<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
---------------------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
COMMISSION FILE NUMBER 0-19946
LINCARE HOLDINGS INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 51-0331330
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19337 US 19 NORTH, SUITE 500, 33764
CLEARWATER, FL (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code: (727) 530-7700
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT OCTOBER 29, 1999
----- -------------------------------
<S> <C>
Common Stock, $0.01 par value............................... 54,040,867 shares
</TABLE>
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LINCARE HOLDINGS INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited)
Condensed consolidated balance sheets....................... 3
Condensed consolidated statements of operations............. 4
Condensed consolidated statements of cash flows............. 5
Notes to condensed consolidated financial statements........ 6
Item 2 Management's Discussion and Analysis of Results of
Operations and Financial Condition.......................... 7
Item 3 Quantitative and Qualitative Disclosure Regarding Market
Risk........................................................ 9
PART II. OTHER INFORMATION
Item 1 Legal Proceedings........................................... 10
Item 2 Changes in Securities....................................... 10
Item 3 Defaults Upon Senior Securities............................. 10
Item 4 Submission of Matters to a Vote of the Security Holders..... 10
Item 5 Other Information........................................... 10
Item 6 Exhibits and Reports on Form 8-K............................ 10
SIGNATURE........................................................... 11
</TABLE>
2
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LINCARE HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 12,360 $ 5,100
Accounts and notes receivable............................. 98,983 85,187
Income tax receivable..................................... 1,679 3,553
Inventories............................................... 3,020 2,908
Prepaid expenses.......................................... 910 478
-------- --------
Total current assets.............................. 116,952 97,226
-------- --------
Property and equipment...................................... 300,261 246,033
Less: accumulated depreciation.............................. 134,985 105,799
-------- --------
Net property and equipment........................ 165,276 140,234
-------- --------
Other assets:
Goodwill.................................................. 391,489 336,485
Intangible assets......................................... 8,421 6,102
Covenants not to compete.................................. 1,105 1,772
Other..................................................... 2,754 820
-------- --------
Total other assets................................ 403,769 345,179
-------- --------
Total assets................................. $685,997 $582,639
======== ========
Current liabilities:
Current installments of long-term obligations............. $ 11,606 $ 12,923
Accounts payable.......................................... 21,937 19,169
Accrued expenses:
Compensation and benefits.............................. 13,059 10,679
Other.................................................. 6,554 5,377
-------- --------
Total current liabilities......................... 53,156 48,148
-------- --------
Long-term obligations, excluding current installments....... 155,000 22,258
Deferred income taxes....................................... 14,272 15,651
Minority interest........................................... 840 926
Stockholders' equity:
Common stock.............................................. 584 583
Additional paid-in capital................................ 134,696 128,828
Retained earnings......................................... 441,419 367,085
Less: treasury stock...................................... 113,970 840
-------- --------
Total stockholders' equity........................ 462,729 495,656
-------- --------
Total liabilities and stockholders' equity... $685,997 $582,639
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
LINCARE HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
----------------------------- -----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Net revenues................................ $ 150,247 $ 125,691 $ 429,353 $ 357,113
----------- ----------- ----------- -----------
Costs and expenses:
Costs of goods and services............... 23,124 18,998 66,753 55,698
Operating expenses........................ 33,875 28,160 97,278 82,444
Selling, general and administrative
expenses............................... 33,144 27,568 94,867 79,686
Bad debt expense.......................... 1,803 1,508 5,152 4,285
Depreciation expense...................... 10,710 8,845 30,560 25,420
Amortization expense...................... 4,091 3,328 11,858 9,279
----------- ----------- ----------- -----------
106,747 88,407 306,468 256,812
----------- ----------- ----------- -----------
Operating income.................. 43,500 37,284 122,885 100,301
----------- ----------- ----------- -----------
Other income (expense):
Interest income........................... 194 74 300 358
Interest expense.......................... (1,512) (504) (2,909) (720)
Net loss on disposal of property
and equipment.......................... (142) (10) (187) (44)
----------- ----------- ----------- -----------
(1,460) (440) (2,796) (406)
----------- ----------- ----------- -----------
Income before income taxes........ 42,040 36,844 120,089 99,895
Income taxes................................ 16,019 14,111 45,755 38,260
----------- ----------- ----------- -----------
Net income........................ $ 26,021 $ 22,733 $ 74,334 $ 61,635
=========== =========== =========== ===========
Basic -- earnings per common share........ $ 0.46 $ 0.39 $ 1.28 $ 1.06
=========== =========== =========== ===========
Diluted -- earnings per common share...... $ 0.45 $ 0.38 $ 1.26 $ 1.04
=========== =========== =========== ===========
Weighted average number of common shares
outstanding............................... 57,067,880 58,104,111 57,910,187 57,887,913
=========== =========== =========== ===========
Weighted average number of common shares and
common share equivalents outstanding...... 58,291,293 59,355,421 58,893,187 59,391,985
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
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LINCARE HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
--------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1999 1998
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Cash from operations........................................ $116,808 $113,255
Investing activities:
Proceeds from sale of property and equipment.............. 540 93
Capital expenditures...................................... (51,577) (52,590)
(Increase) decrease in other assets....................... (1,934) 437
Business acquisitions, net of cash acquired............... (50,500) (71,674)
-------- --------
(103,471) (123,734)
-------- --------
Financing activities:
Proceeds from long-term obligations....................... 262,000 48,000
Payment of long-term obligations.......................... (160,234) (35,706)
Decrease in minority interest............................. (220) (253)
Proceeds from issuance of common stock.................... 1,053 7,352
Proceeds from the sale of put options..................... 4,454 --
Treasury stock acquired................................... (113,966) (1,731)
Treasury stock issued..................................... 836 --
-------- --------
(6,077) 17,662
-------- --------
Increase in cash............................................ 7,260 7,183
Cash and cash equivalents, beginning of period.............. 5,100 4,078
-------- --------
Cash and cash equivalents, end of period.................... $ 12,360 $ 11,261
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
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LINCARE HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying condensed consolidated balance sheet as of September 30,
1999, the condensed consolidated statements of operations for the three and nine
month periods ended September 30, 1999 and 1998 and the condensed consolidated
statements of cash flows for the nine months ended September 30, 1999 and 1998
are unaudited. In the opinion of management, all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the entire year. The accompanying condensed
consolidated balance sheet as of December 31, 1998 is derived from the Lincare
Holdings Inc. (the "Company") audited balance sheet as of that date.
NOTE 2 -- BUSINESS COMBINATIONS
During the nine months ended September 30, 1999 the Company acquired, in
unrelated acquisitions, the stock of four companies and certain assets of eight
companies. Each acquisition was accounted for as a purchase. The results of the
acquired companies are included in the accompanying consolidated statements of
operations since the respective dates of acquisition.
The aggregate cost of these acquisitions was as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Cash........................................................ $50,500
Deferred acquisition obligations............................ 7,995
Assumption of liabilities................................... 17,151
-------
$75,646
=======
</TABLE>
The aggregate purchase price was allocated as follows:
<TABLE>
<S> <C>
Current assets.............................................. $ 2,588
Property and equipment...................................... 4,752
Intangible assets........................................... 5,774
Goodwill.................................................... 62,532
-------
$75,646
=======
</TABLE>
Unaudited pro forma supplemental information on the results of operations
for the nine months ended September 30, 1999 and September 30, 1998 are provided
below and reflect the acquisitions as if they had been combined at the beginning
of each respective period.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
----------------------
1999 1998
-------- --------
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
Net revenues................................................ $440,698 $390,606
======== ========
Net income.................................................. $ 75,494 $ 66,538
======== ========
Income per common share:
Basic..................................................... $ 1.30 $ 1.15
======== ========
Diluted................................................... $ 1.28 $ 1.12
======== ========
</TABLE>
The unaudited pro forma financial information is not necessarily indicative
of either the results of operations that would have occurred had the
transactions been effected at the beginning of the respective preceding periods
or of future results of operations of the combined companies.
6
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LINCARE HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
BALANCED BUDGET ACT OF 1997
On August 5, 1997, the Balanced Budget Act of 1997 ("BBA") was signed into
law. The BBA reduces Medicare payment amounts for oxygen and oxygen equipment
furnished after January 1, 1998, to 75 percent of the fee schedule amounts in
effect during 1997. Payment amounts for oxygen and oxygen equipment furnished
after January 1, 1999, and each subsequent year are reduced to 70 percent of the
fee schedule amounts in effect during 1997.
The BBA freezes the Consumer Price Index (U.S. urban average) update for
covered items of durable medical equipment for each of the years 1998 through
2002 while limiting fees for parenteral and enteral nutrients, supplies and
equipment to 1995 reasonable charge levels over the same period. The BBA reduces
payment amounts for covered drugs and biologicals to 95 percent of the average
wholesale price of such covered items for each of the years 1998 through 2002.
The BBA authorizes the Department of Health and Human Services to conduct
up to five competitive bidding demonstration projects for the acquisition of
durable medical equipment and requires that one such project be established for
oxygen and oxygen equipment. Each demonstration project is to be operated over a
three-year period and is to be conducted in not more than three competitive
acquisition areas. The first demonstration project became effective in Polk
County, Florida on October 1, 1999. The BBA also includes provisions designated
to reduce health care fraud and abuse including a surety bond requirement for
durable medical equipment providers.
OPERATING RESULTS
The following table sets forth for the periods indicated a summary of the
Company's net revenues by source:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED
ENDED SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------------
1999 1998 1999 1998
-------- -------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Oxygen and other respiratory therapy.... $135,438 $111,168 $385,696 $318,312
Home medical equipment and other........ 14,809 14,523 43,657 38,801
-------- -------- -------- --------
Total......................... $150,247 $125,691 $429,353 $357,113
======== ======== ======== ========
</TABLE>
Net revenues for the three months ended September 30, 1999 increased by
$24,556,000 (or 19.5%) compared with the three months ended September 30, 1998,
and for the nine months ended September 30, 1999 increased $72,240,000 (or
20.2%) compared with the nine months ended September 30, 1998. The price cuts
attributable to the BBA reduced the Company's revenues by approximately
$4,998,000 and $14,203,000 for the three and nine months ended September 30,
1999. Excluding the effect on the Company's revenues from the Medicare price
reductions, internally generated growth increased revenues by approximately
$15,827,000 (or 12.6%) and $43,475,000 (or 12.2%) for the three and nine months
ended September 30, 1999. Growth due to acquisitions increased revenues by
approximately $13,727,000 (or 10.9%) for the three months ended September 30,
1999 and $42,968,000 (or 12.0%) for the nine months ended September 30, 1999
over the comparable prior year period.
Cost of goods and services as a percentage of net revenues were 15.4% for
the three months ended September 30, 1999 compared with 15.1% for the three
months ended September 30, 1998. Costs of goods and services as a percentage of
net revenues were 15.6% for the nine months ended September 30, 1999 and
September 30, 1998.
Operating expenses as a percentage of net revenues were 22.6% for the three
months ended September 30, 1999 as compared to 22.4% for the three months ended
September 30, 1998. Operating expenses as a
7
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percentage of net revenues were 22.7% for the nine months ended September 30,
1999 compared with 23.1% for the nine months ended September 30, 1998.
Selling, general and administrative expenses as a percentage of net
revenues were 22.1% for the three months ended September 30, 1999 compared with
21.9% for the three months ended September 30, 1998. Selling, general and
administrative expenses as a percentage of net revenues were 22.1% for the nine
months ended September 30, 1999 compared with 22.3% for the nine months ended
September 30, 1998.
Amortization expense for the three months ended September 30, 1999
increased to $4,091,000 compared with $3,328,000 for the three month period
ending September 30, 1998. Amortization expense for the nine months ended
September 30, 1999 increased to $11,858,000 compared with $9,279,000 for the
nine month period ended September 30, 1998. The increase is attributable to the
amortization of intangible assets associated with business combinations in 1998
and the first nine months of 1999.
Operating income for the three and nine months ended September 30, 1999
increased to $43,500,000 and $122,885,000, respectively, compared with
$37,284,000 and $100,301,000 for the three and nine months ended September 30,
1998. The increases in operating income are attributable to the continued
revenue growth and efforts to control costs. The Company has been able to
maintain a cost structure that, with increases in net revenue, allows the
Company to spread its fixed costs over a larger base of revenues, resulting in
improvements in operating income.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided from operating activities was $116,808,000 for the nine
months ended September 30, 1999 compared with $113,255,000 for the nine months
ended September 30, 1998.
Net cash used in investing and financing activities was $109,548,000 for
the nine months ended September 30, 1999 compared with $106,112,000 for the nine
months ended September 30, 1998. Activity during the nine-month period ended
September 30, 1999 included the Company's investment of $50,500,000 in business
acquisitions, investment in capital equipment of $51,577,000, proceeds of
$262,000,000 from long-term obligations and payments of $160,234,000 related to
long-term obligations. For the nine month period ended September 30, 1999 as
compared to the nine month period ended September 30, 1998, the cash proceeds
and tax benefit resulting from employee stock options exercised decreased cash
flow by approximately $13,700,000.
As of September 30, 1999, the Company's principal source of liquidity
consisted of $63,796,000 of working capital and $110,000,000 available under its
revolving credit loan and line of credit. On August 23, 1999, the Company
entered into a new revolving credit loan and line of credit, increasing its
borrowing capacity from $100,000,000 to $265,000,000 as of September 24, 1999.
The Company believes that internally generated funds, together with funds that
may be borrowed under such credit facility, will be sufficient to meet the
Company's anticipated capital requirements for the foreseeable future.
On June 11, 1999, the Company's Board of Directors authorized the Company
to repurchase up to $200,000,000 of its outstanding common stock. Purchases will
be made through open market or privately negotiated transactions, subject to
market conditions and trading restrictions. During the three months ended
September 30, 1999, $113,966,000 of common stock had been repurchased.
YEAR 2000 REMEDIATION
Certain risks may exist with respect to potential malfunctions of computer
hardware and software and embedded microprocessors due to the upcoming change in
the century (the "Year 2000 problem"). Malfunctions may arise due to the design
of microchips and microprocessors and computer systems that are programmed to
use two rather than four digits to define the applicable year. The Company is
involved in an extensive, ongoing program to identify and remediate potential
issues arising from the Year 2000 problem.
The Company uses a proprietary and internally developed management
information system (MIS) which serves as the platform for the operating and
financial activities of the Company. The MIS system processes
8
<PAGE> 9
billings to and collections from third party payors for services provided by the
Company and supports all of the Company's accounting, finance and general ledger
functions. The system provides management with information used to measure and
evaluate performance levels throughout the Company including revenues and
profitability, accounts receivable and collections, equipment controls and
utilization, customer activity and manpower trends. The Company has completed,
in all material respects, the conversion of its mission-critical MIS software
thereby mitigating the risk of Year 2000 problems. The costs associated with
this conversion were immaterial and fully expensed in the prior fiscal year.
The Company has assessed its use of ancillary, third party computer
software used to electronically submit medical claims to certain payors. In the
event that the use of this software is impacted by the Year 2000 problem, the
Company's contingency plan includes the submission of paper claims to such
payors. The Company does not believe that this will have a material effect on
the Company's ability to receive payment for services rendered.
Certain medical devices and equipment provided by the Company to its
customers may contain embedded technology such as microprocessors that could be
affected by the Year 2000 problem. The Company has identified those categories
of devices and equipment that may be sensitive to the change in century, and has
developed a plan to determine the Year 2000 status of specific items. In the
event that the Company identifies specific devices and equipment that are not
Year 2000 compliant, or the Company is unable to determine the status of such
items, the Company will remove such items from service and replace them with
therapeutically comparable, Year 2000 compliant equipment from alternate
vendors. The Company does not believe that the scope and cost of exchanging
non-compliant devices and equipment will have a material impact on the Company's
financial position.
The Company is highly dependent upon certain government and private payors
for payment of claims for services and equipment provided by the Company. The
Company is in the process of determining the Year 2000 compliance of computer
systems used by third party payors to process claims for medical services and
equipment submitted by the Company for payment. The Company cannot be assured of
the timely remediation of third party claims processing and payment systems. The
failure by a significant third party payor to correct Year 2000 problems, to the
extent that such issues delay or prevent timely or appropriate payment of
claims, could have a material impact on the Company's cash flow from operations.
The Company is monitoring the Year 2000 progress of Medicare Part B carriers,
and other government agencies and private payors with which the Company does
significant business, to determine the potential impact to the Company. The
Company is also in the process of determining the contingency plans of these
payors to release payments to providers such as the Company in the event of
claims processing system failures. Such plans may include cash advances to
providers based on historical payment trends or processing claims on paper
rather than in an electronic format.
QUANTITATIVE AND QUALITATIVE DISCLOSURE REGARDING MARKET RISK
During September 1999 as part of the Company's stock repurchase program,
the Company has sold European Put Options ("Puts") on underlying shares of the
Company's stock. The Puts have a six month maturity period and the Company was
paid a $4,454,000 premium in advance which was accounted for as additional paid
in capital. The Company has the option to settle the Puts in cash or in shares
of its common stock for $28,282,000 at maturity based on the market price of the
Company's common stock relative to the strike price of the Puts.
The Company is exposed to changes in interest rates as a result of its bank
credit agreement which is based on the London Interbank Offered Rate. A 10%
increase in interest rates related to the Company's bank credit facility would
not have a material effect on the Company's earnings over the next fiscal year
or the bank credit agreement's fair value.
FORWARD LOOKING STATEMENTS
Statements contained in this Form 10-Q that are not based on historical
facts are forward looking statements, subject to uncertainties and risks,
including, but not limited to, the constantly changing health care environment,
potential reductions in reimbursement by government and third party payors for
the Company's products and services, the demand for the Company's products and
services, economic and
9
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competitive conditions, the availability of appropriate acquisition candidates
and the successful completion of acquisitions, access to borrowed and/or equity
capital on favorable terms, and other risks detailed in the Company's Securities
and Exchange Commission filings.
PART II. OTHER INFORMATION
Items 1-5 Not Applicable.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<C> <C> <S>
10.42.1 -- Three-Year Credit Agreement among Lincare Holdings Inc., as
Borrower, Certain Subsidiaries of Borrower from time to time
party thereto, as Guarantors, the several Lenders from time
to time party thereto and Bank of America, N.A., as Agent
10.42.2 -- 364-Day Credit Agreement among Lincare Holdings Inc., as
Borrower, Certain Subsidiaries of Borrower from time to time
party thereto, as Guarantors, the several Lenders from time
to time party thereto and Bank of America, N.A., as Agent
27.0 -- Financial Data Schedule (for SEC Use Only)
</TABLE>
(b) The Company did not file a Current Report on Form 8-K during the three
months ended September 30, 1999.
10
<PAGE> 11
SIGNATURE
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.
Lincare Holdings Inc.
--------------------------------------
Registrant
/s/ PAUL G. GABOS
--------------------------------------
Paul G. Gabos
Secretary, Chief Financial Officer
and Principal Accounting Officer
November 12, 1999
11
<PAGE> 12
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
+++10.23- Amendment to Non-Qualified Stock Option Agreement dated December 2, 1992,
between the Registrant and James M. Emanuel . . . . . . . . . . . . . . . . . . .
***10.31- Non-Qualified Stock Option Agreements dated as of January 23, 1995, between
the Registrant and James T. Kelly . . . . . . . . . . . . . . . . . . . . . . . .
***10.32- Non-Qualified Stock Option Agreements dated as of January 23, 1995, between
the Registrant and Howard R. Deutsch . . . . . . . . . . . . . . . . . . . . . .
***10.33- Non-Qualified Stock Option Agreements dated as of January 23, 1995, between
the Registrant and James M. Emanuel . . . . . . . . . . . . . . . . . . . . . . .
/10.34- Employment Agreement dated as of January 1, 1997 between Lincare Holdings Inc.
and John P. Byrnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
****10.35- Employment Agreement dated as of January 1, 1997 between Lincare Holdings Inc.
and James T. Kelly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
****10.38- Non-Qualified Stock Option Agreements dated as of January 26, 1996, between
the Registrant and John P. Byrnes . . . . . . . . . . . . . . . . . . . . . . . .
****10.39- Non-Qualified Stock Option Agreements dated as of July 15, 1996 between
the Registrant and John P. Byrnes . . . . . . . . . . . . . . . . . . . . . . . .
/10.40- Employment Agreement dated as of June 1, 1997 between Lincare Holdings Inc. and
Paul G. Gabos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
/10.41- Employment Stock Purchase Plan . . . . . . . . . . . . . . . . . . . . . . . . .
/10.42- Credit Agreement dated November 25, 1997 between Registrant and NationsBank of
Florida N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.42.1- Three-Year Credit Agreement among Lincare Holdings Inc., as Borrower, Certain
Subsidiaries of Borrower from time to time party thereto, as Guarantors,
the several Lenders from time to time party thereto and Bank of America,
N.A., as Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.42.2- 364-Day Credit Agreement among Lincare Holdings Inc., as Borrower, Certain
Subsidiaries of Borrower from time to time party thereto, as Guarantors,
the several Lenders from time to time party thereto and Bank of America,
N.A., as Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
/10.43- Form of Non-employee Director Stock Option Agreement . . . . . . . . . . . . . .
/10.44- Form of Non-qualified Stock Option Agreement . . . . . . . . . . . . . . . . . .
+++++22.2- List of Subsidiaries of Lincare Holdings Inc. . . . . . . . . . . . . . . . . . .
</TABLE>
- ---------------
+ Incorporated by reference to the corresponding exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-44672)
<PAGE> 13
++ Incorporated by reference to Exhibit A to the Registrant's Form 8-K
dated October 14, 1992.
+++ Incorporated by reference to the corresponding exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-55260).
++++ Incorporated by reference to the Registrant's Form 8-K dated April 28,
1993.
+++++ Incorporated by reference to the Registrant's Form 10-K dated March
22, 1994.
* Incorporated by reference to the Registrant's Form 10-K dated
March 22, 1995.
** Incorporated by reference to the Registrant's Form 8-K dated May 24,
1995.
*** Incorporated by reference to the Registrant's Form 10-K dated March 27,
1996.
**** Incorporated by reference to the Registrant's Form 10-K dated March 25,
1997.
***** Incorporate by reference to the Registrant's Form 10-Q dated August 12,
1998.
/ Incorporate by reference to the Registrant's Form 10-K dated March 26,
1998.
<PAGE> 1
[EXECUTION COPY]
THREE-YEAR CREDIT AGREEMENT
Dated as of August 23, 1999
among
LINCARE HOLDINGS INC.,
as Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, N.A.,
as Agent
AND
Arranged by:
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and
Sole Book Manager
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
SECTION 1 DEFINITIONS........................................................1
1.1 Definitions......................................................1
1.2 Computation of Time Periods.....................................25
1.3 Accounting Terms................................................25
SECTION 2 CREDIT FACILITIES.................................................25
2.1 Revolving Loans.................................................25
2.2 Letter of Credit Subfacility....................................27
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................32
3.1 Default Rate....................................................32
3.2 Extension and Conversion........................................32
3.3 Prepayments.....................................................33
3.4 Termination and Reduction of Revolving Committed Amount;
Increase of Committed Amount....................................34
3.5 Fees............................................................36
3.6 Capital Adequacy................................................37
3.7 Limitation on Eurodollar Loans..................................37
3.8 Illegality......................................................37
3.9 Requirements of Law.............................................38
3.10 Treatment of Affected Revolving Loans..........................39
3.11 Taxes..........................................................39
3.12 Compensation...................................................41
3.13 Pro Rata Treatment.............................................42
3.14 Sharing of Payments............................................43
3.15 Payments, Computations, Etc....................................43
3.16 Evidence of Debt...............................................45
3.17 Replacement of Affected Lenders................................46
SECTION 4 GUARANTY..........................................................47
4.1 The Guaranty....................................................47
4.2 Obligations Unconditional.......................................47
4.3 Reinstatement...................................................48
4.4 Certain Additional Waivers......................................49
4.5 Remedies........................................................49
4.6 Rights of Contribution..........................................49
4.7 Continuing Guarantee............................................50
SECTION 5 CONDITIONS........................................................50
5.1 Closing Conditions..............................................50
5.2 Conditions to all Extensions of Credit..........................53
SECTION 6 REPRESENTATIONS AND WARRANTIES....................................53
6.1 Financial Condition.............................................54
6.2 No Material Change..............................................54
6.3 Organization and Good Standing..................................54
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<TABLE>
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6.4 Power; Authorization; Enforceable Obligations...................54
6.5 No Conflicts....................................................55
6.6 No Default......................................................55
6.7 Ownership.......................................................55
6.8 Indebtedness....................................................55
6.9 Litigation......................................................56
6.10 Taxes..........................................................56
6.11 Compliance with Law............................................56
6.12 ERISA..........................................................56
6.13 Subsidiaries...................................................57
6.14 Governmental Regulations, Etc..................................58
6.15 Purpose of Revolving Loans and Letters of Credit...............58
6.16 Environmental Matters..........................................58
6.17 Intellectual Property..........................................59
6.18 Solvency.......................................................60
6.19 Investments....................................................60
6.20 Disclosure.....................................................60
6.21 No Unusual Restrictions........................................60
6.22 Year 2000 Compliance...........................................60
6.23 Reimbursement from Third Party Payors..........................60
6.24 Fraud and Abuse................................................61
6.25 Licensing and Accreditation....................................61
SECTION 7 AFFIRMATIVE COVENANTS.............................................62
7.1 Information Covenants...........................................62
7.2 Preservation of Existence and Franchises........................64
7.3 Books and Records...............................................64
7.4 Compliance with Law.............................................65
7.5 Payment of Taxes and Other Indebtedness.........................65
7.6 Insurance.......................................................65
7.7 Maintenance of Property.........................................65
7.8 Performance of Obligations......................................65
7.9 Use of Proceeds.................................................66
7.10 Audits/Inspections.............................................66
7.11 Financial Covenants............................................66
7.12 Additional Credit Parties......................................66
7.13 Pledged Assets.................................................67
7.14 Year 2000 Compliance...........................................67
7.15 Further Assurances.............................................67
SECTION 8 NEGATIVE COVENANTS................................................67
8.1 Indebtedness....................................................67
8.2 Liens...........................................................68
8.3 Nature of Business..............................................68
8.4 Consolidation, Merger, Dissolution, etc.........................69
8.5 Asset Dispositions..............................................69
8.6 Investments.....................................................69
</TABLE>
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<TABLE>
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8.7 Restricted Payments.............................................70
8.8 Prepayments of Indebtedness, etc................................70
8.9 Transactions with Affiliates....................................70
8.10 Fiscal Year; Organizational Documents..........................70
8.11 Limitation on Restricted Actions...............................71
8.12 Ownership of Subsidiaries; Limitations on Borrower.............71
8.13 Sale Leasebacks................................................71
8.14 No Further Negative Pledges....................................71
8.15 No Foreign Subsidiaries........................................72
SECTION 9 EVENTS OF DEFAULT.................................................72
9.1 Events of Default...............................................72
9.2 Acceleration; Remedies..........................................74
SECTION 10 AGENCY PROVISIONS................................................75
10.1 Appointment, Powers and Immunities.............................75
10.2 Reliance by Agent..............................................76
10.3 Defaults.......................................................76
10.4 Rights as a Lender.............................................77
10.5 Indemnification................................................77
10.6 Non-Reliance on Agent and Other Lenders........................77
10.7 Successor Agent................................................78
SECTION 11 MISCELLANEOUS....................................................78
11.1 Notices........................................................78
11.2 Right of Set-Off; Adjustments..................................79
11.3 Benefit of Agreement...........................................80
11.4 No Waiver; Remedies Cumulative.................................82
11.5 Expenses; Indemnification......................................82
11.6 Amendments, Waivers and Consents...............................83
11.7 Counterparts...................................................84
11.8 Headings.......................................................84
11.9 Survival.......................................................84
11.10 Governing Law; Submission to Jurisdiction; Venue..............85
11.11 Severability..................................................85
11.12 Entirety......................................................86
11.13 Binding Effect; Termination...................................86
11.14 Conflict......................................................86
11.15 Confidentiality...............................................86
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SCHEDULES
Schedule 1.1(a) Investments
Schedule 1.1(b) Liens
Schedule 1.1(c) Existing Letters of Credit
Schedule 2.1(a) Lenders
Schedule 6.9 Litigation
Schedule 6.13 Subsidiaries
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 1.1(a) Form of Pledge Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 3.4(b) Form of New Commitment Agreement
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS THREE-YEAR CREDIT AGREEMENT, dated as of August 23, 1999, (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), is by and among LINCARE HOLDINGS INC., a Delaware corporation (the
"Borrower"), each of the Borrower's Subsidiaries (individually a "Guarantor"
and collectively the "Guarantors"), the Lenders (as defined herein) from time
to time party hereto and BANK OF AMERICA, N. A., as Agent for the Lenders (in
such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$250,000,000 credit facility comprised of a $200,000,000 three-year revolving
credit facility as set forth in this Credit Agreement and a $50,000,000 364-day
revolving credit facility as set forth in the 364-Day Credit Agreement (as
defined below), each for the purposes set forth herein and therein; and
WHEREAS, the Lenders have agreed to make the requested $200,000,000
three-year revolving credit facility available to the Borrower on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such
Person of all of the Capital Stock or all or substantially all of the
Property of another Person, whether or not involving a merger or
consolidation with such other Person.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Additional Revolving Commitment" means, with respect to any
lender which executes a New Commitment Agreement in accordance with
Section 3.4(b), the commitment of such Lender in an aggregate
principal amount up to the amount specified in such New Commitment
Agreement (i) to make Loans in accordance with the
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provisions of Section 2.1(a) and (ii) to purchase Participation
Interests in Letters of Credit in accordance with the provisions of
Section 2.2(c).
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person or (ii)
directly or indirectly owning or holding five percent (5%) or more of
the equity interest in such Person. For purposes of this definition,
"control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement,
dated as of July 6, 1999, between the Agent and the Borrower, as
amended, modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term
in Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the
office of such Lender (or of an Affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Borrower by
written notice as the office by which its Eurodollar Loans are made
and maintained.
"Applicable Percentage" means, for purposes of calculating
the applicable interest rate for any day for any Revolving Loan, the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b) and the applicable rate of the Letter of Credit Fee for any day
for purposes of Section 3.5(c)(i), the appropriate applicable
percentage corresponding to the Leverage Ratio in effect as of the
most recent Calculation Date as set forth below:
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APPLICABLE PERCENTAGES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
FOR REVOLVING LOANS
----------------------------- FOR FOR
PRICING LEVERAGE RATIO EURODOLLAR BASE RATE LOANS LETTER OF UNUSED
LEVEL LOANS CREDIT FEE FEE
------- -------------- ---------- --------------- --------- ------
<S> <C> <C> <C> <C> <C>
I < 1.0 to 1.0 1.125% 0.125% 1.125% 0.30%*
-
- --------------------------------------------------------------------------------------------
< 1.5 to 1.0
II -
but 1.375% 0.375% 1.375% 0.35%*
> 1.0 to 1.0
- --------------------------------------------------------------------------------------------
< 2.0 to 1.0
III -
but 1.625% 0.625% 1.625% 0.40%*
> 1.5 to 1.0
- --------------------------------------------------------------------------------------------
IV > 2.0 to 1.0 2.00 % 1.00 % 2.00 % 0.50%*
- --------------------------------------------------------------------------------------------
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*If on any day following 90 days from the Closing Date, the
aggregate outstanding principal amount of all Revolving Loans
plus LOC Obligations hereunder together with any "Revolving
Loans" outstanding under the 364-Day Credit Agreement, (as
such term is defined therein) is less than the product of (A)
one-half (1/2) times (B) the Revolving Committed Amount
hereunder plus the Revolving Committed Amount under the
364-Day Credit Agreement, the applicable Unused Fee (as shown
above) shall be increased by an amount equal to 12.5 basis
points.
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Borrower is required to provide the officer's
certificate in accordance with the provisions of Section 7.1(c) for
the most recently ended fiscal quarter of the Consolidated Parties;
provided, however, that (i) the initial Applicable Percentages shall
be based on Pricing Level II (as shown above) and shall remain at
Pricing Level II until the date six months following the Closing Date,
on and after which time the Pricing Level shall be determined by the
Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding the applicable
Calculation Date and (ii) if the Borrower fails to provide the
officer's certificate as required by Section 7.1(c) for the last day
of the most recently ended fiscal quarter of the Consolidated Parties
preceding the applicable Calculation Date, the Applicable Percentage
from such Calculation Date shall be based on Pricing Level IV until
such time as an appropriate officer's certificate is provided,
whereupon the Applicable Percentages shall be determined by the
Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding such Calculation Date.
Each Applicable Percentage shall be effective from one Calculation
Date until the next Calculation Date. Any adjustment in the Applicable
Percentages shall be applicable to all existing Revolving Loans and
Letters of Credit as well as any new Revolving Loans and Letters of
Credit made or issued.
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"Asset Disposition" means any disposition, other than
pursuant to an Excluded Asset Disposition, of any or all of the
Property (including without limitation the Capital Stock of a
Subsidiary) of any Consolidated Party whether by sale, lease, transfer
or otherwise, but other than pursuant to any casualty or condemnation
event.
"Bank of America" means Bank of America, N.A. and its
successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of
the United States Code, as amended, modified, succeeded or replaced
from time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii)
there shall be commenced against such Person an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed, undischarged or unbonded for a
period of sixty (60) consecutive days; or (iii) such Person shall
commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such
law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv)
such Person shall be unable to, or shall admit in writing its
inability to, pay its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (.5%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"Base Rate Loan" means any Revolving Loan bearing interest at
a rate determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or
New York, New York are authorized or
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required by law to close, except that, when used in connection with a
Eurodollar Loan, such day shall also be a day on which dealings
between banks are carried on in U.S. dollar deposits in London,
England.
"Calculation Date" shall have the meaning assigned to such
term in the definition of "Applicable Percentage" set forth in this
Section 1.1.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case
of a partnership, partnership interests (whether general or limited),
(iv) in the case of a limited liability company, membership interests
and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly
and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more
than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition,
(d) repurchase agreements with a bank or trust company (including any
of the Lenders) or recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or
fully guaranteed by the United States of America in which any Credit
Party shall have a perfected first priority security interest (subject
to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under
the Investment Company Act of 1940, as amended, which are administered
by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
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"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert (other than Persons owning 30% or more of the Voting Stock of
the Borrower on the Closing Date) shall have acquired beneficial
ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, control over, Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 30% or
more of the combined voting power of all Voting Stock of the Borrower,
(ii) any Person or two or more Persons acting in concert (other than
Persons owning 30% or more of the Voting Stock of the Borrower on the
Closing Date) has the ability directly or indirectly, to elect a
majority of the board of directors of the Borrower or (iii) during any
period of up to 12 consecutive months, commencing on the Closing Date,
individuals who at the beginning of such 12-month period were
directors of the Borrower shall cease for any reason (other than the
death, disability or retirement of an officer of the Borrower that is
serving as a director at such time so long as another officer of the
Borrower replaces such Person as a director) to constitute a majority
of the board of directors of the Borrower; provided, however to the
extent there exist vacancies on the Board of Directors as of the
Closing Date or if after the Closing Date, the existing Board of
Directors increases the number of directors on the Board of Directors
by an amount not more than three, the individuals named to fill such
vacancies, if selected by a majority of directors sitting as of the
Closing Date, shall be deemed for purposes of this clause (iii) to
have been appointed prior to the Closing Date.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Commitment" means (i) with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Revolving Committed Amount, (a) to make Revolving Loans in accordance
with the provisions of Section 2.1(a) and (b) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.2(c) and (ii) with respect to the Issuing
Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Consolidated Capital Expenditures" means, for any period,
all capital expenditures of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP.
"Consolidated Cash Interest Expense" means, for any period,
interest expense (including the amortization of debt discount and
premium, the interest component under
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Capital Leases and the implied interest component under Synthetic
Leases), as determined in accordance with GAAP, to the extent the same
are paid in cash during such period.
"Consolidated Cash Taxes" means, for any period, the
aggregate of all taxes of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP, to the
extent the same are paid in cash during such period.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes, (C)
depreciation and amortization expense and (D) other extraordinary
non-recurring, non-cash charges, all as determined in accordance with
GAAP.
"Consolidated EBITDAR" means, for any period, the sum of (i)
Consolidated EBITDA for such period, plus (ii) an amount which in the
determination of Consolidated Net Income for such period has been
deducted for Consolidated Rent Expense for such period, all as
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period,
interest expense (including the amortization of debt discount and
premium, the interest component under Capital Leases and the implied
interest component under Synthetic Leases) of the Consolidated Parties
on a consolidated basis for such period, as determined in accordance
with GAAP.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Net Worth" means, as of any date, shareholders'
equity or net worth of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Rent Expense" means, for any period, with
respect to the Consolidated Parties on a consolidated basis, all rent
payable under an Operating Lease (whether a lease of real property,
personal property or mixed), as determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of
the end of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness for the applicable period
ending on such date (including the principal component of payments
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<PAGE> 13
due on Capital Leases during the applicable period ending on such
date); it being understood that Consolidated Scheduled Funded Debt
Payments shall not include (i) voluntary prepayments or the mandatory
prepayments required pursuant to Section 3.3 or (ii) Funded
Indebtedness with respect to the 364-Day Credit Agreement.
"Continue", "Continuation", and "Continued" shall refer to
the continuation pursuant to Section 3.2 or Sections 3.7 through 3.9,
inclusive, of a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Contract Provider" means any Person or any employee, agent
or subcontractor of such Person who provides professional health care
services under or pursuant to any contract with any Consolidated
Party.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this
Credit Agreement, the Revolving Notes, the LOC Documents, each Joinder
Agreement, the Agent's Fee Letter, the Pledge Agreement, the 364-Day
Credit Agreement, and all other related agreements and documents
issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and
"Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i)
all of the obligations of the Credit Parties to the Lenders (including
the Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Revolving Notes, the Pledge Agreement or any of the
other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a Bankruptcy Event with respect to
any Credit Party, regardless of whether such interest is an allowed
claim under the Bankruptcy Code), (ii) all liabilities and
obligations, whenever arising, owing from any Credit Party to any
Lender, or any Affiliate of a Lender, arising under any Hedging
Agreement or any Equity Swap Agreement and (iii) all of the
obligations and liabilities of the type described in clauses (i) and
(ii) of the definition of "Credit Party Obligations" set forth in
Section 1.1 of the 364-Day Credit Agreement.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender, as
determined by the Agent, that (a) has failed to make a Revolving Loan
or purchase a Participation Interest required pursuant to the term of
this Credit Agreement, (b) has failed to pay to the Agent or any
Lender an amount owed by such Lender pursuant to the terms of this
Credit Agreement,
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or (c) has been deemed insolvent or has become subject to a bankruptcy
or insolvency proceeding or a receiver, trustee or similar official
has been appointed.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of
a Lender; and (iii) any other Person approved by the Agent and, unless
an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower
(such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within five Business Days after written notice of such
proposed assignment has been provided by the assigning Lender to the
Borrower in accordance with Section 11.1); provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as
an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Resource Conservation and Recovery Act of
1976, the Toxic Substances Control Act, the Water Pollution Control
Act, the Clean Air Act and the Hazardous Materials Transportation
Act), regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated
Party to any Person (other than a Credit Party) of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the
exercise of options or warrants or (c) any shares of its Capital Stock
pursuant to the conversion of any debt securities to equity. The term
"Equity Issuance" shall not include any Asset Disposition.
"Equity Swap Agreements" means any agreement entered into by
the Borrower in order to manage existing or anticipated risk
associated with the repurchase by the Borrower of shares of its
Capital Stock at a predetermined purchase price.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
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<PAGE> 15
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the
Borrower and which is treated as a single employer under Sections
414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event with respect to which the Department
of Labor has not waived the reporting requirement or the substantial
cessation of operations (within the meaning of Section 4062(e) of
ERISA); (ii) the withdrawal by any Consolidated Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the
actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A
of ERISA; (iv) the institution of proceedings to terminate or the
actual termination of a Plan by the PBGC under Section 4042 of ERISA;
(v) any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (vi) the complete or partial
withdrawal of any Consolidated Party or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien
under Section 302(f) of ERISA exist with respect to any Plan that
could reasonably be expected to cause a Material Adverse Effect; or
(viii) the adoption of an amendment to any Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Revolving Loan that bears
interest at a rate based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurodollar Loan for such Interest Period by (b) 1 minus
the Eurodollar Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required
to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by
member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting
the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member
banks with respect to (i) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be
determined, or (ii) any category of extensions of credit or other
assets which include Eurodollar Loans. The Adjusted Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Requirement.
"Event of Default" means such term as defined in Section 9.1.
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<PAGE> 16
"Excluded Asset Disposition" means, with respect to any
Consolidated Party, (i) the sale of inventory in the ordinary course
of such Consolidated Party's business, (ii) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of
such Consolidated Party's business, (iii) any Equity Issuance by such
Consolidated Party, (iv) any disposition on account of any loss of,
damage to or destruction of, or any condemnation or other taking for
public use of, any Property of the Consolidated Parties and (v) any
sale, lease, transfer or other disposition of Property by such
Consolidated Party to any other Consolidated Party.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, vice president,
chief financial officer or treasurer of such Person.
"Existing Credit Agreement" means that certain Credit
Agreement, dated as of November 25, 1997, by and among the Borrower,
the Lenders identified therein and NationsBank, N.A., as Agent (as
amended).
"Existing Letters of Credit" means the letters of credit
described by date of issuance, letter of credit number, undrawn
amount, name of beneficiary and date of expiry on Schedule 1.1(c).
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate charged to the Agent (in its individual capacity) on such day on
such transactions as reasonably determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Consolidated Parties for the twelve month period
ending on such date, the ratio of (a) Consolidated EBITDAR for the
applicable period minus Consolidated Capital Expenditures for the
applicable period minus Consolidated Cash Taxes for the applicable
period to (b) the sum of (i) Consolidated Cash Interest Expense for
the applicable period plus (ii) Consolidated Scheduled Funded Debt
Payments for the applicable period plus (iii) Consolidated Rent
Expense for the applicable period.
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<PAGE> 17
"Foreign Subsidiary" means any direct or indirect Subsidiary
of the Borrower which is not incorporated or organized under the laws
of any state of the United States or the District of Columbia.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest
payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations
or retentions of title under agreements with suppliers entered into in
the ordinary course of business), (d) all obligations of such Person
issued or assumed as the deferred purchase price of Property or
services purchased by such Person (other than trade debt incurred in
the ordinary course of business and due within six months of the
incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) the principal portion of all obligations of
such Person under Capital Leases, (f) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (g) all
preferred Capital Stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (h) the principal portion of all
obligations of such Person under Synthetic Leases, (i) all
Indebtedness of another Person of the type referred to in clause
(a)-(h) above secured by (or for which the holder of such Funded
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (j) all Guaranty
Obligations of such Person with respect to Indebtedness of the type
referred to in clauses (a)-(h) above of another Person and (k)
Indebtedness of the type referred to in clauses (a)-(h) above of any
partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with
respect thereto.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms
of Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means each of the Subsidiaries of the Borrower
(other than Lincare of Columbia) and each Additional Credit Party
which has executed a Joinder Agreement, together with their successors
and assigns, and "Guarantor" means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase
12
<PAGE> 18
any such Indebtedness or any Property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or
purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for
the benefit of any holder of Indebtedness of such other Person, (iii)
to lease or purchase Property, securities or services primarily for
the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness
against loss in respect thereof. The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of
which such Guaranty Obligation is made.
"HCFA" means the United States Health Care Financing
Administration and any successor thereto.
"Hedging Agreement" means any interest rate protection
agreement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person which would appear as liabilities on a balance sheet of such
Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all Guaranty
Obligations of such Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations
of such Person under Hedging Agreements and under Equity Swap
Agreements, (j) the maximum amount of all standby letters of credit
issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by
such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due, by a fixed date (l) the
principal portion of all obligations of such Person under Synthetic
Leases and (m) the Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint
venturer.
"Interbank Offered Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered
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<PAGE> 19
rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such rate
is not available, the term "Interbank Offered Rate" shall mean, for
any Eurodollar Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Interest Payment Date" means (a) as to Base Rate Loans, the
last day of each calendar month and the Maturity Date and (b) as to
Eurodollar Loans, the last day of each applicable Interest Period and
the Maturity Date, and in addition where the applicable Interest
Period for a Eurodollar Loan is greater than three months, then also
the date three months from the beginning of the Interest Period and
each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) in the case of Revolving Loans, no Interest Period shall extend
beyond the Maturity Date and (c) where an Interest Period begins on a
day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month.
"Investment" means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests
or other securities of any Person or (b) any deposit with, or advance,
loan or other extension of credit to, any Person (other than deposits
made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution
to or investment in such Person, including, without limitation, any
Guaranty Obligations (including any support for a letter of credit
issued on behalf of such Person) incurred for the benefit of such
Person.
"Issuing Lender" means Bank of America.
"Joinder Agreement" means a Joinder Agreement substantially
in the form of Exhibit 7.12 hereto, executed and delivered by a new
Guarantor in accordance with the provisions of Section 7.12.
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<PAGE> 20
"Lender" means (i) any of the Persons identified as a
"Lender" on the signature pages hereto, and any Person which may
become a Lender by way of assignment in accordance with the terms
hereof, together with their successors and permitted assigns and (ii)
each of the "Lenders" under and as defined in the 364-Day Credit
Agreement.
"Letter of Credit" means (i) a Letter of Credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2 and (ii) any Existing Letter of Credit, as such
Letter of Credit or Existing Letter of Credit may be amended,
modified, extended, renewed or replaced.
"Letter of Credit Fee" shall have the meaning assigned to
such term in Section 3.5(c)(i).
"Leverage Ratio" means, as of the end of each fiscal quarter
of the Consolidated Parties for the twelve month period ending on such
date, the ratio of (a) Funded Indebtedness of the Consolidated Parties
on the last day of such period to (b) Consolidated EBITDA for such
period.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority 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 Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or
notice statute, and any lease in the nature thereof).
"Lincare of Columbia" means Lincare of Columbia LP, a South
Carolina limited partnership, together with any successors and
permitted assigns.
"LOC Commitment" means the commitment of the Issuing Lender
to issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to
such term in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred
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<PAGE> 21
to in such Letters of Credit plus (ii) the aggregate amount of all
drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed by the Borrower.
"Material Adverse Effect" means a material adverse effect on
(i) the business condition (financial or otherwise), operating
results, liabilities or assets of the Consolidated Parties taken as a
whole, (ii) the ability of the Credit Parties as a whole to perform
any material obligations under the Credit Documents or (iii) the
material rights and remedies of the Agent and the Lenders under the
Credit Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means August 23, 2002.
"Medicaid Program" means the medical assistance program
operated by Governmental Authorities set forth in the Medicaid
Regulations.
"Medicaid Supplier" means an entity entitled to receive
payments from the Medicaid Program and authorized to provide services
and supplies for Medicaid patients in accordance with the Medicaid
Regulations.
"Medicaid Regulations" means, collectively, (i) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting the medical assistance program established by
Title XIX of the Social Security Act and any statutes succeeding
thereto; (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and
other guidelines of all Governmental Authorities having the force of
law promulgated pursuant to or in connection with the statutes
described in clause (i) above; (iii) all state statutes and plans for
medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all
applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (ii) above, in each
case as may be amended, supplemented or otherwise modified from time
to time.
"Medicare Program" means the health insurance program
operated by Governmental Authorities pursuant to the Medicare
Regulations.
"Medicare Supplier" means an entity eligible to receive
payment from the Medicare Program and authorized to provide services
and supplies for Medicare patients
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<PAGE> 22
in accordance with the Medicare Regulations.
"Medicare Regulations" means, collectively, all federal
statutes (whether set forth in Title XVIII of the Social Security Act
or elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act and any
statutes succeeding thereto; together with all applicable provisions
of all rules, regulations, manuals and orders and administrative,
reimbursement and other guidelines having the force of law of all
Governmental Authorities (including, without limitation, Health and
Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any person succeeding to the functions of any of the
foregoing) promulgated pursuant to or in connection with any of the
foregoing having the force of law, as each may be amended,
supplemented or otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than a
Consolidated Party or any ERISA Affiliate are contributing sponsors.
"Net Cash Proceeds" means the aggregate cash proceeds
(including cash actually received by way of deferred payment pursuant
to a promissory note, receivable, or otherwise) received by a
Consolidated Party of any Equity Issuance, net of (a) direct costs
(including, without limitation, legal, accounting and investment
banking fees and sales commissions) and (b) taxes paid or payable as a
result thereof; it being understood that "Net Cash Proceeds" shall
include, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received by any Consolidated
Party in any Equity Issuance.
"New Commitment Agreement" shall have the meaning assigned to
such term in Section 3.4(b).
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
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"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Revolving Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisition" means an Acquisition by the Borrower
or any Subsidiary of the Borrower for the fair market value of the
Capital Stock or Property acquired, provided that (i) the Capital
Stock or Property acquired in such Acquisition relates to a line of
business similar to the business of the Borrower or any of its
Subsidiaries, (ii) in the case of an Acquisition of Capital Stock of
another Person, (A) the board of directors (or other comparable
governing body) of such other Person shall have duly approved such
Acquisition and (B) such Person shall become a wholly-owned direct or
indirect Subsidiary of the Borrower, (iii) the representations and
warranties made by the Credit Parties in any Credit Document shall be
true and correct in all material respects at and as if made as of the
date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an
earlier date and no Default or Event of Default exists as of the date
of such Acquisition (after giving effect thereto) and (iv) (A) if the
aggregate consideration for such Acquisition, exceeds $25,000,000 but
is less than $35,000,000, the Borrower shall have delivered to the
Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to the Acquisition on a Pro Forma Basis, the Borrower
will be in compliance with all of the financial covenants set forth in
Section 7.11 or (B) if the aggregate consideration (including cash and
non-cash consideration and any assumption of Indebtedness) for such
Acquisition exceeds $35,000,000 or if any such Acquisition would cause
the aggregate consideration for all Acquisitions in any fiscal year to
exceed $150,000,000, the Borrower shall have received the approval of
the Required Lenders, which approval shall be given in the Required
Lenders' sole discretion.
"Permitted Investments" means Investments which are (i) cash
and Cash Equivalents; (ii) accounts receivable created, acquired or
made by any Consolidated Party in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iii) Investments consisting of Capital Stock, obligations, securities
or other property received by any Consolidated Party in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing Date
and set forth in Schedule 1.1(a); (v) advances or loans to officers,
employees, agents, customers or suppliers that do not exceed
$1,000,000 in the aggregate at any one time outstanding for all of the
Consolidated Parties; (vi) advances or loans to non-officer,
non-employee directors that do not exceed $5,000,000 in the aggregate
at any one time outstanding for all of the Consolidated Parties; (vii)
Investments in any Credit Party; (viii) Permitted Acquisitions; (ix)
advances in respect of the Stock Buy-Back Plan and (x) additional
Investments not exceeding $5,000,000 in the aggregate at any time
outstanding.
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"Permitted Liens" means:
(i) Liens in favor of the Agent, for the benefit of the
Lenders, to secure the Credit Party Obligations;
(ii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet due
or Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale or loss on
account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party 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, bids,
leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases and Synthetic Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien attaches
to such Property concurrently with or within 90 days after the
acquisition thereof;
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<PAGE> 25
(viii) leases or subleases granted to others not interfering
in any material respect with the business of any Consolidated Party;
(ix) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Credit Agreement;
(x) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xi) Liens of a collection bank arising under Section 4-210
of the Uniform Commercial Code on items in the course of collection;
(xii) Liens of sellers of goods to the Borrower and any of
its Subsidiaries arising under Article 2 of the Uniform Commercial
Code or similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
(xiii) Liens existing as of the Closing Date and set forth on
Schedule 1.1(b); provided that no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date;
(xiv) Liens on Property in an aggregate amount not to exceed
$8,000,000 securing obligations of the Borrower under Equity Swap
Agreements permitted under Section 8.1(f); and
(xv) additional Liens not otherwise permitted by the
foregoing clauses hereof; provided that such additional Liens
permitted by this clause (xv) do not secure Indebtedness of more than
$5,000,000.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form of Exhibit 1.1(a) to be executed and
delivered by each of the applicable Credit Parties in favor of the
Agent, for the benefit of the Lenders, to secure the obligations under
the Credit Documents, as amended, modified, restated or supplemented
from time to time.
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"Pledged Collateral" shall have the meaning assigned to such
term in the Pledge Agreement.
"Prime Rate" means the per annum rate of interest established
from time to time by Bank of America as its prime rate, which rate may
not be the lowest rate of interest charged by Bank of America to its
customers.
"Pro Forma Basis" means, for purposes of calculating
compliance with each of the financial covenants set forth in Section
7.11(b) and (c) in respect of a proposed transaction, that such
transaction shall be deemed to have occurred as of the first day of
the four fiscal-quarter period ending as of the most recent fiscal
quarter end preceding the date of such transaction with respect to
which the Agent has received the information required pursuant to
Section 7.1. In connection with any calculation of the financial
covenants set forth in Section 7.11(b) and (c) upon giving effect to a
transaction on a Pro Forma Basis, (a) any Indebtedness incurred by the
Borrower in connection with such transaction (i) shall be deemed to
have been incurred as of the first day of the applicable period and
(ii) if such Indebtedness has a floating or formula rate, shall have
an implied rate of interest for the applicable period for purposes of
this definition determined by utilizing the rate which is or would be
in effect with respect to such Indebtedness as at the relevant date of
determination and (b) income statement items (whether positive or
negative) attributable to the Property acquired in such transaction or
to the Acquisition comprising such transaction, as applicable, shall
be included to the extent relating to the relevant period.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with any Acquisition as referred to in the definition of "Permitted
Acquisition" set forth in this Section 1.1, as applicable, and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Leverage Ratio and
Consolidated Net Worth as of the most recent fiscal quarter end
preceding the date of the applicable transaction with respect to which
the Agent shall have received the Required Financial Information.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation T, U, or X" means Regulation T, U or X,
respectively, 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.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment (including the abandonment
or discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
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"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section
7.1(a) or (b) for the fiscal period or quarter ending as of such
Calculation Date, and (ii) the certificate of an Executive Officer of
the Borrower required by Section 7.1(c) to be delivered with the
financial statements described in clause (i) above.
"Required Lenders" means, at any time, Lenders holding in the
aggregate more than 50% of (i) the Commitments (and Participation
Interests therein), or (ii) if the Commitments have been terminated,
the outstanding Revolving Loans and Participation Interests (including
the Participation Interests of the Issuing Lender in any Letters of
Credit), provided that the Commitments of and the outstanding
principal amount of Revolving Loans and Participation Interests owing
to a Defaulting Lender shall be excluded for purposes hereof in making
a determination of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding, and (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding.
"Revolving Committed Amount" means TWO HUNDRED MILLION
DOLLARS ($200,000,000), as such amount may be reduced or increased
from time to time as provided in Section 3.4.
"Revolving Loans" shall have the meaning assigned to such
term in Section 2.1(a), but in any event shall include any portion of
any Revolving Loan bearing interest at the Adjusted Base Rate or the
Adjusted Eurodollar Rate and referred to as a Base Rate Loan or a
Eurodollar Loan.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory
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notes may be amended, modified, restated, supplemented, extended,
renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of
The McGraw Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement
pursuant to which any Consolidated Party, directly or indirectly,
becomes liable as lessee, guarantor or other surety with respect to
any lease, whether an Operating Lease or a Capital Lease, of any
Property (a) which such Consolidated Party has sold or transferred (or
is to sell or transfer) to a Person which is not a Consolidated Party
or (b) which such Consolidated Party intends to use for substantially
the same purpose as any other Property which has been sold or
transferred (or is to be sold or transferred) by such Consolidated
Party to another Person which is not a Consolidated Party in
connection with such lease.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Social Security Act" means the Social Security Act as set
forth in Title 42 of the United States Code, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Social Security Act shall be construed
also to refer to any successor sections.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to pay
its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature in their ordinary course, (iii) such Person is
not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is
engaged or is to engage, (iv) the fair value of the Property of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities and obligations, of such
Person and (v) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stock Buy-Back Plan" means that certain plan approved by the
Borrower's Board of Directors on June 9, 1999, which authorized the
Borrower to buy-back Capital Stock of the Borrower in an amount not to
exceed $200,000,000 in the aggregate.
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"Subsidiary" means, as to any Person, (a) any corporation
more than 50% of whose Capital Stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, limited liability
company, joint venture or other entity in which such Person directly
or indirectly through Subsidiaries has more than 50% equity interest
at any time.
"Synthetic Lease" means any tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an Operating Lease in accordance
with GAAP.
"Taxes" means such term as is defined in Section 3.11.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(b).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(b).
"Unused Revolving Committed Amount" means, for any period,
the amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily average sum for such period of (i) the
outstanding aggregate principal amount of all Revolving Loans plus
(ii) the outstanding aggregate principal amount of all LOC
Obligations.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening
of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
100% of whose Voting Stock or other equity interests is at the time
owned by such Person directly or indirectly through other Wholly Owned
Subsidiaries.
"364-Day Credit Agreement" means that 364-Day Credit
Agreement dated as of the date hereof, as amended and modified, among
the Borrower, each of the Borrower's Subsidiaries, the Lenders
identified therein and Bank of America, as Agent.
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1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section
7.1, consistent with the financial statements as at December 31, 1998);
provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 60 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made under the financial covenants set
forth in Section 7.11 (including without limitation for purposes of the
definitions of "Applicable Percentage" and "Pro Forma Basis" set forth in
Section 1.1), in connection with any merger or consolidation as referred to in
Section 8.4 or any Acquisition as referred to in the definition of "Permitted
Acquisition" set forth in Section 1.1, income statement items (whether positive
or negative) attributable to any Person or Property acquired in any Permitted
Acquisition shall, to the extent not otherwise included in such income
statements items for the Consolidated Parties in accordance with GAAP or in
accordance with any defined terms set forth in Section 1.1, be included to the
extent relating to any period applicable in such calculations.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Commitment Percentage of the revolving credit
loans requested by the Borrower in Dollars (the "Revolving Loans")
from time to time from the Closing Date until the Maturity Date, or
such earlier date as the Commitments shall have been terminated as
provided herein for the purposes hereinafter set forth; provided,
however, that (i) with regard to each Lender individually, such
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Lender's share of outstanding Revolving Loans and LOC Obligations
shall not exceed such Lender's Commitment Percentage of the Commitment
Amount, and (ii) with regard to the Lenders collectively, the
aggregate principal amount of outstanding Revolving Loans and LOC
Obligations shall not exceed the Revolving Committed Amount.
Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or
a combination thereof, as the Borrower may request, and may be repaid
and reborrowed in accordance with the provisions hereof; provided,
however, that no more than ten (10) Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new single Eurodollar Loan with a single Interest
Period.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request
a Revolving Loan borrowing by written notice (or telephonic
notice promptly confirmed in writing) to the Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested,
the Interest Period(s) therefor. If the Borrower shall fail
to specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period
of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base
Rate Loan hereunder. The Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base
Rate Loan that is a Revolving Loan shall be in a minimum
aggregate principal amount of $1,000,000 and integral
multiples of $100,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its Commitment
Percentage of each Revolving Loan borrowing available to the
Agent for the account of the Borrower as specified in Section
3.15(a), or in such other manner as the Agent may specify in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in
Dollars and in funds
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immediately available to the Agent. Such borrowing will then
be made available to the Borrower by the Agent by crediting
the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the Agent by
the Lender.
(c) Repayment. The principal amount of all Revolving
Loans shall be due and payable in full on the Maturity Date, unless
accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at
a per annum rate equal to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest
at a per annum rate equal to the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each
Lender shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in an original principal amount equal to such
Lender's Commitment Percentage of the Revolving Committed Amount and
in substantially the form of Exhibit 2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require and in reliance upon
the representations and warranties set forth herein, the Issuing
Lender agrees to issue, and each Lender severally agrees to
participate in the issuance by the Issuing Lender of, standby Letters
of Credit in Dollars from time to time from the Closing Date until the
Maturity Date as the Borrower may request, in a form acceptable to the
Issuing Lender; provided, however, that (i) the LOC Obligations
outstanding shall not at any time exceed TWENTY MILLION DOLLARS
($20,000,000) (the "LOC Committed Amount"); (ii) with regard to each
Lender individually, such Lender's share of outstanding Revolving
Loans and LOC Obligations shall not exceed such Lender's Commitment
Percentage of the Revolving Committed Amount; and (iii) with regard to
the Lenders collectively, the aggregate principal amount of
outstanding Revolving Loans and LOC Obligations shall not exceed the
Revolving Committed Amount. No Letter of Credit shall (x) have an
original expiry date more than one year from the date of issuance or
(y) as originally issued or as extended, have an expiry date extending
beyond the date five (5) Business Days prior to the Maturity Date.
Each Letter
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of Credit shall comply with the related LOC Documents. The issuance
and expiry dates of each Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of
a Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, deliver to each of the Lenders, with a copy
to the Borrower, a detailed report specifying the Letters of Credit
which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report,
and including therein, among other things, the beneficiary, the face
amount and the expiry date, as well as any payment or expirations
which may have occurred.
(c) Participation. Each Lender, upon issuance of a
Letter of Credit (or, in the case of each Existing Letter of Credit,
on the Closing Date), shall be deemed to have purchased without
recourse a Participation Interest from the Issuing Lender in such
Letter of Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based
on the respective Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume and be obligated to
pay to the Issuing Lender and discharge when due, its pro rata share
of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Lender's Participation Interest
in any Letter of Credit, to the extent that the Issuing Lender has not
been reimbursed as required hereunder or under any such Letter of
Credit, each such Lender shall pay to the Issuing Lender its pro rata
share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant
to the provisions of subsection (d) below. The obligation of each
Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the
Borrower. Unless the Borrower shall immediately notify the Issuing
Lender that the Borrower intends to otherwise reimburse the Issuing
Lender for such drawing, the Borrower shall be deemed to have
requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in subsection (e) below on the related Letter of
Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrower promises to reimburse the
Issuing Lender on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds. If the Borrower shall fail to reimburse
the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the
Adjusted Base Rate plus 2%. The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff,
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counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the Agent, the Lenders, the beneficiary of
the Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrower or any
other Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent
for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's pro rata share of such
unreimbursed drawing. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina
time) otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date
of such drawing until such Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the
Federal Funds Rate and thereafter at a rate equal to the Base Rate.
Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of
each such payment by a Lender to the Issuing Lender, such Lender
shall, automatically and without any further action on the part of the
Issuing Lender or such Lender, acquire a Participation Interest in an
amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of
Credit, the Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested by the Borrower to be made
in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of
Section 2.1(b)(i) with respect thereto) shall be immediately made to
the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective
Commitment Percentages of the Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2) and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make its pro rata share of each such
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Revolving Loan immediately upon any such request or deemed request in
the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi)
any termination of the Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any Credit Party), then each such Lender hereby agrees
that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) from
the Issuing Lender such Participation Interests in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share
in such LOC Obligations ratably (based upon the respective Commitment
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)), provided
that at the time any purchase of Participation Interests pursuant to
this sentence is actually made, the purchasing Lender shall be
required to pay to the Issuing Lender, to the extent not paid to the
Issuing Lender by the Borrower in accordance with the terms of
subsection (d) above, interest on the principal amount of
Participation Interests purchased for each day from and including the
day upon which such borrowing would otherwise have occurred to but
excluding the date of payment for such Participation Interests, at the
rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Renewal, Extension. The renewal or extension of any
Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender
may have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of issue
by the International Chamber of Commerce (the "UCP"), in which case
the UCP may be incorporated therein and deemed in all respects to be a
part thereof.
(h) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under
this Section 2.2, the Borrower hereby agrees to pay, and
protect, indemnify and save each Lender harmless from and
against, any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the
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issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto
government or Governmental Authority (all such acts or
omissions, herein called "Government Acts").
(ii) As between the Borrower and the Lenders
(including the Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. No Lender (including the
Issuing Lender) shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (D) for any loss or delay
in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from
causes beyond the control of such Lender, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is
the intention of the parties that this Credit Agreement shall
be construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable
for any failure by such Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (h) is intended to
limit the reimbursement obligations of the Borrower contained
in subsection (d) above. The obligations of the Borrower
under this subsection (h) shall survive the termination of
this Credit Agreement. No act or omissions of any current or
prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Lenders (including the
Issuing Lender) to enforce any right, power or benefit under
this Credit Agreement.
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(v) Notwithstanding anything to the contrary
contained in this subsection (h), the Borrower shall have no
obligation to indemnify any Lender (including the Issuing
Lender) in respect of any liability incurred by such Lender
(A) arising solely out of the gross negligence or willful
misconduct of such Lender, as determined by a court of
competent jurisdiction, or (B) caused by such Lender's
failure to pay under any Letter of Credit after presentation
to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court
of competent jurisdiction, unless such payment is prohibited
by any law, regulation, court order or decree.
(i) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have
been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any Lender to recover from the Issuing Lender
any amounts made available by such Lender to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a
Letter of Credit constituted gross negligence or willful misconduct on
the part of the Issuing Lender.
(j) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any LOC Document (including
any letter of credit application), this Credit Agreement shall control
as among the parties hereto.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, (i) the principal of and, to the extent permitted by law, accrued and
unpaid interest on the Revolving Loans and any other amounts owing hereunder or
under the other Credit Documents shall bear interest, payable on demand, at a
per annum rate 2% greater than the rate which would otherwise be applicable (or
if no rate is applicable, whether in respect of interest, fees or other
amounts, then the Adjusted Base Rate plus 2%) and (ii) the Letter of Credit Fee
shall accrue at a per annum rate 2% greater than the rate which would otherwise
be applicable.
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Revolving Loans into a
subsequent permissible Interest Period or to
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convert Revolving Loans into Revolving Loans of another interest rate type;
provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Revolving
Loans extended as, or converted into, Eurodollar Loans shall be subject to the
terms of the definition of "Interest Period" set forth in Section 1.1 and shall
be in such minimum amounts as provided in, with respect to Revolving Loans,
Section 2.1(b)(ii), (iv) no more than 10 Eurodollar Loans shall be outstanding
hereunder at any time (it being understood that, for purposes hereof,
Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period) and (v) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephonic notice promptly
confirmed in writing) to the office of the Agent specified in Section 11.1, or
at such other office as the Agent may designate in writing, prior to 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Revolving Loans to be so extended or converted, the types of
Revolving Loans into which such Revolving Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in
subsections (b), (c), (d) and (e) of Section 5.2. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Revolving Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Revolving Loans in whole or in part from time to time;
provided, however, that each partial prepayment of Revolving Loans
shall be in a minimum principal amount of $2,000,000 and integral
multiples of $500,000. Prepayment upon the Revolving Loans shall be
made first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities.
(b) Revolving Committed Amount. If at any time, the sum
of the aggregate principal amount of outstanding Revolving Loans plus
LOC Obligations outstanding shall exceed the Revolving Committed
Amount, the Borrower immediately shall prepay
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the Revolving Loans and (after all Revolving Loans have been repaid)
cash collateralize the LOC Obligations, in an amount sufficient to
eliminate such excess.
(c) Generally. Within the parameters of the applications
set forth above, prepayments shall be applied first to Base Rate Loans
and then to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(b) shall be subject
to Section 3.12, but otherwise without premium or penalty.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED
AMOUNT; INCREASE OF COMMITTED AMOUNT.
(a) Reductions in Committed Amount.
(i) Voluntary Reductions. The Borrower may from
time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate
amounts of $5,000,000 or in integral multiples of $1,000,000
in excess thereof (or, if less, the full remaining amount of
the then applicable Revolving Committed Amount)) upon three
Business Days' prior written notice to the Agent; provided,
however, no such termination or reduction shall be made which
would cause the aggregate principal amount of outstanding
Revolving Loans and LOC Obligations to exceed the Revolving
Committed Amount, unless, concurrently with such termination
or reduction, the Revolving Loans are repaid to the extent
necessary to eliminate such excess. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any
notice from the Borrower pursuant to this Section 3.4(a).
(ii) Maturity Date. The Commitments of the Lenders
and the LOC Commitment of the Issuing Lender shall
automatically terminate on the Maturity Date.
(iii) General. The Borrower shall pay to the Agent
for the account of the Lenders in accordance with the terms
of Section 3.5(b), on the date of each reduction of the
Revolving Committed Amount, the Unused Fee accrued through
the date of such termination or reduction on the amount of
the Revolving Committed Amount so terminated or reduced.
(b) Increase in Committed Amount. The Borrower shall
have the right, upon at least ten (10) Business Days' prior written
notice to the Agent, to request an increase of the Revolving Committed
Amount hereunder and of the "Revolving Committed Amount" under the
364-Day Credit Agreement to an aggregate amount of not more than
$300,000,000 at any time on or after the Closing Date and prior to the
Maturity Date, subject, however, in any such case, to satisfaction of
the following conditions precedent:
(i) no Event of Default shall have occurred and be
continuing on the date on which such Revolving Committed
Amount increase is to become effective;
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(ii) the representations and warranties set forth
in Section 6 of this Credit Agreement shall be true and
correct in all material respects on and as of the date on
which such increase is to become effective;
(iii) on or before the date on which such increase
is to become effective, the Agent shall have received, for
its own account, the mutually acceptable fees and expenses
required by separate agreement of the Borrower and the Agent
to be paid in connection with such increase;
(iv) so long as the Commitments remain outstanding
under this Credit Agreement and under the 364-Day Credit
Agreement, the aggregate amount of such increase shall be
allocated pro rata to the Revolving Committed Amount
hereunder and to the "Revolving Committed Amount" under the
364-Day Credit Agreement, provided, however, in no case shall
the Revolving Committed Amount hereunder exceed $240,000,000;
(v) the aggregate amount of such increase
hereunder and under the 364-Day Credit Agreement shall be in
a minimum amount of $10,000,000; and
(vi) such requested increase shall be effective on
such date only to the extent that, on or before such date,
the Agent shall have received and accepted from (x) one or
more Lenders hereunder or (y) with respect any lender,
reasonably acceptable to the Agent and the Borrower, that is
not at such time a Lender hereunder, an agreement in the form
of Exhibit 3.4(b) hereto (each such agreement a "New
Commitment Agreement"), with respect to the Additional
Revolving Commitment of such Lender.
(c) Upon the effectiveness of the increase in the
Revolving Committed Amount pursuant to subsection (b), the Commitment
Percentage of each Lender shall be automatically adjusted to give
effect to such increase, provided, that with respect to each Lender
(other than a Lender whose Revolving Commitment shall have been
increased in connection with such increase in the Revolving Committed
Amount), (i) the product of the Commitment Percentage of each Lender
multiplied by the Revolving Committed Amount for each Lender prior to
giving effect to such adjustment, shall be equal to (ii) the product
of the Commitment Percentage of each Lender multiplied by the
Revolving Committed Amount for each such Lender, after giving effect
to such adjustment.
(d) If and when any adjustment is made to the Commitment
Percentage of any Lender pursuant to subsection (c) at any time when
any Revolving Loans are outstanding, the Borrower, the Agent and the
Lenders will use all commercially reasonable efforts to assign and
assume outstanding Revolving Loans to conform the respective amounts
thereof held by each Lender to the respective Commitment Percentages
as so adjusted, it being understood that the parties hereto shall use
commercially reasonable efforts to avoid prepayment or assignment of
any Revolving Loan that is a Eurodollar Loan on a day other than the
last day of the Interest Period applicable thereto.
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3.5 FEES.
(a) Upfront Fees. The Borrower agrees to pay to the
Agent for the benefit of the Lenders in immediately available funds on
or before the Closing Date an upfront fee (the "Upfront Fee") in the
amount provided in the Agent's Fee Letter.
(b) Unused Fee. In consideration of the Commitments of
the Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Fee") on the Unused
Revolving Committed Amount computed at a per annum rate for each day
during the applicable Unused Fee Calculation Period (hereinafter
defined) at a rate equal to the Applicable Percentage in effect from
time to time. The Unused Fee shall commence to accrue on the Closing
Date and shall be due and payable in arrears on the last business day
of each March, June, September and December (and any date that the
Revolving Committed Amount is reduced as provided in Section 3.4(a)
and the Maturity Date) for the immediately preceding quarter (or
portion thereof) (each such quarter or portion thereof for which the
Unused Fee is payable hereunder being herein referred to as an "Unused
Fee Calculation Period"), beginning with the first of such dates to
occur after the Closing Date.
(c) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In
consideration of the issuance of Letters of Credit hereunder,
the Borrower promises to pay to the Agent for the account of
each Lender a fee (the "Letter of Credit Fee") on such
Lender's Commitment Percentage of the average daily maximum
amount available to be drawn under each such Letter of Credit
computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable
Percentage. The Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each March,
June, September and December for the immediately preceding
quarter (or a portion thereof).
(ii) Issuing Lender Fees. In addition to the Letter
of Credit Fee payable pursuant to clause (i) above the
Borrower promises to pay to the Issuing Lender for its own
account without sharing by the other Lenders (A) a letter of
credit fronting fee, computed at a per annum rate for each
day from the date of issuance to the date of expiration of
each Letter of Credit of one-eighth of one percent (1/8%) on
the maximum amount available to be drawn under each Letter of
Credit on such day, which fee shall be payable quarterly in
arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter
(or a portion thereof) and (B) other customary charges from
time to time of the Issuing Lender with respect to the
issuance, amendment, transfer, administration, cancellation
and conversion of, and drawings under, such Letters of
Credit.
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(d) Administrative Fees. The Borrower agrees to pay to
the Agent, for its own account, an annual administrative fee and such
other fees, if any, referred to in the Agent's Fee Letter
(collectively, the "Agent Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender 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 Lender's capital or assets as a consequence
of its commitments or obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination
by any such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent reasonably determines (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Required Lenders reasonably determine (which
determination shall be conclusive) and notify the Agent that the
Eurodollar Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans,
either prepay such Eurodollar Loans or convert such Eurodollar Loans into Base
Rate Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and
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such Lender's obligation to make or Continue Eurodollar Loans and to convert
Base Rate Loans into Eurodollar Loans shall be suspended until such time as
such Lender may again make, maintain, and fund Eurodollar Loans (in which case
the provisions of Section 3.10 shall be applicable).
3.9 REQUIREMENTS OF LAW.
(a) If, after the date hereof, the adoption of any applicable
law, rule, or regulation, or any change in any applicable law, rule, or
regulation, 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 Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Revolving Notes, or its obligation to make
Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending Office) under this
Credit Agreement or its Revolving Notes in respect of any Eurodollar
Loans (other than taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the United States market for certificates of deposit or
the London interbank market any other condition affecting this Credit
Agreement or its Revolving Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Revolving Notes with respect to any Eurodollar Loans, then the Borrower
shall pay to such Lender on demand such amount or amounts as will compensate
such Lender for such increased cost or reduction. If any Lender requests
compensation by the Borrower under this Section 3.9(a), the Borrower may, by
notice to such Lender (with a copy to the Agent), suspend the obligation of
such Lender to make or Continue Eurodollar Loans, or to convert Base Rate Loans
into Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
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(b) Each Lender shall promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Agent a statement setting forth the additional amount or amounts to be paid
to it hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 TREATMENT OF AFFECTED REVOLVING LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
continue, or to convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so converted, all payments and prepayments of principal that
would otherwise be applied to such Lender's Eurodollar Loans shall be
applied instead to its Base Rate Loans; and
(b) all Revolving Loans that would otherwise be made or
continued by such Lender as Eurodollar Loans shall be made or
continued instead as Base Rate Loans, and all Base Rate Loans of such
Lender that would otherwise be converted into Eurodollar Loans shall
remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Revolving Loans held by the Lenders holding Eurodollar Loans and by such
Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts,
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deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender (or its Applicable
Lending Office) or the Agent (as the case may be) is organized or any
political subdivision thereof (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to
any Lender or the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.11) such Lender or the Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section
11.1, the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto.
(d) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the
date on which it becomes a Lender in the case of each other Lender,
and from time to time thereafter if requested in writing by the
Borrower or the Agent (but only so long as such Lender remains
lawfully able to do so), shall provide the Borrower and the Agent with
(i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying
that such Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii)
Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii)
any other form or certificate required by any taxing authority
(including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to
an exemption from or a reduced rate of tax on payments pursuant to
this Credit Agreement or any of the other Credit Documents.
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(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Lender pursuant to this Section
3.11, then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to eliminate
or reduce any such additional payment which may thereafter accrue if
such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any
payment of Taxes, the Borrower shall furnish to the Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 3.11 shall survive the
repayment of the Revolving Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the
Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of
such Lender) to compensate it for any loss, cost, or reasonable expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a
Eurodollar Loan for any reason (including, without limitation, the
acceleration of the Revolving Loans pursuant to Section 9.2) on a date
other than the last day of the Interest Period for such Revolving
Loan; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any condition precedent
specified in Section 5 to be satisfied) to borrow, convert, continue,
or prepay a Eurodollar Loan on the date for such borrowing,
conversion, continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, continuation, or conversion under
this Credit Agreement.
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With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for herein over
(b) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The covenants of the Borrower set forth in this Section 3.12 shall
survive the repayment of the Revolving Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Revolving Loans. Each Revolving Loan, each payment
or prepayment of principal of any Revolving Loan or reimbursement
obligations arising from drawings under Letters of Credit, each
payment of interest on the Revolving Loans or reimbursement
obligations arising from drawings under Letters of Credit, each
payment of Unused Fees, each payment of the Letter of Credit Fee, each
reduction of the Revolving Committed Amount and each conversion or
extension of any Revolving Loan, shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their
outstanding Revolving Loans and Participation Interests.
(b) Advances. No Lender shall be responsible for the
failure or delay by any other Lender in its obligation to make its
ratable share of a borrowing hereunder; provided, however, that the
failure of any Lender to fulfill its obligations hereunder shall not
relieve any other Lender of its obligations hereunder. Unless the
Agent shall have been notified by any Lender prior to the date of any
requested borrowing that such Lender does not intend to make available
to the Agent its ratable share of such borrowing to be made on such
date, the Agent may assume that such Lender has made such amount
available to the Agent on the date of such borrowing, and the Agent in
reliance upon such assumption, may (in its sole discretion but 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 Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor,
the Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent
shall also be entitled to recover from the Lender 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 Agent to the Borrower to the date such corresponding amount is
recovered by the Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for the applicable borrowing pursuant
to the Notice of Borrowing or (ii) from a Lender at the Federal Funds
Rate.
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3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Revolving Loan, LOC Obligations or any
other obligation owing to such Lender under this Credit Agreement through the
exercise of a right of setoff, banker's lien or counterclaim, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Revolving
Loans, LOC Obligations and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares
as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such
Revolving Loan, LOC Obligations or other obligation in the amount of such
Participation Interest. Except as otherwise expressly provided in this Credit
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or the Agent to the Agent or such
other Lender pursuant to this Credit Agreement on the date when such amount is
due, such payments shall be made together with interest thereon for each date
from the date such amount is due until the date such amount is paid to the
Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.14
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.14 to share in the benefits of any recovery on
such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein,
all payments hereunder shall be made to the Agent in Dollars and in
immediately available funds, without setoff, deduction, counterclaim
or withholding of any kind, at the Agent's office specified in Section
11.1 not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Agent may
(but shall not be obligated to) debit the amount of any such payment
which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The
Borrower shall, at the time it makes any payment under this Credit
Agreement, specify to
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the Agent the Revolving Loans, LOC Obligations, Fees, interest or
other amounts payable by the Borrower hereunder to which such payment
is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the
Agent shall distribute such payment to the Lenders in such manner as
the Agent may determine to be appropriate in respect of obligations
owing by the Borrower hereunder, subject to the terms of Section
3.13(a)). The Agent will distribute such payments to such Lenders, if
any such payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to
the end of such Business Day and otherwise the Agent will distribute
such payment to such Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to
the next succeeding Business Day (subject to accrual of interest and
Fees for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made
in the next following calendar month, then such payment shall instead
be made on the next preceding Business Day. Except as expressly
provided otherwise herein, all computations of interest and fees shall
be made on the basis of actual number of days elapsed over a year of
360 days, except with respect to computation of interest on Base Rate
Loans which (unless the Base Rate is determined by reference to the
Federal Funds Rate) shall be calculated based on a year of 365 or 366
days, as appropriate. Interest shall accrue from and include the date
of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the
Pledged Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents or otherwise with respect to the Credit
Party Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
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SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to the
Borrower or whoever else may be lawfully entitled to receive such
surplus.
In carrying out the foregoing, (i) amounts received shall be applied
in the numerical order provided until exhausted prior to application
to the next succeeding category; (ii) each of the Lenders shall
receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Revolving Loans and LOC Obligations held by
such Lender bears to the aggregate then outstanding Revolving Loans
and LOC Obligations) of amounts available to be applied pursuant to
clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the
extent that any amounts available for distribution pursuant to clause
"FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent
in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters
of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses
"FIFTH" and "SIXTH" above in the manner provided in this Section
3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Revolving Loan made by such Lender to the Borrower
from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Credit
Agreement. Each Lender shall maintain the accuracy of its account or
accounts and to promptly update its account or accounts from time to
time, as necessary.
(b) The Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount,
type and Interest Period of each such Revolving Loan hereunder, (ii)
the amount of any principal or interest due and payable or to become
due and payable to each Lender hereunder and (iii) the amount of any
sum received by the Agent hereunder from or for the account of the
Borrower and each Lender's share thereof. The Agent shall maintain the
accuracy of the subaccounts referred to in the preceding sentence and
to promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and
subaccounts maintained pursuant to subsection (b) of this Section 3.16
(and, if consistent with the entries of the Agent, subsection (a))
shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that
the failure of any Lender or the Agent to maintain any such account,
such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the
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Borrower to repay the Revolving Loans made by such Lender in
accordance with the terms hereof.
3.17 REPLACEMENT OF AFFECTED LENDERS.
If any Lender having a Commitment becomes a Defaulting Lender or if
any Lender is owed increased costs under Section 3.8, Section 3.9, or Section
3.6, or the Borrower is required to make any payments under Section 3.11 to any
Lender in excess of those to the other Lenders, the Borrower shall have the
right, if no Event of Default then exists, to replace such Lender (the
"Replaced Lender") with one or more other Eligible Assignee or Eligible
Assignees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the "Replacement Lender") reasonably acceptable
to the Agent, provided that (i) at the time of any replacement pursuant to this
Section 3.17, the Replaced Lender and Replacement Lender shall enter into one
or more assignment agreements, in form and substance reasonably satisfactory to
such parties and the Agent, pursuant to which the Replacement Lender shall
acquire all or a portion, as the case may be, of the Commitments and
outstanding Loans of, and participation in Letters of Credit by, the Replaced
Lender hereunder and of the Commitments and outstanding Loans of under the
364-Day Credit Agreement and (ii) all obligations of the Borrower owing to the
Replaced Lender relating to the Loans so replaced (including, without
limitation, such increased costs and excluding 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 Lender
concurrently with such replacement. Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Revolving Note or Revolving Notes
executed by the Borrower, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder
with respect to such replaced Revolving Loans, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Lender. Notwithstanding anything to the contrary contained above, (1)
the Lender that acts as the Issuing Lender may not be replaced hereunder at any
time that it has Letters of Credit outstanding hereunder unless arrangements
satisfactory to the Issuing Lender (including the furnishing of a back-up
standby letter of credit in form and substance, and issued by an issuer
satisfactory to such Issuing Lender or the depositing of cash collateral into a
cash collateral account maintained with the Agent in amounts and pursuant to
arrangements satisfactory to such Issuing Lender) have been made with respect
to such outstanding Letters of Credit and (2) the Lender that acts as the Agent
may not be replaced hereunder except in accordance with the terms of Section
10.7. The Replaced Lender shall be required to deliver for cancellation its
applicable Revolving Notes to be canceled on the date of replacement, or if any
such Revolving Note is lost or unavailable, such other assurances or
indemnification therefor as the Borrower may reasonably request.
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SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement or
enters into an Equity Swap Agreement, and the Agent as hereinafter provided the
prompt payment of the Credit Party Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) strictly in accordance with the terms
thereof. The Guarantors hereby further agree that if any of the Credit Party
Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, Hedging Agreements or Equity Swap
Agreements, to the extent the obligations of a Guarantor shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of each Guarantor hereunder
shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the Bankruptcy
Code).
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents, Hedging
Agreements or Equity Swap Agreements, or any other agreement or instrument
referred to therein, or any substitution, release, impairment or exchange of
any other guarantee of or security for any of the Credit Party Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the intent of
this Section 4.2 that the obligations of the Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Each Guarantor
agrees that such Guarantor shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower or any other Guarantor of
the Credit Party Obligations for amounts paid under this Section 4 until such
time as the Lenders (and any Affiliates of Lenders entering into Hedging
Agreements or Equity Swap Agreements) have been paid in full, all Commitments
under this Credit Agreement have been terminated and no Person or Governmental
Authority shall have any right to request any return or reimbursement of funds
from the Lenders in connection with monies received under the Credit Documents,
Hedging Agreements or Equity Swap Agreements.
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Without limiting the generality of the foregoing, it is agreed that, to the
fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to
any Guarantor, the time for any performance of or compliance with any
of the Credit Party Obligations shall be extended, or such performance
or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions
of any of the Credit Documents, any Hedging Agreement, any Equity Swap
Agreement or any other agreement or instrument referred to in the
Credit Documents, Hedging Agreements or Equity Swap Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations
shall be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement, any Equity Swap
Agreement or any other agreement or instrument referred to in the
Credit Documents, Hedging Agreements or Equity Swap Agreements shall
be waived or any other guarantee of any of the Credit Party
Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or
any Lender or Lenders as security for any of the Credit Party
Obligations shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or shall be subordinated
to the claims of any Person (including, without limitation, any
creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever (except notices expressly provided for in the Credit Documents), and
any requirement that the Agent or any Lender exhaust any right, power or remedy
or proceed against any Person under any of the Credit Documents, any Hedging
Agreement, Equity Swap Agreement or any other agreement or instrument referred
to in the Credit Documents, Hedging Agreements or Equity Swap Agreement, or
against any other Person under any other guarantee of, or security for, any of
the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of
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counsel) incurred by the Agent or such Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations, except through the
exercise of rights of subrogation pursuant to Section 4.2 and through the
exercise of rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due
and payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of
Section 4.1. The Guarantors acknowledge and agree that their obligations
hereunder are secured in accordance with the terms of the Pledge Agreement and
that the Lenders may exercise their remedies thereunder in accordance with the
terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such
other Guarantor's Contribution Share (as defined below) of such Excess Payment.
The payment obligations of any Guarantor under this Section 4.6 shall be
subordinate and subject in right of payment to the prior payment in full to the
Agent and the Lenders of the Guaranteed Obligations, and none of the Guarantors
shall exercise any right or remedy under this Section 4.6 against any other
Guarantor until payment and satisfaction in full of all of such Guaranteed
Obligations. For purposes of this Section 4.6, (a) "Guaranteed Obligations"
shall mean any obligations arising under the other provisions of this Section
4; (b) "Excess Payment" shall mean the amount paid by any Guarantor in excess
of its Pro Rata Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall
mean, for any Guarantor in respect of any payment of Guaranteed Obligations,
the ratio (expressed as a percentage) as of the date of such payment of
Guaranteed Obligations of (i) the amount by which the aggregate present fair
salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the
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Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors; provided, however, that,
for purposes of calculating the Pro Rata Shares of the Guarantors in respect of
any payment of Guaranteed Obligations, any Guarantor that became a Guarantor
subsequent to the date of any such payment shall be deemed to have been a
Guarantor on the date of such payment and the financial information for such
Guarantor as of the date such Guarantor became a Guarantor shall be utilized
for such Guarantor in connection with such payment; and (d) "Contribution
Share" shall mean, for any Guarantor in respect of any Excess Payment made by
any other Guarantor, the ratio (expressed as a percentage) as of the date of
such Excess Payment of (i) the amount by which the aggregate present fair
salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Borrower and all of the
Guarantors other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of the
Borrower and the Guarantors hereunder) of the Borrower and all of the
Guarantors other than the maker of such Excess Payment; provided, however,
that, for purposes of calculating the Contribution Shares of the Guarantors in
respect of any Excess Payment, any Guarantor that became a Guarantor subsequent
to the date of any such Excess Payment shall be deemed to have been a Guarantor
on the date of such Excess Payment and the financial information for such
Guarantor as of the date such Guarantor became a Guarantor shall be utilized
for such Guarantor in connection with such Excess Payment. This Section 4.6
shall not be deemed to affect any right of subrogation, indemnity,
reimbursement or contribution that any Guarantor may have under applicable law
against the Borrower in respect of any payment of Guaranteed Obligations.
Notwithstanding the foregoing, all rights of contribution against any Guarantor
shall terminate from and after such time, if ever, that such Guarantor shall be
relieved of its obligations pursuant to Section 8.4.
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Revolving Loans or the Issuing Lender to issue the initial
Letter of Credit, whichever shall occur first, shall be subject to satisfaction
of the following conditions (in form and substance acceptable to the Lenders):
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(a) Executed Credit Documents. Receipt by the Agent of
duly executed copies of (i) this Credit Agreement, (ii) the Revolving
Notes and (iii) the Pledge Agreement.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the
Board of Directors of each Credit Party approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution
and delivery thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in
force and effect as of the Closing Date.
(iv) Good Standing. To the extent received by the
Borrower prior to the Closing Date and subject to Section
7.15 thereafter, copies of (A) certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of
incorporation and each other jurisdiction in which the
failure to so qualify and be in good standing could have a
Material Adverse Effect and (B) to the extent available, a
certificate indicating payment of all corporate or comparable
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
(c) Pledge of Stock. The Agent shall have received all
stock certificates evidencing the Capital Stock pledged to the Agent
pursuant to the Pledge Agreement, together with duly executed in blank
undated stock powers attached thereto.
(d) Opinions of Counsel. The Agent shall have received
an opinion, or opinions, in form and substance satisfactory to the
Agent dated as of the Closing Date from counsel to the Credit Parties.
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(e) Corporate Structure. The corporate capital and
ownership structure of the Borrower and its Subsidiaries shall be as
described in Schedule 6.13.
(f) Consent. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents and
approvals necessary or desirable in connection with the financings and
other transactions contemplated hereby and expiration of all
applicable waiting periods without any action being taken by any
authority that could reasonably be likely to restrain, prevent or
impose any material adverse conditions on such transactions or that
could reasonably be likely to seek or threaten any of the foregoing,
and no law or regulation shall be applicable which in the judgment of
the Agent could reasonably be likely to have such effect.
(g) Litigation. Except as disclosed in Schedule 6.9,
there shall not exist any pending or threatened action, suit,
investigation or proceeding against a Consolidated Party which might
have a Material Adverse Effect.
(h) Officer's Certificates. The Agent shall have
received a certificate or certificates executed by the chief financial
officer of the Borrower as of the Closing Date stating that (A) the
Borrower and each of the Borrower's Subsidiaries is in compliance with
all existing financial obligations, (B) all governmental, shareholder
and third party consents and approvals, if any, with respect to the
Credit Documents and the transactions contemplated thereby have been
obtained, (C) no action, suit, investigation or proceeding is pending
or threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect the Borrower, any of the
Borrower's Subsidiaries, or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect and (D)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to
occur on such date, (1) the Borrower and each of the Borrower's
Subsidiaries is Solvent, (2) no Default or Event of Default exists,
(3) all representations and warranties contained herein and in the
other Credit Documents are true and correct in all material respects,
and (4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.11.
(i) 364-Day Credit Agreement. Receipt by the Agent of a
copy of the 364-Day Credit Agreement as originally executed and
delivered, together with all exhibits and schedules.
(j) Existing Credit Agreement. Receipt by the Agent of
satisfactory evidence of the repayment of all loans and obligations
under the Existing Credit Agreement and the termination of the
commitments thereunder.
(k) Fees and Expenses. Payment by the Credit Parties of
all fees and expenses owed by them to the Lenders and the Agent,
including, without limitation, payment to the Agent of the fees set
forth in the Fee Letter.
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5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any
Revolving Loan and of the Issuing Lender to issue any Letter of Credit
(including the initial Revolving Loans and the initial Letter of Credit) are
subject to satisfaction of the following conditions in addition to satisfaction
on the Closing Date of the conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of
any Revolving Loan an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance
in accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in
Section 6 shall, subject to the limitations set forth therein, be true
and correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) There shall not have been commenced against any
Credit Party an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property
or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall
remain undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto; and
(e) Immediately after giving effect to the making of
such Revolving Loan (and the application of the proceeds thereof) or
to the issuance of such Letter of Credit, as the case may be, (i) the
aggregate principal amount of outstanding Revolving Loans and LOC
Obligations shall not exceed the Revolving Committed Amount, and (ii)
the LOC Obligations shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, and each request for a Letter of
Credit pursuant to Section 2.2(b) shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), (d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
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6.1 FINANCIAL CONDITION.
The audited consolidated balance sheets and income statements
of the Consolidated Parties for the fiscal year ended 1998 and the
unaudited interim balance sheets and income statements of the
Consolidated Parties for the quarterly periods ended after March 31,
1999 and June 30, 1999 have been prepared in accordance with GAAP and
present fairly in all material respects (on the basis disclosed in the
footnotes to such financial statements) the financial condition,
results of operations and cash flows of the applicable parties as of
such date and for such periods. Since December 31, 1998, there has
been no sale, transfer or other disposition by any Consolidated Party
of any material part of the business or property of the Consolidated
Parties, taken as a whole, and no purchase or other acquisition by any
of them of any business or property (including any capital stock of
any other person) material in relation to the consolidated financial
condition of the Consolidated Parties, taken as a whole, in each case,
which, is not (x) reflected in the foregoing financial statements or
in the notes thereto or (y) otherwise permitted by the terms of this
Credit Agreement and communicated to the Agent.
6.2 NO MATERIAL CHANGE.
Since December 31, 1998, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could have a
Material Adverse Effect and (b) except under the Stock Buy-Back Plan and as
otherwise permitted under this Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the Capital Stock in a
Consolidated Party nor has any of the Capital Stock in a Consolidated Party
been redeemed, retired, purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing could have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery
and performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is
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required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party. This Credit Agreement has
been, and each other Credit Document to which any Credit Party is a party will
be, duly executed and delivered on behalf of the Credit Parties. This Credit
Agreement constitutes, and each other Credit Document to which any Credit Party
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Credit Party enforceable against such party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or organization or bylaws or other organizational or governing
documents of such Person, (b) violate, contravene or materially conflict with
any Requirement of Law or any other law, regulation (including, without
limitation, Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, (c) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could have a Material Adverse Effect, or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its
properties is bound which default could have a Material Adverse Effect. No
Default or Event of Default has occurred or exists except as previously
disclosed in writing to the Lenders.
6.7 OWNERSHIP.
Each Consolidated Party is the owner of, and has good and marketable
title to, or a valid leasehold interest in, all of its respective assets and
none of such assets is subject to any Lien other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.
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6.9 LITIGATION.
Except as disclosed in Schedule 6.9, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
might have a Material Adverse Effect.
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP.
No Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Material Adverse Effect. Without
limiting the generality of the foregoing, each Consolidated Party represents
that (i) current billing policies, arrangements, protocols and instructions
comply with requirements of Medicare, Medicaid, and CHAMPUS programs and any
other heath care program operated or financed in whole or in part by and
federal, state, or local government (each a "Medical Reimbursement Program" and
collectively, the "Medical Reimbursement Programs") and are administered by
properly trained personnel except where any such failure to comply could not
reasonably be expected to result in either (A) exclusion from a Medical
Reimbursement Program, or (B) loss of 5% or more of annual consolidated
revenues of the Consolidated Parties and (ii) current compensation arrangements
with physicians comply with state and federal anti-kick back fraud and abuse,
and Stark I and II requirements except where any such failure to comply could
not reasonably be expected to result in either (A) an exclusion from a Medical
Reimbursement Program, or (B) loss of 5% or more of annual consolidated
revenues of the Consolidated Parties.
6.12 ERISA.
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the best knowledge of the Credit Parties, no
event or condition has occurred or exists as a result of which any
ERISA Event could reasonably be expected to occur, with respect to any
Plan; (ii) no material "accumulated funding deficiency," as such term
is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, has occurred with respect to any Plan; (iii) to
the best knowledge of the Credit Parties, each Plan has been
maintained, operated, and funded in compliance with its own terms and
in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and
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(iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
not vested, under each Single Employer Plan, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made (determined, in each case, utilizing the actuarial
assumptions used in such Plan's most recent actuarial valuation
report), did not, by any material amount, exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Credit
Parties, could be reasonably expected to incur, any material
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither any Consolidated Party nor any ERISA Affiliate
would become subject to any material withdrawal liability under ERISA
if any Consolidated Party or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best knowledge of the
Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or may subject any Consolidated Party or any ERISA Affiliate
to any material liability under Sections 406, 409, 502(i), or 502(l)
of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any person against
any such liability.
(e) Neither any Consolidated Party nor any ERISA
Affiliates has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the
Financial Accounting Standards Board Statement 106.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation or organization, the number of shares of each
class of Capital Stock outstanding, the number and percentage of outstanding
shares of each class owned (directly or indirectly) by such Consolidated Party;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding Capital Stock of all such Subsidiaries is validly
issued, fully paid and non-assessable and is owned by each such Consolidated
Party, directly or indirectly, free and clear of all Liens (other
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than those arising under or contemplated in connection with the Credit
Documents). Other than as set forth in Schedule 6.13, no Consolidated Party has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have 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.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use
of the proceeds of the Loans) will violate or result in a violation of
the Securities Act, the Securities Exchange Act or any of Regulations
U and X. If requested by any Lender or the Agent, the Borrower will
furnish to the Agent and each Lender a statement, in conformity with
the requirements of FR Form U-1 referred to in Regulation U, that no
part of the Letters of Credit or proceeds of the Loans will be used,
directly or indirectly, for the purpose of "buying" or "carrying" any
"margin stock" within the meaning of Regulations U and X.
(b) None of the Consolidated Parties is (i) an
"investment company", or a company "controlled" by "investment
company", within the meaning of the Investment Company Act of 1940, as
amended, (ii) a "holding company" as defined in, or otherwise subject
to regulation under, the Public Utility Holding Company Act of 1935,
as amended or (iii) subject to regulation under any other Federal or
state statute or regulation which limits its ability to incur
Indebtedness.
6.15 PURPOSE OF REVOLVING LOANS AND LETTERS OF CREDIT.
The proceeds of the Revolving Loans hereunder shall be used solely by
the Borrower to (a) on the Closing Date to refinance existing Indebtedness of
the Borrower under the Existing Credit Agreement and (b) on and after the
Closing Date, to (i) pay the redemption price for the Capital Stock of the
Borrower pursuant to the Stock Buy-Back Plan and (ii) to provide for ongoing
working capital and general corporate purposes (including Acquisitions) of the
Borrower and its Subsidiaries. The Letters of Credit shall be used only for or
in connection with appeal bonds, reimbursement obligations arising in
connection with surety and reclamation bonds, reinsurance, domestic or
international trade transactions, and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
(a) Each of the facilities and properties owned, leased
or operated by the Consolidated Parties (the "Properties") and all
operations at the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any material
Environmental Law with respect to the Properties or the businesses
operated by the Consolidated Parties (the "Businesses"), and there are
no conditions relating to the
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Businesses or Properties, that could give rise to any material
liability under any applicable Environmental Laws.
(b) To the best knowledge of the Credit Parties, none of
the Properties contains, or has previously contained, any Materials of
Environmental Concern at, on or under the Properties in amounts or
concentrations that constitute or constituted a violation of, or could
give rise to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or
verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Properties or the
Businesses, nor does any Consolidated Party have knowledge or reason
to believe that any such notice will be received or is being
threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, or generated, treated,
stored or disposed of at, on or under any of the Properties or any
other location, in each case by or on behalf of any Consolidated Party
in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the best knowledge of any
Credit Party, threatened, under any Environmental Law to which any
Consolidated Party is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Consolidated Parties, the Properties or the Businesses.
(f) There has been no release or, threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Consolidated Party in connection with the
Properties or otherwise in connection with the Businesses, in
violation of or in amounts or in a manner that could give rise to a
material liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal
right to use could not have a Material Adverse Effect. No claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by any
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Consolidated Party does not infringe on the rights of any Person, except for
such claims and infringements that in the aggregate, could not have a Material
Adverse Effect.
6.18 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.20 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered
to the Lenders nor any other document, certificate or statement furnished to
the Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
6.21 NO UNUSUAL RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could have a Material Adverse Effect.
6.22 YEAR 2000 COMPLIANCE.
Each Credit Party has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by such Credit Party or any of its Subsidiaries (or
suppliers, vendors and customers) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan
in accordance with the timetable. Based on the foregoing, each Credit Party
believes that all computer applications (including those of its suppliers,
vendors and customers) that are material to its and any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 compliant"), except to the extent that
a failure to do so could not reasonably be expected to have Material Adverse
Effect.
6.23 REIMBURSEMENT FROM THIRD PARTY PAYORS.
The accounts receivable of the Consolidated Parties have been and will
continue to be adjusted to reflect the reimbursement policies (both those most
recently published in writing as
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well as those not in writing which have been verbally communicated) of third
party payors such as Medicare, Medicaid, Blue Cross/Blue Shield, private
insurance companies, health maintenance organizations, preferred provider
organizations, alternative delivery systems, managed care systems, government
contracting agencies and other third party payors, except any which,
individually or in the aggregate, would not have a Material Adverse Effect. In
particular, accounts receivable relating to such third party payors do not and
shall not exceed amounts any obligee is entitled to receive under any
capitation arrangement, fee schedule, discount formula, cost-based
reimbursement or other adjustment or limitation to its usual charges payors,
except any which, individually or in the aggregate, would not have a Material
Adverse Effect.
6.24 FRAUD AND ABUSE.
Neither the Consolidated Parties nor, to the knowledge of the officers
of the Consolidated Parties, any of their officers or directors, or, to the
knowledge of any officer of the Consolidated Parties, no Contract Providers,
have engaged in any activities which are prohibited under federal Medicare and
Medicaid statutes, 42 U.S.C. ss.1320a-7b, or 42 U.S.C. ss.1395nn or the
regulations promulgated pursuant to such statutes or related state or local
statutes or regulations, or which are prohibited by binding rules of
professional conduct, including but not limited to the following: (i) knowingly
and willfully making or causing to be made a false statement or representation
of a material fact in any applications for any benefit or payment; (ii)
knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; (iii) failing to disclose knowledge by a claimant of the occurrence
of any event affecting the initial or continued right to any benefit or payment
on its own behalf or on behalf of another, with intent to secure such benefit
or payment fraudulently; (iv) knowingly and willfully soliciting or receiving
any remuneration (including any kickback, bribe or rebate), directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay such
remuneration (a) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare, Medicaid or other
applicable third party payors, or (b) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or ordering
of any good, facility, service, or item for which payment may be made in whole
or in part by Medicare, Medicaid or other applicable third party payors.
6.25 LICENSING AND ACCREDITATION.
Each of the Consolidated Parties and, to the knowledge of the officers
of the Consolidated Parties, each Contract Provider, has, to the extent
applicable: (i) obtained (or been duly assigned) all required certificates of
need or determinations of need as required by the relevant state Governmental
Authority for the acquisition, construction, expansion of, investment in or
operation of its businesses as currently operated; (ii) obtained and maintains
in good standing all required licenses; (iii) to the extent prudent and
customary in the industry in which it is engaged, obtained and maintains
accreditation from all generally recognized accrediting agencies; and (iv)
entered into and maintains in good standing its status as a Medicare Supplier
and as a Medicaid Supplier. To the knowledge of the officers of the
Consolidated Parties, each Contract Provider is duly licensed (where license is
required) by each state or state agency or commission, or any other
Governmental Authority having jurisdiction over the provisions of
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such services by such Person in the locations in which the Consolidated Parties
conduct business, required to enable such Person to provide the professional
services provided by such Person and otherwise as is necessary to enable the
Consolidated Parties to operate as currently operated and as presently
contemplated to be operated. To the knowledge of the officers of the
Consolidated Parties, all such required licenses are in full force and effect
on the date hereof and have not been revoked or suspended or otherwise limited.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the
Commitments hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Consolidated Parties, a consolidated balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
year, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal year, setting
forth in comparative form consolidated figures for the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail, audited by independent certified public
accountants of recognized national standing reasonably acceptable to
the Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for
changes with which such accountants concur) and shall not be limited
as to the scope of the audit or qualified as to the status of the
Consolidated Parties as a going concern.
(b) Quarterly Financial Statements. As soon as
available, and in any event within 45 days after the close of each
fiscal quarter of the Consolidated Parties (other than the fourth
fiscal quarter, in which 90 days after the end thereof) a consolidated
balance sheet and income statement of the Consolidated Parties, as of
the end of such fiscal quarter, together with related consolidated
statements of operations and retained earnings and of cash flows for
such fiscal quarter in each case setting forth in comparative form
consolidated figures for the corresponding period of the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of the chief financial officer of the
Borrower to the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the
Consolidated Parties
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and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 7.1(a) and 7.1(b)
above, a certificate of the chief financial officer of the Borrower
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.11 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Credit Parties propose to take with
respect thereto.
(d) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to any Consolidated Party in connection with
any annual, interim or special audit of the books of such Person.
(e) Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as any Consolidated Party shall send to its
shareholders or to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a holder and (ii) upon the
request of the Agent, all reports and written information to and from
the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(f) Notices. Upon obtaining knowledge thereof, each
Credit Party will give written notice to the Agent promptly of (i) the
occurrence of an event or condition consisting of a Default or Event
of Default, specifying the nature and existence thereof and what
action the Credit Parties propose to take with respect thereto, and
(ii) the occurrence of any of the following with respect to any
Consolidated Party (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against such Person which if
adversely determined is likely to have a Material Adverse Effect, (B)
the institution of any proceedings against such Person with respect
to, or the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal,
state or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which could have a Material
Adverse Effect, (C) any notice or determination concerning the
imposition of any withdrawal liability by a Multiemployer Plan against
such Person or any ERISA Affiliate, the determination that a
Multiemployer Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA or the termination of any Plan or (D)
the institution of any investigation or proceedings against such
Person (or, to the knowledge of the Borrower's officers, any Contract
Provider) to suspend, revoke or terminate or which may result in the
termination of its status as a Medicaid Supplier or its status as a
Medicare Supplier or exclusion from any Medical Reimbursement Program,
promptly deliver to the
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Agent written notice thereof stating the nature and status of such
litigation, dispute, proceeding, investigation, levy, execution or
other process.
(g) ERISA. Upon obtaining knowledge thereof, the
Borrower will give written notice to the Agent promptly (and in any
event within five business days) of: (i) of any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrower or
any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all
amounts which any Consolidated Party or any ERISA Affiliate is
required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and
the Code with respect thereto; or (iv) any change in the funding
status of any Plan that could have a Material Adverse Effect, together
with a description of any such event or condition or a copy of any
such notice and a statement by the chief financial officer of the
Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Credit Parties shall
furnish the Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed
with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year"
(within the meaning of Section 3(39) of ERISA).
(h) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of any Consolidated Party as the
Agent or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
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7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to,
pay and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims
for labor, materials and supplies) which, if unpaid, might give rise to a Lien
upon any of its properties, and (c) except as prohibited hereunder, all of its
other Indebtedness as it shall become due; provided, however, that no
Consolidated Party shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could have a Material Adverse Effect.
7.6 INSURANCE.
Each Credit Party will, and will cause each of its Subsidiaries to, at
all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities
and with such deductibles or self-insurance retentions as are in accordance
with normal industry practice and furnish to the Agent, upon written request,
full information as to the insurance carried.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as
may be needed or proper, to the extent and in the manner customary for
companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
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7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Revolving Loans and will use
the Letters of Credit solely for the purposes set forth in Section 6.15.
7.10 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities
and its other business assets, and to make photocopies or photographs thereof
and to write down and record any information such representative obtains and
shall permit the Lenders or their representatives to investigate and verify the
accuracy of information provided to the Agent and to discuss all such matters
with the officers, employees and representatives of such Person.
7.11 FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties, shall be greater than or equal to 2.75 to 1.0.
(b) Leverage Ratio. The Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, shall be less
than or equal to 2.50 to 1.0.
(c) Consolidated Net Worth. The Consolidated Net Worth
shall at all times be greater than or equal to $491,000,000, increased
by the sum of (i) on a cumulative basis as of the end of each fiscal
quarter of the Borrower, commencing with the fiscal quarter ending
September 30, 1999, an amount equal to 75% of Consolidated Net Income
(to the extent positive) for the fiscal quarter then ended plus (ii)
an amount equal to 100% of the Net Cash Proceeds from any Equity
Issuance occurring after the Closing Date minus (iii) the aggregate
price paid for all purchases of Capital Stock of the Borrower pursuant
to the Stock Buy-Back Plan.
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after any
Person becomes a Subsidiary of any Credit Party, the Borrower shall provide the
Agent with written notice thereof setting forth information in reasonable
detail describing all of the assets of such Person and shall (a) cause such
Person to execute a Joinder Agreement in substantially the same form as Exhibit
7.12, (b) cause 100% of the Capital Stock of such Person to be delivered to the
Agent (together with undated stock powers signed in blank), and pledged to the
Agent pursuant to an appropriate pledge agreement(s) in substantially the form
of the Pledge Agreement and otherwise in form acceptable to the Agent and (c)
if such Person has any Subsidiaries (i) deliver all of the Capital Stock of
such Subsidiaries (together with undated stock powers signed in blank) to the
Agent and
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(ii) execute a pledge agreement in substantially the form of the Pledge
Agreement and otherwise in a form acceptable to the Agent.
7.13 PLEDGED ASSETS.
Except with respect to the Capital Stock of Lincare of Columbia, the
Credit Parties will cause 100% of the issued and outstanding Capital Stock of
each direct and indirect Subsidiary of the Borrower, to be subject at all times
to a first priority, perfected Lien in favor of the Agent pursuant to the terms
and conditions of the Pledge Agreement or such other security documents as the
Agent shall reasonably request.
7.14 YEAR 2000 COMPLIANCE.
The Credit Parties will promptly notify the Agent in the event any
Credit Party discovers or determines that any computer application (including
those of its suppliers, vendors and customers) that is material to its or any
of its Subsidiaries' business and operations will not be Year 2000 Compliant,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.
7.15 FURTHER ASSURANCES.
As soon as available, but in any event within 30 Business Days of the
Closing Date, the Borrower shall have provided the Agent with (a) certificates
of good standing, existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental Authorities of
the state or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could have a Material
Adverse Effect and (b) to the extent available, a certificate indicating
payment of all corporate or comparable franchise taxes certified as of a recent
date by the appropriate governmental taxing authorities.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the
Commitments hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement
and the other Credit Documents;
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(b) Indebtedness of the Borrower and its Subsidiaries
set forth in Schedule 8.1;
(c) purchase money Indebtedness (including Capital
Leases) or Synthetic Leases hereafter incurred by the Borrower or any
of its Subsidiaries to finance the purchase of fixed assets provided
that (i) the total of all such Indebtedness for all such Persons taken
together shall not exceed an aggregate principal amount of $5,000,000
at any one time outstanding (including any such Indebtedness referred
to in subsection (b) above); (ii) such Indebtedness when incurred
shall not exceed the purchase price of the asset(s) financed; and
(iii) no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the time of
such refinancing;
(d) obligations of the Borrower or any of its
Subsidiaries in respect of Hedging Agreements entered into in order to
manage existing or anticipated interest rate or exchange rate risks
and not for speculative purposes;
(e) obligations of the Borrower in respect of the Stock
Buy-Back Plan;
(f) obligations of the Borrower under Equity Swap
Agreements provided that (i) the term of any such Equity Swap
Agreements shall not exceed 6 months and (ii) the notional amount of
all such obligations shall not exceed $45,000,000 in the aggregate at
any time outstanding;
(g) unsecured Indebtedness payable to the seller of the
Capital Stock or Property acquired in a Permitted Acquisition
representing all or a portion of the purchase price of the Capital
Stock or Property so acquired;
(h) Indebtedness owing by one Credit Party to another
Credit Party; and
(i) other Indebtedness hereafter incurred by the
Borrower not exceeding $10,000,000 in aggregate principal amount at
any time outstanding.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens;
provided, however, that the terms of this Section 8.2 shall not be applicable
to Capital Stock of the Borrower which constitute treasury shares held by the
Borrower.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date.
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8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
The Credit Parties will not permit any Consolidated Party to enter
into any transaction of merger or consolidation or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution);
provided that, notwithstanding the foregoing provisions of this
Section 8.4, (a) the Borrower may merge or consolidate with any of its
Subsidiaries provided that (i) the Borrower shall be the continuing or
surviving corporation, (ii) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as
the Agent may request in order to maintain the perfection and priority
of the Liens on the assets of the Credit Parties and (iii) after
giving effect to such transaction, no Default or Event of Default
exists and (b) any Credit Party other than the Borrower may merge or
consolidate with any other Credit Party other than the Borrower
provided that (i) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent
may request in order to maintain the perfection and priority of the
Liens on the assets of the Credit Parties and (ii) after giving effect
to such transaction, no Default or Event of Default exists and (c) the
Borrower or any Subsidiary of the Borrower may merge with any Person
other than a Consolidated Party in connection with a Permitted
Acquisition provided that (i) the Borrower or such Subsidiary shall be
the continuing or surviving corporation and (ii) after giving effect
to such transaction, no Default or Event of Default exists.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party to sell,
lease, transfer or otherwise dispose of any Property (including without
limitation pursuant to any sale/leaseback transaction or securitization
transaction ) other than (i) the sale of inventory in the ordinary course of
business for fair consideration, (ii) the sale or disposition of assets no
longer used or useful in the conduct of such Person's business, (iii) Sale and
Leaseback Transactions permitted under Section 8.13 and (iv) other sales of
assets, provided that (A) no Default or Event of Default shall have occurred or
would occur as a result of such sale or other disposition and (B) the aggregate
book value of assets sold or otherwise disposed of pursuant to clause (iv) in
any given fiscal year does not exceed an amount equal to $10,000,000.
Upon a sale of Capital Stock of a Consolidated Party not prohibited by
this Section 8.5, the Agent shall (to the extent applicable) deliver to the
Credit Parties, upon the Credit Parties' request and at the Credit Parties'
expense, such documentation as is reasonably necessary to evidence the release
of such Consolidated Party from all of its obligations, if any, under the
Credit Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
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8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except, so long as no Default or Event of Default shall
have occurred or would occur as a result thereof, (a) to make dividends payable
solely in the same class of Capital Stock of such Person, (b) to make dividends
or other distributions payable to any Credit Party (directly or indirectly
through Subsidiaries), (c) purchases by the Borrower of its Capital Stock
pursuant to the Stock Buy-Back Plan, provided that the aggregate price for all
such purchases shall not exceed $200,000,000, (d) other repurchases,
redemptions or other acquisitions or retirements for value of any Capital Stock
of the Borrower in connection with stock purchase agreements and shareholder
redemption agreements (other than the Stock Buy-Back Plan), provided that the
aggregate price for all such repurchases, redemptions, acquisitions and
retirements during any fiscal year shall not exceed $10,000,000 and (e) as
permitted by Section 8.8.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Credit Parties will not permit any Consolidated Party to after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such amendment or modification would
add or change any terms in a manner adverse to the issuer of such Indebtedness,
or shorten the final maturity or average life to maturity or require any
payment to be made sooner than originally scheduled or increase the interest
rate applicable thereto or change any subordination provision thereof.
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit any Consolidated Party to enter
into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (a) transactions permitted by Section 8.1, Section 8.4, Section 8.6 or
Section 8.7, (b) normal compensation and reimbursement of expenses of officers
and directors and (c) except as otherwise specifically limited in this Credit
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to change
its fiscal year or amend, modify or change its articles of incorporation or
organization (or corporate charter or other similar organizational document) or
bylaws or operating agreement (or other similar document) in any manner adverse
to the Lenders without the prior written consent of the Required Lenders.
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8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party 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 Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Indebtedness or other obligation owed to any
Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease
or transfer any of its properties or assets to any Credit Party, (e) grant a
lien on its properties or assets whether now owned or hereafter acquired or (f)
act as a Guarantor and pledge its assets pursuant to the Credit Documents or
any renewals, refinancings, exchanges, refundings or extension thereof, except
(in respect of any of the matters referred to in clauses (a)-(d) above) for
such encumbrances or restrictions existing under or by reason of (i) this
Credit Agreement and the other Credit Documents or (ii) applicable law.
8.12 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON BORROWER.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (a)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of
the Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (b)
permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (c) permit, create,
incur, assume or suffer to exist any Lien thereon, in each case (i) except to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock
of Subsidiaries, (ii) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary not prohibited under Section
8.4 or Section 8.5 or (iii) except for Permitted Liens and (d) notwithstanding
anything to the contrary contained in clause (b) above, permit any Subsidiary
of the Borrower to issue any shares of preferred Capital Stock.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Consolidated Party to enter
into any Sale and Leaseback Transaction other than a Sale and Leaseback
Transaction with respect to the corporate headquarters office building to be
built by the Borrower in Clearwater, Florida, provided that value of the
Property subject to such transaction shall not exceed $20,000,000 in the
aggregate.
8.14 NO FURTHER NEGATIVE PLEDGES.
Except (a) pursuant to this Credit Agreement and the other Credit
Documents, and (b) pursuant to any document or instrument governing
Indebtedness incurred pursuant to Section 8.1(c), provided that any such
restriction contained therein relates only to the asset or assets constructed
or acquired in connection therewith, the Credit Parties will not permit any
Consolidated Party to enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given
for some other obligation.
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8.15 NO FOREIGN SUBSIDIARIES.
The Credit Parties will not create, acquire or permit to exist any
Foreign Subsidiary.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Revolving Loans or of any
reimbursement obligations arising from drawings under Letters
of Credit, or
(ii) default, and such default shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Revolving Loans or on any reimbursement
obligations arising from drawings under Letters of Credit, or
of any Fees or other amounts owing hereunder, under any of
the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
made or deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections 7.2,
7.9, 7.11 or 8.1 through 8.15, inclusive;
(ii) default in the due performance or observance
of any term, covenant or agreement contained in Section 7.1
and such default shall continue unremedied for a period of at
least 5 business days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or
notice thereof by the Agent; or
(iii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b), (c)(i) or (c)(ii) of
this Section 9.1) contained in this Credit Agreement and such
default
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shall continue unremedied for a period of at least 30 days
after the earlier of a responsible officer of a Credit Party
becoming aware of such default or notice thereof by the
Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents (subject to applicable
grace or cure periods, if any) or repudiate its obligations
thereunder, or (ii) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary not prohibited
under Section 8.4 or Section 8.5, any Credit Document shall fail to be
in full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under such guaranty, or any Guarantor shall default in the
due performance or observance of any term, covenant or agreement on
its part to be performed or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur
with respect to any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) of any material obligation or
condition of any contract or lease material to the
Consolidated Parties, taken as a whole.
(ii) The occurrence of an "Event of Default" (as
such term is defined therein) under the 364-Day Credit
Agreement.
(iii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in
excess of $2,500,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) any Consolidated Party shall
(1) default in any payment (beyond the applicable grace
period with respect thereto, if any) with respect to any such
Indebtedness, or (2) default (after giving effect to any
applicable grace period) in the observance or performance of
any term, covenant or agreement relating to such Indebtedness
or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event or condition
shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent
on behalf of such holders) to cause (determined
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without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other
than by a regularly scheduled required prepayment, prior to
the stated maturity thereof.
(h) Judgments. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $2,500,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has, in the reasonable judgment of the
Agent, the ability to perform) and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if
such event or condition could have a Material Adverse Effect (i) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of any Consolidated Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (ii) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Agent,
likely to result in the termination of such Plan for purposes of Title
IV of ERISA; (iii) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA, or (B) any
Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency or (within the
meaning of Section 4245 of ERISA) such Plan; or (iv) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur
which may subject any Consolidated Party or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
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(b) Acceleration. Declare the unpaid principal of and
any accrued interest in respect of all Revolving Loans, any
reimbursement obligations arising from drawings under Letters of
Credit and any and all other indebtedness or obligations of any and
every kind owing by the Borrower to the Agent and/or any of the
Lenders hereunder to be due whereupon the same shall be immediately
due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights
and interests created and existing under the Credit Documents
including, without limitation, all rights and remedies existing under
the Pledge Agreement, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Revolving Loans, all reimbursement obligations arising from drawings
under Letters of Credit, all accrued interest in respect thereof, all accrued
and unpaid Fees and other indebtedness or obligations owing to the Agent and/or
any of the Lenders hereunder automatically shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to
act as its agent under this Credit Agreement and the other Credit Documents
with such powers and discretion as are specifically delegated to the Agent by
the terms of this Credit Agreement and the other Credit Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 10.5 and the first sentence of
Section 10.6 hereof shall include its Affiliates and its own and its
Affiliates' officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Credit
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Credit
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Document or any certificate or other document referred to or provided for in,
or received by any of them under, any Credit Document, or for the value,
validity, effectiveness, genuineness, enforceability, or sufficiency of any
Credit Document, or any other document referred to or provided for therein or
for any failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any
condition or to inspect the property (including the books and records) of any
Credit Party or any of its Subsidiaries or Affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Credit Document, unless directed by the Required Lenders; and (e) shall not
be responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence,
willful misconduct or breach of this Credit Agreement. The Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith
and with reasonable care.
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel for any Credit Party), independent accountants, and other experts
selected by the Agent as permitted under Section 10.1. The Agent may deem and
treat the payee of any Revolving Note as the holder thereof for all purposes
hereof unless and until the Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 11.3(b) hereof. As to any
matters not expressly provided for by this Credit Agreement, the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Credit
Document or applicable law or unless it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event
of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the
Required Lenders, provided that, unless and until the Agent shall have received
such directions, the 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 interest of the
Lenders.
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10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Revolving Loans made by it,
Bank of America (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers and obligations hereunder as
any other Lender and may exercise and perform the same as though it were not
acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, enter into Equity Swap Agreements with, provide services
to, and generally engage in any kind of lending, trust, or other business with
any Credit Party or any of its Subsidiaries or Affiliates as if it were not
acting as Agent, and Bank of America (and any successor acting as Agent) and
its Affiliates may accept fees and other consideration from any Credit Party or
any of its Subsidiaries or Affiliates for services in connection with this
Credit Agreement or otherwise without having to account for the same to the
Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective Commitments,
for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Lender) in any way relating to or
arising out of any Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document; provided
that no Lender shall be liable for any of the foregoing to the extent they
arise from the gross negligence, willful misconduct or breach of this Credit
Agreement of the Agent. Without limitation of the foregoing, each Lender agrees
to reimburse the Agent promptly upon demand for its ratable share of any costs
or expenses payable by the Borrower under Section 11.5, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Borrower.
The agreements in this Section 10.5 shall survive the repayment of the
Revolving Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Credit Parties
and their Subsidiaries and decision to enter into this Credit Agreement and
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Credit Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the
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affairs, financial condition, or business of any Credit Party or any of its
Subsidiaries or Affiliates that may come into the possession of the Agent or
any of its Affiliates.
10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint
a successor Agent which shall be a commercial bank organized under the laws of
the United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the fifth Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
if to any Credit Party:
Lincare Holdings Inc.
19337 U.S. 19 North
Suite 500
Clearwater, Florida 33764
Attn: Chief Financial Officer
Telephone: (727) 530-7700
Telecopy: (727) 532-9692
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with a copy to:
Lincare Holdings Inc.
19337 U.S. 19 North
Suite 500
Clearwater, Florida 33764
Attn: Legal Department
Telephone: (727) 530-7700
Telecopy: (727) 532-9692
if to the Agent:
Bank of America, N.A.
as Agent
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services -- Michael Roof
Telephone: 704-388-3916
Telecopy: 704-386-9923
with a copy to:
Bank of America, N. A.
Healthcare Finance Group
700 Louisiana Street
Houston, Texas 77002
Attn: F. Scott Singhoff
Telephone: (713) 247-6961
Telecopy: (713) 247-6719
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of
Default, each Lender (and each of its Affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender (or any of its Affiliates) to or for the credit or the account of any
Credit Party against any and all of the obligations of such Person now or
hereafter existing under this Credit Agreement, under the Revolving Notes,
under any other Credit Document or otherwise, irrespective of whether such
Lender shall have made any demand hereunder or thereunder and although such
obligations may be unmatured. Each Lender agrees promptly to notify any
affected Credit Party after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each
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Lender under this Section 11.2 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender may
have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that none of
the Credit Parties may assign or transfer any of its interests and
obligations without prior written consent of the Lenders; provided
further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be
limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of
its Revolving Loans, its Revolving Notes, and its Commitment);
provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of
$1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights
and obligations under this Credit Agreement;
(iv) such assigning Lender shall simultaneously
assign an identical percentage of the loans and commitments
of such Lender under the 364-Day Credit Agreement to such
Eligible Assignee; and
(v) the parties to such assignment shall execute
and deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit 11.3(b) hereto, together
with any Revolving Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to
the extent of such assignment, have the obligations, rights, and
benefits of a Lender hereunder and the assigning Lender shall, to the
extent of such assignment, relinquish its rights and be released from
its obligations under this Credit Agreement. Upon the consummation of
any assignment pursuant to this Section 11.3(b), the assignor, the
Agent and the Borrower shall make appropriate arrangements so that, if
required, new Revolving Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws of the
United States of
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America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of
Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to
in Section 11.1 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount
of the Revolving Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Revolving Note
subject to such assignment and payment of the processing fee, the
Agent shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit 11.3(b) hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(e) Each Lender may sell participations to one or more
Persons in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Revolving Loans); provided, however, that (i)
such Lender's obligations under this Credit Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii)
the participant shall be entitled to the benefit of the yield
protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 11.2, and
(iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Credit Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to its Revolving
Loans and its Revolving Notes and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement
(other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on
such Revolving Loans or Revolving Notes, extending any scheduled
principal payment date or date fixed for the payment of interest on
such Revolving Loans or Revolving Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in
this Credit Agreement, any Lender may at any time assign and pledge
all or any portion of its Revolving Loans and its Revolving Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation
A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its
obligations hereunder.
(g) Any Lender may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and
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participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.15 hereof.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of
the Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses
of the Agent in connection with the syndication, preparation, execution,
delivery, administration, modification, and amendment of this Credit Agreement,
the other Credit Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under the Credit Documents. The Borrower further
agrees to pay on demand all reasonable costs and expenses of the Agent and the
Lenders, if any, in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and the
other documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent
and each Lender and each of their Affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities, costs, and
expenses (including, without limitation, reasonable attorneys' fees) that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Credit Documents, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Revolving Loans, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 11.5
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
shareholders or creditors or an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower agrees not to
assert any claim against the Agent, any Lender, any of their Affiliates, or any
of their
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respective directors, officers, employees, attorneys, agents, and advisers, on
any theory of liability, for special, indirect, consequential, or punitive
damages arising out of or otherwise relating to the Credit Documents, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Revolving Loans.
(c) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 11.5 shall survive the repayment of the Revolving
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is
in writing entered into by, or approved in writing by, the Required Lenders and
the Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby,
no such amendment, change or waiver shall:
(i) extend the final maturity of any Revolving
Loan or the time of payment of any reimbursement obligation,
or any portion thereof, arising from drawings under Letters
of Credit, or extend or waive the principal payment of any
Revolving Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment
of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates)
thereon or Fees or costs hereunder,
(iii) reduce or waive the principal amount of any
Revolving Loan (except for the waiver of a mandatory
prepayment required by Section 3.3(b) hereof) or of any
reimbursement obligation, or any portion thereof, arising
from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(v) release all or substantially all of the
Pledged Collateral,
(vi) except as the result of or in connection with
a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.4, release the Borrower or
substantially all of the other Credit Parties from its or
their obligations under the Credit Documents,
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(vii) amend, modify or waive any provision of this
Section 11.6 or Section 3.14,
(viii) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders,
(ix) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby;
(x) increase the Revolving Committed Amount
hereunder to an amount in excess of $240,000,000;
(b) without the consent of the Agent, no provision of
Section 10 may be amended;
(c) without the consent of the Issuing Lender,
no provision of Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, each Lender is
entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Revolving Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary
in making proof of this Credit Agreement to produce or account for more than
one such counterpart for each of the parties hereto. Delivery by facsimile by
any of the parties hereto of an executed counterpart of this Credit Agreement
shall be as effective as an original executed counterpart hereof and shall be
deemed a representation that an original executed counterpart hereof will be
delivered.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making
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of the Revolving Loans, the issuance of the Letters of Credit, the repayment of
the Revolving Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Revolving Notes and the making of the Revolving Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Credit Agreement,
each of the Credit Parties hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Credit Parties
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives
any objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) 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.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT,
THE LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY
OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain
85
<PAGE> 91
in full force and effect and shall be construed without giving effect to the
illegal, invalid or unenforceable provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such
time on or after the Closing Date when it shall have been executed by
the Borrower, the Guarantors and the Agent, and the Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this
Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no
Revolving Loans, LOC Obligations or any other amounts payable
hereunder or under any of the other Credit Documents shall remain
outstanding, no Letters of Credit shall be outstanding, all of the
Credit Party Obligations have been irrevocably satisfied in full and
all of the Commitments hereunder shall have expired or been
terminated.
11.14 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.15 CONFIDENTIALITY.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or
affiliate of any Lending Party, if reasonably incidental to the credit
facility, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein (so long as such Person
agrees to be bound by the provisions of this Section 11.15), (c) as required by
any law, rule or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of disclosure by any Lending Party
prohibited by this Credit Agreement, (g) in connection with any litigation to
which such Lending Party or any of its affiliates may be a party, (h) to the
extent necessary in
86
<PAGE> 92
connection with the exercise of any remedy under this Credit Agreement or any
other Credit Document, and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.
[remainder of page intentionally left blank]
87
<PAGE> 93
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as of
the date first above written.
BORROWER: LINCARE HOLDINGS INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
GUARANTORS: LINCARE INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
LINCARE PROCUREMENT INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
LINCARE ASSET MANAGEMENT LP,
a Nevada limited partnership
BY: LINCARE HOLDINGS INC., A
DELAWARE CORPORATION, ITS GENERAL
PARTNER
By: /s/ Paul G. Gabos
----------------------------------
Name: Paul G. Gabos
--------------------------------
Title: CFO
-------------------------------
LINCARE OF NEW YORK INC.,
a New York corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
<PAGE> 94
LINCARE PHARMACY SERVICES INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
LINCARE LICENSING INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
CONVACARE SERVICES INC.,
an Indiana corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
LINCARE TRAVEL INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
----------------------------------------
Name: Paul G. Gabos
--------------------------------------
Title: CFO
-------------------------------------
<PAGE> 95
LENDERS: BANK OF AMERICA, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Forest Scott Singhoff
----------------------------------------
Name: Forest Scott Singhoff
--------------------------------------
Title: Managing Director
-------------------------------------
<PAGE> 96
BANKATLANTIC, as a Lender
By: /s/ Ana C. Bolduc
----------------------------------------
Name: Ana C. Bolduc
--------------------------------------
Title: SVP
-------------------------------------
<PAGE> 97
BANK LEUMI LE - ISRAEL B.M.,
MIAMI AGENCY, as a lender
By: /s/ Joseph F. Realini
----------------------------------------
Name: Joseph F. Realini
--------------------------------------
Title: Vice President
-------------------------------------
<PAGE> 98
COMERICA BANK , as a Lender
By: /s/ Bradley A. Terryn
----------------------------------------
Name: Bradley A. Terryn
--------------------------------------
Title: First Vice President
-------------------------------------
<PAGE> 99
BANKERS TRUST COMPANY, as a Lender
By: /s/ Mary Kay Coyle
----------------------------------------
Name: Mary Kay Coyle
--------------------------------------
Title: Managing Director
-------------------------------------
<PAGE> 100
FLEET NATIONAL BANK, as a Lender
By: /s/ Carol Paige
----------------------------------------
Name: Carol Paige
--------------------------------------
Title: SVP
-------------------------------------
<PAGE> 101
THE FUJI BANK, LIMITED, as a Lender
By: /s/ Raymond Ventura
----------------------------------------
Name: Raymond Ventura
--------------------------------------
Title: Vice President & Manager
-------------------------------------
<PAGE> 102
THE INDUSTRIAL BANK OF JAPAN
LIMITED, as a Lender
By: /s/ Minami Miura
--------------------------------
Name: Minami Miura
------------------------------
Title: Vice President
-----------------------------
<PAGE> 103
MICHIGAN NATIONAL BANK, as a Lender
By: /s/ Naran Shaya
----------------------------------------
Name: Naran Shaya
--------------------------------------
Title: Commercial Relationship Manager
-------------------------------------
<PAGE> 104
SCOTIABANC INC., as a Lender
By: /s/ Dana Maloney
----------------------------------------
Name: Dana Maloney
--------------------------------------
Title: Relationship Manager
-------------------------------------
<PAGE> 105
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ Martin D. Golden
----------------------------------------
Name: Martin D. Golden
--------------------------------------
Title: Vice President
-------------------------------------
<PAGE> 1
[EXECUTION COPY]
364-DAY CREDIT AGREEMENT
Dated as of August 23, 1999
among
LINCARE HOLDINGS INC.,
as Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, N.A.,
as Agent
AND
Arranged by:
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and
Sole Book Manager
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1 DEFINITIONS.......................................................................1
1.1 Definitions......................................................................1
1.2 Computation of Time Periods.....................................................24
1.3 Accounting Terms................................................................24
SECTION 2 CREDIT FACILITIES................................................................24
2.1 Revolving Loans.................................................................24
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES...................................26
3.1 Default Rate....................................................................26
3.2 Extension and Conversion........................................................27
3.3 Prepayments.....................................................................27
3.4 Termination and Reduction of Revolving Committed Amount; Increase of Committed
Amount..........................................................................28
3.5 Fees............................................................................30
3.6 Capital Adequacy................................................................30
3.7 Limitation on Eurodollar Loans..................................................31
3.8 Illegality......................................................................31
3.9 Requirements of Law.............................................................31
3.10 Treatment of Affected Revolving Loans..........................................32
3.11 Taxes..........................................................................33
3.12 Compensation...................................................................35
3.13 Pro Rata Treatment.............................................................35
3.14 Sharing of Payments............................................................36
3.15 Payments, Computations, Etc....................................................37
3.16 Evidence of Debt...............................................................38
3.17 Replacement of Affected Lenders................................................39
SECTION 4 GUARANTY.........................................................................40
4.1 The Guaranty....................................................................40
4.2 Obligations Unconditional.......................................................40
4.3 Reinstatement...................................................................41
4.4 Certain Additional Waivers......................................................42
4.5 Remedies........................................................................42
4.6 Rights of Contribution..........................................................42
4.7 Continuing Guarantee............................................................43
SECTION 5 CONDITIONS.......................................................................44
5.1 Closing Conditions..............................................................44
5.2 Conditions to all Extensions of Credit..........................................46
SECTION 6 REPRESENTATIONS AND WARRANTIES...................................................46
6.1 Financial Condition.............................................................47
6.2 No Material Change..............................................................47
6.3 Organization and Good Standing..................................................47
6.4 Power; Authorization; Enforceable Obligations...................................47
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
6.5 No Conflicts....................................................................48
6.6 No Default......................................................................48
6.7 Ownership.......................................................................48
6.8 Indebtedness....................................................................48
6.9 Litigation......................................................................49
6.10 Taxes..........................................................................49
6.11 Compliance with Law............................................................49
6.12 ERISA..........................................................................49
6.13 Subsidiaries...................................................................50
6.14 Governmental Regulations, Etc..................................................51
6.15 Purpose of Revolving Loans.....................................................51
6.16 Environmental Matters..........................................................51
6.17 Intellectual Property..........................................................52
6.18 Solvency.......................................................................53
6.19 Investments....................................................................53
6.20 Disclosure.....................................................................53
6.21 No Unusual Restrictions........................................................53
6.22 Year 2000 Compliance...........................................................53
6.23 Reimbursement from Third Party Payors..........................................53
6.24 Fraud and Abuse................................................................54
6.25 Licensing and Accreditation....................................................54
SECTION 7 AFFIRMATIVE COVENANTS............................................................55
7.1 Information Covenants...........................................................55
7.2 Preservation of Existence and Franchises........................................57
7.3 Books and Records...............................................................57
7.4 Compliance with Law.............................................................57
7.5 Payment of Taxes and Other Indebtedness.........................................58
7.6 Insurance.......................................................................58
7.7 Maintenance of Property.........................................................58
7.8 Performance of Obligations......................................................58
7.9 Use of Proceeds.................................................................58
7.10 Audits/Inspections.............................................................59
7.11 Financial Covenants............................................................59
7.12 Additional Credit Parties......................................................59
7.13 Pledged Assets.................................................................60
7.14 Year 2000 Compliance...........................................................60
7.15 Further Assurances.............................................................60
SECTION 8 NEGATIVE COVENANTS...............................................................60
8.1 Indebtedness....................................................................60
8.2 Liens...........................................................................61
8.3 Nature of Business..............................................................61
8.4 Consolidation, Merger, Dissolution, etc.........................................62
8.5 Asset Dispositions..............................................................62
8.6 Investments.....................................................................62
8.7 Restricted Payments.............................................................63
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
8.8 Prepayments of Indebtedness, etc................................................63
8.9 Transactions with Affiliates....................................................63
8.10 Fiscal Year; Organizational Documents..........................................63
8.11 Limitation on Restricted Actions...............................................64
8.12 Ownership of Subsidiaries; Limitations on Borrower.............................64
8.13 Sale Leasebacks................................................................64
8.14 No Further Negative Pledges....................................................64
8.15 No Foreign Subsidiaries........................................................65
SECTION 9 EVENTS OF DEFAULT................................................................65
9.1 Events of Default...............................................................65
9.2 Acceleration; Remedies..........................................................67
SECTION 10 AGENCY PROVISIONS...............................................................68
10.1 Appointment, Powers and Immunities.............................................68
10.2 Reliance by Agent..............................................................69
10.3 Defaults.......................................................................69
10.4 Rights as a Lender.............................................................69
10.5 Indemnification................................................................70
10.6 Non-Reliance on Agent and Other Lenders........................................70
10.7 Successor Agent................................................................70
SECTION 11 MISCELLANEOUS...................................................................71
11.1 Notices........................................................................71
11.2 Right of Set-Off; Adjustments..................................................72
11.3 Benefit of Agreement...........................................................72
11.4 No Waiver; Remedies Cumulative.................................................74
11.5 Expenses; Indemnification......................................................75
11.6 Amendments, Waivers and Consents...............................................76
11.7 Counterparts...................................................................77
11.8 Headings.......................................................................77
11.9 Survival.......................................................................77
11.10 Governing Law; Submission to Jurisdiction; Venue..............................77
11.11 Severability..................................................................78
11.12 Entirety......................................................................78
11.13 Binding Effect; Termination...................................................78
11.14 Conflict......................................................................79
11.15 Confidentiality...............................................................79
</TABLE>
<PAGE> 5
SCHEDULES
Schedule 1.1(a) Investments
Schedule 1.1(b) Liens
Schedule 2.1(a) Lenders
Schedule 6.9 Litigation
Schedule 6.13 Subsidiaries
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 1.1(a) Form of Pledge Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 3.4(b) Form of New Commitment Agreement
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
<PAGE> 6
CREDIT AGREEMENT
THIS 364-DAY CREDIT AGREEMENT, dated as of August 23, 1999, (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), is by and among LINCARE HOLDINGS INC., a Delaware corporation (the
"Borrower"), each of the Borrower's Subsidiaries (individually a "Guarantor"
and collectively the "Guarantors"), the Lenders (as defined herein) from time
to time party hereto and BANK OF AMERICA, N. A., as Agent for the Lenders (in
such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$250,000,000 credit facility comprised of a $50,000,000 364-day revolving
credit facility as set forth in this Credit Agreement and a $200,000,000
three-year revolving credit facility as set forth in the Three-Year Credit
Agreement (as defined below), each for the purposes set forth herein and
therein; and
WHEREAS, the Lenders have agreed to make the requested $50,000,000
364-day revolving credit facility available to the Borrower on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such
Person of all of the Capital Stock or all or substantially all of the
Property of another Person, whether or not involving a merger or
consolidation with such other Person.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Additional Revolving Commitment" means, with respect to any
lender which executes a New Commitment Agreement in accordance with
Section 3.4(b), the commitment of such Lender in an aggregate principal
amount up to the amount specified in such New Commitment Agreement to
make Loans in accordance with the provisions of Section 2.1(a).
<PAGE> 7
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other Person
(i) directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the equity
interest in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement, dated
as of July 6, 1999, between the Agent and the Borrower, as amended,
modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(c).
"Applicable Lending Office" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written
notice as the office by which its Eurodollar Loans are made and
maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b), the appropriate applicable percentage corresponding to the
Leverage Ratio in effect as of the most recent Calculation Date as set
forth below:
2
<PAGE> 8
<TABLE>
<CAPTION>
APPLICABLE PERCENTAGES
-------------------------------------------------------------
FOR REVOLVING LOANS
------------------------ FOR
PRICING LEVERAGE EURODOLLAR BASE RATE UNUSED
LEVEL RATIO LOANS LOANS FEE
------- -------------- ---------- --------- ------
<S> <C> <C> <C> <C>
I < = 1.0 to 1.0 1.125% 0.125% 0.25%*
< = 1.5 to 1.0
II but 1.375% 0.375% 0.30%*
> 1.0 to 1.0
< = 2.0 to 1.0
III but 1.625% 0.625% 0.35%*
> 1.5 to 1.0
IV > 2.0 to 1.0 2.00% 1.00% 0.45%*
</TABLE>
*If on any day following 90 days from the Closing Date, the
aggregate outstanding principal amount of all Revolving Loans
hereunder together with any "Revolving Loans" plus "LOC
Obligations" outstanding under the Three-Year Credit Agreement,
(as such terms are defined therein) is less than the product of
(A) one-half (1/2) times (B) the Revolving Committed Amount
hereunder plus the Revolving Committed Amount under the
Three-Year Credit Agreement, the applicable Unused Fee (as shown
above) shall be increased by an amount equal to 12.5 basis
points.
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Borrower is required to provide the officer's
certificate in accordance with the provisions of Section 7.1(c) for the
most recently ended fiscal quarter of the Consolidated Parties;
provided, however, that (i) the initial Applicable Percentages shall be
based on Pricing Level II (as shown above) and shall remain at Pricing
Level II until the date six months following the Closing Date, on and
after which time the Pricing Level shall be determined by the Leverage
Ratio as of the last day of the most recently ended fiscal quarter of
the Consolidated Parties preceding the applicable Calculation Date and
(ii) if the Borrower fails to provide the officer's certificate as
required by Section 7.1(c) for the last day of the most recently ended
fiscal quarter of the Consolidated Parties preceding the applicable
Calculation Date, the Applicable Percentage from such Calculation Date
shall be based on Pricing Level IV until such time as an appropriate
officer's certificate is provided, whereupon the Applicable Percentages
shall be determined by the Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties
preceding such Calculation Date. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentages shall be applicable to all
existing Revolving Loans as well as any new Revolving Loans.
"Asset Disposition" means any disposition, other than pursuant
to an Excluded Asset Disposition, of any or all of the Property
(including without limitation the Capital
3
<PAGE> 9
Stock of a Subsidiary) of any Consolidated Party whether by sale,
lease, transfer or otherwise, but other than pursuant to any casualty
or condemnation event.
"Bank of America" means Bank of America, N.A. and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (.5%) and (b) the Prime Rate for such day. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime
Rate or Federal Funds Rate.
"Base Rate Loan" means any Revolving Loan bearing interest at a
rate determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, except that,
when used in connection with a Eurodollar Loan,
4
<PAGE> 10
such day shall also be a day on which dealings between banks are
carried on in U.S. dollar deposits in London, England.
"Calculation Date" shall have the meaning assigned to such term
in the definition of "Applicable Percentage" set forth in this Section
1.1.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Moody's is
at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders)
or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America in which any Credit Party shall have a
perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at
least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
5
<PAGE> 11
"Change of Control" means the occurrence of any of the following
events: (i) any Person or two or more Persons acting in concert (other
than Persons owning 30% or more of the Voting Stock of the Borrower on
the Closing Date) shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over,
Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing 30% or more of the combined voting power of
all Voting Stock of the Borrower, (ii) any Person or two or more
Persons acting in concert (other than Persons owning 30% or more of the
Voting Stock of the Borrower on the Closing Date) has the ability
directly or indirectly, to elect a majority of the board of directors
of the Borrower or (iii) during any period of up to 12 consecutive
months, commencing on the Closing Date, individuals who at the
beginning of such 12-month period were directors of the Borrower shall
cease for any reason (other than the death, disability or retirement of
an officer of the Borrower that is serving as a director at such time
so long as another officer of the Borrower replaces such Person as a
director) to constitute a majority of the board of directors of the
Borrower; provided, however to the extent there exist vacancies on the
Board of Directors as of the Closing Date or if after the Closing Date,
the existing Board of Directors increases the number of directors on
the Board of Directors by an amount not more than three, the
individuals named to fill such vacancies, if selected by a majority of
directors sitting as of the Closing Date, shall be deemed for purposes
of this clause (iii) to have been appointed prior to the Closing Date.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Commitment" means with respect to each Lender, the commitment
of such Lender in an aggregate principal amount at any time outstanding
of up to such Lender's Commitment Percentage of the Revolving Committed
Amount to make Revolving Loans in accordance with the provisions of
Section 2.1(a).
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP.
"Consolidated Cash Interest Expense" means, for any period,
interest expense (including the amortization of debt discount and
premium, the interest component under Capital Leases and the implied
interest component under Synthetic Leases), as
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<PAGE> 12
determined in accordance with GAAP, to the extent the same are paid in
cash during such period.
"Consolidated Cash Taxes" means, for any period, the aggregate
of all taxes of the Consolidated Parties on a consolidated basis for
such period, as determined in accordance with GAAP, to the extent the
same are paid in cash during such period.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes, (C)
depreciation and amortization expense and (D) other extraordinary
non-recurring, non-cash charges, all as determined in accordance with
GAAP.
"Consolidated EBITDAR" means, for any period, the sum of (i)
Consolidated EBITDA for such period, plus (ii) an amount which in the
determination of Consolidated Net Income for such period has been
deducted for Consolidated Rent Expense for such period, all as
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest
component under Synthetic Leases) of the Consolidated Parties on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Net Worth" means, as of any date, shareholders'
equity or net worth of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Rent Expense" means, for any period, with respect
to the Consolidated Parties on a consolidated basis, all rent payable
under an Operating Lease (whether a lease of real property, personal
property or mixed), as determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of the
end of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness for the applicable period
ending on such date (including the principal component of payments due
on Capital Leases during the applicable period ending on such date); it
being
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<PAGE> 13
understood that Consolidated Scheduled Funded Debt Payments shall not
include (i) voluntary prepayments or the mandatory prepayments required
pursuant to Section 3.3 or (ii) Funded Indebtedness with respect to
this 364-Day Credit Agreement.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 or Sections 3.7 through 3.9,
inclusive, of a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Contract Provider" means any Person or any employee, agent or
subcontractor of such Person who provides professional health care
services under or pursuant to any contract with any Consolidated Party.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Revolving Notes, each Joinder Agreement, the Agent's Fee
Letter, the Pledge Agreement, the Three-Year Credit Agreement, and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto (in each case as the same may
be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time), and "Credit Document" means any one of
them.
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders and the Agent,
whenever arising, under this Credit Agreement, the Revolving Notes, the
Pledge Agreement or any of the other Credit Documents (including, but
not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code),
(ii) all liabilities and obligations, whenever arising, owing from any
Credit Party to any Lender, or any Affiliate of a Lender, arising under
any Hedging Agreement or any Equity Swap Agreement and (iii) all of the
obligations and liabilities of the type described in clauses (i) and
(ii) of the definition of "Credit Party Obligations" set forth in
Section 1.1 of the Three-Year Credit Agreement.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender, as
determined by the Agent, that (a) has failed to make a Revolving Loan
or purchase a Participation Interest required pursuant to the term of
this Credit Agreement, (b) has failed to pay to the Agent or any Lender
an amount owed by such Lender pursuant to the terms of this Credit
Agreement,
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<PAGE> 14
or (c) has been deemed insolvent or has become subject to a bankruptcy
or insolvency proceeding or a receiver, trustee or similar official has
been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower
(such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within five Business Days after written notice of such
proposed assignment has been provided by the assigning Lender to the
Borrower in accordance with Section 11.1); provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as
an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Resource Conservation and Recovery Act of
1976, the Toxic Substances Control Act, the Water Pollution Control
Act, the Clean Air Act and the Hazardous Materials Transportation Act),
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party
to any Person (other than a Credit Party) of (a) shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity. The term "Equity
Issuance" shall not include any Asset Disposition.
"Equity Swap Agreements" means any agreement entered into by the
Borrower in order to manage existing or anticipated risk associated
with the repurchase by the Borrower of shares of its Capital Stock at a
predetermined purchase price.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
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<PAGE> 15
"ERISA Affiliate" means an entity which is under common control
with any Credit Party within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group which includes the Borrower and which
is treated as a single employer under Sections 414(b) or (c) of the
Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence
of a Reportable Event with respect to which the Department of Labor has
not waived the reporting requirement or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or
the termination of a Multiple Employer Plan; (iii) the distribution of
a notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
of proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party
or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions
for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan that could reasonably be expected to cause a
Material Adverse Effect; or (viii) the adoption of an amendment to any
Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA.
"Eurodollar Loan" means any Revolving Loan that bears interest
at a rate based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurodollar Loan for such Interest Period by (b) 1 minus
the Eurodollar Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"Event of Default" means such term as defined in Section 9.1.
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<PAGE> 16
"Excluded Asset Disposition" means, with respect to any
Consolidated Party, (i) the sale of inventory in the ordinary course of
such Consolidated Party's business, (ii) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of such
Consolidated Party's business, (iii) any Equity Issuance by such
Consolidated Party, (iv) any disposition on account of any loss of,
damage to or destruction of, or any condemnation or other taking for
public use of, any Property of the Consolidated Parties and (v) any
sale, lease, transfer or other disposition of Property by such
Consolidated Party to any other Consolidated Party.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, vice president,
chief financial officer or treasurer of such Person.
"Existing Credit Agreement" means that certain Credit Agreement,
dated as of November 25, 1997, by and among the Borrower, the Lenders
identified therein and NationsBank, N.A., as Agent (as amended).
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as reasonably determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Consolidated Parties for the twelve month period
ending on such date, the ratio of (a) Consolidated EBITDAR for the
applicable period minus Consolidated Capital Expenditures for the
applicable period minus Consolidated Cash Taxes for the applicable
period to (b) the sum of (i) Consolidated Cash Interest Expense for the
applicable period plus (ii) Consolidated Scheduled Funded Debt Payments
for the applicable period plus (iii) Consolidated Rent Expense for the
applicable period.
"Foreign Subsidiary" means any direct or indirect Subsidiary of
the Borrower which is not incorporated or organized under the laws of
any state of the United States or the District of Columbia.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person
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evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of
such Person under conditional sale or other title retention agreements
relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations
of such Person issued or assumed as the deferred purchase price of
Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a
balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) the maximum amount
of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(g) all preferred Capital Stock issued by such Person and required by
the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (h) the principal portion of all
obligations of such Person under Synthetic Leases, (i) all Indebtedness
of another Person of the type referred to in clause (a)-(h) above
secured by (or for which the holder of such Funded Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, Property owned or
acquired by such Person, whether or not the obligations secured thereby
have been assumed, (j) all Guaranty Obligations of such Person with
respect to Indebtedness of the type referred to in clauses (a)-(h)
above of another Person and (k) Indebtedness of the type referred to in
clauses (a)-(h) above of any partnership or unincorporated joint
venture in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means each of the Subsidiaries of the Borrower
(other than Lincare of Columbia) and each Additional Credit Party which
has executed a Joinder Agreement, together with their successors and
assigns, and "Guarantor" means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or
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<PAGE> 18
services primarily for the purpose of assuring the holder of such
Indebtedness, or (iv) to otherwise assure or hold harmless the holder
of such Indebtedness against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"HCFA" means the United States Health Care Financing
Administration and any successor thereto.
"Hedging Agreement" means any interest rate protection agreement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person which would appear as liabilities on a balance sheet of such
Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, Property owned or
acquired by such Person, whether or not the obligations secured thereby
have been assumed, (g) all Guaranty Obligations of such Person, (h) the
principal portion of all obligations of such Person under Capital
Leases, (i) all obligations of such Person under Hedging Agreements and
under Equity Swap Agreements, (j) the maximum amount of all standby
letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and required by the terms thereof to be
redeemed, or for which mandatory sinking fund payments are due, by a
fixed date (l) the principal portion of all obligations of such Person
under Synthetic Leases and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner
or a joint venturer.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately
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11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Interest Payment Date" means (a) as to Base Rate Loans, the
last day of each calendar month and the Maturity Date and (b) as to
Eurodollar Loans, the last day of each applicable Interest Period and
the Maturity Date, and in addition where the applicable Interest Period
for a Eurodollar Loan is greater than three months, then also the date
three months from the beginning of the Interest Period and each three
months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) in the case of Revolving Loans, no Interest Period shall extend
beyond the Maturity Date and (c) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar
month in which the Interest Period is to end, such Interest Period
shall end on the last Business Day of such calendar month.
"Investment" means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests or
other securities of any Person or (b) any deposit with, or advance,
loan or other extension of credit to, any Person (other than deposits
made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution
to or investment in such Person, including, without limitation, any
Guaranty Obligations (including any support for a letter of credit
issued on behalf of such Person) incurred for the benefit of such
Person.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12 hereto, executed and delivered by a new
Guarantor in accordance with the provisions of Section 7.12.
"Lender" means (i) any of the Persons identified as a "Lender"
on the signature pages hereto, and any Person which may become a Lender
by way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns and (ii) each of the "Lenders"
under and as defined in the Three-Year Credit Agreement.
"Leverage Ratio" means, as of the end of each fiscal quarter of
the Consolidated Parties for the twelve month period ending on such
date, the ratio of (a) Funded Indebtedness of the Consolidated Parties
on the last day of such period to (b) Consolidated EBITDA for such
period.
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"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority 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 Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Lincare of Columbia" means Lincare of Columbia LP, a South
Carolina limited partnership, together with any successors and
permitted assigns.
"Material Adverse Effect" means a material adverse effect on (i)
the business condition (financial or otherwise), operating results,
liabilities or assets of the Consolidated Parties taken as a whole,
(ii) the ability of the Credit Parties as a whole to perform any
material obligations under the Credit Documents or (iii) the material
rights and remedies of the Agent and the Lenders under the Credit
Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means the date 364 days following the Closing
Date.
"Medicaid Program" means the medical assistance program operated
by Governmental Authorities set forth in the Medicaid Regulations.
"Medicaid Supplier" means an entity entitled to receive payments
from the Medicaid Program and authorized to provide services and
supplies for Medicaid patients in accordance with the Medicaid
Regulations.
"Medicaid Regulations" means, collectively, (i) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting the medical assistance program established by
Title XIX of the Social Security Act and any statutes succeeding
thereto; (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in
clause (i) above and all federal administrative, reimbursement and
other guidelines of all Governmental Authorities having the force of
law promulgated pursuant to or in connection with the statutes
described in clause (i) above; (iii) all state statutes and plans for
medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all
applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
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<PAGE> 21
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (ii) above, in each
case as may be amended, supplemented or otherwise modified from time to
time.
"Medicare Program" means the health insurance program operated
by Governmental Authorities pursuant to the Medicare Regulations.
"Medicare Supplier" means an entity eligible to receive payment
from the Medicare Program and authorized to provide services and
supplies for Medicare patients in accordance with the Medicare
Regulations.
"Medicare Regulations" means, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or
elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act and any
statutes succeeding thereto; together with all applicable provisions of
all rules, regulations, manuals and orders and administrative,
reimbursement and other guidelines having the force of law of all
Governmental Authorities (including, without limitation, Health and
Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing
having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than a
Consolidated Party or any ERISA Affiliate are contributing sponsors.
"Net Cash Proceeds" means the aggregate cash proceeds (including
cash actually received by way of deferred payment pursuant to a
promissory note, receivable, or otherwise) received by a Consolidated
Party of any Equity Issuance, net of (a) direct costs (including,
without limitation, legal, accounting and investment banking fees and
sales commissions) and (b) taxes paid or payable as a result thereof;
it being understood that "Net Cash Proceeds" shall include, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by any Consolidated Party in any Equity
Issuance.
"New Commitment Agreement" shall have the meaning assigned to
such term in Section 3.4(b).
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
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"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Participation Interest" means a purchase by a Lender of a
participation in any Revolving Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisition" means an Acquisition by the Borrower or
any Subsidiary of the Borrower for the fair market value of the Capital
Stock or Property acquired, provided that (i) the Capital Stock or
Property acquired in such Acquisition relates to a line of business
similar to the business of the Borrower or any of its Subsidiaries,
(ii) in the case of an Acquisition of Capital Stock of another Person,
(A) the board of directors (or other comparable governing body) of such
other Person shall have duly approved such Acquisition and (B) such
Person shall become a wholly-owned direct or indirect Subsidiary of the
Borrower, (iii) the representations and warranties made by the Credit
Parties in any Credit Document shall be true and correct in all
material respects at and as if made as of the date of such Acquisition
(after giving effect thereto) except to the extent such representations
and warranties expressly relate to an earlier date and no Default or
Event of Default exists as of the date of such Acquisition (after
giving effect thereto) and (iv) (A) if the aggregate consideration for
such Acquisition, exceeds $25,000,000 but is less than $35,000,000, the
Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to the Acquisition
on a Pro Forma Basis, the Borrower will be in compliance with all of
the financial covenants set forth in Section 7.11 or (B) if the
aggregate consideration (including cash and non-cash consideration and
any assumption of Indebtedness) for such Acquisition exceeds
$35,000,000 or if any such Acquisition would cause the aggregate
consideration for all Acquisitions in any fiscal year to exceed
$150,000,000, the Borrower shall have received the approval of the
Required Lenders, which approval shall be given in the Required
Lenders' sole discretion.
"Permitted Investments" means Investments which are (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made by
any Consolidated Party in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; (iii)
Investments consisting of Capital Stock, obligations, securities or
other property received by any Consolidated Party in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments
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existing as of the Closing Date and set forth in Schedule 1.1(a); (v)
advances or loans to officers, employees, agents, customers or
suppliers that do not exceed $1,000,000 in the aggregate at any one
time outstanding for all of the Consolidated Parties; (vi) advances or
loans to non-officer, non-employee directors that do not exceed
$5,000,000 in the aggregate at any one time outstanding for all of the
Consolidated Parties; (vii) Investments in any Credit Party; (viii)
Permitted Acquisitions; (ix) advances in respect of the Stock Buy-Back
Plan and (x) additional Investments not exceeding $5,000,000 in the
aggregate at any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Agent, for the benefit of the Lenders,
to secure the Credit Party Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party 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, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in
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any material respect, impairing the use of the encumbered Property for
its intended purposes;
(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases and Synthetic Leases) to the extent permitted
under Section 8.1(c), provided that any such Lien attaches to such
Property concurrently with or within 90 days after the acquisition
thereof;
(viii) leases or subleases granted to others not interfering in
any material respect with the business of any Consolidated Party;
(ix) any interest of title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by
this Credit Agreement;
(x) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xi) Liens of a collection bank arising under Section 4-210 of
the Uniform Commercial Code on items in the course of collection;
(xii) Liens of sellers of goods to the Borrower and any of its
Subsidiaries arising under Article 2 of the Uniform Commercial Code or
similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
(xiii) Liens existing as of the Closing Date and set forth on
Schedule 1.1(b); provided that no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date;
(xiv) Liens on Property in an aggregate amount not to exceed
$8,000,000 securing obligations of the Borrower under Equity Swap
Agreements permitted under Section 8.1(f);
(xv) additional Liens not otherwise permitted by the foregoing
clauses hereof; provided that such additional Liens permitted by this
clause (xv) do not secure Indebtedness of more than $5,000,000.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under
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Section 4069 of ERISA be deemed to be) an "employer" within the meaning
of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form of Exhibit 1.1(a) to be executed and delivered
by each of the applicable Credit Parties in favor of the Agent, for the
benefit of the Lenders, to secure the obligations under the Credit
Documents, as amended, modified, restated or supplemented from time to
time.
"Pledged Collateral" shall have the meaning assigned to such
term in the Pledge Agreement.
"Prime Rate" means the per annum rate of interest established
from time to time by Bank of America as its prime rate, which rate may
not be the lowest rate of interest charged by Bank of America to its
customers.
"Pro Forma Basis" means, for purposes of calculating compliance
with each of the financial covenants set forth in Section 7.11(b) and
(c) in respect of a proposed transaction, that such transaction shall
be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end
preceding the date of such transaction with respect to which the Agent
has received the information required pursuant to Section 7.1. In
connection with any calculation of the financial covenants set forth in
Section 7.11(b) and (c) upon giving effect to a transaction on a Pro
Forma Basis, (a) any Indebtedness incurred by the Borrower in
connection with such transaction (i) shall be deemed to have been
incurred as of the first day of the applicable period and (ii) if such
Indebtedness has a floating or formula rate, shall have an implied rate
of interest for the applicable period for purposes of this definition
determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination
and (b) income statement items (whether positive or negative)
attributable to the Property acquired in such transaction or to the
Acquisition comprising such transaction, as applicable, shall be
included to the extent relating to the relevant period.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with any Acquisition as referred to in the definition of "Permitted
Acquisition" set forth in this Section 1.1, as applicable, and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Leverage Ratio and
Consolidated Net Worth as of the most recent fiscal quarter end
preceding the date of the applicable transaction with respect to which
the Agent shall have received the Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Register" shall have the meaning given such term in Section
11.3(c).
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"Regulation T, U, or X" means Regulation T, U or X,
respectively, 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.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section
7.1(a) or (b) for the fiscal period or quarter ending as of such
Calculation Date, and (ii) the certificate of an Executive Officer of
the Borrower required by Section 7.1(c) to be delivered with the
financial statements described in clause (i) above.
"Required Lenders" means, at any time, Lenders holding in the
aggregate more than 50% of (i) the Commitments (and Participation
Interests therein), or (ii) if the Commitments have been terminated,
the outstanding Revolving Loans and Participation Interests), provided
that the Commitments of and the outstanding principal amount of
Revolving Loans and Participation Interests owing to a Defaulting
Lender shall be excluded for purposes hereof in making a determination
of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding, and (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding.
"Revolving Committed Amount" means FIFTY MILLION DOLLARS
($50,000,000), as such amount may be reduced or increased from time to
time as provided in Section 3.4.
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"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a), but in any event shall include any portion of any
Revolving Loan bearing interest at the Adjusted Base Rate or the
Adjusted Eurodollar Rate and referred to as a Base Rate Loan or a
Eurodollar Loan.
"Revolving Note" or "Revolving Notes" means the promissory notes
of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement pursuant
to which any Consolidated Party, directly or indirectly, becomes liable
as lessee, guarantor or other surety with respect to any lease, whether
an Operating Lease or a Capital Lease, of any Property (a) which such
Consolidated Party has sold or transferred (or is to sell or transfer)
to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as
any other Property which has been sold or transferred (or is to be sold
or transferred) by such Consolidated Party to another Person which is
not a Consolidated Party in connection with such lease.
"Single Employer Plan" means any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Social Security Act" means the Social Security Act as set forth
in Title 42 of the United States Code, as amended, and any successor
statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to
sections of the Social Security Act shall be construed also to refer to
any successor sections.
"Solvent" or "Solvency" means, with respect to any Person as of
a particular date, that on such date (i) such Person is able to pay its
debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature in their ordinary course, (iii) such Person is
not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (iv) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities and obligations, of such Person and
(v) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
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matured. In computing the amount of contingent liabilities at any time,
it is intended that such liabilities will be computed at the amount
which, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Stock Buy-Back Plan" means that certain plan approved by the
Borrower's Board of Directors on June 9, 1999, which authorized the
Borrower to buy-back Capital Stock of the Borrower in an amount not to
exceed $200,000,000 in the aggregate.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time, any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time owned by such Person directly or indirectly through Subsidiaries,
and (b) any partnership, association, limited liability company, joint
venture or other entity in which such Person directly or indirectly
through Subsidiaries has more than 50% equity interest at any time.
"Synthetic Lease" means any tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an Operating Lease in accordance with
GAAP.
"Taxes" means such term as is defined in Section 3.11.
"Three-Year Credit Agreement" means that Three-Year Credit
Agreement dated as of the date hereof, as amended and modified, among
the Borrower, each of the Borrower's Subsidiaries, the Lenders
identified therein and Bank of America, as Agent.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(b).
"Unused Fee Calculation Period" shall have the meaning assigned
to such term in Section 3.5(b).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily average sum for such period of the outstanding
aggregate principal amount of all Revolving Loans.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
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"Wholly Owned Subsidiary" of any Person means any Subsidiary
100% of whose Voting Stock or other equity interests is at the time
owned by such Person directly or indirectly through other Wholly Owned
Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section
7.1, consistent with the financial statements as at December 31, 1998);
provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 60 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made under the financial covenants set
forth in Section 7.11 (including without limitation for purposes of the
definitions of "Applicable Percentage" and "Pro Forma Basis" set forth in
Section 1.1), in connection with any merger or consolidation as referred to in
Section 8.4 or any Acquisition as referred to in the definition of "Permitted
Acquisition" set forth in Section 1.1, income statement items (whether positive
or negative) attributable to any Person or Property acquired in any Permitted
Acquisition shall, to the extent not otherwise included in such income
statements items for the Consolidated Parties in accordance with GAAP or in
accordance with any defined terms set forth in Section 1.1, be included to the
extent relating to any period applicable in such calculations.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Commitment. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein,
each Lender severally agrees to
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make available to the Borrower such Lender's Commitment Percentage of
the revolving credit loans requested by the Borrower in Dollars (the
"Revolving Loans") from time to time from the Closing Date until the
Maturity Date, or such earlier date as the Commitments shall have been
terminated as provided herein for the purposes hereinafter set forth;
provided, however, that (i) with regard to each Lender individually,
such Lender's share of outstanding Revolving Loans shall not exceed
such Lender's Commitment Percentage of the Commitment Amount, and (ii)
with regard to the Lenders collectively, the aggregate principal amount
of outstanding Revolving Loans shall not exceed the Revolving Committed
Amount.
Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or
a combination thereof, as the Borrower may request, and may be repaid
and reborrowed in accordance with the provisions hereof; provided,
however, that no more than ten (10) Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new single Eurodollar Loan with a single Interest
Period.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 11:00
A.M. (Charlotte, North Carolina time) on the Business Day prior
to the date of the requested borrowing in the case of Base Rate
Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify (A)
that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, and (D) whether the
borrowing shall be comprised of Base Rate Loans, Eurodollar
Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower
shall fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a Eurodollar Loan,
then such notice shall be deemed to be a request for an Interest
Period of one month, or (II) the type of Revolving Loan
requested, then such notice shall be deemed to be a request for
a Base Rate Loan hereunder. The Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be made
pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate
Loan that is a Revolving Loan shall be in a minimum aggregate
principal amount of $1,000,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
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(iii) Advances. Each Lender will make its Commitment
Percentage of each Revolving Loan borrowing available to the
Agent for the account of the Borrower as specified in Section
3.15(a), or in such other manner as the Agent may specify in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in Dollars
and in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Agent by the Lender.
(c) Repayment. The principal amount of all Revolving Loans shall
be due and payable in full on the Maturity Date, unless accelerated
sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate
equal to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum
rate equal to the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in an original principal amount equal to such Lender's
Commitment Percentage of the Revolving Committed Amount and in
substantially the form of Exhibit 2.1(e).
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, accrued and
unpaid interest on the Revolving Loans and any other amounts owing hereunder or
under the other Credit Documents shall bear interest, payable on demand, at a
per annum rate 2% greater than the rate which would otherwise be applicable (or
if no rate is applicable, whether in respect of interest, fees or other
amounts, then the Adjusted Base Rate plus 2%).
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3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Revolving Loans into a
subsequent permissible Interest Period or to convert Revolving Loans into
Revolving Loans of another interest rate type; provided, however, that (i)
except as provided in Section 3.8, Eurodollar Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable thereto, (ii)
Eurodollar Loans may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Default or Event of Default is in existence on the
date of extension or conversion, (iii) Revolving Loans extended as, or
converted into, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" set forth in Section 1.1 and shall be in such
minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii), (iv) no more than 10 Eurodollar Loans shall be outstanding
hereunder at any time (it being understood that, for purposes hereof,
Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period) and (v) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephonic notice promptly
confirmed in writing) to the office of the Agent specified in Section 11.1, or
at such other office as the Agent may designate in writing, prior to 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Revolving Loans to be so extended or converted, the types of
Revolving Loans into which such Revolving Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in
subsections (b), (c), (d) and (e) of Section 5.2. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Revolving Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Revolving Loans in whole or in part from time to time; provided,
however, that each partial prepayment of Revolving Loans shall be in a
minimum principal amount of $2,000,000 and integral multiples of
$500,000. Prepayment upon the Revolving Loans shall be made first to
Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities.
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(b) Revolving Committed Amount. If at any time, the sum of the
aggregate principal amount of outstanding Revolving Loans outstanding
shall exceed the Revolving Committed Amount, the Borrower immediately
shall prepay the Revolving Loans in an amount sufficient to eliminate
such excess.
(c) Generally. Within the parameters of the applications set
forth above, prepayments shall be applied first to Base Rate Loans and
then to Eurodollar Loans in direct order of Interest Period maturities.
All prepayments under this Section 3.3(b) shall be subject to Section
3.12, but otherwise without premium or penalty.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT; INCREASE
OF COMMITTED AMOUNT.
(a) Reductions in Committed Amount.
(i) Voluntary Reductions. The Borrower may from time to
time permanently reduce or terminate the Revolving Committed
Amount in whole or in part (in minimum aggregate amounts of
$5,000,000 or in integral multiples of $1,000,000 in excess
thereof (or, if less, the full remaining amount of the then
applicable Revolving Committed Amount)) upon three Business
Days' prior written notice to the Agent; provided, however, no
such termination or reduction shall be made which would cause
the aggregate principal amount of outstanding Revolving Loans to
exceed the Revolving Committed Amount, unless, concurrently with
such termination or reduction, the Revolving Loans are repaid to
the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of receipt by the Agent of
any notice from the Borrower pursuant to this Section 3.4(a).
(ii) Maturity Date. The Commitments of the Lenders shall
automatically terminate on the Maturity Date.
(iii) General. The Borrower shall pay to the Agent for
the account of the Lenders in accordance with the terms of
Section 3.5(b), on the date of each reduction of the Revolving
Committed Amount, the Unused Fee accrued through the date of
such termination or reduction on the amount of the Revolving
Committed Amount so terminated or reduced.
(b) Increase in Committed Amount. The Borrower shall have the
right, upon at least ten (10) Business Days' prior written notice to
the Agent, to request an increase of the Revolving Committed Amount
hereunder and of the "Revolving Committed Amount" under the Three-Year
Credit Agreement to an aggregate amount of not more than $300,000,000
at any time on or after the Closing Date and prior to the Maturity
Date, subject, however, in any such case, to satisfaction of the
following conditions precedent:
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(i) no Event of Default shall have occurred and be
continuing on the date on which such Revolving Committed Amount
increase is to become effective;
(ii) the representations and warranties set forth in
Section 6 of this Credit Agreement shall be true and correct in
all material respects on and as of the date on which such
increase is to become effective;
(iii) on or before the date on which such increase is to
become effective, the Agent shall have received, for its own
account, the mutually acceptable fees and expenses required by
separate agreement of the Borrower and the Agent to be paid in
connection with such increase;
(iv) so long as the Commitments remain outstanding under
this Credit Agreement and under the Three-Year Credit Agreement,
the aggregate amount of such increase shall be allocated pro
rata to the Revolving Committed Amount hereunder and to the
"Revolving Committed Amount" under the Three-Year Credit
Agreement, provided, however, in no case shall the Revolving
Committed Amount hereunder exceed $60,000,000;
(v) the aggregate amount of such increase hereunder and
under the Three-Year Credit Agreement shall be in a minimum
amount of $10,000,000; and
(vi) such requested increase shall be effective on such
date only to the extent that, on or before such date, the Agent
shall have received and accepted from (x) one or more Lenders
hereunder or (y) with respect any lender, reasonably acceptable
to the Agent and the Borrower, that is not at such time a Lender
hereunder, an agreement in the form of Exhibit 3.4(b) hereto
(each such agreement a "New Commitment Agreement"), with respect
to the Additional Revolving Commitment of such Lender.
(c) Upon the effectiveness of the increase in the Revolving
Committed Amount pursuant to subsection (b), the Commitment Percentage
of each Lender shall be automatically adjusted to give effect to such
increase, provided, that with respect to each Lender (other than a
Lender whose Revolving Commitment shall have been increased in
connection with such increase in the Revolving Committed Amount), (i)
the product of the Commitment Percentage of each Lender multiplied by
the Revolving Committed Amount for each Lender, prior to giving effect
to such adjustment, shall be equal to (ii) the product of the
Commitment Percentage of each Lender multiplied by the Revolving
Committed Amount for each such Lender, after giving effect to such
adjustment.
(d) If and when any adjustment is made to the Commitment
Percentage of any Lender pursuant to subsection (c) at any time when
any Revolving Loans are outstanding, the Borrower, the Agent and the
Lenders will use all commercially reasonable efforts to assign and
assume outstanding Revolving Loans to conform the respective amounts
thereof held by each Lender to the respective Commitment Percentages as
so adjusted, it being
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understood that the parties hereto shall use commercially reasonable
efforts to avoid prepayment or assignment of any Revolving Loan that is
a Eurodollar Loan on a day other than the last day of the Interest
Period applicable thereto.
3.5 FEES.
(a) Upfront Fees. The Borrower agrees to pay to the Agent for
the benefit of the Lenders in immediately available funds on or before
the Closing Date an upfront fee (the "Upfront Fee") in the amount
provided in the Agent's Fee Letter.
(b) Unused Fee. In consideration of the Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Fee") on the Unused Revolving
Committed Amount computed at a per annum rate for each day during the
applicable Unused Fee Calculation Period (hereinafter defined) at a
rate equal to the Applicable Percentage in effect from time to time.
The Unused Fee shall commence to accrue on the Closing Date and shall
be due and payable in arrears on the last business day of each March,
June, September and December (and any date that the Revolving Committed
Amount is reduced as provided in Section 3.4(a) and the Maturity Date)
for the immediately preceding quarter (or portion thereof) (each such
quarter or portion thereof for which the Unused Fee is payable
hereunder being herein referred to as an "Unused Fee Calculation
Period"), beginning with the first of such dates to occur after the
Closing Date.
(c) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account, an annual administrative fee and such other
fees, if any, referred to in the Agent's Fee Letter (collectively, the
"Agent Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender 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 Lender's capital or assets as a consequence
of its commitments or obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination
by any such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto.
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3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent reasonably determines (which determination shall
be conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders reasonably determine (which
determination shall be conclusive) and notify the Agent that the
Eurodollar Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans,
either prepay such Eurodollar Loans or convert such Eurodollar Loans into Base
Rate Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
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 Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Revolving Notes, or its obligation to make
Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending Office) under this
Credit Agreement or its Revolving Notes in respect of any Eurodollar
Loans (other than taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
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(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the
Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the United States market for certificates of deposit or
the London interbank market any other condition affecting this Credit
Agreement or its Revolving Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Revolving Notes with respect to any Eurodollar Loans, then the Borrower
shall pay to such Lender on demand such amount or amounts as will compensate
such Lender for such increased cost or reduction. If any Lender requests
compensation by the Borrower under this Section 3.9(a), the Borrower may, by
notice to such Lender (with a copy to the Agent), suspend the obligation of
such Lender to make or Continue Eurodollar Loans, or to convert Base Rate Loans
into Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
(b) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Agent a statement setting forth the additional amount or amounts to be paid
to it hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 TREATMENT OF AFFECTED REVOLVING LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
continue, or to convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such conversion no longer exist:
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(a) to the extent that such Lender's Eurodollar Loans have been
so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Revolving Loans that would otherwise be made or
continued by such Lender as Eurodollar Loans shall be made or continued
instead as Base Rate Loans, and all Base Rate Loans of such Lender that
would otherwise be converted into Eurodollar Loans shall remain as Base
Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Revolving Loans held by the Lenders holding Eurodollar Loans and by such
Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by the Borrower to or for the account
of any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Lender and the Agent, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Lender (or its Applicable Lending Office) or the Agent
(as the case may be) is organized or any political subdivision thereof
(all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Credit Agreement or
any other Credit Document to any Lender or the Agent, (i) the sum
payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 3.11) such Lender or the Agent receives an
amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and
(iv) the Borrower shall furnish to the Agent, at its address referred
to in Section 11.1, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present
or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made
under this Credit Agreement or any other Credit
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Document or from the execution or delivery of, or otherwise with
respect to, this Credit Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent
for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to
time thereafter if requested in writing by the Borrower or the Agent
(but only so long as such Lender remains lawfully able to do so), shall
provide the Borrower and the Agent with (i) Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled
to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest
or certifying that the income receivable pursuant to this Credit
Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form W-8
or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate
required by any taxing authority (including any certificate required by
Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of
tax on payments pursuant to this Credit Agreement or any of the other
Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant
to Section 3.11(d) (unless such failure is due to a change in treaty,
law, or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.11, then such
Lender will agree to use reasonable efforts to change the jurisdiction
of its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such
Lender.
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(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the repayment of the
Revolving Loans and other obligations under the Credit Documents and
the termination of the Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of
such Lender) to compensate it for any loss, cost, or reasonable expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
Revolving Loans pursuant to Section 9.2) on a date other than the last
day of the Interest Period for such Revolving Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, convert, continue, or prepay a
Eurodollar Loan on the date for such borrowing, conversion,
continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, continuation, or conversion under this Credit
Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for herein over
(b) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The covenants of the Borrower set forth in this Section 3.12 shall
survive the repayment of the Revolving Loans and other obligations under the
Credit Documents and the termination of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Revolving Loans. Each Revolving Loan, each payment or
prepayment of principal of any Revolving Loan, each payment of interest
on the Revolving Loans, each
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payment of Unused Fees, each reduction of the Revolving Committed
Amount and each conversion or extension of any Revolving Loan, shall be
allocated pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Revolving Loans and
Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share
of a borrowing hereunder; provided, however, that the failure of any
Lender to fulfill its obligations hereunder shall not relieve any other
Lender of its obligations hereunder. Unless the Agent shall have been
notified by any Lender prior to the date of any requested borrowing
that such Lender does not intend to make available to the Agent its
ratable share of such borrowing to be made on such date, the Agent may
assume that such Lender has made such amount available to the Agent on
the date of such borrowing, and the Agent in reliance upon such
assumption, may (in its sole discretion but 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 Agent, the
Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding
amount to the Agent. The Agent shall also be entitled to recover from
the Lender 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 Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for
the applicable borrowing pursuant to the Notice of Borrowing or (ii)
from a Lender at the Federal Funds Rate.
3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Revolving Loan or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a
right of setoff, banker's lien or counterclaim, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Revolving
Loans and other obligations in such amounts, and make such other adjustments
from time to time, as shall be equitable to the end that all Lenders share such
payment in accordance with their respective ratable shares as provided for in
this Credit Agreement. The Lenders further agree among themselves that if
payment to a Lender obtained by such Lender through the exercise of a right of
setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by repurchase of a Participation Interest
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a Participation Interest may, to the fullest extent
permitted by law, exercise
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all rights of payment, including setoff, banker's lien or counterclaim, with
respect to such Participation Interest as fully as if such Lender were a holder
of such Revolving Loan or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent in Dollars and in
immediately available funds, without setoff, deduction, counterclaim or
withholding of any kind, at the Agent's office specified in Section
11.1 not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Agent may
(but shall not be obligated to) debit the amount of any such payment
which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The
Borrower shall, at the time it makes any payment under this Credit
Agreement, specify to the Agent the Revolving Loans, Fees, interest or
other amounts payable by the Borrower hereunder to which such payment
is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the Agent
shall distribute such payment to the Lenders in such manner as the
Agent may determine to be appropriate in respect of obligations owing
by the Borrower hereunder, subject to the terms of Section 3.13(a)).
The Agent will distribute such payments to such Lenders, if any such
payment is received prior to 12:00 Noon (Charlotte, North Carolina
time) on a Business Day in like funds as received prior to the end of
such Business Day and otherwise the Agent will distribute such payment
to such Lenders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next
following calendar month, then such payment shall instead be made on
the next preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days, except
with respect to computation of interest on Base Rate Loans which
(unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
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(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the
Pledged Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Agent in connection with enforcing the rights of the Lenders under
the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations;
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to the Borrower
or whoever else may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category and (ii) each of the Lenders shall receive
an amount equal to its pro rata share (based on the proportion that the
then outstanding Revolving Loans held by such Lender bears to the
aggregate then outstanding Revolving Loans) of amounts available to be
applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH"
above.
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing
each Revolving Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Credit Agreement. Each
Lender shall maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as
necessary.
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(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Revolving Loan hereunder, (ii) the amount
of any principal or interest due and payable or to become due and
payable to each Lender hereunder and (iii) the amount of any sum
received by the Agent hereunder from or for the account of the Borrower
and each Lender's share thereof. The Agent shall maintain the accuracy
of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be
prima facie evidence of the existence and amounts of the obligations of
the Borrower therein recorded; provided, however, that the failure of
any Lender or the Agent to maintain any such account, such Register or
such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay the Revolving
Loans made by such Lender in accordance with the terms hereof.
3.17 REPLACEMENT OF AFFECTED LENDERS.
If any Lender having a Commitment becomes a Defaulting Lender or if any
Lender is owed increased costs under Section 3.8, Section 3.9, or Section 3.6,
or the Borrower is required to make any payments under Section 3.11 to any
Lender in excess of those to the other Lenders, the Borrower shall have the
right, if no Event of Default then exists, to replace such Lender (the
"Replaced Lender") with one or more other Eligible Assignee or Eligible
Assignees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the "Replacement Lender") reasonably acceptable
to the Agent, provided that (i) at the time of any replacement pursuant to this
Section 3.17, the Replaced Lender and Replacement Lender shall enter into one
or more assignment agreements, in form and substance reasonably satisfactory to
such parties and the Agent, pursuant to which the Replacement Lender shall
acquire all or a portion, as the case may be, of the Commitments and
outstanding Loans of, the Replaced Lender hereunder and of the Commitments and
outstanding Loans of, and participation in Letters of Credit under the
Three-Year Credit Agreement and (ii) all obligations of the Borrower owing to
the Replaced Lender relating to the Loans so replaced (including, without
limitation, such increased costs and excluding 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 Lender
concurrently with such replacement. Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Revolving Note or Revolving Notes
executed by the Borrower, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder
with respect to such replaced Revolving Loans, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Lender. Notwithstanding anything to the contrary contained above, the
Lender that acts as the Agent may not be replaced hereunder except in
accordance with the terms of Section 10.7. The
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Replaced Lender shall be required to deliver for cancellation its applicable
Revolving Notes to be canceled on the date of replacement, or if any such
Revolving Note is lost or unavailable, such other assurances or indemnification
therefor as the Borrower may reasonably request.
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement or
enters into an Equity Swap Agreement, and the Agent as hereinafter provided the
prompt payment of the Credit Party Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) strictly in accordance with the terms
thereof. The Guarantors hereby further agree that if any of the Credit Party
Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, Hedging Agreements or Equity Swap
Agreements, to the extent the obligations of a Guarantor shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of each Guarantor hereunder
shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the Bankruptcy
Code).
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents, Hedging
Agreements or Equity Swap Agreements, or any other agreement or instrument
referred to therein, or any substitution, release, impairment or exchange of
any other guarantee of or security for any of the Credit Party Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the intent of
this Section 4.2 that the obligations of the Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Each Guarantor
agrees that such Guarantor shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower or any other Guarantor of
the Credit Party Obligations for amounts paid under this Section 4 until such
time as the Lenders (and any Affiliates of Lenders entering into Hedging
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Agreements or Equity Swap Agreements) have been paid in full, all Commitments
under this Credit Agreement have been terminated and no Person or Governmental
Authority shall have any right to request any return or reimbursement of funds
from the Lenders in connection with monies received under the Credit Documents,
Hedging Agreements or Equity Swap Agreements. Without limiting the generality
of the foregoing, it is agreed that, to the fullest extent permitted by law,
the occurrence of any one or more of the following shall not alter or impair
the liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of
the Credit Documents, any Hedging Agreement, any Equity Swap Agreement
or any other agreement or instrument referred to in the Credit
Documents, Hedging Agreements or Equity Swap Agreements shall be done
or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement, any Equity Swap Agreement or
any other agreement or instrument referred to in the Credit Documents,
Hedging Agreements or Equity Swap Agreements shall be waived or any
other guarantee of any of the Credit Party Obligations or any security
therefor shall be released, impaired or exchanged in whole or in part
or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender
or Lenders as security for any of the Credit Party Obligations shall
fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever (except notices expressly provided for in the Credit Documents), and
any requirement that the Agent or any Lender exhaust any right, power or remedy
or proceed against any Person under any of the Credit Documents, any Hedging
Agreement, Equity Swap Agreement or any other agreement or instrument referred
to in the Credit Documents, Hedging Agreements or Equity Swap Agreement, or
against any other Person under any other guarantee of, or security for, any of
the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the
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Credit Party Obligations is rescinded or must be otherwise restored by any
holder of any of the Credit Party Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Agent and each Lender on demand for all
reasonable costs and expenses (including, without limitation, fees and expenses
of counsel) incurred by the Agent or such Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations, except through the
exercise of rights of subrogation pursuant to Section 4.2 and through the
exercise of rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due
and payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of
Section 4.1. The Guarantors acknowledge and agree that their obligations
hereunder are secured in accordance with the terms of the Pledge Agreement and
that the Lenders may exercise their remedies thereunder in accordance with the
terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such
other Guarantor's Contribution Share (as defined below) of such Excess Payment.
The payment obligations of any Guarantor under this Section 4.6 shall be
subordinate and subject in right of payment to the prior payment in full to the
Agent and the Lenders of the Guaranteed Obligations, and none of the Guarantors
shall exercise any right or remedy under this Section 4.6 against any other
Guarantor until payment and satisfaction in full of all of such Guaranteed
Obligations. For purposes of this Section 4.6, (a) "Guaranteed Obligations"
shall mean any obligations arising under the other provisions of this Section
4; (b) "Excess Payment" shall mean the amount paid by any Guarantor in excess
of its Pro Rata Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall
mean, for any Guarantor in respect of any payment of Guaranteed Obligations,
the ratio (expressed as a percentage) as of the date of such payment of
Guaranteed Obligations of (i) the amount by which
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the aggregate present fair salable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Borrower and all of the Guarantors exceeds the amount of all
of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Borrower and
the Guarantors hereunder) of the Borrower and all of the Guarantors; provided,
however, that, for purposes of calculating the Pro Rata Shares of the
Guarantors in respect of any payment of Guaranteed Obligations, any Guarantor
that became a Guarantor subsequent to the date of any such payment shall be
deemed to have been a Guarantor on the date of such payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such payment; and (d)
"Contribution Share" shall mean, for any Guarantor in respect of any Excess
Payment made by any other Guarantor, the ratio (expressed as a percentage) as
of the date of such Excess Payment of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Borrower and all of the Guarantors other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors other than the maker of such Excess Payment; provided,
however, that, for purposes of calculating the Contribution Shares of the
Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Guaranteed
Obligations. Notwithstanding the foregoing, all rights of contribution against
any Guarantor shall terminate from and after such time, if ever, that such
Guarantor shall be relieved of its obligations pursuant to Section 8.4.
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Credit Party Obligations whenever arising.
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SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Revolving Loans, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of (i) this Credit Agreement, (ii) the Revolving Notes
and (iii) the Pledge Agreement.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of each
Credit Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary of such Credit
Party to be true and correct and in force and effect as of the
Closing Date.
(iv) Good Standing. To the extent received by the
Borrower prior to the Closing Date and subject to Section 7.15
thereafter, copies of (A) certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation
and each other jurisdiction in which the failure to so qualify
and be in good standing could have a Material Adverse Effect and
(B) to the extent available, a certificate indicating payment of
all corporate or comparable franchise taxes certified as of a
recent date by the appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true
and correct as of the Closing Date.
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(c) Pledge of Stock. The Agent shall have received all stock
certificates evidencing the Capital Stock pledged to the Agent pursuant
to the Pledge Agreement, together with duly executed in blank undated
stock powers attached thereto.
(d) Opinions of Counsel. The Agent shall have received an
opinion, or opinions, in form and substance satisfactory to the Agent
dated as of the Closing Date from counsel to the Credit Parties.
(e) Corporate Structure. The corporate capital and ownership
structure of the Borrower and its Subsidiaries shall be as described in
Schedule 6.13.
(f) Consent. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents and
approvals necessary or desirable in connection with the financings and
other transactions contemplated hereby and expiration of all applicable
waiting periods without any action being taken by any authority that
could reasonably be likely to restrain, prevent or impose any material
adverse conditions on such transactions or that could reasonably be
likely to seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the Agent could
reasonably be likely to have such effect.
(g) Litigation. Except as disclosed in Schedule 6.9, there shall
not exist any pending or threatened action, suit, investigation or
proceeding against a Consolidated Party which might have a Material
Adverse Effect.
(h) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by the chief financial officer of
the Borrower as of the Closing Date stating that (A) the Borrower and
each of the Borrower's Subsidiaries is in compliance with all existing
financial obligations, (B) all governmental, shareholder and third
party consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been obtained,
(C) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect the Borrower, any of the
Borrower's Subsidiaries, or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect and (D)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to occur
on such date, (1) the Borrower and each of the Borrower's Subsidiaries
is Solvent, (2) no Default or Event of Default exists, (3) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (4) the
Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.11.
(i) Three-Year Credit Agreement. Receipt by the Agent of a copy
of the Three-Year Credit Agreement as originally executed and
delivered, together with all exhibits and schedules.
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(j) Existing Credit Agreement. Receipt by the Agent of
satisfactory evidence of the repayment of all loans and obligations
under the Existing Credit Agreement and the termination of the
commitments thereunder.
(k) Fees and Expenses. Payment by the Credit Parties of all fees
and expenses owed by them to the Lenders and the Agent, including,
without limitation, payment to the Agent of the fees set forth in the
Fee Letter.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Revolving
Loan (including the initial Revolving Loans) are subject to satisfaction of the
following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered in the case of any
Revolving Loan an appropriate Notice of Borrowing or Notice of
Extension/Conversion;
(b) The representations and warranties set forth in Section 6
shall, subject to the limitations set forth therein, be true and
correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) There shall not have been commenced against any Credit Party
an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding
or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and such involuntary case or
other case, proceeding or other action shall remain undismissed,
undischarged or unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto; and
(e) Immediately after giving effect to the making of such
Revolving Loan (and the application of the proceeds thereof), the
aggregate principal amount of outstanding Revolving Loans shall not
exceed the Revolving Committed Amount.
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), (d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
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6.1 FINANCIAL CONDITION.
The audited consolidated balance sheets and income statements of the
Consolidated Parties for the fiscal year ended 1998 and the unaudited interim
balance sheets and income statements of the Consolidated Parties for the
quarterly periods ended after March 31, 1999 and June 30, 1999 have been
prepared in accordance with GAAP and present fairly in all material respects
(on the basis disclosed in the footnotes to such financial statements) the
financial condition, results of operations and cash flows of the applicable
parties as of such date and for such periods. Since December 31, 1998, there
has been no sale, transfer or other disposition by any Consolidated Party of
any material part of the business or property of the Consolidated Parties,
taken as a whole, and no purchase or other acquisition by any of them of any
business or property (including any capital stock of any other person) material
in relation to the consolidated financial condition of the Consolidated
Parties, taken as a whole, in each case, which, is not (x) reflected in the
foregoing financial statements or in the notes thereto or (y) otherwise
permitted by the terms of this Credit Agreement and communicated to the Agent.
6.2 NO MATERIAL CHANGE.
Since December 31, 1998, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could have a
Material Adverse Effect and (b) except under the Stock Buy-Back Plan and as
otherwise permitted under this Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the Capital Stock in a
Consolidated Party nor has any of the Capital Stock in a Consolidated Party
been redeemed, retired, purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing could have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery
and performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is
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required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party. This Credit Agreement has
been, and each other Credit Document to which any Credit Party is a party will
be, duly executed and delivered on behalf of the Credit Parties. This Credit
Agreement constitutes, and each other Credit Document to which any Credit Party
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Credit Party enforceable against such party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or organization or bylaws or other organizational or governing
documents of such Person, (b) violate, contravene or materially conflict with
any Requirement of Law or any other law, regulation (including, without
limitation, Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, (c) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could have a Material Adverse Effect, or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its
properties is bound which default could have a Material Adverse Effect. No
Default or Event of Default has occurred or exists except as previously
disclosed in writing to the Lenders.
6.7 OWNERSHIP.
Each Consolidated Party is the owner of, and has good and marketable
title to, or a valid leasehold interest in, all of its respective assets and
none of such assets is subject to any Lien other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.
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6.9 LITIGATION.
Except as disclosed in Schedule 6.9, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
might have a Material Adverse Effect.
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP.
No Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Material Adverse Effect. Without
limiting the generality of the foregoing, each Consolidated Party represents
that (i) current billing policies, arrangements, protocols and instructions
comply with requirements of Medicare, Medicaid, and CHAMPUS programs and any
other heath care program operated or financed in whole or in part by and
federal, state, or local government (each a "Medical Reimbursement Program" and
collectively, the "Medical Reimbursement Programs") and are administered by
properly trained personnel except where any such failure to comply could not
reasonably be expected to result in either (A) exclusion from a Medical
Reimbursement Program, or (B) loss of 5% or more of annual consolidated
revenues of the Consolidated Parties and (ii) current compensation arrangements
with physicians comply with state and federal anti-kick back fraud and abuse,
and Stark I and II requirements except where any such failure to comply could
not reasonably be expected to result in either (A) an exclusion from a Medical
Reimbursement Program, or (B) loss of 5% or more of annual consolidated
revenues of the Consolidated Parties.
6.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition
has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
material "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not
waived, has occurred with respect to any Plan; (iii) to the best
knowledge of the Credit Parties, each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and
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(iv) no lien in favor of the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior
to the date on which this representation is made or deemed made
(determined, in each case, utilizing the actuarial assumptions used in
such Plan's most recent actuarial valuation report), did not, by any
material amount, exceed as of such valuation date the fair market value
of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any material withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither any
Consolidated Party nor any ERISA Affiliate would become subject to any
material withdrawal liability under ERISA if any Consolidated Party or
any ERISA Affiliate were to withdraw completely from all Multiemployer
Plans and Multiple Employer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made.
Neither any Consolidated Party nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning
of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Consolidated Party or any ERISA Affiliate to any
material liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates has
any material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation or organization, the number of shares of each
class of Capital Stock outstanding, the number and percentage of outstanding
shares of each class owned (directly or indirectly) by such Consolidated Party;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding Capital Stock of all such Subsidiaries is validly
issued, fully paid and non-assessable and is owned by each such Consolidated
Party, directly or indirectly, free and clear of all Liens (other
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than those arising under or contemplated in connection with the Credit
Documents). Other than as set forth in Schedule 6.13, no Consolidated Party has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have 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.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act, the Securities Exchange Act or any of Regulations U and
X. If requested by any Lender or the Agent, the Borrower will furnish
to the Agent and each Lender a statement, in conformity with the
requirements of FR Form U-1 referred to in Regulation U, that no
proceeds of the Loans will be used, directly or indirectly, for the
purpose of "buying" or "carrying" any "margin stock" within the meaning
of Regulations U and X.
(b) None of the Consolidated Parties is (i) an "investment
company", or a company "controlled" by "investment company", within the
meaning of the Investment Company Act of 1940, as amended, (ii) a
"holding company" as defined in, or otherwise subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended or
(iii) subject to regulation under any other Federal or state statute or
regulation which limits its ability to incur Indebtedness.
6.15 PURPOSE OF REVOLVING LOANS.
The proceeds of the Revolving Loans hereunder shall be used solely by
the Borrower to (a) on the Closing Date to refinance existing Indebtedness of
the Borrower under the Existing Credit Agreement and (b) on and after the
Closing Date, to (i) pay the redemption price for the Capital Stock of the
Borrower pursuant to the Stock Buy-Back Plan and (ii) to provide for ongoing
working capital and general corporate purposes (including Acquisitions) of the
Borrower and its Subsidiaries.
6.16 ENVIRONMENTAL MATTERS.
(a) Each of the facilities and properties owned, leased or
operated by the Consolidated Parties (the "Properties") and all
operations at the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any material
Environmental Law with respect to the Properties or the businesses
operated by the Consolidated Parties (the "Businesses"), and there are
no conditions relating to the Businesses or Properties, that could give
rise to any material liability under any applicable Environmental Laws.
(b) To the best knowledge of the Credit Parties, none of the
Properties contains, or has previously contained, any Materials of
Environmental Concern at, on or
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under the Properties in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability under,
Environmental Laws.
(c) No Consolidated Party has received any written or verbal
notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the
Businesses, nor does any Consolidated Party have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported
or disposed of from the Properties, or generated, treated, stored or
disposed of at, on or under any of the Properties or any other
location, in each case by or on behalf of any Consolidated Party in
violation of, or in a manner that could give rise to liability under,
any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which any Consolidated Party
is or will be named as a party, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Consolidated Parties, the
Properties or the Businesses.
(f) There has been no release or, threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations (including, without limitation, disposal) of
any Consolidated Party in connection with the Properties or otherwise
in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to a material liability under
Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal
right to use could not have a Material Adverse Effect. No claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by any
Consolidated Party does not infringe on the rights of any Person, except for
such claims and infringements that in the aggregate, could not have a Material
Adverse Effect.
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6.18 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.20 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
6.21 NO UNUSUAL RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could have a Material Adverse Effect.
6.22 YEAR 2000 COMPLIANCE.
Each Credit Party has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by such Credit Party or any of its Subsidiaries (or
suppliers, vendors and customers) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan
in accordance with the timetable. Based on the foregoing, each Credit Party
believes that all computer applications (including those of its suppliers,
vendors and customers) that are material to its and any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 compliant"), except to the extent that
a failure to do so could not reasonably be expected to have Material Adverse
Effect.
6.23 REIMBURSEMENT FROM THIRD PARTY PAYORS.
The accounts receivable of the Consolidated Parties have been and will
continue to be adjusted to reflect the reimbursement policies (both those most
recently published in writing as well as those not in writing which have been
verbally communicated) of third party payors such as Medicare, Medicaid, Blue
Cross/Blue Shield, private insurance companies, health maintenance
organizations, preferred provider organizations, alternative delivery systems,
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managed care systems, government contracting agencies and other third party
payors, except any which, individually or in the aggregate, would not have a
Material Adverse Effect. In particular, accounts receivable relating to such
third party payors do not and shall not exceed amounts any obligee is entitled
to receive under any capitation arrangement, fee schedule, discount formula,
cost-based reimbursement or other adjustment or limitation to its usual
charges, except any which, individually or in the aggregate, would not have a
Material Adverse Effect.
6.24 FRAUD AND ABUSE.
Neither the Consolidated Parties nor, to the knowledge of the officers
of the Consolidated Parties, any of their officers or directors, or, to the
knowledge of any officer of the Consolidated Parties, no Contract Providers,
have engaged in any activities which are prohibited under federal Medicare and
Medicaid statutes, 42 U.S.C. ss.1320a-7b, or 42 U.S.C. ss.1395nn or the
regulations promulgated pursuant to such statutes or related state or local
statutes or regulations, or which are prohibited by binding rules of
professional conduct, including but not limited to the following: (i) knowingly
and willfully making or causing to be made a false statement or representation
of a material fact in any applications for any benefit or payment; (ii)
knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; (iii) failing to disclose knowledge by a claimant of the occurrence
of any event affecting the initial or continued right to any benefit or payment
on its own behalf or on behalf of another, with intent to secure such benefit
or payment fraudulently; (iv) knowingly and willfully soliciting or receiving
any remuneration (including any kickback, bribe or rebate), directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay such
remuneration (a) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare, Medicaid or other
applicable third party payors, or (b) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or ordering
of any good, facility, service, or item for which payment may be made in whole
or in part by Medicare, Medicaid or other applicable third party payors.
6.25 LICENSING AND ACCREDITATION.
Each of the Consolidated Parties and, to the knowledge of the officers
of the Consolidated Parties, each Contract Provider, has, to the extent
applicable: (i) obtained (or been duly assigned) all required certificates of
need or determinations of need as required by the relevant state Governmental
Authority for the acquisition, construction, expansion of, investment in or
operation of its businesses as currently operated; (ii) obtained and maintains
in good standing all required licenses; (iii) to the extent prudent and
customary in the industry in which it is engaged, obtained and maintains
accreditation from all generally recognized accrediting agencies; and (iv)
entered into and maintains in good standing its status as a Medicare Supplier
and as a Medicaid Supplier. To the knowledge of the officers of the
Consolidated Parties, each Contract Provider is duly licensed (where license is
required) by each state or state agency or commission, or any other
Governmental Authority having jurisdiction over the provisions of such services
by such Person in the locations in which the Consolidated Parties conduct
business, required to enable such Person to provide the professional services
provided by such Person and otherwise as is necessary to enable the
Consolidated Parties to operate as currently operated and
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as presently contemplated to be operated. To the knowledge of the officers of
the Consolidated Parties, all such required licenses are in full force and
effect on the date hereof and have not been revoked or suspended or otherwise
limited.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the
Commitments hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement
of the Consolidated Parties, as of the end of such fiscal year,
together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth
in comparative form consolidated figures for the preceding fiscal year,
all such financial information described above to be in reasonable form
and detail, audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified as to the status of the Consolidated Parties
as a going concern.
(b) Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which 90
days after the end thereof) a consolidated balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
quarter, together with related consolidated statements of operations
and retained earnings and of cash flows for such fiscal quarter in each
case setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
the chief financial officer of the Borrower to the effect that such
quarterly financial statements fairly present in all material respects
the financial condition of the Consolidated Parties and have been
prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments.
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(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Borrower
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.11 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Credit Parties propose to take with respect
thereto.
(d) Auditor's Reports. Promptly upon receipt thereof, a copy of
any other report or "management letter" submitted by independent
accountants to any Consolidated Party in connection with any annual,
interim or special audit of the books of such Person.
(e) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as any Consolidated Party shall send to its shareholders or to
a holder of any Indebtedness owed by any Consolidated Party in its
capacity as such a holder and (ii) upon the request of the Agent, all
reports and written information to and from the United States
Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(f) Notices. Upon obtaining knowledge thereof, each Credit Party
will give written notice to the Agent promptly of (i) the occurrence of
an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (ii) the occurrence
of any of the following with respect to any Consolidated Party (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Person which if adversely determined is likely
to have a Material Adverse Effect, (B) the institution of any
proceedings against such Person with respect to, or the receipt of
notice by such Person of potential liability or responsibility for
violation, or alleged violation of any federal, state or local law,
rule or regulation, including but not limited to, Environmental Laws,
the violation of which could have a Material Adverse Effect, (C) any
notice or determination concerning the imposition of any withdrawal
liability by a Multiemployer Plan against such Person or any ERISA
Affiliate, the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of
ERISA or the termination of any Plan or (D) the institution of any
investigation or proceedings against such Person (or, to the knowledge
of the Borrower's officers, any Contract Provider) to suspend, revoke
or terminate or which may result in the termination of its status as a
Medicaid Supplier or its status as a Medicare Supplier or exclusion
from any Medical Reimbursement Program, promptly deliver to the Agent
written notice thereof stating the nature and status of such
litigation, dispute, proceeding, investigation, levy, execution or
other process.
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(g) ERISA. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent promptly (and in any event within five
business days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Borrower or any of its ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which any
Consolidated Party or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto;
or (iv) any change in the funding status of any Plan that could have a
Material Adverse Effect, together with a description of any such event
or condition or a copy of any such notice and a statement by the chief
financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Credit
Parties shall furnish the Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return
(Form 5500 series), as well as all schedules and attachments thereto
required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(h) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the
Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental
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Authorities, applicable to it and its Property if noncompliance with any such
law, rule, regulation, order or restriction could have a Material Adverse
Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims
for labor, materials and supplies) which, if unpaid, might give rise to a Lien
upon any of its properties, and (c) except as prohibited hereunder, all of its
other Indebtedness as it shall become due; provided, however, that no
Consolidated Party shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could have a Material Adverse Effect.
7.6 INSURANCE.
Each Credit Party will, and will cause each of its Subsidiaries to, at
all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities
and with such deductibles or self-insurance retentions as are in accordance
with normal industry practice and furnish to the Agent, upon written request,
full information as to the insurance carried.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as
may be needed or proper, to the extent and in the manner customary for
companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Revolving Loans solely for
the purposes set forth in Section 6.15.
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7.10 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities
and its other business assets, and to make photocopies or photographs thereof
and to write down and record any information such representative obtains and
shall permit the Lenders or their representatives to investigate and verify the
accuracy of information provided to the Agent and to discuss all such matters
with the officers, employees and representatives of such Person.
7.11 FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Consolidated
Parties, shall be greater than or equal to 2.75 to 1.0.
(b) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Consolidated Parties, shall be less than or
equal to 2.50 to 1.0.
(c) Consolidated Net Worth. The Consolidated Net Worth shall at
all times be greater than or equal to $491,000,000, increased by the
sum of (i) on a cumulative basis as of the end of each fiscal quarter
of the Borrower, commencing with the fiscal quarter ending September
30, 1999, an amount equal to 75% of Consolidated Net Income (to the
extent positive) for the fiscal quarter then ended plus (ii) an amount
equal to 100% of the Net Cash Proceeds from any Equity Issuance
occurring after the Closing Date minus (iii) the aggregate price paid
for all purchases of Capital Stock of the Borrower pursuant to the
Stock Buy-Back Plan.
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after any Person
becomes a Subsidiary of any Credit Party, the Borrower shall provide the Agent
with written notice thereof setting forth information in reasonable detail
describing all of the assets of such Person and shall (a) cause such Person to
execute a Joinder Agreement in substantially the same form as Exhibit 7.12, (b)
cause 100% of the Capital Stock of such Person to be delivered to the Agent
(together with undated stock powers signed in blank), and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge Agreement and otherwise in form acceptable to the Agent and (c) if such
Person has any Subsidiaries (i) deliver all of the Capital Stock of such
Subsidiaries (together with undated stock powers signed in blank) to the Agent
and (ii) execute a pledge agreement in substantially the form of the Pledge
Agreement and otherwise in a form acceptable to the Agent.
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7.13 PLEDGED ASSETS.
Except with respect to the Capital Stock of Lincare of Columbia, the
Credit Parties will cause 100% of the issued and outstanding Capital Stock of
each direct and indirect Subsidiary of the Borrower, to be subject at all times
to a first priority, perfected Lien in favor of the Agent pursuant to the terms
and conditions of the Pledge Agreement or such other security documents as the
Agent shall reasonably request.
7.14 YEAR 2000 COMPLIANCE.
The Credit Parties will promptly notify the Agent in the event any
Credit Party discovers or determines that any computer application (including
those of its suppliers, vendors and customers) that is material to its or any
of its Subsidiaries' business and operations will not be Year 2000 Compliant,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.
7.15 FURTHER ASSURANCES.
As soon as available, but in any event within 30 Business Days of the
Closing Date, the Borrower shall have provided the Agent with (a) certificates
of good standing, existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental Authorities of
the state or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could have a Material
Adverse Effect and (b) to the extent available, a certificate indicating
payment of all corporate or comparable franchise taxes certified as of a recent
date by the appropriate governmental taxing authorities.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the
Commitments hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set forth
in Schedule 8.1;
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(c) purchase money Indebtedness (including Capital Leases) or
Synthetic Leases hereafter incurred by the Borrower or any of its
Subsidiaries to finance the purchase of fixed assets provided that (i)
the total of all such Indebtedness for all such Persons taken together
shall not exceed an aggregate principal amount of $5,000,000 at any one
time outstanding (including any such Indebtedness referred to in
subsection (b) above); (ii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing;
(d) obligations of the Borrower or any of its Subsidiaries in
respect of Hedging Agreements entered into in order to manage existing
or anticipated interest rate or exchange rate risks and not for
speculative purposes;
(e) obligations of the Borrower in respect of the Stock Buy-Back
Plan;
(f) obligations of the Borrower under Equity Swap Agreements
provided that (i) the term of any such Equity Swap Agreements shall not
exceed 6 months and (ii) the notional amount of all such obligations
shall not exceed $45,000,000 in the aggregate at any time outstanding;
(g) unsecured Indebtedness payable to the seller of the Capital
Stock or Property acquired in a Permitted Acquisition representing all
or a portion of the purchase price of the Capital Stock or Property so
acquired;
(h) Indebtedness owing by one Credit Party to another Credit
Party; and
(i) other Indebtedness hereafter incurred by the Borrower not
exceeding $10,000,000 in aggregate principal amount at any time
outstanding.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens;
provided, however, that the terms of this Section 8.2 shall not be applicable
to Capital Stock of the Borrower which constitute treasury shares held by the
Borrower.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date.
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8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
The Credit Parties will not permit any Consolidated Party to enter into
any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); provided
that, notwithstanding the foregoing provisions of this Section 8.4, (a)
the Borrower may merge or consolidate with any of its Subsidiaries
provided that (i) the Borrower shall be the continuing or surviving
corporation, (ii) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may
request in order to maintain the perfection and priority of the Liens
on the assets of the Credit Parties and (iii) after giving effect to
such transaction, no Default or Event of Default exists and (b) any
Credit Party other than the Borrower may merge or consolidate with any
other Credit Party other than the Borrower provided that (i) the Credit
Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request in order to
maintain the perfection and priority of the Liens on the assets of the
Credit Parties and (ii) after giving effect to such transaction, no
Default or Event of Default exists and (c) the Borrower or any
Subsidiary of the Borrower may merge with any Person other than a
Consolidated Party in connection with a Permitted Acquisition provided
that (i) the Borrower or such Subsidiary shall be the continuing or
surviving corporation and (ii) after giving effect to such transaction,
no Default or Event of Default exists.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party to sell,
lease, transfer or otherwise dispose of any Property (including without
limitation pursuant to any sale/leaseback transaction or securitization
transaction ) other than (i) the sale of inventory in the ordinary course of
business for fair consideration, (ii) the sale or disposition of assets no
longer used or useful in the conduct of such Person's business, (iii) Sale and
Leaseback Transactions permitted under Section 8.13 and (iv) other sales of
assets, provided that (A) no Default or Event of Default shall have occurred or
would occur as a result of such sale or other disposition and (B) the aggregate
book value of assets sold or otherwise disposed of pursuant to clause (iv) in
any given fiscal year does not exceed an amount equal to $10,000,000.
Upon a sale of Capital Stock of a Consolidated Party not prohibited by
this Section 8.5, the Agent shall (to the extent applicable) deliver to the
Credit Parties, upon the Credit Parties' request and at the Credit Parties'
expense, such documentation as is reasonably necessary to evidence the release
of such Consolidated Party from all of its obligations, if any, under the
Credit Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
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8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except, so long as no Default or Event of Default shall
have occurred or would occur as a result thereof, (a) to make dividends payable
solely in the same class of Capital Stock of such Person, (b) to make dividends
or other distributions payable to any Credit Party (directly or indirectly
through Subsidiaries), (c) purchases by the Borrower of its Capital Stock
pursuant to the Stock Buy-Back Plan, provided that the aggregate price for all
such purchases shall not exceed $200,000,000, (d) other repurchases,
redemptions or other acquisitions or retirements for value of any Capital Stock
of the Borrower in connection with stock purchase agreements and shareholder
redemption agreements (other than the Stock Buy-Back Plan), provided that the
aggregate price for all such repurchases, redemptions, acquisitions and
retirements during any fiscal year shall not exceed $10,000,000 and (e) as
permitted by Section 8.8.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Credit Parties will not permit any Consolidated Party to after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such amendment or modification would
add or change any terms in a manner adverse to the issuer of such Indebtedness,
or shorten the final maturity or average life to maturity or require any
payment to be made sooner than originally scheduled or increase the interest
rate applicable thereto or change any subordination provision thereof.
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
transactions permitted by Section 8.1, Section 8.4, Section 8.6 or Section 8.7,
(b) normal compensation and reimbursement of expenses of officers and directors
and (c) except as otherwise specifically limited in this Credit Agreement,
other transactions which are entered into in the ordinary course of such
Person's business on terms and conditions substantially as favorable to such
Person as would be obtainable by it in a comparable arms-length transaction
with a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation or
organization (or corporate charter or other similar organizational document) or
bylaws or operating agreement (or other similar document) in any manner adverse
to the Lenders without the prior written consent of the Required Lenders.
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8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party 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 Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Indebtedness or other obligation owed to any
Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease
or transfer any of its properties or assets to any Credit Party, (e) grant a
lien on its properties or assets whether now owned or hereafter acquired or (f)
act as a Guarantor and pledge its assets pursuant to the Credit Documents or
any renewals, refinancings, exchanges, refundings or extension thereof, except
(in respect of any of the matters referred to in clauses (a)-(d) above) for
such encumbrances or restrictions existing under or by reason of (i) this
Credit Agreement and the other Credit Documents or (ii) applicable law.
8.12 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON BORROWER.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (a)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of
the Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (b)
permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (c) permit, create,
incur, assume or suffer to exist any Lien thereon, in each case (i) except to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock
of Subsidiaries, (ii) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary not prohibited under Section
8.4 or Section 8.5 or (iii) except for Permitted Liens and (d) notwithstanding
anything to the contrary contained in clause (b) above, permit any Subsidiary
of the Borrower to issue any shares of preferred Capital Stock.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Consolidated Party to enter into
any Sale and Leaseback Transaction other than a Sale and Leaseback Transaction
with respect to the corporate headquarters office building to be built by the
Borrower in Clearwater, Florida, provided that value of the Property subject to
such transaction shall not exceed $20,000,000 in the aggregate.
8.14 NO FURTHER NEGATIVE PLEDGES.
Except (a) pursuant to this Credit Agreement and the other Credit
Documents, and (b) pursuant to any document or instrument governing
Indebtedness incurred pursuant to Section 8.1(c), provided that any such
restriction contained therein relates only to the asset or assets constructed
or acquired in connection therewith, the Credit Parties will not permit any
Consolidated Party to enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given
for some other obligation.
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8.15 NO FOREIGN SUBSIDIARIES.
The Credit Parties will not create, acquire or permit to exist any
Foreign Subsidiary.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of
any of the Revolving Loans, or
(ii) default, and such default shall continue for three
(3) or more Business Days, in the payment when due of any
interest on the Revolving Loans, or of any Fees or other amounts
owing hereunder, under any of the other Credit Documents or in
connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or deemed
to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.9, 7.11
or 8.1 through 8.15, inclusive;
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Section 7.1 and such
default shall continue unremedied for a period of at least 5
business days after the earlier of a responsible officer of a
Credit Party becoming aware of such default or notice thereof by
the Agent; or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to
in subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a
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responsible officer of a Credit Party becoming aware of such
default or notice thereof by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents (subject to applicable grace or
cure periods, if any) or repudiate its obligations thereunder, or (ii)
except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary not prohibited under Section 8.4 or Section
8.5, any Credit Document shall fail to be in full force and effect or
to give the Agent and/or the Lenders the Liens, rights, powers and
privileges purported to be created thereby, or any Credit Party shall
so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, the guaranty given by any Guarantor hereunder (including
any Additional Credit Party) or any provision thereof shall cease to be
in full force and effect, or any Guarantor (including any Additional
Credit Party) hereunder or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) of any material obligation or
condition of any contract or lease material to the Consolidated
Parties, taken as a whole.
(ii) The occurrence of an "Event of Default" (as such
term is defined therein) under the Three-Year Credit Agreement.
(iii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in excess
of $2,500,000 in the aggregate for the Consolidated Parties
taken as a whole, (A) any Consolidated Party shall (1) default
in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (2)
default (after giving effect to any applicable grace period) in
the observance or performance of any term, covenant or agreement
relating to such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee
or agent on behalf of such holders) to cause (determined without
regard to whether any notice or lapse of time is required), any
such
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Indebtedness to become due prior to its stated maturity; or (B)
any such Indebtedness shall be declared due and payable, or
required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof.
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability
of $2,500,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged
coverage and has, in the reasonable judgment of the Agent, the ability
to perform) and any such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 60 days
from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition could have a Material Adverse Effect (i) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of any Consolidated Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (ii) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Agent, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of
the Agent, likely to result in (A) the termination of such Plan for
purposes of Title IV of ERISA, or (B) any Consolidated Party or any
ERISA Affiliate incurring any liability in connection with a withdrawal
from, reorganization of (within the meaning of Section 4241 of ERISA),
or insolvency or (within the meaning of Section 4245 of ERISA) such
Plan; or (iv) any prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Consolidated Party or
any ERISA Affiliate to any liability under Sections 406, 409, 502(i),
or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which any Consolidated Party or any
ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
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(b) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Revolving Loans and any and all
other indebtedness or obligations of any and every kind owing by the
Borrower to the Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
(c) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the Pledge
Agreement, all rights and remedies against a Guarantor and all rights
of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Revolving Loans, all accrued interest in respect thereof, all accrued
and unpaid Fees and other indebtedness or obligations owing to the Agent and/or
any of the Lenders hereunder automatically shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to act
as its agent under this Credit Agreement and the other Credit Documents with
such powers and discretion as are specifically delegated to the Agent by the
terms of this Credit Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto. The Agent (which term
as used in this sentence and in Section 10.5 and the first sentence of Section
10.6 hereof shall include its Affiliates and its own and its Affiliates'
officers, directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be
responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Credit
Document or any certificate or other document referred to or provided for in,
or received by any of them under, any Credit Document, or for the value,
validity, effectiveness, genuineness, enforceability, or sufficiency of any
Credit Document, or any other document referred to or provided for therein or
for any failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any
condition or to inspect the property (including the books and records) of any
Credit Party or any of its Subsidiaries or Affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Credit Document, unless directed by the Required Lenders; and (e) shall not
be responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence,
willful misconduct or
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breach of this Credit Agreement. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith and with
reasonable care.
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent as permitted under Section 10.1. The Agent may deem and treat the payee
of any Revolving Note as the holder thereof for all purposes hereof unless and
until the Agent receives and accepts an Assignment and Acceptance executed in
accordance with Section 11.3(b) hereof. As to any matters not expressly
provided for by this Credit Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that
the Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Credit Document or applicable law
or unless it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event
of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the
Required Lenders, provided that, unless and until the Agent shall have received
such directions, the 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 interest of the
Lenders.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Revolving Loans made by it, Bank
of America (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers and obligations hereunder as
any other Lender and may exercise and perform the same as though it were not
acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, enter into Equity Swap Agreements with, provide services
to, and generally engage in any kind of lending,
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trust, or other business with any Credit Party or any of its Subsidiaries or
Affiliates as if it were not acting as Agent, and Bank of America (and any
successor acting as Agent) and its Affiliates may accept fees and other
consideration from any Credit Party or any of its Subsidiaries or Affiliates
for services in connection with this Credit Agreement or otherwise without
having to account for the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective Commitments,
for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Lender) in any way relating to or
arising out of any Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document; provided
that no Lender shall be liable for any of the foregoing to the extent they
arise from the gross negligence, willful misconduct or breach of this Credit
Agreement of the Agent. Without limitation of the foregoing, each Lender agrees
to reimburse the Agent promptly upon demand for its ratable share of any costs
or expenses payable by the Borrower under Section 11.5, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Borrower.
The agreements in this Section 10.5 shall survive the repayment of the
Revolving Loans and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Credit Parties
and their Subsidiaries and decision to enter into this Credit Agreement and
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Credit Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any Credit Party or
any of its Subsidiaries or Affiliates that may come into the possession of the
Agent or any of its Affiliates.
10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint
a successor Agent which shall be a commercial bank organized under the laws of
the United States
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of America having combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the fifth Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
if to any Credit Party:
Lincare Holdings Inc.
19337 U.S. 19 North
Suite 500
Clearwater, Florida 33764
Attn: Chief Financial Officer
Telephone: (727) 530-7700
Telecopy: (727) 532-9692
with a copy to:
Lincare Holdings Inc.
19337 U.S. 19 North
Suite 500
Clearwater, Florida 33764
Attn: Legal Department
Telephone: (727) 530-7700
Telecopy: (727) 532-9692
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if to the Agent:
Bank of America, N.A.
as Agent
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services -- Michael Roof
Telephone: 704-388-3916
Telecopy: 704-386-9923
with a copy to:
Bank of America, N. A.
Healthcare Finance Group
700 Louisiana Street
Houston, Texas 77002
Attn: F. Scott Singhoff
Telephone: (713) 247-6961
Telecopy: (713) 247-6719
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or
any of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Revolving Notes, under any other Credit
Document or otherwise, irrespective of whether such Lender shall have made any
demand hereunder or thereunder and although such obligations may be unmatured.
Each Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto; provided that none of the Credit Parties may
assign or transfer any of its interests and obligations without prior
written consent of the Lenders; provided further that the rights of
each Lender to transfer, assign or grant participations in its rights
and/or obligations hereunder shall be limited as set forth in this
Section 11.3.
72
<PAGE> 78
(b) Each Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Revolving
Loans, its Revolving Notes, and its Commitment); provided, however,
that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of $1,000,000
in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement;
(iv) such assigning Lender shall simultaneously assign an
identical percentage of the loans and commitments of such Lender
under the Three-Year Credit Agreement to such Eligible Assignee;
and
(v) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit 11.3(b) hereto, together with
any Revolving Note subject to such assignment and a processing
fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any
assignment pursuant to this Section 11.3(b), the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if
required, new Revolving Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Revolving Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this
73
<PAGE> 79
Credit Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Revolving Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 11.3(b) hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Revolving Loans); provided, however, that (i)
such Lender's obligations under this Credit Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participant shall be entitled to the benefit of the yield protection
provisions contained in Sections 3.7 through 3.12, inclusive, and the
right of set-off contained in Section 11.2, and (iv) the Borrower shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Credit Agreement,
and such Lender shall retain the sole right to enforce the obligations
of the Borrower relating to its Revolving Loans and its Revolving Notes
and to approve any amendment, modification, or waiver of any provision
of this Credit Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which
interest is payable on such Revolving Loans or Revolving Notes,
extending any scheduled principal payment date or date fixed for the
payment of interest on such Revolving Loans or Revolving Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any
portion of its Revolving Loans and its Revolving Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations
hereunder.
(g) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 11.15 hereof.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of
the Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power
74
<PAGE> 80
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle the Borrower or any other Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
with respect thereto and with respect to advising the Agent as to its rights
and responsibilities under the Credit Documents. The Borrower further agrees to
pay on demand all reasonable costs and expenses of the Agent and the Lenders,
if any, in connection with the enforcement (whether through negotiations, legal
proceedings, or otherwise) of the Credit Documents and the other documents to
be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities, costs, and
expenses (including, without limitation, reasonable attorneys' fees) that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Credit Documents, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Revolving Loans, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 11.5
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
shareholders or creditors or an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower agrees not to
assert any claim against the Agent, any Lender, any of their Affiliates, or any
of their respective directors, officers, employees, attorneys, agents, and
advisers, on any theory of liability, for special, indirect, consequential, or
punitive damages arising out of or otherwise relating to the Credit Documents,
any of the transactions contemplated herein or the actual or proposed use of
the proceeds of the Revolving Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Revolving Loans and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
75
<PAGE> 81
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is
in writing entered into by, or approved in writing by, the Required Lenders and
the Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby, no such
amendment, change or waiver shall:
(i) extend the final maturity of any Revolving Loan or the
time of payment of any reimbursement obligation, or any portion
thereof, or extend or waive the principal payment of any
Revolving Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of
any post-default increase in interest rates) thereon or Fees or
costs hereunder,
(iii) reduce or waive the principal amount of any Revolving
Loan (except for the waiver of a mandatory prepayment required
by Section 3.3(b) hereof),
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver
of any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) release all or substantially all of the Pledged
Collateral,
(vi) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, release the Borrower or substantially all of
the other Credit Parties from its or their obligations under the
Credit Documents,
(vii) amend, modify or waive any provision of this Section
11.6 or Section 3.14,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders,
(ix) consent to the assignment or transfer by the Borrower
or all or substantially all of the other Credit Parties of any
of its or their rights and obligations under (or in respect of)
the Credit Documents except as permitted thereby; or
76
<PAGE> 82
(x) increase the Revolving Committed Amount hereunder to an
amount in excess of $60,000,000;
(b) without the consent of the Agent, no provision of Section 10
may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, each Lender is
entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Revolving Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary
in making proof of this Credit Agreement to produce or account for more than
one such counterpart for each of the parties hereto. Delivery by facsimile by
any of the parties hereto of an executed counterpart of this Credit Agreement
shall be as effective as an original executed counterpart hereof and shall be
deemed a representation that an original executed counterpart hereof will be
delivered.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Revolving Loans, the
repayment of the Revolving Loans and other obligations under the Credit
Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Revolving Notes and the making of the Revolving Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. Any legal action or proceeding with respect
to this Credit Agreement or any other Credit Document may be brought in
the courts of the State of North Carolina in Mecklenburg County, or of
the United States for the Western District
77
<PAGE> 83
of North Carolina, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the nonexclusive jurisdiction of such courts. Each of the Credit
Parties further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) 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.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time on
or after the Closing Date when it shall have been executed by the
Borrower, the Guarantors and the Agent, and the Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this
Credit
78
<PAGE> 84
Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no
Revolving Loans or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, all of the Credit
Party Obligations have been irrevocably satisfied in full and all of
the Commitments hereunder shall have expired or been terminated.
11.14 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.15 CONFIDENTIALITY.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or
affiliate of any Lending Party, if reasonably incidental to the credit
facility, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein (so long as such Person
agrees to be bound by the provisions of this Section 11.15), (c) as required by
any law, rule or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of disclosure by any Lending Party
prohibited by this Credit Agreement, (g) in connection with any litigation to
which such Lending Party or any of its affiliates may be a party, (h) to the
extent necessary in connection with the exercise of any remedy under this
Credit Agreement or any other Credit Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.
[remainder of page intentionally left blank]
79
<PAGE> 85
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as of
the date first above written.
BORROWER: LINCARE HOLDINGS INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
GUARANTORS: LINCARE INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
LINCARE PROCUREMENT INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
LINCARE ASSET MANAGEMENT LP,
a Nevada limited partnership
BY: : LINCARE HOLDINGS INC., A
DELAWARE CORPORATION, ITS GENERAL
PARTNER
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
LINCARE OF NEW YORK INC.,
a New York corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
<PAGE> 86
LINCARE PHARMACY SERVICES INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
LINCARE LICENSING INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
CONVACARE SERVICES INC.,
an Indiana corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
LINCARE TRAVEL INC.,
a Delaware corporation
By: /s/ Paul G. Gabos
-------------------------------------------
Name: Paul G. Gabos
Title: CFO
2
<PAGE> 87
LENDERS: BANK OF AMERICA, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Forest Scott Singhoff
------------------------------------------
Name: Forest Scott Singhoff
Title: Managing Director
3
<PAGE> 88
BANKATLANTIC, as a Lender
By: /s/ Ana C. Bolduc
------------------------------------------
Name: Ana C. Bolduc
Title: SVP
4
<PAGE> 89
BANK LEUMI LE - ISRAEL B.M.,
MIAMI AGENCY, as a lender
By: /s/ Joseph F. Realini
------------------------------------------
Name: Joseph F. Realini
Title: Vice President
5
<PAGE> 90
COMERICA BANK , as a Lender
By: /s/ Bradley A. Terryn
------------------------------------------
Name: Bradley A. Terryn
Title: First Vice President
7
<PAGE> 91
BANKERS TRUST COMPANY, as a Lender
By: /s/ Mary Kay Coyle
------------------------------------------
Name: Mary Kay Coyle
Title: Managing Director
7
<PAGE> 92
FLEET NATIONAL BANK, as a Lender
By: /s/ Carol Paige
------------------------------------------
Name: Carol Paige
Title: SVP
8
<PAGE> 93
THE FUJI BANK, LIMITED, as a Lender
By: /s/ Raymond Ventura
------------------------------------------
Name: Raymond Ventura
Title: Vice President & Manager
9
<PAGE> 94
THE INDUSTRIAL BANK OF JAPAN
LIMITED, as a Lender
By: /s/ Minami Miura
------------------------------------------
Name: Minami Miura
Title: Vice President
10
<PAGE> 95
MICHIGAN NATIONAL BANK, as a Lender
By: /s/ Naran Shaya
------------------------------------------
Name: Naran Shaya
Title: Commercial Relationship Manager
11
<PAGE> 96
SCOTIABANC INC., as a Lender
By: /s/ Dana Maloney
------------------------------------------
Name: Dana Maloney
Title: Relationship Manager
12
<PAGE> 97
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ Martin D. Golden
------------------------------------------
Name: Martin D. Golden
Title: Vice President
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LINCARE HOLDINGS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 12,360
<SECURITIES> 0
<RECEIVABLES> 104,643
<ALLOWANCES> 5,660
<INVENTORY> 3,020
<CURRENT-ASSETS> 116,952
<PP&E> 300,261
<DEPRECIATION> 134,985
<TOTAL-ASSETS> 685,997
<CURRENT-LIABILITIES> 53,156
<BONDS> 0
0
0
<COMMON> 584
<OTHER-SE> 134,696
<TOTAL-LIABILITY-AND-EQUITY> 685,997
<SALES> 429,353
<TOTAL-REVENUES> 429,353
<CGS> 66,753
<TOTAL-COSTS> 66,753
<OTHER-EXPENSES> 239,715
<LOSS-PROVISION> 5,152
<INTEREST-EXPENSE> 2,909
<INCOME-PRETAX> 120,089
<INCOME-TAX> 45,755
<INCOME-CONTINUING> 74,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 74,334
<EPS-BASIC> 1.28
<EPS-DILUTED> 1.26
</TABLE>
