinvested in replacement assets to the extent
permitted by Section 4.02(A)(c);
(f) each of the Borrower and its Subsidiaries may sell assets,
PROVIDED, that (i) each such sale shall be for an amount at least equal to
the fair market value thereof (as determined in good faith by senior
management of the Borrower), (ii) each such sale results in consideration
at least 80% of which (taking the amount of cash, the principal amount of
any promissory notes and the fair market value, as determined in good faith
by senior management of the Borrower, of any other consideration) shall be
in the form of cash or cash equivalents (it being understood that any
assumed debt shall be considered cash for this purpose), and (iii) the
aggregate sale proceeds from all assets subject to such sales pursuant to
this clause (f) shall not exceed $200,000 in any fiscal year of the
Borrower;
(g) each of the Borrower and its Subsidiaries may enter into
sale-leaseback transactions, so long as (i) the sale portion of any such
transaction is permitted under Section 8.02(e) or (f), and (ii) the lease
portion of such transaction is permitted under this Agreement;
(h) the Borrower and its Subsidiaries may sell or discount, in each
case without recourse, accounts receivables arising in the ordinary course
of business, but only in connection with the compromise or collection
thereof;
(i) the Borrower and its Subsidiaries may sell for cash or exchange
specific items of equipment, so long as the purpose of each such sale or
exchange is to acquire (and results within 180 days of such sale or
exchange in the acquisition of) replacement items of equipment which are
the functional equivalent of the item of equipment so sold or exchanged;
(j) (x) the Borrower and any of its Subsidiaries may sell, transfer or
otherwise dispose of assets in the ordinary course of business that, in the
reasonable business judgment of the Borrower or such Subsidiary, are
determined to be uneconomical or obsolete in the conduct of its business
and (y) the Borrower and any of its Subsidiaries may exchange assets with
third Persons, as long as the value of the assets exchanged pursuant to
this clause (j)(y), when combined with the amount of proceeds derived from
assets sold pursuant to Section 8.02(e), shall not exceed $5,000,000 in any
fiscal year of the Borrower;
(k) the Borrower and its Subsidiaries may, in the ordinary course of
business, license patents, trademarks, copyrights and know-how to third
Persons and to one another, so long as each such license is permitted to
be assigned pursuant to the Security Agreement (to the extent that a
security interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the
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granting of a Lien by the Borrower or any of its Subsidiaries pursuant to
the Security Agreement in the intellectual property covered by such
license;
(l) any Foreign Subsidiary of the Borrower may be merged with and
into, or be voluntarily dissolved or liquidated into, or transfer any of
its assets to, any Wholly-Owned Foreign Subsidiary of the Borrower so long
as in each case at least 65% of the total combined voting power of all
classes of capital stock of all first-tier Foreign Subsidiaries of the
Borrower are pledged pursuant to the Pledge Agreement;
(m) the assets of any Foreign Subsidiary of the Borrower may be
transferred to the Borrower or any of its Wholly-Owned Domestic
Subsidiaries, and any Foreign Subsidiary of the Borrower may be merged with
and into, or be voluntarily dissolved or liquidated into, the Borrower or
any of its Wholly-Owned Domestic Subsidiaries so long as the Borrower or
such Wholly-Owned Domestic Subsidiary is the surviving corporation of any
such merger, dissolution or liquidation;
(n) the Borrower and its Wholly-Owned Domestic Subsidiaries may sell
or otherwise transfer inventory between or among themselves in the ordinary
course of business for resale by the Borrower or such Wholly-Owned Domestic
Subsidiaries, as the case may be, so long as the security interest granted
to the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Agreement in the inventory so transferred shall remain in
full force and effect and perfected (to at least the same extent as in
effect immediately prior to such transfer);
(o) the Borrower and its Domestic Subsidiaries may sell or transfer
inventory to the Borrower's Foreign Subsidiaries in the ordinary course of
business for resale by such Foreign Subsidiary;
(p) the Borrower may lease as lessor equipment, machinery or its Real
Property to one or more Wholly-Owned Domestic Subsidiaries of the Borrower
so long as (x) such lease is for fair market value (determined in good
faith by the Board of Directors or senior management of the Borrower)
and (y) the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets so leased shall remain in full force and effect and perfected (to
at least the same extent as in effect immediately prior to such transfer);
(q) any Domestic Subsidiary of the Borrower may transfer assets to the
Borrower or to any other Wholly-Owned Domestic Subsidiary of the Borrower
so long as the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets so transferred shall remain in full force and effect and perfected
(to at least the same extent as in effect immediately prior to such
transfer);
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(r) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into, or be voluntarily dissolved or liquidated into, the Borrower
so long as (i) the Borrower is the surviving corporation of such merger,
dissolution or liquidation and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets of such Wholly-Owned Domestic Subsidiary
so merged, dissolved or liquidated shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
(s) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into, or be voluntarily dissolved or liquidated into, any other
Wholly-Owned Domestic Subsidiary of the Borrower so long as (i) such
Wholly-Owned Domestic Subsidiary of the Borrower is the surviving
corporation of such merger, dissolution or liquidation and (ii) the
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of such
Domestic Subsidiary so merged, dissolved or liquidated shall remain in full
force and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, dissolution or liquidation);
(t) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may acquire assets constituting all or
substantially all of a business, business unit, division or product line of
any Person not already a Subsidiary of the Borrower or the capital stock of
any such Person (any such acquisition permitted by this clause (t), a
"Permitted Acquisition"), PROVIDED, that (i) such Person (or the assets so
acquired) was, immediately prior to such acquisition, engaged (or used)
primarily in the business permitted pursuant to Section 8.01(a), (ii) if
such acquisition is structured as a stock acquisition, then either (A) the
Person so acquired becomes a Wholly-Owned Domestic Subsidiary of the
Borrower or (B) such Person is merged with and into a Wholly-Owned Domestic
Subsidiary of the Borrower (with such Wholly-Owned Domestic Subsidiary
being the surviving corporation of such merger), and in any case, all of
the provisions of Section 8.17 have been complied with in respect of such
Person, (iii) any Liens or Indebtedness assumed or issued in connection
with such acquisition are otherwise permitted under Section 8.03 or 8.04,
as the case may be, (iv) the only consideration paid by the Borrower in
respect of any such Permitted Acquisition consists of cash, Holdings Common
Stock permitted to be issued under Section 8.15 and/or Indebtedness to the
extent permitted by Section 8.04, (v) all representations and warranties
contained herein or in the other Credit Documents shall be true and correct
in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto),
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date, and (vi) the aggregate amount paid
(including for this purpose all cash consideration paid, the face amount of
all Indebtedness incurred in connection with any such Permitted
Acquisition, and the
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fair market value (determined as of the proposed date of consummation of
such Permitted Acquisition in good faith by senior management of the
Borrower) of any Holdings Common Stock, if any, issued as consideration in
connection with such Permitted Acquisition), in connection with any such
acquisition (or series of related acquisitions) shall not exceed an amount
equal to the sum of (x) $6,500,000 less the aggregate amount of such
$6,500,000 previously utilized to make Permitted Acquisitions plus, unless
such amount is negative, (y) the Excess Proceeds Amount at the time of such
acquisition, PROVIDED that in no event shall the aggregate amount of
Permitted Acquisitions made in any fiscal year pursuant to this clause (t)
exceed $10,000,000 (or, during a Reduced Leverage Period, $20,000,000), and
provided further that without the prior written consent of the Required
Banks, no more than $6,500,000 (or, during a Reduced Leverage Period,
$10,000,000) may be used to consummate any single, or series of related
Permitted Acquisitions;
(u) as long as no Default or Event of Default then exists or would
result therefrom, Holdings may sell any of the investments which are listed
on Annex XV (the "Permitted Holdings Investments");
(v) IMED B.V.I. may be liquidated with and into its parent corporation
so long as such parent corporation is the Borrower or a Wholly-Owned
Subsidiary of the Borrower;
(w) the operations of River Medical may be wound down and/or
liquidated;
(x) the Borrower and any of its Subsidiaries may enter into
(1) Instruments on Contract in accordance with Section 8.08 and
(2) Instrument Capital Leases;
(y) the Borrower and/or any of its Subsidiaries party to any
Instrument Capital Lease may sell the assets subject to such Instrument
Capital Lease or the lease payment receivables arising pursuant to such
Instrument Capital Lease; and
(z) the Borrower and its Subsidiaries may sell the Creedmoor Property
so long as (i) such sale is for cash and at fair market value (as
determined by the Board of Directors of the Borrower in good faith),
(ii) the Net Proceeds therefrom are either applied to repay Term Loans as
provided in Section 4.02(A)(c) or reinvested in replacement assets to the
extent permitted by Section 4.02(A)(c), (iii) the Borrower or such
Subsidiary leases back such Creedmoor Property pursuant to a lease the
terms of which are satisfactory to the Administrative Agent and (iv) the
lease payments and obligations to be made by the Borrower and/or such
Subsidiary in respect of the lease referred to in clause (iii) above are
permitted under this Agreement.
To the extent the Required Banks waive the provisions of this Section 8.02
with respect to the sale or other disposition of any Collateral, or any
Collateral is sold or otherwise disposed of as permitted by this Section 8.02,
such Collateral in each case shall be sold or otherwise
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disposed of free and clear of the Liens created by the Security Documents and
the Administrative Agent shall take such actions (including, without
limitation, directing the Collateral Agent to take such actions) as are
appropriate in connection therewith.
8.03 LIENS. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind (real or personal,
tangible or intangible) of Holdings or any of its Subsidiaries, whether now
owned or hereafter acquired, or sell any such property or assets subject to
an understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to Holdings or any of its Subsidiaries) or assign any right to
receive income, except for the following (collectively, the "Permitted
Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Initial Borrowing Date which are listed,
and the property subject thereto described, in Annex XIII, without giving
effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
(f) Liens incurred or deposits made (x) in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); and (y) to
secure the
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performance of leases of Real Property, to the extent incurred or made in
the ordinary course of business consistent with past practices;
(g) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Borrower or
any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances
not interfering in any material respect with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) any interest or title of a licensor, lessor or sublessor under
any lease permitted by this Agreement;
(k) Liens created pursuant to Capital Leases permitted pursuant to
Sections 8.04(d) and (n);
(l) Permitted Encumbrances;
(m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 120 days after the respective
purchase) of assets acquired after the Initial Borrowing Date, PROVIDED,
that (i) any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien does not exceed 100%, nor is less
than 70% of the lesser of the fair market value or the purchase price of
the property being purchased at the time of the incurrence of such
Indebtedness, and (iii) the Indebtedness secured thereby is permitted to
be incurred pursuant to Section 8.04(d);
(n) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, PROVIDED, that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 8.04(k) and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries;
(o) Liens securing Indebtedness permitted pursuant to, and subject
to the limitations set forth in, Section 8.04(i), so long as any such Lien
attaches only to the assets of the respective Foreign Subsidiary which is
the obligor under such Indebtedness;
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(p) Liens on (1) the instruments or other medical devices which are
the subject of any Instrument on Contract or (2) the Borrower's interest in
any Instrument Capital Lease or the property subject thereto; and
(q) additional Liens incurred by the Borrower and its Subsidiaries so
long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed
$1,000,000.
In connection with the granting of Liens of the type described in
clauses (k), (m), (n) and (p) of this Section 8.03 by the Borrower or any of
its Subsidiaries, at the reasonable request of the Borrower, and at the
Borrower's expense, the Administrative Agent and the Collateral Agent shall
take (and are hereby authorized to take) any actions reasonably requested by
the Borrower in connection therewith (including, without limitation, by
executing appropriate lien releases in favor of the holder or holders of such
Liens, in either case solely with respect to the item or items of equipment
or other assets subject to such Liens).
8.04 INDEBTEDNESS. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness to Remain Outstanding on the Initial Borrowing Date
and listed on Annex VIII, without giving effect to any subsequent
extension, renewal or refinancing thereof (other than a refinancing of the
7-1/4% Debentures on the terms and subject to the conditions provided in
Section 8.15(i));
(c) Indebtedness under Interest Rate Protection Agreements entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations;
(d) Indebtedness of the Borrower and its Subsidiaries incurred
pursuant to purchase money Liens permitted under Section 8.03(m) and
Capitalized Lease Obligations; PROVIDED, that (x) all such Capitalized
Lease Obligations are permitted under Section 8.08 and (y) the sum of
(i) the aggregate outstanding Capitalized Lease Obligations (other than
(a) Capitalized Lease Obligations in respect of the lease of the Creedmoor
Property if such Property is sold as permitted by Section 8.02(z) and
(b) Capitalized Lease Obligations incurred in connection with the
modernization of the Borrower's information systems) plus (ii) the
aggregate outstanding principal amount of such purchase money Indebtedness
at any time shall not exceed $5,000,000;
(e) Indebtedness of the Borrower (and (x) subordinated guaranties
thereof by Domestic Subsidiaries of the Borrower and (y) subordinated
guaranties thereof by Foreign Subsidiaries of the Borrower to the extent
such Foreign Subsidiaries have guaranteed the Obligations pursuant to
Section 7.14) incurred under the Senior
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Subordinated Notes in an aggregate principal amount not to exceed
$200,000,000 (as reduced by any repayments of principal thereof);
(f) Indebtedness constituting (1) Intercompany Loans to the extent
permitted by Section 8.05(g) or (2) other intercompany loans to the extent
permitted by 8.05(l);
(g) Indebtedness under Other Hedging Agreements providing protection
against fluctuations in currency values in connection with the Borrower's
or any of its Subsidiaries' operations so long as management of the
Borrower or such Subsidiary, as the case may be, has determined that the
entering into of such Other Hedging Agreements are BONA FIDE hedging
activities;
(h) Indebtedness of Foreign Subsidiaries to the Borrower or any of its
Domestic Subsidiaries as a result of any investment made pursuant to
Section 8.05(n);
(i) Indebtedness of Foreign Subsidiaries under lines of credit
extended by third Persons to any such Foreign Subsidiary the proceeds of
which Indebtedness are used for such Foreign Subsidiary's working capital
purposes, PROVIDED, that the aggregate principal amount of all such
Indebtedness outstanding at any time for all Foreign Subsidiaries shall not
exceed $15,000,000 (the "Foreign Subsidiary Working Capital Indebtedness"),
and such Indebtedness may be (i) secured by Liens permitted under
Section 8.03(o) and/or (ii) supported by Letters of Credit;
(j) Indebtedness consisting of guaranties (x) by the Borrower of
Indebtedness and leases permitted to be incurred by Wholly-Owned Domestic
Subsidiaries of the Borrower, (y) by Domestic Subsidiaries of the Borrower
of Indebtedness and leases permitted to be incurred by the Borrower or
other Wholly-Owned Domestic Subsidiaries of the Borrower and (z) by Foreign
Subsidiaries of Indebtedness and leases permitted to be incurred by other
Wholly-Owned Foreign Subsidiaries of the Borrower;
(k) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness), provided that (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, (ii) such Indebtedness does
not constitute debt for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (k), and
(iii) at the time of such Permitted Acquisition such Indebtedness does not
exceed 10% of the total value of the assets of the Subsidiary so acquired,
or of the assets so acquired, as the case may be;
(l) Indebtedness of Holdings incurred under the 15% Debentures in the
aggregate outstanding principal amount of $21,924,000, provided that such
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Indebtedness shall only be permitted to exist for 30 days following the
Initial Borrowing Date;
(m) Indebtedness of Holdings under the Shareholder Subordinated Notes;
(n) Capitalized Lease Obligations incurred in respect of (x) the lease
of the Creedmoor Property to the extent that (i) such Property is sold
pursuant to Section 8.02(z) and (ii) such Capitalized Lease Obligations are
permitted by Section 8.08 and (y) the modernization of the Borrower's
information systems;
(o) Indebtedness of the Borrower or any of its Subsidiaries consisting
of take-or-pay obligations contained in supply agreements entered into in
the ordinary course of business;
(p) Indebtedness of Fidata owing to Holdings to the extent permitted
by Section 8.05(v); and
(q) additional Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted hereunder not exceeding $2,000,000 in
the aggregate principal amount at any time outstanding.
8.05 ADVANCES, INVESTMENTS AND LOANS. Holdings will not, and will not
permit any of its Subsidiaries to, 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, or
purchase or own a futures contract or otherwise become liable for the
purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, or hold any cash, Cash Equivalents or Foreign
Cash Equivalents, except:
(a) Holdings and its Subsidiaries may invest in cash and Cash
Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms of the Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into in compliance
with Section 8.04(c) shall be permitted;
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(e) Holdings may acquire and hold obligations of one or more officers
or other employees of Holdings or its Subsidiaries in connection with such
officers' or employees' acquisition of shares of Holdings Common Stock so
long as no cash is paid by Holdings or any of its Subsidiaries in
connection with the acquisition of any such obligations;
(f) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases shall be permitted;
(g) the Borrower may make intercompany loans and advances to any of
its Subsidiaries, any Subsidiary of the Borrower may make intercompany
loans and advances to the Borrower, and any Subsidiary of the Borrower may
make intercompany loans and advances to any other Subsidiary of the
Borrower (collectively, "Intercompany Loans"), PROVIDED, that (w) at no
time shall the aggregate outstanding principal amount of all Intercompany
Loans made pursuant to this clause (g) by the Borrower and its Wholly-Owned
Domestic Subsidiaries to non-Wholly-Owned Domestic Subsidiaries and Foreign
Subsidiaries, when added to the amount of contributions, capitalizations
and forgiveness theretofore made pursuant to Section 8.05(m), exceed
$10,000,000 (determined without regard to any write-downs or write-offs of
such loans and advances), (x) each Intercompany Loan made by a Foreign
Subsidiary or a non-Wholly-Owned Domestic Subsidiary to the Borrower or a
Wholly-Owned Domestic Subsidiary of the Borrower shall contain the
subordination provisions set forth on Exhibit I, (y) each Intercompany Loan
shall be evidenced by an Intercompany Note and (z) each such Intercompany
Note (other than (1) Intercompany Notes issued by Foreign Subsidiaries of
the Borrower to the Borrower or any of its Domestic Subsidiaries and
(2) Intercompany Notes held by Foreign Subsidiaries of the Borrower, in
each case except to the extent provided in Section 7.14) shall be pledged
to the Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries to
employees of Holdings and its Subsidiaries incurred in the ordinary course
of business, in an aggregate outstanding principal amount not to exceed
$1,000,000 at any time (determined without regard to any write-downs or
write-offs of such loans and advances), shall be permitted;
(i) Holdings may make equity contributions to the capital of the
Borrower;
(j) Foreign Subsidiaries of the Borrower may invest in Foreign Cash
Equivalents;
(k) Other Hedging Agreements may be entered into in compliance with
Section 8.04(g);
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(l) advances, loans and investments in existence on the Initial
Borrowing Date and listed on Annex XIV shall be permitted, without giving
effect to any additions thereto or replacements thereof;
(m) the Borrower and its Wholly-Owned Domestic Subsidiaries may make
cash capital contributions to non-Wholly-Owned Domestic Subsidiaries and
Foreign Subsidiaries of the Borrower, and may capitalize or forgive any
Indebtedness owed to them by a non-Wholly-Owned Domestic Subsidiary or
Foreign Subsidiary of the Borrower and outstanding under clause (g) of this
Section 8.05, PROVIDED, that the aggregate amount of such contributions,
capitalizations and forgiveness, when added to the aggregate outstanding
principal amount of Intercompany Loans made to non-Wholly-Owned Domestic
Subsidiaries and Foreign Subsidiaries under such clause (g) (determined
without regard to any write-downs or write-offs thereof), shall not exceed
an amount equal to $10,000,000;
(n) the Borrower and its Subsidiaries may make investments in their
respective Subsidiaries in connection with the transfers of those assets
permitted to be transferred pursuant to Sections 8.02(l) and (m), it being
understood that the Borrower and its Subsidiaries may convert any
investment initially made as an equity investment to intercompany
Indebtedness held by the Borrower or such Subsidiary;
(o) the Borrower and its Domestic Subsidiaries may make and hold
investments in their respective Foreign Subsidiaries to the extent that
such investments arise from the sale of inventory in the ordinary course
of business by the Borrower or such Domestic Subsidiary to such Foreign
Subsidiaries for resale by such Foreign Subsidiaries (including any such
investments resulting from the extension of the payment terms with respect
to such sales);
(p) the Borrower and its Subsidiaries may make transfers of assets
to their respective Subsidiaries in accordance with Sections 8.02(n), (o)
and (q);
(q) the Borrower may contribute cash to one or more of its
Wholly-Owned Domestic Subsidiaries formed after the Initial Borrowing Date
in accordance with Section 8.17 so long as the aggregate amount of such
cash so contributed to all such Wholly-Owned Domestic Subsidiaries does not
exceed $5,000,000;
(r) Permitted Acquisitions shall be permitted in accordance with
Section 8.02(t);
(s) the Borrower and its Subsidiaries may acquire and hold debt
securities as partial consideration for a sale of assets pursuant to
Section 8.02(e) or (f) to the extent permitted by any such Section;
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(t) Holdings may hold the Permitted Holdings Investments, without
giving effect to any additions thereto or replacements thereof (other than
proceeds of the sale thereof to the extent held in the form of cash or Cash
Equivalents);
(u) the Borrower and its Subsidiaries may enter into Instruments on
Contract, to the extent permitted by Section 8.08;
(v) Holdings may make loans and/or capital contributions to Fidata to
enable Fidata to wind down its operations, provided that the aggregate
principal of such loans plus the aggregate amount of such capital
contributions shall not exceed $200,000; and
(w) in addition to investments permitted by clauses (a) through (v)
above, the Borrower and its Subsidiaries may make additional loans,
advances and investments to or in a Person, so long as the amount of any
such loan, advance or investment (at the time of the making thereof) does
not exceed an amount equal to the sum of (A) $2,000,000 less the aggregate
amount of such $2,000,000 previously used to make loans, advances and
investments pursuant to this clause (w) to the extent same are then still
outstanding (determined without regard to any write-downs or write-offs
thereof and net of cash repayments of principal in the case of loans and
cash equity returns (whether as a dividend or redemption) in the case of
equity investments), plus, unless such amount is negative, (B) an amount
equal to the Excess Proceeds Amount at such time, PROVIDED that in no event
shall the aggregate amount of loans, advances and investments made in any
fiscal year pursuant to this clause (w) with the Excess Proceeds Amount
exceed $2,000,000 (or, during a Reduced Leverage Period, $4,000,000), and
PROVIDED FURTHER, that neither the Borrower nor any of its Subsidiaries may
make or own any investment in Margin Stock.
8.06 DIVIDENDS, ETC. Holdings will not, and will not permit any of its
Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock of Holdings or any such Subsidiary, as the case may
be) or return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital
stock, now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or make any payment
pursuant to a tax sharing agreement, or set aside any funds for any of the
foregoing purposes, and Holdings will not permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of
the capital stock of Holdings or any other Subsidiary, as the case may be,
now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to the Borrower,
any Wholly-Owned Subsidiary of the Borrower, IMED Pty or IMED Ltd.;
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(ii) Holdings may redeem or purchase shares of Holdings Common Stock
or options to purchase Holdings Common Stock, respectively, held by former
employees of Holdings or any of its Subsidiaries following the termination
of their employment, provided that (w) the only consideration paid by
Holdings in respect of such redemptions and/or purchases shall be cash and
Shareholder Subordinated Notes, (x) the sum of (A) the aggregate amount
paid by Holdings in cash in respect of all such redemptions and/or
purchases plus (B) the aggregate amount of all principal and interest
payments made on Shareholder Subordinated Notes, shall not exceed
$1,000,000 in any fiscal year of Holdings, provided that to the extent an
amount less than $1,000,000 is used for such payments during any fiscal
year, then the unused portion may be applied cumulatively over the
following fiscal years as long as no more than $3,000,000 in the aggregate
is used for such payments in any one fiscal year, provided, further that
such amount shall be increased by an amount (not to exceed $1,000,000 for
purposes of this clause (ii)) equal to the proceeds received by Holdings
after the Initial Borrowing Date from the sale or issuance of Holdings
Common Stock to management of Holdings or any of its Subsidiaries and
(y) at the time of any cash payment permitted to be made pursuant to this
Section 8.06(ii), including any cash payment under a Shareholder
Subordinated Note, no Default or Event of Default shall then exist or
result therefrom;
(iii) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may pay cash Dividends to Holdings, so long
as Holdings promptly uses such proceeds for the purposes described in
clause (ii) of this Section 8.06;
(iv) the Borrower may pay cash Dividends to Holdings, so long as the
proceeds thereof are promptly used by Holdings to pay operating expenses
in the ordinary course of business (including, without limitation,
professional fees and expenses) and other similar corporate overhead costs,
expenses and expenditures, or to pay salaries or other compensation
of employees who perform services for Holdings and the Borrower, provided
that the aggregate amount of cash Dividends paid pursuant to this
Section 8.06(iv) shall not during any fiscal year of the Borrower exceed,
when added to any licensing agreement payments made by the Borrower or any
of its Subsidiaries to Holdings during such fiscal year, $1,500,000;
(v) the Borrower may pay cash Dividends to Holdings, so long as the
proceeds thereof are promptly interest (when and as due and payable) on
Indebtedness to Remain Outstanding of Holdings or (y) accrued but unpaid
interest on Indebtedness to Remain Outstanding permitted pursuant to
Section 8.15(i)(c), provided that in clauses (x) and (y) no Default or
Event of Default has occurred and is continuing at the time of any such
Dividend;
(vi) so long as no Default or Event of Default then exists or would
result therefrom, upon the final scheduled maturity of the
7-1/4 Debentures, the Borrower
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may pay cash Dividends to Holdings in an amount equal to the principal
amount of such 7-1/4% Debentures, so long as the proceeds thereof are
promptly used by Holdings to repay the principal of such 7-1/4% Debentures,
provided that the cash Dividends may only be paid pursuant to this
clause (vi) to the extent that the Leverage Ratio at such time (determined
both before and after giving effect to such Dividends (and the incurrence
of any Indebtedness to finance such Dividends)) is less than or equal
to 3.0:1.0;
(vii) the Borrower may pay cash Dividends to Holdings in the amounts
and at the times provided for under the Holdings Tax Allocation Agreement,
provided that the amount of cash Dividends so paid with respect to a
taxable year or other taxable period shall not exceed the sum of: (x) the
lesser of (A) the federal income taxes that the Borrower and its
Subsidiaries (the "Borrower Subgroup") would be required to pay with
respect to such taxable year if the Borrower Subgroup had filed a separate
consolidated federal income tax return for the current year and for all
prior taxable years (collectively, the "Hypothetical Separate Federal
Income Tax Liability"), and (B) the product of (I) the federal income tax
liability of the Holdings Consolidated Group for such year and (II) a
fraction, (a) the numerator of which is an amount equal to the Hypothetical
Separate Federal Income Tax Liability for such year and (b) the denominator
of which is the sum of (x) the Hypothetical Separate Federal Income Tax
Liability of the Borrower Subgroup for such year plus (y) the separate
federal income tax liability (or less the corresponding negative tax
liability) that each other member of the Holdings Consolidated Group would
have incurred for such year if such corporations had filed separate
federal income tax returns for such year and all prior years (provided that
the amount determined under this clause (y) shall not be less than zero),
PROVIDED that, in the event that the income tax liability of the Holdings
Consolidated Group for any taxable year exceeds the Hypothetical Separate
Federal Income Tax Liability of the Borrower Subgroup for such year (an
"Excess Tax Liability"), the Borrower may pay to Holdings (as an additional
Dividend) such Excess Tax Liability, PROVIDED, HOWEVER, that the Borrower
shall not pay to Holdings any amount in respect of an Excess Tax Liability
that is greater than (A) the sum of the Hypothetical Separate Federal
Income Tax Liability of the Borrower Subgroup for all taxable years ending
after the Effective Date minus (B) the sum of all amounts previously paid
by the Borrower to Holdings pursuant to this clause (x); and (y) if the
Borrower or any of its Subsidiaries file combined, consolidated or unitary
state tax returns with Holdings for any taxable year or other taxable
period, the amount of state income taxes in respect of which a combined,
consolidated or unitary return was filed, calculated under the same
methodology set forth in clause (x) with respect to federal income tax
liability. If Holdings receives a refund or a credit or is subject to any
final determination with respect to any audit adjustment (including
interest and penalties) with respect to tax liabilities which relates to
any taxable year or other taxable period in which the Borrower or its
Subsidiaries are included in the Holdings Consolidated Group or file
combined, consolidated or unitary state tax returns with Holdings, then the
amount of the payments provided for in this clause (vii) shall be
recomputed (and
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appropriate adjustments in payments shall be made) for all affected
taxable years in accordance with the principles enumerated above to take
into account any such refund, credit or final determination; and
(viii) Holdings may utilize the proceeds from the sale of any Permitted
Holdings Investments (net of the repayment of outstanding loans made by
Holdings to Fidata) to pay cash Dividends to its shareholders, PROVIDED
that the amount of Dividends permitted pursuant to this Section 8.06(viii)
shall be reduced by the amount of such net cash proceeds used for the
purposes set forth in clause (B) of the definition of Excess Proceeds
Amount.
8.07 TRANSACTIONS WITH AFFILIATES. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate (other than any transactions between the
Borrower and any Wholly-Owned Subsidiary of the Borrower, except River
Medical, and any transactions between Wholly-Owned Subsidiaries of the
Borrower, except River Medical) other than in the ordinary course of business
and on terms and conditions substantially as favorable to Holdings or such
Subsidiary as would be obtainable by Holdings or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an
Affiliate; PROVIDED, that the following shall in any event be permitted:
(i) the Transaction; (ii) Dividends may be paid to the extent provided in
Section 8.06 and (iii) Holdings and the Borrower and its Domestic Subsidiaries
may enter into the Holdings Tax Allocation Agreement and may make any payments
required thereunder.
8.08 CAPITAL EXPENDITURES. (a) (i) Holdings will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any fiscal year set forth below Holdings and its Subsidiaries may make
Capital Expenditures so long as the aggregate amount so made by Holdings and
its Subsidiaries (on a consolidated basis) during any such fiscal year does
not exceed the amount set forth opposite such fiscal year below:
FISCAL YEAR ENDING AMOUNT
------------------ ------
December 31, 1997 $24,000,000
December 31, 1998 $22,000,000
December 31, 1999 and thereafter $18,000,000
(ii) If for any fiscal year of Holdings commencing with the fiscal year
ending on December 31, 1998, (x) the Consolidated EBITDA for the immediately
preceding fiscal year is more than the projected Consolidated EBITDA of
Holdings set forth on Annex XII for such immediately preceding fiscal year
(the amount by which such actual Consolidated EBITDA exceeds such projected
Consolidated EBITDA, the "Surplus"), then the amount of Capital Expenditures
permitted to be made in such fiscal year pursuant to this Section 8.08(a)
shall be (A)
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the amount set forth in clause (a)(i) above opposite such fiscal year
plus (B) the Surplus multiplied by 0.25.
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by Holdings and its Subsidiaries
pursuant to clause (a) above in any fiscal year (before giving effect to any
increase in such permitted expenditure amount pursuant to this clause (b)) is
greater than the amount of such Capital Expenditures made by Holdings and its
Subsidiaries during such fiscal year, such excess (the "Rollover Amount") may
be carried forward and utilized to make Capital Expenditures in succeeding
fiscal years, provided that in no event shall the aggregate amount of Capital
Expenditures made by Holdings and its Subsidiaries during any fiscal year
pursuant to Section 8.08(a) exceed 125% of the amount set forth in such
Section 8.08(a).
(c) Notwithstanding the foregoing, Holdings and its Subsidiaries may
make Capital Expenditures (which Capital Expenditures will not be included in
any determination under the foregoing clause (a)) with the insurance proceeds
received by Holdings or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are to replace or restore any properties or
assets in respect of which such proceeds were paid within 367 days following
the date of the receipt of such insurance proceeds to the extent such
insurance proceeds are not required to be applied to repay Term Loans
pursuant to Section 4.02(A)(g).
(d) Notwithstanding the foregoing, Holdings and its Subsidiaries may
make Capital Expenditures (which Capital Expenditures will not be included in
any determination under the foregoing clause (a)) with the Net Proceeds of
Asset Sales, to the extent such Net Proceeds are not required to be applied
to repay Term Loans pursuant to Section 4.02(A)(c).
(e) Notwithstanding the foregoing, Holdings may make Capital
Expenditures (which Capital Expenditures will not be included in any
determination under the foregoing clause (a)) constituting Permitted
Acquisitions.
(f) Notwithstanding the foregoing, Holdings and its Subsidiaries may
make Capital Expenditures at any time in an aggregate amount equal to the
Excess Proceeds Amount at such time (which Capital Expenditures will not be
included in any determination under the foregoing clause (a)), provided that
the aggregate amount of Capital Expenditures permitted to be made by Holdings
and its Subsidiaries pursuant to this clause (f) in any fiscal year shall be
$5,000,000 (or at any time during a Reduced Leverage Period, $10,000,000).
(g) The Borrower and its Subsidiaries may incur Capitalized Lease
Obligations in an aggregate amount not to exceed $6,000,000 under a lease of
the Creedmoor Property to the extent sold pursuant to Section 8.02(z) (which
Capitalized Lease Obligations will not be included in any determination under
the foregoing clause (a)).
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8.09 MINIMUM CONSOLIDATED EBITDA. Neither Holdings nor the Borrower
will permit Consolidated EBITDA for any Test Period ending on a date set
forth below to be less than the amount set forth opposite such date:
Minimum Consolidated
Date EBITDA
---- ---------------------
March 31, 1997 $ 14,700,000
June 30, 1997 $ 33,550,000
September 30, 1997 $ 54,300,000
December 31, 1997 $ 78,600,000
March 31, 1998
$ 81,600,000
June 30, 1998 $ 84,800,000
September 30, 1998 $ 86,200,000
December 31, 1998 $ 88,400,000
March 31, 1999
$ 89,200,000
June 30, 1999 $ 90,300,000
September 30, 1999 $ 91,300,000
December 31, 1999 $ 92,600,000
March 31, 2000
$ 93,600,000
June 30, 2000 $ 94,800,000
September 30, 2000 $ 96,100,000
December 31, 2000 $ 97,600,000
March 31, 2001
$ 99,600,000
June 30, 2001 $102,100,000
September 30, 2001 $104,500,000
December 31, 2001 $107,500,000
March 31, 2002
$109,500,000
June 30, 2002 $111,900,000
September 30, 2002 $114,300,000
December 31, 2002 $117,200,000
March 31, 2003
$118,600,000
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June 30, 2003 $120,300,000
September 30, 2003 $122,100,000
December 31, 2003 $124,200,000
March 31, 2004
$125,700,000
June 30, 2004 $127,500,000
September 30, 2004 $129,400,000
December 31, 2004 $131,600,000
March 31, 2005
$132,600,000
June 30, 2005 $133,900,000
8.10 INTEREST COVERAGE RATIO. Neither Holdings nor the Borrower will
permit the Interest Coverage Ratio for any Test Period ending on a date set
forth below to be less than the ratio set forth opposite such date:
Date Ratio
---- -----
June 30, 1997 1.55:1.00
September 30, 1997 1.70:1.00
December 31, 1997 1.85:1.00
March 31, 1998 1.95:1.00
June 30, 1998 2.00:1.00
September 30, 1998 2.05:1.00
December 31, 1998 2.10:1.00
March 31, 1999 2.15:1.00
June 30, 1999 2.20:1.00
September 30, 1999 2.25:1.00
December 31, 1999 2.30:1.00
March 31, 2000
2.35:1.00
June 30, 2000 2.40:1.00
September 30, 2000 2.45:1.00
December 31, 2000 2.50:1.00
March 31, 2001 2.60:1.00
June 30, 2001 2.70:1.00
September 30, 2001 2.75:1.00
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December 31, 2001 2.75:1.00
March 31, 2002 3.00:1.00
June 30, 2002 3.10:1.00
September 30, 2002 3.25:1.00
December 31, 2002 3.35:1.00
March 31, 2003 3.50:1.00
June 30, 2003 3.65:1.00
September 30, 2003 3.70:1.00
December 31, 2003 3.75:1.00
March 31, 2004
4.05:1.00
June 30, 2004 4.15:1.00
September 30, 2004 4.20:1.00
December 31, 2004 4.25:1.00
March 31, 2005 4.50:1.00
June 30, 2005 4.75:1.00
8.11 LEVERAGE RATIO. Neither Holdings nor the Borrower will permit the
Leverage Ratio at any time during a fiscal quarter set forth below to be more
than the ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 1997 6.40:1.00
September 30, 1997 5.95:1.00
December 31, 1997 5.35:1.00
March 31, 1998
5.10:1.00
June 30, 1998 5.00:1.00
September 30, 1998 4.75:1.00
December 31, 1998 4.60:1.00
March 31, 1999 4.55:1.00
June 30, 1999 4.45:1.00
September 30, 1999 4.35:1.00
December 31, 1999 4.25:1.00
March 31, 2000
4.20:1.00
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June 30, 2000 4.10:1.00
September 30, 2000 4.05:1.00
December 31, 2000 4.00:1.00
March 31, 2001
3.80:1.00
June 30, 2001 3.65:1.00
September 30, 2001 3.50:1.00
December 31, 2001 3.35:1.00
March 31, 2002 3.20:1.00
June 30, 2002 3.10:1.00
September 30, 2002 2.95:1.00
December 31, 2002 2.85:1.00
March 31, 2003 2.75:1.00
June 30, 2003 2.65:1.00
September 30, 2003 2.55:1.00
December 31, 2003 2.50:1.00
March 31, 2004
2.40:1.00
June 30, 2004 2.35:1.00
September 30, 2004 2.30:1.00
December 31, 2004 2.25:1.00
March 31, 2005
2.05:1.00
June 30, 2005 1.75:1.00
8.12 FIXED CHARGE COVERAGE RATIO. Neither Holdings nor the Borrower
will permit the ratio of (i) (x) Consolidated EBITDA less (y) Capital
Expenditures of the Borrower and its Subsidiaries on a consolidated basis to
(ii) Consolidated Fixed Charges for any Test Period (commencing with the Test
Period ending on September 30, 1997) to be less than 1.00:1.00.
8.13 MINIMUM CONSOLIDATED NET WORTH. Neither Holdings nor the Borrower
will permit Consolidated Net Worth at any time to be less than the sum of (1)
$85,000,000 plus (2) if such amount is positive, an amount equal to 75% of
Consolidated Net Income for the period commencing January 1, 1997 through the
last day of the then most recently ended fiscal quarter.
8.14 DESIGNATED SENIOR DEBT. Holdings will not, and will not permit
any of its Subsidiaries to (i) designate any Indebtedness (other than the
Obligations) as "Designated
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Senior Debt" for purposes of, and as defined in, the Senior Subordinated
Notes Documents or (ii) designate any documents with respect to any
Indebtedness (other than this Agreement) as the "New Credit Facility" as
defined in the Senior Subordinated Notes Documents for purposes of the
receipt of notices by the Administrative Agent, and delivery of blockage
notices pursuant to the subordination provisions of the Senior Subordinated
Notes Documents.
8.15 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND
CERTAIN OTHER AGREEMENTS; ETC. Holdings will not, and will not permit any of
its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Indebtedness to Remain Outstanding or
Senior Subordinated Notes, PROVIDED, that (a) the Series B Senior
Subordinated Notes may be issued in exchange for the Series A Senior
Subordinated Notes in accordance with the terms of the Senior Subordinated
Note Indenture, (b) Holdings shall be permitted to apply, or contribute to
the Borrower to apply, the net cash proceeds from the sale of any Permitted
Holdings Investments to repay, purchase or acquire any of the foregoing
Indebtedness, (c) Holdings shall be permitted to apply up to $16,800,000 of
the net cash proceeds of (1) any cash capital contributions by Picower
and/or any of his Affiliates to Holdings, and (2) any sale or issuance of
Holdings Common Stock (x) to Picower and/or any of his Affiliates or
(y) pursuant to a public offering consummated after June 30, 2001, to
repay, repurchase, redeem or acquire any of the 7-1/4% Debentures, and
(d) the 7-1/4% Debentures may be refinanced with the net cash proceeds of
any Permitted Refinancing Debt;
(ii) amend or modify, or permit the amendment or modification of, any
provision of any Indebtedness to Remain Outstanding, any Existing
Indebtedness Agreement or any Senior Subordinated Notes Document;
(iii) amend, modify or change in any way adverse to the interests of the
Banks, its Certificate of Incorporation (including, without limitation, by
filing or modification of any certificate of designation) or By-Laws, or
any agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement
with respect to its capital stock which in any way could be adverse to the
interests of the Banks, provided that Holdings or any of its Subsidiaries
may amend its Certificate of Incorporation and By-Laws to change its name
so long as at least 15 days prior notice thereof is given to the
Administrative Agent and the Collateral Agent;
(iv) issue any class of capital stock other than (x) in the case of
the Borrower and its Subsidiaries, non-redeemable common stock and (y) in
the case of Holdings, issuances of Holdings Common Stock where, after
giving effect to such issuance, no
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Event of Default will exist under Section 9.10 and to the extent the
proceeds thereof are applied in accordance with this Agreement; or
(v) amend, modify, change, terminate, permit the amendment or
modification of, any provision of the Holding Tax Allocation Agreement,
or enter into any new Tax Sharing Agreements.
8.16 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. Holdings will
not, and will not permit any of its Subsidiaries (other than Fidata and River
Medical) to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of
any such Subsidiary to (a) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profits owned
by Holdings or any Subsidiary of Holdings, or pay any Indebtedness owed to
Holdings or a Subsidiary of Holdings, (b) make loans or advances to Holdings
or any of Holdings' Subsidiaries or (c) transfer any of its properties or
assets to Holdings or any of Holdings' Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) applicable
law, (ii) this Agreement and the other Credit Documents, (iii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or a Subsidiary of the Borrower, (iv)
customary provisions restricting assignment of any licensing agreement
entered into by the Borrower or a Subsidiary of the Borrower in the ordinary
course of business, (v) customary provisions restricting the transfer of
assets subject to Liens permitted under Sections 8.03(k) and (m), (vi) the
Senior Subordinated Notes Documents, (vii) an agreement that has been entered
into for the sale or disposition of all or substantially all of the equity
interests or property or assets of a Subsidiary; PROVIDED that such
restrictions are limited to the Subsidiary that is the subject to such
agreement or (viii) restrictions applicable to any Foreign Subsidiary
pursuant to Indebtedness permitted to be incurred pursuant to Section
8.04(i), PROVIDED that such restrictions shall be limited to customary net
worth, leverage, cash flow and other financial ratios applicable to such
Foreign Subsidiary, customary restrictions on mergers and consolidations
involving such Foreign Subsidiary, customary restrictions on transactions
with affiliates of such Foreign Subsidiary and customary provisions
subordinating the payment of intercompany Indebtedness owed by such Foreign
Subsidiary to the Borrower or any of its Subsidiaries upon the occurrence of
a default in respect of Indebtedness of such Foreign Subsidiary or its
Subsidiaries and/or events of insolvency with respect to such Foreign
Subsidiary or its Subsidiaries; and PROVIDED, FURTHER that in no event shall
any Indebtedness incurred by a Foreign Subsidiary prohibit such Foreign
Subsidiary from making any dividend or other distribution to the Borrower or
its Subsidiary or from otherwise making any loan to the Borrower or its
Subsidiaries in the absence of a breach by such Foreign Subsidiary of the
covenants contained in such Indebtedness.
8.17 LIMITATION ON THE CREATION OF SUBSIDIARIES. Notwithstanding
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire
after the Initial Borrowing Date any Subsidiary; PROVIDED that, the Borrower
and its Wholly-Owned Subsidiaries shall be permitted to establish, create or
acquire (x) Subsidiaries as a result of investments made pursuant to
Section 8.05(w)
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and (y) Wholly-Owned Subsidiaries so long as (i) at least 30 days' prior
written notice thereof is given to the Administrative Agent, (ii) the capital
stock of such new Subsidiary is pledged pursuant to, and to the extent
required by, the Pledge Agreement and the certificates representing such
stock, together with stock powers duly executed in blank, are delivered to
the Collateral Agent, (iii) such new Subsidiary (other than a Foreign
Subsidiary except to the extent otherwise required pursuant to Section 7.14)
executes a counterpart of the Subsidiary Guaranty, the Pledge Agreement and
the Security Agreement and (iv) to the extent requested by the Administrative
Agent or the Required Banks, takes all actions required pursuant to
Section 7.11. In addition, each new Wholly-Owned Subsidiary shall execute and
deliver, or cause to be executed and delivered, all other relevant
documentation of the type described in Section 5 as such new Subsidiary would
have had to deliver if such new Subsidiary were a Credit Party on the Initial
Borrowing Date.
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 PAYMENTS. The Borrower shall (i) default in the payment when due
of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any
Unpaid Drawing, any interest on the Loans or any Fees or any other amounts
owing hereunder or under any other Credit Document;
9.02 REPRESENTATIONS, ETC. Any representation, warranty or statement
made by Holdings, the Borrower or any other Credit Party herein or in any
other Credit Document or in any statement or certificate delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the
date as of which made or deemed made; or
9.03 COVENANTS. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained
in Sections 7.10, 7.11, 7.13 or 8, or (b) default in the due performance or
observance by it of any term, covenant or agreement (other than those
referred to in Section 9.01, 9.02 or clause (a) of this Section 9.03)
contained in this Agreement and such default shall continue unremedied for a
period of at least 30 days after notice to the defaulting party by the
Administrative Agent or the Required Banks; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. (a) Holdings or any of its
Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created
or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Indebtedness to become due prior to its stated maturity; or
(b) any Indebtedness (other than the Obligations) of Holdings or any of its
Subsidiaries shall be declared to be due and payable, or shall be required to
be prepaid other than by a regularly scheduled required prepayment or as
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a mandatory prepayment (unless such required prepayment or mandatory
prepayment results from a default thereunder or an event of the type that
constitutes an Event of Default), prior to the stated maturity thereof;
PROVIDED, that it shall not constitute an Event of Default pursuant to
clause (a) or (b) of this Section 9.04 unless the principal amount of any one
issue of such Indebtedness, or the aggregate amount of all such Indebtedness
referred to in clauses (a) and (b) above, exceeds $7,500,000 at any one time;
or
9.05 BANKRUPTCY, ETC. Holdings or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"), PROVIDED that any such voluntary
case shall not be an Event of Default if (x) the foregoing occurs with
respect to a Subsidiary of Holdings which is not a Significant Subsidiary and
(y) prior to commencing such a voluntary case, such Subsidiary shall have
given written notice of its intention to commence such a case to the Agents
and shall have received the prior written consent of the Agents; or an
involuntary case is commenced against Holdings or any of its Subsidiaries and
the petition is not controverted within 10 days, or is not dismissed within
60 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 Holdings or any of its Subsidiaries; or Holdings or
any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Holdings or any of its
Subsidiaries; or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or Holdings or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holdings or any of
its Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan which is subject to
Title IV of ERISA is, shall have been or is likely to be terminated or to be the
subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made with respect
to a Plan or a Foreign Pension Plan has not been timely made, the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate has incurred or is
likely to incur any liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) under Section 4980B of the Code, or the Borrower or any Subsidiary
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of the Borrower has incurred or is likely to incur liabilities pursuant to
one or more employee welfare benefit plans (as defined in Section 3(1) of
ERISA) that provide benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or Plans or Foreign Pension
Plans; (b) there shall result from any such event or events the imposition of
a lien, the granting of a security interest, or a liability or a material
risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the opinion of the
Required Banks, has had, or could reasonably be expected to have, a Material
Adverse Effect; or
9.07 SECURITY DOCUMENTS. (a) Any Security Document shall cease to be
in full force and effect, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby in favor
of the Collateral Agent, or (b) any Credit Party shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any such Security Document and
such default shall continue beyond any cure or grace period specifically
applicable thereto pursuant to the terms of such Security Document; or
9.08 GUARANTIES. The Guaranties or any provision thereof shall cease
to be in full force and effect, or any Guarantor or any Person acting by or
on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under any Guaranty or any Guarantor shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any Guaranty; or
9.09 JUDGMENTS. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries involving a liability (to the
extent not paid or not fully covered by insurance) in excess of $7,500,000
for all such judgments and decrees and all such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal within
60 days from the entry thereof; or
9.10 OWNERSHIP. A Change of Control Event shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Banks, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent or any Bank to enforce its claims against any
Guarantor or the Borrower, except as otherwise specifically provided for in
this Agreement (PROVIDED, that if an Event of Default specified in Section 9.05
shall occur with respect to the Borrower, the result which would occur upon
the giving of written notice by the Administrative Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment (or the unutilized
portion thereof) terminated, whereupon the Commitment of each Bank (or the
unutilized portion thereof) shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and all Obligations owing hereunder (including Unpaid
Drawings) to be,
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whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or direct
the Collateral Agent to enforce), any or all of the Liens and security
interests created pursuant to the Security Documents; (iv) terminate any
Letter of Credit which may be terminated in accordance with its terms; and
(v) direct the Borrower to pay (and the Borrower hereby agrees upon receipt
of such notice, or upon the occurrence of any Event of Default specified in
Section 9.05, to pay) to the Collateral Agent at the Payment Office such
additional amounts of cash, to be held as security for the Borrower's
reimbursement obligations in respect of Letters of Credit then outstanding,
equal to the aggregate Stated Amount of all Letters of Credit then
outstanding.
SECTION 10. DEFINITIONS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the
plural and in the plural the singular:
"A Term Loan" shall have the meaning provided in Section 1.01(A)(a).
"A Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the
column entitled "A Term Loan Commitment," as the same may be reduced or
terminated pursuant to Section 3.02, 3.03 and/or 9.
"A Term Loan Facility" shall mean the Facility evidenced by the Total A
Term Loan Commitment.
"A Term Loan Maturity Date" shall mean August 1, 2002.
"A Term Note" shall have the meaning provided in Section 1.05(a).
"A TL Percentage" shall mean, at any time, a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount
of all A Term Loans outstanding at such time and the denominator of which is
equal to the aggregate principal amount of all Term Loans outstanding at such
time.
"Acquisition" shall mean the acquisition by the Borrower of 100% of the
outstanding capital stock of IVAC Holdings indirectly through a merger of
IMED Merger Sub (a Wholly-Owned Subsidiary of the Borrower) with and into
IVAC Holdings.
"Acquisition Agreement" shall mean the Agreement and Plan of Merger,
dated as of August 24, 1996 by and among the Participating Stockholders (as
defined therein), IMED, IMED Merger Sub, IVAC Holdings and IVAC.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other agreements and documents relating to the Acquisition.
<PAGE>
"Additional Security Documents" shall have the meaning provided in
Section 7.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market
as published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any
week, the weekly average offering rate determined by the Administrative Agent
on the basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or, if such
quotations are unavailable, then on the basis of other sources reasonably
selected by the Administrative Agent, by (y) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements as specified in
Regulation D applicable on such day to a three-month certificate of deposit
of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves), plus (2) the then daily net annual assessment
rate as estimated by the Administrative Agent for determining the current
annual assessment payable by BTCo to the Federal Deposit Insurance
Corporation for insuring three month certificates of deposit.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.10.
"Affected Eurodollar Loans" shall have the meaning provided in Section
4.02(B)(b).
"Affiliate" shall mean, 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
the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor appointed pursuant to Section 11.10.
"Aggregate Unutilized Commitment" with respect to any Bank at any time
shall mean the sum of (i) such Bank's A Term Loan Commitment at such time, if
any, (ii) such Bank's B Term Loan Commitment at such time, if any, (iii) such
Bank's C Term Loan Commitment at such time, if any, (iv) such Bank's D Term
Loan Commitment at such time, if any, and (v) such Bank's Revolving Loan
Commitment at such time less the sum of (x) the aggregate out-
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standing principal amount of all Revolving Loans made by such Bank and (y)
such Bank's RL Percentage of the Letter of Credit Outstandings at such time.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Applicable Base Rate Margin" shall mean (i) in the case of A Term Loans
and Revolving Loans, 1.25%, less the Applicable Performance Discount, if any,
(ii) in the case of B Term Loans, 1.75%, (iii) in the case of C Term Loans,
2.25% and (iv) in the case of D Term Loans, 2.50%.
"Applicable Commitment Fee Percentage" shall mean .50%, less the
Applicable Performance Discount, if any.
"Applicable Eurodollar Margin" shall mean (i) in the case of A Term
Loans and Revolving Loans, 2.50%, less the Applicable Performance Discount,
if any, (ii) in the case of B Term Loans, 3.00%, (iii) in the case of C Term
Loans, 3.50% and (iv) in the case of D Term Loans, 3.75%.
"Applicable Performance Discount" shall mean initially zero, PROVIDED
that during any Applicable Period the Applicable Performance Discount shall
be the respective percentage per annum set forth in clause (A) or (B) below
if, but only if, as of the Test Date with respect to such Applicable Period
the condition set forth in clause (A) or (B) below is met:
(A) .25 of 1% (0% for purposes of the Applicable
Commitment Fee Percentage) if the Leverage Ratio on
such Test Date is less than 3.0:1.0; or
(B) .50% of 1% (.125 of 1% for purposes of the
Applicable Commitment Fee Percentage) if the Leverage
Ratio on such Test Date is less than 2.5:1.0.
Notwithstanding anything to the contrary contained above in this definition,
the Applicable Performance Discount shall be zero at any time when an Event
of Default shall exist.
"Applicable Period" shall mean each period which shall commence on a
date on which the financial statements are delivered pursuant to Section
7.01(b) or (c), as the case may be, and which shall end on the earlier of
(i) the date of actual delivery of the next financial statements pursuant to
Section 7.01(b) or (c), as the case may be, and (ii) the latest date on which
the next financial statements are required to be delivered pursuant to
Section 7.01(b) or (c), as the case may be; PROVIDED that for purposes of the
definition of Applicable Performance Discount, no Applicable Period shall
commence on a date occurring prior to the date of delivery of financial
statements pursuant to Section 7.01(c) in respect of the fiscal year ending
December 31, 1997.
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"Asset Sale" shall mean any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person other than the Borrower or
any Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person) of
Holdings or such Subsidiary other than (i) sales, transfers or other
dispositions of inventory made in the ordinary course of business and (ii)
sales of assets pursuant to Section 8.02(f), (h), (i), (j), (k), (u), (x) or
(y).
"Asset Sale Escrow Account" shall have the meaning provided in Section
4.02(A)(c).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Assumption Acknowledgment" shall have the meaning provided in Section
12.17(ii).
"Authorized Officer" shall mean any senior officer of Holdings or the
Borrower designated as such in writing to the Administrative Agent by
Holdings or the Borrower, in each case to the extent reasonably acceptable to
the Administrative Agent.
"B Banks" shall have the meaning provided in Section 4.02(C).
"B Term Loan" shall have the meaning provided in Section 1.01(A)(b).
"B Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the
column entitled "B Term Loan Commitment," as the same may be terminated
pursuant to Section 3.03 and/or 9.
"B Term Loan Facility" shall mean the Facility evidenced by the Total B
Term Loan Commitment.
"B Term Loan Maturity Date" shall mean November 1, 2003.
"B Term Note" shall have the meaning provided in Section 1.05(a).
"B TL Percentage" shall mean, at any time, a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount
of all B Term Loans outstanding at such time and the denominator of which is
equal to the aggregate principal amount of all Term Loans outstanding at such
time.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Default" shall mean (i) the refusal (which has not been retracted)
of a Bank to make available its portion of any Borrowing (including any
Mandatory Borrowing) or to fund its portion of any unreimbursed payment under
Section 2.04(c) or (ii) a Bank having notified the Administrative Agent
and/or the Borrower that it does not intend to comply with the
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obligations under Section 1.01(A), 1.01(C) or 2.04(c), in the case of either
clause (i) or (ii) above as a result of the appointment of a receiver or
conservator with respect to such Bank at the direction or request of any
regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate and (y) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement; provided that on and after the date of consummation of the
IMED Merger and execution of the Assumption Acknowledgment in accordance with
Section 12.17, the "Borrower" shall mean IVAC Holdings.
"Borrower Subgroup" shall have the meaning provided in Section 8.06(vii).
"Borrowing" shall mean the incurrence of one Type of Loan pursuant to a
single Facility by the Borrower from all of the Banks having Commitments with
respect to such Facility on a PRO RATA basis on a given date (or resulting
from conversions on a given date), having in the case of Eurodollar Loans the
same Interest Period; PROVIDED, that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of any related Borrowing of
Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity, and
any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the interbank Eurodollar market.
"C Banks" shall have the meaning provided in Section 4.02(C).
"C Term Loan" shall have the meaning provided in Section 1.01(A)(c).
"C Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the
column entitled "C Term Loan Commitment," as the same may be terminated
pursuant to Section 3.03 and/or 9.
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"C Term Loan Facility" shall mean the Facility evidenced by the Total C
Term Loan Commitment.
"C Term Loan Maturity Date" shall mean November 1, 2004.
"C Term Note" shall have the meaning provided in Section 1.05(a).
"C TL Percentage" shall mean, at any time a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount
of all C Term Loans outstanding at such time and the denominator of which is
equal to the aggregate principal amount of all Term Loans outstanding at such
time.
"Capital Expenditures" shall mean, with respect to any Person, without
duplication, (i) all expenditures by such Person which should be capitalized
in accordance with GAAP, including, without duplication, all such
expenditures with respect to fixed or capital assets (including, without
limitation, expenditures for maintenance and repairs which should be
capitalized in accordance with GAAP), (ii) all expenditures made by such
Person relating to instruments leased or transferred to customers pursuant to
Instruments on Contract, and (iii) the amount of all Capitalized Lease
Obligations incurred by such Person.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equity Issuance" shall have the meaning provided in the definition
of "Equity Financing."
"Cash Equivalents" shall mean (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 six months from the date of acquisition, (ii) U.S. dollar
denominated time deposits, certificates of deposit and bankers acceptances of
(x) any Bank or (y) 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 or Bank, an "Approved Bank"), in
each case with maturities of not more than six months from the date of
acquisition, (iii) commercial paper issued by any Approved Bank or by the
parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-1 or the equivalent thereof by S&P or
at least P-1 or the equivalent thereof by Moody's, or guaranteed by any
industrial company with a long term unsecured debt rating of at least A or
A2, or the equivalent
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of each thereof, from S&P or Moody's, as the case may be, and in each case
maturing within six months after the date of acquisition, (iv) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within six months from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either S&P or Moody's and (v) investments in money market funds substantially
all the assets of which are comprised of securities of the types described in
clauses (i) through (iv) above.
"Change of Control Event" shall mean (a) Holdings shall cease to own
directly 100% on a fully diluted basis of the economic and voting interest in
the Borrower's capital stock, (b) any Person or "group" (within the meaning
of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in
effect on the Effective Date), other than Picower and/or his Related Parties,
shall (i) have acquired beneficial ownership of 40% or more on a fully
diluted basis of the voting and/or economic interest in Holdings' capital
stock, (ii) have acquired a greater beneficial ownership on a fully diluted
basis of the voting and/or economic interest in Holdings' capital stock than
that of Picower and his Related Parties or (iii) obtained the power (whether
or not exercised) to elect a majority of Holdings' directors, (c) (i) Picower
and/or his Related Parties shall cease to be the beneficial owner of more
than 50% on a fully diluted basis of the voting interest in Holdings' capital
stock and (ii) the Board of Directors of Holdings shall cease to consist of a
majority of Continuing Directors, (d) Picower and his Related Parties cease
to hold beneficial ownership of at least 30% on a fully diluted basis of the
voting and/or economic interest in Holdings' capital stock or (e) any "Change
of Control" as such term is defined in the Senior Subordinated Note
Indenture, or any successor or similar provision, shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of the
Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.13.
"Commitment" shall mean, with respect to each Bank, such Bank's A Term
Loan Commitment, B Term Loan Commitment, C Term Loan Commitment, D Term Loan
Commitment and Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
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"Consolidated Current Assets" shall mean, at any time, the current
assets of the Borrower and its Subsidiaries at such time determined on a
consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the current
liabilities of the Borrower and its Subsidiaries determined on a consolidated
basis, but excluding deferred income taxes and the current portion of and
accrued but unpaid interest on any Indebtedness under this Agreement and any
other long-term Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Borrower and its Subsidiaries determined on a consolidated basis.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income,
before (a) total interest expense (inclusive of amortization of deferred
financing fees and original issue discount) and interest income (other than
interest income earned in connection with any Instrument Capital Lease) of
the Borrower and its Subsidiaries determined on a consolidated basis, (b)
provisions for taxes based on income and foreign withholding taxes, (c)
Restructuring Expenditures to the extent deducted in determining Consolidated
Net Income for such period, PROVIDED that the aggregate amount of
Restructuring Expenditures added back pursuant to this clause (c) for all
periods shall not exceed $17,000,000 (less that portion of Restructuring
Expenditures, up to $11,000,000, which are accounted for through purchase
accounting), and (d) the write-off of inventory step-up and in-process
research and development costs in accordance with purchase accounting, and
determined (i) without giving effect to any extraordinary gains or losses but
with giving effect to gains or losses from sales of assets sold in the
ordinary course of business and (ii) without giving effect to any impact from
the LIFO method of inventory accounting.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and
amortization expense and other non-cash charges that were deducted in
determining Consolidated EBIT for such period.
"Consolidated Fixed Charges" of any Person shall mean, for any period,
the sum, without duplication, for such Person of the amounts for such period
of (i) Consolidated Interest Expense, (ii) scheduled payments on Indebtedness
and (iii) taxes paid during such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries (net of any interest income
of such Person for such period arising out of Instrument Capital Leases)
determined on a consolidated basis with respect to all outstanding
Indebtedness of Holdings and its Subsidiaries, including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs or benefits
under Interest Rate Protection Agreements, but excluding, however,
amortization of deferred financing costs and any interest expense on deferred
compensation arrangements to the extent included in total interest expense.
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"Consolidated Net Income" shall mean, for any period, the net income (or
loss), after provision for taxes, of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period;
PROVIDED, HOWEVER, that (A) there shall be excluded (without duplication)
(i) income (or loss) of any Person (other than a consolidated Subsidiary of
such Person) in which any other Person (other than such Person or any of its
consolidated Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such Person or
(subject to subclause (iii) below) any of its consolidated Subsidiaries by
such other Person during such period, (ii) the income (or loss) of any Person
during such period accrued prior to the date it becomes a consolidated
Subsidiary of such Person or is merged into or consolidated with such Person
or any of its consolidated Subsidiaries, (iii) the income of any consolidated
Subsidiary of Holdings to the extent attributable to minority interests held
therein by Persons other than Holdings and its Wholly-Owned Subsidiaries, and
(iv) the income of any consolidated Subsidiary of Holdings during such period
to the extent that the declaration or payment of dividends or similar
distributions by that consolidated Subsidiary of such income is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or Holdings or any of its other Subsidiaries.
"Consolidated Net Worth" shall mean the Net Worth of the Borrower and
its Subsidiaries determined on a consolidated basis after appropriate
deduction for any minority interests in Subsidiaries.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (x) for the purchase or payment of any such primary obligation or (y)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof; PROVIDED, HOWEVER, that the term Contingent Obligation
shall not include endorsements of instruments for deposit or collection or
standard contractual indemnities entered into, in each case in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
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"Continuing Directors" shall mean the directors of Holdings on the
Effective Date and each other director if such director's nomination for the
election to the Board of Directors of Holdings is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the New Term
Notes, the New Revolving Notes, the Guaranties, each Security Document, the
Subsidiary Assumption Agreement and the Assumption Acknowledgment.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
"Creedmoor Property" shall mean that property located at 1515 IVAC Way,
Creedmoor, North Carolina.
"Current Ratio" shall mean the ratio of Consolidated Current Assets to
Consolidated Current Liabilities.
"D Banks" shall have the meaning provided in Section 4.02(C).
"D Term Loan" shall have the meaning provided in Section 1.01(A)(d).
"D Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the
column entitled "D Term Loan Commitment," as the same may be terminated
pursuant to Section 3.03 and/or 9.
"D Term Loan Facility" shall mean the Facility evidenced by the Total D
Term Loan Commitment.
"D Term Loan Maturity Date" shall mean May 1, 2005.
"D Term Note" shall have the meaning provided in Section 1.05(a).
"D TL Percentage" shall mean, at any time a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount
of all D Term Loans outstanding at such time and the denominator of which is
equal to the aggregate principal amount of all Term Loans outstanding at such
time.
"Debentures Escrow Account" shall have the meaning provided in
Section 5.09(f).
"Debentures Redemption" shall have the meaning provided in
Section 5.09(f).
"Decisions" shall mean Decisions Incorporated, a Delaware corporation.
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"Decisions Note" shall mean those notes issued by Holdings and/or IMED
to Decisions in an aggregate outstanding principal amount of $37.5 million as
of the Initial Borrowing Date.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" shall have the meaning provided in Section 8.06.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Documents" shall mean the Credit Documents, the Equity Financing
Documents, the Senior Subordinated Note Documents, the Refinancing Documents,
the Existing Senior Notes Tender Offer/Consent Solicitation Documents and the
documents relating to the Debentures Redemption and the Holdings Preferred
Stock Redemption.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings which is
not a Foreign Subsidiary.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employment Agreements" shall have the meaning provided in Section 5.13.
"Environmental Claims" shall mean any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices
of non-compliance or violation, investigations or proceedings relating in any
way to any Environmental Law or any permit issued to Holdings or any of its
Subsidiaries under any such law (hereafter "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law, and (b) any and all
Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" shall mean any applicable international, United
Kingdom, Canadian, Mexican, U.S. federal, state, provincial, territorial or
local statute, law, treaty, rule, regulation, ordinance, code, policy or rule
of common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any
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judicial or administrative order, consent, decree or judgment (for purposes
of this definition (collectively, "Laws")), relating to the environment or
Hazardous Materials or health and safety including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), 42 U.S.C. Section 6901 ET SEQ.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Section 1801 ET SEQ.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 ET
SEQ.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251 ET SEQ.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section
2601 ET SEQ.; the Oil Pollution Act of 1990, as amended, 33 U.S.C. Section
2701 - 2761; the Clean Air Act, as amended, 42 U.S.C. Section 7401 ET SEQ.;
the Safe Drinking Water Act, as amended, 42 U.S.C. Section 3808 ET SEQ.; the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. 651 ET
SEQ.; and their counterparts or equivalents under state or local law and
under the laws of the United Kingdom, Canada or Mexico.
"Equity Exchange" shall have the meaning provided in the definition of
the term "Equity Financing."
"Equity Financing" shall mean (i) the issuance by Holdings of Holdings
Common Stock to Picower and/or one of his affiliated companies for cash (the
"Cash Equity Issuance"), (ii) the exchange by Decisions of the Decisions
Notes for Holdings Common Stock (the "Equity Exchange") and (iii) the
issuance by Holdings of Holdings Common Stock to Picower and/or one of his
affiliated companies, in lieu of the payment of a premium in connection with
the Equity Exchange and the forgiveness of other obligations related to the
Decisions Notes (the "Picower Payment"), it being understood and acknowledged
that no cash shall be paid in connection with the Equity Exchange or Picower
Payment.
"Equity Financing Documents" shall mean each of the documents related to
the consummation of the Equity Financing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with Holdings or a Subsidiary of Holdings is deemed to
be a "single employer" (i) within the meaning of Section 414(b), (c), (m) or
(o) of the Code or (ii) as a result of Holdings or a Subsidiary of Holdings
being or having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for a
Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100 of
1%) of the offered quotation
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to first-class banks in the interbank Eurodollar market by the Administrative
Agent for U.S. dollar deposits of amounts in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan of the Administrative
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal
to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period (i) the sum of (A)
Consolidated Net Income for such period, plus (B) the amount of all non-cash
charges (including, without limitation or duplication, depreciation,
amortization and non-cash interest expense) included in determining
Consolidated Net Income for such period, plus (C) the decrease, if any, in
Working Capital from the first day to the last day of such period, plus (D)
provisions for taxes appearing on an income statement of the Borrower and its
Subsidiaries for such period, minus (ii) the sum (without duplication) of (A)
any non-cash credits (including from sales of assets) included in determining
Consolidated Net Income for such period, (B) gains from sales of assets
(other than sales of inventory in the ordinary course of business) included
in determining Consolidated Net Income for such period, (C) an amount equal
to (1) all Capital Expenditures (excluding Capital Expenditures made pursuant
to Section 8.08(c), (d), (e) or (f)) made during such period to the extent
not financed by Indebtedness (including Capitalized Lease Obligations but
excluding Loans hereunder) plus (or minus, if negative) (2) the Rollover
Amount for such period to be carried forward to the next period less the
Rollover Amount (if any) for the preceding period carried forward to the
current period, (D) the amount of cash expended in respect of Permitted
Acquisitions during such period, except to the extent constituting Capital
Expenditures or financed with Indebtedness, (E) the aggregate principal
amount of permanent principal payments of Indebtedness for borrowed money of
Holdings and its Subsidiaries (other than (1) repayments in respect of the
Indebtedness to be Refinanced, (2) repayments of Indebtedness with proceeds
of issuance or other Indebtedness or equity or equity contributions or with
proceeds of assets sales, Recovery Events or Pension Plan Refunds and (3)
repayments of Loans or other Obligations, provided that repayments of Loans
shall be deducted in determining Excess Cash Flow if such repayments were (x)
required as a result of a Scheduled Repayment under Section 4.02(A)(b) or (y)
made as a voluntary prepayment with internally generated funds (but in the
case of a voluntary prepayment of Revolving Loans or Swingline Loans, only to
the extent accompanied by a voluntary reduction to the Total Revolving Loan
Commitment)) during such period, (F) non-cash charges added back in a
previous period pursuant to clause (i)(B) above to the extent any such charge
has become a cash item in the current period, (G) the increase, if any, in
Working Capital from the first day to the last day of such period, (H) costs
incurred by Holdings during such period and paid for with the
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proceeds of dividends paid to Holdings pursuant to Section 8.06(iv), (v),
(vi) and (vii) to the extent not deducted in determining Consolidated Net
Income for such period, (I) any cash Restructuring Expenditures incurred
during such period to the extent not deducted in determining Consolidated Net
Income for such period, (J) any Restructuring Reserves as at the end of such
period, (K) taxes paid by the Borrower and its Subsidiaries during such
period, and (L) the principal portion of Capital Lease Obligations paid by
the Borrower and its Subsidiaries during such period.
"Excess Cash Flow Period" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal
year of Holdings.
"Excess Cash Payment Date" shall mean the date occurring 100 days after
the last day of a fiscal year of Holdings (beginning with its fiscal year
ending on December 31, 1997).
"Excess Proceeds" shall mean (i) the portion of the net proceeds
received by Holdings after the Initial Borrowing Date from any equity
issuance by Holdings which is permitted to be retained by Holdings pursuant
to clause (y) or (z) of Section 4.02(A)(d), (ii) the portion of Excess Cash
Flow of the Borrower and its Subsidiaries which is permitted to be retained
by the Borrower pursuant to Section 4.02(A)(f) and (iii) the net cash
proceeds received by Holdings from the sale or disposition of any Permitted
Holdings Investment (to the extent not used to pay a dividend under Section
8.06(viii)).
"Excess Proceeds Amount" shall initially be zero, which amount shall be
(A) INCREASED (i) on each Excess Cash Payment Date (commencing with the
Excess Cash Payment Date occurring 100 days after the fiscal year ending
December 31, 1997) so long as any repayment required pursuant to Section
4.02(A)(f) has been made, by an amount equal to that portion of Excess Cash
Flow for the immediately preceding Excess Cash Flow Period which is permitted
to be retained pursuant to Section 4.02(A)(f), (ii) on the date of the
receipt by Holdings of the proceeds from any equity issuance by Holdings
which are permitted to be retained by Holdings pursuant to clause (y) of
Section 4.02(A)(d), by the amount of such net proceeds which are permitted to
be so retained and (iii) at the time any sale or liquidation of a Permitted
Holdings Investment is made pursuant to Section 8.02(u), by the net cash
proceeds thereof (to the extent not used to pay a dividend under Section
8.06(viii)) and (B) REDUCED (i) on each Excess Cash Payment Date (commencing
with the Excess Cash Payment Date occurring 100 days after the fiscal year
ending December 31, 1997) where Excess Cash Flow for the immediately
preceding Excess Cash Flow Period is a negative number, by such amount, (ii)
at the time any Capital Expenditure is made pursuant to Section 8.08(f) by
the amount thereof, (iii) at the time any Permitted Acquisition is made, by
the amount of Excess Proceeds expended in connection therewith and (iv) at
the time when any investment is made pursuant to Section 8.05(w), by the
amount of Excess Proceeds expended in connection therewith (it being
understood that the Excess Proceeds Amount may be reduced to an amount below
zero after giving effect to the reductions enumerated in clause (B) above).
"Excess Tax Liability" shall have the meaning provided in Section
8.06(vii).
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Credit Agreements" shall mean (a) the Amended and Restated
Loan Agreement, dated as of April 2, 1990 and amended and restated on August
12, 1994, between the Borrower and General Electric Capital Corporation and
(b) the Credit Agreement, dated as of December 30, 1994 as amended and
restated, by and among IVAC Holdings, IVAC, Chemical Bank and the lenders
named therein.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.13.
"Existing Senior Notes" shall mean IVAC's 9-1/4% Senior Notes due 2002,
as in effect on the Initial Borrowing Date and as the same may be modified,
supplemented or amended from time to time pursuant to the terms hereof.
"Existing Senior Notes Consent" shall mean each written consent
permitting IVAC to amend or supplement the Existing Senior Notes Indentures
in a manner satisfactory to the Agents so as to permit the Acquisition and
the IVAC Merger and all other elements of the Transaction and any other
related matters necessary in connection therewith.
"Existing Senior Notes Indenture" shall mean the Indenture entered into
by and between IVAC and Marine Midland Bank, as trustee thereunder, as in
effect on the Initial Borrowing Date.
"Existing Senior Notes Tender Offer/Consent Solicitation" shall mean (a)
the tender offer by the Borrower and/or IVAC to repurchase all outstanding
Existing Senior Notes and (b) the solicitation of the Existing Senior Notes
Consents from the holders of the Existing Senior Notes.
"Existing Senior Notes Tender Offer/Consent Solicitation Documents"
shall mean the Borrower's and/or IVAC's Offer to Purchase and Consent
Solicitation, dated as of October 16, 1996, as supplemented on October 31,
1996 and November 6, 1996, the Existing Senior Note Consents and each of the
other agreements and documents entered into in connection with the Existing
Senior Notes Tender Offer/Consent Solicitation.
"Facility" shall mean any of the credit facilities established under
this Agreement, I.E., the A Term Loan Facility, the B Term Loan Facility, the
C Term Loan Facility, the D Term Loan Facility or the Revolving Loan Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"FDA" shall mean the Federal Food and Drug Administration or any other
federal, foreign, state or local agency or governmental body having
regulatory authority over the products of Holdings and or any of its
Subsidiaries.
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"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Fidata" shall mean Fidata Trust Company New York, a New York
corporation.
"15% Debentures" shall mean Holdings' 15% Subordinated Debentures Due
1999, as in effect on the Initial Borrowing Date and as the same may be
modified, supplemented or amended from time to time pursuant to the terms
hereof.
"510(k)" shall have the meaning provided in Section 6.26(c).
"Foreign Cash Equivalents" shall mean certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada, Japan or any
country that is a member of the European Economic Community 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, in each case with
maturities of not more than six months from the date of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or
more of its Subsidiaries primarily for the benefit of employees of Holdings
or such Subsidiaries residing outside the United States of America, which
plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA
or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings that is
incorporated under the laws of any jurisdiction other than the United States
of America, any State thereof, or any territory thereof.
"Foreign Subsidiary Working Capital Indebtedness" shall have the meaning
provided in Section 8.04(i).
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 8,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 12.07(a).
"Good Manufacturing Practices Regulations" shall mean those regulations
regulating the requirements for methods used in, and the facilities and
controls used for, the manufacture, packing, storage, and installation of
medical devices.
"Guaranteed Creditors" shall mean and include each of the Agents, the
Syndication Agents, the Banks and each Person (other than any Credit Party)
which is a party to an Interest Rate Protection Agreement or Other Hedging
Agreement to the extent such party constitutes a Secured Creditor under the
Security Documents.
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"Guaranteed Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest (whether such interest is allowed as a claim in a
bankruptcy proceeding with respect to the Borrower or otherwise) on each Note
issued by the Borrower to each Bank, and Loans made under this Agreement and
all reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit, together with all the other obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities (including, without limitation, indemnities, fees
and interest thereon) of the Borrower to such Bank now existing or hereafter
incurred under, arising out of or in connection with this Agreement or any
other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by the
Borrower and (ii) the full and prompt payment when due (whether by
acceleration or otherwise) of all obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) of the Borrower owing under any such Interest Rate Protection
Agreement or Other Hedging Agreement entered into by the Borrower or any of
its Subsidiaries with any Bank or any affiliate thereof (even if such Bank
subsequently ceases to be a Bank under this Agreement for any reason) so long
as such Bank or affiliate participates in such Interest Rate Protection
Agreement or Other Hedging Agreement, and their subsequent assigns, if any,
whether now in existence or hereafter arising, and the due performance and
compliance with all terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Guaranty" shall mean and include each of the Holding Company Guaranties
and the Subsidiary Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "restricted hazardous materials," "extremely hazardous
wastes," "restrictive hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar meaning and
regulatory effect; or (c) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental authority.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Common Stock" shall have the meaning provided in Section 6.16.
"Holding Company Guaranty" shall mean the guaranty of Holdings pursuant
to Section 13.
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"Holdings Consolidated Group" shall mean Holdings and all direct and
indirect Subsidiaries of Holdings (present or future), if any, that are
eligible to be included in consolidated federal income tax returns with
Holdings.
"Holdings Preferred Stock" shall mean the preferred stock of Holdings
having an aggregate liquidation preference immediately prior to the Initial
Borrowing Date of up to $8,500,000.
"Holdings Preferred Stock Redemption" shall have the meaning provided in
Section 5.09(g).
"Holdings Tax Allocation Agreement" shall mean the Tax Sharing
Agreement, dated as of the Effective Date, among Holdings and the Borrower
and its Domestic Subsidiaries.
"Hypothetical Separate Federal Income Tax Liability" shall have the
meaning provided in Section 8.06(vii).
"IMED" shall mean IMED Corporation, a Delaware corporation.
"IMED B.V.I." shall mean IMED Holding Co. Ltd. British Virgin Islands, a
British Virgin Islands corporation.
"IMED Ltd." shall mean IMED Ltd., a British corporation.
"IMED Merger" shall have the meaning provided in Section 12.17.
"IMED Merger Documents" shall mean the certificate of merger, the
Assumption Acknowledgment and all other agreements and documents related to
the IMED Merger.
"IMED Merger Sub" shall mean IMED Merger Sub, Inc, a Delaware
corporation.
"IMED Pty" shall mean IMED Pty Limited, ACN 003 080 215, an Australian
corporation.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services payable to the sellers thereof or any of such
seller's assignees which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person but excluding deferred
rent as determined in accordance with GAAP, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obli-
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gations, provided that this clause (vi) shall not be included in the
definition of "Indebtedness" for purposes of Section 9.04), (vii) all
obligations under Interest Rate Protection Agreements and Other Hedging
Agreements (including indemnity obligations in connection therewith) and
(viii) all Contingent Obligations of such Person, PROVIDED, that Indebtedness
shall not include trade payables and accrued expenses, in each case arising
in the ordinary course of business.
"Indebtedness to be Refinanced" shall mean collectively, the
indebtedness arising pursuant to the Existing Credit Agreements.
"Indebtedness to Remain Outstanding" shall have the meaning provided in
Section 6.24.
"Initial Borrowing Date" shall mean the date upon which the Term Loans
are incurred hereunder.
"Instrument Capital Lease" shall mean any lease or transfer of an
instrument or other medical device to a third party customer of the Borrower
or any of its Subsidiaries which is not accounted for by the Borrower or such
Subsidiary as a capital expenditure in accordance with GAAP.
"Instrument on Contract" shall mean any lease of an instrument or other
medical device to a third party customer of the Borrower or any of its
Subsidiaries which is accounted for by the Borrower or such Subsidiary as a
capital expenditure, and not as a Capital Lease, in accordance with GAAP.
"Intercompany Loan" shall have the meaning provided in Section 8.05(g).
"Intercompany Notes" shall mean promissory notes, in the form of Exhibit
K, evidencing Intercompany Loans.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"IVAC" shall mean IVAC Medical Systems, a Delaware corporation.
"IVAC Holdings" shall mean IVAC Holdings, Inc., a Delaware corporation.
"IVAC Merger" shall mean the merger of IVAC with and into IVAC Holdings.
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"IVAC Merger Documents" shall mean the certificate of merger and all
other agreements and documents related to the IVAC Merger.
"IVAC Overseas" shall mean IVAC Overseas Holdings, Inc., a Delaware
corporation.
"L/C Supportable Indebtedness" shall mean (i) obligations of Holdings or
its Subsidiaries incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds and other
similar statutory obligations and (ii) such other obligations of Holdings or
any of its Subsidiaries as are reasonably acceptable to the Administrative
Agent and the respective Letter of Credit Issuer and otherwise permitted to
exist pursuant to the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo, and any Bank which at the
request of Holdings and with the consent of the Administrative Agent agrees,
in such Bank's sole discretion, to become a Letter of Credit Issuer for the
purpose of issuing Letters of Credit pursuant to Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated Debt
at such time to Consolidated EBITDA for the Test Period then last ended;
provided that solely in determining the Leverage Ratio (1) for the Test
Period ended March 31, 1997, Consolidated EBITDA for such Test Period shall
be multiplied by 4, (ii) for the Test Period ended June 30, 1997,
Consolidated EBITDA for such Test Period shall be multiplied by 2 and (iii)
for the Test Period ended September 30, 1997, Consolidated EBITDA, for such
period shall be multiplied by 4/3.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien 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 any similar
recording or notice statute, and any lease having substantially the same
effect as the foregoing).
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"Loan" shall mean each and every Loan made by any Bank hereunder,
including A Term Loans, B Term Loans, C Term Loans, D Term Loans, Revolving
Loans or Swingline Loans.
"Majority Banks" of any Facility shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if all outstanding Obligations of the other Facilities under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Management Agreements" shall have the meaning provided in Section 5.13.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(C).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise)
or prospects of Holdings, the Borrower, Holdings and its Subsidiaries taken
as a whole or the Borrower and its Subsidiaries (including, without
limitation, IVAC) taken as a whole.
"Material Contracts" shall have the meaning provided in Section 5.13(i).
"Maturity Date" with respect to any Facility shall mean either the A
Term Loan Maturity Date, the B Term Loan Maturity Date, the C Term Loan
Maturity Date, the D Term Loan Maturity Date or the Revolving Loan Maturity
Date, as the case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
"Medical Device Reports" shall have the meaning provided in Section 6.26.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans (other
than Swingline Loans), $1,000,000; (ii) for Eurodollar Loans, $2,000,000 and
(iii) for Swingline Loans, $500,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Mortgage" shall have the meaning provided in Section 5.12(a).
"Mortgage Policies" shall have the meaning provided in Section 5.12(b).
"Mortgaged Properties" shall mean and include (i) all Real Properties
owned by Holdings and its Domestic Subsidiaries to the extent designated as
such on Annex III and (ii) each Real Property subjected to a mortgage in
favor of the Collateral Agent for the benefit of the Secured Creditors
pursuant to Section 7.11.
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"Net Proceeds" shall mean, with respect to any Asset Sale, the Proceeds
resulting therefrom net of (a) cash expenses of sale (including brokerage
fees, if any, transfer taxes and payment of principal, premium and interest
of Indebtedness other than the Loans required to be repaid as a result of
such Asset Sale) and (b) incremental income taxes paid or payable as a result
thereof.
"Net Worth" shall mean, as to any Person, the sum of its capital stock,
capital in excess of par or stated value of shares of its capital stock,
retained earnings and any other account which, in accordance with GAAP,
constitutes stockholders equity, excluding any treasury stock.
"New Revolving Notes" shall have the meaning provided in Section
12.17(ix).
"New Swingline Note" shall have the meaning provided in Section
12.17(ix).
"New Term Notes" shall have the meaning provided in Section 12.17(ix).
"Non-Compete Agreements" shall have the meaning provided in Section 5.13.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting Bank.
"Note" shall mean each A Term Note, each B Term Note, each C Term Note,
each D Term Note, each Revolving Note and the Swingline Note.
"Notice of Adverse Findings" shall mean a document issued by the FDA
each time a noncompliance is discovered pursuant to any routine inspection of
a device firm.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice of Debentures Redemption" shall have the meaning provided in
Section 5.09(f).
"Notice of Holdings Preferred Stock Redemption" shall have the meaning
provided in Section 5.09(g).
"Notice Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006 or such other
office as the Administrative Agent may designate to Holdings, the Borrower
and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to
the Agents or any Bank pursuant to the terms of this Agreement or any other
Credit Document.
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"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed
to protect against fluctuations in currency values.
"Paribas" shall mean Banque Paribas, in its individual capacity, and any
successor corporation thereto by merger, consolidation or otherwise.
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006 or such other
office as the Administrative Agent may designate to Holdings, the Borrower
and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments (net of reasonable
costs associated therewith, including income, excise and other taxes payable
thereon) received by Holdings and/or of its Subsidiaries from any return of
any surplus assets from any single Plan or Foreign Pension Plan.
"Permitted Acquisition" shall have the meaning provided in Section
8.02(t).
"Permitted Encumbrances" shall mean (i) those liens, encumbrances and
other matters affecting title to any Mortgaged Property listed in the
Mortgage Policies in respect thereof and found, on the date of delivery of
such Mortgage Policies to the Collateral Agent in accordance with the terms
hereof, reasonably acceptable by the Collateral Agent, (ii) as to any
particular Mortgaged Property at any time, such easements, encroachments,
covenants, rights of way, minor defects, irregularities or encumbrances on
title which do not, in the reasonable opinion of the Collateral Agent,
materially impair such Mortgaged Property for the purpose for which it is
held by the mortgagor thereof, or the lien held by the Collateral Agent,
(iii) zoning and other municipal ordinances, which are not violated in any
material respect by the existing improvements and the present use made by the
mortgagor thereof of the Premises (as defined in the respective Mortgage),
(iv) general real estate taxes and assessments not yet delinquent, and (v)
such other items as the Collateral Agent may consent to (such consent not to
be unreasonably withheld).
"Permitted Fidata Amount" shall mean that amount which may be
contributed or loaned by Holdings to Fidata for the purpose of winding down
or liquidating Fidata, in an aggregate amount not to exceed $200,000.
"Permitted Holdings Investments" shall have the meaning provided in
Section 8.02(u).
"Permitted Liens" shall have the meaning provided in Section 8.03.
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"Permitted Refinancing Debt" shall mean Indebtedness issued by Holdings
in connection with a refinancing of the 7-1/4% Debentures; PROVIDED that (i)
such Indebtedness has a longer average life than the 7-1/4% Debentures, (ii)
such Indebtedness is not guaranteed or otherwise supported in any way by the
Borrower or any Subsidiary of the Borrower, and (iii) such Indebtedness, and
the agreements and other documents entered into by Holdings in connection
therewith shall, in the judgment of the Administrative Agent, contain terms
and conditions (including, without limitation, with respect to the obligor in
respect of such Indebtedness, amortization schedules, interest rates,
redemption provisions, maturities, covenants, defaults, security and
remedies) no less favorable to Holdings or to the Banks than the terms and
conditions of the 7-1/4% Debentures.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Picower" shall mean Jeffry Picower.
"Picower Payment" shall have the meaning provided in the definition of
the term "Equity Financing."
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation
to contribute of) Holdings or a Subsidiary of Holdings or an ERISA Affiliate,
and each such plan for the five year period immediately following the latest
date on which Holdings, or a Subsidiary of Holdings or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.10.
"Pledged Securities" shall mean all the Pledged Securities as defined in
the Pledge Agreement.
"PMA" shall have the meaning provided in Section 6.26(c).
"Preferred Stock Escrow Account" shall have the meaning provided in
Section 5.09(g).
"Prime Lending Rate" shall mean the rate which the Administrative Agent
announces from time to time as its prime lending rate, the Prime Lending Rate
to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Proceeds" shall mean with respect to any Asset Sale, the aggregate cash
payments (including any cash received by way of deferred payment pursuant to
a note receivable issued
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in connection with such Asset Sale, other than the portion of such deferred
payment constituting interest, but only as and when so received) received by
Holdings and/or any of its Subsidiaries from such Asset Sale.
"Projections" shall have the meaning provided in Section 5.16.
"Quarterly Payment Date" shall mean the last Business Day of each March,
June, September and December.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason
of any theft, physical destruction or damage or any other similar event with
respect to any properties or assets of Holdings or any of its Subsidiaries,
(ii) by reason any condemnation, taking, seizing or similar event with
respect to any properties or assets of Holdings or any of its Subsidiaries
and (iii) under any policy of insurance required to be maintained under
Section 7.03.
"Recovery Event Escrow Account" shall have the meaning provided in
Section 4.02(A)(g).
"Reduced Leverage Period" shall mean any Applicable Period if, and only
if, the Leverage Ratio was less than or equal to 3.0:1.0 on the Test Date
with respect thereto.
"Refinancing" shall mean the refinancing and repayment in full of all
amounts outstanding under, and the termination in full of all commitments and
letters of credit in respect of, the Indebtedness to be Refinanced.
"Refinancing Documents" shall mean each of the agreements, documents and
instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 7.12.
"Regulation D" shall mean 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 S-X" shall mean Regulation S-X promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date hereof.
"Regulation U" shall mean 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.
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"Regulatory Letter" shall mean regulatory action taken by the FDA in the
form of a letter, pursuant to discovery of any major violation of the Food,
Drug, and Cosmetic Act and other related regulations.
"Related Party" shall mean with respect to Picower, (i) any spouse or
immediate family member of Picower, or (ii) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners,
owners or Persons beneficially holding (directly or through one or more
Subsidiaries) an 80% or more controlling interest of which consist of the
Picower and/or such other Persons referred to in the immediately preceding
clause (i).
"Release" shall mean active or passive disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
migrating, emptying, seeping, placing, pouring and the like, into or upon any
land or water or air, or otherwise entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived pursuant to
regulations under Section 4043 of ERISA.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or, if after the Total
Revolving Loan Commitment has been terminated, outstanding Revolving Loans
and RL Percentages of outstanding Swingline Loans and Letter of Credit
Outstandings) constitute greater than 50% of the sum of (i) the total
outstanding Term Loans of Non-Defaulting Banks and (ii) the Total Revolving
Loan Commitment less the aggregate Revolving Loan Commitments of Defaulting
Banks (or, if after the Total Revolving Loan Commitment has been terminated,
the total outstanding Revolving Loans of Non-Defaulting Banks and the
aggregate RL Percentages of all Non-Defaulting Banks of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time).
"Restructuring Expenditures" shall mean nonrecurring expenditures and
charges arising out of the restructuring, consolidation, severance or
discontinuance of any portion of the operations of any entities or businesses
of Holdings and its Subsidiaries in connection with the Acquisition, the IVAC
Merger or the IMED Merger.
"Restructuring Reserves" shall mean, at any time, an amount equal to
$17,000,000 less all Restructuring Expenditures (to the extent accounted for
through purchase accounting) theretofore made after the Initial Borrowing
Date.
"Revolving Loan" shall have the meaning provided in Section 1.01(A)(e).
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"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the
column entitled "Revolving Loan Commitment," as the same may be reduced from
time to time pursuant to Section 3.02, 3.03 and/or 9.
"Revolving Loan Facility" shall mean the Facility evidenced by the Total
Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean August 1, 2002.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"River Medical" shall mean River Medical, Inc., a Delaware corporation.
"RL Bank" shall mean at any time each Bank with a Revolving Loan
Commitment or with outstanding Revolving Loans.
"RL Percentage" shall mean at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Loan Commitment by the Total
Revolving Loan Commitment; PROVIDED, that if the Total Revolving Loan
Commitment has been terminated, the RL Percentage of each Bank shall be
determined by dividing such Bank's Revolving Loan Commitment immediately
prior to such termination by the Total Revolving Loan Commitment immediately
prior to such termination.
"Rollover Amount" shall have the meaning provided in Section 8.08(b).
"S&P" shall mean Standard & Poor's Corporation.
"Scheduled A Repayment" shall have the meaning provided in Section
4.02(A)(b)(i).
"Scheduled B Repayment" shall have the meaning provided in Section
4.02(A)(b)(ii).
"Scheduled C Repayment" shall have the meaning provided in Section
4.02(A)(b)(iii).
"Scheduled D Repayment" shall have the meaning provided in Section
4.02(A)(b)(iv).
"Scheduled Repayment" shall mean any Scheduled A Repayment, Scheduled B
Repayment, Scheduled C Repayment and Scheduled D Repayment.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
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"Section 305 Notices" shall mean any notice which is required to be
given by the Secretary of the Department of Health and Human Services of the
United States of America to any person against whom a criminal proceeding is
contemplated for a violation of the Federal Food, Drug and Cosmetic Act.
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning provided in Section 5.11.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement, the
Pledge Agreement, each Mortgage, each Additional Security Document, if any
and each other document or instrument entered into pursuant to Sections 5.10,
5.11, 7.14 and 12.17(iv), if any, in each case as and when executed and
delivered in accordance with the terms of this Agreement.
"Senior Subordinated Note Documents" shall mean and include each of the
documents and other agreements entered into (including, without limitation,
the Senior Subordinated Note Indenture) relating to the issuance by the
Borrower of the Senior Subordinated Notes, as in effect on the Initial
Borrowing Date (to the extent thereof) and as the same may be entered into,
modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Senior Subordinated Note Indenture" shall mean the Indenture entered
into by and between the Borrower and the United States Trust Company of New
York, as trustee thereunder, as in effect on the Initial Borrowing Date and
as the same may be modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Series A Senior Subordinated
Notes and any Series B Senior Subordinated Notes issued in exchange therefor
in accordance with the terms of the Senior Subordinated Note Indenture.
"Series A Senior Subordinated Notes" shall mean the Borrower's ______%
Senior Subordinated Notes due 2006 as in effect on the Initial Borrowing Date
and as the same may be modified, supplemented or amended from time to time
pursuant to the terms hereof and thereof.
"Series B Senior Subordinated Notes" shall mean the Borrower's 9.75%
Series B Senior Subordinated Notes due 2006 issued in exchange for Series A
Senior Subordinated Notes, in the form set forth in the Senior Subordinated
Note Indenture as in effect on the Initial
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Borrowing Date, and as such Series B Senior Subordinated Notes may be
modified, supplemented or amended from time to time, pursuant to the terms
hereof and thereof.
"7-1/4% Debentures" shall mean Holdings' Convertible Subordinated
Debentures Due 2002, as in effect on the Initial Borrowing Date and as the
same may be modified, supplemented or amended from time to time pursuant to
the terms hereof.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in any
other way by the Borrower or any of its Subsidiaries) in the form of Exhibit
L.
"Shareholders' Agreements" shall have the meaning set forth in Section
5.13(d).
"Siemen's Obligations" shall mean those minimum royalty obligations
owing to Siemen's in an amount not to exceed $9,000,000 in the aggregate as
of the Initial Borrowing Date.
"Significant Subsidiary" shall mean any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X.
"Start Date" shall mean the first day of any Applicable Period.
"Stated Amount" of each Letter of Credit shall mean at any time the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Subsidiary" of any Person shall mean and include (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 stock of 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, limited liability company or other entity in
which such Person directly or indirectly through Subsidiaries, has more than
a 50% equity interest at the time.
"Subsidiary Assumption Agreement" shall have the meaning provided in
Section 12.17(iii).
"Subsidiary Guarantor" shall mean each Subsidiary of Holdings (other
than (i) the Borrower, (ii) Fidata, (iii) River Medical and (iv) a Foreign
Subsidiary except to the extent otherwise provided in Section 7.14) that is
or becomes a party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section 5.20.
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"Supermajority Banks" of any Facility shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in,
this Agreement if (x) all outstanding Obligations of the other Facilities
under this Agreement were repaid in full and all Commitments with respect
thereto were terminated and (y) the percentage "50%" contained therein were
changed to "66-2/3%."
"Swingline Expiry Date" shall mean the date which is five Business Days
prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(B).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agents" shall have the meaning provided in the first
paragraph of this Agreement.
"Syndication Date" shall have the meaning provided in Section 1.01(A)(a).
"Tax Sharing Agreements" shall have the meaning provided in Section
5.13(h).
"Taxes" shall have the meaning provided in Section 4.04.
"10% Preferred Stock" shall have the meaning provided in Section 6.16(a).
"Term Loan" shall mean each A Term Loan, each B Term Loan, each C Term
Loan and each D Term Loan.
"Test Date" shall mean, with respect to any Applicable Period, the last
day of the most recent fiscal quarter or fiscal year, as the case may be,
ended immediately prior to the Start Date with respect to such Applicable
Period.
"Test Period" shall mean (i) for any determination made on and prior to
September 30, 1997, the period from January 1, 1997 to the last day of the
fiscal quarter of Holdings then last ended, PROVIDED that the first Test
Period shall end on March 31, 1997, and (ii) for any determination made
thereafter, the four consecutive fiscal quarters of Holdings then last ended.
"Total A Term Loan Commitment" shall mean the sum of the A Term Loan
Commitments of each of the Banks.
"Total B Term Loan Commitment" shall mean the sum of the B Term Loan
Commitments of each of the Banks.
"Total C Term Loan Commitment" shall mean the sum of the C Term Loan
Commitments of each of the Banks.
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"Total D Term Loan Commitment" shall mean the sum of the D Term Loan
Commitments of each of the Banks.
"Total Commitment" shall mean the sum of the Total Term Loan Commitment
and the Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean the sum of the Total A Term Loan
Commitment, the Total B Term Loan Commitment, the Total C Term Loan
Commitment and the Total D Term Loan Commitment.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of the
aggregate principal amount of all Revolving Loans and Swingline Loans at such
time plus the Letter of Credit Outstandings at such time.
"Transaction" shall mean, collectively, (i) the Acquisition, (ii) the
issuance by the Borrower of the Senior Subordinated Notes on the Initial
Borrowing Date, (iii) the incurrence of the Loans hereunder on the Initial
Borrowing Date, (iv) the Refinancing, (v) the Existing Senior Notes Tender
Offer/Consent Solicitation, the purchase of Existing Senior Notes pursuant
thereto and the subsequent defeasance of any remaining Existing Senior Notes,
(vi) the Debentures Redemption, (vii) the Holdings Preferred Stock
Redemption, (viii) the IVAC Merger, (ix) the IMED Merger and (x) the payment
of fees and expenses in connection with the foregoing.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Base Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in
accordance with actuarial assumptions at such time consistent with Statement
of Financial Accounting Standards No. 87, exceeds the market value of the
assets allocable thereto.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
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"Waivable Mandatory Repayment" shall have the meaning provided in
Section 4.02(C).
"Waivable Voluntary Repayment" shall have the meaning provided in
Section 4.02(C).
"Warning Letter" shall mean a letter issued by the FDA for any violation
of regulatory significance.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares and/or other nominal amounts of shares required to be held other than
by such Person under applicable law) is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
"Working Capital" shall mean the excess of Consolidated Current Assets
(but excluding therefrom all cash, Cash Equivalents and deferred income taxes
to the extent included in current assets) over Consolidated Current
Liabilities.
"Written," "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device,
telegraph or cable.
SECTION 11. THE AGENTS.
11.01 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints BTCo and Paribas as Agents of such Bank (for purposes of this
Section 11, the term "Agents" shall mean BTCo acting as Administrative Agent
and Collateral Agent and Banque Paribas acting as Documentation Agent) to act
as specified herein and in the other Credit Documents. Each such Bank hereby
irrevocably authorizes Paribas and BTCo as Agent to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents
and to exercise such powers and perform such duties as are expressly
delegated to each Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto. Each Agent agrees to act as such upon the express conditions
contained in this Section 11. Notwithstanding any provision to the contrary
elsewhere in this Agreement or in any other Credit Document, no Agent shall
have any duties or responsibilities, except those expressly set forth herein
or in the other Credit Documents, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise
exist against any Agent. The provisions of this Section 11 are solely for
the benefit of the Agents and the Banks, and neither Holdings nor any
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of its Subsidiaries shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this
Agreement, each Agent shall act solely as agent of the Banks and no Agent
assumes nor shall be deemed to have assumed any obligation or relationship of
agency or trust with or for Holdings or any of its Subsidiaries.
Notwithstanding anything to the contrary contained in this Agreement, each
Syndication Agent in its capacity as Syndication Agent shall have no
obligations or liabilities under this Agreement or any other Credit Document.
11.02 DELEGATION OF DUTIES. Each Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care except to the extent otherwise required by Section 11.03.
11.03 EXCULPATORY PROVISIONS. No Agent nor any of its 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 with this Agreement or 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 Holdings, any of
its Subsidiaries or any of their respective officers contained in this
Agreement or the other Credit Documents, any other Document or in any
certificate, report, statement or other document referred to or provided for
in, or received by such Agent under or in connection with, this Agreement or
any other Document or for any failure of Holdings or any of its Subsidiaries
or any of their respective officers to perform its obligations hereunder or
thereunder. No Agent shall be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or the other Documents, or to
inspect the properties, books or records of Holdings or any of its
Subsidiaries. No Agent shall be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other Document or for any
representations, warranties, recitals or statements made herein or therein or
made 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 such Agent to the Banks
or by or on behalf of Holdings or any of its Subsidiaries to such 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
the Loans or of the existence or possible existence of any Default or Event
of Default.
11.04 RELIANCE BY AGENTS. Each 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,
facsimile, telex or teletype message, statement, order 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, without limitation, counsel to
Holdings or any of its Subsidiaries), independent
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accountants and other experts selected by such Agent. Each Agent shall be
fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document 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. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the other Credit Documents in accordance with a request of the Required
Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks.
11.05 NOTICE OF DEFAULT. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has actually received notice from a Bank, Holdings or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that an
Agent receives such a notice, such Agent shall give prompt notice thereof to
the Banks. Each Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks;
PROVIDED, that, unless and until such Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
11.06 NON-RELIANCE ON AGENT, AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of Holdings or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
such Agent to any Bank. Each Bank represents to each Agent that it has,
independently and without reliance upon any 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 condition, prospects and creditworthiness of
Holdings and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon any 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 Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other condition, prospects and
creditworthiness of Holdings and its Subsidiaries. No Agent shall have any
duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, assets, property, financial
and other condition, prospects or creditworthiness of Holdings or any of its
Subsidiaries which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
11.07 INDEMNIFICATION. The Banks agree to indemnify each Agent in its
capacity as such ratably according to their respective "percentages" as used
in determining the Required
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Banks at such time (determined as if there are no Defaulting Banks), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable 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 such Agent in its capacity as such in any way relating to or
arising out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby
or any action taken or omitted to be taken by such Agent under or in
connection with any of the foregoing, but only to the extent that any of the
foregoing is not paid by Holdings or any of its Subsidiaries; PROVIDED, that
no Bank shall be liable to any Agent for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting primarily from the gross
negligence or willful misconduct of such Agent. To the extent any Bank would
be required to indemnify such Agent pursuant to the immediately preceding
sentence but for the fact that it is a Defaulting Bank, such Defaulting Bank
shall not be entitled to receive any portion of any payment or other
distribution hereunder until each other Bank shall have been reimbursed for
the excess, if any, of the aggregate amount paid by such Bank under this
Section 11.07 over the aggregate amount such Bank would have been obligated
to pay had such first Bank not been a Defaulting Bank. If any indemnity
furnished to any Agent for any purpose shall, in the opinion of such Agent be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this Section 11.07
shall survive the payment of all Obligations and termination of all
Commitments.
11.08 AGENTS IN THEIR INDIVIDUAL CAPACITIES. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in
any kind of business with Holdings and its Subsidiaries as though such Agent
were not an Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, each Agent shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it were
not an Agent and the terms "Bank" and "Banks" shall include each Agent in its
individual capacity.
11.09 HOLDERS. Each Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice
of the assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Administrative Agent. Any request, authority or
consent of any Person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
11.10 RESIGNATION OF AN AGENT; SUCCESSOR AGENT. Any Agent may resign
as an Agent upon 20 days' notice to the Banks. Upon the resignation of such
Agent, the Required Banks shall appoint from among the Banks a successor
Agent which is a bank or a trust company for the Banks subject, to the extent
that no Default or Event of Default has occurred and is then continuing, to
prior approval by Holdings (such approval not to be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of such
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Agent, and the term "Agent" shall include such successor agent effective upon
its appointment, and the resigning Agent's rights, powers and duties as an
Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement. If a
successor Agent shall not have been so appointed within such 20 day period
after the date such notice of resignation was given by such Agent, the
Agent's resignation shall become effective and the Banks shall thereafter
perform all duties of such Agent hereunder and/or under any other Credit
Documents until such time, if any, as the Required Banks appoint a successor
Agent as provided above. After the resignation of such Agent hereunder, the
provisions of this Section 11 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 12. MISCELLANEOUS.
12.01 PAYMENT OF EXPENSES, ETC. The Borrower hereby agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the negotiation, preparation, execution and
delivery of the Credit Documents and the documents and instruments referred
to therein and any amendment, waiver or consent relating thereto and in
connection with the Agents' syndication efforts with respect to this
Agreement; (ii) pay all reasonable out-of-pocket costs and expenses of the
Agents and each of the Banks in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein and, after an
Event of Default shall have occurred and be continuing, the protection of the
rights of the Agents and each of the Banks thereunder (including, without
limitation, (x) any expenses incurred by the Agents and/or the Banks in
connection with the enforcement of any Credit Documents in any bankruptcy
proceeding involving Borrower and (y) the reasonable fees and disbursements
of counsel (including in-house counsel) for the Agents and for each of the
Banks); (iii) 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
(iv) indemnify each Agent, Administrative Agent, the Collateral Agent and
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, (a) any
investigation, litigation or other proceeding (whether or not any Agent, the
Collateral Agent or any Bank is a party thereto) related to the entering into
and/or performance of this Agreement or any other Document or the use of the
proceeds of any Loans hereunder or the Transaction or the consummation of any
other transactions contemplated in any Document (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified), or (b) the actual or alleged generation, presence or Release of
Hazardous Materials (i) on or from, or the transportation of Hazardous
Materials to or from, any Real Property at any time owned or operated by
Holdings or any of its Subsidiaries, or (ii) in the air, surface water or
groundwater or on the
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surface or subsurface of any Real Property or (c) any Environmental Claim
relating to Holdings or its Subsidiaries or any Real Property at any time
owned or operated by Holdings or any of its Subsidiaries, in each case,
including, without limitation, the reasonable fees and disbursements of
counsel and independent consultants incurred in connection with any such
investigation, litigation or other proceeding. Notwithstanding anything to
the contrary in this Agreement, the Borrower shall be permitted to pay all
fees in connection with the Transaction, regardless of whether such fees are
owing by Holdings, IVAC Holdings or any Wholly-Owned Subsidiary of Holdings.
12.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of
any such rights, upon the occurrence and continuance of an Event of Default,
each Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party
or to any other Person, any such notice 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, by branches and agencies of such Bank wherever located)
to or for the credit or the account of such Credit Party against and on
account of the Obligations and liabilities of such Credit Party to such Bank
or any other Bank under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of
such Credit Party purchased by such Bank or any other Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall
be contingent or unmatured. Each Bank is hereby designated the agent of all
other Banks for purposes of effecting set off pursuant to this Section 12.02,
and each Credit Party hereby grants to each Bank for such Bank's own benefit
and as agent for all other Banks a continuing security interest in any and
all deposits, accounts or moneys of such Credit Party maintained from time to
time with such Bank.
12.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit
Party, at the address specified opposite its signature below or in the other
relevant Credit Documents, as the case may be; if to any Bank, at its address
specified for such Bank on Annex II; or, at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied or cabled or sent by overnight courier, and shall be effective
when received.
12.04 BENEFIT OF AGREEMENT. (a) This 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, HOWEVER, no Credit Party may
assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of all
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of the Banks and, PROVIDED FURTHER, that, although any Bank may transfer,
assign or grant participations in its rights hereunder, such Bank shall
remain a "Bank" for all purposes hereunder (and may not transfer or assign
all or any portion of its Commitments hereunder except as provided in Section
12.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, PROVIDED FURTHER, that no Bank
shall transfer or grant any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Loan
Maturity Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the
amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default
or of a mandatory reduction in the Total Commitment shall not constitute a
change in the terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof),
(ii) consent to the assignment or transfer by Holdings or the Borrower of any
of its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents
(except as expressly provided in the Credit Documents) supporting the Loans
hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in
the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to its parent company and/or any affiliate of such
Bank which is at least 50% owned by such Bank or its parent company or to one
or more Banks or (y) assign all, or if less than all, a portion equal to at
least $5,000,000 in the aggregate for the assigning Bank or assigning Banks,
of such Revolving Loan Commitments and/or outstanding principal amount of
Term Loans hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Bank by execution of an
Assignment and Assumption Agreement, PROVIDED that (i) at such time Annex I
shall be deemed modified to reflect the Commitments (and/or outstanding Term
Loans, as the case may be) of such new Bank and of the existing Banks, (ii)
upon surrender of the old Notes, new Notes will be issued, at the Borrower's
expense, to such new Bank and to the assigning Bank, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments
(and/or outstanding Term Loans, as the case may be), (iii) the consent of the
Administrative Agent shall be required in connection with any such assignment
pursuant to clause (y) of this Section 12.04(b) (which consent shall not be
unreasonably withheld or delayed), (iv) the
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consent of each Letter of Credit Issuer shall be required in connection with
any such assignment of Revolving Loan Commitments pursuant to clause (y) of
this Section 12.04(b) (which consent shall not be unreasonably withheld) and
(v) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Bank, the payment of a
non-refundable assignment fee of $3,500 and, PROVIDED FURTHER, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 7.12 hereof. To the
extent of any assignment pursuant to this Section 12.04(b), the assigning
Bank shall be relieved of its obligations hereunder with respect to its
assigned Commitments. At the time of each assignment pursuant to this
Section 12.04(b) to a Person which is not already a Bank hereunder and which
is not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for Federal income tax purposes, the respective assignee Bank
shall provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable a Section 4.04(b)(ii)
Certificate) described in Section 4.04(b). To the extent that an assignment
of all or any portion of a Bank's Commitments and related outstanding
Obligations pursuant to Section 1.13 or this Section 12.04(b) would, at the
time of such assignment, result in increased costs under Section 1.10, 1.11,
2.05 or 4.04 from those being charged by the respective assigning Bank prior
to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.
12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent, 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 any Credit Party and any 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 herein
expressly provided are cumulative and not exclusive of any rights or remedies
which any Agent, the Administrative Agent or any Bank would otherwise have.
No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Agent, the
Administrative Agent or the Banks to any other or further action in any
circumstances without notice or demand.
12.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Credit
Party in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its PRO RATA
share of such payment) PRO RATA based upon their respective shares, if any,
of the Obligations with respect to which such payment was received.
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(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or
interest on, the Loans, Unpaid Drawings or Fees, of a sum which with respect
to the related sum or sums received by other Banks is in a greater proportion
than the total of such Obligation then owed and due to such Bank bears to the
total of such Obligation then owed and due to all of the Banks immediately
prior to such receipt, then such Bank receiving such excess payment shall
purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in
such amount as shall result in a proportional participation by all of the
Banks in such amount; PROVIDED, that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in
writing by Holdings or the Borrower to the Banks); PROVIDED, that except as
otherwise specifically provided herein, all computations determining
compliance with Sections 4.02 and 8, including definitions used therein,
shall utilize accounting principles and policies in effect at the time of the
preparation of, and in conformity with those used to prepare, the December
31, 1995 financial statements delivered to the Banks pursuant to Section
6.10(b) and (c).
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK EXCEPT CERTAIN CREDIT
DOCUMENTS WHICH SHALL BE GOVERNED BY SUCH OTHER JURISDICTION AS SPECIFIED IN
EACH SUCH CREDIT DOCUMENT. Any legal action or proceeding with respect to
this Agreement or any other Credit Document 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 Credit Party
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.
Each Credit Party hereby further irrevocably waives any claim that any such
courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or
any other Credit Document brought in any of the aforesaid courts, that any
such court lacks jurisdiction over such Credit Party. Each Credit Party
irrevocably consents to the service of process in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Credit Party, at its address for
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notices pursuant to Section 12.03, such service to become effective 30 days
after such mailing. Each Credit Party hereby irrevocably waives any
objection to such service of process and further irrevocably waives and
agrees not to plead or claim in any action or proceeding commenced hereunder
or under any other Credit Document that service of process was in any way
invalid or ineffective. Nothing herein shall affect the right of any Agent,
the Administrative Agent, any Bank or the holder of any Note to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party 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 Agreement or
any other Credit Document brought in the courts referred to in clause (a)
above 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.
12.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A complete set
of counterparts executed by all the parties hereto shall be lodged with
Holdings, the Borrower and each Agent.
12.10 EFFECTIVENESS. This Agreement shall become effective on the date
(the "Effective Date") on which Holdings, the Borrower and each of the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent
at the Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written, telex or
facsimile notice (actually received) at such office that the same has been
signed and mailed to it. The Administrative Agent will give Holdings, the
Borrower and each Bank prompt written notice of the occurrence of the
Effective Date.
12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12 AMENDMENT OR WAIVER; ETC. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Parties party thereto and the
Required Banks, PROVIDED that no such change, waiver, discharge or
termination shall, without the consent of each Bank (other than a Defaulting
Bank) (with Obligations being directly affected thereby in the case of
following clause (i)), (i) extend the final scheduled maturity of any Loan or
Note or extend the stated maturity of any Letter of Credit beyond the
Revolving Loan Maturity Date, or reduce the rate or extend the time of
payment of interest or Fees thereon, or reduce the principal amount thereof,
(ii) release all or
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substantially all of the Collateral (except as expressly provided in the
Security Documents) under all the Security Documents, (iii) amend, modify or
waive any provision of this Section 12.12, (iv) reduce the percentage
specified in the definition of Required Banks (it being understood that, with
the consent of the Required Banks, additional extensions of credit pursuant
to this Agreement may be included in the determination of the Required Banks
on substantially the same basis as the extensions of Term Loans and Revolving
Loan Commitments are included on the Effective Date) or (v) consent to the
assignment or transfer by Holdings or the Borrower of any of its rights and
obligations under this Agreement (other than such assignment or transfer
consummated in accordance with this Agreement as in effect on the Initial
Borrowing Date); PROVIDED, FURTHER, that no such change, waiver, discharge or
termination shall (1) increase the Commitments of any Bank over the amount
thereof then in effect without the consent of such Bank (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment shall
not constitute an increase of the Commitment of any Bank, and that an
increase in the available portion of any Commitment of any Bank shall not
constitute an increase in the Commitment of such Bank), (2) without the
consent of BTCo, amend, modify or waive any provision of Section 2 or alter
its rights or obligations with respect to Letters of Credit or Swingline
Loans, (3) without the consent of each Agent, amend, modify or waive any
provision of Section 11 as same applies to such Agent or any other provision
as same relates to the rights or obligations of such Agent, (4) without the
consent of the Collateral Agent, amend, modify or waive any provision
relating to the rights or obligations of the Collateral Agent, (5) without
the consent of the Majority Banks of each Facility which is being allocated a
lesser prepayment, repayment or commitment reduction as a result of the
actions described below (or without the consent of the Majority Banks of each
Facility in the case of an amendment to the definition of Majority Banks),
amend the definition of Majority Banks or alter the required application of
any prepayments or repayments (or commitment reduction), as between the
various Facilities pursuant to Section 4.01(a) or 4.02 (although the Required
Banks may waive, in whole or in part, any such prepayment, repayment or
commitment reduction so long as the application, as amongst the various
Facilities, of any such prepayment, repayment or commitment reduction which
is still required to be made is not altered) or (6) without the consent of
the Supermajority Banks of the respective Facility, amend the definition of
Supermajority Banks or amend, modify or waive any Scheduled Repayment of such
affected Facility.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clause (a)(i) through (v), inclusive, of the first proviso to Section
12.12(a), the consent of the Required Banks is obtained but the consent of
one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right, so long as all non-consenting Banks
whose individual consent is required are treated as described in either
clause (A) or (B) below, to either (A) replace each such non-consenting Bank
or Banks with one or more Replacement Banks pursuant to Section 1.13 so long
as at the time of such replacement, each such Replacement Bank consents to
the proposed change, waiver, discharge or termination or (B) terminate all
of such non-consenting Bank's Commitments and repay in full its outstanding
Loans, in accordance with
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Sections 3.02(b) and/or 4.01(b), PROVIDED that, unless the Commitments
terminated and Loans repaid pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Banks or the
increase of the Commitments and/or outstanding Loans of existing Banks (who
in each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B) the Required Banks (determined before
giving effect to the proposed action) shall specifically consent thereto,
PROVIDED FURTHER, that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second
proviso to Section 12.12(a).
12.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall survive
the execution and delivery of this Agreement and the making and repayment of
the Loans.
12.14 DOMICILE OF LOANS. Each Bank may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of
such Bank; PROVIDED, that the Borrower shall not be responsible for costs
arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such
transfer (other than a transfer pursuant to Section 1.12) to the extent such
costs would not otherwise be applicable to such Bank in the absence of such
transfer.
12.15 CONFIDENTIALITY. (a) Each of the Banks agrees that it will use
its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional
advisors, to affiliates or to another Bank if the Bank or such Bank's holding
or parent company in its sole discretion determines that any such party
should have access to such information) any information with respect to
Holdings, the Borrower or any of its Subsidiaries which is furnished pursuant
to this Agreement; PROVIDED, that any Bank may disclose any such information
(a) as has become generally available to the public or has become available
to such Bank on a non-confidential basis, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the National Association of Insurance Commission or similar
organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons
or subpoena or in connection with any litigation, (d) in order to comply with
any law, order, regulation or ruling applicable to such Bank, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Bank; PROVIDED, that such
prospective transferee agrees, for the benefit of such Bank and the Borrower,
to provisions substantially identical to those contained in this Section.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related
to Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries, provided that such Persons shall be subject to the
provisions of this Section 12.15 to the same extent as such Bank).
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12.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.17 IMED MERGER. Notwithstanding anything to the contrary contained
in this Agreement or in any other Credit Document, the Borrower shall, as
required by Section 7.20, on the Initial Borrowing Date, immediately
following the Acquisition, merge with and into IVAC Holdings (the "IMED
Merger"), at the time of which IMED Merger the following conditions shall
have been satisfied (it being understood and agreed that all documents and
instruments listed below shall be executed and delivered into an escrow
arrangement satisfactory to the Agents on the Initial Borrowing Date (before
the incurrence of the initial Loans on such date) pending consummation of the
IMED Merger):
(i) the Agents shall have received copies of the documents and
instruments of transfer in connection with the IMED Merger, certified as
true and correct by an officer of the Borrower, which documents and
instruments shall be satisfactory in form and substance to the Bank;
(ii) IVAC Holdings shall have duly authorized, executed and delivered
to the Agents the IMED Merger Documents which shall include an assumption
acknowledgment in the form of Exhibit M attached hereto (the "Assumption
Acknowledgment"), pursuant to which IVAC Holdings shall assume all of the
Borrower's rights, obligations and liabilities under this Agreement, the
Notes, the Security Agreement, the Pledge Agreement and the Mortgages and
shall become the "Borrower" for all purposes of this Agreement and the
other Credit Documents;
(iii) all Domestic Subsidiaries of IVAC Holdings (other than River
Medical) shall have duly authorized, executed and delivered to the
Administrative Agent an assumption agreement in the form of Exhibit N
attached hereto (the "Subsidiary Assumption Agreement"), pursuant to which
each such Domestic Subsidiary shall become a party to the Subsidiary
Guaranty, the Pledge Agreement and the Security Agreement;
(iv) (a) IVAC Holdings shall have executed and delivered forms of
the Pledge Agreement, conformed to satisfy all applicable German and
English law, and shall have delivered to the Collateral Agent, as Pledgee
the Pledged Securities referred to therein, endorsed in blank in the case
of promissory notes or accompanied by executed and undated stock powers in
the case of capital stock and (b) IVAC Overseas shall have executed and
delivered forms of the Pledge Agreement, conformed to satisfy all
applicable French and Spanish law, and shall have delivered to the
Collateral Agent, as Pledgee the Pledged Securities referred to therein,
endorsed in blank in the case of
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promissory notes or accompanied by executed and undated stock powers in the case
of capital stock;
(v) all steps shall have been taken, to the satisfaction of the
Agents in its sole discretion, to preserve and protect the security
interests created in the assets of IMED pursuant to this Agreement, the
Pledge Agreement, the Security Agreement and the Mortgages in favor of the
Collateral Agent;
(vi) IVAC Holdings shall have delivered to the Agents opinions
(a) substantially in the form of Exhibit O attached hereto, of counsel
Gordon Altman Butowsky Weitzen Shalov & Wein, and (b) in form and substance
satisfactory to the Agents, of the local counsel referred to in
Section 7.22, such opinions to the effect that the Administrative Agent for
the benefit of the Banks has a continued first priority fully perfected
Lien on the assets of IMED which shall become the assets of IVAC Holdings
pursuant to the IMED Merger and covering such other matters relating to
such transactions, the assumption by IVAC Holdings of the Borrower's
obligations and Liens upon the Borrower's properties as the Agents may
reasonably require;
(vii) the Borrower shall have delivered or caused to be delivered to
the Agents such other documents or instruments as the Agents may reasonably
require in connection with such transaction;
(viii) IVAC Holdings shall have delivered or caused to be delivered
to the Collateral Agent a Mortgage Policy not less favorable to the
Collateral Agent than the policy delivered pursuant to Section 5.12(b) (or
an acknowledgement from the issuer of such policy that the policy continues
in full force and effect as to IVAC Holdings);
(ix) IVAC Holdings shall have executed and delivered new Term Notes
(the "New Term Notes"), Revolving Notes (the "New Revolving Notes") and a
Swingline Note (the "New Swingline Note") substantially in the form
executed by the Borrower pursuant to Section 1.05;
(x) IVAC Holdings shall have executed and delivered to the Agents a
certificate signed by an appropriate officer of IVAC Holdings stating that
all of the applicable conditions set forth in Sections 5.02, 5.06, 5.07
and 5.08 exist as of such date;
(xi) IVAC Holdings and each of its Domestic Subsidiaries shall have
(a) executed and delivered to the Agents a certificate signed by the
chairman, a vice chairman, the president or any vice-president of such
Credit Party, and attested to by the secretary or any assistant secretary
of such Credit Party, in the form of Exhibit E with appropriate insertions,
together with copies of the Certificate of Incorporation and By-Laws of
such Credit Party and the resolutions of such Credit Party referred to in
such certificate and all of the foregoing (including each such Certificate
of Incorporation and By-Laws) shall be satisfactory to the Agents or the
Required Banks;
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(xii) the Agents or the Required Banks shall have received all
information and copies of all certificates, documents and papers, including
good standing certificates, bring-down certificates and any other records
of corporate proceedings and governmental approvals, if any, which the
Agents or the Required Banks reasonably may have requested in connection
therewith, such documents and papers, where appropriate, to be certified
by proper corporate or governmental authorities; and
(xiii) the ownership and capital structure (including, without
limitation, the terms of any capital stock, options, warrants or other
securities issued by IVAC Holdings or any of its Subsidiaries) and
management of IVAC Holdings and its Subsidiaries shall be in form and
substance reasonably satisfactory to the Agents or the Required Banks.
Upon the transfer in accordance with this Section 12.17, and provided that the
Borrower has assigned to IVAC Holdings its rights and powers hereunder, IVAC
Holdings shall succeed to, and be substituted for, and may exercise every right
and power of, the Borrower under this Agreement and the Notes with the same
effect as if IVAC Holdings had been named as the Borrower herein.
12.18 GERMAN PLEDGE AGREEMENT. In case an Event of Default shall
occur and BTCo exercises its rights, powers and remedies under the German
Pledge Agreement for the protection and enforcement of its rights in respect
of the Collateral thereunder, BTCo shall allocate such proceeds to the Banks
ratably according to their respective "percentages" as used in determining
the Required Banks at such time.
SECTION 13. HOLDING COMPANY GUARANTY.
13.01 THE GUARANTY. In order to induce the Banks to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans and the
issuance of the Letters of Credit, Holdings hereby agrees with the Banks as
follows: Holdings hereby unconditionally and irrevocably guarantees as
primary obligor and not merely as surety the full and prompt payment when
due, whether upon maturity, acceleration or otherwise, of any and all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any
or all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors becomes due and payable hereunder, Holdings unconditionally
promises to pay such indebtedness to the Administrative Agent and/or the
Banks, or order, on demand, together with any and all expenses which may be
incurred by the Administrative Agent or the Banks in collecting any of the
Guaranteed Obligations. If claim is ever made upon any Guaranteed Creditor
for repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including the Borrower), then
and in such event Holdings agrees that any such
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EX 10.1 K
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty or other instrument
evidencing any liability of the Borrower, and Holdings shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
13.02 BANKRUPTCY. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 9.05, and unconditionally, promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, in lawful money of the United
States.
13.03 NATURE OF LIABILITY. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any
other guarantor or by any other party, and the liability of Holdings
hereunder is not affected or impaired by (a) any direction as to application
of payment by the Borrower or by any other party, or (b) any other continuing
or other guaranty, undertaking or maximum liability of a guarantor or of any
other party as to the Guaranteed Obligations of the Borrower, or (c) any
payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel by
the Borrower, or (e) any payment made to any Guaranteed Creditor on the
Guaranteed Obligations which any such Guaranteed Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and Holdings
waives any right to the deferral or modification of its obligations hereunder
by reason of any such proceeding.
13.04 INDEPENDENT OBLIGATION. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other
guarantor, any other party or the Borrower and whether or not any other
guarantor, any other party or the Borrower be joined in any such action or
actions. Holdings waives, to the full extent permitted by law, the benefit
of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate
to toll the statute of limitations as to Holdings.
13.05 AUTHORIZATION. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute
and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in
the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and
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<PAGE>
the Guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of Holdings or the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
13.06 RELIANCE. It is not necessary for any Guaranteed Creditor to
inquire into the capacity or powers of the Borrower or the officers,
directors, partners or agents acting or purporting to act on their behalf,
and any Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
13.07 SUBORDINATION. Any of the indebtedness of the Borrower relating
to the Guaranteed Obligations now or hereafter owing to Holdings is hereby
subordinated to the Guaranteed Obligations of the Borrower owing to the
Guaranteed Creditors; and if the Administrative Agent so requests at a time
when an Event of Default exists, all such
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<PAGE>
indebtedness relating to the Guaranteed Obligations of the Borrower to
Holdings shall be collected, enforced and received by Holdings for the
benefit of the Guaranteed Creditors and be paid over to the Administrative
Agent on behalf of the Guaranteed Creditors on account of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors, but without
affecting or impairing in any manner the liability of Holdings under the
other provisions of this Guaranty. Prior to the transfer by Holdings of any
note or negotiable instrument evidencing any of the indebtedness relating to
the Guaranteed Obligations of the Borrower to Holdings, Holdings shall mark
such note or negotiable instrument with a legend that the same is subject to
this subordination. Without limiting the generality of the foregoing,
Holdings hereby agrees with the Guaranteed Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as
a result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.
13.08 WAIVER. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Borrower, any other guarantor
or any other party, (ii) proceed against or exhaust any security held from
the Borrower, any other guarantor or any other party or (iii) pursue any
other remedy in any Guaranteed Creditor's power whatsoever. Holdings waives
any defense based on or arising out of any defense of the Borrower, any other
guarantor or any other party, other than payment in full of the Guaranteed
Obligations, based on or arising out of the disability of the Borrower, any
other guarantor or any other party, or the validity, legality or
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than payment in full of the Guaranteed Obligations. The Guaranteed Creditors
may, at their election, foreclose on any security held by any Agent,
Administrative Agent, the Collateral Agent or any other Guaranteed Creditor
by one or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of Holdings
hereunder except to the extent the Guaranteed Obligations have been paid.
Holdings waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy
of Holdings against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which
Holdings assumes and incurs hereunder, and agrees that the Administrative
Agent and the Banks shall have no duty to advise Holdings of information
known to them regarding such circumstances or risks.
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<PAGE>
(c) Holdings hereby acknowledges and affirms that it understands that
to the extent the Guaranteed Obligations are secured by real property located
in the State of California, Holdings shall be liable for the full amount of
its liability hereunder notwithstanding foreclosure on such real property by
trustee sale or any other reason impairing Holdings' or any secured
creditor's right to proceed against the Borrower or any other guarantor of
the Guaranteed Obligations.
(d) Holdings hereby waives, to the fullest extent permitted by
applicable law, all rights and benefits under Sections 580a, 580b, 580d and
726 of the California Code of Civil Procedure. Holdings hereby further
waives, to the fullest extent permitted by applicable law, without limiting
the generality of the foregoing or any other provision hereof, all rights and
benefits which might otherwise be available to Holdings under Sections 2787
through 2855, inclusive, 2899 and 3433 of the California Civil Code.
(e) Holdings further understands, is aware and hereby acknowledges that
if the Guaranteed Creditors elect to nonjudicially foreclose on any real
property security located in the State of California any right of subrogation
of Holdings against any Credit Party may be impaired or extinguished and that
as a result of such impairment or extinguishment of subrogation rights,
Holdings may have a defense to a deficiency judgment arising out of the
operation of Section 580d of the California Code of Civil Procedure and
related principles of estoppel. Holdings waives all rights and defenses
arising out of an election of remedies by the Banks, even though that
election of remedies, such as a nonjudicial foreclosure with respect to
security for a guaranteed obligation, has destroyed the guarantor's rights of
subrogation and reimbursement against the principal by the operation of
Section 580d of the Code of Civil Procedure or otherwise.
13.09 NATURE OF LIABILITY. It is the desire and intent of Holdings and
the Guaranteed Creditors that this Guaranty shall be enforced against
Holdings to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. If, however,
and to the extent that, the obligations of Holdings under this Guaranty 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 amount of the Guaranteed
Obligations of Holdings shall be deemed to be reduced and Holdings shall pay
the maximum amount of the Guaranteed Obligations which would be permissible
under applicable law.
* * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
ADDRESSES:
ADVANCED MEDICAL, INC.
By ____________________________________
Title:
IMED CORPORATION
By ____________________________________
Title:
BANKERS TRUST COMPANY,
Individually, as Administrative Agent
and as Syndication Agent
By ____________________________________
Title:
BANQUE PARIBAS,
Individually, as Documentation Agent
and as Syndication Agent
By ____________________________________
Title:
By ____________________________________
Title:
<PAGE>
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
Individually and as Syndication Agent
By ____________________________________
Title:
<PAGE>
ANNEX I
LIST OF BANKS
<TABLE>
<CAPTION>
REVOLVING
BANK A TERM LOAN B TERM LOAN C TERM LOAN D TERM LOAN LOAN
COMMITMENT COMMITMENT COMMITMENT COMMITMENT COMMITMENT
---- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Bankers Trust Company $ $ $ $ $
Banque Paribas $ $ $ $ $
Donaldson, Lufkin &
Jenrette Securities
Corporation $ $ $ $ $
Total: $75,000,000 $42,500,000 $42,500,000 $40,000,000 $50,000,000
</TABLE>
<PAGE>
ANNEX II
BANK ADDRESSES
BANK
<PAGE>
ANNEX II
Page 2
ADDRESS
- -------
Bankers Trust Company
<PAGE>
ANNEX II
Page 3
One Bankers Trust Plaza
New York, NY 10006
Attention:
Telephone No.:
Facsimile No.:
Banque Paribas
<PAGE>
ANNEX II
Page 4
Attention:
Telephone No.:
Facsimile No.:
Donaldson, Lufkin & Jenrette
Securities Corporation
<PAGE>
ANNEX II
Page 5
Attention:
Telephone No.:
Facsimile No.:
<PAGE>
EXHIBIT 10.2
INDENTURE dated as of November 26, 1996 between IMED
Corporation ("IMED"), IMED International Trading, Corp., as a
guaranteeing subsidiary ("IMED International Trading") and United
States Trust Company of New York, as trustee (the "Trustee").
The Company, the Guaranteeing Subsidiaries and the Trustee
agree as follows for the benefit of each other and for the equal
and ratable benefit of the holders (the "Holders") of the 9 3/4%
Series A Senior Subordinated Notes due 2006 (the "Series A
Notes") and the 9 3/4% Series B Senior Subordinated Notes due 2006
(the "Series B Notes" and, together with the Series A Notes, the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means the Global Note bearing the
Private Placement Legend that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold in
reliance on Rule 144A and to Institutional Accredited Investors.
"ACCOUNTS RECEIVABLE SUBSIDIARY" means a newly created, Wholly Owned
Subsidiary of the Company which is formed solely for the purpose of, and
which engages in no activities other than activities in connection with,
financing accounts receivable of the Company and/or its Restricted
Subsidiaries, (ii) which is designated by the Board of Directors of the
Company as an Accounts Receivables Subsidiary pursuant to a Board of
Directors' resolution set forth in an Officers' Certificate and delivered to
the Trustee, (iii) that has total assets at the time of such creation and
designation with a book value of $10,000 or less, (iv) no portion of the
Indebtedness or any other obligation (contingent or otherwise) of which (a)
is at any time guaranteed by the Company or any Restricted Subsidiary of the
Company, (b) is at any time recourse to or obligates the Company or any other
Restricted Subsidiary of the Company in any way, other than pursuant to
representations and covenants entered into in the ordinary course of business
in connection with the sale of accounts receivable to such Accounts
Receivable Subsidiary or (c) subjects any property or asset of the Company or
any other Restricted Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant
to representations and covenants entered into in the ordinary course of
business in connection with sales of accounts receivable, (v) with which
neither the Company nor any Restricted Subsidiary of the Company has any
contract, agreement, arrangement or understanding other than contracts,
agreements, arrangements and understandings entered into in the ordinary
course of business in connection with sales of accounts receivable in
accordance with Section 4.18 hereof and fees payable in the ordinary course
of business in connection with servicing accounts receivable and (vi) with
respect to which neither the Company nor any Restricted Subsidiary of the
Company has any obligation (a) to subscribe for additional shares of Capital
Stock or other Equity Interests therein or make any additional capital
contribution or similar payment or transfer thereto or (b) to maintain or
preserve the solvency or any balance sheet term, financial condition, level
of income or results of operations thereof.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person
merges with or into or becomes a Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Subsidiary of such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any
asset acquired by such specified Person.
<PAGE>
"ADVANCED MEDICAL" means Advanced Medical, Inc., a Delaware corporation
and the corporate parent of IMED.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or, indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
"AGENT" means the Registrar or any Paying Agent.
"APPLICABLE PROCEDURES" means, with respect to any transfer
or exchange of beneficial interests in a Global Note, the rules
and procedures of Depository, that apply to such transfer or
exchange.
"ASSET SALE" means (i) the sale, lease, conveyance, or
other disposition of any assets (including, without limitation,
by way of a sale and leaseback) other than (A) in the ordinary
course of business or (B) sales of accounts receivables to the
Accounts Receivable Subsidiary in accordance with Section 4.18
hereof (PROVIDED that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole will be governed by
the provisions described in Sections 4.14 or 5.01 hereof, and not
by the provisions of Section 4.10 hereof), and (ii) the issue or
sale by the Company or any of its Restricted Subsidiaries of
Equity Interests of any of the Company's Restricted Subsidiaries,
in the case of clauses (i) and (ii), whether in a single
transaction or a series of related transactions (a) that have a
fair market value in excess of $3.0 million, or (b) for net
proceeds in excess of $3.0 million. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a
Restricted Subsidiary or by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary, (ii) an issuance of
Equity Interests by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, (iii) a Restricted Payment that is
permitted by Section 4.07 and (iv) the sale and leaseback of any
assets within 90 days of the acquisition of such assets will not
be deemed to be Asset Sales.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback
transaction means, at the time of determination, the present
value (discounted at the rate of interest implicit in such
transaction, determined in accordance with GAAP) of the
obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback
transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company or any authorized committee of the Board of Directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any
determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at such time be so
required to be capitalized on the balance sheet in accordance
with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participation, rights or
other equivalents (however
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<PAGE>
designated) of corporate stock and (iii) in the case of a partnership,
partnership interests (whether general or limited).
"CEDEL" means Cedel Bank, societe anonyme.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
any sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation) in one or a series of related transactions, of
all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole to any "person" (as defined in Section 13(d) of the Exchange
Act) or "group" (as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act) other than the Principal and his Related Parties; (ii) the adoption of a
plan for the liquidation or dissolution of the Company other than a
liquidation or dissolution that results in substantially all of the assets of
the Company being held by the corporate parent of the Company; (iii) the
Company consolidates with, or merges with or into, another "person" (as
defined above) or "group" (as defined above) in a transaction or series of
related transactions in which the Voting Stock of the Company is converted
into or exchanged for cash, securities or other property, other than any
transaction where (A) the outstanding Voting Stock of the Company is
converted into or exchanged for Voting Stock (other than Disqualified Stock)
of the surviving or transferee corporation and (B) either (1) the "beneficial
owners" (as defined in Rule 13d-3 under the Exchange Act) of the outstanding
Voting Stock of the Company immediately prior to such transaction own
beneficially, directly or indirectly through one or more Subsidiaries, not
less than a majority of the total outstanding Voting Stock of the surviving
or transferee corporation immediately after such transaction or (2) if,
immediately prior to such transaction the Company is a direct or indirect
Subsidiary of any other Person (each such other Person, the "Holding
Company"), the "beneficial owners" (as defined above) of the outstanding
Voting Stock of such Holding Company immediately prior to such transaction
own beneficially, directly or indirectly through one or more Subsidiaries,
not less than a majority of the outstanding Voting Stock of the surviving or
transferee corporation immediately after such transaction; (iv) the
consummation of any transaction or series of related transactions (including,
without limitation, by way of merger or consolidation) the result of which is
that any "person" (as defined above) or "group" (as defined above) other than
the Principal and his Related Parties becomes the "beneficial owner" (as
defined above) of more than 40% of the voting power of the Voting Stock of
the Company or (v) during any consecutive two-year period, the first day on
which a majority of the members of the Board of Directors of Parent who were
members of the Board of Directors at the beginning of such period are not
Continuing Directors.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means IMED, as obligor under the Notes, prior to the Merger,
whereupon the term shall refer to IVAC Holdings, unless and until a successor
replaces IVAC Holdings in accordance with Article 5 hereof, and thereafter
includes such successor.
"CONSOLIDATED EBITDA" means, with respect to any Person for any period,
the Consolidated Net Income of such Person and its Restricted Subsidiaries
for such period, PLUS, to the extent deducted in computing Consolidated Net
Income, (i) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, (ii) Consolidated Interest
Expense of such Person for such period, (iii) depreciation and amortization
(including amortization of goodwill and other intangibles) and all other
non-cash charges (excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of
such Person and its Restricted Subsidiaries for such period, (iv) any
extraordinary or non-recurring loss and any net loss realized in connection
with either an Asset Sale or the extinguishment of Indebtedness, in each
case, on a consolidated basis determined in accordance with GAAP and (v) cash
severance, restructuring and transaction costs incurred within one year of
the date of the Indenture in connection with the Merger in an amount not to
exceed $17.0 million to the extent included in computing Consolidated Net
Income.
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<PAGE>
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and other non-cash charges
of, a Restricted Subsidiary of a Person shall be added to Consolidated Net
Income to compute Consolidated EBITDA only to the extent (and in the same
proportion) that the Net Income of such Restricted Subsidiary was included in
calculating the Consolidated Net Income of such Person.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the interest expense of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP (including amortization of original issue discount and
deferred financing costs, except as set forth in the proviso to this
definition, non-cash interest payments, the interest component of all
payments associated with Capital Lease Obligations, net payments, if any,
pursuant to Hedging Obligations and imputed interest with respect to
Attributable Debt; PROVIDED, HOWEVER, that in no event shall any amortization
of deferred financing cost incurred on or prior to the date of the Indenture
in connection with the New Credit Facility or any amortization of deferred
financing costs incurred in connection with the issuance of the Notes be
included in Consolidated Interest Expense).
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED, HOWEVER, that (i) the Net Income (but not
loss) of any Person that is not a Restricted Subsidiary or that is accounted
for by the equity method of accounting shall be included only to the extent
of the amount of dividends or distributions paid to the referent Person or a
Restricted Subsidiary thereof in cash, (ii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded, (iii) the cumulative effect of a
change in accounting principles shall be excluded, and (iv) the Net Income of
any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of Net Income is not, at the date of determination,
permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary.
"CONVERTIBLE DEBENTURES" means the 7 1/4% Convertible Subordinated
Debentures due 2002 of Advanced Medical issued pursuant to the Indenture,
dated as of January 15, 1992, between Advanced Medical and U.S. Trust Company
of California, N.A. as in effect on the date of the Indenture.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the relevant Person who (i) was a member
of such Board of Directors on the date of the Indenture, (ii) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at the
time of such nomination or election, or (iii) became a member of the Board of
Directors as a result of the actions of the Principal; PROVIDED that at the
time the Principal took any such action, the Principal was the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) in excess of 50% of
the Voting Stock of the Company.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFINITIVE NOTES" means Notes that are in the form of the Notes
attached hereto as EXHIBIT A, that do not include the information called for
by footnotes 1 and 2 thereof.
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<PAGE>
"DESIGNATED GUARANTOR SENIOR DEBT" means, with respect to any
Guaranteeing Subsidiary, (i) so long as any Indebtedness of such Guaranteeing
Subsidiary is outstanding under the New Credit Facility, such Indebtedness,
and (ii) thereafter, any other Guarantor Senior Debt permitted under the
Indenture the principal amount of which is $50.0 million or more and that has
been designated by the Guaranteeing Subsidiary as "Designated Guarantor
Senior Debt."
"DESIGNATED SENIOR DEBT" means (i) so long as any Indebtedness is
outstanding under the New Credit Facility, such Indebtedness, and (ii)
thereafter, any other Senior Debt permitted under the Indenture the principal
amount of which is $50.0 million or more and that has been designated by the
Company as "Designated Senior Debt."
"DEPOSITORY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depository with respect to the Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable, except to the extent such Capital Stock is exchangeable into
indebtedness at the option of the issuer thereof and only subject to the
terms of any debt instrument to which such issuer is a party), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, or convertible or exchangeable into
Indebtedness on or prior to the date on which the Notes mature.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $100.0 million or its
equivalent in foreign currency, whose short-term debt is rated "A-3" (or
higher) according to Standard & Poor's Ratings Group ("S&P") or "P-2" (or
higher) according to Moody's Investor Services, Inc. ("Moody's") or carrying
an equivalent rating by a nationally recognized rating agency if both of the
two named rating agencies cease publishing ratings of investments.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"EXCESS AMOUNT" means, with respect to any New Credit Facility, the
amount by which aggregate payments of principal made thereunder exceed the
aggregate payments of principal required to be made through the date of
determination, in respect of any term Indebtedness, under the amortization
schedule of such New Credit Facility.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" has the meaning set forth in the Registration Rights
Agreement.
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<PAGE>
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in
the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries (other than the Indebtedness under the New Credit
Facility) in existence on the date hereof until such amounts are repaid,
including, without limitation, the Existing Senior Notes as amended on the
date hereof.
"EXISTING SENIOR NOTES" means the 9 1/4% Senior Notes due 2002 of IVAC
Medical Systems.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum of (i) the Consolidated Interest Expense of such Person for such period
and (ii) any interest expense on Indebtedness of another Person that is (A)
Guaranteed by the referent Person or one of its Restricted Subsidiaries
(whether or not such Guarantee is called upon) or (B) secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not
such Lien is called upon); PROVIDED THAT with respect to clause (ii)(B), the
amount of Indebtedness (and attributable interest expense) shall be equal to
the lesser of (I) the principal amount of the Indebtedness secured by the
assets of such Person or one of its Restricted Subsidiaries and (II) the fair
market value (as determined by the Board of Directors of such Person and set
forth in an Officers' Certificate delivered to the Trustee) of the assets
securing such Indebtedness and (iii) the product of (a) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Subsidiary) on any series of preferred stock of such Person, TIMES (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated EBITDA of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person
and its Restricted Subsidiaries for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues
or redeems preferred stock subsequent to the commencement of the period for
which the Fixed Charge Coverage Ratio is being calculated but on or prior to
the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. For purposes of
making the computation referred to above, (i) acquisitions that have been
made by the Company or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and shall give
pro forma effect to the Indebtedness and the Consolidated EBITDA of the
Person which is the subject of any such acquisition, (ii) the Consolidated
EBITDA attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
"FOREIGN SUBSIDIARY" means any Restricted Subsidiary of the Company
organized and existing under the laws of any jurisdiction outside of the
United States.
"GAAP" means generally accepted accounting principles 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, the Securities
and Exchange Commission or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States, which are in effect from time to time; PROVIDED, HOWEVER, that
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all reports and other financial information provided by the Company to the
Holders, the Trustee and/or the Commission shall be prepared in accordance
with GAAP, as in effect on the date of such report or other financial
information.
"GLOBAL NOTE" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form
of the Note attached hereto as EXHIBIT A.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTEE OBLIGATIONS" means any principal, interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable with
respect to the Subsidiary Guarantees.
"GUARANTEEING SUBSIDIARY" means (i) prior to the Merger, IMED
International Trading Corp., (ii) immediately subsequent to the Merger, each
of IMED International Trading Corp. and IVAC Overseas Holdings, Inc., (iii)
any other Restricted Subsidiary of the Company that executes a Subsidiary
Guarantee in accordance with Section 11.05 and (iv) their respective
successors and assigns, unless and until any successor replaces any such
Guaranteeing Subsidiary in accordance with Article 11 hereof, and thereafter
shall mean each such successor.
"GUARANTOR SENIOR DEBT" means, with respect to each Guaranteeing
Subsidiary, all Obligations of such Guaranteeing Subsidiary permitted to be
incurred pursuant to the Indenture under or in respect of the New Credit
Facility and (ii) any other Indebtedness permitted to be incurred by such
Guaranteeing Subsidiary under the terms of the Indenture and any Hedging
Obligation permitted to be incurred by such Guaranteeing Subsidiary under the
terms of the Indenture, unless the instrument under which the foregoing is
incurred expressly provides that such Indebtedness is on parity with or
subordinated in right of payment to the Subsidiary Guarantee of such
Guaranteeing Subsidiary. Notwithstanding anything to the contrary in the
foregoing, Guarantor Senior Debt will not include (w) any liability for
federal, state, local or other taxes; (x) any Indebtedness of any
Guaranteeing Subsidiary to the Company or any Subsidiary of the Company or
any of their respective Affiliates, (y) any trade payables or (z) any
Indebtedness that is incurred in violation of the Indenture.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates or foreign exchange rates and (iii) indemnity
agreements and arrangements entered into in connection with the agreements
and arrangements described in clauses (i) and (ii).
"HOLDER" means a Person in whose name a Note is registered.
"INCUR OR INCUR" means, with respect to any Indebtedness (including
Acquired Debt), to create, incur, issue, assume, guaranty or otherwise become
directly or indirectly liable for or with respect to, or become responsible
for, the payment of such Indebtedness (including Acquired Debt); PROVIDED
that neither
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the accrual of interest nor the accretion of original issue discount shall be
considered an incurrence of Indebtedness, (ii) the issuance of any New Notes
in exchange for a like principal amount of Notes shall not be deemed to be an
Incurrence of Indebtedness and (iii) the assumption of Indebtedness by the
surviving entity of a transaction permitted by Section 11.03(a) hereof or the
last sentence of Section 5.01 hereof in existence at the time of such
transaction shall not be deemed an incurrence of Indebtedness. The term
"incurrence" has corresponding meaning.
"INDEBTEDNESS" means, with respect to any Person without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property, except any such balance
that constitutes an accrued expense or trade payable, or representing any
Hedging Obligations if and to the extent any of the foregoing indebtedness
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with
GAAP, as well as all indebtedness of others secured by a Lien on any asset of
such Person (whether or not such indebtedness is assumed by such Person), the
maximum fixed repurchase price of Disqualified Stock issued by such Person
and the liquidation preference of preferred stock issued by such Person, in
each case if held by any Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company, and, to the extent not otherwise
included, the Guarantee by such Person of any such indebtedness of any other
Person.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDIRECT PARTICIPANT" means a Person who holds an interest through a
Participant.
"INITIAL SALE" means the first transaction in which accounts receivable
are sold by the Company and/or its Restricted Subsidiaries to an Accounts
Receivable Subsidiary.
"INSTITUTIONAL ACCREDITED INVESTOR" means an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"INSTRUMENT CONTRACT" means any contract or agreement to which the
Company or any of its Restricted Subsidiaries is a party pursuant to which
the other party to any such contract or agreement acquires on behalf of
itself or another party instruments from the Company or such Restricted
Subsidiary at no or reduced initial cost by paying a premium (a portion of
which is recorded by the Company in accordance with GAAP as interest income)
for subsequent purchases of disposable administration sets.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP; PROVIDED that an acquisition of assets,
Equity Interests or other securities by the Company for consideration
consisting of common equity securities of the Company shall not be deemed to
be an Investment. If the Company or any Restricted Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company, or any Restricted Subsidiary of the
Company issues Equity Interests, such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date
of any such sale, disposition or issuance equal to the fair market value of
the Equity Interests of such Person held by the Company or such Restricted
Subsidiary immediately following any such sale, disposition or issuance.
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"IVAC HOLDINGS" means IVAC Holdings, Inc., a Delaware corporation.
"IVAC MEDICAL SYSTEMS" means IVAC Medical Systems, Inc., a Delaware
corporation.
"IVAC OVERSEAS HOLDINGS" means IVAC Overseas Holdings, Inc., a Delaware
corporation.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized
by law, regulation or executive order to remain closed. 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.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest).
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"MARKETABLE SECURITIES" means (i) Government Securities, (ii) any
certificate of deposit maturing not more than 270 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution or any
lender under the New Credit Facility, (iii) commercial paper maturing not
more than 270 days after the date of acquisition of an issuer (other than an
Affiliate of the Company) with a rating, at the time as of which any
investment therein is made, of "A-3" (or higher) according to Standard &
Poor's Corporation or "P-2" (or higher) according to Moody's Investors
Services Inc. or carrying an equivalent rating by a nationally recognized
rating agency if both of the two named rating agencies cease publishing
ratings of investments, (iv) any bankers acceptances or money market deposit
accounts issued by an Eligible Institution and (v) any fund investing
exclusively in investments of the types described in clauses (i) through (iv)
above.
"MERGER" means (i) the transactions contemplated by the Agreement and
Plan of Merger dated as of August 23, 1996, by and among IMED, IMED Merger
Sub, Inc. ("IMED Merger Sub"), IVAC Holdings, IVAC Medical Systems and
certain stockholders of IVAC Holdings; (ii) the merger of IMED with and into
IVAC Holdings; and (iii) the merger of IVAC Medical Systems with and into
IVAC Holdings; PROVIDED that each such transaction shall occur on or before
the date hereof.
"NET INCOME" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP, excluding, however, (i)
any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with (a) any Asset Sale
(including, without limitation, dispositions pursuant to sale and leaseback
transactions or (b) the extinguishment of any Indebtedness of such Person or
any of its Restricted Subsidiaries, and (ii) any extraordinary or
nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, amounts required to be applied to the repayment of
Indebtedness (other than long-term Indebtedness of a Restricted Subsidiary of
such Person and Indebtedness under the New Credit Facility) secured by a Lien
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on the asset or assets that are the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"NEW CREDIT FACILITY" means that certain credit agreement, dated as of
November 26, 1996, by and among the Company, Advanced Medical, Bankers Trust
Company, as administration agent and syndication agent, Banque Paribas, as
documentation agent and syndication agent, Donaldson, Lufkin & Jenrette
Securities Corporation, as syndication agent, and the lenders party thereto,
including any related notes, guarantees, collateral documents, instruments
and agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time
(together with any amendment, modification, renewal, refunding, replacement
or refinancing to or of any of the foregoing (collectively a "Modification")
or to any Modification, ad infinitum), including, without limitation, any
agreement modifying the maturity or amortization schedule of or refinancing
or refunding all or any portion of the Indebtedness thereunder or increasing
the amount that may be borrowed under such agreement or any successor
agreement, whether or not among the same parties.
"NON-RECOURSE DEBT" means Indebtedness (i) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (ii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries; PROVIDED,
HOWEVER, that in no event shall Indebtedness of any Unrestricted Subsidiary
fail to be Non-Recourse Debt solely as a result of any default provisions
contained in a Guarantee thereof by the Company or any of its Restricted
Subsidiaries if the Company or such Restricted Subsidiary was otherwise
permitted to incur such Guarantee pursuant to the Indenture.
"NOTE CUSTODIAN" means the Trustee, as custodian for the Depository
with respect to the Notes in global form, or any successor entity thereto.
"NOTES" means the Company's 9 3/4% Series A Senior Subordinated Notes
due 2006 issued pursuant to this Indenture and 9 3/4% Series B Senior
Subordinated Notes due 2006 issued in exchange for 9 3/4% Series A Senior
Subordinated Notes due 2006.
"OBLIGATIONS" means any principal, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the Offering Memorandum, dated November 19,
1996, relating to the Notes.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, delivered to the Trustee that
meets the requirements of Section 13.05 hereof.
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"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company,
any Subsidiary of the Company or the Trustee.
"PARENT" means (i) Advanced Medical or (ii) if Advanced Medical ceases
to either (i) exist or (ii) beneficially own, directly or indirectly, in
excess of 50% of the Capital Stock of the Company, the ultimate corporate
parent of the Company that owns all of the outstanding Capital Stock of the
Company either directly or through one or more Wholly Owned Subsidiaries or
(iii) if there exists no corporate parent of the Company, the Company.
"PARTICIPANT" means, with respect to DTC, Euroclear or Cedel, a Person
who has an account with DTC, Euroclear or Cedel, respectively (and, with
respect to DTC, shall include Euroclear and Cedel).
"PERMITTED INVESTMENTS" means (i) Investments in the Company or in a
Restricted Subsidiary of the Company (including, without limitation,
Guarantees of the Indebtedness and/or other Obligations of the Company and/or
any Restricted Subsidiary of the Company, so long as such Indebtedness and/or
other Obligations are permitted under the Indenture), (ii) Investments in
Marketable Securities, (iii) Investments by the Company or any Restricted
Subsidiary of the Company in, or the purchase of the securities of, a Person
if, as a result of such Investment, (a) such person becomes a Restricted
Subsidiary of the Company or (b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of
the Company, (iv) Investments in accounts and notes receivable acquired in
the ordinary course of business, (v) Investments in connection with the sale
of medical instruments pursuant to Instrument Contracts or any leasing of
medical instruments in the ordinary course of business, (vi) any non-cash
consideration received in connection with an Asset Sale that complies with
Section 4.10 hereof, (vi) Investments in connection with Hedging Obligations
permitted to be incurred under Section 4.09 hereof, (vii) loans to employees
not to exceed $1,000,000 at any time outstanding, and (viii) Investments in
an Accounts Receivable Subsidiary received in consideration of sales of
accounts receivable in accordance with Section 4.18 hereof.
"PERMITTED JUNIOR SECURITIES" means (i) equity securities of Parent and
(ii) debt securities of the Company, that are unsecured, subordinated at
least to the same extent as the Notes to Senior Debt of the Company and
guarantees of any such debt by any Guaranteeing Subsidiary that are unsecured
and subordinated at least to the same extent as the Subsidiary Guarantee of
such Guaranteeing Subsidiary to the Senior Debt of such Guaranteeing
Subsidiary, as the case may be, and have a final maturity date at least as
late as the final maturity date of, and have a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Notes.
"PERMITTED LIENS" means (i) Liens on property of the Company and any
Guaranteeing Subsidiary securing (a) Senior Debt and/or (b) Hedging
Obligations permitted to be incurred under the Indenture; (ii) Liens in favor
of the Company or any of its Restricted Subsidiaries, (iii) Liens on property
of a Person existing at the time such Person is merged with or into or
consolidated with the Company or any Restricted Subsidiary of the Company;
PROVIDED, that such Liens were not incurred in connection with, or in
contemplation of, such merger or consolidation and do not extend to any
assets of the Company or any Restricted Subsidiary of the Company other than
the assets acquired in such merger or consolidation; (iv) Liens on property
of a Person existing at the time such Person becomes a Restricted Subsidiary
of the Company; PROVIDED that such Liens were not incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary
and do not extend to any assets of the Company or any other Restricted
Subsidiary of the Company; (v) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the
Company; PROVIDED that such Liens were not incurred in connection with, or in
contemplation of, such acquisition and do not extend to any assets of the
Company or any of its Restricted Subsidiaries other than the
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property so acquired; (vi) Liens to secure the performance of statutory
obligations, surety or appeal bonds or performance bonds, or landlords',
carriers', warehousemen's, mechanics', suppliers', materialmen's or other
like Liens, in any case incurred in the ordinary course of business and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate process of law, if a reserve or other appropriate provision, if
any, as is required by GAAP shall have been made therefor; (vii) Liens
existing on the date hereof; (viii) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded; PROVIDED that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor; (ix) Liens to secure (A) Indebtedness (including Capital Lease
Obligations) permitted by clause (iii) of the second paragraph of Section
4.09 hereof covering only the assets acquired with such Indebtedness or the
assets which are the subject of the sale leaseback transaction, as the case
may be, and (B) Indebtedness of any Restricted Subsidiary (other than a
Guaranteeing Subsidiary) permitted to be incurred by such Restricted
Subsidiary pursuant to Section 4.09 hereof; (x) Liens incurred in the
ordinary course of business of the Company or any Restricted Subsidiary of
the Company with respect to obligations not constituting Indebtedness for
borrowed money that do not exceed $15.0 million in the aggregate at any one
time outstanding; (xi) Liens securing Indebtedness incurred to refinance
Indebtedness that has been secured by a Lien permitted under the Indenture;
PROVIDED that (a) any such Lien shall not extend to or cover any assets or
property not securing the Indebtedness so refinanced and (b) the refinancing
Indebtedness secured by such Lien shall have been permitted to be incurred
under Section 4.09 hereof; (xii) Liens in favor of the lessee on instruments
which are the subject of leases entered into in the ordinary course of
business; PROVIDED that any such Lien shall not extend to or cover any assets
or property of the Company and its Restricted Subsidiaries that is not the
subject of any such lease; (xiii) Liens in favor of the contracting party in
instruments which are the subject of Instrument Contracts entered into in the
ordinary course of business; PROVIDED that any such Lien shall not extend to
or cover any assets or property of the Company and its Restricted
Subsidiaries that is not the subject of any such Instrument Contract; and
(xiv) Liens to secure Attributable Debt that is permitted to be incurred
pursuant to Section 4.13 hereof; PROVIDED that any such Lien shall not extend
to or cover any assets of the Company or any Guaranteeing Subsidiary other
than the assets which are the subject of the sale leaseback transaction in
which the Attributable Debt is incurred.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease
or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries; PROVIDED that: (i) the principal amount of such Permitted
Refinancing Indebtedness does not exceed the principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity date at
least as late as the final maturity date of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred by the Company or by the Restricted Subsidiary who
is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PRINCIPAL" means Jeffry M. Picower.
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"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Notes in the form set forth in Section 2.06(f)(i).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, by and among IMED, IMED International
Trading and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S GLOBAL NOTE" means the Global Note bearing the Private
Placement Legend that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Regulation S.
"RELATED PARTY" means, with respect to the Principal, (i) any spouse or
immediate family member of the Principal or (ii) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners,
owners or Persons beneficially holding (directly or through one or more
Subsidiaries) a 80% or more controlling interest of which consist of the
Principal and/or such other Persons referred to in the immediately preceding
clause (i).
"REPLACEMENT ASSETS" means (i) a business permitted by Section 4.17
hereof, (ii) a controlling equity interest in any Person engaged in a line of
business permitted by Section 4.17 hereof, or (iii) tangible assets, product
distribution rights or intellectual property or rights thereto used in a line
of business permitted by the Section 4.17 hereof.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative for any Senior Debt or Guarantor Senior Debt.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED BENEFICIAL INTEREST" means any beneficial interest of a
Participant or Indirect Participant in the 144A Global Note or the Regulation
S Global Note.
"RESTRICTED BROKER-DEALER" has the meaning set forth in the
Registration Rights Agreement.
"RESTRICTED GLOBAL NOTES" means the 144A Global Note and the Regulation
S Global Note, each of which shall bear the Private Placement Legend.
"RESTRICTED INVESTMENT" means any Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RIVER DIVESTITURE" means the discontinuance of the operations of River
Medical, Inc. ("River") in June 1996.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means (i) all Obligations of the Company permitted to be
incurred pursuant to the Indenture under or in respect of the New Credit
Facility and (ii) any other Indebtedness permitted to be incurred by the
Company under the terms of the Indenture and any Hedging Obligation permitted
to be incurred under by the Company the terms of the Indenture, unless the
instrument under which the foregoing is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes.
Notwithstanding anything to the contrary in the foregoing, Senior Debt will
not include (w) any liability for federal, state, local or other taxes; (x)
any Indebtedness of the Company to any Subsidiary of the Company or any of
its Affiliates, (y) any trade payables or (z) any Indebtedness that is
incurred in violation of the Indenture.
"SERIES A NOTES" means the Company's 9 3/4% Series A Senior Subordinated
Notes due 2006 issued pursuant to this Indenture.
"SERIES B NOTES" means the Company's 9 3/4% Series B Senior
Subordinated Notes due 2006 to be issued pursuant to this Indenture (i) in an
Exchange Offer (as defined in the Registration Rights Agreement) or (ii) upon
the request of any holder of Series A Notes covered by a Shelf Registration
Statement (as defined in the Registration Rights Agreement), in exchange for
such Series A Notes.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the date hereof.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of Voting Stock is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination
thereof); PROVIDED, HOWEVER, that the Accounts Receivable Subsidiary and its
Subsidiaries shall not be deemed Subsidiaries of the Company or any of its
other Subsidiaries.
"SUBSIDIARY GUARANTEE" means any guarantee of the Notes by a
Guaranteeing Subsidiary.
"TAX SHARING AGREEMENT" means the tax sharing agreement, dated as of
November 26, 1996, between the Company and Advanced Medical as executed on
the date of the Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TRANSFER RESTRICTED SECURITIES" means Notes or beneficial interest
therein that bear or are required to bear the Private Placement Legend.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
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"UNRESTRICTED BENEFICIAL INTEREST" means a beneficial interest of a
Participant or an Indirect Participant in the Unrestricted Global Note.
"UNRESTRICTED GLOBAL NOTES" means one or more Global Notes that do not
and are not required to bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant
to a Board Resolution, but only to the extent that such Subsidiary: (i) has
no Indebtedness other than Non-Recourse Debt; (ii) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company
or such Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company; (iii) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person's financial condition or
to cause such Person to achieve any specified levels of operating results;
and (iv) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries. Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant from the date of such incurrence). The Board of
Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that such designation
shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i)
such Indebtedness is permitted under Section 4.09 hereof and (ii) no Default
or Event of Default would be in existence following such designation.
"VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of any Person (irrespective of whether or not, at the
time, stock of any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
then outstanding principal amount of such Indebtedness into (ii) the total of
the product obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a Restricted
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 Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
"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
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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.
Defined in
Term Section
"Affiliate Transaction". . . . . . . 4.11
"Asset Sale Offer" . . . . . . . . . 3.09
"Change of Control Offer". . . . . . 4.14
"Change of Control Payment". . . . . 4.14
"Change of Control Payment Date" . . 4.14
"Covenant Defeasance". . . . . . . . 8.03
"Event of Default" . . . . . . . . . 6.01
"Excess Proceeds". . . . . . . . . . 4.10
"Legal Defeasance" . . . . . . . . . 8.02
"Offer Amount" . . . . . . . . . . . 3.09
"Offer Period" . . . . . . . . . . . 3.09
"Paying Agent" . . . . . . . . . . . 2.03
"Private Placement Legend" . . . . . 2.06(f)(i)
"Purchase Date". . . . . . . . . . . 3.09
"Registrar". . . . . . . . . . . . . 2.03
"Restricted Payments". . . . . . . . 4.07
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:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company, each Guaranteeing Subsidiary
and any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
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(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections
or rules adopted by the Commission from time to time; and
(g) For purposes of making any determination of any amount under any
single definition set forth in Section 1.01 hereof, such
determination shall be made without double counting of any item;
provided that with respect to the definition of "Fixed Charge
Coverage Ratio" it shall not be deemed to be double counting if an
item is included in the calculation of each of "Consolidated
EBITDA" and "Fixed Charges."
SECTION 1.05. RIVER.
All calculations made pursuant to this Indenture for any four-quarter
period the last day of which is on or prior to December 31, 1997 shall be
made on a pro forma basis (i) to exclude the operating results of River for
all periods prior to the date hereof and (ii) to exclude any restructuring
charges associated with the River Divestiture incurred prior to the date
hereof and, in each case, as if such transactions had occurred on September 30,
1995.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes initially
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guaranteeing Subsidiary and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Notes issued in global form shall be substantially in the form of
EXHIBIT A attached hereto (including the text referred to in footnotes 1 and
2 thereto). Notes issued in the form of Definitive Notes shall be
substantially in the form of EXHIBIT A attached hereto (but without the text
referred to in footnotes 1 and 2 thereto). Notes offered and sold to QIBs in
reliance on Rule 144A and Institutional Accredited Investors shall be issued
initially in the form of a 144A Global Note, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the
Regulation S Global Note, duly executed by the Company and authenticated by the
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Trustee as hereinafter provided. Unrestricted Global Notes representing
Unrestricted Beneficial Interests shall be issued initially in accordance
with Sections 2.06(a)(iv), 2.06(c)(ii) and 2.06(e), duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of each of the Global Notes may from time to time
be increased or decreased by adjustments made on the records of the Trustee
as hereinafter provided.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms
and Conditions of Cedel Bank" and "Customer Handbook" of Cedel shall be
applicable to interests in the Regulation S Global Note that are held by the
Participants through Euroclear or Cedel.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Notes. The Trustee shall, upon
a written order of the Company signed by two Officers, authenticate Series B
Notes for original issuance in exchange for a like principal amount of Series
A Notes exchanged in the Exchange Offer or otherwise exchanged for Series A
Notes pursuant to the terms of the Registration Rights Agreement. The
aggregate principal amount of the Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Trustee may (at the Company's expense) appoint an authenticating
agent acceptable to the Company to authenticate Notes. An authenticating
agent may authenticate Notes 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 of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii)
an office or agency where Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
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The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, interest or Liquidated Damages, if any, on the
Notes, and shall notify the Trustee of any default by the Company or any
Guaranteeing Subsidiary in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon the
occurrence of events specified in Section 6.01(vii) and (viii), the Trustee
shall serve as Paying Agent for the Notes.
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES.
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 all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company and/or the Guaranteeing
Subsidiaries shall furnish to the Trustee at least seven 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 the Holders of Notes and the
Company and the Guaranteeing Subsidiaries shall otherwise comply with TIA
Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL NOTES.
The transfer and exchange of beneficial interests in a Global Note shall be
effected through the Depositary, in accordance with this Indenture and the
procedures of the Depository therefor. Beneficial interests in Global Notes
shall be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. The Trustee shall have
no obligation to ascertain the Depository's compliance with any such
restrictions on transfer. Transfers of beneficial interests shall also
require compliance with subparagraph (i) below, as well as one or more of the
other following subparagraphs as applicable:
(i) ALL TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS. In connection
with all transfers and exchanges of beneficial interests in Global Notes
(other than transfers of beneficial interests in a Global Note to Persons who
take delivery thereof in the form of a beneficial interest in the same Global
Note), the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) instructions given in accordance with the Applicable
Procedures from a Participant or an Indirect Participant directing the
Depository to credit or cause to be credited a beneficial interest in the
specified Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) a written order given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) instructions given in
accordance with the Applicable Procedures from a Participant or an Indirect
Participant directing the Depository to cause to be issued a Definitive Note
in an amount equal to the beneficial interest to be transferred or exchanged.
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(ii) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME RESTRICTED GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer restrictions
set forth in the Private Placement Legend.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the Registrar receives the following:
(A) if the transferee is a QIB that will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must deliver
a certificate in the form of EXHIBIT B hereto, including the certifications
in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial
interest in the Regulation S Global Note, then the transferor must deliver a
certificate in the form of EXHIBIT B hereto, including the certifications in
item (2) thereof; and
(C) if the transferee is not a QIB and will take delivery in the form of
a beneficial interest in the 144A Global Note, then the transferor must
deliver (x) a certificate in the form of EXHIBIT B hereto, including the
certification in item (3) thereof, (y) to the extent required by item 3(d)
of EXHIBIT B hereto, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act and such Beneficial interest is being transferred in
compliance with any applicable blue sky securities laws of any state of the
United States and (z) if the transfer is being made to an Institutional
Accredited Investor and effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 under the Securities Act or Rule 904 under the Securities Act, a
certificate from the transferee in the form of EXHIBIT C hereto.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTE FOR BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTE. Beneficial
interests in any Restricted Global Note may be exchanged by the holder
thereof for a beneficial interest in the Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to the Exchange Offer
in accordance with the Registration Rights Agreement and the holder, in the
case of an exchange, or the transferee, in the case of a transfer, is not
(1) a broker-dealer, (2) a Person participating in the distribution of the
Series B Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Restricted Broker Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a beneficial interest
in the Unrestricted Global Note, a certificate from such holder in the form
of EXHIBIT D hereto, including the certifications in item (1)(a) thereof;
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(2) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who will take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note, a certificate in the form of Exhibit B hereto, including the
certification in item (4) thereof; and
(3) in each such case set forth in this paragraph (D), an Opinion of
Counsel in form reasonably acceptable to the Company, to the effect that such
exchange or transfer is in compliance with the Securities Act, that the
restrictions on transfer contained herein and in the Private Placement Legend
are not required in order to maintain compliance with the Securities Act, and
such beneficial interest is being exchanged or transferred in compliance with
any applicable blue sky securities laws of any state of the United States.
If any such transfer is effected pursuant to paragraph (B) above at a
time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in compliance with
Section 2.02, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to paragraph (B) above.
(v) NOTATION BY THE TRUSTEE OF TRANSFER OF BENEFICIAL INTERESTS AMONG
GLOBAL NOTES. Upon satisfaction of the requirements for transfer of
beneficial interests pursuant to clauses (iii) or (iv) above, the Trustee, as
Registrar, shall reduce or cause to be reduced the aggregate principal amount
of the relevant Global Note from which the beneficial interest is being
transferred, and increase or cause to be increased the aggregate principal
amount of the Global Note to which the beneficial interest is being
transferred, in each case, by the principal amount of the beneficial interest
being transferred. No transfer of beneficial interests shall be effected
until, and any transferee pursuant thereto shall succeed to the rights of a
holder of beneficial interests only when, the Registrar has made appropriate
adjustments to the applicable Global Note in accordance with this paragraph.
(b) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES.
(i) If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interests for a Definitive Note or
to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon receipt by the Registrar of the
following documentation (all of which may be submitted by facsimile):
(A) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note, a
certificate from such holder in the form of EXHIBIT D hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications in
item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 904 under the Securities
Act, a certificate to the effect set forth in EXHIBIT B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from registration in accordance with Rule 144 under the Securities
Act, a certificate to the effect set forth in EXHIBIT B hereto, including the
certifications in item (3)(a) thereof;
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(E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (3)(d) thereof, a certificate
from the transferee to the effect set forth in EXHIBIT C hereof and, to the
extent required by item 3(d) of EXHIBIT B, an Opinion of Counsel from the
transferee or the transferor reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities Act and such
beneficial interest is being transferred in compliance with any applicable
blue sky securities laws of any state of the United States;
(F) if such beneficial interest is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred to an effective
registration statement under the Securities Act, a certificate to the effect
set forth in EXHIBIT B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount.
Definitive Notes issued in exchange for a beneficial interest pursuant to
this Section 2.06(b) shall be registered in such names and in such authorized
denominations as the Holder shall instruct the Registrar through instructions
from the Depository and the Participant or Indirect Participant. The Trustee
shall deliver such Definitive Notes to the Persons in whose name such Notes
are so registered. Definitive Notes issued in exchange for a beneficial
interest pursuant to this Section 2.06(b)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein
unless:
(I) such exchange or transfer is effected pursuant to the Exchange Offer
in accordance with the Registration Rights Agreement and the holder, in the
case of an exchange, or the transferee, in the case of a transfer, is not
(1) a broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company.
(II) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(III) any such transfer is effected by a Restricted Broker Dealer
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(IV) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note
that does not bear the Private Placement Legend, a certificate from such
holder in the form of EXHIBIT D hereto, including the certifications in item
(1)(b) thereof; and
(2) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who will take
delivery thereof in the form of a Definitive Note that does not bear the
Private Placement Legend, a certificate in the form of EXHIBIT B hereto,
including the certifications in item (4) thereof; and
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(3) in each such case set forth in this paragraph (IV), an Opinion of
Counsel in form reasonably acceptable to the Company, to the effect that such
exchange or transfer is in compliance with the Securities Act, that the
restrictions on transfer contained herein and in the Private Placement Legend
are not required in order to maintain compliance with the Securities Act, and
such beneficial interest is being exchanged or transferred in compliance with
any applicable blue sky securities laws of any State of the United States.
(ii) If any holder of a beneficial interest in an Unrestricted Global
Note proposes to exchange such beneficial interest for a Definitive Note or
to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions
set forth in Section 2.06(a)(i), the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly and
the Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Definitive Notes issued in exchange for a
beneficial interest pursuant to this Section 2.06(b)(ii) shall be registered
in such names and in such authorized denominations as the Holder shall
instruct the Registrar through instructions from the Depository and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered.
Definitive Notes issued in exchange for a beneficial interest pursuant to
this Section 2.06(b)(ii) shall not bear the Private Placement Legend and
shall not be subject to the restrictions on transfer set forth herein and in
the Private Placement Legend.
(c) TRANSFER OR EXCHANGE OF RESTRICTED DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) If any holder of Restricted Definitive Notes proposes to exchange
such Notes for a beneficial interest in a Restricted Global Note or to
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt
by the Registrar of the following documentation (all of which may be
submitted by facsimile):
(A) if the holder of such Restricted Definitive Notes proposes to
exchange such Notes for a beneficial interest in a Restricted Global Note,
a certificate from such holder in the form of EXHIBIT D hereto, including
the certifications in item (2)(b) thereof;
(B) if such Definitive Notes are being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications in
item (1) thereof;
(C) if such Definitive Notes are being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 904 under the
Securities Act, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (2) thereof;
(D) if such Definitive Notes are being transferred pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Definitive Notes are being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set
forth in EXHIBIT B hereto, including the certifications in item (3)(d)
thereof, a certificate from the transferee to the effect set forth in
EXHIBIT C hereof and, to the extent required by item 3(d) of EXHIBIT B,
an Opinion of Counsel from the transferee or the transferor reasonably
acceptable to the Company to the effect that such transfer is in
compliance
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with the Securities Act and such beneficial interest is being transferred
in compliance with any applicable blue sky securities laws of any state of
the United States;
(F) if such Definitive Notes are being transferred to the Company or
one of its Subsidiaries, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (3)(b) thereof; or
(G) if such Definitive Notes are being transferred pursuant to an
effective registration statement under the Securities Act, a certificate
to the effect set forth in EXHIBIT B hereto, including the certifications
in item (3)(c) thereof,
the Trustee shall cancel the Definitive Notes, increase or cause to be
increased the aggregate principal amount of, in the case of clauses (B), (D),
(E), (F) and (G) above, the 144A Global Note, and in the case of clause (C)
above, the Regulation S Global Note.
(ii) A holder of Restricted Definitive Notes may exchange such Notes for
a beneficial interest in the Unrestricted Global Note or transfer such
Restricted Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note only:
(A) if such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder, in the case of an exchange, or the transferee, in the case of a
transfer, is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Series B Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Restricted Broker Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) upon receipt by the Registrar of the following documentation (all
of which may be submitted by facsimile):
(1) if the holder of such Restricted Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted Global
Note, a certificate from such holder in the form of EXHIBIT D hereto,
including the certifications in item (1)(c) thereof;
(2) if the holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note, a
certificate in the form of EXHIBIT B hereto, including the certifications
in item (4) thereof; and
(3) in each such case set forth in this paragraph (D), an Opinion
of Counsel in form reasonably acceptable to the Company, to the effect
that such exchange or transfer is in compliance with the Securities Act,
that the restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act, and such beneficial interest is being exchanged or
transferred in compliance with any applicable blue sky securities laws of
any State of the United States.
If any such transfer is effected pursuant to paragraph (B) above at a
time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in
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compliance with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Registered Notes transferred pursuant to
paragraph (B) above.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive Notes
are presented by a Holder to the Registrar with a request to register the
transfer of the Definitive Notes or to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested
only if the Definitive Registered Notes are presented or surrendered for
registration of transfer or exchange, are endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing and
the Registrar receives the following documentation (all of which may be
submitted by facsimile):
(A) if holder of such Definitive Notes proposes to exchange such
Definitive Note for Definitive Notes of other authorized denominations, a
certificate from such holder in the form of EXHIBIT D hereto, including
the certifications in item 2(c) thereof;
(B) if such Definitive Notes are being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications in
item (1) thereof;
(C) if such Definitive Notes are being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 904 under the
Securities Act, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (2) thereof;
(D) if such Definitive Notes are being transferred pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Definitive Notes are being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set
forth in EXHIBIT B hereto, including the certifications in item (3)(d)
thereof, a certificate from the transferee to the effect set forth in
EXHIBIT C hereof and, to the extent required by item 3(d) of EXHIBIT B,
an Opinion of Counsel from the transferee or the transferor reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act and such beneficial interest is being
transferred in compliance with any applicable blue sky securities laws of
any state of the United States;
(F) if such Definitive Notes are being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (3)(b) thereof; or
(G) if such Definitive Notes are being transferred to an effective
registration statement under the Securities Act, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications in
item (3)(c) thereof.
(e) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
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aggregate principal amount equal to the principal amount of the restricted
beneficial interests tendered for acceptance by persons that are not (x)
broker-dealers, (y) Persons participating in the distribution of the Series B
Notes or (z) Persons who are affiliates (as defined in Rule 144) of the
Company and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes that do not bear the Private Placement Legend in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer. Concurrently with the issuance
of such Notes, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly and the Company
shall execute and the Trustee shall authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Definitive Notes in
the appropriate principal amount.
(f) LEGENDS.
(i) Each Restricted Global Note and, except as permitted by clause (ii)
below, each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend (the "Private Placement Legend")
in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL), (2) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
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(ii) Notwithstanding the foregoing, any Definitive Notes issued
pursuant to Section 2.06(e) shall not bear the Private Placement Legend.
In addition, in connection with the transfer or exchange of any
Restricted Definitive Notes, if the Registrar receives the following:
(A) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for a Definitive Registered Note that does not bear
the Private Placement Legend, a certificate from such holder in the form
of EXHIBIT D hereto, including the certifications in item (1)(d) thereof;
(B) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private Placement
Legend, a certificate in the form of EXHIBIT B hereto, including the
certifications in item (4) thereof; and
(C) in each case set forth in these subparagraphs (A) and (B), an
Opinion of counsel in form reasonably acceptable to the Company, to the
effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and in
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Note is being exchanged or
transferred in compliance with any applicable blue sky securities laws of
any State of the United States, then, upon compliance with the provisions
of Section 2.06(d), the Trustee shall authenticate and issue Definitive
Notes that do not bear the Private Placement Legend and all restrictions
on the transfer of such Definitive Notes shall be rescinded.
(g) RESTRICTIONS ON TRANSFER AND EXCHANGE OF A GLOBAL NOTE. (i)
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (ii) of this Section 2.06(g)), a
Global Note may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. (ii) If at any time:
(A) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for the
Global Note and a successor Depository for the Global Note is not
appointed by the Company within 90 days after delivery of such
notice; or
(B) the Company, at its sole discretion, notifies the Trustee in writing
that it elects to cause the issuance of Definitive Notes under this
Indenture,
then the Company and the Guaranteeing Subsidiaries shall execute, and the
Trustee shall, upon receipt of an authentication order in accordance with
Section 2.02 hereof, authenticate and deliver, Definitive Notes in an
aggregate principal amount equal to the principal amount of the Global Note
in exchange for such Global Note.
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes or have been redeemed or repurchased, all Global Notes shall be
returned to or retained and cancelled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for an interest in another
Global Note or for Definitive Notes or redeemed or repurchased, the principal
amount of Notes represented by such Global Note shall be reduced accordingly
and an endorsement shall be made on such Global Note, by the Trustee to
reflect such reduction.
(i) GENERAL PROVISIONS RELATING TO ALL TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Global Notes and Definitive Notes
upon the Company's order or at the Registrar's request.
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(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any stamp or transfer tax or similar governmental charge
payable in connection therewith (other than any such stamp or transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 4.10, 4.14 and 9.05 hereof).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or exchange.
(iv) The Registrar shall not be required (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption
under Section 3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding interest
payment date.
(v) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes and
for all other purposes, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receives evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the
written order of the Company signed by two Officers of the Company, shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company
to protect the Company, the Trustee, any Agent and any authenticating agent
from any loss that any of them may suffer if a Note is replaced. The Company
and the Trustee may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section 2.08 as not outstanding. Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because the Company or any
Guaranteeing Subsidiary or an Affiliate of the Company or any Guaranteeing
Subsidiary holds the Note.
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If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a Redemption Date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Guaranteeing Subsidiary, or by any Affiliate of the Company or
any Guaranteeing Subsidiary shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes as
to which a Responsible Officer of the Trustee has received written notice are
so owned shall be so considered. Notwithstanding the foregoing, Notes that
are to be acquired by the Company or any Guaranteeing Subsidiary or an
Affiliate of the Company or any Guaranteeing Subsidiary pursuant to an
exchange offer, tender offer or other agreement shall not be deemed to be
owned by such entity until legal title to such Notes passes to such entity.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of
the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that
the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall upon receipt of a
written order of the Company signed by two Officers authenticate definitive
Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver to the Trustee for cancellation any
Notes previously authenticated and delivered hereunder or which the Company
may have acquired in any manner whatsoever, and all Notes so delivered shall
be promptly cancelled by the Trustee. All Notes surrendered to it for
registration of transfer, exchange or payment, if surrendered to any Person
other than the Trustee, it shall be delivered to the Trustee. The Trustee
and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation. Subject to Section
2.07 hereof, the Company may not issue new Notes to replace Notes that it has
redeemed or paid or that have been delivered to the Trustee for cancellation.
All cancelled Notes held by the Trustee shall be destroyed and certification
of their destruction delivered to the Company, unless by a written order,
signed by two Officers of the Company, the Company shall direct that
cancelled Notes be returned to it.
SECTION 2.12. RECORD DATE.
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The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided
for in TIA Section 316 (c).
SECTION 2.13. DEFAULTED INTEREST.
If the Company or any Guaranteeing Subsidiary defaults in a payment of
interest on the Notes, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date,
which date shall be at the earliest practicable date but in all events at
least five (5) Business Days prior to the payment date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company shall fix
or cause to be fixed each such special record date and payment date, and
shall promptly thereafter, notify the Trustee of any such date. At least
fifteen (15) days before the special record date, the Company (or the
Trustee, in the name and at the expense of the Company) shall mail or cause
to be mailed to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
SECTION 2.14. COMPUTATION OF INTEREST.
Interest on the Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
SECTION 2.15. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number, and if it
does so, the trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
will promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 45 days but not more than 60 days before a redemption date
(unless a shorter period is acceptable to the Trustee), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Notes pursuant
to the provisions of Sections 3.09 or 4.14 hereof, it shall furnish to the
Trustee, at least 45 days before the scheduled purchase date, an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the offer to purchase shall occur, (ii) the terms of the offer, (iii) the
purchase price, (iv) the principal amount of the Notes to be purchased, (v)
the purchase date, and (vi) further setting forth a statement to the effect
that (a) the Company or one of its Restricted Subsidiaries has effected an
Asset Sale and there are Excess Proceeds aggregating more than $15.0 million
and the amount of such Excess Proceeds or (b) a Change of Control has
occurred, as applicable.
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SECTION 3.02. SELECTION OF NOTES TO BE PURCHASED OR REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection
of the Notes for redemption shall be made by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on
which the Notes are listed or, if the Notes are not so listed, on a PRO RATA
basis, by lot or by such other method as the Trustee deems fair and
appropriate PROVIDED that no Notes with a principal amount of $1,000 or less
shall be redeemed in part.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
purchase or redemption, the principal amount thereof to be redeemed. Notes
and portions of Notes selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Notes of a Holder are to be
purchased or redeemed, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption also apply to portions of Notes 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 or cause to be mailed, by first class mail, a notice
of redemption to each Holder whose Notes are to be redeemed at its registered
address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price and accrued interest and
Liquidated Damages, if any;
(c) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and
that, after the redemption date upon surrender of
such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon
surrender of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest and Liquidated Damages,
if any, on Notes called for redemption cease to
accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for
redemption are being redeemed; and
(h) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in
such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that
the Company shall have delivered to the Trustee, at least 45 days
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prior to the redemption date (or such shorter period as shall be acceptable
to the Trustee), an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph. The notice mailed in the manner herein
provided shall be conclusively presumed to have been duly given whether or
not the Holder receives such notice. In any case, failure to give such notice
by mail or any defect in the notice to the Holder of any Note shall not
affect the validity of the proceeding for the redemption of any other Note.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
Redemption Date at the redemption price, plus accrued and unpaid interest and
Liquidated Damages, if any, to such date. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or before 12:00 p.m. (New York City time) on each redemption date or
the date on which Notes must be accepted for purchase pursuant to Section
3.09 or 4.14, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Notes to be redeemed or
purchased on that date. The Trustee or the Paying Agent shall promptly
return to the Company upon its written request any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary
to pay the redemption price of (including any applicable premium), accrued
interest on and Liquidated Damages, if any, all Notes to be redeemed or
purchased.
If Notes called for redemption or tendered in an Asset Sale Offer or
Change of Control Offer are paid or if the Company has deposited with the
Trustee or Paying Agent money sufficient to pay the redemption or purchase
price of, unpaid and accrued interest and Liquidated Damages, if any, on all
Notes to be redeemed or purchased on and after the redemption or purchase
date interest and Liquidated Damages, if any, shall cease to accrue on the
Notes or the portions of Notes called for redemption or tendered and not
withdrawn in an Asset Sale Offer or Change of Control Offer (regardless of
whether certificates for such securities are actually surrendered). If a
Note is redeemed or purchased on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid
interest and Liquidated Damages, if any, shall be paid to the Person in whose
name such Note was registered at the close of business on such record date.
If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, and Liquidated
Damages, if any, from the redemption or purchase date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes shall not be
redeemable at the Company's option prior to December 1, 2001. Thereafter,
the Notes shall be subject to redemption at the option of the
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Company, in whole or in part, upon not less than 30 nor more than 60 days
notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on December 1 of the years indicated
below:
YEAR PERCENTAGE
2001 . . . . . . . . . . . . . . . . . . . . . 104.875%
2002 . . . . . . . . . . . . . . . . . . . . . 103.250%
2003 . . . . . . . . . . . . . . . . . . . . . 101.625%
2004 and thereafter. . . . . . . . . . . . . . 100.000%
Notwithstanding the foregoing, at any time prior to December 1, 1999,
the Company on one or more occasions may redeem up to $70.0 million in
aggregate principal amount of Notes with any of the net proceeds of one or
more public or private offerings of common stock of: (i) Advanced Medical or
any other corporate parent of the Company to the extent the net proceeds
thereof are contributed to the Company as a capital contribution to common
equity or (ii) the Company, in each case, at a redemption price of 109.75% of
the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable date of redemption; PROVIDED that
at least $130.0 million in aggregate principal amount of the Notes remain
outstanding immediately after the occurrence of each such redemption;
PROVIDED, FURTHER, that with respect to any private offering of the common
stock (other than of Advanced Medical), such common stock shall be issued at
a price no lower than the fair market value thereof, as evidenced by an
independent investment banking firm of national standing delivered to the
Trustee; and PROVIDED, FURTHER, that any such redemption must occur within 90
days of the date of the closing of such public or private offering.
Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under the Sections 3.09, 4.10 and 4.14 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below:
The Asset Sale Offer shall remain open for a period of twenty (20)
Business Days after the Commencement Date relating to such Asset Sale Offer,
except to the extent that a longer period is required by applicable law (as
so extended, the "Offer Period"). No later than five Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company shall
purchase the principal amount of Notes required to be purchased pursuant to
Sections 3.02 and 4.10 hereof (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset Sale
Offer.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note
is registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who
tender Notes pursuant to the Asset Sale Offer.
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On the Commencement Date of any Asset Sale Offer, the Company shall
send or cause to be sent, by first class mail, a notice to the Trustee and
each of the Holders. Such notice, which shall govern the terms of the Asset
Sale Offer, shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer and shall state:
(a) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the
length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment
shall continue to accrue interest;
(d) that, unless the Company defaults in the payment of
the purchase price, any Note accepted for payment
pursuant to the Asset Sale Offer shall cease to
accrue interest and Liquidated Damages, if any, after
the Purchase Date;
(e) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to
surrender the Note, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the
Company, a depositary, if appointed by the Company,
or a Paying Agent at the address specified in the
notice not later than the close of business on the
last day of the Offer Period;
(f) that Holders shall be entitled to withdraw their
election if the Company, the depositary or the Paying
Agent, as the case may be, receives, not later than
the close of business on the last day of the Offer
Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the
Company shall select the Notes to be purchased on a
PRO RATA basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered
(or transferred by book-entry transfer).
On or before 12:00 p.m. (New York City time) on each Purchase Date, the
Company shall irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Notes equal to the Offer Amount, together with accrued
and unpaid interest and Liquidated Damages, if any, thereon, to be held for
payment in accordance with the terms of this Section 3.09. On the Purchase
Date, the Company shall, to the extent lawful, (i) accept for payment, on a
pro rata basis to the extent necessary, the Offer Amount of Notes or portions
thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Notes tendered, (ii) deliver or cause the
Paying Agent or depositary, as the case may be, to deliver to the Trustee
Notes so accepted and (iii) deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09. The Company, the
depository or the Paying Agent, as the case may be, shall promptly (but in
any case not later than three (3) Business Days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of
the Notes tendered by such Holder and accepted by the Company for purchase,
plus any accrued and unpaid interest and
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Liquidated Damages, if any, thereon, and the Company shall promptly issue a
new Note, and the Trustee, shall authenticate and mail or deliver such new
Note, to such Holder, equal in principal amount to any unpurchased portion of
such Holder's Notes surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall
publicly announce in a newspaper of general circulation or in a press release
provided to a nationally recognized financial wire service the results of the
Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. The Company shall pay all Liquidated Damages, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement. Principal, premium, if any, interest and Liquidated Damages, if
any, shall be considered paid for all purposes hereunder on the date the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. (New York City time) money deposited by the Company in immediately
available funds and designated for and sufficient to pay all such principal,
premium, if any, interest and Liquidated Damages, if any, then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes
to the extent lawful; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace
period) at the same rate 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 (which may be an office of the Trustee or an
affiliate of the Trustee or Registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes 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 Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, 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.
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The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company shall furnish to the
Holders of Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms
10-Q and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations
of the Company and its Restricted Subsidiaries and, with respect to the
annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required
to be filed with the Commission on Form 8-K if the Company were required to
file such reports. In addition, whether or not required by the rules and
regulations of the Commission, from and after the consummation of the
Exchange Offer or the effectiveness of the Shelf Registration Statement (as
defined in the Registration Rights Agreement), the Company will file a copy
of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and make
such information available to securities analysts and prospective investors
upon request. In addition, the Company and the Guaranteeing Subsidiaries
have agreed that, for so long as any Notes remain outstanding, they will
furnish to Holders and to securities analysts and prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act. The Company shall at all times comply
with TIA Section 314(a).
The financial information to be distributed to Holders of Notes shall
be filed with the Trustee and mailed to the Holders at their addresses
appearing in the register of Notes maintained by the Registrar, within 120
days after the end of the Company's fiscal years and within 60 days after the
end of each of the first three quarters of each such fiscal year.
The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information and if requested by
the Company the Trustee will deliver such reports to the Holders under this
Section 4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review
of the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with
a view to determining whether each has kept, observed, performed and
fulfilled its obligations under this Indenture (including with respect to any
Restricted Payments made during such year, the basis upon which the
calculations required by Section 4.07 hereof were computed, which
calculations may be based on the Company's latest available financial
statements), and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge each entity has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Company
is taking or proposes to take with respect thereto) and that to the best of
his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of, interest or Liquidated
Damages, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
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(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, in connection with
the year-end financial statements delivered pursuant to Section 4.03 hereof,
the Company shall use its best efforts to deliver a written statement of the
Company's independent public accountants (who shall be a firm of established
national reputation reasonably satisfactory to the Trustee) that in making
the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article Four or Section 5.01 hereof
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation. In the event that such written statement of
the Company's independent public accountants cannot be obtained, the Company
shall deliver an Officer's Certificate certifying that it has used its best
efforts to obtain such statements and was unable to do so.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental
levies, except such as are contested in good faith and by appropriate
proceedings and with respect to which appropriate reserves have been taken in
accordance with GAAP.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each Guaranteeing Subsidiary 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, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and the Company and each Guaranteeing Subsidiary (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, 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 has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any distribution (including in connection with any merger or
consolidation) on account of any Equity Interests of the Company or any of
its Restricted Subsidiaries (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends
or distributions payable to the Company or any Wholly Owned Restricted
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or
retire for value any Equity Interests of the Company, any of its Restricted
Subsidiaries or any other Affiliate of the Company (other than any such
Equity Interests owned by the Company or any Wholly Owned Restricted
Subsidiary of the Company); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness
that is subordinated in right of payment to the Notes or a Subsidiary
Guarantee, except at the original final maturity thereof or in accordance
with the scheduled mandatory redemption or repayment provisions set forth in
the original documentation governing such Indebtedness (but not pursuant to
any mandatory offer to repurchase upon the occurrence of any event); or (iv)
make any Restricted Investment (all such payments and other actions
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set forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence
thereof, and
(b) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company
and its Restricted Subsidiaries after the date of
this Indenture (excluding Restricted Payments
permitted by clauses (ii), (iii), (v), (vi), (x) and
(xii) of the next succeeding paragraph), is less than
the sum of (1) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting
period) from the beginning of the first fiscal
quarter commencing after the date of this Indenture
to the end of the Company's most recently ended
fiscal quarter for which internal financial
statements are available at the time of such
Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, minus 100% of
such deficit), plus (2) 100% of the aggregate net
cash proceeds received by the Company from
contributions of capital or the issue or sale since
the date of the Indenture of Equity Interests of the
Company or of debt securities of the Company that
have been converted into such Equity Interests (other
than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company and
other than Disqualified Stock or debt securities that
have been converted into Disqualified Stock), PLUS
(3) to the extent that any Restricted Investment that
was made after the date of the Indenture is sold for
cash or otherwise liquidated or repaid for cash, the
cash return of capital with respect to such
Restricted Investment (less the cost of disposition,
if any); PROVIDED that no cash proceeds received by
the Company from the issue or sale of any Equity
Interests issued by the Company will be counted in
determining the amount available for Restricted
Payments under this clause (b) to the extent such
proceeds were used to redeem, repurchase, retire or
acquire any Equity Interests of the Company pursuant
to clause (ii) of the next succeeding paragraph, to
defease, redeem or repurchase any subordinated
Indebtedness pursuant to clause (iii) of the next
succeeding paragraph or to repurchase, redeem or
acquire any Equity Interests of the Company pursuant
to clause (iv) of the next succeeding paragraph, and
(c) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as
if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of
Section 4.09 hereof.
The foregoing provisions will not prohibit any or all of the following
(each and all of which (1) constitutes an independent exception to the
foregoing provisions and (2) may occur in addition to any action permitted to
occur under any other exception): (i) the payment of any dividend within 60
days after the date of declaration thereof, if at such date of declaration
such payment would have complied with the provisions of the Indenture; (ii)
the redemption, repurchase, retirement or other acquisition of any Equity
Interests of the Company in exchange for, or out of the net proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Company) of
other Equity Interests of the Company (other than Disqualified Stock);
PROVIDED that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (b)(2) of the preceding paragraph; (iii) the defeasance,
redemption or repurchase of subordinated Indebtedness with the net proceeds
from an incurrence of Permitted Refinancing Indebtedness or the substantially
concurrent sale (other than to a Subsidiary of the Company) of Equity
Interests of the Company (other than Disqualified Stock); PROVIDED that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded
from clause (b)(2) of the preceding paragraph; (iv) a Restricted Payment to
fund the repurchase,
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redemption or other acquisition or retirement for value of any Equity
Interests of Advanced Medical or the Company held by any member of Advanced
Medical's, the Company's or any of its Restricted Subsidiaries' management
pursuant to any management equity subscription agreement or stock option
agreement; PROVIDED that (A) the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$1.0 million in any twelve-month period (or $3.0 million in any single twelve
month period during the term of the Notes) PLUS the aggregate cash proceeds
received by the Company during such twelve-month period from any reissuance
of Equity Interests by Advanced Medical or the Company to members of
management of Advanced Medical, the Company and its Restricted Subsidiaries
and (B) no Default or Event of Default shall have occurred and be continuing
immediately after such transaction; PROVIDED that the amount in excess of
$1.0 million (or $3.0 million, as the case may be) expended for all such
repurchases, redemptions and other acquisitions and retirements of Equity
Interests pursuant to this clause (iv) in any twelve month period shall be
excluded from clause (b)(2) of the preceding paragraph; (v) the payment of
dividends (A) by a Restricted Subsidiary on any class of common stock of such
Restricted Subsidiary if such dividend is paid PRO RATA to all holders of
such class of common stock and (B) by a Guaranteeing Subsidiary on any class
of preferred stock issued in compliance with Section 4.09 hereof; (vi) the
repurchase of any class of common stock of a Restricted Subsidiary if such
repurchase is made PRO RATA with respect to such class of common stock; (vii)
the payment of dividends or the making of loans or advances by the Company to
Advanced Medical in order to permit the payment by Advanced Medical of
interest in respect of the Convertible Debentures in accordance with their
terms; (viii) the payment of dividends or the making of loans or advances by
the Company to Advanced Medical in order to permit the payment by Advanced
Medical of principal in respect of the Convertible Debentures at January 15,
2002 in accordance with their terms if, at the time of such Restricted
Payment, the Company would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of the Section 4.09 hereof; (ix) the payment of dividends
or the making of loans or advances by the Company to Advanced Medical not to
exceed $1.5 million in any fiscal year for, among other things, costs,
expenses and capital expenditures incurred by Advanced Medical in its
capacity as a holding company; (x) payments to Advanced Medical pursuant to
the Tax Sharing Agreement; (xi) any other Restricted Payment (other than (A)
a dividend or other distribution on account of any Equity Interests of the
Company or any of its Restricted Subsidiaries and (B) a purchase, redemption
or other acquisition of any Equity Interests of the Company, any of its
Restricted Subsidiaries or any Affiliate of the Company) if the amount
thereof, together with all other Restricted Payments made pursuant to this
clause (xi) since the date of the Indenture does not exceed $15.0 million;
and (xii) the redemption, repurchase, or other acquisition of Notes.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such designation, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated shall be deemed to be Restricted Payments at
the time of such designation and will reduce the amount available for
Restricted Payments under the first paragraph of this Section 4.07. All such
outstanding Investments shall be deemed to constitute Restricted Investments
in an amount equal to the greater of (i) the net book value of such
Investments at the time of such designation and (ii) the fair market value of
such Investments at the time of such designation. Such designation shall only
be permitted if such Restricted Investment would be permitted at such time
and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations
shall be based upon the Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
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The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to: (i)(A) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries on
its Capital Stock or (B) pay any Indebtedness owed to the Company or any of
its Restricted Subsidiaries; (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries; or (iii) transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries, except for
such encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness, as in effect on the date of the Indenture; (b) the New Credit
Facility as in effect on the date of the Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof; PROVIDED that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive in the aggregate than
those contained in the New Credit Facility as in effect on the date of the
Indenture; (c) the Indenture and the Notes; (d) applicable law; (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by
the Company or any of its Restricted Subsidiaries, as in effect at the time
of acquisition (except to the extent such Indebtedness was incurred in
connection with, or in contemplation of, such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the
Person, so acquired; PROVIDED that in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred; (f)
customary non-assignment provisions in leases and other agreements entered
into in the ordinary course of business and consistent with past practices;
(g) purchase money obligations for property acquired in the ordinary course
of business that impose restrictions of the nature described in clause (iii)
above on the property so acquired; (h) Permitted Refinancing Indebtedness;
PROVIDED that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive in the aggregate
than those contained in the agreements governing the Indebtedness being
refinanced; (i) an agreement that has been entered into for the sale or
disposition of all or substantially all of the Equity Interests or property
or assets of a Restricted Subsidiary; PROVIDED that such restrictions are
limited to the Restricted Subsidiary that is the subject of such agreement;
or (j) restrictions applicable to any Foreign Subsidiary pursuant to
Indebtedness permitted to be incurred pursuant to clause (x) of the second
paragraph of Section 4.09 hereof; PROVIDED that such restrictions shall be
limited to customary net worth, leverage, cash flow and other financial
ratios applicable to such Foreign Subsidiary, customary restrictions on
mergers and consolidations involving such Foreign Subsidiary, customary
restrictions on transactions with affiliates of such Foreign Subsidiary and
customary provisions subordinating the payment of intercompany Indebtedness
owed by such Foreign Subsidiary to the Company or any of its Restricted
Subsidiaries upon the occurrence of a default in respect of Indebtedness of
such Foreign Subsidiary or its Subsidiaries and/or events of insolvency with
respect to such Foreign Subsidiary or its Subsidiaries; and PROVIDED FURTHER
that in no event shall any Indebtedness incurred by a Foreign Subsidiary
prohibit such Foreign Subsidiary from making any dividend or other
distribution to the Company or its Restricted Subsidiaries or from otherwise
making any loan to the Company or its Restricted Subsidiaries in the absence
of a breach by such Foreign Subsidiary of the covenants contained in such
Indebtedness.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, Incur any Indebtedness (including Acquired Debt) and
the Company and any Guaranteeing Subsidiary will not issue any Disqualified
Stock and will not permit any of their respective Restricted Subsidiaries
that are not Guaranteeing Subsidiaries to issue any shares of preferred
stock; PROVIDED, HOWEVER, that the Company and any Guaranteeing Subsidiary
may Incur Indebtedness or issue shares of Disqualified Stock, if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least (x) 2.25 to 1 if such
incurrence or issuance occurs on or before December 1, 1999, or (y) 2.5 to 1
if such incurrence or issuance occurs at any time thereafter,
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in each case, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.
The foregoing provisions will not apply to any of the following (each and
all of which (1) may be issued or incurred, (2) constitutes an independent
exception to the foregoing provisions and (3) may be incurred in addition to
any other Indebtedness permitted to be incurred under any other exception):
(i) the incurrence by the Company or any Guaranteeing Subsidiary of
Indebtedness and letters of credit pursuant to any New Credit Facility (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company or the relevant Guaranteeing
Subsidiary thereunder) in an aggregate principal amount outstanding at any
one time not to exceed $265.0 million (A) LESS the aggregate amount of all
mandatory repayments (a "Mandatory Repayment") of the principal of any term
Indebtedness under the New Credit Facility that have been made since the date
of the Indenture pursuant to the amortization schedule of any New Credit
Facility (other than any Mandatory Repayment made concurrently with
refinancing or refunding of the New Credit Facility), (B) PLUS the Excess
Amount and (C) LESS the aggregate amount of all Net Proceeds of Asset Sales
applied pursuant to clause (b) or (c) of the first sentence of the second
paragraph under Section 4.10 hereof to permanently reduce Indebtedness (and,
in the case of revolving Indebtedness, the commitments) under the New Credit
Facility or to cash collateralize letters of credit and permanently reduce
commitments with respect to revolving Indebtedness under the New Credit
Facility; PROVIDED that the amount of Indebtedness permitted to be incurred
pursuant to the New Credit Facility in accordance with this clause (i) shall
be in addition to any Indebtedness permitted to be incurred pursuant to the
New Credit Facility or otherwise in reliance on, and in accordance with,
clause (ix) of this paragraph; (ii) the incurrence by the Company and any
Guaranteeing Subsidiary of Indebtedness represented by the Notes and any
Subsidiary Guarantee; (iii) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness (A) represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property used in the business of
the Company or such Restricted Subsidiary or (B) in connection with sale and
leaseback transactions, in an aggregate principal amount with respect to this
clause (iii) not to exceed $20.0 million at any time outstanding; PROVIDED
THAT in no event shall the aggregate principal amount of Indebtedness
incurred pursuant to clause (iii)(B) exceed $5.0 million at any time
outstanding; (iv) Existing Indebtedness; (v) the incurrence by the Company or
any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund, Indebtedness that was permitted by the
Indenture; (vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that (a) any
subsequent issuance or transfer (other than for security purposes) of Equity
Interests and (b) any subsequent sale or other transfer (including for
security purposes other than to secure Indebtedness permitted to be incurred
pursuant to clause (i) of this paragraph) of such Indebtedness, in each case,
that results in any such Indebtedness being held by a Person other than the
Company or any of its Restricted Subsidiaries shall be deemed to constitute
an incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, not permitted pursuant to this clause (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
(a) interest rate risk with respect to any floating rate Indebtedness of such
Person so long as such floating rate Indebtedness is permitted by the terms
of the Indenture to be outstanding or (b) exchange rate risk with respect to
agreements or indebtedness of such Person payable or denominated in a
currency other than U.S. dollars; (viii) the incurrence by the Company's
Unrestricted Subsidiaries of Non-Recourse Debt; PROVIDED, HOWEVER, that if
any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of the Company; (ix) the incurrence
by the Company and any Guaranteeing Subsidiary of Indebtedness in an
aggregate principal amount at any time outstanding not to exceed $25.0
million; (x) the incurrence by any Foreign Subsidiary of Indebtedness and
letters of credit to fund working capital and capital
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expenditure requirements (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of such Foreign
Subsidiary thereunder) in an aggregate maximum principal amount outstanding
at any one time not to exceed $15.0 million; (xi) Obligations in respect of
performance and surety bonds provided by the Company or any Guaranteeing
Subsidiary in the ordinary course of business; and (xii) the incurrence or
issuance by any Restricted Subsidiary of the Company of Indebtedness or
preferred stock (in addition to Indebtedness and preferred stock that may be
incurred or issued pursuant to any other clause of this paragraph) in an
aggregate principal amount not to exceed $1.0 million.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time
of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash
and/or Marketable Securities; PROVIDED that the amount of (x) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent
balance sheet or in the notes thereto), of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to
the Notes or any guarantee thereof) that are assumed by the transferee of any
such assets and (y) any notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are immediately
converted by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received), will be deemed to be cash for purposes of this
provision; PROVIDED FURTHER, that the 75% limitation referred to above shall
not apply to any sale, transfer or other disposition of assets in which the
cash portion of the consideration received therefor is equal to or greater
than the after-tax net cash proceeds that would have been received by the
Company had a transaction involving the same assets complied with the
aforementioned 75% limitation but was not structured with the same tax
benefits as the actual transaction, as certified in an Officers' Certificate.
Within 367 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or any Restricted Subsidiary may apply such Net Proceeds (a) to
permanently reduce long-term Indebtedness of a Restricted Subsidiary that is
not a Guaranteeing Subsidiary, (b) to permanently reduce Senior Debt (and, in
the case of revolving Indebtedness, to permanently reduce the commitments) of
the Company or any Guaranteeing Subsidiary, (c) to cash collateralize letters
of credit under the New Credit Facility and concurrently therewith
permanently reduce commitments under the New Credit Facility by an amount
equal to the Net Proceeds applied to such cash collateralization (PROVIDED
that any such cash collateral released to the Company and/or its Restricted
Subsidiaries upon the expiration of such letters of credit is applied in
accordance with clause (a), (b) or (d) of this sentence not later than the
last to occur of (i) 367 days after the original receipt of such Net Proceeds
and (ii) 90 days after such release), or (d) to an investment in another
business, the making of a capital expenditure or the acquisition of other
tangible assets, product distribution rights or intellectual property or
rights thereto, in each case, in a line of business permitted by Section 4.17
hereof. Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the preceding sentence of this paragraph shall be deemed to
constitute, "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company will be required to make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of purchase, in accordance with the procedures set forth in Section 3.09
hereof. To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company or any
Restricted Subsidiary may use any remaining Excess Proceeds for any purpose
not prohibited under this Indenture. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds,
the Trustee shall select the
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Notes to be purchased on a pro rata basis. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Notwithstanding the two immediately preceding paragraphs, the Company
and the Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of the
consideration received in connection with such Asset Sale constitutes
Replacement Assets or a combination of Replacement Assets and cash and (ii)
such Asset Sale is for fair market value (which, in the case of any
Replacement Assets the fair market value of which exceeds $3.0 million, will
be evidenced by the opinion of an accounting, appraisal or investment banking
firm of national standing delivered to the Trustee); PROVIDED that any Net
Proceeds in the form of cash received by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated
pursuant to this paragraph shall be subject to the provisions of the
immediately preceding paragraph.
An Asset Sale Offer shall be made pursuant to the provisions of Section
3.09 hereof. No later than the date which is five (5) Business Days after
the date on which the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall notify the Trustee of such Asset Sale Offer in
accordance with Section 3.09 hereof and commence or cause to be commenced the
Asset Sale Offer on a date no later than fifteen (15) Business Days after
such notice (the "Commencement Date").
The Asset Sale Offer shall be made by the Company in compliance with
all applicable laws, including, without limitation, Rule 14e-1 under the
Exchange Act and the rules thereunder, to the extent applicable, and all
other applicable federal and state securities laws.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter
into any contract, agreement, understanding, loan, advance or guarantee with,
or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Company or such Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and (ii) if such Affiliate
Transaction involves aggregate payments in excess of $5.0 million, the
Company delivers to the Trustee a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and such Affiliate Transaction is
approved by a majority of the disinterested members of the Board of Directors
of the Company; PROVIDED, HOWEVER, that (a) any employment agreement entered
into by the Company or any of its Restricted Subsidiaries in the ordinary
course of business of the Company or such Restricted Subsidiary, (b)
transactions between or among the Company and/or its Restricted Subsidiaries,
(c) payment of employee benefits, including bonuses, retirement plans and
stock options and director fees in the ordinary course of business, (d)
Restricted Payments permitted by the provisions of this Indenture described
above under clauses (i), (iv), (v), (vi), (vii), (viii), (ix) and (x) of the
second paragraph of Section 4.07 hereof, and (e) transactions permitted by
the provisions of Section 4.18 hereof, in each case, shall not be deemed
Affiliate Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) securing any Obligations on any
property or asset now owned or hereafter acquired, or on any income or
profits therefrom or assign or convey any right to receive income therefrom,
unless the Notes and the Subsidiary Guarantees, as applicable, are either (i)
secured by a Lien on such property, assets, income or profits that if such
other Obligations are
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subordinated in right of payment to the Notes and/or the Subsidiary
Guarantees, that is senior in priority to the Lien securing such other
Obligations or (ii) equally and ratably secured by a Lien on such property,
assets, income or profits with the Lien securing such other Obligations if
such other Obligations are PARI PASSU in right of payment to the Notes and/or
the Subsidiary Guarantees.
SECTION 4.13. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company and any Guaranteeing Subsidiary may enter into a sale and
leaseback transaction if (i) the Company or such Guaranteeing Subsidiary
could have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to (A) the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof and/or (B) clause (iii)(B) of Section 4.09 hereof (as limited by the
proviso to such clause), and (ii) the Lien to secure such Indebtedness does
not extend to or cover any assets of the Company or such Guaranteeing
Subsidiary other than the assets which are the subject of the sale leaseback
transaction, (iii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in
good faith by the Board of Directors of the Company and set forth in an
Officers' Certificate delivered to the Trustee) of the property that is the
subject of such sale and leaseback transaction and (iv) the transfer of
assets in such sale and leaseback transaction is permitted by, and the
proceeds of such transaction are applied in compliance with, Section 4.10
hereof.
SECTION 4.14. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price
in cash equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the date of
purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.14 and that all Notes
properly tendered will be accepted for payment;
(2) the purchase price and the purchase date (the "CHANGE
OF CONTROL PAYMENT DATE"), which will be no earlier
than 30 days nor later than 60 days from the date
such notice is mailed;
(3) that any Note not properly tendered will continue to
accrue interest;
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer will
cease to accrue interest, and Liquidated Damages, if
any, after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be
required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, or transfer by book-
entry, to the Paying Agent at the address specified
in the notice not later than the close of business on
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than
the close of business on the Change of Control
Payment Date, a telegram, telex, facsimile
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transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is
withdrawing his election to have such Notes
purchased;
(7) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry), which
unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof; and
(8) the circumstances and material facts regarding such
Change of Control (including, but not limited to,
information with respect to pro forma and historical
financial information after giving effect to such
Change of Control, and information regarding the
Person or Persons acquiring control).
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail
to each Holder of Notes so tendered the Change of Control Payment for such
Notes, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; PROVIDED
that each such new Note will be in a principal amount of $1,000 or an
integral multiple thereof. Prior to being required to comply with the
provisions of this Section 4.14, but in any event within 90 days following a
Change of Control, the Company shall either repay all outstanding Senior Debt
or obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Notes required by this
Section 4.14. The Company shall publicly announce in a newspaper of national
circulation or in a press release provided to a nationally recognized
financial wire service the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
The Change of Control provisions described above shall be applicable
whether or not any other provisions of this Indenture are applicable.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, as the case may be, the
Company and each of the Guaranteeing Subsidiaries shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or
any such Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; PROVIDED, that the Company
shall not be required to preserve any such right, license or franchise, or
the corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors 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 adverse in
any material respect to the Holders of the Notes.
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SECTION 4.16. ANTI-LAYERING.
The Company shall not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is both (a)
subordinate or junior in right of payment to any Senior Debt and
(b) senior in any respect in right of payment to the Notes; and
no Guaranteeing Subsidiary shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is
both (a) subordinate or junior in right of payment to its Senior
Debt and (b) senior in any respect in right of payment to its
Subsidiary Guarantee.
SECTION 4.17. LINE OF BUSINESS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any line of business other
than (i) the same or a similar line of business as the Company
and its Restricted Subsidiaries are engaged in on the date of
this Indenture and (ii) such business activities as are
complementary to or are incidental, ancillary or related to the
foregoing.
SECTION 4.18. SALES OF ACCOUNTS RECEIVABLE.
The Company may, and any of its Restricted Subsidiaries may,
sell at any time and from time to time, all of their respective
accounts receivable to an Accounts Receivable Subsidiary;
PROVIDED that (i) the cash received in each such sale is not less
than 90% of the aggregate face value of the receivables sold and
the remainder of the consideration received in each such sale is
a promissory note (a "Promissory Note") which is subordinated to
no Indebtedness or obligation other than the financial
institution or other entity providing the financing to the
Accounts Receivable Subsidiary with respect to such accounts
receivable (a "Financier"); PROVIDED FURTHER that the Initial
Sale will include all eligible accounts receivable of the Company
and/or its Restricted Subsidiaries that will be party to such
arrangements in existence on the date of the Initial Sale, (ii)
the cash proceeds received from the Initial Sale less reasonable
and customary transaction costs will be deemed to be Net Proceeds
and will be applied in accordance with the second paragraph of
Section 4.10 hereof; and (iii) the Company and its Restricted
Subsidiaries will sell their accounts receivable to the Accounts
Receivable Subsidiary no less frequently than on a weekly basis.
The Company (i) shall not permit any Accounts Receivable
Subsidiary to sell any accounts receivable purchased from the
Company or any of its Restricted Subsidiaries to any other person
except on an arms-length basis and solely for consideration in
the form of cash or Marketable Securities, (ii) shall not permit
the Accounts Receivable Subsidiary to engage in any business or
transaction other than the purchase, financing and sale of
accounts receivable of the Company and its Restricted
Subsidiaries and activities incidental thereto, (iii) shall not
permit any Accounts Receivable Subsidiary to incur Indebtedness
in an amount in excess of the book value of such Accounts
Receivable Subsidiary's total assets, as determined in accordance
with GAAP, (iv) shall, at least as frequently as monthly, cause
the Accounts Receivable Subsidiary to remit to the Company as
payment on the Promissory Notes, all available cash or Marketable
Securities not held in a collection account pledged to a
Financier, to the extent not applied to pay or maintain reserves
for reasonable operating expenses of the Accounts Receivable
Subsidiary or to satisfy reasonable minimum operating capital
requirements and (v) shall not, and shall not permit any of its
Subsidiaries to, sell accounts receivable to any Accounts
Receivable Subsidiary upon (1) the occurrence of a Default with
respect to the Company and its Restricted Subsidiaries and (2)
the occurrence of any event specified in Section 6.01(vii) or
(viii) (without giving effect to any grace periods specified
therein) with respect to such Accounts Receivable Subsidiary.
SECTION 4.19. PERMITTED TRANSACTIONS.
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Notwithstanding anything in this Indenture to the contrary,
the Company and its Restricted Subsidiaries shall be permitted to
consummate the following transactions on the date hereof or, in
the case of clause (vii), on the first Business Day following the
date hereof, in each case, as contemplated in the Offering
Memorandum: (i) the merger of IMED Merger Sub with and into IVAC
Holdings, (ii) the merger of IMED with and into IVAC Holdings,
(iii) the merger of IVAC Medical Systems with and into IVAC
Holdings, (iv) the consummation of the tender offer and consent
solicitation for the Existing Senior Notes (and any incurrence of
Indebtedness that may be deemed to occur if and to the extent
that any such Indebtedness is not purchased after such tender
offer), (v) the entering into of the New Credit Facility, (vi)
the repayment of the 13.2% Junior Subordinated Notes due 2006 of
IVAC Holdings, (vi) the repayment of Indebtedness of each of
IMED, IVAC Holdings and IVAC Medical Systems on the date of the
Indenture, (vii) the payment to the holders of options to acquire
common stock of IVAC Holdings in respect of such options in
accordance with the Merger Agreement and (viii) all related
transactions contemplated in the Offering Memorandum and the
payment of fees and expenses in connection with the foregoing.
SECTION 4.20. DOCUMENTS TO BE EXECUTED UPON CONSUMMATION OF
MERGER.
Immediately subsequent to the Merger, (a) IVAC Holdings
shall execute and deliver to the Trustee an assumption agreement
substantially in the form of EXHIBIT F hereto pursuant to which
it shall assume all the Obligations of IMED under the Notes and
this Indenture and (b) IVAC Overseas Holdings shall execute and
deliver to the Trustee a supplemental indenture substantially in
the form of EXHIBIT G hereto pursuant to which it shall become a
Guaranteeing Subsidiary.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving entity), or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more
related transactions to, another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving
any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized
or existing under the laws of the United States, any state
thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made
assumes all the obligations of the Company under the Notes and
the Indenture pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee; (iii) immediately after
such transaction, no Default or Event of Default exists; and (iv)
the Company or the Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been
made will, at the time of such transaction after giving pro forma
effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09 hereof. The foregoing will not prohibit a
consolidation or merger between the Company and a Wholly Owned
Restricted Subsidiary, the transfer of all or substantially all
of the properties or assets of the Company to a Wholly Owned
Restricted Subsidiary or the transfer of all or substantially all
of the properties or assets of a Wholly Owned Restricted
Subsidiary to the Company; PROVIDED that if the Company is not
the surviving entity of such transaction or to the Person to
which such transfer is made, the surviving entity or the Person
to which such transfer is made shall comply with clause (ii) of
this paragraph.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company in accordance with
Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so
that from and after the date of such consolidation, merger, sale,
lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the
successor corporation and not to the Company), and may exercise
every right and power of the Company under this Indenture with
the same effect as if such successor Person had been named as the
Company herein; PROVIDED, that, (i) solely for the purposes of
computing Consolidated Net Income for purposes of clause (b) of
the first paragraph of Section 4.07 hereof, the Consolidated Net
Income of any person other than the Company and its Restricted
Subsidiaries shall be included only for periods subsequent to the
effective time of such merger, consolidation, combination or
transfer of assets; and (ii) in the case of any sale, assignment,
transfer, lease, conveyance, or other disposition of less than
all of the assets of the predecessor Company, the predecessor
Company shall not be released or discharged from the obligation
to pay the principal of or interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of
interest or Liquidated Damages, if any, with
respect to the Notes (whether or not prohibited by
Article 10 or Article 12 hereof);
(ii) default in payment when due of principal or
premium, if any, on the Notes at maturity, upon
redemption or otherwise (whether or not prohibited
by Article 10 or Article 12 hereof);
(iii) failure by the Company or any Guaranteeing
Subsidiary for 30 days after receipt of notice
from the Trustee or Holders of at least 25% in
principal amount of the Notes then outstanding to
comply with the provisions described under
Sections 4.07, 4.09, 4.10, 4.13, 4.14, 4.18 or
5.01 hereof;
(iv) failure by the Company or any Guaranteeing
Subsidiary for 60 days after notice from the
Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to
comply with its other agreements in this Indenture
or the Notes;
(v) default under any mortgage, indenture or
instrument under which there may be issued or by
which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or
any of their respective Restricted Subsidiaries
(or the payment of which is guaranteed by the
Company or any of their respective Restricted
Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the date
hereof, which default (A) (i) is caused by a
failure to pay when due at final stated maturity
(giving effect to any grace period related
thereto) principal of such Indebtedness (a
"Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its
express maturity and (B)
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in each case, the principal amount of any such
Indebtedness due to be paid, together with the
principal amount of any other such Indebtedness
under which there has been a Payment Default or
the maturity of which has been accelerated as a
result of any matter contemplated in clause
(v)(A)(i) or (v)(A)(ii), aggregates $15.0 million
or more;
(vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments (to the extent
not covered by insurance and as to which the
insurer has not acknowledged coverage in writing)
aggregating in excess of $15.0 million, which
judgments are not paid, fully bonded, discharged
or stayed within 60 days after their entry;
(vii) the Company or any Restricted Subsidiary that is a
Significant Subsidiary or group of Restricted
Subsidiaries that, together, would constitute a
Significant Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case in which it is the
debtor,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) admits in writing its inability generally to pay
its debts as the same become due;
(viii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any
Restricted Subsidiary that is a Significant
Subsidiary or group of Restricted Subsidiaries that,
together, would constitute a Significant Subsidiary
of the Company in an involuntary case in which it is
the debtor,
(ii) appoints a Custodian of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary or group of Restricted Subsidiaries that,
together, would constitute a Significant Subsidiary
of the Company or for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary or group of
Restricted Subsidiaries that, together, would
constitute a Significant Subsidiary of the Company,
or
(iii) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary or group of Restricted Subsidiaries that,
together, would constitute a Significant Subsidiary
of the Company,
and the order or decree contemplated in clauses (i),
(ii) or (iii), remains unstayed and in effect for
60 consecutive days; or
(ix) the termination of the Subsidiary Guarantee(s) of either
a Guaranteeing Subsidiary that is a Significant
Subsidiary or group of Guaranteeing Subsidiaries that
together constitute a Significant Subsidiary for any
reason not permitted by the Indenture, or the denial of any
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Person acting on behalf of any such Guaranteeing
Subsidiary or group of Guaranteeing Subsidiaries of its
Obligations under any such Subsidiary Guarantee(s).
To the extent that the last day of the period referred to in
clauses (i), (iii), (iv) or (vi) of the immediately preceding
paragraph is not a Business Day, then the first Business Day
following such day shall be deemed to be the last day of the
period referred to in such clauses. Any "day" will be deemed to
end as of 11:59 p.m., New York City time.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default with
respect to the Company specified in clauses (vii) and (viii) of
Section 6.01 hereof) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then
outstanding Notes may declare the unpaid principal of, premium,
if any, accrued and unpaid interest and Liquidated Damages, if
any, on all the Notes to be due and payable by notice in writing
to the Company (and the Trustee, if given by the Holders)
specifying the respective Event of Default and that it is a
"notice of acceleration" (the "Acceleration Notice"), and the
same (i) shall become immediately due and payable or (ii) if
there are any amounts outstanding under the New Credit Facility,
shall become immediately due and payable upon the first to occur
of an acceleration under the New Credit Facility or five (5)
Business Days after receipt by the Company and the Representative
under the New Credit Facility of such Acceleration Notice but
only if such Event of Default is then continuing. If an Event of
Default with respect to the Company specified in clauses (vii) or
(viii) of Section 6.01 hereof occurs, all outstanding Notes shall
IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the
then outstanding Notes by written notice to the Trustee may
rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration)
have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of
principal, premium, if any, interest and Liquidated Damages, if
any, on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of
a Note in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection
with a tender offer or exchange for Notes) by notice to the
Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the
payment of principal of or premium, if any, or interest or
Liquidated Damages, if any, on the Notes. Upon any such waiver,
such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent
thereon.
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Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of
conducting any proceeding for exercising 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 other Holders of Notes
or that may involve the Trustee in personal liability. The
Trustee may take any other action which it deems proper which is
not inconsistent with any such direction.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Subsidiary Guarantees or the Notes only if:
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default or the
Trustee receives such notice from the Company;
(b) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to
the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss,
liability or expense;
(d) 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
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do
not give the Trustee a direction inconsistent with
the request.
A Holder of a Note may not use this Indenture to prejudice
the rights of another Holder of a Note or to obtain a preference
or priority over another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal,
premium, if any, interest, and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), 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 such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii)
hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of,
premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest 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.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to 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 Holders of the
Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive
and distribute any money or other securities or property payable
or deliverable upon the conversion or exchange of the Notes or on
any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder 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 Holders, to pay to the
Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and
all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorgan-
ization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting
the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article
6, it shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
SECOND: to holders of Senior Debt and Guarantor Senior
Debt to the extent required by Article 10 or 12 hereof;
THIRD: to Holders of Notes for amounts due and unpaid on
the Notes for principal, premium, if any, interest, and
Liquidated Damages, if any, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest, and
Liquidated Damages, if any, respectively;
FOURTH: without duplication, to the Holders for any other
Obligations owing to the Holders under this Indenture and the
Notes; and
FIFTH: to the Company, the Guaranteeing Subsidiaries or to
such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
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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 a 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
does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing
of which it has knowledge, 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 its 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 an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this
Indenture or the TIA and the Trustee need
perform only those duties that are specifically
set forth in this Indenture or the TIA and no
others, and no implied covenants or obligations
shall be read into this Indenture against the
Trustee; and
(ii) 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 furnished to the Trustee and 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.
(c) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent
facts; and
(iii) 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 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and
(c) of this Section 7.01.
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(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation
to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such
Holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree
in writing 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.
(a) The Trustee may conclusively rely on the truth of the
statements and correctness of the opinions contained
in, and shall be protected from acting or refraining
from acting upon, 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 or an Opinion of
Counsel or both. The Trustee shall not be liable for
any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of
Counsel. Prior to taking, suffering or admitting any
action, the Trustee may consult with counsel of the
Trustee's own choosing and the written advice of such
counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability
in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes
to be authorized or within the rights or powers
conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice
from the Company or any Guaranteeing Subsidiary shall
be sufficient if signed by an Officer of the Company
or Guaranteeing Subsidiary, as applicable.
(f) 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
Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity satisfactory
to the Trustee against the costs, expenses and
liabilities that might be incurred by it in
compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may
become the owner of Notes and may otherwise deal with the
Company, the Guaranteeing Subsidiaries or any Affiliate of the
Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as
Trustee or resign. Any Agent may do the same with like rights
and duties. The Trustee is also subject to Sections 7.10 and
7.11 hereof.
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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,
the Subsidiary Guarantees or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes
or any money paid to the Company or upon the Company's direction
under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement
in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing
and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to Holders of Notes a notice of the Default or
Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment on any Note
pursuant to Section 6.01(i) or (ii) hereof, the Trustee may
withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of
such reporting date that complies with TIA -section- 313(a) (but if no event
described in TIA -section- 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA -section- 313(b). The Trustee shall also transmit
by mail all reports as required by TIA -section- 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with
the Commission and each stock exchange on which the Company has
informed the Trustee in writing the Notes are listed in
accordance with TIA -section- 313(d). The Company shall promptly notify
the Trustee when the Notes are listed on any stock exchange and
of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guaranteeing Subsidiaries shall pay to
the Trustee from time to time reasonable compensation for its
acceptance of this Indenture and services hereunder. To the
extent permitted by law, 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 promptly upon
request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents
and counsel.
The Company and the Guaranteeing Subsidiaries shall
indemnify the Trustee against any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture
against the Company and the Guaranteeing Subsidiaries (including
this Section 7.07) and defending itself against any claim
(whether asserted by the Company, the Guaranteeing Subsidiaries
or any Holder or any other person) or liability in connection
with the exercise or performance of any of its powers or duties
hereunder except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The
Trustee shall notify the Company and the Guaranteeing
Subsidiaries promptly of any claim for which it may
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seek indemnity. Failure by the Trustee to so notify the Company and
the Guaranteeing Subsidiaries shall not relieve the Company and
the Guaranteeing Subsidiaries of its obligations hereunder. The
Company and the Guaranteeing Subsidiaries shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company and the Guaranteeing
Subsidiaries shall pay the reasonable fees and expenses of such
counsel. The Company and the Guaranteeing Subsidiaries need not
pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The obligations of the Company and the Guaranteeing
Subsidiaries under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's and the Guaranteeing Subsidiaries'
payment obligations in this Section 7.07, the Trustee shall have
a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay
principal, interest and Liquidated Damages, if any, on particular
Notes. Such Lien shall survive the satisfaction and discharge of
this Indenture and the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(vii) or (viii)
hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA
- -section- 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of
a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the
Company. The Holders of Notes of a majority in principal amount
of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) 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 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 then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by
the Company.
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 Notes of at least 10% in
principal amount of
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the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a
Note who has been a Holder of a Note for at least six months,
fails to comply with Section 7.10, such Holder of a Note may
petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all
the rights, powers and the duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the
successor Trustee, PROVIDED that all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or
converts into, or transfers all or substantially all of its
corporate trust business to, another corporation, the successor
corporation without any further act shall be the successor
Trustee or any Agent.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the
United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power,
that is subject to supervision or examination by federal or state
authorities. The Trustee and its direct parent shall at all
times have a combined capital surplus of at least $50.0 million
as set forth in its most recent annual report of condition.
This Indenture shall always have a Trustee who satisfies
the requirements of TIA -section- 310(a)(1), (2) and (5). The Trustee is
subject to TIA -section- 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY.
The Trustee is subject to TIA -section- 311(a), excluding any
creditor relationship listed in TIA -section- 311(b). A Trustee who has
resigned or been removed shall be subject to TIA -section- 311(a) to the
extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate,
at any time, elect to have either Section 8.02 or 8.03 hereof be
applied to all outstanding Notes and Subsidiary Guarantees upon
compliance with the conditions set forth below in this Article 8.
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SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.02, the Company and each
Guaranteeing Subsidiary shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have
been discharged from its obligations with respect to all
outstanding Notes and Subsidiary Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the
Company and each Guaranteeing Subsidiary shall be deemed to have
paid and discharged the entire Indebtedness represented by the
outstanding Notes and Subsidiary Guarantees, which shall
thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Notes and Subsidiary Guarantees and
this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging
the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, premium, if any,
interest and Liquidated Damages, if any, on such Notes when such
payments are due or on the redemption date, as the case may be,
from the trust referred to in Section 8.04(a), (b) the Company's
obligations with respect to such Notes under Sections 2.02, 2.03,
2.04, 2.05, 2.06, 2.07, 2.10 and 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee including
without limitation thereunder Section 7.07, 8.05 and 8.07
hereunder and the Company's obligations in connection therewith
and (d) the provisions of this Article 8. Subject to compliance
with this Article 8, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, the Company and each
Guaranteeing Subsidiary shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 3.09, 4.05,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17,
4.18, 5.01 and 11.01 hereof with respect to the outstanding Notes
and Subsidiary Guarantees on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes and Subsidiary Guarantees shall
thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all
other purposes hereunder (it being understood that such Notes and
Subsidiary Guarantees shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Notes and Subsidiary
Guarantees, the Company, its Subsidiaries or any Guaranteeing
Subsidiary may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees shall be
unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(i)
through 6.01(vi) and Section 6.01(ix) hereof shall not constitute
Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes and
Subsidiary Guarantees:
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In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of
the Notes, (i) cash in United States dollars, (ii)
non-callable Government Securities which through the
scheduled payment of principal, premium, if any,
interest and Liquidated Damages, if any, in respect
thereof in accordance with their terms will provide,
not later than one day before the due date of
payment, cash in United States dollars in an amount,
or (iii) a combination thereof, in such amounts as
shall be sufficient, in the opinion of a nationally
recognized firm of independent public accountants
expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the
principal of, premium, if any, interest and
Liquidated Damages, if any, on the outstanding Notes
on the stated maturity or on the applicable
redemption date, as the case may be, and the Company
must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof,
the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the
Company has received from, or there has been
published by, the Internal Revenue Service a ruling
or (B) since the date hereof, there has been a change
in the applicable federal income tax law, in either
case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of
the outstanding Notes shall not recognize income,
gain or loss for federal income tax purposes as a
result of such Legal Defeasance and shall be subject
to federal income tax on the same amounts, in the
same manner and at the same time as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders
of the outstanding Notes shall not recognize income,
gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and shall be
subject to federal income tax on the same amounts, in
the same manner and at the same times as would have
been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit or
insofar as Sections 6.01(vii) and (viii) hereof are
concerned, at any time in the period ending on the
91st day after the date of deposit (it being
understood that this condition shall not be deemed
satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute
a default under any material agreement or instrument
(other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that after the 91st
day following the deposit, the trust funds shall not
be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was
not made by the Company with the intent of preferring
the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering,
delaying or defrauding any other creditors of the
Company or others;
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(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for
relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(i) the Trustee shall have received such other documents
and assurances as the Trustee shall have reasonably
required.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 hereof in respect of the outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, interest and
Liquidated Damages, if any, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash
or non-callable Government Securities deposited pursuant to
Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding
Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time
upon the written request of the Company and be relieved of all
liability with respect to any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which,
in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered
under Section 8.04(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the
principal of, premium, if any, interest or Liquidated Damages, if
any, on any Note and remaining unclaimed for one year after such
principal, and premium, if any, or interest or Liquidated
Damages, if any, has become due and payable shall be paid to the
Company on its written request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New
York Times and The Wall Street Journal (national edition), notice
that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance
of such money then remaining shall be repaid to the Company.
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EX 10.2E
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company and the
Guaranteeing Subsidiaries under this Indenture, the Notes and the Subsidiary
Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if the
Company makes any payment of principal of, premium, if any, interest or
Liquidated Damages, if any, on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF THE NOTES.
Notwithstanding Section 9.02 of this Indenture, without the consent of
any Holder of Notes the Company, the Guaranteeing Subsidiaries and the
Trustee may amend or supplement this Indenture, the Subsidiary Guarantees or
the Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or a Guaranteeing
Subsidiary's obligations to the Holders of the Notes in the case of
a merger, transfer of assets or consolidation pursuant to Article 5
or Article 11 hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the
Note;
(e) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA;
(f) to allow any Guaranteeing Subsidiary to guarantee the Notes; or
(g) to effect the assumption by IVAC Holdings required by Section 4.20
hereof and in connection with the supplemental indenture required
to be delivered by IVAC Overseas Holdings pursuant to Section 4.20
hereof.
Upon the written request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company and
the Guaranteeing Subsidiaries in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended
or supplemental Indenture that affects its own rights, duties or immunities
under this Indenture or otherwise.
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SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture, the
Notes or the Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for Notes), and, subject to Sections 6.02,
6.04 and 6.07 hereof, any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, or premium,
if any, or interest or Liquidated Damages, if any, on the Notes (except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Notes or the Subsidiary
Guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained
in connection with or a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Company and the
Guaranteeing Subsidiaries in the execution of such amended or supplemental
Indenture unless such amended or supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may, but shall not be obligated to, enter into such amended
or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof. After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Note
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 amended or supplemental Indenture or waiver.
Subject to Sections 6.02, 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Company or the Guaranteeing
Subsidiaries with any provision of this Indenture, the Notes or the
Subsidiary Guarantees. However, without the consent of each Holder affected,
an amendment, or waiver may not (with respect to any Note or Subsidiary
Guarantee held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to the redemption
of the Notes or any Change of Control Offer;
(c) reduce the rate of or change the time for payment of interest or
Liquidated Damages, if any, on any Notes;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest or Liquidated Damages,
if any, on the Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default that
resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
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(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption or repurchase payment with respect to any Note;
(h) make any change in the foregoing amendment and waiver provisions
of this Article 9; or
(i) except as provided in Sections 8.02, 8.03 and 11.04
hereof, release any of the Guaranteeing Subsidiaries from their
obligations under the Subsidiary Guarantees or make any change in
the Subsidiary Guarantees that would adversely affect the Holders.
Notwithstanding the foregoing, Sections 3.09 and 4.10 may be amended or
supplemented only with the consent of the Holders of at least two-thirds in
principal amount of the Notes then outstanding (including consents obtained
in connection with a tender offer or exchange offer for the Notes). In
addition, any amendment to the provisions of Article 10 or Article 12 of this
Indenture shall require the consent of the Holders of at least 75% in
aggregate amount of Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Notes) if such
amendment would adversely affect the rights of the Holders of Notes.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Subsidiary
Guarantees or the Notes shall be set forth in a amended or supplemental
Indenture that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder's Note, even if notation of the consent is not made
on any Note. However, any such Holder or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for
determining which Holders of the Notes must consent to such amendment,
supplement or waiver. If the Company fixes a record date, the record date
shall be fixed at (i) the later of 30 days prior to the first solicitation of
such consent or the date of the most recent list of Holders of Notes
furnished for the Trustee prior to such solicitation pursuant to Section 2.05
hereof or (ii) such other date as the Company shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
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SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture
until the Board of Directors approves it. In signing or refusing to sign any
amended or supplemental indenture the Trustee shall be entitled to receive
and (subject to Section 7.01) shall be fully protected in relying upon, in
addition to the documents required by Section 13.04 hereof, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such
amended or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid
and binding upon the Company and the Guaranteeing Subsidiaries in accordance
with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
all Obligations on the Notes shall be subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior
payment in full in cash or Marketable Securities of all Senior Debt, whether
outstanding on the date hereof or thereafter incurred.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property,
an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities:
(a) the holders of Senior Debt will be entitled to receive payment in
full in cash or Marketable Securities of all Obligations due in respect of
such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt, whether or
not such interest is in an allowed claim under applicable law) before the
Holders of Notes will be entitled to receive any payment with respect to the
Notes (except that Holders of Notes may receive (i) Permitted Junior
Securities and any other Permitted Junior Securities issued in exchange for
any Permitted Junior Securities and (ii) payments and other distributions
made from the defeasance trust created pursuant to Article 8 hereof); and
(b) until all Obligations with respect to Senior Debt are paid in
full in cash or Marketable Securities, any distribution to which the Holders
of Notes would be entitled shall be made to the holders of Senior Debt
(except that Holders of Notes may receive (i) Permitted Junior Securities and
any other Permitted Junior Securities issued in exchange for any Permitted
Junior Securities and (ii) payments and other distributions made from the
defeasance trust created pursuant to Article 8 hereof).
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company also may not make any payment upon or in respect of the Notes
(except that Holders of Notes may receive (i) Permitted Junior Securities and
any other Permitted Junior Securities issued in exchange for any Permitted
Junior Securities and (ii) payments and other distributions made from the
defeasance trust created pursuant to Article 8 hereof) if:
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(i) a default in the payment of the principal of, premium, if any, or
interest on Designated Senior Debt occurs and is continuing; or
(ii) any other default occurs and is continuing with respect to Designated
Senior Debt that permits holders of the Designated Senior Debt as
to which such default relates to accelerate its maturity and the
Trustee receives a notice of such default (a "Payment Blockage
Notice") from a Representative with respect to such Designated
Senior Debt. If the Trustee receives any such Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section 10.03 unless and until (i) 360 days
have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (ii) all scheduled payments of
principal, premium, if any, interest and Liquidated Damages, if
any, on the Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Company may and shall resume payments on the Notes:
(a) in the case of a payment default described in clause (i) above,
upon the date on which such default is cured or waived, and
(b) in case of a nonpayment default described in clause (ii) above,
the earlier of the date on which such nonpayment default is cured
or waived or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of any
Designated Senior Debt has been accelerated.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall provide the names of the Representatives of the Senior Debt
to the Trustee and the Trustee shall promptly notify such Representatives of
Senior Debt of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee receives any payment of any Obligations
with respect to the Notes at a time when the Trustee has actual knowledge
that such payment is prohibited by Section 10.02 or 10.03 hereof, such
payment shall be held by the Trustee, in trust for the benefit of, and shall
be paid forthwith over and delivered, upon written request to, the holders of
Senior Debt as their interest may appear or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Debt may have
been issued, as their interest may appear, for application to the payment of
all Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
In the event that any Holder receives any payment of any Obligations
with respect to the Notes at a time when such payment is prohibited by
Section 10.02 or 10.03 hereof, such payment shall be held by such Holder, in
trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request to, the holders of Senior Debt as their interest may
appear or their Representative under the indenture or other agreement (if
any) pursuant to which Senior Debt may have been issued, as their interest
may appear, for application to the payment of all Obligations with respect to
Senior Debt remaining unpaid to the extent necessary to pay such Obligations
in full in accordance with their terms, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt 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 Debt, and shall not be liable to any such
holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 10, except
if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give
such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full in cash or Marketable Securities
and until the Notes are paid in full, Holders shall be subrogated (equally
and ratably with all other Indebtedness PARI PASSU with the Notes) to the
rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders
have been applied to the payment of Senior Debt. A distribution made under
this Article 10 to holders of Senior Debt that otherwise would have been made
to Holders is not, as between the Company and Holders, a payment by the
Company on the Senior Debt.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of the Holders and holders
of Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Company and the Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal
of, premium, if any, interest and Liquidated Damages, if any, on
the Notes in accordance with their terms;
(ii) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(iii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or an Event of Default, subject to the
rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal of,
premium, if any, interest or Liquidated Damages, if any, on a Note on the due
date, the failure is nevertheless a Default or an Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be prejudiced or impaired by
any act or failure to act by the Company or any Holder or by the failure of
the Company or any Holder to comply with this Indenture.
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SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon
any certificate of such Representative or of the liquidating trustee or agent
or other Person making any distribution to the Trustee or to the Holders for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt 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
10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment
or distribution by the Trustee, and the Trustee and the Paying Agent may
continue to make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least two Business Days prior to
the date of such payment written notice that the payment of any Obligations
with respect to the Notes would violate this Article 10, PROVIDED that this
Section 10.11 shall not limit or modify the rights of holders of Senior Debt
to recover any such payments from the Holders of the Notes pursuant to
Sections 10.02, 10.03 and/or 10.05. Only the Company or a Representative may
give the notice. Nothing in this Article 10 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof
of claim or proof of debt in the form required in any proceeding referred to
in Section 6.09 hereof at least 30 days before the expiration of the time to
file such claim, a Representative of Designated Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Notes.
SECTION 10.13. AMENDMENTS.
Any amendment to the provisions of this Article 10 shall require the
consent of the Holders of at least 75% in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the
Holders of Notes.
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ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. SUBSIDIARY GUARANTEE.
Subject to Section 11.06 hereof, each of the Guaranteeing Subsidiaries
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes and the Obligations of the Company hereunder and
thereunder, that: (a) the principal of, premium, if any, interest and
Liquidated Damages, if any, on the Notes will be promptly paid in full when
due, subject to any applicable grace period, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest,
if any, and Liquidated Damages, if any, on the Notes, and all other payment
Obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full and performed, all in accordance
with the terms hereof and thereof; and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other Obligations, the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance so
guaranteed for whatever reason the Guaranteeing Subsidiaries will be jointly
and severally obligated to pay the same immediately. An Event of Default
under this Indenture or the Notes shall constitute an event of default under
the Subsidiary Guarantees, and shall entitle the Holders to accelerate the
Obligations of the Guaranteeing Subsidiaries hereunder in the same manner and
to the same extent as the Obligations of the Company. The Guaranteeing
Subsidiaries hereby agree that their Obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder 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 Guaranteeing Subsidiary. Each
Guaranteeing Subsidiary 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
this Subsidiary Guarantee will not be discharged except by complete
performance of the Obligations contained in the Notes and this Indenture. If
any Holder or the Trustee is required by any court or otherwise to return to
the Company, the Guaranteeing Subsidiaries, or any Note Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company
or the Guaranteeing Subsidiaries, any amount paid by either to the Trustee or
such Holder, this Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guaranteeing Subsidiary
agrees that it shall not be entitled to, and hereby waives, any right of
subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby. Each Guaranteeing Subsidiary further agrees that, as
between the Guaranteeing Subsidiaries, 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 6 for the
purposes of this Subsidiary 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 declaration of
acceleration of such Obligations as provided in Article 6 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guaranteeing Subsidiaries for the purpose of this Subsidiary
Guarantee. The Guaranteeing Subsidiaries shall have the right to seek
contribution from any non-paying Guaranteeing Subsidiary so long as the
exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantees.
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SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guaranteeing Subsidiary hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of EXHIBIT E shall be endorsed by an
Officer of such Guaranteeing Subsidiary on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guaranteeing Subsidiary, by manual or facsimile signature, by an
Officer of such Guaranteeing Subsidiary.
Each Guaranteeing Subsidiary hereby agrees that its Subsidiary
Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates
the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary
Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
set forth in this Indenture on behalf of the Guaranteeing Subsidiaries.
SECTION 11.03. GUARANTEEING SUBSIDIARIES MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained
in this Indenture shall prohibit a merger between a Guaranteeing Subsidiary
and another Guaranteeing Subsidiary or a merger between a Guaranteeing
Subsidiary and the Company.
(b) Except as provided in Section 11.03(a) hereof or in a transaction
referred to in Section 11.04 hereof, no Guaranteeing Subsidiary may
consolidate with or merge with or into (whether or not such Guaranteeing
Subsidiary is the surviving Person), another corporation, Person or entity
whether or not affiliated with such Guaranteeing Subsidiary, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its assets to another corporation, Person or entity unless: (i) subject to
the provisions of Section 11.04, the Person formed by or surviving any such
consolidation or merger (if other than such Guaranteeing Subsidiary) assumes
all the obligations of such Guaranteeing Subsidiary pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee in the Form of EXHIBIT H hereto, under the Notes and the Indenture;
(ii) immediately after giving effect to such transaction, no Default or Event
of Default exists; and (iii) the Company would be permitted by virtue of the
Company's pro forma Fixed Charge Coverage Ratio, immediately after giving
effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio set forth in Section
4.09 hereof.
(c) In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and substantially in the form of
EXHIBIT H hereto, of the Subsidiary Guarantee endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guaranteeing Subsidiary, such successor
Person shall succeed to and be substituted for the Guaranteeing Subsidiary
with the same effect as if it had been named herein as a Guaranteeing
Subsidiary; PROVIDED that, solely for purposes of computing Consolidated Net
Income for purposes of clause (b) of the first paragraph of Section 4.07
hereof, the Consolidated Net Income of any Person other than the Company and
its Restricted Subsidiaries shall only be included for periods subsequent to
the effective time of such merger, consolidation, combination or transfer of
assets. Such successor Person thereupon may
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cause to be signed any or all of the Subsidiary Guarantees to be endorsed
upon all of the Notes issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee. All of the
Subsidiary Guarantees so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.
SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets (including, if applicable, all of
the Capital Stock of any Guaranteeing Subsidiary), any Liens in favor of the
Trustee in the assets sold thereby shall be released; PROVIDED that, in the
event of an Asset Sale, the Net Proceeds from such sale or other disposition
are treated in accordance with the provisions of Section 4.10 hereof. If the
assets sold in such sale or other disposition include all or substantially
all of the assets of any Guaranteeing Subsidiary or all of the Capital Stock
of any Guaranteeing Subsidiary, then such Guaranteeing Subsidiary (in the
event of a sale or other disposition of all of the Capital Stock of such
Guaranteeing Subsidiary) or the Person acquiring the property (in the event
of a sale or other disposition of all or substantially all of the assets of a
Guaranteeing Subsidiary) shall be released from and relieved of its
Obligations under its Subsidiary Guarantee or Section 11.03 hereof, as the
case may be; PROVIDED that (i) in the event of an Asset Sale, the Net
Proceeds from such sale or other disposition are treated in accordance with
the provisions of Section 4.10 hereof and (ii) the Company is in compliance
with all other provisions of this Indenture applicable to such disposition.
Upon delivery by the Company to the Trustee of an Officers' Certificate to
the effect of the foregoing, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guaranteeing
Subsidiary from its Obligation under its Subsidiary Guarantee. Any
Guaranteeing Subsidiary not released from its Obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of,
premium, if any, interest and Liquidated Damages, if any, on the Notes and
for the other Obligations of such Guaranteeing Subsidiary under the Indenture
as provided in this Article 11.
SECTION 11.05. ADDITIONAL GUARANTEEING SUBSIDIARIES.
Any Person that was not a Guaranteeing Subsidiary on the date of this
Indenture may become a Guaranteeing Subsidiary by executing and delivering to
the Trustee (a) a supplemental indenture in substantially the form of
EXHIBIT H, and (b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such
Person (subject to such customary exceptions concerning creditors rights',
fraudulent transfers, public policy and equitable principles as may be
acceptable to the Trustee in its discretion).
SECTION 11.06. LIMITATION ON GUARANTEEING SUBSIDIARY LIABILITY.
For purposes hereof, each Guaranteeing Subsidiary's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Notes and this Indenture and (ii) the amount, if any, which
would not have (A) rendered such Guaranteeing Subsidiary "insolvent" (as such
term is defined in the United States Bankruptcy Code and in the Debtor and
Creditor Law of the State of New York) or (B) left such Guaranteeing
Subsidiary with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; PROVIDED that, it will be a
presumption in any lawsuit or other proceeding in which a Guaranteeing
Subsidiary is a party that the amount guaranteed pursuant to the Subsidiary
Guarantee is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Guaranteeing Subsidiary, or debtor in
possession or trustee in bankruptcy of the
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Guaranteeing Subsidiary, otherwise proves in such a lawsuit that the
aggregate liability of the Guaranteeing Subsidiary is the amount set forth in
clause (ii) above. In making any determination as to solvency or sufficiency
of capital of a Guaranteeing Subsidiary in accordance with the previous
sentence, the right of such Guaranteeing Subsidiary to contribution from
other Guaranteeing Subsidiaries, and any other rights such Guaranteeing
Subsidiary may have, contractual or otherwise, shall be taken into account.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 11 shall in each case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully and for all intents and purposes as
if such Paying Agent were named in this Article 11 in place of the Trustee.
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTEE
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Guaranteeing Subsidiaries agree, and each Holder by accepting a
Note agrees, that all Guarantee Obligations, shall be subordinated in right
of payment, to the extent and in the manner provided in this Article 12, to
the prior payment in full in cash or Marketable Securities of all Guarantor
Senior Debt, whether outstanding on the date hereof or thereafter incurred.
SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of any Guaranteeing Subsidiary in a
liquidation or dissolution of such Guaranteeing Subsidiary or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Guaranteeing Subsidiary or its property, an assignment for
the benefit of creditors or any marshalling of such Guaranteeing Subsidiary's
assets and liabilities:
(a) the holders of Guarantor Senior Debt of such Guaranteeing
Subsidiary will be entitled to receive payment in full in cash or Marketable
Securities of all Obligations due in respect of such Guarantor Senior Debt
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Guarantor Senior Debt, whether or not such
interest is in an allowed claim under applicable law) before the Holders of
Notes will be entitled to receive any payment under the Subsidiary Guarantee
of such Guaranteeing Subsidiary; and
(b) until all Obligations with respect to Guarantor Senior Debt of
any Guaranteeing Subsidiary are paid in full in cash or Marketable
Securities, any distribution under the Subsidiary Guarantee of such
Guaranteeing Subsidiary to which the Holders of Notes would be entitled shall
be made by such Guaranteeing Subsidiary to the holders of Guarantor Senior
Debt of such Guaranteeing Subsidiary (except that Holders of Notes may
receive (i) Permitted Junior Securities and any other Permitted Junior
Securities issued in exchange for any Permitted Junior Securities and (ii)
payments and other distributions made from the defeasance trust created
pursuant to Article 8 hereof).
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SECTION 12.03. DEFAULT ON DESIGNATED GUARANTOR SENIOR DEBT.
No Guaranteeing Subsidiary may make any payment upon or in respect of such
Guaranteeing Subsidiary's Subsidiary Guarantee (except that Holders of Notes
may receive (i) Permitted Junior Securities and any other Permitted Junior
Securities issued in exchange for any Permitted Junior Securities and (ii)
payments and other distributions made from the defeasance trust created
pursuant to Article 8 hereof) if:
(i) a default in the payment of the principal of, premium,
if any, or interest on Designated Guarantor Senior Debt of such
Guaranteeing Subsidiary occurs and is continuing; or
(ii) any other default occurs and is continuing with respect to Designated
Guarantor Senior Debt of such Guaranteeing Subsidiary that permits
holders of such Designated Guarantor Senior Debt as to which such
default relates to accelerate its maturity and the Trustee receives
a notice of such default (a "Payment Blockage Notice") from a
Representative with respect to such Designated Guarantor Senior
Debt. If the Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes
of this Section 12.03 unless and until (i) 360 days have elapsed
since the effectiveness of the immediately prior Payment Blockage
Notice and (ii) all scheduled payments of principal, premium, if
any, interest and Liquidated Damages, if any, on the Notes and the
Subsidiary Guarantee that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
Such Guaranteeing Subsidiary may and shall resume payments on its
Subsidiary Guarantee:
(a) in the case of a payment default described in clause (i) above,
upon the date on which such default is cured or waived, and
(b) in case of a nonpayment default described in clause (ii) above,
the earlier of the date on which such nonpayment default is cured
or waived or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of any
Designated Guarantor Senior Debt of such Guaranteeing Subsidiary
has been accelerated.
SECTION 12.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Guaranteeing Subsidiary shall provide the names of the Representatives of
the Guarantor Senior Debt to the Trustee and the Trustee shall promptly
notify such Representatives of Guarantor Senior Debt of the acceleration.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee receives any payment of any Guarantee
Obligations with respect to a Guaranteeing Subsidiary at a time when the
Trustee has actual knowledge that such payment is prohibited by Section 12.02
or 12.03 hereof, such payment shall be held by the Trustee, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written
request to, the holders of Guarantor Senior Debt of such Guaranteeing
Subsidiary as their interest may appear or their Representative under the
indenture or other agreement (if any) pursuant to which such Guarantor Senior
Debt may have been issued, as their interest may appear, for application to
the payment of all Obligations with respect to such
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Guarantor Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of such
Guarantor Senior Debt.
In the event that any Holder receives any payment of any Guarantee
Obligations of a Guaranteeing Subsidiary at a time when such payment is
prohibited by Section 12.02 or 12.03 hereof, such payment shall be held by
such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request to, the holders of Guarantor Senior Debt
of such Guaranteeing Subsidiary as their interest may appear or their
Representative under the indenture or other agreement (if any) pursuant to
which such Guarantor Senior Debt may have been issued, as their interest may
appear, for application to the payment of all Obligations with respect to
such Guarantor Senior Debt remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect
to any concurrent payment or distribution to or for the holders of such
Guarantor Senior Debt.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Guarantor Senior Debt 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 Debt, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Guaranteeing Subsidiaries or any
other Person money or assets to which any holders of Guarantor Senior Debt
shall be entitled by virtue of this Article 12, except if such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.
SECTION 12.06. NOTICE BY GUARANTEEING SUBSIDIARY.
Each Guaranteeing Subsidiary shall promptly notify the Trustee and the
Paying Agent of any facts known to such Guaranteeing Subsidiary that would
cause a payment of any Guarantee Obligations to violate this Article 12, but
failure to give such notice shall not affect the subordination of the
Subsidiary Guarantees to the Guarantor Senior Debt as provided in this
Article 12.
SECTION 12.07. SUBROGATION.
After all Guarantor Senior Debt is paid in full in cash or Marketable
Securities and until the Subsidiary Guarantees are paid in full, Holders
shall be subrogated (equally and ratably with all other Indebtedness pari
passu with the Subsidiary Guarantees) to the rights of holders of Guarantor
Senior Debt to receive distributions applicable to Guarantor Senior Debt to
the extent that distributions otherwise payable to the Holders have been
applied to the payment of Guarantor Senior Debt. A distribution made under
this Article 12 to holders of Guarantor Senior Debt that otherwise would have
been made to Holders is not, as between the Guaranteeing Subsidiaries and
Holders, a payment by the Guaranteeing Subsidiaries on the Guarantor Senior
Debt.
SECTION 12.08. RELATIVE RIGHTS.
This Article 12 defines the relative rights of the Holders and holders
of Guarantor Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Guaranteeing Subsidiaries and the Holders,
the obligation of the Guaranteeing Subsidiaries, which is absolute
and unconditional, to pay principal of, premium, if any, interest
and Liquidated Damages, if any, on the Notes in accordance with the
terms of the Subsidiary Guarantees;
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(ii) affect the relative rights of Holders and creditors of the
Guaranteeing Subsidiaries other than their rights in relation to
holders of Guarantor Senior Debt; or
(iii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or an Event of Default, subject to the
rights of holders and owners of Guarantor Senior Debt to receive
distributions and payments otherwise payable to Holders.
If any Guaranteeing Subsidiary fails because of this Article 12 to pay
its Guarantee Obligations in accordance with its Subsidiary Guarantee on the
due date, the failure is nevertheless a Default or an Event of Default.
SECTION 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY GUARANTEEING SUBSIDIARY.
No right of any holder of Guarantor Senior Debt to enforce the
subordination of the Guarantee Obligations shall be prejudiced or impaired by
any act or failure to act by the Guaranteeing Subsidiaries or any Holder or
by the failure of the Guaranteeing Subsidiaries or any Holder to comply with
this Indenture.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTITIVE.
Whenever a distribution is to be made or a notice given to holders of
Guarantor Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of a Guaranteeing Subsidiary
referred to in this Article 12, the Trustee and the Holders shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction
or upon any certificate of such Representative or of the liquidating trustee
or agent or other Person making any distribution to the Trustee or to the
Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Guarantor Senior Debt and other
Indebtedness of such Guaranteeing Subsidiary, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 12.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment
or distribution by the Trustee, and the Trustee and the Paying Agent may
continue to make payments on the Subsidiary Guarantees, unless the Trustee
shall have received at its Corporate Trust Office at least five Business Days
prior to the date of such payment written notice that the payment of any
Obligations with respect to the Subsidiary Guarantees would violate this
Article 12. Only the Guaranteeing Subsidiaries or a Representative may give
the notice. Nothing in this Article 12 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Debt with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 12, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and
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all such purposes. If the Trustee does not file a proper proof of claim or
proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, a Representative of Designated Guarantor Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Notes.
SECTION 12.13. AMENDMENTS.
Any amendment to the provisions of this Article 12 shall require the
consent of the Holders of at least 75% in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the
Holders of Notes.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Company, any Guaranteeing Subsidiary
or the Trustee to the others is duly given if in writing and delivered in
Person or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day
delivery, to the others' address:
If to the Company or any Guaranteeing Subsidiary:
IMED Corporation
10221 Wateridge Circle
San Diego, CA 92121
Telecopy: (619) 458-6217
Attention: Chief Financial Officer
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With a copy to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036-1510
Attention: Keith L. Schaitkin, Esq.
If to the Trustee:
United States Trust Company of New York
114 West 47th Street, 15th Floor
New York, New York 10036
Telecopier No.: (212) 852-1625
Attention: Corporate Trust Administration
The Company, any Guaranteeing Subsidiary or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail to its address shown on the register kept by the Registrar. Any notice
or communication shall also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA. Failure to mail a notice
or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guaranteeing
Subsidiary to the Trustee to take any action under this Indenture, the
Company or such Guaranteeing Subsidiary shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of
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<PAGE>
the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
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 (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she 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 satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
SECTION 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Guaranteeing Subsidiary, as such, shall have any liability for
any obligations of the Company under the Notes, any Subsidiary Guarantee,
this Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes and any Subsidiary Guarantee.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a wavier is
against public policy.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SUBSIDIARY GUARANTEES AND THE NOTES.
SECTION 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
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<PAGE>
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidi-aries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 13.10. SUCCESSORS.
All agreements of the Company and the Guaranteeing Subsidiaries in this
Indenture and the Notes shall bind their respective successors and assigns.
All agreements of the Trustee in this Indenture shall bind its successors and
assigns.
SECTION 13.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes 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 13.12. 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 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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<PAGE>
SIGNATURES
Dated as of November 26, 1996 IMED CORPORATION
By:
-------------------------------
Name:
Title:
Dated as of November 26, 1996 IMED INTERNATIONAL TRADING CORP.
By:
-------------------------------
Name:
Title:
Dated as of November 26, 1996 UNITED STATES TRUST COMPANY
OF NEW YORK
By:
-------------------------------
Name:
Title:
S-1
<PAGE>
EXHIBIT A
(Face of Note)
9 3/4% Series [A/B] Senior Subordinated Notes due 2006
No. $_______________
CUSIP NO. __________
IMED CORPORATION
promises to pay to _____________________________________
or registered assigns,
the principal sum of ___________ Dollars
$________, as increased or decreased as set forth on the schedule hereto,
on _______, 2006.
Interest Payment Dates: June 1 and December 1, of each year, commencing
June 1, 1997.
Record Dates: May 15 and November 15
Dated: __________, 1996
IMED CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the
Notes referred to in the
within-mentioned Indenture:
United States Trust Company of New York,
as Trustee
By:
-------------------------------
<PAGE>
(Back of Note)
9 3/4% Series [A/B] Senior Subordinated Notes due 2006
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.](1)
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE SECURITIES
ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) or (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL
ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR
(e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL), (2) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.]
- -----------------------------
(1) This paragraph should be included if the Note is issued in global form.
<PAGE>
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. IMED Corporation, a Delaware corporation, or its successor
(the "Company"), promises to pay interest on the principal amount of
this Note at the rate of 9 3/4% per annum and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and
Liquidated Damages in United States dollars (except as otherwise
provided herein) semi-annually in arrears on June 1 and December 1,
commencing on June 1, 1997, or if any such day is not a Business Day,
on the next succeeding Business Day (each an "Interest Payment Date").
Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date
of issuance; PROVIDED that if there is no existing Default or Event of
Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date, except in the case of the original
issuance of Notes, in which case interest shall accrue from the date
of authentication. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at
a rate that is 1.0% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business
on the May 15 or November 15 next preceding the Interest Payment
Date, even if such Notes are cancelled after such record date and on
or before such Interest Payment Date, except as provided in Section
2.13 of the Indenture with respect to defaulted interest. The Notes
shall be payable as to principal, premium, if any, interest and
Liquidated Damages, if any, at the office or agency of the Company
maintained for such purpose within or without the City and State of
New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in
the register of Holders; PROVIDED that payment by wire transfer of
immediately available funds shall be required with respect to
principal of, and interest, premium and Liquidated Damages, if any,
on, all Global Notes and all other Notes the Holders of which shall
have provided written wire transfer instructions to the Company or the
Paying Agent. Such payment shall be 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.
3. PAYING AGENT AND REGISTRAR. Initially, United States Trust Company of
New York, the Trustee under the Indenture, shall act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
November 26, 1996 ("Indenture") between the Company, the Guaranteeing
Subsidiary and the Trustee. The terms of the Notes include those
stated in the Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Sections 77aaa-77bbbb) (the "TIA"). The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for
a statement of such terms. The Notes are general unsecured Obligations
of the Company limited to
<PAGE>
$200,000,000 in aggregate principal amount, plus amounts, if any,
sufficient to pay premium, if any, interest or Liquidated Damages, if
any, on outstanding Notes as set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes shall not
be redeemable at the Company's option prior to December 1, 2001.
Thereafter, the Notes shall be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below together with accrued and unpaid
interest and any Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning
on December 1 of the years indicated below:
Year Percentage
---- ----------
2001. . . . . . . . . . . . . . . . . . . . .104.875%
2002. . . . . . . . . . . . . . . . . . . . .103.250%
2003. . . . . . . . . . . . . . . . . . . . .101.625%
2004 and thereafter . . . . . . . . . . . . .100.000%
Notwithstanding the foregoing, at any time prior to December 1,
1999, the Company on one or more occasions may redeem up to $70.0
million in aggregate principal amount of Notes with any of the net
proceeds of one or more public or private offerings of common stock
of: (i) Advanced Medical or any other corporate parent of the
Company to the extent the net proceeds thereof are contributed to
the Company as a capital contribution to common equity or (ii) the
Company, in each case, at a redemption price of 109.75% of the
principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable date of
redemption; PROVIDED that at least $130.0 million in aggregate
principal amount of the Notes remain outstanding immediately after
the occurrence of each such redemption; PROVIDED, FURTHER, that with
respect to any private offering of the common stock (other than of
Advanced Medical), such common stock shall be issued at a price no
lower than the fair market value thereof, as evidenced by an
independent investment banking firm of national standing delivered
to the Trustee; and PROVIDED, FURTHER, that any such redemption must
occur within 90 days of the date of the closing of such public or
private offering.
Any redemption pursuant to Section 3.07 of the Indenture shall
be made pursuant to the provisions of Section 3.01 through 3.06
thereof.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to
101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the
date of purchase.
<PAGE>
Within 30 days following any Change of Control, the Company will
mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control setting forth
the procedures governing the Change of Control Offer required by
the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall offer to all Holders of Notes (an
"Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash
equal to 100% of principal amount thereof, plus accrued and
unpaid interest, and Liquidated Damages, if any, thereon to the
date of purchase in accordance with the procedures set forth in
the Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company or any Restricted Subsidiary may use any
remaining Excess Proceeds for any purpose not prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered
by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a PRO RATA
basis.
(c) Holders of the Notes that are the subject of an offer to
purchase will receive a Change of Control Offer or Asset Sale
Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form titled
"Option of Holder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes
in denominations larger than $1,000 may be redeemed in part but only in
whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed. On and after the redemption date, interest and
Liquidated Damages, if any, ceases to accrue on the Notes or portions
thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in initial denominations of $1,000
and integral multiples of $1,000. The transfer of the Notes may be
registered and the Notes may be exchanged as provided in the
Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part. Also, it need not exchange or
register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
10. SUBORDINATION. Each Holder by accepting a Note agrees that
the payment of principal of, premium and Liquidated Damages, if any,
and interest on each Note is subordinated in right of payment, to
the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full of all Senior Debt (whether
outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed), and the subordination is for the
benefit of the holders of Senior Debt.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture, the Notes and the Subsidiary Guarantees
may be amended or supplemented with the consent of the
<PAGE>
Holders of at least a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender
offer or exchange offer for Notes), and any existing Default or
Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, interest or Liquidated
Damages, if any, on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any
provision of the Indenture, the Notes or the Subsidiary Guarantees
may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for
Notes).
Without the consent of any Holder of Notes, the
Company, the Guaranteeing Subsidiaries and the Trustee may amend or
supplement the Indenture, the Subsidiary Guarantees or the Notes to
cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or a
Guaranteeing Subsidiary's obligations to Holders of the Notes in
case of a merger, transfer of assets or consolidation, to make any
change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to
allow any Guaranteeing Subsidiary to guarantee the Notes.
SECTIONS 3.09 AND 4.10 of the Indenture may only be amended or
supplemented with the consent of the Holders of at least two-thirds
in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the
Notes). In addition, any amendment to the provisions of Article 10 or
Article 12 of the Indenture shall require the consent of the Holders
of at least 75% in aggregate amount of Notes then outstanding
(including consents obtained in connection with a tender offer or
exchange offer for the Notes) if such amendment would adversely affect
the rights of the Holders of Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or
Liquidated Damages, if any, with respect to the Notes (whether or
not prohibited by Article 10 and Article 12 of the Indenture); (ii)
default in payment when due of principal or premium, if any, on the
Notes at maturity, upon redemption or otherwise (whether or not
prohibited by Article 10 and Article 12 of the Indenture); (iii)
failure by the Company or any Guaranteeing Subsidiary for 30 days
after receipt of notice from the Trustee or Holders of at least 25%
in principal amount of the Notes then outstanding to comply with the
provisions described in Sections 4.07, 4.09, 4.10, 4.13, 4.14, 4.18
or 5.01 of the Indenture; (iv) failure by the Company or any
Guaranteeing Subsidiary for 60 days after notice from the Trustee or
the Holders of at least 25% in principal amount of the Notes then
outstanding to comply with its other agreements in the Indenture or
the Notes; (v) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
of their respective Restricted Subsidiaries (or the payment of which
is guaranteed by the Company or any of their respective Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or
is created after the date of the Indenture, which default (A) (i) is
caused by a failure to pay when due at final stated maturity (giving
effect to any grace period related thereto) principal of such
Indebtedness (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity and
(B) in each case, the principal amount of any such Indebtedness due
to be paid, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been accelerated as a result of any matter
contemplated in clause (v)(A)(i) or (v)(A)(ii), aggregates $15.0
million or more; (vi) failure by the Company or any of its
respective Restricted Subsidiaries to pay final judgments (to the
extent not covered by insurance and as to which the insurer has not
<PAGE>
acknowledged coverage in writing) aggregating in excess of $15.0
million, which judgments are not paid, fully bonded, discharged or
stayed within 60 days after their entry; (vii) certain events of
bankruptcy or insolvency with respect to the Company or any
Restricted Subsidiary of the Company that is a Significant
Subsidiary or group of Restricted Subsidiaries of the Company that,
together, would constitute a Significant Subsidiary; and (viii) the
termination of the Subsidiary Guarantee(s) of either a Guaranteeing
Subsidiary that is a Significant Subsidiary or group of Guaranteeing
Subsidiaries that together constitute a Significant Subsidiary for
any reason not permitted by the Indenture, or the denial of any
Person acting on behalf of any such Guaranteeing Subsidiary or group
of Guaranteeing Subsidiaries of its Obligations under any such
Subsidiary Guarantee(s). If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be
due and payable by notice in writing to the Company and the Trustee
specifying the respective Event of Default and that it is a "notice
of acceleration" (the "Acceleration Notice") and the same (i) shall
become immediately due and payable or (ii) if there are any amounts
outstanding under the New Credit Facility, shall become immediately
due and payable upon the first to occur of an acceleration under the
New Credit Facility or 5 Business Days after receipt by the Company
and the Representative under the New Credit Facility of such
Acceleration Notice but only if such Event of Default is then
continuing. Notwithstanding the foregoing, in the case of an Event
of Default arising from certain events of bankruptcy or insolvency
with respect to the Company, all outstanding Notes will become due
and payable without further action or notice. Holders of the Notes
may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Holders of a
majority in aggregate principal amount of the Notes then
outstanding, by notice to the Trustee, may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture, except a continuing
Default or Event of Default in the payment of interest or Liquidated
Damages, if any, on, or principal of, the Notes. The Trustee may
withhold from Holders of the Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating
to the payment of principal, interest or Liquidated Damages, if any)
if it determines that withholding notice is in such Holders'
interest. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event
of Default to deliver to the Trustee a statement specifying such
Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may 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 the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company or any
Guaranteeing Subsidiary, as such, shall have any liability for any
obligations of the Company under the Notes, any Subsidiary 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 Notes
by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of
the Notes and any Subsidiary Guarantee. Such waiver may not be
effective to waive liabilities under the federal securities laws and
it is the view of the Commission that such a waiver is against
public policy.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
<PAGE>
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder 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).
18. Additional Rights of Holders of Transfer Restricted
Securities. In addition to the rights provided to Holders of the
Notes under the Indenture, Holders of Transferred Restricted
Securities shall have all the rights set forth in the Registration
Rights Agreement dated as of the date hereof, among the Company, the
Guaranteeing Subsidiary and the parties named on the signature pages
thereof (the "Registration Rights Agreement").
19. 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 Notes and the
Trustee may use CUSIP numbers in notices of redemption as a
convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
IMED Corporation
10221 Wateridge Circle
San Diego, CA 92121
Telecopy: (619) 458-6217
Attention: Chief Financial Officer
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
-----------------------
Your Signature:
-----------------------
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.14 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
----------------------- -----------------------
(Sign exactly as your name
appears on the Note)
Tax Identification No.:
---------------
Signature Guarantee.
<PAGE>
SCHEDULE OF EXCHANGES OF NOTES(2)
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR OTHER
NOTES HAVE BEEN MADE:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Date of Exchange Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Principal Amount of this Principal Amount of this Global Note following officer of Trustee or
Global Note Global Note such decrease (or Note Custodian
increase)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------------
(2) THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
United States Trust Company
of New York
114 West 47th Street
15th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Reference is hereby made to the Indenture, dated as of November
26, 1996 (the "INDENTURE"), between IMED Corporation, as issuer, IMED
International Trading Corp. and United States Trust Company of New York, as
trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
___________________, (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in the principal amount of $_______ in such Note[s] or interests (the
"TRANSFER"), to ____________ (the "TRANSFEREE"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR DEFINITIVE NOTES PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
United States Securities Act of 1933, as amended (the "SECURITIES ACT"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interests or Definitive Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the beneficial interests or
Definitive Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A
Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BENEFICIAL INTERESTS IN
THE REGULATION S GLOBAL NOTE OR DEFINITIVE NOTES PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling
efforts have been made in contravention of the requirements of Rule 904(b) of
Regulation S under the Securities Act and (iii) the transaction is not part
of a plan or scheme to evade the registration requirements of the Securities
Act. In addition, if the Transfer is being effected prior to expiration of
the
<PAGE>
"restricted period" (as defined in Regulation S under the Securities Act) and
the Transferee is a dealer, as defined in Section 2(12) of the Securities
Act, or a person receiving a selling concession, fee or other remuneration in
respect of the Notes or beneficial interest therein transferred, the
Transferor hereby represents and agrees that (i) neither the Transferor nor
any person acting on his behalf knows that the Transferee of the Notes or
beneficial interests therein is a U.S. person and (ii) if the Transferor or
any person acting on its behalf knows that the Transferee is a dealer, as
defined in Section 2(12) of the Securities Act, or is a person receiving a
selling concession, fee or other remuneration in respect of the Notes or
beneficial interests therein sold, the Transferor or person acting on its
behalf has sent to the Transferee a confirmation or other notice stating that
the Notes and any beneficial interest therein may be offered and sold during
the "restricted period" only in accordance with the provisions of Regulation
S under the Securities Act, pursuant to registration of the Notes under the
Securities Act or pursuant to an available exemption from the registration
requirements of the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Regulation
S Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF BENEFICIAL
INTERESTS IN THE 144A GLOBAL NOTE OR DEFINITIVE NOTES PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Definitive
Notes bearing the Private Placement Legend and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
State of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
Transferor hereby further certifies that the Transfer complies with the
transfer restrictions applicable to beneficial interests in a Restricted
Global Note or Definitive Notes bearing the Private Placement Legend and the
requirements of the exemption claimed, which certification is supported by
(x) if such Transfer is in respect of a principal amount of Notes at the time
of Transfer of $100,000 or more, a certificate executed by the Transferee in
the form of Exhibit C to the Indenture, or (y) if such Transfer is in respect
of a principal amount of Notes at the time of transfer of less than $100,000,
(1) a certificate executed by the Transferee in the form of Exhibit C to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), to the effect that (1) such Transfer is in compliance with
the Securities Act and (2) such Transfer complies with any applicable blue
sky securities laws of any state of the United States. Upon consummation of
the proposed transfer in accordance
<PAGE>
with the terms of the Indenture, the transferred beneficial interest or
Definitive Notes will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the 144A Global Note and/or the
Definitive Notes and in the Indenture and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BENEFICIAL INTERESTS IN
THE UNRESTRICTED GLOBAL NOTE OR IN DEFINITIVE NOTES THAT DO NOT BEAR THE
PRIVATE PLACEMENT LEGEND.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States, and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interests or Definitive Notes will no longer be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Definitive Notes bearing
the Private Placement Legend and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144
and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any State of the United States
and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interests or Definitive Notes will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Definitive Notes bearing the Private Placement Legend and in
the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
------------------------------
[Insert Name of Transferor]
By:
---------------------------
Name:
Title:
Dated: ,
-------------- ----
<PAGE>
FORM OF ANNEX A TO CERTIFICATE
OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) or (b)]
(a) / / Beneficial Interests in the
(i) / / 144A Global Note (CUSIP _____), or
(ii) / / Regulation S Global Note (CUSIP _____), or
(b) / / Definitive Note.
2. That the Transferee will hold:
[CHECK ONE]
(a) / / Beneficial Interests in the:
(i) / / 144A Global Note (CUSIP _____), or
(ii) / / Regulation S Global Note (CUSIP _____), or
(iii) / / Unrestricted Global Note (CUSIP _____), or
(b) / / Restricted Definitive Notes;
(c) / / Definitive Notes that do not bear the Private Placement Legend;
in accordance with the terms of this Indenture.
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
United States Trust Company
of New York
114 West 47th Street
15th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Reference is hereby made to the Indenture, dated as of November
26, 1996 (the "INDENTURE"), between IMED Corporation, as issuer, IMED
International Trading Corp. and United States Trust Company of New York, as
trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with our proposed purchase of $__________ aggregate
principal amount of:
(a) / / Beneficial interests, or
(b) / / Definitive Notes,
we confirm that:
1. We understand that any subsequent transfer of the Notes of
any interest therein is subject to certain restrictions and conditions set
forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except
in compliance with, such restrictions and conditions and the Securities Act
of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we should sell the Notes
or any interest therein, (A) we will do so only (1)(a) to a person who the
Seller reasonably believes is a qualified institutional buyer (as defined in
Rule 144A under the Securities Act) in a transaction meeting the requirements
of 144A, (b) in a transaction meeting the requirements of Rule 144 under the
Securities Act, (c) outside the United States to a foreign person in a
transaction meeting the requirements of Rule 904 of the Securities Act, (d)
to an institutional `Accredited Investor' (as defined in Rule 501(a)(1), (2),
(3) or (7) of the Securities Act (an `Institutional Accredited Investor'))
that, prior to such transfer, furnishes the Trustee a signed letter to the
effect set forth herein and, if such transfer is in respect of an aggregate
principal amount of Notes less than $100,000, an opinion of counsel
acceptable to the Company that such transfer is in compliance with the
Securities Act or (e) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel), (2) to the Company or any of its subsidiaries or (3) pursuant to an
effective registration statement and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction and (B) we will, and each subsequent holder will be
required to, notify any purchaser from it of the security evidenced hereby of
the resale restrictions set forth in (A) above."
<PAGE>
3. We understand that, on any proposed resale of the Notes or
beneficial interests, we will be required to furnish to you and the Company
such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interests therein
purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
6. We are not acquiring the Notes with a view to any
distribution thereof that would violate the Securities Act or the securities
laws of any State of the United States.
<PAGE>
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.
------------------------------
[Insert Name of Accredited
Investor]
By:
---------------------------
Name:
Title:
Dated: ,
-------------- ----
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE OF EXCHANGE
United States Trust Company
of New York
114 West 47th Street
15th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Reference is hereby made to the Indenture, dated as of November
26, 1996 (the "INDENTURE"), between IMED Corporation, as issuer, IMED
International Trading Corp. and United States Trust Company of New York, as
trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR RESTRICTED BENEFICIAL
INTERESTS FOR DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND
OR UNRESTRICTED BENEFICIAL INTERESTS
a. / / CHECK IF EXCHANGE IS FROM RESTRICTED BENEFICIAL INTEREST TO
UNRESTRICTED BENEFICIAL INTEREST. In connection with the Exchange of the
Holder's Restricted Beneficial Interest for Unrestricted Beneficial Interests
in an equal principal amount, the Holder hereby certifies (i) the
Unrestricted Beneficial Interests are being acquired for the Holder's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as amended
(the "SECURITIES ACT"), (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Beneficial Interests are being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
b. / / CHECK IF EXCHANGE IS FROM RESTRICTED BENEFICIAL INTEREST TO
DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In connection
with the Exchange of the Holder's Restricted Beneficial Interests for
Definitive Notes that do not bear the Private Placement Legend, the Holder
hereby certifies (i) the Definitive Notes are being acquired for the Holder's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act and (iv) the Definitive Notes are being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
c. / / CHECK IF EXCHANGE IS FROM DEFINITIVE NOTES TO UNRESTRICTED BENEFICIAL
INTERESTS. In connection with the Holder's Exchange of Definitive Notes for
Unrestricted Beneficial Interests, (i) the Unrestricted Beneficial Interests
are being acquired for the Holder's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Beneficial
Interests are being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
<PAGE>
d. / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTES TO DEFINITIVE
NOTES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In connection with the
Holder's Exchange of a Restricted Definitive Note for Definitive Notes that
do not bear the Private Placement Legend, the Holder hereby certifies (i) the
Definitive Notes that do not bear the Private Placement Legend are being
acquired for the Holder's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Notes are being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR RESTRICTED BENEFICIAL
INTERESTS FOR RESTRICTED DEFINITIVE NOTES OR RESTRICTED BENEFICIAL INTERESTS
a. / / CHECK IF EXCHANGE IS FROM RESTRICTED BENEFICIAL INTERESTS TO
RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Holder's
Restricted Beneficial Interest for Definitive Notes with an equal principal
amount, (i) the Definitive Notes are being acquired for the Holder's own
account without transfer and (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the United States Securities
Act, and in compliance with any applicable blue sky securities laws of any
state of the United States. Upon consummation of the proposed Exchange, in
accordance with the terms of the Indenture, the Definitive Notes issued will
be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Definitive Notes and in the Indenture and the
Securities Act.
b. / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTES TO BENEFICIAL
INTERESTS. In connection with the Exchange of the Holder's Restricted
Definitive Registered Note for Restricted Beneficial Interests in the
[CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, with an equal
principal amount, (i) the Definitive Notes are being acquired for the
Holder's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Definitive Note and pursuant to and in accordance with the
Securities Act and in compliance with any applicable blue sky securities laws
of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Definitive Notes
issued will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Definitive Notes and in the Indenture
and the Securities Act.
c. / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTES TO RESTRICTED
DEFINITIVE NOTES OF OTHER AUTHORIZED DENOMINATIONS. In connection with the
Exchange of the Holder's Restricted Definitive Notes for Definitive Notes of
other authorized denominations with an equal aggregate principal amount, (i)
the Definitive Notes are being acquired for the Holder's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant
to and in accordance with the United States Securities Act, and in compliance
with any applicable blue sky securities laws of any state of the United
States. Upon consummation of the proposed Exchange, in accordance with the
terms of the Indenture, the Definitive Notes issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the Definitive Notes and in the Indenture and the Securities Act.
<PAGE>
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
------------------------------
[Insert Name of Holder]
By:
---------------------------
Name:
Title:
Dated: ,
-------------- ----
<PAGE>
EXHIBIT E
SUBSIDIARY GUARANTEE
Subject to Section 11.06 of the Indenture, each Guaranteeing Subsidiary
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of
the Indenture, the Notes and the Obligations of the Company under the Notes
or under the Indenture, that: (a) the principal of, premium, if any, interest
and Liquidated Damages, if any, on the Notes will be promptly paid in full
when due, subject to any applicable grace period, whether at maturity, by
acceleration, redemption or otherwise, and interest on overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest,
if any, and Liquidated Damages, if any, on the Notes and all other payment
Obligations of the Company to the Holders or the Trustee under the Indenture
or under the Notes will be promptly paid in full and performed, all in
accordance with the terms thereof; and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other payment Obligations,
the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, subject to any applicable grace
period, whether at stated maturity, by acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guaranteeing Subsidiaries will be
jointly and severally obligated to pay the same immediately.
The obligations of the Guaranteeing Subsidiaries to the Holders and to
the Trustee pursuant to this Subsidiary Guarantee and the Indenture are
expressly set forth in Article 11 and Article 12 of the Indenture, and
reference is hereby made to such Indenture for the precise terms of this
Subsidiary Guarantee. The terms of Articles 11 and 12 of the Indenture are
incorporated herein by reference. This Subsidiary Guarantee is subject to
release as and to the extent provided in Section 11.04 of the Indenture. The
obligations of the Guaranteeing Subsidiaries to the Holders and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
subordinated to the extent set forth in Article 12 of the Indenture and
reference is hereby made to such Indenture for the precise terms of such
subordination.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon each Guaranteeing Subsidiary and its respective
successors and assigns to the extent set forth in the Indenture until full
and final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This
is a Subsidiary Guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Guaranteeing Subsidiaries' liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Notes and the Indenture and (ii) the amount, if any, which
would not have (A) rendered such Guaranteeing Subsidiary "insolvent" (as such
term is defined in the United States Bankruptcy Code and in the Debtor and
Creditor Law of the State of New York) or (B) left such Guaranteeing
Subsidiary with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; PROVIDED that, it will be a
presumption in any lawsuit or other proceeding in which a Guaranteeing
Subsidiary is a party that the amount guaranteed pursuant to the Subsidiary
Guarantee is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Guaranteeing Subsidiary, or debtor in
possession or
<PAGE>
trustee in bankruptcy of such Guaranteeing Subsidiary, otherwise proves in
such a lawsuit that the aggregate liability of the Guaranteeing Subsidiary is
limited to the amount set forth in clause (ii) above. The Indenture provides
that, in making any determination as to the solvency or sufficiency of
capital of a Guaranteeing Subsidiary in accordance with the previous
sentence, the right of such Guaranteeing Subsidiary to contribution from
other Guaranteeing Subsidiaries and any other rights such Guaranteeing
Subsidiary may have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
[GUARANTEEING SUBSIDIARY]
By:
-------------------------------------
Name:
Title:
<PAGE>
EXHIBIT F
FORM OF INDENTURE ASSUMPTION AGREEMENT
INDENTURE ASSUMPTION AGREEMENT (this "Agreement"), dated as of
November 26, 1996, between IVAC Holdings, Inc., a Delaware corporation (the
"Company"), and United States Trust Company of New York, a New York banking
corporation and trust company, as trustee under the indenture referred to
below (the "Trustee").
W I T N E S S E T H
WHEREAS, IMED Corporation, a Delaware corporation ("IMED"), has
heretofore executed and delivered to the Trustee an indenture (the
"Indenture"), dated as of the date hereof, providing for the issuance of
$200,000,000 aggregate principal amount of 9 3/4% Senior Subordinated Notes due
2006 (the "Notes") of IMED;
WHEREAS, IMED has been merged with and into the Company;
WHEREAS, pursuant to Section 4.20 of the Indenture, the Company is
required to execute and deliver this Agreement concurrently with such merger;
WHEREAS, pursuant to Section 9.01 of the Indenture the Trustee is
authorized to execute and deliver this Agreement; and
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Company and the Trustee mutually covenant and agree for the equal and
ratable benefit of the holders of the Notes as follows:
1. ASSUMPTION. The Company hereby assumes all of the
obligations of IMED under the Indenture and the Notes and, hereafter, shall
be deemed the "Company" for all purposes under the Indenture and the Notes.
2. NEW YORK LAW TO GOVERN. The internal law of the State of New
York, without regard to the choice of law rules thereof, shall govern and be
used to construe this Agreement.
3. COUNTERPARTS. The parties may sign any number of copies of
this Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement.
4. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
[Signatures on following page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the date first above written.
Dated: November 26, 1996 IVAC HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
Dated: November 26, 1996 UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
------------------------------------
Name:
Title:
<PAGE>
EXHIBIT G
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
November 26, 1996 between IVAC Overseas Holdings Inc. ("IVAC Overseas
Holdings"), a subsidiary of IVAC Holdings, Inc. (as successor to IMED
Corporation), a Delaware corporation (the "Company"), and United States Trust
Company of New York, as trustee under the indenture referred to below (the
"Trustee"). Capitalized terms used herein and not defined herein shall have
the meaning ascribed to them in the Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of November 26, 1996,
providing for the issuance of an aggregate principal amount of $200,000,000
of 9 3/4% Senior Subordinated Notes due 2006 (the "Notes");
WHEREAS, Section 4.20 of the Indenture provides that the Company is
required to cause IVAC Overseas Holding to execute and deliver to the Trustee
a supplemental indenture pursuant to which IVAC Overseas Holding shall
unconditionally guarantee all of the Company's Obligations under the Notes
pursuant to a Subsidiary Guarantee on the terms and conditions set forth
herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, IVAC
Overseas Holdings and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO SUBSIDIARY GUARANTEE. IVAC Overseas Holdings hereby
agrees, jointly and severally with all other Guaranteeing Subsidiaries, to
guarantee the Company's Obligations under the Notes and the Indenture on the
terms and subject to the conditions set forth in Article 11 and Article 12 of
the Indenture and to be bound by all other applicable provisions of the
Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the
Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
G-1
<PAGE>
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the correctness of the
recitals of fact contained herein, all of which recitals are made solely by
the Guaranteeing Subsidiary.
G-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: November 26, 1996 IVAC OVERSEAS HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
Dated: November 26, 1996 UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
------------------------------------
Name:
Title:
G-3
<PAGE>
EXHIBIT H
FORM OF SUPPLEMENTAL INDENTURE
Supplemental Indenture (this "Supplemental Indenture"), dated as of
_______ __, 1996 between Guaranteeing Subsidiary (the "New Guaranteeing
Subsidiary"), a subsidiary of IVAC Holdings, Inc. (as successor to IMED
Corporation), a Delaware corporation (the "Company"), and United States Trust
Company of New York, as trustee under the indenture referred to below (the
"Trustee"). Capitalized terms used herein and not defined herein shall have
the meaning ascribed to them in the Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of November 26, 1996,
providing for the issuance of an aggregate principal amount of $200,000,000
of 9 3/4% Senior Subordinated Notes due 2006 (the "Notes");
WHEREAS, Section 11.05 of the Indenture provides that under certain
circumstances the Company may cause, and Section 11.03 of the Indenture
provides that under certain circumstances the Company must cause, certain of
its subsidiaries to execute and deliver to the Trustee a supplemental
indenture pursuant to which such subsidiaries shall unconditionally guarantee
all of the Company's Obligations under the Notes pursuant to a Subsidiary
Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO SUBSIDIARY GUARANTEE. The New Guaranteeing
Subsidiary hereby agrees, jointly and severally with all other Guaranteeing
Subsidiaries, to guarantee the Company's Obligations under the Notes and the
Indenture on the terms and subject to the conditions set forth in Article 11
and Article 12 of the Indenture and to be bound by all other applicable
provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the
Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
H-1
<PAGE>
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the correctness of the
recitals of fact contained herein, all of which recitals are made solely by
the New Guaranteeing Subsidiary.
H-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ________________ [NAME OF NEW GUARANTEEING SUBSIDIARY]
By: ____________________________
Name:
Title:
Dated: ________________ UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By: ____________________________
Name:
Title:
H-3
<PAGE>
EXECUTION COPY
_______________________________________________________________________________
_______________________________________________________________________________
IMED CORPORATION
IMED INTERNATIONAL TRADING CORP.
_________________
SERIES A AND SERIES B
$200,000,000
9 3/4% SENIOR SUBORDINATED NOTES DUE 2006
_________________
INDENTURE
Dated as of November 26, 1996
_________________
_________________
UNITED STATES TRUST COMPANY OF NEW YORK
_________________
Trustee
_______________________________________________________________________________
_______________________________________________________________________________
H-5
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 7.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;13.02
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;13.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.05
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05,13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . 16
Section 1.03. Incorporation by Reference of Trust Indenture Act . . . . 16
Section 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . 17
Section 1.05. River . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . 18
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . 18
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . 19
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . 19
Section 2.05. Lists of Holders of the Notes . . . . . . . . . . . . . . 19
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . 20
Section 2.07. Replacement Notes . . . . . . . . . . . . . . . . . . . . 29
Section 2.08. Outstanding Notes . . . . . . . . . . . . . . . . . . . . 29
Section 2.09. Treasury Notes. . . . . . . . . . . . . . . . . . . . . . 30
Section 2.10. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 30
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.12. Record Date . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.13. Defaulted Interest. . . . . . . . . . . . . . . . . . . . 30
Section 2.14. Computation of Interest.. . . . . . . . . . . . . . . . . 31
Section 2.15. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 31
Section 3.02. Selection of Notes to Be Redeemed . . . . . . . . . . . . 31
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . 32
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . 33
Section 3.05. Deposit of Redemption or Purchase Price . . . . . . . . . 33
Section 3.06. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . 33
Section 3.07. Optional Redemption . . . . . . . . . . . . . . . . . . . 33
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . . . . . . . 34
Section 3.09. Offer to Purchase by Application of Excess Proceeds . . . 34
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes. . . . . . . . . . . . . . . . . . . . . 36
Section 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . 36
Section 4.03. Reports . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . 37
i
<PAGE>
Section 4.05. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . 38
Section 4.07. Restricted Payments . . . . . . . . . . . . . . . . . . . 38
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries . . . . . . . . . . . . . . . . . 41
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.10. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.11. Transactions with Affiliates. . . . . . . . . . . . . . . 44
Section 4.12. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.13. Sale and Leaseback Transactions . . . . . . . . . . . . . 45
Section 4.14. Offer to Purchase Upon Change of Control . . . . . . . . 45
Section 4.15. Corporate Existence . . . . . . . . . . . . . . . . . . . 47
Section 4.16. Anti-Layering . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.17. Line of Business. . . . . . . . . . . . . . . . . . . . . 47
Section 4.18. Sales of Accounts Receivable. . . . . . . . . . . . . . . 47
Section 4.19. Permitted Transactions. . . . . . . . . . . . . . . . . . 48
Section 4.20. Documents to be Executed Upon Consummation of Merger. . . 48
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets . . . . . . . . 49
Section 5.02. Successor Corporation Substituted . . . . . . . . . . . . 49
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . 50
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 52
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 52
Section 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . 52
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . 52
Section 6.07. Rights of Holders of Notes to Receive Payment . . . . . . 53
Section 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . 53
Section 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . 53
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . 54
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 55
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . 56
Section 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . 56
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . 56
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 57
Section 7.06. Reports by Trustee to Holders of the Notes . . . . . . . 57
Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . 57
Section 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . 58
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<PAGE>
Section 7.09. Successor Trustee by Merger, Etc. . . . . . . . . . . . . 59
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . 59
Section 7.11. Preferential Collection of Claims Against The Company . . 59
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . . . . . . 60
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . 60
Section 8.04. Conditions to Legal or Covenant Defeasance. . . . . . . . 61
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions. . . . . . . . . 62
Section 8.06. Repayment to The Company. . . . . . . . . . . . . . . . . 62
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of the Notes . . . . . . . . . 63
Section 9.02. With Consent of Holders of Notes. . . . . . . . . . . . . 64
Section 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . 65
Section 9.04. Revocation and Effect of Consents . . . . . . . . . . . . 65
Section 9.05. Notation on or Exchange of Notes. . . . . . . . . . . . . 66
Section 9.06. Trustee to Sign Amendments, Etc . . . . . . . . . . . . . 66
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate . . . . . . . . . . . . . . . . 66
Section 10.02. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . 66
Section 10.03. Default on Designated Senior Debt . . . . . . . . . . . . 67
Section 10.04. Acceleration of Notes . . . . . . . . . . . . . . . . . . 67
Section 10.05. When Distribution Must Be Paid Over . . . . . . . . . . . 67
Section 10.06. Notice By Company . . . . . . . . . . . . . . . . . . . . 68
Section 10.07. Subrogation . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.08. Relative Rights . . . . . . . . . . . . . . . . . . . . . 68
Section 10.09. Subordination May Not Be Impaired By Company . . . . . . 69
Section 10.10. Distribution or Notice To Representative . . . . . . . . 69
Section 10.11. Rights of Trustee and Paying Agent . . . . . . . . . . . 69
Section 10.12. Authorization to Effect Subordination . . . . . . . . . . 69
Section 10.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE 11
GUARANTEE OF NOTES
Section 11.01. Subsidiary Guarantee . . . . . . . . . . . . . . . . . . 70
Section 11.02. Execution and Delivery of Subsidiary Guarantee. . . . . . 71
Section 11.03. Guaranteeing Subsidiaries May Consolidate, Etc., on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.04. Releases Following Sale of Assets . . . . . . . . . . . . 72
iii
<PAGE>
Section 11.05. Additional Guaranteeing Subsidiaries. . . . . . . . . . . 72
Section 11.06. Limitation on Guaranteeing Subsidiary Liability . . . . . 73
Section 11.07. "Trustee" to Include Paying Agent . . . . . . . . . . . . 73
ARTICLE 12
SUBORDINATION
Section 12.01. Agreement to Subordinate . . . . . . . . . . . . . . . . 73
Section 12.02. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . 73
Section 12.03. Default on Designated Guarantor Senior Debt . . . . . . . 74
Section 12.04. Acceleration of Notes . . . . . . . . . . . . . . . . . . 75
Section 12.05. When Distribution Must Be Paid Over . . . . . . . . . . . 75
Section 12.06. Notice By Guaranteeing Subsidiary . . . . . . . . . . . . 75
Section 12.07. Subrogation . . . . . . . . . . . . . . . . . . . . . . . 76
Section 12.08. Relative Rights . . . . . . . . . . . . . . . . . . . . . 76
Section 12.09. Subordination May Not Be Impaired By Guaranteeing
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . 76
Section 12.10. Distribution or Notice To Representative. . . . . . . . . 76
Section 12.11. Rights of Trustee and Paying Agent. . . . . . . . . . . . 77
Section 12.12. Authorization to Effect Subordination . . . . . . . . . . 77
Section 12.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . 77
Section 13.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 13.03. Communication by Holders of Notes with Other Holders
of Notes . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 13.04. Certificate and Opinion as to Conditions Precedent. . . . 79
Section 13.05. Statements Required in Certificate or Opinion . . . . . . 79
Section 13.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . 79
Section 13.07. No Personal Liability of Directors, Officers, Employees
and Stockholders. . . . . . . . . . . . . . . . . . . . . 80
Section 13.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . 80
Section 13.09. No Adverse Interpretation of Other Agreements . . . . . . 80
Section 13.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . 80
Section 13.11. Severability. . . . . . . . . . . . . . . . . . . . . . . 80
Section 13.12. Counterpart Originals . . . . . . . . . . . . . . . . . . 80
Section 13.13. Table of Contents, Headings, etc. . . . . . . . . . . . . 80
iv
<PAGE>
EXHIBIT 10.3
AGREEMENT OF STOCK PURCHASE AND PLAN OF RECAPITALIZATION
Agreement of Stock Purchase and Plan of Recapitalization dated
November 26, 1996, by and among ADVANCED MEDICAL, INC., a Delaware Corporation
("AM"), DECISIONS INCORPORATED, a Delaware corporation ("Decisions") and Jeffry
M. Picower, an individual residing at 1410 South Ocean Boulevard, Palm Beach, FL
33480.
WHEREAS, AM and Mr. Picower have entered into a letter agreement (the
"Letter Agreement") pursuant to which Mr. Picower agreed, among other things,
directly or through an affiliate (the "Designee"), to: (i) purchase AM common
stock from AM at a price of $3.00 per share for an aggregate purchase price of
$40 million (the "Takedown Amount") as a means of providing equity financing to
AM in connection with AM acquiring a company and entering into a merger
agreement (the "Merger Agreement") in connection therewith (the
"Transaction")(the transaction described in this clause (i) being referred to as
the "Stock Purchase"); and (ii) pursuant to a written plan of recapitalization,
cause the transfer of three outstanding notes (described in Section 4.5 below)
(the "Notes") held by Decisions to AM in exchange for shares (the "Shares")of AM
common stock, par value $.01 per share ("Common Stock") in a transaction that
will qualify as a recapitalization within the meaning of Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code")(the transaction
described in this clause (ii) being referred to as the "Plan of
Recapitalization"); and
WHEREAS, the parties hereto agree that the Stock Purchase provided for
herein constitutes the purchase for fair market value of AM common stock by Mr.
Picower; and
WHEREAS, the parties hereto agree that the Plan of Recapitalization
provided for herein constitutes an exchange of equal values and is fair to AM
and Decisions; and
WHEREAS, Decisions has entered into an agreement with Mr. Picower
pursuant to which Decisions assumed all of the obligations and was assigned all
of the rights of Mr. Picower under the Letter Agreement and Mr. Picower has
designated Decisions as the Designee and Decisions agrees to act as the Designee
hereunder; and
WHEREAS, AM and Mr. Picower now desire to formalize the terms of the
Letter Agreement;
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NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto, desiring to be legally bound, do hereby agree as follows:
1. ADDITIONAL FINANCING. Mr. Picower hereby agrees to purchase or
cause the Designee to purchase Common Stock from AM at a price of $3.00 per
share at an aggregate purchase price equal to the Takedown Amount which amount
will be provided by Mr. Picower or Designee to AM in order for AM to pay: (i)
the purchase price in connection with the Transaction; (ii) additional working
capital requirements resulting from the Transaction; and (iii) related
transaction expenses and the cost of other transactions currently contemplated
(collectively, the "Additional Financing").
2. PLAN OF RECAPITALIZATION.
2.1 EXCHANGE. The parties hereto agree that the Plan of
Recapitalization constitutes a plan of reorganization within the meaning of
Section 368 of the Code and the Treasury Regulations promulgated thereunder
whereby Decisions will transfer the Notes to AM, and AM, in exchange therefor,
will transfer 29,416,086 shares of Common Stock to Decisions in a transaction
qualifying as a recapitalization under Section 368(a)(1)(E) of the Code.
2.2 INTEREST. AM agrees that it will pay to Decisions, in cash,
all accrued and unpaid interest on the Notes through the date of Closing.
3. CLOSING. The closing (the "Closing") of the transactions
contemplated hereby will take place at the offices of Gordon Altman Butowsky
Weitzen Shalov & Wein, 114 West 47th Street, New York, New York 10036 or such
other place as the parties may agree, contemporaneously with the closing of the
Transaction. At the Closing, Decisions shall deliver the Takedown Amount and
the Notes to AM and AM shall deliver a stock certificate representing the Shares
to Decisions.
4. REPRESENTATIONS AND WARRANTIES OF MR. PICOWER and Decisions. Mr.
Picower and Decisions (collectively, the "Picower Parties") hereby jointly and
severally represent and warrant to AM that:
4.1 AUTHORIZATION; BINDING AGREEMENT. This Agreement
constitutes the legal, valid and binding agreement of each of the Picower
Parties, enforceable against each in
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accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general equitable
principles. No restrictions (whether legal capacity or otherwise) exist with
respect to any Picower Parties' right and ability to enter into this Agreement
and perform all of its obligations hereunder.
4.2 ORGANIZATION. Decisions is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Decisions has the requisite corporate power to conduct its businesses as it is
currently conducted and is duly qualified to do business in each jurisdiction in
which the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the lack of
such qualification would not in the aggregate have a material adverse effect on
the business, results of operations or financial condition of Decisions taken as
a whole.
4.3 INVESTMENT INTENT. Decisions is acquiring the Shares
hereunder solely for the purpose of investment for its own account and not with
a view to, or for sale in connection with, the "distribution," as such term is
used in Section 2(11) of the Securities Act of 1933, as amended (the "1933
Act"), of any of the Shares in violation of the 1933 Act or any applicable state
securities laws. Decisions understands that the Shares have not been
registered under the 1933 Act or any applicable state securities laws and that
it will not be legally entitled to offer for sale, sell, or otherwise transfer
any of the Shares unless they have been registered under the 1933 Act and
applicable state securities laws or unless an exemption from registration is
available for such offer, sale, or other transfer under the 1933 Act and
applicable state securities laws.
4.4 FEES. Neither Mr. Picower nor his affiliates have paid or
become obligated to pay any fee or commission to any investment banker, broker,
finder or intermediary in connections with the transactions contemplated by this
Agreement.
4.5 NOTES. Decisions owns, and at the Closing will own, the
Notes free and clear of all liens, pledges, encumbrances, security interests or
other claims of any nature or kind. The Notes consist of (i) a $6 million 7%
convertible note issued by AM due January 4, 2001, convertible into
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6,024,096 shares of AM common stock; (ii) a $6.5 million 9% convertible note
issued by AM due January 4, 2001, convertible into 10,534,848 shares of AM
common stock; and (iii) a $25 million 7% convertible note issued by AM due
January 4, 2001, convertible into 9,523,809 shares of AMI common stock.
4.6 AUTHORITY RELATIVE TO THIS AGREEMENT. Decisions has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Decisions and the consummation by Decisions of the
transactions contemplated hereby have been duly and validly authorized by its
Board of Directors and no other corporate proceedings on the part of Decisions
are necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and delivered
by Decisions and, constitutes a valid and binding obligation of Decisions,
enforceable against Decisions in accordance with its terms.
5. REPRESENTATIONS AND WARRANTIES OF AM. AM represents and warrants
to Mr. Picower that:
5.1 ORGANIZATION. AM is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. AM has
the requisite corporate power to conduct its businesses as it is currently
conducted and is duly qualified to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the lack of such
qualification would not in the aggregate have a material adverse effect on the
business, results of operations or financial condition of AM taken as a whole.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. AM has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by AM and the consummation by AM of the transactions contemplated
hereby have been duly and validly authorized by its Board of Directors and no
other corporate proceedings on the part of AM are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by AM and
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constitutes a valid and binding agreement of AM, enforceable against AM in
accordance with its terms.
5.3 VALIDITY. The Shares to be issued to Decisions pursuant to
this Agreement will be duly authorized, validly issued, fully paid and non-
assessable and free of preemptive rights.
6. TERMINATION. If: (I) AM does not complete the Transaction and
request that Mr. Picower provide or direct Designee to provide the Additional
Financing as contemplated above, prior to June 30, 1997; or (ii) the Merger
Agreement is terminated in accordance with its terms, the obligations hereunder
will terminate unless this limitation is waived by the parties hereto in writing
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained herein shall survive the closing of the transactions
contemplated hereby.
8. MISCELLANEOUS.
8.1 SEVERABILITY AND GOVERNING LAW. Should any section or any
part of a section within this Agreement be rendered void, invalid or
unenforceable by any court of law for any reason, such provision shall be
construed to be enforceable to the maximum extent possible, and such invalidity
or unenforceability shall not void or render invalid or unenforceable any other
section or part of a section in this Agreement. This Agreement shall be
construed and governed by the laws of the State of New York.
8.2 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.3 SECTION HEADINGS. Section titles or captions contained in
this Agreement are inserted as a matter of convenience and for reference
purposes only, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
8.4 SINGULAR AND PLURAL, ETC. Whenever the singular number is
used herein and where required by the context, the same shall include the
plural, and the neuter gender shall include the masculine and feminine genders
and vice versa.
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8.5 SUCCESSORS AND ASSIGNS. All rights, covenants and
agreements of the parties contained in this Agreement shall, except as otherwise
provided herein, be binding upon and inure to the benefit of their respective
successors and assigns.
8.6 THIRD PARTY BENEFICIARIES. Except as otherwise provided
herein, nothing in this Agreement is intended to, or shall be construed so as to
create any third party beneficiary in this Agreement or otherwise confer any
rights upon any person, firm or corporation that is not a party hereto.
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IN WITNESS WHEREOF, the parties have hereunto set their hands as of
the date first above written.
ADVANCED MEDICAL, INC.
By: /s/ Joseph W. Kuhn
Name: Joseph W. Kuhn
Title: President
DECISIONS INCORPORATED
By: /s/ Jeffry M. Picower
Name: Jeffry M. Picower
Title: C of B
/s/ Jeffry M. Picower
Jeffry M. Picower
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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of August 23, 1996 by and
between IMED Corporation, a Delaware corporation ("IMED"), and Advanced Medical,
Inc., a Delaware corporation ("AMI"), on the one hand, and William J. Mercer
(the "Executive"), on the other.
RECITALS
WHEREAS, IMED proposes to engage in a business combination (the "Business
Combination") involving IVAC Medical Systems, Inc., a Delaware corporation,
pursuant to a certain Agreement and Plan of Merger dated August 23, 1996 (the
"Merger Agreement").
WHEREAS, AMI owns (on a fully diluted basis) 100% of the Common Stock of
IMED.
WHEREAS, each of AMI and IMED desire to employ the Executive as of the
effective date of the closing under the Merger Agreement (the "Effective Date"),
and the Executive desires to accept employment with each of AMI and IMED, on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing recitals and the
respective covenants and agreements of the parties contained in this document,
IMED, AMI and the Executive agree as follows:
1. EMPLOYMENT AND DUTIES. During the Employment Period (as hereinafter
defined), the Executive shall serve as President and Chief Executive Officer of
both IMED and AMI. The duties and responsibilities of the Executive shall
include the duties and responsibilities for the Executive's respective corporate
offices and positions as set forth in the by-laws of IMED and AMI, respectively,
from time to time in effect, and such other duties and responsibilities as the
Boards of Directors of each of IMED and AMI, respectively, may from time to time
reasonably assign to the Executive, in all cases to be consistent with the
Executive's corporate offices and positions. The Executive shall perform
faithfully the executive duties and responsibilities referred to above to the
best of his ability, on a full-time basis. At the next meetings of the Boards
of Directors of each of IMED and AMI, the Executive shall be nominated to serve
as a director of each of IMED and AMI, and, if elected, he shall serve in such
capacities without additional compensation.
2. EMPLOYMENT PERIOD.
(a) EFFECTIVE DATE. Anything herein to the contrary notwithstanding,
if the Effective Date does not occur on or prior to January 31, 1997 (which date
may be extended by agreement of the parties), then this Agreement shall
terminate and be of no further force and effect on such date, and none of the
parties shall have any further obligation to any other party hereunder.
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(b) BASIC RULE. The employment period shall begin upon the Effective
Date and shall continue thereafter through the period, subject to renewal as
hereinafter provided for (the "Employment Period"), ending on the date, subject
to extension as hereinafter provided for (the "Expiration Date"), which is five
years from the Effective Date, unless sooner terminated pursuant to the
provisions of this Agreement. So long as the Employment Period is then in
effect, and no termination notice that is then effective has theretofore been
given, the Employment Period shall automatically extend for an additional one
year beyond the Expiration Date otherwise next set to occur, unless any party
gives written notice of non-renewal to the other parties at least 60
calendar days prior to that Expiration Date. If such notice of non-renewal is
given, the Employment Period shall expire on that Expiration Date.
(c) EMPLOYMENT BY IMED AND AMI. At all times the Executive shall be
employed by both IMED and AMI. For all purposes of this Agreement, a
termination of the Executive's employment with either IMED or AMI for any reason
shall be deemed to be a termination of Executive's employment with both IMED and
AMI for that same reason.
(d) EARLY TERMINATION FOR CAUSE. Either or both of IMED and AMI may
terminate the Executive's employment for Cause (as hereinafter defined) by
giving the Executive 30 days' advance notice in writing of such termination.
For all purposes under this Agreement, the term "Cause" shall mean (i) a breach
by Executive of any of his obligations under this Agreement of a type and kind
which is materially adverse to either or both of IMED and AMI and which remains
uncured by the Executive for five (5) calendar days following Executive's
receipt of such notice, (ii) any act by the Executive which constitutes gross
misconduct of a type and kind which is materially adverse to either or both of
IMED and AMI and which remains uncured by the Executive for five (5) calendar
days following Executive's receipt of such notice, (iii) a violation of a
federal or state law, rule or regulation applicable to the business of either or
both of IMED and AMI of a type and kind that is materially adverse to either or
both of IMED and AMI, or (iv) the conviction of the Executive of, or entry by
the Executive of a guilty or no contest plea to, the commission of a felony
involving moral turpitude. No compensation or benefits shall be paid or
provided to the Executive under this Agreement on account of a termination for
Cause, or for periods following the date when such a termination of employment
is effective. In the event the Executive's employment is terminated for Cause,
the Executive's rights under the benefit plans of each of IMED and AMI shall be
determined under the provisions of those plans. Any waiver of notice shall be
valid only if it is made in writing and expressly refers to the applicable
notice requirement of this subparagraph.
(e) EARLY TERMINATION FOR DISABILITY. Either or both of IMED and AMI
may terminate the Executive's employment for Disability (as hereinafter defined)
by giving the Executive 30 days' advance notice in writing of such termination.
For all purposes under this Agreement, the term "Disability" shall mean a
circumstance which the Executive, at the time notice is given, has been unable
by reason of his incapacity due to physical or mental illness to perform his
obligations under this Agreement for a period of not less than six (6)
consecutive months. No compensation or benefits shall be paid or provided to
the Executive under this Agreement on account of termination for Disability, or
for periods following the date when such a termination of employment is
effective. In
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the event the Executive's employment is terminated on account of Disability, the
Executive's rights under the benefit plans of each of IMED and AMI shall be
determined under the provisions of those plans. Any waiver of notice shall be
valid only if it is made in writing and expressly refers to the applicable
notice requirement of this subparagraph.
(f) EARLY TERMINATION GENERALLY. Either or both of IMED and AMI may
terminate the Executive's employment prior to the end of the Employment Period
but only by giving the Executive 30 days' advance notice of such termination in
writing. If either or both of IMED and AMI terminate the Executive's employment
prior to the end of the Employment Period for any reason other than Cause or
Disability, the Executive shall be entitled to receive the payments and benefits
referred to in Paragraphs 13(a)(i) and 13(b) below (subject to the terms and
conditions of said Paragraphs), and the Executive's rights under any applicable
benefit plans shall be determined under the provisions of those plans. Any
waiver of notice shall be valid only if it is made in writing and expressly
refers to the applicable notice requirement of this subparagraph.
(g) EARLY TERMINATION ON ACCOUNT OF DEATH. The Executive's
employment shall terminate in the event of the Executive's death. Neither IMED
nor AMI shall have any obligation to pay or provide any compensation or benefits
under this Agreement on account of the Executive's death, or for periods
following the Executive's death (provided, however, that if, prior to the
Executive's death, Executive was entitled to receive payments or benefits under
either one or both of Paragraphs 13(a)(i) and 13(b) below, then the Beneficiary
(as hereinafter defined) shall be entitled to continue to receive those payments
or benefits (subject to the terms and conditions of said Paragraphs) to the same
extent that the Executive would have been entitled to receive those payments or
benefits if he had not died). The rights of the Beneficiary under the benefit
plans of IMED and AMI in the event of the Executive's death shall be determined
under the provisions of those plans.
(h) EARLY TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate the Executive's employment prior to the end of the
Employment Period only for Good Reason (as hereinafter defined) and then only by
giving IMED and AMI 30 days' advance notice in writing of such termination. If
the Executive terminates his employment for Good Reason, the Executive shall be
entitled to receive the payments or benefits referred to in Paragraphs 13(a)(i)
and 13(b) below (subject to the terms and conditions of said Paragraphs), and
the Executive's rights under the benefit plans of IMED and AMI shall be
determined under the provisions of those plans. Any waiver of notice shall be
valid only if it is made in writing and expressly refers to the applicable
notice requirement of this subparagraph. For all purposes of this Agreement,
the term "Good Reason" means the occurrence of any one or more of the following
events without, in each case, the prior written consent of the Executive
thereto:
(i) a change in the Executive's responsibilities or duties which
then results in a significant diminution in the Executive's position with either
or both of IMED and AMI;
(ii) a substantial reduction, without good business reasons, of
the facilities and perquisites (including office space and location) then
available to the Executive;
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(iii) a material reduction in the Base Salary then payable
to, or Bonus opportunity then available to, the Executive;
(iv) a material reduction in the kind or level of employee
benefits to which the Executive is then entitled, with the result that the
Executive's overall benefits package is significantly reduced;
(v) the relocation of the Executive to a facility or a location
more than 25 miles from the Executive's then present location;
(vi) any purported termination by either or both of IMED and AMI
of the Executive's employment which is not effected for death, Disability or for
Cause, or any purported termination of the Executive's employment for which the
grounds relied upon therefor are not valid;
(vii) the failure of either or both of IMED and AMI to obtain
the assumption of this Agreement by its successor as required by Paragraph 19
hereof; or
(viii) any breach by either or both of IMED and AMI of any
provision of this Agreement applicable to it which is material and adverse to
the Executive.
3. PLACE OF EMPLOYMENT. The Executive's services shall be performed at
IMED's principal executive offices in the San Diego, California area. The
parties acknowledge, however, that the Executive may be required to travel in
connection with the performance of his duties hereunder.
4. BASE SALARY. For all services to be rendered by the Executive
pursuant to this Agreement, IMED shall pay the Executive during the Employment
Period a base salary (the "Base Salary") at an annual rate of not less than Four
Hundred Thousand Dollars ($400,000). The Base Salary shall be paid in periodic
installments in accordance with IMED's regular payroll practices. The Board of
Directors of IMED shall review the amount of the Base Salary at least annually
as of the payroll payment date nearest each anniversary of the Effective Date
and may (but shall have no obligation to) increase the amount thereof.
5. BONUS. Beginning with IMED's 1997 fiscal year end for each fiscal
year thereafter during the Employment Period, the Executive shall be eligible to
receive an annual bonus (the "Bonus"), payable by IMED, of up to 100% of the
Executive's Base Salary for such fiscal year of IMED (the "Target Amount") based
upon certain operational and financial criteria, including revenue and
profitability targets and other organizational milestones (such criteria being
hereinafter collectively referred to as the "Targets"). The Targets for each
fiscal year during the Employment Period shall be agreed upon, not less than
45 days prior to the beginning of such fiscal year, by the Executive and a
director of IMED designated for such purpose; provided, however, that the
Targets for fiscal year 1997 shall be agreed upon within 90 days following the
Effective Date. The parties acknowledge that it is their intention that the
Targets for each fiscal year shall be set at levels that are aggressive but
achievable. In the event that IMED does not achieve the Targets in any fiscal
year
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during the Employment Term, the Board of Directors of IMED may (but shall have
no obligation to) award the Executive a bonus with respect to such fiscal year
and, if the Board does so, such bonus shall be in such amount as the Board, in
its sole, absolute and unrestricted discretion, shall determine. The Board of
Directors of IMED may (but shall have no obligation to) also award the Executive
a bonus in excess of the Target Amount based upon the Executive's achievements
in the relevant fiscal year. The Board of Directors of IMED, AMI or both may
(but shall have no obligation to) institute, for the benefit of the Executive,
such additional bonus plans such Board shall determine, in each case in the
sole, absolute and unrestricted discretion of such Board.
The Bonus payable hereunder shall be payable in a single installment within
30 days following the date (the "Delivery Date") of delivery to the Board of
Directors of IMED's audited financial statements for the fiscal year to which
such Bonus relates or as otherwise agreed by the Executive and IMED's Board of
Directors. Any other bonus payable hereunder shall be payable at such time or
times as the pertinent Board of Directors shall, in its sole, absolute and
unrestricted direction, determine.
6. STOCK OPTIONS.
(a) OPTION GRANTS. Effective as of the Effective Date, AMI shall
grant the Executive two options (the "Options") to purchase an aggregate of
600,000 shares of AMI's common stock (the "Option Shares") at a per share
exercise price ("Option Exercise Price") equal to the average of the closing
price of AMI's common stock for the five business days next following the date
of the signing of this Agreement (inclusive). One of the Options ("Option A")
shall cover 500,000 shares and shall vest as described in Paragraph 6(b) below.
The second Option ("Option B") shall cover 100,000 shares and shall vest as
described in Paragraph 6(c) below. The Options shall be subject to such other
terms and conditions as are described in Paragraphs 6(d) and (e) below.
(b) VESTING OF OPTION A. Option A shall vest and become exercisable
as to 100,000 Option Shares as of the Effective Date, and as to an additional
100,000 Option Shares on each of the first, second, third and fourth
anniversaries of the Effective Date.
(c) VESTING OF OPTION B. Option B shall vest and become exercisable
in its entirety on the Delivery Date in 2001, if IMED meets the applicable
Targets for each of fiscal years 1997, 1998, 1999 and 2000, or, if later, then
on the Delivery Date next following the end of the fiscal year in which IMED has
met the applicable Targets in four out of the five fiscal years then ended.
(d) CHANGE OF CONTROL. Anything herein to the contrary
notwithstanding, all Options not then vested shall immediately vest and become
exercisable at the effective time of a Change of Control, as such term is
defined in the Stock Plan (as hereinafter defined).
(e) OPTION PROVISIONS. The Options shall be granted under the AMI
Second Amended and Restated 1988 Stock Option Plan, as amended (the "Stock
Plan"), and, except as expressly provided otherwise in this Paragraph 6, shall
be subject to the terms and conditions of the
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Stock Plan and the related form of option agreement; provided, however, that
AMI's Board of Directors may, in its discretion, grant Options under a new stock
option plan adopted prior to the Effective Date or otherwise outside of the
Stock Plan, and any such Options shall include such other terms as the AMI Board
of Directors may specify that are not inconsistent with the terms hereof and of
the applicable plan, if any. If granted under the Stock Plan or any other stock
option plan of AMI, the Options shall be granted as Incentive Stock Options to
the extent permitted by Section 422(d) of the Internal Revenue Code of 1986, as
amended. The Options shall expire on the first to occur of (i) in the event the
Executive's employment terminates by reason of the Executive's death or is
terminated by either or both of IMED and AMI as a result of the Executive's
Disability, twelve (12) months from the date of such termination; (ii) in the
event the Executive's employment terminates or expires for any other reason
(including, without limitation, termination by the Executive for Good Reason and
by either or both of IMED and AMI for Cause), ninety (90) days after the date of
such resignation or termination; or (iii) ten (10) years from the date of grant
of each Option.
7. EXPENSES. The Executive shall be entitled to prompt reimbursement for
all reasonable, ordinary and necessary travel, entertainment, and other expenses
incurred by the Executive during the Employment Period (in accordance with the
policies and procedures established for senior executive officers of IMED or
AMI, as the case may be) in the performance of his duties and responsibilities
for IMED or AMI, as the case may be, under this Agreement; provided, that the
Executive shall properly account for such expenses in accordance with the
policies and procedures of IMED and AMI, as applicable.
8. EMPLOYEE BENEFIT PLANS. During the Employment Period, the Executive
shall be entitled to participate in employee benefit plans or programs of either
or both of IMED and AMI, if any, to the extent that his position, tenure,
salary, age, health and other qualifications make him eligible to participate,
subject to the rules and regulations applicable thereto.
9. INSURANCE. IMED shall provide the Executive with a $1 million
executive life insurance policy. The beneficiary of such policy shall be named
by the Executive.
10. VACATIONS AND HOLIDAYS. Executive shall be entitled to four (4)
weeks' paid vacation and holidays in accordance with IMED's policies from time
to time for senior executive officers.
11. OTHER BENEFITS. IMED shall provide the Executive with a mobile phone,
fax and computer. IMED shall pay the annual dues of the country club known as
"The Farms" and the city club known as the "University Club" of the Executive.
12. OTHER ACTIVITIES. The Executive shall devote substantially all of his
working time and efforts during normal business hours to the business and
affairs of IMED and AMI and their respective affiliates and to the diligent and
faithful performance of the duties and responsibilities duly assigned to him
pursuant to this Agreement, except for vacations, holidays and absences due to
illness. However, the Executive may devote a reasonable amount of his time to
civic, community, or charitable activities and, with the prior written approval
of the respective Boards of Directors of
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IMED and AMI, to serve as a director of other corporations and devote a
reasonable amount of his time to other types of business or public activities
not expressly mentioned in this Paragraph.
13. TERMINATION BENEFITS. In the event the Executive's employment
terminates prior to the end of the Employment Period, then the Executive shall
be entitled to receive severance and other benefits as follows:
(a) SEVERANCE.
(i) INVOLUNTARY TERMINATION. If either or both of IMED and AMI
terminate the Executive's employment other than for Disability or Cause, or if
the Executive terminates his employment for Good Reason, then, in lieu of any
severance benefits to which the Executive may otherwise be entitled under any
IMED or AMI severance plan or program, the Executive shall be entitled to
payment of his Base Salary until the end of the Employment Period or, if
earlier, until a material breach by the Executive of his obligations under
Paragraph 14, 15 or 16 hereof that remains uncured for five (5) calendar days
following notice by IMED or AMI of such breach; provided, however, that such
payments shall be reduced to the extent of any other compensation that the
Executive receives or earns in the event he obtains a full-time senior
management position with a subsequent employer.
(ii) OTHER TERMINATION. In the event the Executive's employment
terminates for any reason other than as described in Paragraph 13(a)(i) above,
including, without limitation, by reason of the Executive's death, Disability or
resignation other than for Good Reason, then the Executive shall be entitled to
receive severance and any other benefits only as may then be established under
IMED's or AMI's existing severance and benefit plans and polices at the time of
such termination.
(b) OPTIONS. In the event the Executive's employment is terminated
by either or both of IMED and AMI as described in Paragraph 13(a)(i) above, then
the vesting of the unvested portion of the Options, if any, shall automatically
accelerate and the Executive shall have the right to exercise all or any portion
of such Options, in addition to any portion of the Options exercisable prior to
such event.
(c) NO DUTY TO MITIGATE. The Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner).
14. PROPRIETARY INFORMATION. During the Employment Period and thereafter,
the Executive shall not, without the prior written consent of the Boards of
Directors of each of IMED and AMI, disclose or use for any purpose (except in
the course of the Executive's employment under this Agreement and in furtherance
of the business of AMI, IMED or any affiliates of either one or both of them)
any confidential information or proprietary data of any one or more of IMED, AMI
or any such
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affiliate. As an express condition of the Executive's employment with IMED and
AMI, the Executive agrees to execute confidentiality agreements as requested by
either or both of IMED and AMI.
15. NON-SOLICITATION. The Executive covenants and agrees with IMED and
AMI that during the Employment Period and for a period expiring one (1) year
after the date of termination or expiration thereof, neither the Executive nor
his Controlled Affiliates (as hereinafter defined) shall solicit any of the
then-current employees of either or both of IMED and AMI or any of their
respective affiliates to terminate their employment with IMED, AMI, or such
affiliates or to become employed by any firm, company or other business
enterprise with which the Executive may then be connected. As used herein,
"Controlled Affiliate" of the Executive means any member of the Executive's
immediate family (including, without limitation, his spouse, children, parents
and siblings) and any other person or entity which, directly or indirectly, is
at any time controlled by the Executive. For purposes of this definition,
"control" of a person or entity means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person, whether by
contract or otherwise.
16. NON-COMPETITION. The Executive covenants and agrees with IMED and AMI
that during the Employment Period and for a period expiring one (1) year after
the date of termination or expiration thereof, neither the Executive nor any
Controlled Affiliate shall, whether on his or its own behalf or on behalf of any
other person, firm, partnership, corporation or other business venture
(hereinafter, a "person"), own, manage, control, participate in, consult with,
be employed by, render services for or otherwise assist in any manner any person
that is engaged in, any Business Activity (as hereinafter defined) competitive
with the Business (as hereinafter defined). Nothing herein shall prohibit the
Executive or any Controlled Affiliate from being an owner of not more than 2% of
the equity or debt securities of any such person, so long as the Executive has
no active participation (other than exercising voting or consensual rights with
respect to such interest of up to 2%) in the business of such person. As used
herein: (i) "Business Activity," with respect to any person, means any direct
or indirect primary business activity of such person; and (ii) "Business" means,
as of the date of determination, any Business Activity of any one or more of
IMED, AMI or any affiliate of either one or both of them.
17. NO ADEQUATE REMEDY AT LAW.
(a) EQUITABLE RELIEF. In the event that the Executive shall breach
any of the provisions of Paragraph 14, 15 or 16 hereof, or in the event that any
such breach is threatened by the Executive, in addition to and without limiting
or waiving any other remedies available to either or both of IMED and AMI in law
or in equity, either or both of IMED and AMI, as the case may be, shall be
entitled to immediate injunctive relief in any court, domestic or foreign,
having the capacity to grant such relief, to restrain such breach or threatened
breach and to enforce the provisions of such Paragraphs. The Executive
acknowledges that it is impossible to measure in money the damages that either
or both of IMED and AMI will sustain in the event that the Executive breaches or
threatens to breach any of the provisions of such Paragraphs and, in the event
that either or both of IMED and AMI shall institute any action or proceeding to
enforce those provisions seeking injunctive relief, the
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Executive hereby waives and agrees not to assert and shall not use as a defense
thereto the claim or defense that either or both of IMED and AMI has an adequate
remedy at law. The foregoing shall not prejudice the right of each of IMED and
AMI to require the Executive to account for and pay over to it the amount of any
actual damages incurred by IMED or AMI, as the case may be, as a result of any
such breach.
(b) The parties acknowledge that (i) the provisions of Paragraph 14,
15 and 16 are essential to protect the business and goodwill of IMED and AMI,
and (ii) the foregoing restrictions are under all of the circumstances
reasonable and necessary for the protection of each of IMED and AMI and their
business. If, however, at the time of enforcement of any or such paragraphs or
any other provision of this Agreement, a court or arbitrator shall hold that the
duration, scope or area restriction or any other provision hereof is
unreasonable under circumstances now or then existing, the parties hereto agree
that the maximum duration, scope or area reasonable under the circumstances
shall be substituted for the stated duration, scope or area.
18. RIGHT TO ADVICE OF COUNSEL. The Executive acknowledges that he has
consulted with counsel and is fully aware of his rights and obligations under
this Agreement.
19. SUCCESSORS. Each of IMED and AMI shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that IMED or
AMI, as the case may be, would be required to perform if no such succession had
taken place. Failure of IMED or AMI, as the case may be, to obtain such
assumption agreement prior to the effectiveness of any such succession shall
constitute Good Reason, within the meaning of Paragraph 2(h)(vii) hereof, for
the Executive to terminate his employment hereunder. If the Executive
terminates his employment for such Good Reason, he shall be entitled to the
payments and benefits described in Paragraphs 13(a)(i) and 13(b) of this
Agreement, subject to the terms and conditions of said Paragraphs.
20. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
San Diego, California, in accordance with the rules of the American Arbitration
Association then in effect by an arbitrator selected by IMED and AMI, on the one
hand, and the Executive, on the other, within 10 days after any party has
notified the others in writing that it desires a dispute between them to be
settled by arbitration. In the event the parties cannot agree on such
arbitrator within such 10 day period, IMED and AMI, on the one hand, and the
Executive, on the other, shall each select an arbitrator and inform the other
party in writing of such arbitrator's name and address within 5 days after the
end of such 10-day period and the arbitrators so selected shall select a third
arbitrator within 15 days thereafter; provided, however, that in the event of a
failure by either IMED and AMI or the Executive to select an arbitrator and
notify the other party of such selection within the time period provided above,
the arbitrator selected by the other party shall be the sole arbitrator of the
dispute. IMED and AMI, on the one hand, and the Executive, on the other, shall
pay their or his own expenses associated with such arbitration, including the
expense of any arbitrator selected by such party or parties and IMED shall pay
the expenses of the
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jointly selected arbitrator. The decision of the arbitrator or a majority of
the panel of arbitrators shall be binding upon the parties, and judgment in
accordance with that decision may be entered in any court having jurisdiction
thereover. Punitive damages shall not be awarded.
Notwithstanding the foregoing, each party hereto specifically reserves
the right to seek equitable remedies in a court of competent jurisdiction.
21. ABSENCE OF CONFLICT. The Executive represents and warrants that his
employment by IMED and AMI as described herein shall not constitute a breach of
or conflict with and shall not be constrained by any prior employment or
consulting agreement or relationship.
22. ASSIGNMENT. This Agreement and all rights under this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees, successors and assigns.
This Agreement is personal in nature, and none of the parties to this Agreement
shall, without the written consent of the others, assign or transfer this
Agreement or any one or more of its rights or obligation under this Agreement to
any other person or entity; except that either or both of IMED and AMI may
assign this Agreement to any of its affiliates, PROVIDED, that such assignment
shall not relieve the assigning party of its obligations hereunder. If the
Executive should die while any amounts are still payable, or any benefits are
still required to be provided, to the Executive hereunder, all such amounts or
benefits, unless otherwise provided herein, shall be paid or provided in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate
(in each case, a "Beneficiary").
23. NOTICES. For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: William J. Mercer
P.O. Box 1386
6160 Paseo DeLicias
Rancho Santa Fe, CA 92067
If to AMI: c/o IMED Corporation
950 3rd Avenue
30th Floor
New York, NY 10022
If to IMED: IMED Corporation
950 3rd Avenue
30th Floor
New York, NY 10022
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or to such other address or the attention of such other person as the recipient
party has previously furnished to the other parties in writing in accordance
with this paragraph. Such notices or other communications shall be effective
upon delivery or, if earlier, three days after they have been mailed as provided
above.
24. INTEGRATION. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter hereof and supersedes
all prior or contemporaneous agreements whether written or oral. This Agreement
supersedes all prior agreements relating to the employment of the Executive by
IVAC Medical Systems, Inc., which agreements shall terminate as of the Effective
Date. No waiver, alteration, or modification of any of the provisions of this
Agreement shall be binding unless in writing and signed by duly authorized
representatives of the parties hereto.
25. WAIVER. Failure or delay on the part of either party hereto to
enforce any right, power, or privilege hereunder shall not be deemed to
constitute a waiver thereof. Additionally, a waiver by either party or a breach
of any promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent breach or promise by such other party.
26. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
27. HEADINGS. The headings of the paragraphs contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this Agreement.
28. APPLICABLE LAWS. This Agreement shall be governed by and construed in
accordance with the internal substantive laws, and not the choice of law rules,
of the State of California.
29. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of IMED and AMI by their duly authorized officers, as of the day and
year first above written.
IMED CORPORATION
By: /s/ Jeffry M. Picower
Jeffry M. Picower
Chairman
ADVANCED MEDICAL, INC.
By: /s/ Jeffry M. Picower
Jeffry M. Picower
Chairman
EXECUTIVE
/s/ William J. Mercer
William J. Mercer
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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 23rd day of
August, 1996, by and among ADVANCED MEDICAL, INC. ("AM"), IMED CORPORATION
("IMED"), a majority-owned subsidiary of AM, AM and IMED each being a
corporation organized under the laws of the State of Delaware and having an
office and place of business at 9775 Businesspark Avenue, San Diego California
92131, and Joseph W. Kuhn, ("Executive"), residing at 13979 Hickory Street,
Poway, California 92064.
B A C K G R O U N D
The Executive, AM and IMED are parties to an employment agreement
dated August 31, 1993, as amended from time to time (the "Existing Agreement").
IMED proposes to engage in a business combination (the "Business Combination")
as a result of which IVAC Holdings, Inc. ("Holdings"), the parent of IVAC
Medical Systems, Inc., a Delaware corporation ("Operating Co."), will be merged
with IMED Merger Sub, Inc., a wholly-owned subsidiary of IMED. Immediately
thereafter, Operating Co. will be merged with and into Holdings and IMED will be
merged with and into Holdings (the "Subsequent Combination"). IMED and AM
desire to employ the Executive as of the effective date of the Business
Combination ("Effective Date") in the capacity of the Executive Vice President,
Chief Financial Officer, Secretary and Treasurer of each of AM and IMED, and the
Executive desires to be so employed, all upon and subject to the terms and
conditions set forth in this Agreement. Following the Subsequent Combination
any reference to IMED in this Agreement shall be deemed to be a reference to
Holdings.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
1. EMPLOYMENT. Each of IMED and AM hereby employs the Executive pursuant
to the terms and conditions of this Agreement, effective as of the Effective
Date, unless on or prior to such date the Executive dies, becomes unable to
perform his duties hereunder, voluntarily terminates his existing employment
with AM or IMED, or is discharged for "Cause" (as contemplated and defined in
AM's Third Amended and Restated 1988 Stock Option Plan) in which event this
Agreement shall be deemed to be terminated, fully released and of no force or
effect (a "Termination"). The Executive hereby
<PAGE>
accepts such employment by IMED and AM, as the case may be, upon such terms and
conditions.
2. RESPONSIBILITIES AND DUTIES. During the Term of Employment (as
hereinafter defined), the Executive shall be employed as the Executive Vice
President, Chief Financial Officer, Secretary and Treasurer of each of AM and
IMED. In that capacity, for each of such companies, the Executive shall have
the responsibilities and duties customarily ascribed to a person holding the
offices referred to above in companies similarly situated, as well as: (i) with
respect to IMED, such other duties and responsibilities consistent with such
offices as the executive holding the title of Chief Executive Officer of IMED
(the "IMED CEO") or, if there is no one serving in the capacity of IMED CEO,
that the Board of Directors of IMED (the "IMED Board"), shall from time to time,
reasonably determine; and (ii) with respect to AM, such other duties and
responsibilities consistent with such offices as the executive holding the title
of Chief Executive Officer of AM (the "AM CEO") or, if there is no one serving
in the capacity of AM CEO, that the Board of Directors of AM (the "AM Board"),
shall from time to time, reasonably determine. It is agreed and understood
between the parties that the Executive shall devote a substantial portion of his
working time to the performance of his responsibilities and duties to IMED
hereunder, but shall also devote that portion of his working time as is
reasonably necessary to the performance of his responsibilities and duties to AM
hereunder. During the Term of Employment, the Executive shall devote his full
working time to the performance of his responsibilities and duties hereunder and
shall comply with the policies of IMED and AM with respect to conflict of
interest and business ethics from time to time in effect.
During the Term of Employment, the Executive shall not, without the
prior written consent of both AM and IMED, render services, whether or not
compensated, to any other person or entity as an employee, independent
contractor of otherwise, PROVIDED, HOWEVER, that nothing contained herein shall
restrict the Executive: (i) from rendering services to charitable organizations,
industry organizations, trade organizations and civic organizations; (ii) in
each case, with the prior written approval of both AM and IMED, which approval
will not be unreasonably withheld, from serving as a director of any one or more
other corporations; or (iii) from managing his personal investments, in each of
the above cases in such manner as shall not interfere with the performance by
the Executive of his duties and responsibilities hereunder.
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The Executive shall report directly to the CEO of the pertinent
company, if there is no other person serving in the capacity of CEO, to the
pertinent Board of Directors. The Executive's principal duties shall be
rendered at the principal office of IMED and AM in San Diego, California.
3. COMPENSATION. For all services to be performed by the Executive
under this Agreement, IMED shall pay to the Executive during the Term of
Employment a base salary ("Base Salary") at the rate of $250,000 per annum. All
Base Salary payable to the Executive pursuant to this Section 3 shall be payable
in accordance with the normal payroll practices of IMED for executive personnel
from time to time in effect. IMED shall review the amount of Base Salary at
least annually as of the payroll payment date nearest each anniversary of the
Effective Date and may (but shall have no obligation to) increase the
Executive's Base Salary, pay management bonuses (other than the Company Bonus
and the Additional Bonus) to the Executive or do both.
4. EXPENSES AND ADDITIONAL BENEFITS.
a. BENEFIT PLANS. The Executive will be eligible to participate in
any "stay-put" or "retention" bonus plans of AM or IMED or both AM and IMED. In
addition, the Executive will be eligible to participate in the employee benefit
plans, medical insurance plans, disability income plans, retirement plans and
other health and welfare plans of IMED as generally made available to all
executive officers of IMED, as they may exist from time to time, except: (i) for
any severance and other termination benefits; and (ii) to the extent such plans
are duplicative of, or in conflict with, benefits otherwise provided to the
Executive under this Agreement and subject to the applicable terms and
conditions of such plans as they may exist from time-to-time, including, without
limitation, those relating to eligibility and employee contribution.
b. OTHER BENEFITS. During the Term of Employment, IMED shall
provide the Executive with a mobile phone, fax and computer and pay all
reasonable costs associated therewith and shall pay the initiation fee and
annual dues of a country club chosen by the Executive such as the Fairbanks
Ranch Country Club or another country club located in San Diego, California.
c. AUTOMOBILE. During the Term of Employment, AM shall pay all
lease payments under a lease for an automobile in the class of a BMW 740iL,
together with all insurance and
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maintenance costs on such vehicle, consistent with past practice.
d. VACATION. During the Term of Employment, the Executive will be
entitled to four (4) weeks paid vacation and holidays in accordance with IMED's
policies available to executives.
e. DOCUMENTED EXPENSES. IMED shall reimburse the Executive for all
reasonable, documented travel, entertainment and other out-of-pocket expenses
incurred by the Executive on behalf of the IMED in the course of his employment
hereunder in accordance with IMED's normal policies and provisions regarding
such reimbursement. AM shall reimburse the Executive for all reasonable,
documented travel, entertainment and other out-of-pocket expenses incurred by
the Executive on behalf of the AM in the course of his employment hereunder in
accordance with AM's normal policies and provisions regarding such
reimbursement.
f. TAXES. The Executive understands and acknowledges that he may
incur personal income tax (whether federal, state, local or otherwise) liability
relating to some or all of the benefits described in this Agreement and agrees
that he shall be solely responsible for the maintenance of any records relating
thereto and he shall be solely responsible for the payment thereof. All Base
Salary or other compensation or benefits, in cash or in kind, paid to the
Executive hereunder shall be subject to normal withholding and deductions
imposed by any one or more of local, state, federal and foreign governments.
g. INCENTIVE COMPENSATION. Beginning with IMED's 1997 fiscal year
and for each fiscal year thereafter during the Term of Employment, the Executive
shall be eligible to receive an annual bonus (the "Company Bonus") of 50% of the
Executive's Base Salary for such fiscal year (the "Target Amount") based upon
IMED achieving certain operational and financial criteria, including revenue and
profitability targets and other organizational milestones (such criteria being
hereinafter collectively referred to as the "Targets"). As long as the Mercer
Agreement (as hereinafter defined) is in effect, the Targets for each fiscal
year during the Term of Employment shall be the same as those targets set by the
IMED Board for William Mercer, the IMED CEO as of the Effective Date, pursuant
to the employment agreement of Mr. Mercer (the "Mercer Agreement") or, such
other targets as Mr. Mercer and the Executive may agree upon not less than 45
days prior to
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the beginning of such fiscal year; PROVIDED, HOWEVER, that if the Targets for
the fiscal year 1997 are to be Targets agreed upon by Mr. Mercer and the
Executive, such Targets will be agreed upon within 90 days following the
Effective Date. If the Mercer Agreement is no longer in effect, the Targets for
each fiscal year shall be those Targets agreed upon, not less than 45 days prior
to the beginning of such fiscal year, by the Executive and by a director serving
on the IMED Board and designated by the IMED Board for such purpose; PROVIDED,
HOWEVER, that the Targets for fiscal year 1997 will be agreed upon within 90
days following the Effective Date. If IMED does not achieve the Targets in any
fiscal year during the Employment Term, the Board of Directors may, in its sole
and absolute discretion, award the Executive a bonus with respect to such fiscal
year in such amount as it, in its sole and absolute discretion, shall determine.
In addition, beginning with IMED's 1997 fiscal year and for each
fiscal year thereafter during the Term of Employment, the Executive shall be
eligible to receive an additional annual bonus (the "Additional Bonus") of 25%
of the Executive's Base Salary for each fiscal year during the Term of
Employment (the "Individual Target Amount") based upon certain operational,
financial and personal goals and certain organizational milestones (the
achievement of which is in the control of and intended to be primarily the
result of the Executive's efforts) (such criteria being hereinafter collectively
referred to as the "Individual Targets"). The Individual Targets for each
fiscal year during the Term of Employment will be agreed upon, not less than 45
days prior to the beginning of such fiscal year, by the Executive and the IMED
CEO or, if there is no other person serving in the capacity of IMED CEO, by the
Executive and by a director serving on the IMED Board and designated by the IMED
Board for such purpose; PROVIDED, HOWEVER, that the Individual Targets for
fiscal year 1997 will be agreed upon within 90 days following the Effective
Date.
The Company Bonus and the Additional Bonus, if any, payable hereunder
for any fiscal year shall be paid by IMED in a single installment within 30 days
following the date (the "Delivery Date") of delivery to the Board of Directors
of IMED's audited financial statements for the fiscal year to which such bonus
relates or as otherwise agreed to by the Executive and either the IMED Board or
the IMED CEO.
h. OPTIONS. All of the stock options previously granted by AM to
the Executive through the date hereof under
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the AM 1988 Amended and Restated Stock Option Plan (the "Plan") shall continue
in effect in accordance with the terms of the grant of each such option and the
option agreement evidencing such grant, and, except as contemplated in Section
6(c) below, shall continue to vest at the rate of 20% per year from the date of
grant.
Effective as of the Effective Date, AM shall grant the Executive
options (the "Options") under the Plan to purchase an aggregate of 75,000 shares
of AM's common stock at a per share exercise price equal to the average closing
price of AM's common stock for the five business days next following the signing
of this Agreement (inclusive) and vesting ratably on each one year anniversary
of the date of grant in equal amounts over three years.
Anything herein to the contrary notwithstanding, all Options not then
vested shall immediately vest and become exercisable at the effective time of a
Change of Control, as such term is defined in the Plan.
5. TERM OF EMPLOYMENT.
The Executive's term of employment hereunder ("Term of Employment")
shall commence on the Effective Date and shall continue until the "Agreement
Termination Date", which shall mean the earliest to occur of:
a. the death of the Executive;
b. the total or partial disability of the Executive that renders him
unable to perform his obligations under this Agreement for either IMED
or AM for a period of not less than six (6) consecutive months;
c. the discharge of the Executive by the IMED Board or the AM Board
for "Cause" (as defined in AM's Amended and Restated 1988 Stock Option
Plan);
d. the discharge of the Executive by the IMED Board or the AM Board
without Cause and only by giving the Executive thirty (30) day advance
notice in writing of such termination (a "Separation") prior to the
Final Date;
e. the voluntary termination of the Term of Employment by the
Executive; PROVIDED, HOWEVER,
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that in the event of a material breach by IMED or AM of the terms of
this Agreement (a "Material Breach"), the Executive will provide IMED
or AM with notice thereof and if IMED or AM fails to cure the same
during the thirty (30) day period following receipt of such notice,
the Executive may terminate his employment with AM and IMED and such
shall be deemed to constitute a Separation; or
f. the Final Date;
If the Executive is terminated pursuant to Sections 5(b) or 5(c), the
Executive shall be given written notice of termination thirty (30) days in
advance of such termination. During the thirty (30) day period, the Executive
will be given the opportunity to present his position on the matter to the AM or
IMED CEO, or if there is no one serving in the capacity of AM CEO, the AM Board
of Directors, and if there is no one serving in the capacity of IMED CEO, the
IMED Board of Directors.
"Final Date" shall mean the third anniversary of the Effective Date,
provided that the Final Date shall automatically extend for additional one year
periods on the third anniversary date of the Effective Date and on each
subsequent anniversary date of the Effective Date unless any party has given
written notice of non-renewal to the other party at least 60 calendar days prior
to: (i) such third anniversary date; or (ii) any such other anniversary date.
If such notice of non-renewal is given by AM or IMED, and the Final Date occurs
as a result thereof (an "AM/IMED Notice Event"), then such termination of this
Agreement shall be deemed to constitute a Separation.
6. EFFECTS OF TERMINATION.
a. Upon termination of the Term of Employment pursuant to Sections
5(a), (b), (c), (e) except as a result of a termination pursuant to a Material
Breach or (f), the Executive shall be entitled to receive within thirty (30)
days after the date of termination any amounts due and unpaid to the Executive
from IMED as of the Agreement Termination Date.
b. Following the termination of the Term of Employment pursuant to
Section 5(d) or Section 5(e) as a result of a Material Breach, or in the event
of the occurrence of an AM/IMED Notice Event, the Executive shall be entitled to
receive: (i)a lump sum payment of an amount equal to one (1)
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year's Base Salary to be paid promptly following the date of termination; and
(ii) payment of such prorated portion of the Company Bonus and Additional Bonus
as IMED determines to be appropriate under the circumstances (IMED hereby
agreeing to be reasonable in that regard), to be paid promptly following the
determination thereof (the payments to be made pursuant to Section 6(b)(i) and
6(b)(ii) being referred to herein as the "Severance Payments"). During the one
year period following termination of the Term of Employment (but not for any
period after which the Executive has commenced full time employment with an
employer other than AM or IMED and has qualified for coverage under the benefit
plans of such employer), the Executive shall be entitled to receive (to the
extent consistent with past practice) the benefits referred to on Schedule 1
hereto to the extent he participated therein at the time of Separation.
Severance Payments made to the Executive hereunder are in lieu of, and
not in addition to, any unemployment compensation payments from any state or
local governmental agency or instrumentality or otherwise for the same
unemployment period. The Executive agrees he will not apply for unemployment
benefits.
c. In the event of the occurrence of a Separation, then all stock
options granted to the Executive pursuant to the Plan prior to the effective
date of such Separation shall immediately vest and become exercisable at any
time during the one year period following a Separation.
d. The rights and remedies provided to the Executive under this
Section 6 and any right to any stay-put or retention bonus as contemplated in
the first sentence of Section 4(a) hereof shall be the sole and exclusive rights
and remedies of the Executive in the event of either or both of the termination
of this Agreement and the Executive's employment hereunder.
7. NON-DISCLOSURE, NON COMPETITION
AND NON-SOLICITATION
a. NON-DISCLOSURE. The Executive agrees that all information
pertaining to the prior, current or contemplated business of IMED, AM and their
affiliates (excluding (i) publicly available information (in substantially the
form in which it is publicly available) unless such information is publicly
available by reason of unauthorized disclosure and (ii) information of a general
nature not pertaining
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exclusively to IMED or AM which is generally available) are valuable and
confidential assets of IMED and AM. Such information shall include, without
limitation, information relating to intellectual property, patents, trademarks,
trade secrets, supplier lists, customer lists, bidding procedures, financing
techniques and sources and such financial statements of IMED, AM and their
affiliates as are not available to the public. The Executive shall hold all
such information in trust and confidence for IMED and AM and shall not use or
disclose any such information for other than IMED's or AM's business and shall
be liable for damages incurred by IMED or AM as a result of disclosure of such
information by the Executive for any purpose other than IMED's or AM's business,
either during his employment or after the Agreement Termination Date.
b. NON-COMPETITION. Executive agrees that at any time during the
Term of Employment and for a period of twelve (12) months thereafter, whether or
not the Executive is discharged for Cause prior thereto, the Executive will not
accept any employment with, or render any services to, any person, firm or
corporation in which its primary business activity competes with any business
conducted by IMED, AM or their affiliates on the Agreement Termination Date.
c. NON-SOLICITATION. Executive agrees that he will not, during the
Term of Employment and for a period of twelve (12) months thereafter, directly
or indirectly, individually or on behalf of other persons, aid or endeavor to
solicit or induce (i) any employees of IMED, AM or their affiliates to leave
their employment with IMED, AM or their affiliates in order to accept employment
with another person or entity, or (ii) any customers of IMED, AM or their
affiliates to purchase products or services sold or provided by IMED, AM or
their affiliates from another person or entity.
d. NO ADEQUATE REMEDY AT LAW. The parties hereto acknowledge that
it is impossible to measure in money the damages which will accrue to IMED or AM
in the event the Executive breaches any of the covenants in paragraphs 7(a)
through (c) above and, if IMED or AM shall institute any action or proceeding to
enforce those covenants, the Executive hereby waives and agrees not to assert
the claim or defense that IMED or AM has an adequate remedy at law. The
foregoing shall not prejudice IMED or AM's right to require the Executive to
account for and pay over to IMED or AM the amount of any actual damages incurred
by IMED or AM as a result of any such breach, up to but not in excess of the
compensation
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and other benefits derived or received by the Executive as a result of any
transaction constituting a breach of the covenants set forth in paragraph 7(a),
(b) or (c) above.
8. REPRESENTATIONS AND WARRANTIES.
a. The Executive represents and warrants to and agrees with IMED and
AM that the execution and delivery of this Agreement by the Executive and the
performance by the Executive of his duties hereunder shall not result in any
breach of, or constitute a default under, any agreement to which he is a party
or by which he may be bound.
b. IMED and AM each represent and warrant to and agrees with the
Executive that the execution and delivery of this Agreement by IMED and AM and
the performance by IMED and AM of its obligations hereunder shall not result in
any breach of, or constitute a default under, any agreement to which it is a
party or by which it may be bound.
9. NOTICE. Any notice to be given hereunder by a party shall be
deemed given, if in writing and delivered personally or sent by registered or
certified mail, to their respective addresses hereinabove provided, and shall be
effective upon receipt. Any party may change its or his address by written
notice to all other parties given in the manner specified above.
10. ASSIGNMENT. This Agreement and all rights under this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective personal or legal representatives,
executors, administrators, heirs, distributees, deviates, legatees, successors
and assigns. This Agreement is personal in nature, and none of the parties to
this Agreement shall, without the written consent of the others, assign or
transfer this Agreement or any one or more of its rights or obligations under
this Agreement to any other person or entity, except that: (i) the foregoing
shall not restrict the Business Combination or the Subsequent Combination as
contemplated herein; and (ii) either or both of IMED or AM may assign this
Agreement to any of its affiliates; PROVIDED, that such assignment shall not
relieve the assigning party of its obligations hereunder. If the Executive
should die while any amounts are still payable, or any benefits are still
required to be provided, to the Executive hereunder, all such amounts or
benefits, unless otherwise provided herein, shall be paid or provided in
accordance with the terms of this Agreement to
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the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
11. GOVERNING LAW. This Agreement shall be construed and governed in
all respects by the law applicable to contracts made and to be performed in
State of California.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding among IMED, AM and the Executive relating to the subject
matter hereof, and neither this Agreement nor any provisions hereof can be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought.
13. SEVERABILITY. The invalidity of any term or terms of this
Agreement shall not invalidate or otherwise affect any other term of this
Agreement, which shall remain in full force and effect. The parties agree that
in the event a court of competent jurisdiction determines that any terms of
Section 6 hereof are invalid or otherwise unenforceable, it is their intention
that such court shall substitute terms therefor which such court determines are
enforceable, so as to result in the enforcement of such Section to the maximum
extent permitted by law.
14. OBLIGATION SEVERAL. The obligation of IMED and AM hereunder are
several and not joint. IMED shall only be obligated for the express obligations
of IMED hereunder and AM shall only be obligated for the express obligations of
AM hereunder.
15. EFFECT. From and after the Effective Date, this agreement shall
supersede, and replace all other agreements (written or oral), understandings,
letters and discussions concerning Executive's employment with IMED, AM or any
of its affiliates including, without limitation, the Existing Agreement
(collectively, the "Prior Agreements"). On the Effective Date all of the Prior
Agreements shall, by virtue of this Agreement, be and be deemed to be
terminated, fully released and of no force or effect. Until the Effective Date,
if any, the terms of the Prior Agreements shall continue in effect in accordance
with the terms thereof.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, more of which need contain the signature of more than one party
hereto, each of which shall
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be deemed to be an original, and all of which together shall constitute a single
agreement.
IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.
IMED CORPORATION.
By: /s/ Jeffry M. Picower
Name: Jeffry M. Picower
Title: Chairman of the
Board of Directors
ADVANCED MEDICAL, INC.
By: /s/ Jeffry M. Picower
Name: Jeffry M. Picower
Title: CEO
/s/ Joseph W. Kuhn
Joseph W. Kuhn
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Schedule 1
Life Insurance Benefits - Basic,
Supplemental, Family Protection
Comprehensive Medical/Dental Plan
Retirement Plan*
Savings and Stock Plan
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*/Pursuant to the terms of the Retirement Plan, from and after the date
employment is terminated, the Executive will continue to be covered by the
Retirement Plan and will be entitled to those benefits which have vested in the
plan, but will not be entitled to receive any additional benefits under that
plan after the date of such termination, whether or not the Executive is
receiving Severance Payments.
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