SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 333-13523
DADE INTERNATIONAL INC.
(Exact name of Registrant as Specified in its Charter)
Delaware 36-3949533
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1717 Deerfield Road
Deerfield, Illinois 60015-0778
(Address of Principal Executive Officer) (Zip Code)
847-267-5300
(Registrant's Telephone Number, Including Area Code)
Indicate by check 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 proceeding 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 last 90 days.
Yes X No______________
The number of shares of the registrant's Common Stock, $.01 par value
per share, outstanding as of May 1, 1997, the latest practicable date,
was 1,000 shares.
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Dade International Inc.
Consolidated Balance Sheet
December 31, March 31,
(Dollars in millions, except share-related data) 1996 1997
(Unaudited)
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Assets
Current assets:
Cash and cash equivalents $ 3.7 $ 6.0
Accounts receivable, net 183.8 175.9
Inventories 155.0 164.8
Prepaid expenses and other current assets 9.6 9.7
Deferred income taxes 45.5 45.5
Total current assets 397.6 401.9
Property, plant and equipment, net 187.0 180.6
Debt issuance costs, net 42.4 40.9
Goodwill, net 135.3 134.1
Patents and trademarks, net 30.0 29.2
Deferred income taxes 171.9 169.5
Prepaid pension asset 26.0 26.0
Other assets 18.6 22.0
Total Assets $1,008.8 $1,004.2
Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Current portion of long-term debt $ 3.4 $ 3.4
Short-term debt 15.8 15.1
Accounts payable 60.2 42.3
Accrued liabilities 146.5 142.7
Total current liabilities 225.9 203.5
Revolving credit facility - 25.0
Long-term debt, less current portion 436.6 435.7
Senior subordinated notes 350.0 350.0
Other liabilities 21.3 21.4
Total Liabilities 1,033.8 1,035.6
Commitments and contingencies - -
Common stock, $.01 par value, 1000 shares
authorized, issued and outstanding - -
Additional paid-in-capital 87.2 87.2
Accumulated deficit (110.3) (109.3)
Unrealized gain on marketable equity securities 0.1 0.1
Cumulative translation adjustment (2.0) (9.4)
Total Stockholder's Equity (Deficit) (25.0) (31.4)
Total Liabilities and Stockholder's
Equity (Deficit) $1,008.8 $1,004.2
See accompanying notes to consolidated financial statements.
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Dade International Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
(Dollars in millions) 1996 1997
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Net Sales $ 158.5 $ 200.6
Operating Costs and Expenses
Cost of goods 82.1 97.3
Marketing and administrative expenses 52.4 68.1
Research and development expenses 6.6 11.5
Goodwill amortization expense (credit) (0.1) 1.3
Income from operations 17.5 22.4
Other Income (Expense)
Interest expense, net (7.1) (21.4)
Other 0.8 0.6
Income before income taxes 11.2 1.6
Income tax expense 4.1 0.6
Net Income $ 7.1 $ 1.0
See accompanying notes to consolidated financial statements.
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Dade International Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
(Dollars in millions) 1996 1997
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Operating Activities:
Net income $ 7.1 $ 1.0
Adjustments to reconcile net income to
net cash utilized by operating activities:
Depreciation and amortization expense 3.2 15.0
Deferred income taxes 3.3 2.4
Changes in balance sheet items:
Accounts receivable, net 17.3 1.4
Inventories (5.9) (12.9)
Accounts payable (12.8) (16.5)
Accrued liabilities (17.8) (2.2)
Other (2.0) (3.0)
Net cash flow utilized by operating activities (7.6) (14.8)
Investing Activities:
Capital expenditures (11.6) (7.6)
Proceeds from Baxter International
Inc. for purchase price adjustments 9.7 -
Net cash flow utilized by investing activities (1.9) (7.6)
Financing Activities:
Proceeds from short-term debt, net of repayment 9.6 0.8
Proceeds from revolving credit facility, net
of repayment - 25.0
Repayment of borrowings under long-term loans (10.5) (0.9)
Proceeds from sale of net assets held for sale 10.7 -
Net cash flow provided by financing activities 9.8 24.9
Effect of foreign exchange rates on cash 0.1 (0.2)
Net increase in cash and cash equivalents 0.4 2.3
Cash and Cash Equivalents:
Beginning of Period 27.9 3.7
End of Period $ 28.3 $ 6.0
See accompanying notes to consolidated financial statements.
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DADE INTERNATIONAL INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions)
Note 1. Organization, Business and Interim Financial Information
Dade International Inc. (the ``Company''), was incorporated in Delaware
in 1994 to effect the acquisition (the ``Dade Acquisition'') of the in
vitro diagnostics products manufacturing and services businesses of
Baxter Diagnostics Inc., a wholly-owned subsidiary of Baxter
International Inc. (``Baxter''). The Company develops, manufactures and
markets diagnostic equipment, reagents, consumable supplies and services
worldwide.
The Company is a wholly-owned subsidiary of Diagnostics Holding, Inc.
(``Holdings''). Bain Capital, Inc. and GS Capital Partners, L.P., an
affiliate of the Goldman Sachs Group, L.P., their respective related
investors and the management of the Company own substantially all of the
voting capital stock of Holdings.
The Company acquired effective May 1, 1996, the world-wide in vitro
diagnostics business (``Chemistry'' or ``Chemistry Acquisition'') of E.I.
du Pont de Nemours and Company (``DuPont''). As a result, the unaudited
consolidated financial statements as of and for the three months ended
March 31, 1997 are not comparable to those for the same period in the
prior year.
The unaudited interim financial statements of the Company have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote
disclosures have been condensed or omitted. These unaudited interim
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1996.
In the opinion of management, the unaudited interim consolidated
financial statements reflect all adjustments (which include only normal
and recurring adjustments) necessary for a fair presentation of the
interim periods. The results of operations for the interim periods are
not necessarily indicative of the results of operations expected for the
full year. The results reported for the three months ended March 31,
1997 reflect management's preliminary allocation of the purchase price
necessary to record the Chemistry Acquisition. This preliminary
allocation is subject to further refinement and adjustment.
Certain prior period balances have been reclassified to conform with the
current presentation.
Note 2. Change in International Reporting Period
Prior to 1996, the Company's operations outside the United States and
Puerto Rico (collectively ``International Operations'') were
consolidated on a one-month delay (i.e. international December 1995
results were reported as January 1996 results) in the consolidated
financial statements of the Company. Effective with 1996 reporting,
this one month lag for International Operations was eliminated. As a
consequence, operating results for the three-month period ended March
31, 1996 include four months of International Operations. The Company
has designated the month of December 1995 as the ``lag month'' for
purposes of comparability to future periods. International Operations
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during the lag month produced net sales of approximately $12.3 million
and net income of approximately $1.3 million, thus increasing
consolidated net sales and consolidated net income by these respective
amounts for the three months ended March 31, 1996.
Note 3. Inventories
Inventories of the Company consist of the following (in millions):
December 31 March 31
1996 1997
(unaudited)
Raw materials $ 33.1 $ 35.0
Work-in-process 39.9 38.7
Finished products 82.0 91.1
Total inventories $155.0 $164.8
Note 4. Behring Diagnostics Merger
On March 12, 1997, the Company announced that it had reached agreement
in principle to merge with Behring Diagnostics, a unit of Hoechst AG.
The planned stock transaction is expected to be consummated in the
second half of 1997.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company's 1996 Annual Report on Form 10-K contains management's
discussion and analysis of the Company's financial condition and results
of operations as of and for the year ended December 31, 1996.
Management's Discussion and Analysis which follows focuses on material
changes since that time and should be read in conjunction with the 1996
Annual Report on Form 10-K. Relevant trends that are reasonably likely
to be of a material nature are discussed to the extent known.
Certain statements included in this document are forward-looking, such
as statements relating to estimates of operating and capital expenditure
requirements, future revenue and operating income, and cash flow and
liquidity. Such forward-looking statements are based on the Company's
current expectations and are subject to a number of risks and
uncertainties that could cause actual results in the future to differ
significantly from results expressed or implied in any forward-looking
statements made by, or on behalf of the Company. These risks and
uncertainties include, but are not limited to, uncertainties relating to
economic and business conditions, governmental and regulatory policies,
and the competitive environment in which the Company operates. These
and other risks are detailed below as well as in other documents filed
by the Company with Securities and Exchange Commission.
Overview and Comparability
For comparative purposes, the Company's unaudited consolidated balance
sheet and statements of operations have been significantly impacted by
the Chemistry Acquisition which was consummated May 1, 1996.
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Results of Operations
Net Sales
Net sales for the three months ended March 31, 1997 increased $42.1
million or 27% as compared to the respective prior year period.
Excluding the $12.3 million impact of the change in the reporting period
for the Company's international operations during the prior year period
and adverse foreign exchange rate impacts of approximately $5.7 million,
sales increased $60.1 million or 41% during the current quarter. The
increase in net sales is primarily attributable to the Chemistry
Acquisition, offset by decreases in the Company's non-core product lines
primarily due to volume declines and a competitive pricing environment.
As a result of the Chemistry Acquisition, the Paramax and Stratus non-
cardiac product lines were designated as non-core due to product line
overlap and to better position and leverage the Company's product
offerings in the cardiac market. These mature product lines declined by
$13.2 million versus the first quarter of 1996.
Gross Profit
Gross profit increased $26.9 million or 35% to $103.3 million over the
prior year period. The increase in gross profit was mainly due to the
Chemistry Acquisition, offset by decreased gross profit from non-core
product lines. Gross margins increased 3.3% to 51.5%, in the current
quarter, reflecting the continuing realization of manufacturing cost
reduction initiatives and shifts in product mix during the quarter.
Research and Development Expense
Research and development expense for the three months ended March 31,
1997 increased $4.9 million to $11.5 million over the comparable prior
year period. Research and development expenses increased to 5.7% of net
sales for the current period as compared to 4.2% in the same period last
year, as a result of additional research and development personnel and
facilities in connection with the Chemistry Acquisition. Increased
research and development expenditures are supporting initiatives to
expand test menus, to develop the next generation Dimension RxL
instrument and to develop a new cardiac platform.
Marketing and Administrative Expense
Marketing and administrative expense for the three months ended March
31, 1997 increased $15.7 million to $68.1 million from the prior year
period. The increase for the period was primarily attributable to the
Chemistry Acquisition. As a percentage of sales, marketing and
administrative expense remained relatively constant from the current
quarter versus the same period last year, in spite of incremental
duplicative expenses in the areas of finance, information systems and
human resources associated with the establishment of the Company as a
stand-alone entity in preparation for the termination of its transition
service agreements with DuPont. Offsetting these increases were the
realized impacts of cost reduction initiatives implemented during 1996.
Operating Income
Income from operations increased $4.9 million over the same period of
the prior year to $22.4 million. After taking into effect the impact of
the change in the reporting period for the Company's International
Operations, the increase was $7.3 million. As a percentage of sales,
operating income was 11.2% in the current quarter, up slightly from
11.0% for the same period last year. The increase was driven primarily
by the impact of the Chemistry Acquisition.
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Income Taxes
For the three months ended March 31, 1997, the Company recorded a tax
provision at an effective rate of approximately 37%, similar to the
effective rate recorded in the year earlier quarter. At March 31, 1997
the Company has a net deferred tax asset of $215.0 million as compared
to $217.4 million at December 31, 1996. Management continues to believe
that realization of the net deferred tax asset is not dependent on
material improvement over the Company's forecast of current levels of
consolidated pre-tax income, material changes in the present
relationship between income reported for financial and tax purposes,
material asset sales or other non-routine transactions.
Other Income (Expense)
The Company's debt levels increased as a result of the Chemistry
Acquisition. Although offset partially by lower rates on the senior
subordinated notes issued in connection with that acquisition, interest
expense for the three months ended March 31, 1997 increased $14.3
million over the prior year period.
Net Income
Net Income for the three months ended March 31, 1997 was $1.0 million,
a decrease of $6.1 million from the comparable prior year period. After
taking into effect the impact of the change in the reporting period for
the Company's international operations and adverse foreign exchange rate
impacts, the decrease was $2.8 million. This decrease in net income was
substantially attributable to higher interest expense associated with
the Company's debt levels resulting from the Chemistry Acquisition.
Liquidity and Capital Resources
The Company's principal liquidity requirements are for working capital,
capital expenditures, debt service and restructuring activities. The
Company has historically funded its liquidity needs with a combination
of cash flows from operations and borrowings under its revolving credit
facility.
During the first quarter of 1997 working capital increased $26.7 million
to $198.4 million. The increase in working capital is primarily due to
decreased accounts payable resulting from the timing of payments and
increased inventory levels as the Company rebuilt stocks depleted by
strong fourth quarter 1996 shipments. The increase in working capital
during the first quarter of 1997 was funded primarily by borrowings
under the revolving credit facility.
Capital expenditures of the Company decreased $4.0 million to $7.6
million compared to the same period in prior year. The decrease is
generally due to strong instruments placements in the first quarter of
1996 and to an increase in instruments being financed by customers
through the Company's third party capital lease program (in which a
third party purchases the instrument from the Company and in turn leases
the instrument to the customer via a capital lease.)
Management believes cash flows from operating activities, together with
available revolving credit borrowing capacity under the existing credit
agreements, are sufficient to permit the Company to meet its financial
obligations and fund its operations and planned investments.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is involved in a number of legal proceedings none of which
is expected to have a material adverse effect on the Company's business
or financial condition.
Item 4. Submission of Matters to a Vote of Security Holders.
Effective March 19, 1997, the Company's sole shareholder, by written
consent, re-elected the board of directors in its entirety.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits are listed on the Exhibit Index hereto.
(b) Reports on Form 8-K.
On March 13, 1997, the Company filed a Current Report on Form 8-K
reporting its March 12, 1997, press release concerning its proposed
merger with the Behring Diagnostics business of Hoechst A.G.
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.
DADE INTERNATIONAL INC.
(Registrant)
Date: May 13, 1997 By: /S/ James W.P. Reid-Anderson
James W.P. Reid-Anderson
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer
and duly authorized Officer
of Registrant)
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Exhibit Index
Number Description
10.1 1997 Executive Stock Purchase and Option Plan.
10.2 Form of Agreement under 1997 Executive Stock
Purchase and Option Plan.
10.3 1997 Management Stock Option Plan.
10.4 Form of Agreement under 1997 Management
Stock Option Plan.
10.5 Amended and Restated Credit Agreement dated
as of April 29, 1997 among Diagnostics
Holding, Inc., Dade International Inc.,
various lending institutions and Bankers
Trust Company, as Agent.
Diagnostics Holding, Inc.
1997 EXECUTIVE STOCK PURCHASE AND OPTION PLAN
1. Purpose of Plan. This 1997 Executive Stock Purchase and
Option Plan (the "1997 Plan") of Diagnostics Holding, Inc. (the
"Company") is designed to provide incentives to such present and future
officers and employees of the Company or its subsidiaries as may be
selected in the sole discretion of the Board, and to such consultants or
advisers to the Company as the Chief Executive Officer of the Company
shall recommend and the Board shall approve as performing services for
the Company or its subsidiaries which merit participation in this 1997
Plan (collectively, "Participants"), through the grant of Options by the
Company to Participants or through the sale of Common Stock to
Participants. Only those Participants who are employees of the Company
and its Subsidiaries shall be eligible to receive incentive stock
options.
2. Definitions. Certain terms used in this 1997 Plan have the
meanings set forth below:
"Board" means the Company's board of directors.
"Cause" means (i) the intentional disregard of a written direction
from the Board to a Participant to which such Participant has not
objected within ten (10) days of receiving such written direction, which
intentional disregard is materially injurious to the Company or any of
its Subsidiaries, (ii) the knowing and intentional theft by such
Participant of property of the Company or any of its Subsidiaries, which
property has a substantial value, or (iii) the commission by such
Participant of an act of moral turpitude which is materially injurious
to the Company or any of its Subsidiaries.
Class L Common" means the Company's Class L Common Stock, par value
$.01 per share, or, in the event that the outstanding shares of such
Class L common stock are hereafter recapitalized, converted into or
exchanged for different stock or securities of the Company, such other
stock or securities.
"Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
"Common" means the Company's Common Stock, par value $.01 per
share, or, in the event that the outstanding shares of such common stock
are hereafter recapitalized, converted into or exchanged for different
stock or securities of the Company, such other stock or securities.
"Common Stock" means the Class L Common and the Common.
"Executive Stock" with respect to a Participant, means any Common
Stock purchased by such Participant hereunder and any Common Stock
issued to such Participant upon exercise of any Options granted
hereunder.
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"Fair Market Value" of a share of Common Stock means (a) the mean
between the highest and lowest reported sale prices of a share of Common
Stock on the New York Stock Exchange--Composite Transactions Table (or,
if not so reported, on any domestic stock exchanges on which the Common
Stock is then listed); or (b) if the Common Stock is not listed on any
domestic stock exchange, the mean between the closing high bid and low
asked prices of a share of Common Stock as reported by the National
Association of Securities Dealers Automated Quotation System (or, if not
so reported, by the system then regarded as the most reliable source of
such quotations); or (c) if the Common Stock is listed on a domestic
stock exchange or quoted in the domestic over-the-counter market, but
there are not reported sales or quotations, as the case may be, on the
given date, the value determined pursuant to (a) or (b) above using the
reported sale prices or quotations on the last previous date on which so
reported; or (d) if none of the foregoing clauses apply, the fair market
value of a share of Common Stock without discounts as determined in good
faith by the Board and stated in writing in a notice delivered to the
holders of the Common Stock involved (a "Determination Notice").
"Independent Third Party" means any person who, immediately prior
to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a fully-diluted basis (a "5% Owner"), who is
not controlling, controlled by or under common control with any such 5%
Owner and who is not the spouse or descendent (by birth or adoption) of
any such 5% Owner or a trust for the benefit of such 5% Owner and/or
such other persons.
"Investors" means the Persons listed on Schedule A hereto.
"Option" means any option enabling the holder thereof to purchase
any class of Common Stock from the Company granted by the Board pursuant
to the provisions of this Plan. Options to be granted under this Plan
may be incentive stock options within the meaning of Section 422 of the
Code ("Incentive Stock Options") or in such other form, consistent with
this Plan, as the Board may determine.
"Original Value" of each share of Executive Stock will be equal to
the purchase price paid by the Participant for each share of Class L
Common, and the price paid by the Participant for each share of Common
(as proportionally adjusted for all stock splits, stock dividends and
other recapitalizations affecting the Class L Common or the Common, as
the case may be, subsequent to the date of adoption hereof).
"Permitted Transferee" means a person to whom a Participant has
transferred Common Stock or Options pursuant to a provision hereof or of
an agreement to which such Participant and the Company are parties which
permitted such transfer at the time such transfer was effected.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the
time the option is granted, each of the corporations other than the last
corporation in the chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
3. Grant of Options. The Board shall have the right and power to
grant to any Participant Options at any time prior to the termination of
this Plan in such quantity, at such price, on such terms and subject to
such conditions that are consistent with this Plan and established by
the Board. Options granted under this Plan shall be in one of the forms
described in this Paragraph 3 below, or in such other form or forms as
the Board may determine, and shall be subject to such additional terms
and conditions and evidenced by agreements as shall be determined from
time to time by the Board.
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(A) Target Options.
(I) A "Tranche I Option" shall entitle a Participant to
purchase from the Company one or more shares of Common and shall
have an exercise price per share of $7.00 (the "Tranche I Price").
(II) A "Tranche II Option" shall entitle a Participant to
purchase from the Company one or more shares of Common and shall
have an exercise price per share of $16.00 (the "Tranche II
Price").
(III) Tranche I Options and Tranche II Options are
referred to herein as "Target Options," and the shares issued upon
exercise of the Tranche I Options or the Tranche II Options are
referred to herein as "Target Option Shares". The number of Target
Option Shares, the Tranche I Price, and the Tranche II Price will
be equitably adjusted for any stock split, stock dividend,
reclassification or recapitalization of the Company which occurs
subsequent to the date of adoption hereof. Target Options will
expire (the "Expiration Date") on the earlier of the tenth
anniversary of the date of adoption hereof or the date of
termination of the respective Participant's employment with the
Company or a Subsidiary for any reason (the "Termination Date"),
provided that such Participant will have 30 days after the
Expiration Date to exercise Target Options with respect to Target
Option Shares which are then exercisable pursuant to Paragraph 3(a)
(iv) below. Target Options are not intended to be "incentive stock
options" within the meaning of Section 422A of the Internal Revenue
Code.
(IV) Exercisability. Target Options will immediately become
exercisable with respect to Target Option Shares on the date
immediately prior to the tenth anniversary of the date of adoption
hereof (the "Vesting Date"), provided that the Vesting Date shall
be accelerated with respect to Tranche I Options or Tranche II
Options, as the case may be, to the date on which a Tranche I
Acceleration Event or a Tranche II Acceleration Event (as defined
below) occurs. For this purpose, a Tranche I Acceleration Event
shall be the date on which the purchasers of the Company's Common
Stock under that certain Stock Purchase Agreement dated as of
December 20, 1994 (the "Stock Purchase Agreement") as set forth on
Exhibit A attached hereto (collectively, the "Investors") have
achieved an Investor Return Multiple (as defined below) of at least
three (a "Tranche I Acceleration Event"); and a Tranche II
Acceleration Event shall be the date on which the Investors have
achieved an Investor Return Multiple of at least five (a "Tranche
II Acceleration Event"). A Tranche I Acceleration Event and
Tranche II Acceleration Event are also referred to herein as
"Acceleration Events".
(V) Vesting of Target Option Shares. Target Option Shares
shall be vested immediately upon exercise of the Target Options
with respect thereto.
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(VI) Procedure for Exercise. At any time after Target Options
have become exercisable, whether on the Vesting Date or pursuant to
an Acceleration Event and prior to the Expiration Date, a
Participant may exercise all or a portion of his or her Target
Options with respect to Target Option Shares which have become
exercisable by delivering written notice of exercise to the Company
together with (A) a written acknowledgment that such Participant
has read, and has been afforded an opportunity to ask questions of
management of the Company regarding all financial and other
information provided to such Participant regarding the Company, and
(B) payment in full by delivery of a cashier's or certified check
in the amount of the Tranche I Price with respect to Tranche I
Options and the Tranche II Price with respect to Tranche II Options
plus the amount of any additional federal and state income taxes
required to be withheld by reason of the exercise of Target
Options. As a condition to any exercise of a Target Option, a
Participant will permit the Company to deliver to him or her all
financial and other information regarding the Company and its
Subsidiaries which it believes necessary to enable such Participant
to make an informed investment decision.
(VII) Determination of Investor Return Multiple.
(A) "Investor Return Multiple" means the number
determined by dividing Cash Inflows (as defined below) by Cash
Outflows (as defined below). The calculation of Investor Return
will be determined in good faith by the Board.
(B) "Cash Inflows" as used herein shall include the sum
of all cash payments received by the Investors on or prior to an
Acceleration Event with respect to debt or equity securities of the
Company purchased by the Investors (excluding all management fees,
points, and other fees paid to the Investors by or on behalf of the
Company and/or its Subsidiaries) prior to such Acceleration Event
(whether such payments are received from the Company or any third
party, and whether such payments are received as interest,
dividends, proceeds with respect to sale or redemption of such
securities, upon a liquidation of the Company or otherwise)
including reimbursement for payments made by Investors in respect
of fees and expenses incurred in connection therewith.
(C) "Cash Outflows" as used herein shall include the sum
of all cash payments and investments made by the Investors to and
in the Company and to others to acquire debt or equity securities
of the Company including payments made by Investors in respect of
fees and expenses incurred in connection therewith.
(B) Time Options.
(I) A "Time Option" shall entitle a Participant to purchase
one or more shares of Common ("Time Option Shares") and shall have
an exercise price per share of $4.00 (the "Option Price"). The
Option Price and the number of Time Option Shares will be equitably
adjusted for any stock split, stock dividend, reclassification or
recapitalization of the Company which occurs subsequent to the date
of this Agreement. Time Options will expire on the Expiration
Date, provided that a Participant will have 30 days after the
Expiration Date to exercise his or her Time Option with respect to
the percentage of Time Option Shares as determined pursuant to
Paragraph 3(b)(iii) below. Time Options are not intended to be
"incentive stock options" within the meaning of Section 422A of the
Internal Revenue Code.
<PAGE>
(II) Exercisability. On each date set forth below, a Time
Option will have vested and become exercisable with respect to the
percentage of Time Option Shares set forth opposite such date if
the respective Participant is employed by the Company or a
Subsidiary on such date:
Date Cumulative Percentage
of Time Options Exercisable
January 1, 1998 20%
January 1, 1999 40%
January 1, 2000 60%
January 1, 2001 80%
January 1, 2002 100%
(III) Vesting of Time Option Shares. Time Option Shares
shall be vested immediately upon exercise of the Time Option with
respect thereto.
(IV) Procedure for Exercise. At any time after a Time Option
has become exercisable with respect to any Time Option Shares and
prior to the Expiration Date, a Participant may exercise the Time
Option with respect to the Time Option Shares above by delivering
written notice of exercise to the Company, together with (a)
written acknowledgment that such Participant has read and has been
afforded an opportunity to ask questions of management of the
Company regarding all financial and other information provided to
such Participant regarding the Company and (b) payment in full by
delivery of a cashier's or certified check in the amount of the
Option Price with respect to such Time Option Shares plus the
amount of any additional federal and state income taxes required to
be withheld by reason of the exercise of the Time Option. As a
condition to any exercise of a Time Option, a Participant will
permit the Company and its Subsidiaries to deliver to him or her
all financial and other information regarding the Company and its
Subsidiaries which it believes necessary to enable such Participant
to make an informed investment decision.
<PAGE>
4. Sale of Common Stock. The Board shall have the power and
authority to sell to any Participant any class or classes of Common
Stock ("Purchased Stock") at any time prior to the termination of this
1997 Plan in such quantity, at such price, on such terms and subject to
such conditions that are consistent with this 1997 Plan and established
by the Board. Common Stock sold under this 1997 Plan shall be subject
to such terms and evidenced by agreements as shall be determined from
time to time by the Board.
5. Repurchase Option. In the event that a Participant is no
longer employed by the Company or any of its Subsidiaries for any reason
(the date of such termination being referred to herein as the
"Termination Date"), the Executive Stock issued to such Participant,
whether held by such Participant, or one or more Permitted Transferees
(as defined in Paragraph 2 above), will be subject to repurchase by the
Company and the Investors (solely at their option) pursuant to the terms
and conditions set forth in this Paragraph 5 (the "Repurchase Option").
(A) Termination Other than for Cause. If a Participant is no
longer employed by the Company or any of its Subsidiaries as a result of
any reason other than such Participant's termination for Cause, then on
or after the Termination Date, the Company may elect to purchase all
(but not less than all unless the Company is unable, as described in
Subparagraph (f) below, to purchase all of the Executive Stock issued to
such Participant at a price per share equal to (i) the Fair Market Value
thereof with respect to any Termination Date occurring after January 1,
1999 (x) as determined on the Termination Date, if the Repurchase Notice
(as defined in Subparagraph (c) below) has been delivered within three
months of the Termination Date, or (y) as determined on a date
determined by the Board within thirty (30) days prior to the delivery of
the Repurchase Notice, if the Repurchase Notice is delivered after the
third month following the Termination Date or (ii) 110% of the price
paid for such Executive Stock by Executive, with respect to any
Termination Date occurring on or prior to January 1, 1999 and at such
time that the Company is not a Public Company (as defined in the Stock
Purchase Agreement) (an "Early Termination").
(B) Termination for Cause. If a Participant is no longer employed
by the Company or any of its Subsidiaries as a result of such
Participant's termination for Cause, then on or after the Termination
Date, the Company may elect to purchase all (but not less than all
unless the Company is unable, as described in Subparagraph (f) below, to
purchase all) of the Executive Stock issued to such Participant at a
price per share equal to the lower of its Original Value or the Fair
Market Value thereof.
<PAGE>
(C) Repurchase Procedures. The Company may elect to exercise the
right to purchase all (but not less than all unless the Company is
unable, as described in Subparagraph (f) below, to purchase all) of the
shares of Executive Stock issued to a Participant pursuant to the
Repurchase Option by delivering written notice (the "Repurchase Notice")
to the holder or holders of the such Executive Stock. The Repurchase
Notice will set forth the number of shares of Executive Stock to be
acquired from such holder(s), the Fair Market Value, the price paid by
Executive for such shares, the aggregate consideration to be paid for
such shares and the time and place for the closing of the transaction.
In the event that the Company elects to purchase less than all, of such
Executive Stock pursuant to the terms of this Paragraph 5, if any shares
of such Executive Stock are held by Permitted Transferees of such
Participant, the Company shall purchase the shares elected to be
purchased from such holder(s) of Executive Stock, pro rata according to
the number of shares of Executive Stock held by such holder(s) at the
time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest share). If Executive Stock of different
classes is to be purchased by the Company and Executive Stock is held by
Permitted Transferees of such Participant, the number of shares of each
class of Executive Stock to be purchased will be allocated among such
holders, pro rata according to the total number of shares of Executive
Stock to be purchased from such person.
(D) Investors' Rights.
(I) If the Company is unable, as described in Subparagraph
(f) below, to purchase all of the Executive Stock (issued to a
particular Participant) pursuant to the Repurchase Option prior to
the 180th day following the Termination Date, the Investors will be
entitled to exercise the Repurchase Option, in the manner set forth
in this Paragraph 5, for the Executive Stock the Company has not
elected to purchase (the "Available Shares"). As soon as
practicable, but in any event within thirty (30) days after the
Company determines that there will be any Available Shares, the
Company will deliver written notice (the "Option Notice") to the
Investors setting forth the number of Available Shares and the
price for each Available Share as determined pursuant to the
provisions of this Paragraph 5.
(II) Each of the Investors will initially be permitted to
purchase its pro rata share (based upon the number of shares of
Common Stock then held by such Investors) of the Available Shares.
Each Investor may elect to purchase any number of the Available
Shares (subject to all of the terms of this Paragraph 5) by
delivering written notice to the Company within thirty (30) days
after receipt of the Option Notice from the Company (such 30-day
period being referred to herein as the "Investor Election Period").
<PAGE>
(III) As soon as practicable but in any event within five (5)
days after the expiration of the Investor Election Period, the
Company will, if necessary, notify the Investors electing to
purchase Available Shares of any Available Shares which Investors
have elected not to purchase and each of the electing Investors
will be entitled to purchase the remaining Available Shares on the
same terms as described above (the "Second Option Notice");
provided that if in the aggregate such Investors elect to purchase
more than the remaining Available Shares, such remaining Available
Shares purchased by each such Investor will be reduced on a pro
rata basis based upon the number of shares of Common Stock then
held by such Investors; and provided further that if in the
aggregate such Investors elect to purchase less than all of the
remaining Available Shares, the Investors shall not be permitted to
purchase any of the Available Shares. Provided that, in the
aggregate, the Investors elect to purchase all but not less than
all of the Available Shares, each Investor may elect to purchase
any of the remaining Available Shares available to such Investor by
delivering written notice to the Company within ten (10) days after
the delivery of the Second Option Notice (with such 10-day period
referred to herein as the "Second Period").
(IV) As soon as practicable but in any event within five (5)
business days after the expiration of the Investor Election Period
or the Second Investor Election Period (if any) the Company will,
if necessary, notify the holder(s) of the Executive Stock as to the
number of such shares being purchased from the holder(s) by each of
the Investors (the "Supplemental Repurchase Notice"). At the time
the Company delivers a Supplemental Repurchase Notice to the
holder(s) of such Executive Stock, the Company will also deliver to
each electing Investor written notice setting forth the number of
such shares that the Company and each Investor will acquire, the
aggregate purchase price to be paid and the time and place of the
closing of the transaction.
(V) The Company shall have the option at any time to
repurchase from any Investor any shares of Common Stock purchased
by such Investor pursuant to the terms hereof at a price per share
equal to the amount paid therefor by such Investor plus 8% per
annum from the date such Investor purchased such shares to the date
of repurchase of such shares by the Company. For purposes of
determining an Investor Return Multiple, the amount of cash
payments to, and investments by, Investors under this Paragraph 5
shall not be taken into account in determining Cash Inflows and
Cash Outflows.
<PAGE>
(E) Closing. The closing of the transactions contemplated by this
Paragraph 5 will take place on the date designated by the Company in the
Repurchase Notice or the Supplemental Repurchase Notice, as the case may
be, which date will not be more than ninety (90) days after the delivery
of such notice. The Company and/or the Investors, as the case may be,
will pay for the Executive Stock to be purchased pursuant to the
Repurchase Option by delivery of, in the case of each Investor, a check
payable to the holder of Executive Stock in the full amount payable
hereunder for such Executive Stock (the "Repurchase Price"), and in the
case of the Company (i) a check payable to the holder of such Executive
Stock in the amount of the Repurchase Price or (ii) if the Repurchase
Price is greater than $100,000, the Company may elect to deliver a check
payable to the holder of such Executive Stock in an amount equal to the
greater of $100,000 or one-third (1/3) of the Repurchase Price, and a
note or notes in the amount of the balance of the Repurchase Price
payable in three (3) equal annual installments beginning on the first
anniversary of the closing of such purchase and bearing interest
(payable quarterly) at a rate per annum equal to 8%. Any notes issued
by the Company pursuant to this Paragraph 5(e) shall be subject to any
restrictive covenants to which the Company is subject at the time of
such purchase. The Company and/or the Investors, as the case may be,
will receive customary representations and warranties from each seller
regarding the sale of Executive Stock, including but not limited to the
representation that such seller has good and marketable title to the
Executive Stock to be transferred free and clear of all liens, claims
and other encumbrances.
(F) Restrictions on Repurchase. Notwithstanding anything to the
contrary contained in this Plan, all repurchases of Executive Stock by
the Company shall be subject to applicable restrictions contained in the
Delaware General Corporation Law and in the Company's and its
Subsidiaries' debt and equity financing agreements. If any such
restrictions prohibit the repurchase of Executive Stock hereunder which
the Company is otherwise entitled to make, the Company may make such
repurchases as soon as it is permitted to do so under such restrictions.
6. Administration of the Plan. The Board shall have the power
and authority to prescribe, amend and rescind rules and procedures
governing the administration of this Plan, including, but not limited to
the full power and authority (i) to interpret the terms of this Plan,
the terms of any Options granted under this Plan, and the rules and
procedures established by the Board governing any such Options and (ii)
to determine the rights of any person under this Plan, or the meaning of
requirements imposed by the terms of this Plan or any rule or procedure
established by the Board. Each action of the Board shall be binding on
all persons.
<PAGE>
7. Participation Rights. At least thirty (30) days prior to any
sale or exchange (a "Transfer") of any class of Common Stock by an
Investor (other than a Transfer among the Investors or an employee of
the Company or its Subsidiary), such Investor (the "Transferring
Stockholder") will deliver a written notice (the "Sale Notice") to the
Company and the holders of such class of Executive Stock (the "Other
Stockholders"), specifying in reasonable detail the identity of the
prospective transferee(s) and the terms and conditions of the Transfer.
The Other Stockholders may elect to participate in the contemplated
Transfer by delivering written notice to the Transferring Stockholder
within thirty (30) days after delivery of the Sale Notice. If any Other
Stockholders have elected to participate in such Transfer, each of the
Transferring Stockholder and such Other Stockholders will be entitled to
sell in the contemplated Transfer, at the same price and on the same
terms, a number of shares of such class of Common Stock equal to the
product of (i) the quotient determined by dividing the number of shares
of such class of Common Stock owned by such person by the aggregate
number of shares of such class of Common Stock owned by the Transferring
Stockholder and the Other Stockholders participating in such sale and
(ii) the number of shares of such class of Common Stock to be sold in
the contemplated Transfer. Notwithstanding the foregoing, in the event
that the Transferring Stockholder intends to transfer more than one
class of Common Stock, the Other Stockholders participating in such
transfer shall be required to sell in the contemplated Transfer a pro
rata portion of shares of all classes of Common Stock, which portion
shall be determined in the manner set forth immediately above. The
Transferring Stockholder will use reasonable efforts to obtain the
agreement of the prospective transferee(s) to the participation of the
Other Stockholders in any contemplated Transfer, and the Transferring
Stockholder will not Transfer any of its Securities to the prospective
transferee(s) unless (i) the prospective transferee(s) agrees to allow
the participation of the Other Stockholders or (ii) the Transferring
Stockholder agrees to purchase the number of such class of Securities
from the Other Stockholders which the Other Stockholders would have been
entitled to sell pursuant to the preceding sentence.
<PAGE>
8. Anti-Dilution.
(A) If and whenever on or after the date of adoption hereof, the
Company issues or sells, or in accordance with this Paragraph 8 is
deemed to have issued or sold, any shares of Common Stock (including
shares held in the Company's treasury) ("New Stock") some or all of
which are issued and/or sold, other than pursuant to the terms hereof,
to any of the Investors or any of their affiliates (the "Existing
Stockholders"), then immediately upon such issuance or sale the Company
shall, in a written notice (a "New Stock Notice") delivered to each
Participant no later than the tenth (10th) day following such issuance
or sale, offer for sale to each Participant a number of additional
shares of Common Stock such that the number of shares of Common Stock,
plus the number of unexercised Options, held by such Participant
immediately after such issuance or sale (assuming purchase by such
Participant of such additional shares) equals the number of shares of
Common Stock, plus the number of unexercised Options, held by such
Participant immediately prior to such issuance or sale multiplied by the
total number of shares of Common Stock deemed under this Paragraph 8 to
be outstanding immediately after such issuance or sale, divided by the
total number of shares of Common Stock deemed under this Paragraph 8 to
be outstanding immediately prior to such issuance or sale. The New
Stock Notice shall state the number of shares offered for sale to such
Participant pursuant to this Paragraph 8, the purchase price per share
therefor, as determined pursuant to this Paragraph 8, and the time and
place for the closing of the purchase in the event such Participant
accepts the offer. The date of such closing shall be not more than
ninety (90) days following the issuance or sale of the New Stock.
(B) A Participant may elect to purchase all, none, or any portion
not less than 20% of the Common Stock offered for sale in a New Stock
Notice by delivering to the Company written notice thereof within
fifteen (15) days following such Participant's receipt of such New Stock
Notice. In the event any one or more Participants elect to purchase
less than all of the shares offered for sale to such Participants in New
Stock Notices with respect to a particular issuance or sale, the Company
shall make available any such shares which such Participants elect not
to purchase on a pro rata basis to all other Participants, in a manner
substantially similar to that provided in Paragraph 5(d) hereof with
respect to Investors' Rights.
(C) For purposes of the computation referred to in this Paragraph
8, the number of shares of Common Stock outstanding shall be deemed to
include all shares issuable to the holders of any securities exercisable
for, or convertible into, shares of Common Stock. For purposes of the
computation of the consideration per share received, as referred to in
this Paragraph 8, the consideration received upon issuance or sale of
securities shall be deemed to include the consideration received for all
securities issued in the same transaction to the same purchaser, as
appropriate under the circumstances. The Common Stock offered for sale
pursuant to this Paragraph 8 shall be of the same class as the New
Stock; and, if the New Stock is comprised of Common Stock of more than
one class, the stock offered for sale pursuant to this Paragraph 8 shall
be comprised of the same classes in the same proportions as the New
Stock. The purchase price per share for Common Stock offered for sale
pursuant to this Paragraph 8 shall be equal to the price per share at
which the New Stock is sold.
<PAGE>
(D) The Existing Stockholders may, in their sole discretion, elect
to fulfill the Company's obligations to Participants under this
Paragraph 8 out of such Existing Stockholders' holdings of Common Stock.
In the event the Existing Stockholders fulfill the Company's obligations
to Participants under this Paragraph 8 with respect to an issuance or
sale of Common Stock, the Company shall have no further obligations to
such Participants under this Paragraph 8 with respect to such issuance
or sale.
9. Limitation on the Aggregate Number of Shares. The number of
shares of Common Stock issued under this 1997 Plan (including the number
of shares of Common Stock with respect to which Options may be granted
under this 1997 Plan (and which may be issued upon the exercise or
payment thereof)) shall not exceed, in the aggregate, 4,350 shares of
Class L Common and 191,150 shares of Common (as such numbers are
equitably adjusted pursuant to the terms hereof). If any Options expire
unexercised or unpaid or are canceled, terminated or forfeited in any
manner without the issuance of Common Stock or payment thereunder, the
shares with respect to which such Options were granted shall again be
available under this 1997 Plan. Similarly, if any shares of Common
Stock issued hereunder, either as Purchase Stock or upon exercise of
Options, are repurchased hereunder, such shares shall again be available
under this 1997 Plan for reissuance as Executive Stock. In addition, if
any party other than the Company purchases shares of Common Stock in
lieu of repurchase by the Company, the Company will, as promptly as
legally permissible, purchase such shares from such party and such
shares shall again be available under this 1997 Plan for reissuance as
Executive Stock. In creating this 1997 Plan, the Company and its
stockholders believe that sufficient shares of Common Stock are being
made available under this 1997 Plan to carry out the purposes expressed
in Section 1 hereof based upon the number of key management positions
and the specific people filling those positions at the time that the
Company acquired Dade International, Inc. At that time there were
certain positions which the Company expected to fill within one year
thereafter. Over time, it may occur that the Company can be managed on
a cost effective and more efficient basis with a smaller core management
team. Should that occur, the Board has reserved the right to allocate
the Common Stock remaining available under this 1997 Plan as a further
incentive to existing core management. Should new management positions
be added beyond those which existed as of the date of this Plan, when
the above numbers of shares were determined, the Company's Chief
Executive Officer will prepare a recommendation for the Board. If there
are sufficient shares of Common Stock still remaining unallocated under
the 1997 Plan, he will recommend that the person filling such new
position be allocated Common Stock from any shares available under this
1997 Plan at that time. Should there be insufficient Common Stock
available, in the opinion of the Chief Executive Officer, to carry out
the purposes of this 1997 Plan, he shall prepare a recommendation for
the Board which the Board will consider for the purpose of amending this
1997 Plan to increase the number of shares of Common Stock available
hereunder in order that the individuals who fill such new positions may
be added as Participants hereunder without consideration being given to
the interests of then existing Participants. Shares of Common Stock to
be issued upon exercise of the Options or shares of Common Stock to be
sold directly hereunder may be either authorized and unissued shares,
treasury shares, or a combination thereof, as the Board shall determine.
<PAGE>
10. Incentive Stock Options. All Incentive Stock Options (i)
shall have an exercise price per share of Common Stock of not less than
100% of the fair market value of such share on the date of grant, (ii)
shall not be exercisable more than ten (10) years after the date of
grant, (iii) shall not be transferable other than by will or under the
laws of descent and distribution and, during the lifetime of the
Participant to whom such Incentive Stock Options were granted, may be
exercised only by such Participant (or his guardian or legal
representative), and (iv) shall be exercisable only during the
Participant's employment by the Company or a Subsidiary, provided,
however, that the Board may, in its discretion, provide at the time that
an Incentive Stock Option is granted that such Incentive Stock Option
may be exercised for a period ending no later than either (x) the
termination of this 1997 Plan in the event of the Participant's death
while an employee of the company or a Subsidiary, or (y) the date which
is three (3) months after termination of the Participant's employment
for any other reason. The Board's discretion to extend the period
during which an Incentive Stock Option is exercisable shall only apply
if and to the extent that (i) the Participant was entitled to exercise
such option on the date of termination, and (ii) such option would not
have expired had the Participant continued to be employed by the Company
or a Subsidiary. To the extent that the aggregate fair market value of
stock with respect to which Incentive Stock Options are exercisable for
the first time by any individual during any calendar year exceeds
$100,000, such options shall be treated as options which are not
Incentive Stock Options.
11. Listing, Registration and Compliance with laws and
Regulations. Each Option shall be subject to the requirement that if at
any time the Board shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to the Option upon
any securities exchange or under any state or federal securities or
other law or regulation, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to or in
connection with the granting of such Option or the issue or purchase of
shares thereunder, no such Option may be exercised or paid in Common
Stock in whole or in part unless such listing, registration,
qualification, consent or approval (a "Required Listing") shall have
been effected or obtained, and the holder of the Option will supply the
Company with such certificates, representations and information as the
Company shall request which are reasonably necessary or desirable in
order for the Company to obtain such Required Listing, and shall
otherwise cooperate with the Company in obtaining such Required Listing.
In the case of officers and other persons subject to Section 16(b) of
the Securities Exchange Act of 1934, as amended, the Board may at any
time impose any limitations upon the exercise of an Option which, in the
Board's discretion, are necessary or desirable in order to comply with
Section 16(b) and the rules and regulations thereunder. If the Company,
as part of an offering of securities or otherwise, finds it desirable
because of federal or state regulatory requirements to reduce the period
during which any Options may be exercised, the Board may, in its
discretion and without the consent of the holders of any such Options,
so reduce such period on not less than 15 days' written notice to the
holders thereof.
<PAGE>
12. Cash Payments Upon Exercise. Upon the written request of the
holder of exercisable Options which are not Incentive Stock Options, the
Board may provide that such holder shall, as soon as practicable after
the exercise of the Options, receive, in lieu of any issuance of Common
Stock, a cash payment in such amount as the Board and such holder may
agree, but not more than the excess of the Fair Market Value of a share
of Common Stock (on the date the holder recognizes taxable income) over
the Option's exercise price multiplied by the number of shares as to
which the Option is exercised.
13. Adjustment for Change in Common Stock. In the event of a
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation or other change in the
Common Stock, the Board shall make appropriate changes in the number and
type of shares authorized by this 1997 Plan, the number and type of
shares covered by outstanding Options and the prices specified therein.
14. Taxes. The Company shall be entitled, if necessary or
desirable, to withhold (or secure payment from the 1997 Plan participant
in lieu of withholding) the amount of any withholding or other tax due
from the Company with respect to any amount payable and/or shares
issuable under this 1997 Plan, and the Company may defer such payment or
issuance unless indemnified to its satisfaction.
15. Termination and Amendment. The Board at any time may suspend
or terminate this 1997 Plan and make such additions or amendments as it
deems advisable under this 1997 Plan, except that they may not, without
further approval by the Company's stockholders, (a) increase the maximum
number of shares as to which Options may be granted under this 1997
Plan, except pursuant to an express provision hereof or (b) extend the
term of this 1997 Plan; provided that, subject to Paragraph 11 hereof,
the Board may not change any of the terms of a written agreement with
respect to an Option between the Company and the holder of such Option
without the approval of the holder of such Option. No Options shall be
granted or shares of Common Stock issued hereunder after February 5,
2007; provided that, if the term of this 1997 Plan is otherwise
extended, no Incentive Stock Options shall be granted hereunder after
February 5, 2007.
<PAGE>
Schedule A
Investors
Bain Capital Fund IV, L.P.
Bain Capital Fund IV-B, L.P.
BCIP Associates
BCIP Trust Associates, L.P.
Randolph Street Partners
GS Capital Partners, L.P.
Bridge Street Fund 1994, L.P.
Stone Street Fund 1994
EXECUTIVE AGREEMENT
EXECUTIVE AGREEMENT dated as of ______________, 1997 among
Diagnostics Holding, Inc., a Delaware corporation (the "Company"),
and <FIRST> <LAST> ("Executive").
Pursuant to the Company's 1997 Executive Stock Purchase and Option
Plan (the "1997 Plan"), the Company and Executive desire to enter into
an agreement pursuant to which Executive will purchase, and the Company
will sell, <<L>> shares of Class L Common and <L> [COMMON] shares of
Common. In addition, the Company desires to grant to Executive options
to acquire <TOTALALL> shares of Common, which options shall be divided
into three grants, two grants for <TARGET7> shares of Common which will
be based on performance targets and will have different exercise prices
(the "Target Options") and one grant for <TIME> shares of Common which
will be subject to time vesting (the "Time Option"). The Target Options
and the Time Option are hereinafter referred to individually as an
"Option" and collectively as the "Options". All shares of Common Stock
now or hereafter acquired by Executive pursuant to the 1997 Plan are
referred to herein as the "Executive Stock."
The parties hereto agree as follows:
STOCK AND OPTION PROVISIONS
1. Purchase and Sale of Stock.
(A) Upon execution of this Agreement, Executive will purchase,
andthe Company will sell, <<L>> shares of Class L Common at a price of
$44.00 <L> per share and [COMMON] shares of Common at a price of $4.00
per share (collectively, the "Purchased Stock"). The Company will
deliver to Executive a copy of, and a receipt for, the certificate
representing such Class L Common and such Common, and Executive will
deliver to the Company a certified check or wire transfer of funds
in the amount of $<TOTALCOST>. Such shares of Class L Common and Common
shall be fully vested immediately upon issuance.
(B) 83(b) Election. Within 30 days after the date
hereof, Executive will make an effective election with the Internal
Revenue Service under Section 83(b) of the Internal Revenue Code and the
regulations promulgated thereunder.
(C) (Representations and Warranties. In connection
with the purchase and sale of the Purchase Stock hereunder, Executive
represents and warrants to the Company that:
(I) The Purchased Stock to be acquired by Executive
pursuant to this Agreement will be acquired for Executive's own
account and not with a view to, or intention of, distribution
thereof in violation of the Securities Act of 1933, as amended
(the "1933 Act"), or any applicable state securities laws, and
the Purchased Stock will not be disposed of in contravention of
the 1933 Act or any applicable state securities laws.
(II) Executive is sophisticated in financial matters
and is able to evaluate the risks and benefits of the investment
in the Purchase Stock.
(III) Executive is able to bear the economic risk of
his investment in the Purchase Stock for an indefinite period of
time because the Purchased Stock has not been registered under the
1933 Act and, therefore, cannot be sold unless subsequently
registered under the 1933 Act or an exemption from such
registration is available.
(IV) Executive has had an opportunity to ask
questions and receive answers concerning the terms and conditions
of the offering of Purchased Stock and has had full access to such
other requested.
<PAGE>
(V) This Agreement constitutes the legal, valid and
binding obligation of Executive, enforceable in accordance with its
terms, and the execution, delivery and performance of this Agreement
by Executive does not and will not conflict with, violate or cause
a breach of any agreement, contract or instrument to which Executive
is a party or any judgment, order or decree to which Executive is
subject.
(D) Acknowledgment. As an inducement to the Company to sell
the Purchased Stock to Executive, as a condition thereto, Executive
acknowledges and agrees that neither the issuance of the Purchased Stock
to Executive nor any provision contained herein shall entitle Executive
to remain in the employment of the Company and its Subsidiaries or
affect the right of the Company to terminate Executive's employment at
any time for any reason.
(E) (1997 Plan Acknowledgment. The Company and Executive
acknowledge and agree that this Agreement has been executed and
delivered, and the Purchased Stock has been issued hereunder, in
connection with and as part of the compensation and incentive
arrangements between the Company and Executive.
2. Stock Options.
(A) Target Option Grants. The Company hereby grants to Executive,
pursuant to the Plan, the Target Options to purchase (A) <TARGET7>
shares of Common (the "Tranche I Options"), with an exercise price of
$7.00 (the "Tranche I Price"), and (B) <TARGET16> shares of Common (the
"Tranche II Options") with an exercise price of $16.00 the "Tranche II
Price"). The shares issued upon exercise of the Tranche I Options or
the Tranche II Options are referred to herein as the ("Target Option
Shares"). The number of Target Option Shares, the Tranche I Price, and
the Tranche II Price will be equitably adjusted for any stock split,
stock dividend, reclassification or recapitalization of the Company
which occurs subsequent to the date of this Agreement. The Target
Options will expire (the "Expiration Date") on the earlier of the tenth
anniversary of the date hereof or the date of termination of Executive's
employment with the Company or a Subsidiary for any reason (the
"Termination Date"), provided that Executive will have 30 days after the
Expiration Date to exercise the Target Options with respect to the
Target Option Shares which are then exercisable pursuant to the terms of
the 1997 Plan.
(B) Time Option Grant. The Company hereby grants to Executive,
pursuant to the Plan, the Time Option to purchase <TIME> shares of
Common Stock ("Time Option Shares"), at a price per share of $4.00 (the
"Option Price"). The Option Price and the number of Time Option Shares
will be equitably adjusted for any stock split, stock dividend,
reclassification or recapitalization of the Company which occurs
subsequent to the date of this reement. The Time Option will expire
on the Expiration Date, provided that Executive will have 30 days after
the Expiration Date to exercise the Time Option with respect to the
percentage of Time Option Shares as determined pursuant to the terms of
the 1997 Plan.
<PAGE>
(C) Securities Laws Restrictions. Executive represents that when
Executive exercises the Options he will be purchasing Executive Stock
for Executive's own account and not on behalf of others. Executive
understands and acknowledges that federal and state securities laws
govern and restrict Executive's right to offer, sell or otherwise
dispose of any Executive Stock unless Executive's offer, sale or other
disposition thereof is registered under the 1933 Act and state
securities laws or, in the opinion of the Company's counsel, such offer,
sale or other disposition is exempt from registration thereunder.
Executive agrees that he will not offer, sell or otherwise dispose of
any Executive Stock in any manner which would: (i) require the Company
to file any registration statement (or similar filing under state law)
with the Securities and Exchange Commission or to amend or supplement
any such filing or (ii) violate or cause the Company to violate the 1933
Act, the rules and regulations promulgated thereunder or any other state
or federal law. Executive further understands that the certificates for
any Executive Stock Executive purchases will bear the legend set forth
in Paragraph 5 her eof or such other legends as the Company deems
necessary or desirable in connection with the 1933 Act or other rules,
regulations or laws.
(D) Non-Transferability of Option. The Options are personal to
Executive and are not transferable by Executive. Only Executive or his
estate or heirs is entitled to exercise the Options.
3. Repurchase Option. In the event that Executive is no longer
employed by the Company or any of its Subsidiaries for any reason (the
date of such termination being referred to herein as the "Termination
Date"), the Executive Stock, whether held by Executive, or one or more
Permitted Transferees (as defined in Paragraph 4 below), will be subject
to repurchase by the Company and the Investors (solely at their option)
pursuant to the terms and conditions set forth in the 1997 Plan (the
"Repurchase Option").
4. Restrictions on Transfer.
(A) Transfer of Executive Stock. Without the express written
consent of the Company to transfers of Executive Stock in accordance
with the terms of this Agreement, Executive will not sell, pledge or
otherwise transfer any interest in any shares of Executive Stock, except
pursuant to (i) the provisions of Paragraphs 2, 3 and 7 hereof, (ii) the
provisions of Paragraph 4(b) below, (iii) pursuant to the Registration
Agreement, dated as of December 20, 1994, as amended, among the Company
and its stockholders or (iv) pursuant to the provisions of the 1997
Plan.
(B) Certain Permitted Transfers. The restrictions contained in
this Paragraph 4 will not apply with respect to transfers of Executive
Stock pursuant to applicable laws of descent and distribution, provided
that the restrictions contained in this Paragraph 4 will continue to be
applicable to the Executive Stock after any such transfer and the
transferees of such Executive Stock shall agree in writing to be bound
by the provisions of this Agreement. Any transferee of Executive Stock
pursuant to a transfer in accordance with the provisions of this
Paragraph 4(b) is herein referred to as a "Permitted Transferee." Upon
the transfer of Executive Stock pursuant to this Paragraph 4(b), the
Permitted Transferee(s) will deliver a written notice (the "Transfer
Notice") to the Company. The Transfer Notice will disclose in
reasonable detail the identity of the Permitted Transferee(s).
<PAGE>
5. Additional Restrictions on Transfer.
(A) The certificates representing the Executive Stock will bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND
CERTAIN OTHER AGREEMENTS SET FORTH IN AN EXECUTIVE AGREEMENT
BETWEEN THE ISSUER (THE "COMPANY") AND A CERTAIN EMPLOYEE OF
THE COMPANY DATED AS OF ________________, 1997, A COPY OF
WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(B) No holder of Executive Stock may sell, transfer or dispose of
any Executive Stock (except pursuant to an effective registration
statement under the Securities Act of 1933) without first delivering to
the Company an opinion of counsel reasonably acceptable in form and
substance to the Company (which counsel shall be reasonably acceptable
to the Company) that registration under the 1933 Act is not required in
connection with such transfer.
6. Definition of Executive Stock. For all purposes of this
Agreement, Executive Stock will continue to be Executive Stock in the
hands of any holder other than Executive (except for the Company and
purchasers pursuant to an offering registered under the 1933 Act or
purchasers pursuant to a Rule 144 transaction), and each such other
holder of Executive Stock will succeed to all rights and obligations
attributable to Executive as a holder of Executive Stock hereunder.
Executive Stock will also include shares of the Company's capital stock
issued with respect to shares of Executive Stock by way of a stock
split, stock dividend or other recapitalization.
7. Sale of the Company.
(A) If the Board and the holders of a majority of the shares of
Common Stock then outstanding approve a sale of all or substantially all
of the Company's assets determined on a consolidated basis or a sale of
all or substantially all of the Company's outstanding capital stock
(whether by merger, recapitalization, consolidation, reorganization,
combination or otherwise) to any Independent Third Party or group of
Independent Third Parties (collectively an "Approved Sale"), each holder
of Executive Stock will vote for, consent to and raise no objections
against such Approved Sale. If the Approved Sale is structured as (i) a
merger or consolidation, each holder of Executive Stock will waive any
dissenters rights, appraisal rights or similar rights in connection with
such merger or consolidation or (ii) a sale of stock, each holder of
Executive Stock will agree to sell all of his shares of Executive Stock
and rights to acquire shares of Executive Stock on the terms and
conditions approved by the Board and the holders of a majority of the
Common Stock then outstanding. Each holder of Executive Stock will take
all necessary or desirable actions in connection with the consummation
of the Approved Sale as requested by the Company.
<PAGE>
(B) The obligations of the holders of Common Stock with respect to
the Approved Sale of the Company are subject to the satisfaction of the
following conditions: (i) upon the consummation of the Approved Sale,
each holder of Common Stock will receive the same form of consideration
and the same portion of the aggregate consideration that such holders of
Common Stock would have received if such aggregate consideration had
been distributed by the Company in complete liquidation pursuant to the
rights and preferences set forth in the Company's Certificate of
Incorporation as in effect immediately prior to such Approved Sale; (ii)
if any holders of a class of Common Stock are given an option as to the
form and amount of consideration to be received, each holder of such
class of Common Stock will be given the same option; and (iii) each
holder of then currently exercisable rights to acquire shares of a class
of Common Stock will be given an opportunity to exercise such rights
sale as holders of such class of Common Stock.
(C) If the Company or the holders of the Company's securities
enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) promulgated by the Securities Exchange
Commission may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization),
the holders of Executive Stock will, at the request of the Company,
appoint a purchaser representative (as such term is defined in Rule 501)
reasonably acceptable to the Company. If any holder of Executive Stock
appoints a purchaser representative designated by the Company, the
Company will pay the fees of such purchaser representative, but if any
holder of Executive Stock declines to appoint the purchaser
representative designated by the Company such holder will appoint
another purchaser representative, and such holder will be responsible
for the fees of the purchaser representative so appointed.
(D) Executive and the other holders of Executive Stock (if any)
will bear their pro-rata share (based upon the number of shares sold) of
the costs of any sale of Executive Stock pursuant to an Approved Sale to
the extent such costs are incurred for the benefit of all holders of
Common Stock and are not otherwise paid by the Company or the acquiring
party. Costs incurred by Executive and the other holders of Executive
Stock on their own behalf will not be considered costs of the
transaction hereunder.
(E) The provisions of this Paragraph 7 will terminate upon
completion of the initial public offering of the Common Stock.
8. Public Offering. In the event that the Board and the holders
of a majority of the shares of Common Stock then outstanding approve an
initial public offering and sale of Common Stock (a "Public Offering")
pursuant to an effective registration statement under the Securities Act
of 1933, as amended, the holders of Executive Stock will take all
necessary or desirable actions in connection with the consummation of
the Public Offering. In the event that such Public Offering is an
underwritten offering and the managing underwriters advise the Company
in writing that in their opinion the Common Stock structure will
adversely affect the marketability of the offering, each holder of
Executive Stock will consent to and vote for a recapitalization,
reorganization and/or exchange of the Common Stock into securities that
the managing underwriters, the Board and holders of a majority of the
shares of Common Stock then outstanding find acceptable and will take
all necessary or desirable actions in connection with the consummation
of the recapitalization, reorganization and/or exchange.
<PAGE>
9. Termination of Provisions Relating to Executive Stock. The
provisions of Paragraphs 3 and 4, and the rights of Executive under
Paragraph 7 of the Plan, will terminate upon the first to occur of (i)
an Approved Sale, or (ii) (A) the Company (or its successor as a result
of merger, consolidation, reorganization or sale) becoming a reporting
company under the Securities Exchange Act of 1934 as a result of the
registration of its common equity securities thereunder and (B) the
Investors and their affiliates collectively ceasing to own at least 50%
of the aggregate number of shares of Common Stock that they own on the
date hereof (as adjusted for stock splits, stock dividends and
recapitalization and for exchanges in connection with a merger,
consolidation, reorganization or sale).
MISCELLANEOUS PROVISIONS
10. Notices. Any notice provided for in this Agreement must be in
writing and must be personally delivered, received by certified mail,
service, to the Investors at the addresses indicated in the Company's
records and to the other recipients at the address indicated below:
To the Company:
Diagnostics Holding Inc.
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attn: Mark Nunnelly
Stephen G. Pagliuca
Adam Kirsch
To Executive:
<FIRST> <LAST>
<STREET>
[CITY]
or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the
sending party. Any notice under this Agreement will be deemed to have
been given when so delivered or mailed.
11. Severability. Whenever possible each provision of this
Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability will not affect any other provision or the
effectiveness or validity of any provision in any other jurisdiction,
and this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
12. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and
preempts any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the
subject matter hereof in any way.
13. Counterparts. This Agreement may be executed in separate
counterparts, each of which will be deemed to be an original and all of
which taken together will constitute one and the same agreement.
<PAGE>
14. Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive, the
Company, the Investors and their respective successors and assigns,
provided that
Executive may not assign any of his rights or obligations, except as
expressly provided by the terms of this Agreement.
15. Governing Law. The corporate law of Delaware will govern all
issues concerning the relative rights of the Company and its
stockholders. All other issues concerning the enforceability, validity
and binding effect of this Agreement will be governed by and construed
in accordance with the laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdiction) that would
cause the application of the law of any jurisdiction other than the
State of Illinois.
16. Remedies. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party hereto will have the
right to injunctive relief, in addition to all of its other rights and
remedies at law or in equity, to enforce the provisions of this
Agreement.
17. Effect of Transfers in Violation of Agreement. The Company
will not be required (a) to transfer on its books any shares of Executive
Stock which have been sold or transferred in violation of any of the
provisions set forth in this Agreement or (b) to treat as owner of such
shares, to accord the right to vote as such owner or to pay dividends to
any transferee to whom such shares have been transferred in violation of
this Agreement.
<PAGE>
18. Amendments and Waivers. Any provision of this Agreement may
be amended or waived only with the prior written consent of the Company,
Executive and the Investors who hold 70% of the Common Stock held by the
Third Party Beneficiaries. The parties hereto acknowledge and agree
that the Investors are third party beneficiaries of this Agreement.
This Agreement will inure to the benefit of and be enforceable
by the Investors and their respective successors andassigns.
19. Diagnostics Holding, Inc. 1997 Executive Stock Purchase and
Option Plan. The grant of Options and issuance of Executive Stock
hereunder is pursuant to, and subject to all the terms and conditions
of, the Company's 1997 Executive Stock Purchase and Option Plan (the
"1997 Plan"), attached hereto as Exhibit A. Capitalized terms defined
in the 1997 Plan and otherwise not defined herein are used herein as
therein defined.
* * * * *
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
Diagnostics Holding, Inc.
By:_______________________________
Title:
Participant's Signature:
__________________________________
<<FIRST>> <<LAST>>
Diagnostics Holding, Inc.
1997 MANAGEMENT STOCK OPTION PLAN
1. Purpose of Plan. This 1997 Management Stock Option Plan (the
"1997 Plan") of Diagnostics Holding, Inc. (the "Company") is designed to
provide incentives to such present and future officers and employees of
the Company or its subsidiaries as may be selected in the sole
discretion of the Board, and to such consultants or advisers to the
Company as the Chief Executive Officer of the Company shall recommend
and the Board shall approve as performing services for the Company or
its subsidiaries which merit participation in this 1997 Plan
(collectively, "Participants"), through the grant of Options by the
Company to Participants. Only those Participants who are employees of
the Company and its Subsidiaries shall be eligible to receive incentive
stock options.
2. Definitions. Certain terms used in this 1997 Plan have the
meanings set forth below:
"Board" means the Company's board of directors.
"Cause" means (i) the intentional disregard of a written direction
from the Board to a Participant to which such Participant has not
objected within ten (10) days of receiving such written direction, which
intentional disregard is materially injurious to the Company or any of
its Subsidiaries, (ii) the knowing and intentional theft by such
Participant of property of the Company or any of its Subsidiaries, which
property has a substantial value, or (iii) the commission by such
Participant of an act of moral turpitude which is materially injurious
to the Company or any of its Subsidiaries.
"Class L Common" means the Company's Class L Common Stock, par
value $.01 per share, or, in the event that the outstanding shares of
such Class L common stock are hereafter recapitalized, converted into or
exchanged for different stock or securities of the Company, such other
stock or securities.
"Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
"Common" means the Company's Common Stock, par value $.01 per
share, or, in the event that the outstanding shares of such common stock
are hereafter recapitalized, converted into or exchanged for different
stock or securities of the Company, such other stock or securities.
"Common Stock" means the Class L Common and the Common.
"Executive Stock" with respect to a Participant, means any Common
Stock issued to such Participant upon exercise of any Options granted
hereunder.
<PAGE>
"Fair Market Value" of a share of Common Stock means (a) the mean
between the highest and lowest reported sale prices of a share of Common
Stock on the New York Stock Exchange--Composite Transactions Table (or,
if not so reported, on any domestic stock exchanges on which the Common
Stock is then listed); or (b) if the Common Stock is not listed on any
domestic stock exchange, the mean between the closing high bid and low
asked prices of a share of Common Stock as reported by the National
Association of Securities Dealers Automated Quotation System (or, if not
so reported, by the system then regarded as the most reliable source of
such quotations); or (c) if the Common Stock is listed on a domestic
stock exchange or quoted in the domestic over-the-counter market, but
there are not reported sales or quotations, as the case may be, on the
given date, the value determined pursuant to (a) or (b) above using the
reported sale prices or quotations on the last previous date on which so
reported; or (d) if none of the foregoing clauses apply, the fair market
value of a share of Common Stock without discounts as determined in good
faith by the Board and stated in writing in a notice delivered to the
holders of the Common Stock involved (a "Determination Notice"),
provided that if there has been a fair market value determination by an
Independent Valuation Expert within one (1) year of delivery of such
Determination Notice, Fair Market Value shall not be less than that
determined by such Independent Valuation Expert.
"Independent Third Party" means any person who, immediately prior
to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a fully-diluted basis (a "5% Owner"), who is
not controlling, controlled by or under common control with any such 5%
Owner and who is not the spouse or descendent (by birth or adoption) of
any such 5% Owner or a trust for the benefit of such 5% Owner and/or
such other persons.
"Independent Valuation Expert" means an Independent Third Party New
York Stock Exchange Member firm or the business valuation group of any
Independent Third Party "Big 6" accounting firm or either of the
valuation firms of [Houlihan Lokey] or [Murray Devine]. provided that
such valuation firm is an Independent Third Party, selected by the Board
to value Common Stock.
"Investors" means the Persons listed on Schedule A hereto.
"Option" means any option enabling the holder thereof to purchase
any class of Common Stock from the Company granted by the Board pursuant
to the provisions of this Plan. Options to be granted under this Plan
may be incentive stock options within the meaning of Section 422 of the
Code ("Incentive Stock Options") or in such other form, consistent with
this Plan, as the Board may determine.
"Original Value" of each share of Executive Stock will be equal to
the price paid by the Participant for each share of Common Stock (as
proportionally adjusted for all stock splits, stock dividends and other
recapitalizations affecting the Common Stock subsequent to the date of
adoption hereof).
"Permitted Transferee" means a person to whom a Participant has
transferred Common Stock or Options pursuant to a provision hereof or of
an agreement to which such Participant and the Company are parties which
permitted such transfer at the time such transfer was effected.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the
time the option is granted, each of the corporations other than the last
corporation in the chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
<PAGE>
3. Grant of Options. The Board shall have the right and power to
grant to any Participant Options at any time prior to the termination of
this 1997 Plan in such quantity, at such price, on such terms and
subject to such conditions that are consistent with this 1997 Plan and
established by the Board. Options granted under this 1997 Plan shall be
in one of the forms described in this Paragraph 3 below, or in such
other form or forms as the Board may determine, and shall be subject to
such additional terms and conditions and evidenced by agreements as
shall be determined from time to time by the Board.
(A) Target Options.
(I) A "Tranche I Option" shall entitle a Participant to
purchase from the Company one or more shares of Common and shall
have an exercise price per share of $7.00 (the "Tranche I Price").
(II) A "Tranche II Option" shall entitle a Participant to
purchase from the Company one or more shares of Common and shall
have an exercise price per share of $16.00 (the "Tranche II
Price").
(III) Tranche I Options and Tranche II Options are
referred to herein as "Target Options," and the shares issued upon
exercise of the Tranche I Options or the Tranche II Options are
referred to herein as "Target Option Shares". The number of Target
Option Shares, the Tranche I Price, and the Tranche II Price will
be equitably adjusted for any stock split, stock dividend,
reclassification or recapitalization of the Company which occurs
subsequent to the date of adoption hereof. Target Options will
expire (the "Expiration Date") on the earlier of the tenth
anniversary of the date of adoption hereof or the date of
termination of the respective Participant's employment with the
Company or a Subsidiary for any reason (the "Termination Date"),
provided that such Participant will have 30 days after the
Expiration Date to exercise Target Options with respect to Target
Option Shares which are then exercisable pursuant to Paragraph 3(a)
(iv) below. Target Options are not intended to be "incentive stock
options" within the meaning of Section 422A of the Internal Revenue
Code.
(IV) Exercisability. Target Options will immediately become
exercisable with respect to Target Option Shares on the date
immediately prior to the tenth anniversary of the date of adoption
hereof (the "Vesting Date"), provided that the Vesting Date shall
be accelerated with respect to Tranche I Options or Tranche II
Options, as the case may be, to the date on which a Tranche I
Acceleration Event or a Tranche II Acceleration Event (as defined
below) occurs. For this purpose, a Tranche I Acceleration Event
shall be the date on which the purchasers of the Company's Common
Stock under that certain Stock Purchase Agreement dated as of
December 20, 1994 (the "Stock Purchase Agreement") as set forth on
Exhibit A attached hereto (collectively, the "Investors") have
achieved an Investor Return Multiple (as defined below) of at least
three (a "Tranche I Acceleration Event"); and a Tranche II
Acceleration Event shall be the date on which the Investors have
achieved an Investor Return Multiple of at least five (a "Tranche
II Acceleration Event"). A Tranche I Acceleration Event and
Tranche II Acceleration Event are also referred to herein as
"Acceleration Events".
<PAGE>
(V) Vesting of Target Option Shares. Target Option Shares
shall be vested immediately upon exercise of the Target Options
with respect thereto.
(VI) Procedure for Exercise. At any time after Target Options
have become exercisable, whether on the Vesting Date or pursuant to
an Acceleration Event and prior to the Expiration Date, a
Participant may exercise all or a portion of his or her Target
Options with respect to Target Option Shares which have become
exercisable by delivering written notice of exercise to the Company
together with (A) a written acknowledgment that such Participant
has read, and has been afforded an opportunity to ask questions of
management of the Company regarding all financial and other
information provided to such Participant regarding the Company, and
(B) payment in full by delivery of a cashier's or certified check
in the amount of the Tranche I Price with respect to Tranche I
Options and the Tranche II Price with respect to Tranche II Options
plus the amount of any additional federal and state income taxes
required to be withheld by reason of the exercise of Target
Options. As a condition to any exercise of a Target Option, a
Participant will permit the Company to deliver to him or her all
financial and other information regarding the Company and its
Subsidiaries which it believes necessary to enable such Participant
to make an informed investment decision.
(VII) Determination of Investor Return Multiple.
(A) "Investor Return Multiple" means the number
determined by dividing Cash Inflows (as defined below) by Cash
Outflows (as defined below). The calculation of Investor Return
will be determined in good faith by the Board.
(B) "Cash Inflows" as used herein shall include the sum
of all cash payments received by the Investors on or prior to an
Acceleration Event with respect to debt or equity securities of the
Company purchased by the Investors (excluding all management fees,
points, and other fees paid to the Investors by or on behalf of the
Company and/or its Subsidiaries) prior to such Acceleration Event
(whether such payments are received from the Company or any third
party, and whether such payments are received as interest,
dividends, proceeds with respect to sale or redemption of such
securities, upon a liquidation of the Company or otherwise)
including reimbursement for payments made by Investors in respect
of fees and expenses incurred in connection therewith.
(C) "Cash Outflows" as used herein shall include the sum
of all cash payments and investments made by the Investors to and
in the Company and to others to acquire debt or equity securities
of the Company including payments made by Investors in respect of
fees and expenses incurred in connection therewith.
(b) Time Options.
(I) A "Time Option" shall entitle a Participant to purchase
one or more shares of Common ("Time Option Shares") and shall have
an exercise price per share of $4.00 (the "Option Price"). The
Option Price and the number of Time Option Shares will be equitably
adjusted for any stock split, stock dividend, reclassification or
recapitalization of the Company which occurs subsequent to the date
of this Agreement. Time Options will expire on the Expiration
Date, provided that a Participant will have 30 days after the
Expiration Date to exercise his or her Time Option with respect to
the percentage of Time Option Shares as determined pursuant to
Paragraph 3(b)(iii) below. Time Options are not intended to be
"incentive stock options" within the meaning of Section 422A of the
Internal Revenue Code.
<PAGE>
(II) Exercisability. On each date set forth below, a Time
Option will have vested and become exercisable with respect to the
percentage of Time Option Shares set forth opposite such date if
the respective Participant is employed by the Company or a
Subsidiary on such date:
Date Cumulative Percentage
of Time Options Exercisable
January 1, 1998 20%
January 1, 1999 40%
January 1, 2000 60%
January 1, 2001 80%
January 1, 2002 100%
(III) Vesting of Time Option Shares. Time Option Shares
shall be vested immediately upon exercise of the Time Option with
respect thereto.
(IV) Procedure for Exercise. At any time after a Time Option
has become exercisable with respect to any Time Option Shares and
prior to the Expiration Date, a Participant may exercise the Time
Option with respect to the Time Option Shares above by delivering
written notice of exercise to the Company, together with (a)
written acknowledgment that such Participant has read and has been
afforded an opportunity to ask questions of management of the
Company regarding all financial and other information provided to
such Participant regarding the Company and (b) payment in full by
delivery of a cashier's or certified check in the amount of the
Option Price with respect to such Time Option Shares plus the
amount of any additional federal and state income taxes required to
be withheld by reason of the exercise of the Time Option. As a
condition to any exercise of a Time Option, a Participant will
permit the Company and its Subsidiaries to deliver to him or her
all financial and other information regarding the Company and its
Subsidiaries which it believes necessary to enable such Participant
to make an informed investment decision.
4. Repurchase Option. In the event that a Participant is no
longer employed by the Company or any of its Subsidiaries for any reason
(the date of such termination being referred to herein as the
"Termination Date"), the Executive Stock issued to such Participant,
whether held by such Participant, or one or more Permitted Transferees
(as defined in Paragraph 2 above), will be subject to repurchase by the
Company and the Investors (solely at their option) pursuant to the terms
and conditions set forth in this Paragraph 4 (the "Repurchase Option").
<PAGE>
(A) Termination Other than for Cause. If a Participant is no
longer employed by the Company or any of its Subsidiaries as a result of
any reason other than such Participant's termination for Cause, then on
or after the Termination Date, the Company may elect to purchase all
(but not less than all unless the Company is unable, as described in
Subparagraph (f) below, to purchase all) of the Executive Stock issued
to such Participant at a price per share equal to (i) the Fair Market
Value thereof with respect to any Termination Date occurring after
January 1, 1999 (x) as determined on the Termination Date, if the
Repurchase Notice (as defined in Subparagraph (c) below) has been
delivered within three months of the Termination Date, or (y) as
determined on a date determined by the Board within 30 days prior to the
delivery of the Repurchase Notice, if the Repurchase Notice is delivered
after the third month following the Termination Date or (ii) 110% of the
price paid for such Executive Stock by Executive, with respect to any
Termination Date occurring on or prior to January 1, 1999 and at such
time that the Company is not a Public Company (as defined in the Stock
Purchase Agreement) (an "Early Termination").
(B) Termination for Cause. If a Participant is no longer employed
by the Company or any of its Subsidiaries as a result of such
Participant's termination for Cause, then on or after the Termination
Date, the Company may elect to purchase all (but not less than all
unless the Company is unable, as described in Subparagraph (f) below, to
purchase all) of the Executive Stock issued to such Participant at a
price per share equal to the lower of its Original Value or the Fair
Market Value thereof.
(C) Repurchase Procedures. The Company may elect to exercise the
right to purchase all (but not less than all unless the Company is
unable, as described in Subparagraph (f) below, to purchase all) of the
shares of Executive Stock issued to a Participant pursuant to the
Repurchase Option by delivering written notice (the "Repurchase Notice")
to the holder or holders of the such Executive Stock. The Repurchase
Notice will set forth the number of shares of Executive Stock to be
acquired from such holder(s), the Fair Market Value for such shares, the
aggregate consideration to be paid for such shares and the time and
place for the closing of the transaction. In the event that the Company
is unable to purchase all, but elects to purchase less than all, of such
Executive Stock pursuant to the terms of this Paragraph 4, if any shares
of such Executive Stock are held by Permitted Transferees of such
Participant, the Company shall purchase the shares elected to be
purchased from such holder(s) of Executive Stock, pro rata according to
the number of shares of Executive Stock held by such holder(s) at the
time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest share). If Executive Stock of different
classes is to be purchased by the Company and Executive Stock is held by
Permitted Transferees of such Participant, the number of shares of each
class of Executive Stock to be purchased will be allocated among such
holders, pro rata according to the total number of shares of Executive
Stock to be purchased from such person.
<PAGE>
(D) Investors' Rights.
(I) If the Company is unable, as described in Subparagraph
(f) below, to purchase all of the Executive Stock (issued to a
particular Participant) pursuant to the Repurchase Option prior to
the 180th day following the Termination Date, the Investors will be
entitled to exercise the Repurchase Option, in the manner set forth
in this Paragraph 5, for the Executive Stock the Company has not
elected to purchase (the "Available Shares"). As soon as
practicable, but in any event within thirty (30) days after the
Company determines that there will be any Available Shares, the
Company will deliver written notice (the "Option Notice") to the
Investors setting forth the number of Available Shares and the
price for each Available Share as determined pursuant to the
provisions of this Paragraph 4.
(II) Each of the Investors will initially be permitted to
purchase its pro rata share (based upon the number of shares of
Common Stock then held by such Investors) of the Available Shares.
Each Investor may elect to purchase any number of the Available
Shares (subject to all of the terms of this Paragraph 4) by
delivering written notice to the Company within 30 days after
receipt of the Option Notice from the Company (such 30-day period
being referred to herein as the "Investor Election Period").
(III) As soon as practicable but in any event within five (5)
days after the expiration of the Investor Election Period, the
Company will, if necessary, notify the Investors electing to
purchase Available Shares of any Available Shares which Investors
have elected not to purchase and each of the electing Investors
will be entitled to purchase the remaining Available Shares on the
same terms as described above (the "Second Option Notice");
provided that if in the aggregate such Investors elect to purchase
more than the remaining Available Shares, such remaining Available
Shares purchased by each such Investor will be reduced on a pro
rata basis based upon the number of shares of Common Stock then
held by such Investors; and provided further that if in the
aggregate such Investors elect to purchase less than all of the
remaining Available Shares, the Investors shall not be permitted to
purchase any of the Available Shares. Provided that, in the
aggregate, the Investors elect to purchase all but not less than
all of the Available Shares, each Investor may elect to purchase
any of the remaining Available Shares available to such Investor by
delivering written notice to the Company within 10 days after the
delivery of the Second Option Notice (with such 10-day period
referred to herein as the "Second Period").
(IV) As soon as practicable but in any event within five (5)
business days after the expiration of the Investor Election Period
or the Second Investor Election Period (if any) the Company will,
if necessary, notify the holder(s) of the Executive Stock as to the
number of such shares being purchased from the holder(s) by each of
the Investors (the "Supplemental Repurchase Notice"). At the time
the Company delivers a Supplemental Repurchase Notice to the
holder(s) of such Executive Stock, the Company will also deliver to
each electing Investor written notice setting forth the number of
such shares that the Company and each Investor will acquire, the
aggregate purchase price to be paid and the time and place of the
closing of the transaction.
<PAGE>
(V) The Company shall have the option at any time to
repurchase from any Investor any shares of Common Stock purchased
by such Investor pursuant to the terms hereof at a price per share
equal to the amount paid therefor by such Investor plus 8% per
annum from the date such Investor purchased such shares to the date
of repurchase of such shares by the Company. For purposes of
determining an Investor Return Multiple, the amount of cash
payments to, and investments by, Investors under this Paragraph 4
shall not be taken into account in determining Cash Inflows and
Cash Outflows.
(E) Closing. The closing of the transactions contemplated by this
Paragraph 4 will take place on the date designated by the Company in the
Repurchase Notice or the Supplemental Repurchase Notice, as the case may
be, which date will not be more than 90 days after the delivery of such
notice. The Company and/or the Investors, as the case may be, will pay
for the Executive Stock to be purchased pursuant to the Repurchase
Option by delivery of, in the case of each Investor, a check payable to
the holder of Executive Stock in the full amount payable hereunder for
such Executive Stock (the "Repurchase Price"), and in the case of the
Company (i) a check payable to the holder of such Executive Stock in the
amount of the Repurchase Price or (ii) if the Repurchase Price is
greater than $100,000, the Company may elect to deliver a check payable
to the holder of such Executive Stock in an amount equal to the greater
of $100,000 or one-third (1/3) of the Repurchase Price, and a note or
notes in the amount of the balance of the Repurchase Price payable in
three equal annual installments beginning on the first anniversary of
the closing of such purchase and bearing interest (payable quarterly) at
a rate per annum equal to 8%. Any notes issued by the Company pursuant
to this Paragraph 4(e) shall be subject to any restrictive covenants to
which the Company is subject at the time of such purchase. The Company
and/or the Investors, as the case may be, will receive customary
representations and warranties from each seller regarding the sale of
Executive Stock, including but not limited to the representation that
such seller has good and marketable title to the Executive Stock to be
transferred free and clear of all liens, claims and other encumbrances.
(F) Restrictions on Repurchase. Notwithstanding anything to the
contrary contained in this 1997 Plan, all repurchases of Executive Stock
by the Company shall be subject to applicable restrictions contained in
the Delaware General Corporation Law and in the Company's and its
Subsidiaries' debt and equity financing agreements. If any such
restrictions prohibit the repurchase of Executive Stock hereunder which
the Company is otherwise entitled to make, the Company may make such
repurchases as soon as it is permitted to do so under such restrictions.
5. Administration of the Plan. The Board shall have the power
and authority to prescribe, amend and rescind rules and procedures
governing the administration of this 1997 Plan, including, but not
limited to the full power and authority (i) to interpret the terms of
this 1997 Plan, the terms of any Options granted under this 1997 Plan,
and the rules and procedures established by the Board governing any such
Options and (ii) to determine the rights of any person under this 1997
Plan, or the meaning of requirements imposed by the terms of this 1997
Plan or any rule or procedure established by the Board. Each action of
the Board shall be binding on all persons.
<PAGE>
6. Participation Rights. At least 30 days prior to any sale or
exchange (a "Transfer") of any class of Common Stock by an Investor
(other than a Transfer among the Investors or an employee of the Company
or its Subsidiary), such Investor (the "Transferring Stockholder") will
deliver a written notice (the "Sale Notice") to the Company and the
holders of such class of Executive Stock (the "Other Stockholders"),
specifying in reasonable detail the identity of the prospective
transferee(s) and the terms and conditions of the Transfer. The Other
Stockholders may elect to participate in the contemplated Transfer by
delivering written notice to the Transferring Stockholder within 30 days
after delivery of the Sale Notice. If any Other Stockholders have
elected to participate in such Transfer, each of the Transferring
Stockholder and such Other Stockholders will be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, a number
of shares of such class of Common Stock equal to the product of (i) the
quotient determined by dividing the number of shares of such class of
Common Stock owned by such person by the aggregate number of shares of
such class of Common Stock owned by the Transferring Stockholder and the
Other Stockholders participating in such sale and (ii) the number of
shares of such class of Common Stock to be sold in the contemplated
Transfer. Notwithstanding the foregoing, in the event that the
Transferring Stockholder intends to transfer more than one class of
Common Stock, the Other Stockholders participating in such transfer
shall be required to sell in the contemplated Transfer a pro rata
portion of shares of all classes of Common Stock, which portion shall be
determined in the manner set forth immediately above. The Transferring
Stockholder will use reasonable efforts to obtain the agreement of the
prospective transferee(s) to the participation of the Other Stockholders
in any contemplated Transfer, and the Transferring Stockholder will not
Transfer any of its Securities to the prospective transferee(s) unless
(i) the prospective transferee(s) agrees to allow the participation of
the Other Stockholders or (ii) the Transferring Stockholder agrees to
purchase the number of such class of Securities from the Other
Stockholders which the Other Stockholders would have been entitled to
sell pursuant to the preceding sentence.
<PAGE>
7. Anti-Dilution.
(A) If and whenever on or after the date of adoption hereof, the
Company issues or sells, or in accordance with this Paragraph 7 is
deemed to have issued or sold, any shares of Common Stock (including
shares held in the Company's treasury) ("New Stock") some or all of
which are issued and/or sold, other than pursuant to the terms hereof,
to any of the Investors or any of their affiliates (the "Existing
Stockholders"), then immediately upon such issuance or sale the Company
shall, in a written notice (a "New Stock Notice") delivered to each
Participant no later than the tenth (10th) day following such issuance
or sale, offer for sale to each Participant a number of additional
shares of Common Stock such that the number of shares of Common Stock,
plus the number of unexercised Options, held by such Participant
immediately after such issuance or sale (assuming purchase by such
Participant of such additional shares) equals the number of shares of
Common Stock, plus the number of unexercised Options, held by such
Participant immediately prior to such issuance or sale multiplied by the
total number of shares of Common Stock deemed under this Paragraph 7 to
be outstanding immediately after such issuance or sale, divided by the
total number of shares of Common Stock deemed under this Paragraph 7 to
be outstanding immediately prior to such issuance or sale. The New
Stock Notice shall state the number of shares offered for sale to such
Participant pursuant to this Paragraph 7, the purchase price per share
therefor, as determined pursuant to this Paragraph 7, and the time and
place for the closing of the purchase in the event such Participant
accepts the offer. The date of such closing shall be not more than
ninety (90) days following the issuance or sale of the New Stock.
(B) A Participant may elect to purchase all, none, or any portion
not less than 20% of the Common Stock offered for sale in a New Stock
Notice by delivering to the Company written notice thereof within
fifteen (15) days following such Participant's receipt of such New Stock
Notice. In the event any one or more Participants elect to purchase
less than all of the shares offered for sale to such Participants in New
Stock Notices with respect to a particular issuance or sale, the Company
shall make available any such shares which such Participants elect not
to purchase on a pro rata basis to all other Participants and all
participants in the stock option plans of the Company, in a manner
substantially similar to that provided in Paragraph 4(d) hereof with
respect to Investors' Rights.
(C) For purposes of the computation referred to in this Paragraph
7, the number of shares of Common Stock outstanding shall be deemed to
include all shares issuable to the holders of any securities exercisable
for, or convertible into, shares of Common Stock. For purposes of the
computation of the consideration per share received, as referred to in
this Paragraph 7, the consideration received upon issuance or sale of
securities shall be deemed to include the consideration received for all
securities issued in the same transaction to the same purchaser, as
appropriate under the circumstances. The Common Stock offered for sale
pursuant to this Paragraph 7 shall be of the same class as the New
Stock; and, if the New Stock is comprised of Common Stock of more than
one class, the stock offered for sale pursuant to this Paragraph 7 shall
be comprised of the same classes in the same proportions as the New
Stock. The purchase price per share for Common Stock offered for sale
pursuant to this Paragraph 7 shall be equal to the price per share at
which the New Stock is sold.
<PAGE>
(D) The Existing Stockholders may, in their sole discretion, elect
to fulfill the Company's obligations to Participants under this
Paragraph 7 out of such Existing Stockholders' holdings of Common Stock.
In the event the Existing Stockholders fulfill the Company's obligations
to Participants under this Paragraph 7 with respect to an issuance or
sale of Common Stock, the Company shall have no further obligations to
such Participants under this Paragraph 7 with respect to such issuance
or sale.
8. Limitation on the Aggregate Number of Shares. The number of
shares of Common Stock issued under this 1997 Plan (including the number
of shares of Common Stock with respect to which Options may be granted
under this 1997 Plan (and which may be issued upon the exercise or
payment thereof)) shall not exceed, in the aggregate, 368,986 shares of
Common (as such number is equitably adjusted pursuant to the terms
hereof). If any Options expire unexercised or unpaid or are canceled,
terminated or forfeited in any manner without the issuance of Common
Stock or payment thereunder, the shares with respect to which such
Options were granted shall again be available under this 1997 Plan.
Similarly, if any shares of Common Stock issued hereunder upon exercise
of Options are repurchased hereunder, such shares shall again be
available under this 1997 Plan for reissuance as Executive Stock. In
addition, if any party other than the Company purchases shares of Common
Stock in lieu of repurchase by the Company, the Company will, as
promptly as legally permissible, purchase such shares from such party
and such shares shall again be available under this 1997 Plan for
reissuance as Executive Stock. In creating this 1997 Plan the Company
and its stockholders believe that sufficient shares of Common Stock are
being made available under this 1997 Plan to carry out the purposes
expressed in Section 1 hereof based upon the number of key management
positions and the specific people filling those positions at the time
that the Company acquired Dade International, Inc. At that time there
were certain positions which the Company expected to fill within one
year thereafter. Over time, it may occur that the Company can be
managed on a cost effective and more efficient basis with a smaller core
management team. Should that occur, the Board has reserved the right to
allocate the Common Stock remaining available under this 1997 Plan as a
further incentive to existing core management. Should new management
positions be added beyond those which existed as of the date of this
Plan, when the above numbers of shares were determined, the Company's
Chief Executive Officer will prepare a recommendation for the Board. If
there are sufficient shares of Common Stock still remaining unallocated
under the 1997 Plan he will recommend that the person filling such new
position be allocated Common Stock from any shares available under this
1997 Plan at that time. Should there be insufficient Common Stock
available, in the opinion of the Chief Executive Officer, to carry out
the purposes of this 1997 Plan, he shall prepare a recommendation for
the Board which the Board will consider for the purpose of amending this
1997 Plan to increase the number of shares of Common Stock available
hereunder in order that the individuals who fill such new positions may
be added as Participants hereunder without consideration being given to
the interests of then existing Participants. Shares of Common Stock to
be issued upon exercise of Options may be either authorized and unissued
shares, treasury shares, or a combination thereof, as the Board shall
determine.
<PAGE>
9. Incentive Stock Options. All Incentive Stock Options (i)
shall have an exercise price per share of Common Stock of not less than
100% of the fair market value of such share on the date of grant, (ii)
shall not be exercisable more than ten years after the date of grant,
(iii) shall not be transferable other than by will or under the laws of
descent and distribution and, during the lifetime of the Participant to
whom such Incentive Stock Options were granted, may be exercised only by
such Participant (or his guardian or legal representative), and (iv)
shall be exercisable only during the Participant's employment by the
Company or a Subsidiary, provided, however, that the Board may, in its
discretion, provide at the time that an Incentive Stock Option is
granted that such Incentive Stock Option may be exercised for a period
ending no later than either (x) the termination of this Plan in the
event of the Participant's death while an employee of the company or a
Subsidiary, or (y) the date which is three months after termination of
the Participant's employment for any other reason. The Board's
discretion to extend the period during which an Incentive Stock Option
is exercisable shall only apply if and to the extent that (i) the
Participant was entitled to exercise such option on the date of
termination, and (ii) such option would not have expired had the
Participant continued to be employed by the Company or a Subsidiary. To
the extent that the aggregate fair market value of stock with respect to
which Incentive Stock Options are exercisable for the first time by any
individual during any calendar year exceeds $100,000, such options shall
be treated as options which are not Incentive Stock Options.
10. Listing, Registration and Compliance with Laws and
Regulations. Each Option shall be subject to the requirement that if at
any time the Board shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to the Option upon
any securities exchange or under any state or federal securities or
other law or regulation, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to or in
connection with the granting of such Option or the issue or purchase of
shares thereunder, no such Option may be exercised or paid in Common
Stock in whole or in part unless such listing, registration,
qualification, consent or approval (a "Required Listing") shall have
been effected or obtained, and the holder of the Option will supply the
Company with such certificates, representations and information as the
Company shall request which are reasonably necessary or desirable in
order for the Company to obtain such Required Listing, and shall
otherwise cooperate with the Company in obtaining such Required Listing.
In the case of officers and other persons subject to Section 16(b) of
the Securities Exchange Act of 1934, as amended, the Board may at any
time impose any limitations upon the exercise of an Option which, in the
Board's discretion, are necessary or desirable in order to comply with
Section 16(b) and the rules and regulations thereunder. If the Company,
as part of an offering of securities or otherwise, finds it desirable
because of federal or state regulatory requirements to reduce the period
during which any Options may be exercised, the Board may, in its
discretion and without the consent of the holders of any such Options,
so reduce such period on not less than 15 days' written notice to the
holders thereof.
<PAGE>
11. Cash Payments Upon Exercise. Upon the written request of the
holder of exercisable Options which are not Incentive Stock Options, the
Board may provide that such holder shall, as soon as practicable after
the exercise of the Options, receive, in lieu of any issuance of Common
Stock, a cash payment in such amount as the Board and such holder may
agree, but not more than the excess of the Fair Market Value of a share
of Common Stock (on the date the holder recognizes taxable income) over
the Option's exercise price multiplied by the number of shares as to
which the Option is exercised.
12. Adjustment for Change in Common Stock. In the event of a
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation or other change in the
Common Stock, the Board shall make appropriate changes in the number and
type of shares authorized by this 1997 Plan, the number and type of
shares covered by outstanding Options and the prices specified therein.
13. Taxes. The Company shall be entitled, if necessary or
desirable, to withhold (or secure payment from the Plan participant in
lieu of withholding) the amount of any withholding or other tax due from
the Company with respect to any amount payable and/or shares issuable
under this 1997 Plan, and the Company may defer such payment or issuance
unless indemnified to its satisfaction.
14. Termination and Amendment. The Board at any time may suspend
or terminate this 1997 Plan and make such additions or amendments as it
deems advisable under this 1997 Plan, except that they may not, without
further approval by the Company's stockholders, (a) increase the maximum
number of shares as to which Options may be granted under this 1997
Plan, except pursuant to an express provision hereof or (b) extend the
term of this 1997 Plan; provided that, subject to Paragraph 10 hereof,
the Board may not change any of the terms of a written agreement with
respect to an Option between the Company and the holder of such Option
without the approval of the holder of such Option. No Options shall be
granted or shares of Common Stock issued hereunder after February 5,
2007; provided that, if the term of this 1997 Plan is otherwise
extended, no Incentive Stock Options shall be granted hereunder after
February 5, 2007.
<PAGE>
Schedule A
Investors
Bain Capital Fund IV, L.P.
Bain Capital Fund IV-B, L.P.
BCIP Associates
BCIP Trust Associates, L.P.
Randolph Street Partners
GS Capital Partners, L.P.
Bridge Street Fund 1994, L.P.
Stone Street Fund 1994<PAGE>
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT dated as of ________________, 1997 among
Diagnostics Holding, Inc., a Delaware corporation (the ``Company"), and
<FIRST> <LAST> (``Executive").
Pursuant to the Company's 1997 Management Stock Option Plan (the
"1997 Plan"), the Company and Executive desire to enter into an
agreement pursuant to which the Company will grant to Executive Options
to acquire <TOTALALL> shares of Common, which Options shall be divided
into three grants, two grants for <TARGET7> shares of Common which will
be based on performance targets and will have different exercise prices
(the "Target Options") and one grant for <TIME> shares of Common which
will be subject to time vesting (the "Time Option"). All shares of
Common Stock now or hereafter acquired by Executive pursuant to the 1997
Plan are referred to herein as the "Executive Stock."
The parties hereto agree as follows:
STOCK AND OPTION PROVISIONS
1. Stock Options.
(A) Target Option Grants. The Company hereby grants to Executive,
pursuant to the Plan, the Target Options to purchase (A) <TARGET7>
shares of Common (the "Tranche I Options"), with an exercise price of
$7.00 (the "Tranche I Price"), and (B) <TARGET16> shares of Common (the
"Tranche II Options") with an exercise price of $16.00 the "Tranche II
Price"). The shares issued upon exercise of the Tranche I Options or
the Tranche II Options are referred to herein as the ("Target Option
Shares"). The number of Target Option Shares, the Tranche I Price, and
the Tranche II Price will be equitably adjusted for any stock split,
stock dividend, reclassification or recapitalization of the Company
which occurs subsequent to the date of this Agreement. The Target
Options will expire (the "Expiration Date") on the earlier of the tenth
anniversary of the date hereof or the date of termination of Executive's
employment with the Company or a Subsidiary for any reason (the
"Termination Date"), provided that Executive will have 30 days after the
Expiration Date to exercise the Target Options with respect to the
Target Option Shares which are then exercisable pursuant to the terms of
the 1997 Plan.
(B) Time Option Grant. The Company hereby grants to Executive,
pursuant to the Plan, the Time Option to purchase <TIME> shares of
Common Stock ("Time Option Shares"), at a price per share of $4.00 (the
"Option Price"). The Option Price and the number of Time Option Shares
will be equitably adjusted for any stock split, stock dividend,
reclassification or recapitalization of the Company which occurs
subsequent to the date of this Agreement. The Time Option will expire
on the Expiration Date, provided that Executive will have 30 days after
the Expiration Date to exercise the Time Option with respect to the
percentage of Time Option Shares as determined pursuant to the terms of
the 1997 Plan.
(C) Securities Laws Restrictions. Executive represents that when
Executive exercises the Options he will be purchasing Executive Stock
for Executive's own account and not on behalf of others. Executive
understands and acknowledges that federal and state securities laws
govern and restrict Executive's right to offer, sell or otherwise
dispose of any Executive Stock unless Executive's offer, sale or other
disposition thereof is registered under the 1933 Act and state
securities laws or, in the opinion of the Company's counsel, such offer,
sale or other disposition is exempt from registration thereunder.
Executive agrees that he will not offer, sell or otherwise dispose of
any Executive Stock in any manner which would: (i) require the Company
<PAGE>
to file any registration statement (or similar filing under state law)
with the Securities and Exchange Commission or to amend or supplement
any such filing or (ii) violate or cause the Company to violate the 1933
Act, the rules and regulations promulgated thereunder or any other state
or federal law. Executive further understands that the certificates for
any Executive Stock Executive purchases will bear the legend set forth
in Paragraph 5 hereof or such other legends as the Company deems
necessary or desirable in connection with the 1933 Act or other rules,
regulations or laws.
(D) Non-Transferability of Option. The Options are personal to
Executive and are not transferable by Executive. Only Executive or his
estate or heirs is entitled to exercise the Options.
2. Repurchase Option. In the event that Executive is no longer
employed by the Company or any of its Subsidiaries for any reason (the
date of such termination being referred to herein as the "Termination
Date"), the Executive Stock, whether held by Executive, or one or more
Permitted Transferees (as defined in Paragraph 3 below), will be subject
to repurchase by the Company and the Investors (solely at their option)
pursuant to the terms and conditions set forth in the Plan (the
"Repurchase Option").
3. Restrictions on Transfer.
(A) Transfer of Executive Stock. Without the express written
consent of the Company to transfers of Executive Stock in accordance
with the terms of this Agreement, Executive will not sell, pledge or
otherwise transfer any interest in any shares of Executive Stock, except
pursuant to (i) the provisions of Paragraphs 1, 2 and 6 hereof, (ii) the
provisions of Paragraph 3(b) below, (iii) pursuant to the Registration
Agreement, dated as of December 20, 1994, as amended, among the Company
and its stockholders or (iv) pursuant to the provisions of the 1997
Plan.
(B) Certain Permitted Transfers. The restrictions contained in
this Paragraph 3 will not apply with respect to transfers of Executive
Stock pursuant to applicable laws of descent and distribution, provided
that the restrictions contained in this Paragraph 3 will continue to be
applicable to the Executive Stock after any such transfer and the
transferees of such Executive Stock shall agree in writing to be bound
by the provisions of this Agreement. Any transferee of Executive Stock
pursuant to a transfer in accordance with the provisions of this
Paragraph 3(b) is herein referred to as a "Permitted Transferee." Upon
the transfer of Executive Stock pursuant to this Paragraph 3(b), the
Permitted Transferee(s) will deliver a written notice (the "Transfer
Notice") to the Company. The Transfer Notice will disclose in
reasonable detail the identity of the Permitted Transferee(s).
4. Additional Restrictions on Transfer.
(A) The certificates representing the Executive Stock will bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND
CERTAIN OTHER AGREEMENTS SET FORTH IN A MANAGEMENT AGREEMENT
BETWEEN THE ISSUER (THE "COMPANY") AND A CERTAIN EMPLOYEE OF
THE COMPANY DATED AS OF ________________, 1997, A COPY OF
WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
<PAGE>
(B) No holder of Executive Stock may sell, transfer or dispose of
any Executive Stock (except pursuant to an effective registration
statement under the Securities Act of 1933) without first delivering to
the Company an opinion of counsel reasonably acceptable in form and
substance to the Company (which counsel shall be reasonably acceptable
to the Company) that registration under the 1933 Act is not required in
connection with such transfer.
5. Definition of Executive Stock. For all purposes of this
Agreement, Executive Stock will continue to be Executive Stock in the
hands of any holder other than Executive (except for the Company and
purchasers pursuant to an offering registered under the 1933 Act or
purchasers pursuant to a Rule 144 transaction), and each such other
holder of Executive Stock will succeed to all rights and obligations
attributable to Executive as a holder of Executive Stock hereunder.
Executive Stock will also include shares of the Company's capital stock
issued with respect to shares of Executive Stock by way of a stock
split, stock dividend or other recapitalization.
6. Sale of the Company.
(A) If the Board and the holders of a majority of the shares of
Common Stock then outstanding approve a sale of all or substantially all
of the Company's assets determined on a consolidated basis or a sale of
all or substantially all of the Company's outstanding capital stock
(whether by merger, recapitalization, consolidation, reorganization,
combination or otherwise) to any Independent Third Party or group of
Independent Third Parties (collectively an "Approved Sale"), each holder
of Executive Stock will vote for, consent to and raise no objections
against such Approved Sale. If the Approved Sale is structured as (i) a
merger or consolidation, each holder of Executive Stock will waive any
dissenters rights, appraisal rights or similar rights in connection with
such merger or consolidation or (ii) a sale of stock, each holder of
Executive Stock will agree to sell all of his shares of Executive Stock
and rights to acquire shares of Executive Stock on the terms and
conditions approved by the Board and the holders of a majority of the
Common Stock then outstanding. Each holder of Executive Stock will take
all necessary or desirable actions in connection with the consummation
of the Approved Sale as requested by the Company.
(B) The obligations of the holders of Common Stock with respect
to the Approved Sale of the Company are subject to the satisfaction of
the following conditions: (i) upon the consummation of the Approved Sale,
each holder of Common Stock will receive the same form of consideration
and the same portion of the aggregate consideration that such holders of
Common Stock would have received if such aggregate consideration had
been distributed by the Company in complete liquidation pursuant to the
rights and preferences set forth in the Company's Certificate of
Incorporation as in effect immediately prior to such Approved Sale; (ii)
if any holders of a class of Common Stock are given an option as to the
form and amount of consideration to be received, each holder of such
class of Common Stock will be given the same option; and (iii) each
holder of then currently exercisable rights to acquire shares of a class
of Common Stock will be given an opportunity to exercise such rights
prior to the consummation of the Approved Sale and participate in such
sale as holders of such class of Common Stock.
(C) If the Company or the holders of the Company's securities
enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) promulgated by the Securities Exchange
Commission may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization),
the holders of Executive Stock will, at the request of the Company,
appoint a purchaser representative (as such term is defined in Rule 501)
reasonably acceptable to the Company. If any holder of Executive Stock
appoints a purchaser representative designated by the Company, the
<PAGE>
Company will pay the fees of such purchaser representative, but if any
holder of Executive Stock declines to appoint the purchaser representative
designated by the Company such holder will appoint another purchaser
representative, and such holder will be responsible for the fees of the
purchaser representative so appointed.
(D) Executive and the other holders of Executive Stock (if any)
will bear their pro-rata share (based upon the number of shares sold) of
the costs of any sale of Executive Stock pursuant to an Approved Sale to
the extent such costs are incurred for the benefit of all holders of
Common Stock and are not otherwise paid by the Company or the acquiring
party. Costs incurred by Executive and the other holders of Executive
Stock on their own behalf will not be considered costs of the
transaction hereunder.
(E) The provisions of this Paragraph 6 will terminate upon
completion of the initial public offering of the Common Stock.
7. Public Offering. In the event that the Board and the holders
of a majority of the shares of Common Stock then outstanding approve an
initial public offering and sale of Common Stock (a "Public Offering")
pursuant to an effective registration statement under the Securities Act
of 1933, as amended, the holders of Executive Stock will take all
necessary or desirable actions in connection with the consummation of
the Public Offering. In the event that such Public Offering is an
underwritten offering and the managing underwriters advise the Company
in writing that in their opinion the Common Stock structure will
adversely affect the marketability of the offering, each holder of
Executive Stock will consent to and vote for a recapitalization,
reorganization and/or exchange of the Common Stock into securities that
the managing underwriters, the Board and holders of a majority of the
shares of Common Stock then outstanding find acceptable and will take
all necessary or desirable actions in connection with the consummation
of the recapitalization, reorganization and/or exchange.
8. Termination of Provisions Relating to Executive Stock. The
provisions of Paragraphs 2 and 3, and the rights of Executive under
Paragraph 6 of the 1997 Plan, will terminate upon the first to occur of
(i) an Approved Sale, or (ii) (A) the Company (or its successor as a
result of merger, consolidation, reorganization or sale) becoming a
reporting company under the Securities Exchange Act of 1934 as a result
of the registration of its common equity securities thereunder and
(B) the Investors and their affiliates collectively ceasing to own at
least 50% of the aggregate number of shares of Common Stock that they
own on the date hereof (as adjusted for stock splits, stock dividends
and recapitalization and for exchanges in connection with a merger,
consolidation, reorganization or sale).
MISCELLANEOUS PROVISIONS
9. Notices. Any notice provided for in this Agreement must be in
writing and must be personally delivered, received by certified mail,
return receipt requested, or sent by guaranteed overnight delivery
service, to the Investors at the addresses indicated in the Company's
records and to the other recipients at the address indicated below:
To the Company:
Diagnostics Holding Inc.
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attn: Mark Nunnelly
Stephen G. Pagliuca
Adam Kirsch
<PAGE>
To Executive:
<FIRST> <LAST>
<STREET>
[CITY]
or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the
sending party. Any notice under this Agreement will be deemed to have
been given when so delivered or mailed.
10. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability will not affect any other provision or the
effectiveness or validity of any provision in any other jurisdiction,
and this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
11. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and
preempts any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the
subject matter hereof in any way.
12. Counterparts. This Agreement may be executed in separate
counterparts, each of which will be deemed to be an original and all of
which taken together will constitute one and the same agreement.
13. Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive, the
Company, the Investors and their respective successors and assigns,
provided that Executive may not assign any of his rights or obligations,
except as expressly provided by the terms of this Agreement.
14. Governing Law. The corporate law of Delaware will govern
all issues concerning the relative rights of the Company and its
stockholders. All other issues concerning the enforceability, validity
and binding effect of this Agreement will be governed by and construed
in accordance with the laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdiction) that would
cause the application of the law of any jurisdiction other than the
State ofIllinois.
15. Remedies. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions
of this Agreement and that any party hereto will have the right to
injunctive relief, in addition to all of its other rights and remedies
at law or in equity, to enforce the provisions of this Agreement.
16. Effect of Transfers in Violation of Agreement. The Company
will not be required (a) to transfer on its books any shares of
Executive Stock which have been sold or transferred in violation of any
of the provisions set forth in this Agreement or (b) to treat as owner
of such shares, to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares have been transferred in
violation of this Agreement.
17. Amendments and Waivers. Any provision of this Agreement may
be amended or waived only with the prior written consent of the Company,
Executive and the Investors who hold 70% of the Common Stock held by the
Investors.
18. Third Party Beneficiaries. The parties hereto acknowledge
and agree that the Investors are third party beneficiaries of this
Agreement. This Agreement will inure to the benefit of and be
enforceable by the Investors and their respective successors and
assigns.
<PAGE>
19. Diagnostics Holding, Inc. 1997 Management Stock Option Plan.
The grant of Options and issuance of Executive Stock hereunder is
pursuant to, and subject to all the terms and conditions of, the 1997
Plan attached hereto as Exhibit A. Capitalized terms defined in the
1997 Plan and otherwise not defined herein shall have the meanings set
forth in the 1997 Plan.
* * * * *
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
Diagnostics Holding, Inc.
By:
Title:
Participant's Signature:
______________________________
<FIRST> <LAST>
AMENDED AND RESTATED
CREDIT AGREEMENT
among
DIAGNOSTICS HOLDING, INC.,
DADE INTERNATIONAL INC.,
VARIOUS LENDING INSTITUTIONS,
THE BANK OF NOVA SCOTIA,
THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
THE FIRST NATIONAL BANK OF BOSTON,
GE CAPITAL COMMERCIAL FINANCE
AND SANWA BUSINESS CREDIT CORPORATION, AS CO-AGENTS,
and
BANKERS TRUST COMPANY,
AS AGENT
________________________________
Dated as of May 7, 1996
and
Amended and Restated as of April 29, 1997
________________________________
$564,140,000
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit.................. 1
1.01 Commitments.................................. 1
1.02 Minimum Borrowing Amounts, etc............... 4
1.03 Notice of Borrowing.......................... 5
1.04 Disbursement of Funds........................ 5
1.05 Notes........................................ 6
1.06 Conversions.................................. 8
1.07 Pro Rata Borrowings.......................... 9
1.08 Interest..................................... 9
1.09 Interest Periods............................. 10
1.10 Increased Costs, Illegality, etc............. 11
1.11 Compensation................................. 13
1.12 Change of Lending Office..................... 14
1.13 Replacement of Banks......................... 14
SECTION 2. Letters of Credit........................... 15
2.01 Letters of Credit............................ 15
2.02 Letter of Credit Requests; Notices of Issu-
ance......................................... 17
2.03 Agreement to Repay Letter of Credit Draw-
ings......................................... 17
2.04 Letter of Credit Participations.............. 18
2.05 Increased Costs.............................. 20
SECTION 3. Fees; Commitments........................... 21
3.01 Fees......................................... 21
3.02 Voluntary Termination or Reduction of Total
Unutilized Revolving Loan Commitment......... 22
3.03 Mandatory Adjustments of Commitments, etc.... 22
SECTION 4. Payments.................................... 24
4.01 Voluntary Prepayments........................ 24
4.02 Mandatory Prepayments........................ 25
4.03 Method and Place of Payment.................. 34
4.04 Net Payments................................. 34
SECTION 5. Conditions Precedent........................ 36
5.01 Execution of Agreement; Notes................ 36
5.02 No Default; Representations and Warranties... 36
5.03 Officer's Certificate........................ 37
5.04 Notice of Borrowing; Letter of Credit Re-
quest........................................ 37
5.05 Corporate Proceedings........................ 37
5.06 Adverse Change, etc.......................... 37
5.07 Litigation................................... 37
(i)
<PAGE>
Page
5.08 Approvals.................................... 38
5.09 Consummation of the Transaction.............. 38
5.10 Acknowledgements, etc........................ 39
5.11 Subsidiary Guaranty.......................... 40
5.12 Plans; Collective Bargaining Agreements;
Existing Indebtedness Agreements;
Shareholders' Agreements; Management
Agreements; Employment Agreements; Non-
Compete Agreements; Tax Allocation
Agreements; Material Contracts............... 40
5.13 Existing Indebtedness........................ 41
5.14 Payment of Fees.............................. 42
SECTION 6. Representations, Warranties and Agreements.. 42
6.01 Corporate Status............................. 42
6.02 Corporate Power and Authority................ 42
6.03 No Violation................................. 43
6.04 Litigation................................... 43
6.05 Use of Proceeds; Margin Regulations.......... 43
6.06 Governmental Approvals....................... 44
6.07 Investment Company Act....................... 44
6.08 Public Utility Holding Company Act........... 44
6.09 True and Complete Disclosure................. 44
6.10 Financial Condition; Financial Statements.... 44
6.11 Security Interests........................... 46
6.12 Representations and Warranties in Other
Documents.................................... 46
6.13 Transaction and Original Transaction......... 46
6.14 Special Purpose Corporation.................. 47
6.15 Compliance with ERISA........................ 47
6.16 Capitalization............................... 48
6.17 Subsidiaries................................. 49
6.18 Intellectual Property........................ 49
6.19 Compliance with Statutes, etc................ 49
6.20 Environmental Matters........................ 49
6.21 Properties................................... 50
6.22 Labor Relations.............................. 50
6.23 Tax Returns and Payments..................... 51
6.24 Existing Indebtedness........................ 51
6.25 Subordination................................ 52
SECTION 7. Affirmative Covenants....................... 52
7.01 Information Covenants........................ 52
7.02 Books, Records and Inspections............... 55
7.03 Insurance.................................... 56
7.04 Payment of Taxes............................. 56
7.05 Corporate Franchises......................... 56
7.06 Compliance with Statutes, etc................ 56
7.07 Compliance with Environmental Laws........... 57
(ii)
<PAGE
Page
7.08 ERISA........................................ 57
7.09 Good Repair.................................. 58
7.10 End of Fiscal Years; Fiscal Quarters......... 58
7.11 Additional Security; Further Assurances...... 58
7.12 Interest Rate Protection..................... 59
7.13 Register..................................... 59
7.14 Maintenance of Corporate Separateness........ 60
7.15 Baxter PIK Notes; Baxter Preferred Stock;
Permitted Holdings PIK Securities............ 60
7.16 Foreign Subsidiaries Security................ 61
7.17 Contributions; Payments...................... 62
7.18 Accounts Receivable Facility Transaction..... 62
SECTION 8. Negative Covenants.......................... 63
8.01 Changes in Business.......................... 63
8.02 Consolidation, Merger, Sale or Purchase of
Assets, etc.................................. 63
8.03 Liens........................................ 69
8.04 Indebtedness................................. 72
8.05 Designated Senior Debt....................... 75
8.06 Advances, Investments and Loans.............. 75
8.07 Dividends, etc............................... 80
8.08 Transactions with Affiliates................. 83
8.09 Capital Expenditures......................... 83
8.10 Minimum Consolidated EBITDA.................. 86
8.11 Interest Coverage Ratio...................... 87
8.12 Current Ratio................................ 87
8.13 Leverage Ratio............................... 88
8.14 Limitation on Voluntary Payments and Modi-
fications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and
Certain Other Agreements; Issuance of
Capital Stock; etc........................... 89
8.15 Limitation on Certain Restrictions on Sub-
sidiaries.................................... 90
8.16 Limitation on the Creation of Subsidiaries... 91
SECTION 9. Events of Default........................... 91
9.01 Payments..................................... 91
9.02 Representations, etc......................... 91
9.03 Covenants.................................... 91
9.04 Default Under Other Agreements............... 92
9.05 Bankruptcy, etc.............................. 92
9.06 ERISA........................................ 93
9.07 Security Documents........................... 93
9.08 Guaranties................................... 93
9.09 Judgments.................................... 93
9.10 Ownership.................................... 94
9.11 Distribution Agreement....................... 94
(iii)
<PAGE>
Page
9.12 Accounts Receivable Facility................. 94
SECTION 10. Definitions................................ 95
SECTION 11. The Agent..................................131
11.01 Appointment.................................131
11.02 Delegation of Duties........................132
11.03 Exculpatory Provisions......................132
11.04 Reliance by Agent...........................132
11.05 Notice of Default.....................
11.06 Non-Reliance on Agent and Other Banks.......133
11.07 Indemnification.............................134
11.08 Agent in its Individual Capacity............134
11.09 Holders.....................................134
11.10 Resignation of the Agent; Successor Agent...135
SECTION 12. Miscellaneous..............................135
12.01 Payment of Expenses, etc....................135
12.02 Right of Setoff; Collateral Matters.........136
12.03 Notices.....................................137
12.04 Benefit of Agreement........................137
12.05 No Waiver; Remedies Cumulative..............139
12.06 Payments Pro Rata...........................139
12.07 Calculations; Computations..................140
12.08 Governing Law; Submission to Jurisdiction;
Venue........................................140
12.09 Counterparts................................141
12.10 Effectiveness...............................141
12.11 Headings Descriptive........................142
12.12 Amendment or Waiver; etc....................142
12.13 Survival....................................143
12.14 Domicile of Loans...........................143
12.15 Confidentiality.............................144
12.16 Waiver of Jury Trial........................144
12.17 Additions of New Banks, etc.................144
SECTION 13. Holdings Guaranty..........................145
13.01 The Guaranty................................145
13.02 Bankruptcy..................................145
13.03 Nature of Liability.........................145
13.04 Independent Obligation......................146
13.05 Authorization...............................146
13.06 Reliance....................................147
13.07 Subordination...............................147
13.08 Waiver......................................147
13.09 Nature of Liability.........................149
ANNEX I List of Banks
(iv)
<PAGE>
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Projections
ANNEX V Subsidiaries
ANNEX VI Insurance
ANNEX VII Existing Indebtedness
ANNEX VIII Existing Liens
ANNEX IX Projected Consolidated EBITDA
ANNEX X Target Ratios
ANNEX XI Existing Investments
ANNEX XII Original Letters of Credit
ANNEX XIII Acquisition Agreements
ANNEX XIV Capital Stock
ANNEX XV Taxes
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B-1 -- Form of A Term Note
EXHIBIT B-2 -- Form of B Term Note
EXHIBIT B-3 -- Form of C Term Note
EXHIBIT B-4 -- Form of D Term Note
EXHIBIT B-5 -- Form of Revolving Note
EXHIBIT B-6 -- Form of Swingline Note
EXHIBIT C -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT D -- Form of Officers' Certificate
EXHIBIT E -- Form of Security Documents
Acknowledgment and Amendment
EXHIBIT F -- Form of Subsidiary Guaranty
Acknowledgment
EXHIBIT G -- Form of Subordination Provisions
EXHIBIT H -- Form of Assignment and Assumption
Agreement
EXHIBIT I -- Form of Intercompany Note
EXHIBIT J - Form of Baxter PIK Note
EXHIBIT K -- Form of Shareholder Subordinated Note
EXHIBIT L -- Form of Baxter Preferred Stock
EXHIBIT M -- Form of Borrower Subordinated Note
(v)
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 7, 1996
and amended and restated as of April 29, 1997, among DIAGNOSTICS
HOLDING, INC., a Delaware corporation ("Holdings"), DADE INTERNATIONAL
INC., a Delaware corporation (the "Borrower"), the lenders from time to
time party hereto (each, a "Bank" and, collectively, the "Banks"), and
BANKERS TRUST COMPANY, as Agent (in such capacity, the "Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined
in Section 10 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Original Banks and the
Agent are parties to a Credit Agreement, dated as of May 7, 1996 (as
amended and modified to but not including the Restatement Effective
Date, the "Original Credit Agreement"); and
WHEREAS, Holdings and the Borrower have requested that the
Original Credit Agreement be amended and restated, and the Banks and the
Agent are willing to amend and restate the same upon the terms and
conditions set forth below;
NOW, THEREFORE, the parties hereto agree that the Original
Credit Agreement shall be and is hereby amended and restated in its
entirety as follows:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (A) Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees to make a loan
or loans to the Borrower, which loans shall be drawn, to the extent such
Bank has a commitment under such Facility, under the A Term Loan
Facility, the B Term Loan Facility, the C Term Loan Facility, the D Term
Loan Facility and the Revolving Loan Facility, as set forth below:
(a) Loans under the A Term Loan Facility (each, an "A Term
Loan" and, collectively, the "A Term Loans") (i) shall be incurred
by the Borrower pursuant to a single drawing, which shall be on the
Restatement Effective Date, (ii) shall be denominated in U.S.
Dollars, (iii) shall be made as Base Rate Loans and, except as
hereinafter provided, may, at the option of the Borrower, be
maintained as and/or converted into Base Rate Loans or Eurodollar
Loans, provided, that (x) all A Term Loans made by all Banks
pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of A Term Loans of the same Type
and (y) no A Term Loans maintained as Eurodollar Loans may be
incurred prior to the earlier of (1) the 90th day after the
Restatement Effective Date and (2) that date (the "Syndication
Date") upon which the Agent determines in its sole discretion (and
notifies the Borrower) that the primary syndication (and resultant
additions of institutions as Banks pursuant to Section 12.04) has
been completed and (iv) shall not exceed for any Bank at the time
of incurrence thereof on the Restatement Effective Date that
aggregate principal amount which equals the A Term Loan Commitment,
if any, of such Bank at such time. Once repaid, A Term Loans may
not be reborrowed.
<PAGE>
(b) Each loan under the B Term Loan Facility (each, a "B Term
Loan" and, collectively, the "B Term Loans") (i) shall be incurred
by the Borrower pursuant to a single drawing, which shall be on the
Restatement Effective Date, (ii) shall be denominated in U.S.
Dollars, (iii) shall be made as Base Rate Loans and, except as
hereinafter provided, may, at the option of the Borrower, be
maintained as and/or converted into Base Rate Loans or Eurodollar
Loans, provided, that (x) all B Term Loans made by all Banks
pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of B Term Loans of the same Type
and (y) no B Term Loans maintained as Eurodollar Loans may be
incurred prior to the earlier of (1) the 90th day after the
Restatement Effective Date and (2) the Syndication Date and (iv)
shall not exceed for any Bank at the time of incurrence thereof on
the Restatement Effective Date that aggregate principal amount
which equals the B Term Loan Commitment, if any, of such Bank at
such time. Once repaid, B Term Loans may not be reborrowed.
(c) Each loan under the C Term Loan Facility (each, a "C Term
Loan" and, collectively, the "C Term Loans") (i) shall be incurred
by the Borrower pursuant to a single drawing, which shall be on the
Restatement Effective Date, (ii) shall be denominated in U.S.
Dollars, (iii) shall be made as Base Rate Loans and, except as
hereinafter provided, may, at the option of the Borrower, be
maintained as and/or converted into Base Rate Loans or Eurodollar
Loans, provided, that (x) all C Term Loans made by all Banks
pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of C Term Loans of the same Type
and (y) no C Term Loans maintained as Eurodollar Loans may be
incurred prior to the earlier of (1) the 90th day after the
Restatement Effective Date and (2) the Syndication Date and (iv)
shall not exceed for any Bank at the time of incurrence thereof on
the Restatement Effective Date that aggregate principal amount
which equals the C Term Loan Commitment, if any, of such Bank at
such time. Once repaid, C Term Loans may not be reborrowed.
(d) Each loan under the D Term Loan Facility (each, a "D Term
Loan" and, collectively, the "D Term Loans") (i) shall be incurred
by the Borrower pursuant to a single drawing, which shall be on the
Restatement Effective Date, (ii) shall be denominated in U.S.
Dollars, (iii) shall be made as Base Rate Loans and, except as
hereinafter provided, may, at the option of the Borrower, be
maintained as and/or converted into Base Rate Loans or Eurodollar
Loans, provided, that (x) all D Term Loans made by all Banks
pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of D Term Loans of the same Type
and (y) no D Term Loans maintained as Eurodollar Loans may be
incurred prior to the earlier of (1) the 90th day after the
Restatement Effective Date and (2) the Syndication Date and (iv)
shall not exceed for any Bank at the time of incurrence thereof on
the Restatement Effective Date that aggregate principal amount
which equals the D Term Loan Commitment, if any, of such Bank at
such time. Once repaid, D Term Loans may not be reborrowed.
<PAGE>
(e) Each loan under the Revolving Loan Facility (each, a
"Revolving Loan" and, collectively, the "Revolving Loans") (i) may
be incurred by the Borrower at any time and from time to time on
and after the Restatement Effective Date and prior to the Revolving
Loan Maturity Date, (ii) shall be denominated in U.S. Dollars,
(iii) except as hereinafter provided, may, at the option of the
Borrower, be incurred and maintained as and/or converted into Base
Rate Loans or Eurodollar Loans, provided, that (x) all Revolving
Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the
same Type and (y) no incurrences of, or conversions into, Revolving
Loans maintained as Eurodollar Loans may be effected prior to the
earlier of (1) the 90th day after the Restatement Effective Date
and (2) the Syndication Date, (iv) may be repaid and reborrowed in
accordance with the provisions hereof and (v) shall not exceed for
any Bank at any time outstanding that aggregate principal amount
which, when combined with (I) the aggregate principal amount of all
other then outstanding Revolving Loans made by such Bank and (II)
such Bank's RL Percentage, if any, of the Swingline Loans then
outstanding and the Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, Revolving Loans or Swingline
Loans) at such time, equals the Revolving Loan Commitment, if any,
of such Bank at such time.
(B) Subject to and upon the terms and conditions herein set
forth, BTCo in its individual capacity agrees to make at any time and
from time to time after the Restatement Effective Date and prior to the
Swingline Expiry Date, a loan or loans to the Borrower (each, a
"Swingline Loan" and, collectively, the "Swingline Loans"), which
Swingline Loans (i) shall be made and maintained as Base Rate Loans,
(ii) shall be denominated in U.S. Dollars, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not
exceed in aggregate principal amount at any time outstanding, when
combined with the aggregate principal amount of all Revolving Loans then
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, Revolving Loans or Swingline Loans) at such time, an
amount equal to the Total Revolving Loan Commitment then in effect and
(v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. BTCo shall not be obligated
to make any Swingline Loans at a time when a Bank Default exists unless
BTCo has entered into arrangements satisfactory to it and the Borrower
to eliminate BTCo's risk with respect to the Defaulting Bank's or Banks'
participation in such Swingline Loans, including by cash collateralizing
such Defaulting Bank's or Banks' RL Percentage of the outstanding
Swingline Loans. BTCo will not make a Swingline Loan after it has
received written notice from the Borrower or the Required Banks stating
that a Default or an Event of Default exists until such time as BTCo
shall have received a written notice of (i) rescission of such notice
from the party or parties originally delivering the same or (ii) a
waiver of such Default or Event of Default from the Required Banks.
<PAGE>
(C) On any Business Day, BTCo may, in its sole discretion,
give notice to the RL Banks that its outstanding Swingline Loans shall
be funded with a Borrowing of Revolving Loans (provided that each such
notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section 9.05 or
upon the exercise of any of the remedies provided in the last paragraph
of Section 9), in which case a Borrowing of Revolving Loans constituting
Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be
made on the immediately succeeding Business Day by all RL Banks pro rata
based on each RL Bank's RL Percentage, and the proceeds thereof shall be
applied directly to repay BTCo for such outstanding Swingline Loans.
Each RL Bank hereby irrevocably agrees to make Base Rate Loans upon one
Business Day's notice pursuant to each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the date
specified in writing by BTCo, notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount
otherwise required hereunder, (ii) whether any conditions specified in
Section 5 are then satisfied, (iii) whether a Default or an Event of
Default has occurred and is continuing, (iv) the date of such Mandatory
Borrowing and (v) any reduction in the Total Revolving Loan Commitment
after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RL Bank (other than BTCo) hereby agrees that it shall
forthwith purchase from BTCo (without recourse or warranty) such
assignment of the outstanding Swingline Loans as shall be necessary to
cause the RL Banks to share in such Swingline Loans ratably based upon
their respective RL Percentages, provided that all interest payable on
the Swingline Loans shall be for the account of BTCo until the date the
respective assignment is purchased and, to the extent attributable to
the purchased assignment, shall be payable to the RL Bank purchasing
same from and after such date of purchase.<PAGE>
1.02 Minimum Borrowing Amounts, etc The aggregate principal
amount of each Borrowing under a Facility shall not be less than the
Minimum Borrowing Amount for such Facility. More than one Borrowing may
be incurred on any day; provided, that at no time shall there be
outstanding more than fifteen Borrowings of Eurodollar Loans.
<PAGE>
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to incur Loans under any Facility (excluding Borrowings of Swingline
Loans and Mandatory Borrowings), it shall give the Agent at its Notice
Office, prior to 11:00 A.M. (New York time), at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Eurodollar Loans and at least one Business
Day's prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Base Rate Loans to be made hereunder.
Each such notice (each, a "Notice of Borrowing") shall, except as
provided in Section 1.10, be irrevocable, and, in the case of each
written notice and each confirmation of telephonic notice, shall be in
the form of Exhibit A-1, appropriately completed to specify (i) the
Facility pursuant to which such Borrowing is to be made, (ii) the
aggregate principal amount of the Loans to be made pursuant to such
Borrowing, (iii) the date of such Borrowing (which shall be a Business
Day) and (iv) whether the respective Borrowing shall consist of Base
Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and,
if Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Agent shall promptly give each Bank written notice (or
telephonic notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof, if any, and of
the other matters covered by the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give BTCo not later than 12:00 Noon
(New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each
Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and shall specify in each case (x) the date of such
Borrowing (which shall be a Business Day) and (y) the aggregate
principal amount of the Swingline Loan to be made pursuant to such
Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(C), with the Borrower irrevocably agreeing, by
its incurrence of any Swingline Loan, to the making of Mandatory
Borrowings as set forth in such Section.
(c) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice permitted to be
given hereunder, the Agent or BTCo (in the case of a Borrowing of
Swingline Loans) or the respective Letter of Credit Issuer (in the case
of Letters of Credit), as the case may be, may prior to receipt of
written confirmation act without liability upon the basis of such
telephonic notice, believed by the Agent, BTCo or such Letter of Credit
Issuer, as the case may be, in good faith to be from an Authorized
Officer of the Borrower. In each such case, the Borrower hereby waives
the right to dispute the Agent's, BTCo's or such Letter of Credit
Issuer's record of the terms of such telephonic notice.
<PAGE>
1.04 Disbursement of Funds. (a) No later than 1:00 P.M.
(New York time) on the date specified in each Notice of Borrowing (or
(x) in the case of Swingline Loans, not later than 2:00 P.M. (New York
time) on the date specified in Section 1.03(b)(i) or (y) in the case of
Mandatory Borrowings, not later than 12:00 Noon (New York time) on the
date specified in Section 1.01(C)), each Bank with a Commitment under
the respective Facility will make available its pro rata share, if any,
of each Borrowing requested to be made on such date (or in the case of
Swingline Loans, BTCo shall make available the full amount thereof) in
the manner provided below. All amounts shall be made available to the
Agent in U.S. Dollars and immediately available funds at the Payment
Office and the Agent promptly will make available to the Borrower by
depositing to its account at the Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the
Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Agent
its portion of the Borrowing or Borrowings to be made on such date, the
Agent may assume that such Bank has made such amount available to the
Agent on such date of Borrowing, and the Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do
so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made available same to the Borrower, the Agent
shall be entitled to recover such corresponding amount from such Bank.
If such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall 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 Bank or the
Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Agent to the Borrower to the date such corresponding
amount is recovered by the Agent, at a rate per annum equal to (x) if
paid by such Bank, the overnight Federal Funds rate or (y) if paid by
the Borrower, the then applicable rate of interest, calculated in
accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any
default by such Bank hereunder.
<PAGE>
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, all the Loans made to it by each Bank
shall be evidenced (i) if A Term Loans, by a promissory note
substantially in the form of Exhibit B-1 with blanks appropriately
completed in conformity herewith (each, an "A Term Note" and,
collectively, the "A Term Notes"), (ii) if B Term Loans, by a promissory
note substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each, a "B Term Note" and,
collectively, the "B Term Notes"), (iii) if C Term Loans, by a
promissory note substantially in the form of Exhibit B-3 with blanks
appropriately completed in conformity herewith (each, a "C Term Note"
and, collectively, the "C Term Notes"), (iv) if D Term Loans, by a
promissory note substantially in the form of Exhibit B-4 with blanks
appropriately completed in conformity herewith (each, a "D Term Note"
and, collectively, the "D Term Notes"), (v) if Revolving Loans, by a
promissory note substantially in the form of Exhibit B-5 with blanks
appropriately completed in conformity herewith (each, a "Revolving Note"
and, collectively, the "Revolving Notes") and (vi) if Swingline Loans,
by a promissory note substantially in the form of Exhibit B-6 with
blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The A Term Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Restatement Effective Date, (iii) be
in a stated principal amount equal to the A Term Loans made by such
Bank, (iv) mature on the A Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The B Term Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Restatement Effective Date, (iii) be
in a stated principal amount equal to the B Term Loans made by such
Bank, (iv) mature on the B Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit
Documents.
(d) The C Term Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Restatement Effective Date, (iii) be
in a stated principal amount equal to the C Term Loans made by such
Bank, (iv) mature on the C Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit
Documents.
<PAGE>
(e) The D Term Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Restatement Effective Date, (iii) be
in a stated principal amount equal to the D Term Loans made by such
Bank, (iv) mature on the D Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit
Documents.
(f) The Revolving Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank or
its registered assigns and be dated the Restatement Effective Date,
(iii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Bank and be payable in the principal amount of the
Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan
Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(g) The Swingline Note issued to BTCo shall (i) be executed
by the Borrower, (ii) be payable to the order of BTCo or its registered
assigns and be dated the Restatement Effective Date, (iii) be in a
stated principal amount equal to the Maximum Swingline Amount and be
payable in the principal amount of the Swingline Loans evidenced
thereby, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in Section 1.08 in respect of the Base Rate Loans evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit
Documents.
(h) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior
to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation shall not affect the Borrower's obligations in
respect of such Loans.
<PAGE>
1.06 Conversions. The Borrower shall have the option to
convert on any Business Day occurring on or after the earlier of (x) the
90th day after the Restatement Effective Date and (y) the Syndication
Date, all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans (other
than Swingline Loans which at all times shall be maintained as Base Rate
Loans) owing by the Borrower pursuant to a single Facility into a
Borrowing or Borrowings of another Type of Loan under such Facility;
provided, that (i) except as otherwise provided in Section 1.10(b), no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to
such Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) Base Rate Loans may only be converted into Eurodollar
Loans if no payment Default, or Event of Default, is in existence on the
date of the conversion and (iii) Borrowings of Eurodollar Loans
resulting from this Section 1.06 shall be limited in number as provided
in Section 1.02. Each such conversion shall be effected by the Borrower
by giving the Agent at its Notice Office, prior to 11:00 A.M. (New York
time), at least three Business Days' (or one Business Day's in the case
of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted, the Type of Loans
to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Agent shall give each Bank prompt notice of any such
proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans (other
than Swingline Loans) under this Agreement shall be made by the Banks
pro rata on the basis of their A Term Loan Commitments, B Term Loan
Commitments, C Term Loan Commitments, D Term Loan Commitments or
Revolving Loan Commitments, as the case may be. It is understood that
no Bank shall be responsible for any default by any other Bank of its
obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans to be made by it hereunder, regardless of the failure
of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof
until the earlier of (i) the maturity (whether by acceleration or
otherwise) of such Base Rate Loan and (ii) the conversion of such Base
Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be the Applicable Base Rate Margin plus
the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until the earlier
of (i) the maturity (whether by acceleration or otherwise) of such
Eurodollar Loan and (ii) the conversion of such Eurodollar Loan to a
Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable,
at a rate per annum which shall at all times be the Applicable
Eurodollar Margin plus the relevant Eurodollar Rate.
<PAGE>
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of
the rate then borne by such Loans and (y) the rate which is 2% in excess
of the rate otherwise applicable to Base Rate Loans of such Facility
from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall
be payable (i) in respect of each Base Rate Loan, quarterly in arrears
on each Quarterly Payment Date, (ii) in respect of each Eurodollar Loan,
on (x) the date of any prepayment or repayment thereof (on the amount
prepaid or repaid), (y) the date of any conversion into a Base Rate Loan
pursuant to Section 1.06, 1.09 or 1.10(b), as applicable (on the amount
converted) and (z) the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, at
maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
<PAGE>
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly
notify the Borrower and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of,
or conversion into, a Borrowing of Eurodollar Loans (in the case of the
initial Interest Period applicable thereto) or prior to 12:00 Noon (New
York time) on the third Business Day prior to the expiration of an
Interest Period applicable to a Borrowing of Eurodollar Loans, it shall
have the right to elect the Interest Period applicable to such Borrowing
by giving the Agent written notice (or telephonic notice promptly
confirmed in writing) thereof, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six-month period or, to
the extent approved by all Banks with a Commitment and/or outstanding
Loans, as the case may be, of the respective Facility, a twelve-month
period. Notwithstanding anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall have
the same Interest Period;
(ii) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of
such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(iii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided, that if any Interest
Period would otherwise expire on a day which is not a Business Day
but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) no Interest Period for a Borrowing under a Facility may
be elected if it would extend beyond the respective Maturity Date
for such Facility;
(vi) no Interest Period may be elected at any time when a
payment Default, or an Event of Default, is then in existence; and
<PAGE>
(vii) no Interest Period with respect to any Borrowing of Term
Loans shall extend beyond any date upon which a mandatory
prepayment of such Term Loans is required to be made under Section
4.02(A)(b) (i), (ii), (iii) or (iv), as the case may be, if, after
giving effect to the selection of such Interest Period, the
aggregate principal amount of such Term Loans maintained as
Eurodollar Loans with Interest Periods ending after such date of
mandatory repayment would exceed the aggregate principal amount of
such Term Loans permitted to be outstanding after such mandatory
prepayment.
If upon the expiration of any Interest Period, the Borrower has failed
to elect, or is not permitted to elect by virtue of the application of
clause (vi) above, a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such
current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event
that (x) in the case of clause (i) below, the Agent or (y) in the case
of clauses (ii) and (iii) below, any Bank, shall have determined (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the
Restatement Effective Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of net income taxes or
similar charges) because of (x) any change since the Restatement
Effective Date in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but
not limited to a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the
extent included in the computation of the Eurodollar Rate) and/or
(y) other circumstances affecting such Bank, the interbank
Eurodollar market or the position of such Bank in such market; or
(iii) at any time since the Restatement Effective Date, that
the making or continuance of any Eurodollar Loan has become
unlawful by compliance by such Bank in good faith with any law,
governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or
order not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith
would not be unlawful), or has become impracticable as a result of
a contingency occurring after the Restatement Effective Date which
materially and adversely affects the interbank Eurodollar market;
<PAGE>
then, and in any such event, such Bank (or the Agent in the case of
clause (i) above) shall (x) on such date and (y) as promptly as
practicable (and in any event within 10 Business Days) after the date on
which such event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i)) to the
Agent of such determination (which notice the Agent shall promptly
transmit to each of the other Banks). Thereafter, (x) in the case of
clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Agent notifies the Borrower and the Banks that the
circumstances giving rise to such notice by the Agent no longer exist,
and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower agrees to pay to such Bank, upon written
demand therefor (accompanied by the written notice referred to below),
such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Bank in
its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed
to such Bank, showing the basis for the calculation thereof, submitted
to the Borrower by such Bank shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified
in Section 1.10(b) as promptly as possible and, in any event, within the
time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower
may (and in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii) the Borrower shall) either (i) if the affected Eurodollar
Loan is then being made pursuant to a Borrowing, cancel said Borrowing
by giving the Agent telephonic notice (confirmed promptly in writing)
thereof on the same date that the Borrower was notified by a Bank
pursuant to Section 1.10(a)(ii) or (iii)), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days'
notice to the Agent, require the affected Bank to convert each such
Eurodollar Loan into a Base Rate Loan (which conversion, in the case of
the circumstances described in Section 1.10(a)(iii), shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan (or such earlier date as shall be required by applicable
law)); provided, that if more than one Bank is affected at any time,
then all affected Banks must be treated the same pursuant to this
Section 1.10(b).
<PAGE>
(c) If any Bank shall have determined that after the
Restatement Effective Date, the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration
thereof by the National Association of Insurance Commissioners ("NAIC")
or any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such
Bank or any corporation controlling such Bank with any request or
directive regarding capital adequacy (whether or not having the force of
law) of the NAIC or any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on
such Bank's or such other corporation's capital or assets as a
consequence of such Bank's Commitments or obligations hereunder to a
level below that which such Bank or such other corporation could have
achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Bank's or such other corporation's
policies with respect to capital adequacy), then from time to time, upon
written demand by such Bank (with a copy to the Agent), accompanied by
the notice referred to in the last sentence of this clause (c), the
Borrower agrees to pay to such Bank such additional amount or amounts as
will compensate such Bank or such other corporation for such reduction.
Each Bank, upon determining in good faith that any additional amounts
will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the
basis of the calculation of such additional amounts, although the
failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this
Section 1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. The Borrower agrees to compensate each
Bank, promptly upon its written request (which request shall set forth
the basis for requesting such compensation and shall be made through the
Agent), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of
the liquidation or reemployment of deposits or other funds required by
such Bank to fund its Eurodollar Loans but excluding loss of anticipated
profit with respect to any Loans) which such Bank may sustain: (i) if
for any reason (other than a default by such Bank or the Agent) a
Borrowing of Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or
not withdrawn by the Borrower or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including any repayment made pursuant
to Section 4.02 or as a result of an acceleration of the Loans pursuant
to Section 9) or conversion of any Eurodollar Loans occurs on a date
which is not the last day of an Interest Period applicable thereto;
(iii) if any prepayment of any Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its
Eurodollar Loans when required by the terms of this Agreement or (y) an
election made pursuant to Section 1.10(b). Calculation of all amounts
payable to a Bank under this Section 1.11 shall be made as though that
Bank had actually funded its relevant Eurodollar Loan through the
purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate
in an amount equal to the amount of that Loan, having a maturity
comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of that Bank to a
domestic office of that Bank in the United States of America; provided,
however, that each Bank may fund each of its Eurodollar Loans in any
manner it sees fit and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this Section 1.11.
<PAGE>
1.12 Change of Lending Office. Each Bank agrees that, upon
the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), 1.10(c), 2.05 or 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Bank) to designate another
lending office for any Loans or Letters of Credit affected by such
event; provided, that such designation is made on such terms that, in
the sole judgment of such Bank, such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of
any such Section. Nothing in this Section 1.12 shall affect or postpone
any of the obligations of the Borrower or the right of any Bank provided
in Section 1.10, 2.05 or 4.04.
<PAGE>
1.13 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank, (y) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05
or Section 4.04 with respect to any Bank which results in such Bank
charging to the Borrower increased costs in excess of those being
generally charged by the other Banks or (z) in the case of a refusal by
a Bank to consent to a proposed change, waiver, discharge or termination
with respect to this Agreement which has been approved by the Required
Banks as provided in Section 12.12(b), the Borrower shall have the
right, if no payment Default, or Event of Default, then exists, to
replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement
Bank") reasonably acceptable to the Agent, provided that (i) at the time
of any replacement pursuant to this Section 1.13, the Replacement Bank
shall enter into one or more Assignment and Assumption Agreements
pursuant to Section 12.04(b) (and with all fees payable pursuant to said
Section 12.04(b) to be paid by the Replacement Bank) pursuant to which
the Replacement Bank shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in Letters of
Credit by, the Replaced Bank and, in connection therewith, shall pay to
(x) the Replaced Bank in respect thereof an amount equal to the sum of
(A) an amount equal to the principal of, and all accrued interest on,
all outstanding Loans of the Replaced Bank, (B) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect
thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section
3.01, (y) the respective Letter of Credit Issuer an amount equal to such
Replaced Bank's RL Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) with respect to a Letter of Credit issued by
it to the extent such amount was not theretofore funded by such Replaced
Bank and (z) BTCo an amount equal to such Replaced Bank's RL Percentage
of any Mandatory Borrowing to the extent such amount was not theretofore
funded by such Replaced Bank, and (ii) all obligations (including,
without limitation, all such amounts, if any, owing under Section 1.11)
of the Borrower owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to in clauses (i)
and (ii) above, recordation of the assignment on the Register by the
Agent pursuant to Section 7.13 and, if so requested by the Replacement
Bank, delivery to the Replacement Bank of the appropriate Note or Notes
executed by the Borrower, (x) the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Bank and (y) Annex I
hereto shall be deemed modified to reflect the changed Commitments
(and/or outstanding Term Loans, as the case may be) resulting from the
assignment from the Replaced Bank to the Replacement Bank.<PAGE>
<PAGE>
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms
and conditions herein set forth, the Borrower may request a Letter of
Credit Issuer at any time and from time to time on or after the
Restatement Effective Date and prior to the Revolving Loan Maturity Date
to issue, for the account of the Borrower and in support of, (x) trade
obligations of the Borrower or any of its Subsidiaries that arise in the
ordinary course of business and are in respect of general corporate
purposes of the Borrower or its Subsidiaries, as the case may be, and/or
(y) on a standby basis, L/C Supportable Indebtedness, and subject to and
upon the terms and conditions herein set forth each Letter of Credit
Issuer agrees to issue from time to time, irrevocable letters of credit
in such form as may be approved by such Letter of Credit Issuer (each
such letter of credit, a "Letter of Credit" and, collectively, the
"Letters of Credit"). Notwithstanding the foregoing, no Letter of
Credit Issuer shall be under any obligation to issue any Letter of
Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Letter of Credit Issuer from issuing such Letter of
Credit or any requirement of law applicable to such Letter of
Credit Issuer or any request or directive (whether or not having
the force of law) from any governmental authority with jurisdiction
over such Letter of Credit Issuer shall prohibit, or request that
such Letter of Credit Issuer refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect to such
Letter of Credit any restriction or reserve or capital requirement
(for which such Letter of Credit Issuer is not otherwise
compensated) not in effect on the Restatement Effective Date, or
any unreimbursed loss, cost or expense which was not applicable, in
effect or known to such Letter of Credit Issuer as of the
Restatement Effective Date, and which such Letter of Credit Issuer
in good faith deems material to it; or
(ii) such Letter of Credit Issuer shall have received notice
from the Required Banks prior to the issuance of such Letter of
Credit of the type described in clause (vi) of Section 2.01(b).
<PAGE>
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of
Credit) at such time, would exceed either (x) $35,000,000 or (y) when
added to the aggregate principal amount of all Revolving Loans and
Swingline Loans then outstanding, the Total Revolving Loan Commitment at
such time; (ii) (x) each standby Letter of Credit shall have an expiry
date occurring not later than one year after such standby Letter of
Credit's date of issuance, provided, that any standby Letter of Credit
may be automatically renewable for periods of up to one year so long as
such standby Letter of Credit provides that the respective Letter of
Credit Issuer retains an option, satisfactory to such Letter of Credit
Issuer, to terminate such standby Letter of Credit within a specified
period of time prior to each scheduled renewal date and (y) each trade
Letter of Credit shall have an expiry date occurring not later than 180
days after such trade Letter of Credit's date of issuance; (iii) (x) no
standby Letter of Credit shall have an expiry date occurring later than
the Business Day next preceding the Revolving Loan Maturity Date and (y)
no trade Letter of Credit shall have an expiry date occurring later than
30 days prior to the Revolving Loan Maturity Date; (iv) each Letter of
Credit shall be denominated in U.S. Dollars; (v) the Stated Amount of
each Letter of Credit shall not be less than $100,000 or such lesser
amount as is acceptable to the Letter of Credit Issuer; and (vi) no
Letter of Credit Issuer will issue any Letter of Credit after it has
received written notice from the Borrower or the Required Banks stating
that a Default or an Event of Default exists until such time as such
Letter of Credit Issuer shall have received a written notice of (i)
rescission of such notice from the party or parties originally
delivering the same or (ii) a waiver of such Default or Event of Default
by the Required Banks.
(c) Notwithstanding the foregoing, in the event a Bank
Default exists, no Letter of Credit Issuer shall be required to issue
any Letter of Credit unless the respective Letter of Credit Issuer has
entered into arrangements satisfactory to it and the Borrower to
eliminate such Letter of Credit Issuer's risk with respect to the
participation in Letters of Credit of the Defaulting Bank or Banks,
including by cash collateralizing such Defaulting Bank's or Banks' RL
Percentage of the Letter of Credit Outstandings.
(d) Annex XII hereto contains a description of all letters of
credit issued pursuant to the Original Credit Agreement and outstanding
on the Restatement Effective Date. Each such letter of credit,
including any extension or renewal thereof (each, as amended from time
to time in accordance with the terms thereof and hereof, an "Original
Letter of Credit") shall constitute a "Letter of Credit" for all
purposes of this Agreement, issued, for purposes of Section 2.04(a), on
the Restatement Effective Date. Any Bank hereunder to the extent it has
issued an Original Letter of Credit that is to remain outstanding on the
Restatement Effective Date shall constitute a "Letter of Credit Issuer"
for all purposes of this Agreement.
<PAGE>
2.02 Letter of Credit Requests; Notices of Issuance.
(a) Whenever it desires that a Letter of Credit be issued, the Borrower
shall give the Agent and the respective Letter of Credit Issuer written
notice (or telephonic notice confirmed in writing) thereof prior to
12:00 Noon (New York time) at least five Business Days (or such shorter
period as may be acceptable to such Letter of Credit Issuer) prior to
the proposed date of issuance (which shall be a Business Day), which
written notice shall be in the form of Exhibit A-2 (each such notice, a
"Letter of Credit Request"). Each Letter of Credit Request shall
include any other documents as the respective Letter of Credit Issuer
customarily requires in connection therewith. The Agent shall promptly
transmit copies of each Letter of Credit Request to each RL Bank.
(b) Each Letter of Credit Issuer shall, on the date of each
issuance of or amendment or modification to a Letter of Credit by it,
give the Agent, each RL Bank and the Borrower written notice of the
issuance of or amendment or modification to such Letter of Credit,
accompanied by a copy to the Agent of the Letter of Credit or Letters of
Credit issued by it and each such amendment or modification thereto.
2.03 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Letter of Credit
Issuer, by making payment to the Agent in immediately available funds at
the Payment Office, for any payment or disbursement made by such Letter
of Credit Issuer under any Letter of Credit issued by it (each such
amount so paid or disbursed until reimbursed, an "Unpaid Drawing") no
later than one Business Day following the date of such payment or
disbursement, with interest on the amount so paid or disbursed by such
Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M.
(New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such
Letter of Credit Issuer is reimbursed therefor at a rate per annum which
shall be the Applicable Base Rate Margin plus the Base Rate as in effect
from time to time for Revolving Loans (plus an additional 2% per annum
if not reimbursed by the third Business Day after the date of such
payment or disbursement), such interest also to be payable on demand.
Each Letter of Credit Issuer shall provide the Borrower prompt notice of
any payment or disbursement made by it under any Letter of Credit issued
by it, although the failure of, or delay in, giving any such notice
shall not release or diminish the obligations of the Borrower under this
Section 2.03(a) or under any other Section of this Agreement.
(b) The Borrower's obligation under this Section 2.03 to
reimburse the respective Letter of Credit Issuer with respect to Unpaid
Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrower may
have or have had against such Letter of Credit Issuer, the Agent or any
Bank, including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit issued by it to conform to the
terms of the Letter of Credit or any non-application or misapplication
by the beneficiary of the proceeds of such drawing; provided, however,
that the Borrower shall not be obligated to reimburse such Letter of
Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit issued by it as a result of acts or
omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer.
<PAGE>
2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by a Letter of Credit Issuer of any Letter of Credit, such
Letter of Credit Issuer shall be deemed to have sold and transferred to
each other RL Bank, and each such RL Bank (each, a "Participant") shall
be deemed irrevocably and unconditionally to have purchased and received
from such Letter of Credit Issuer, without recourse or warranty, an
undivided interest and participation, to the extent of such
Participant's RL Percentage, in such Letter of Credit, each substitute
letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although Letter
of Credit Fees shall be payable directly to the Agent for the account of
the RL Banks as provided in Section 3.01(b) and the Participants shall
have no right to receive any portion of any Facing Fees) and any
security therefor or guaranty pertaining thereto. Upon any change in
the Revolving Loan Commitments of the RL Banks pursuant to Section 1.13
or 12.04(b) or otherwise, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 2.04
to reflect the new RL Percentages of the assigning and assignee Banks.
(b) In determining whether to pay under any Letter of Credit,
no Letter of Credit Issuer shall have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Letter of Credit
Issuer under or in connection with any Letter of Credit issued by it if
taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any
resulting liability.
<PAGE>
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrower shall
not have reimbursed such amount in full to such Letter of Credit Issuer
pursuant to Section 2.03(a), such Letter of Credit Issuer shall promptly
notify the Agent, and the Agent shall promptly notify each Participant
of such failure, and each Participant shall promptly and unconditionally
pay to the Agent for the account of such Letter of Credit Issuer, the
amount of such Participant's RL Percentage of such payment in U.S.
Dollars and in same day funds; provided, however, that no Participant
shall be obligated to pay to the Agent its RL Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of
Credit Issuer under a Letter of Credit issued by it as a result of acts
or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer. If the Agent so notifies any
Participant required to fund a payment under a Letter of Credit prior to
11:00 A.M. (New York time) on any Business Day, such Participant shall
make available to the Agent for the account of the respective Letter of
Credit Issuer such Participant's RL Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent
such Participant shall not have so made its RL Percentage of the amount
of such payment available to the Agent for the account of the respective
Letter of Credit Issuer, such Participant agrees to pay to the Agent for
the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Agent for the account of such
Letter of Credit Issuer at the overnight Federal Funds rate. The
failure of any Participant to make available to the Agent for the
account of the respective Letter of Credit Issuer its RL Percentage of
any payment under any Letter of Credit issued by it shall not relieve
any other Participant of its obligation hereunder to make available to
the Agent for the account of such Letter of Credit Issuer its RL
Percentage of any payment under any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible
for the failure of any other Participant to make available to the Agent
for the account of such Letter of Credit Issuer such other Participant's
RL Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment
of a reimbursement obligation as to which the Agent has received for the
account of such Letter of Credit Issuer any payments from the
Participants pursuant to clause (c) above, such Letter of Credit Issuer
shall promptly pay to the Agent and the Agent shall promptly pay to each
Participant which has paid its RL Percentage thereof, in U.S. Dollars
and in same day funds, an amount equal to such Participant's RL
Percentage of the principal amount thereof and interest thereon accruing
after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to
the Agent for the account of the respective Letter of Credit Issuer with
respect to Letters of Credit issued by it shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other
qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
<PAGE>
(ii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the
Agent, any Letter of Credit Issuer, any Bank, or other Person,
whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower or any
of its Subsidiaries and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If after the Restatement Effective
Date, the adoption or effectiveness of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Participant
with any request or directive (whether or not having the force of law)
by any such authority, central bank or comparable agency shall either
(i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by such
Letter of Credit Issuer or such Participant's participation therein, or
(ii) impose on any Letter of Credit Issuer or any Participant any other
conditions affecting this Agreement, any Letter of Credit or such
Participant's participation therein; and the result of any of the
foregoing is to increase the cost to such Letter of Credit Issuer or
such Participant of issuing, maintaining or participating in any Letter
of Credit, or to reduce the amount of any sum received or receivable by
such Letter of Credit Issuer or such Participant hereunder, then, upon
written demand to the Borrower by such Letter of Credit Issuer or such
Participant (a copy of which notice shall be sent by such Letter of
Credit Issuer or such Participant to the Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the
Borrower shall pay to such Letter of Credit Issuer or such Participant
such additional amount or amounts as will compensate such Letter of
Credit Issuer or such Participant for such increased cost or reduction.
A certificate submitted to the Borrower by such Letter of Credit Issuer
or such Participant, as the case may be (a copy of which certificate
shall be sent by such Letter of Credit Issuer or such Participant to the
Agent), setting forth the basis for the determination of such additional
amount or amounts necessary to compensate such Letter of Credit Issuer
or such Participant as aforesaid shall be final and conclusive and
binding on the Borrower absent manifest error, although the failure to
deliver any such certificate shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this
Section 2.05 upon subsequent receipt of such certificate.
<PAGE>
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower shall pay to the Agent for
distribution to each Bank a commitment fee (the "Commitment Fee") for
the period from the Restatement Effective Date to but not including the
date the Total Commitment has been terminated, computed at the rate of
1/2 of 1% per annum on the daily Aggregate Unutilized Commitment of such
Bank. Accrued Commitment Fees shall be due and payable in arrears on
the Restatement Effective Date and thereafter, in arrears on each
Quarterly Payment Date and the date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Borrower shall pay to the Agent for the account of
the RL Banks pro rata on the basis of their RL Percentages, a fee in
respect of each Letter of Credit (the "Letter of Credit Fee") computed
at a rate per annum equal to the Applicable Eurodollar Margin then in
effect with respect to Revolving Loans on the daily Stated Amount of
such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and upon the
first day after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to the Agent for the account of
the respective Letter of Credit Issuer a fee in respect of each Letter
of Credit issued by such Letter of Credit Issuer (the "Facing Fee")
computed at the rate of 1/4 of 1% per annum on the daily Stated Amount
of such Letter of Credit; provided, that in no event shall the annual
Facing Fee with respect to each Letter of Credit be less than $500; it
being agreed that, on the date of issuance of any Letter of Credit and
on each anniversary thereof prior to the termination of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue
with respect to such Letter of Credit for the immediately succeeding 12-
month period, the full $500 shall be payable on the date of issuance of
such Letter of Credit and on each such anniversary thereof prior to the
termination of such Letter of Credit. Except as provided in the
immediately preceding sentence, accrued Facing Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and upon the
first day after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower hereby agrees to pay directly to the
respective Letter of Credit Issuer upon each issuance of, payment under,
and/or amendment of, a Letter of Credit issued by it such amount as
shall at the time of such issuance, payment or amendment be the
administrative charge which such Letter of Credit Issuer is customarily
charging for issuances of, payments under or amendments of, letters of
credit issued by it.
(e) The Borrower shall pay to the Agent, for its own account,
such fees as may be agreed to from time to time between the Borrower and
the Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
<PAGE>
3.02 Voluntary Termination or Reduction of Total Unutilized
Revolving Loan Commitment. (a) Upon at least two Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) to
the Agent at its Notice Office (which notice the Agent shall promptly
transmit to each of the Banks), the Borrower shall have the right,
without premium or penalty, to terminate or partially reduce the Total
Unutilized Revolving Loan Commitment; provided that (x) any such
termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment of each of the RL Banks
and (y) any partial reduction pursuant to this Section 3.02 shall be in
the amount of at least $1,000,000.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks
as provided in Section 12.12(b), the Borrower shall have the right, upon
five Business Days' prior written notice to the Agent at its Notice
Office (which notice the Agent shall promptly transmit to each of the
Banks), to terminate the entire Revolving Loan Commitment of such Bank,
so long as all Loans, together with accrued and unpaid interest, Fees
and all other amounts, due and owing to such Bank are repaid
concurrently with the effectiveness of such termination pursuant to
Section 4.01(b) and the Borrower shall pay to the Agent at such time an
amount in cash and/or Cash Equivalents equal to such Bank's RL
Percentage of the outstanding Letters of Credit (which cash and/or Cash
Equivalents shall be held by the Agent as security for the obligations
of the Borrower hereunder in respect of the outstanding Letters of
Credit pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Agent, which shall
permit certain investments in Cash Equivalents reasonably satisfactory
to the Agent until the proceeds are applied to the secured obligations)
(at which time Annex I shall be deemed modified to reflect such changed
amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to
indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 12.01 and 12.06), which shall survive
as to such repaid Bank.
3.03 Mandatory Adjustments of Commitments, etc. (a) The
Total Commitment shall terminate in its entirety on April 30, 1997
unless the Restatement Effective Date has occurred on or before such
date.
(b) Each of the Total A Term Loan Commitment, Total B Term
Loan Commitment, the Total C Term Loan Commitment and the Total D Term
Loan Commitment shall terminate on the Restatement Effective Date, after
giving effect to the making of Term Loans on such date.
(c) The Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate on the earlier of (x) the
date on which a Change of Control Event occurs and (y) the Revolving
Loan Maturity Date.
<PAGE>
(d) The Total Revolving Loan Commitment shall be reduced (i)
on the second Business Day following the Accounts Receivable Facility
Transaction Date, by an amount equal to the Accounts Receivable Facility
Proceeds and (ii) on the second Business Day after each date after the
Accounts Receivable Facility Transaction Date on which the holders of
Investor Certificates fund any increase in the net invested amount of
such Investor Certificates, by the respective increase; provided that
after the aggregate reduction to the Total Revolving Loan Commitment
pursuant to clauses (i) and/or (ii) above is in an amount equal to
$30,000,000, no such further reduction shall be required pursuant to
this Section 3.03(d) unless and until the sum (such sum, the "Aggregate
Net Invested Amount") of (x) the Accounts Receivable Facility Proceeds
plus (y) the sum of the respective increases under clause (ii) above
exceeds $75,000,000; provided further, that on the second Business Day
following any date on which the Aggregate Net Invested Amount is
increased above $75,000,000, an amount equal to such increase above
$75,000,000 shall be applied (at the option of the Borrower) either to
(A) reduce the Total Revolving Loan Commitment and/or (B) prepay the A
Term Loans pursuant to Section 4.02(A)(j) (such election (which may be
to apply all or part of such increase to the Total Revolving Loan
Commitment and/or all or part of such increase to the A Term Loans, so
long as the full amount of such increase is applied) to be evidenced by
a written notice to be delivered by the Borrower to the Agent on or
prior to the second Business Day following the date of such increase,
which notice shall specify the amount of such increase to be applied to
each of the Total Revolving Loan Commitment and the A Term Loans, it
being understood that if the Borrower fails to give such notice then the
full amount of such increase shall be applied to reduce the Total
Revolving Loan Commitment).
(e) On each date upon which a mandatory repayment of Term
Loans pursuant to Section 4.02(A)(c), (d), (e), (f), (g) or (h) is
required (and exceeds in amount the aggregate principal amount of Term
Loans then outstanding) or would be required if an unlimited amount of
Term Loans were then outstanding, the Total Revolving Loan Commitment
shall be permanently reduced by the amount, if any, by which the amount
required to be applied pursuant to said Sections (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the
aggregate principal amount of Term Loans then outstanding.
(f) Each reduction or adjustment of the Total A Term Loan
Commitment, the Total B Term Loan Commitment, the Total C Term Loan
Commitment, the Total D Term Loan Commitment or the Total Revolving Loan
Commitment pursuant to this Section 3.03 (or pursuant to Section 4.02)
shall apply proportionately to the A Term Loan Commitment, the B Term
Loan Commitment, the C Term Loan Commitment, the D Term Loan Commitment
or the Revolving Loan Commitment, as the case may be, of each Bank with
such a Commitment.
<PAGE>
SECTION 4. Payments.
4.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans made to it, in whole or in part, without
premium or penalty except as otherwise provided in this Agreement, from
time to time on the following terms and conditions: (i) the Borrower
shall give the Agent at its Notice Office written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay such
Loans, whether such Loans are A Term Loans, B Term Loans, C Term Loans,
D Term Loans, Revolving Loans or Swingline Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be given by the
Borrower prior to 11:00 A.M. (New York time) (x) at least one Business
Day prior to the date of such prepayment in the case of Term Loans or
Revolving Loans maintained as Base Rate Loans, (y) on the date of such
prepayment in the case of Swingline Loans and (z) at least three
Business Days prior to the date of such prepayment in the case of
Eurodollar Loans, which notice shall, except in the case of Swingline
Loans, promptly be transmitted by the Agent to each of the Banks; (ii)
each prepayment shall be in an aggregate principal amount of at least
$1,000,000 (or $500,000 in the case of Swingline Loans); provided, that
no partial prepayment of Eurodollar Loans made pursuant to a Borrowing
shall reduce the aggregate principal amount of the Loans outstanding
pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto; (iii) each prepayment in respect of any Loans
made pursuant to a Borrowing shall be applied pro rata among such Loans;
provided, that at the Borrower's election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01, such
prepayment shall not be applied to any Revolving Loans of a Defaulting
Bank at any time when the aggregate amount of Revolving Loans of any
Non-Defaulting Bank exceeds such Non-Defaulting Bank's RL Percentage of
all Revolving Loans then outstanding; (iv) each prepayment of Term Loans
pursuant to this Section 4.01 must consist of a prepayment of A Term
Loans (in an amount equal to the A TL Percentage of such prepayment), B
Term Loans (in an amount equal to the B TL Percentage of such
prepayment), C Term Loans (in an amount equal to the C TL Percentage of
such prepayment) and D Term Loans (in an amount equal to the D TL
Percentage of such prepayment); (v) each prepayment of A Term Loans
pursuant to this Section 4.01 shall reduce the then remaining Scheduled
A Repayments on a pro rata basis (based upon the then remaining
principal amount of each such Scheduled A Repayment); (vi) each
prepayment of B Term Loans pursuant to this Section 4.01 shall reduce
the then remaining Scheduled B Repayments on a pro rata basis (based
upon the then remaining principal amount of each such Scheduled B
Repayment); (vii) each prepayment of C Term Loans pursuant to this
Section 4.01 shall reduce the then remaining Scheduled C Repayments on a
pro rata basis (based upon the then remaining principal amount of each
such Scheduled C Repayment); and (viii) each prepayment of D Term Loans
pursuant to this Section 4.01 shall reduce the then remaining Scheduled
D Repayments on a pro rata basis (based upon the then remaining
principal amount of each such Scheduled D Repayment).<PAGE>
<PAGE>
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks
as provided in Section 12.12(b), the Borrower shall have the right, upon
five Business Days' prior written notice to the Agent at its Notice
Office (which notice the Agent shall promptly transmit to each of the
Banks) to repay all Loans, together with accrued and unpaid interest,
Fees and all other amounts due and owing to such Bank in accordance with
said Section 12.12(b), so long as (A) in the case of the repayment of
Revolving Loans of any RL Bank pursuant to this clause (b), the
Revolving Loan Commitment of such RL Bank is terminated concurrently
with such repayment pursuant to Section 3.02(b) (at which time Annex I
shall be deemed modified to reflect the changed Revolving Loan
Commitments) and (B) in the case of the repayment of Loans of any Bank,
the consents required by Section 12.12(b) in connection with the
repayment pursuant to this clause (b) shall have been obtained.
4.02 Mandatory Prepayments.
(A) Requirements:
(a) If on any date the sum of (i) the aggregate outstanding
principal amount of Revolving Loans and Swingline Loans (after giving
effect to all other repayments thereof on such date) plus (ii) the
Letter of Credit Outstandings on such date exceeds the Total Revolving
Loan Commitment as then in effect, the Borrower shall repay on such date
the principal of Swingline Loans, and if no Swingline Loans are or
remain outstanding, Revolving Loans, in an aggregate amount equal to
such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans, the aggregate amount of
Letter of Credit Outstandings exceeds the Total Revolving Loan
Commitment as then in effect, the Borrower agrees to pay to the Agent an
amount in cash and/or Cash Equivalents equal to such excess (up to the
aggregate amount of Letter of Credit Outstandings at such time) and the
Agent shall hold such payment as security for the obligations of the
Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the Agent (which
shall permit certain investments in Cash Equivalents satisfactory to the
Agent until the proceeds are applied to the secured obligations).
<PAGE>
(b) (i) The Borrower shall be required to repay the principal
amount of A Term Loans on each date set forth below in the amount set
forth opposite such date below (each such repayment, as the same may be
reduced as provided in Sections 4.01 and 4.02(B), a "Scheduled A
Repayment"):
Scheduled A Repayment Date Amount
the last Business Day in September, 1999 $ 4,000,000
the last Business Day in December, 1999 $ 8,000,000
the last Business Day in March, 2000 $11,500,000
the last Business Day in June, 2000 $11,500,000
the last Business Day in September, 2000 $11,500,000
the last Business Day in December, 2000 $11,500,000
<PAGE>
the last Business Day in March, 2001 $19,250,000
the last Business Day in June, 2001 $19,250,000
the last Business Day in September, 2001 $19,250,000
A Term Loan Maturity Date $19,250,000
<PAGE>
(ii) The Borrower shall be required to repay the principal
amount of B Term Loans on each date set forth below in the amount set
forth opposite such date below (each such repayment, as the same may be
reduced as provided in Sections 4.01 and 4.02(B), a "Scheduled B
Repayment"):
Scheduled B Repayment Date Amount
the last Business Day in June, 1997 $ 360,000
the last Business Day in September, 1997 $ 356,000
the last Business Day in December, 1997 $ 358,000
the last Business Day in March, 1998 $ 358,000
the last Business Day in June, 1998 $ 358,000
the last Business Day in September, 1998 $ 358,000
the last Business Day in December, 1998 $ 358,000
the last Business Day in March, 1999 $ 358,000
the last Business Day in June, 1999 $ 358,000
the last Business Day in September, 1999 $ 358,000
the last Business Day in December, 1999 $ 358,000
the last Business Day in March, 2000 $ 358,000
the last Business Day in June, 2000 $ 358,000
the last Business Day in September, 2000 $ 358,000
the last Business Day in December, 2000 $ 358,000
the last Business Day in March, 2001 $ 358,000
the last Business Day in June, 2001 $ 358,000
the last Business Day in September, 2001 $ 358,000
the last Business Day in December, 2001 $ 358,000
the last Business Day in March, 2002 $26,979,500
the last Business Day in June, 2002 $26,979,500
the last Business Day in September, 2002 $26,979,500
B Term Loan Maturity Date $26,979,500
<PAGE>
(iii) The Borrower shall be required to repay the principal
amount of C Term Loans on each date set forth below in the amount set
forth opposite such date below (each such repayment, as the same may be
reduced as provided in Sections 4.01 and 4.02(B), a "Scheduled C
Repayment"):
Scheduled C Repayment Date Amount
the last Business Day in June, 1997 $ 360,000
the last Business Day in September, 1997 $ 356,000
the last Business Day in December, 1997 $ 358,000
the last Business Day in March, 1998 $ 358,000
the last Business Day in June, 1998 $ 358,000
the last Business Day in September, 1998 $ 358,000
the last Business Day in December, 1998 $ 358,000
the last Business Day in March, 1999 $ 358,000
the last Business Day in June, 1999 $ 358,000
the last Business Day in September, 1999 $ 358,000
the last Business Day in December, 1999 $ 358,000
the last Business Day in March, 2000 $ 358,000
the last Business Day in June, 2000 $ 358,000
the last Business Day in September, 2000 $ 358,000
the last Business Day in December, 2000 $ 358,000
the last Business Day in March, 2001 $ 358,000
the last Business Day in June, 2001 $ 358,000
the last Business Day in September, 2001 $ 358,000
the last Business Day in December, 2001 $ 358,000
the last Business Day in March, 2002 $ 358,000
the last Business Day in June, 2002 $ 358,000
the last Business Day in September, 2002 $ 358,000
the last Business Day in December, 2002 $ 358,000
the last Business Day in March, 2003 $26,621,500
the last Business Day in June, 2003 $26,621,500
the last Business Day in September, 2003 $26,621,500
C Term Loan Maturity Date $26,621,500
<PAGE>
(iv) The Borrower shall be required to repay the principal
amount of D Term Loans on each date set forth below in the amount set
forth opposite such date below (each such repayment as the same may be
reduced as provided in Sections 4.01 and 4.02(B), a "Scheduled D
Repayment"):
Scheduled D Repayment Date Amount
the last Business Day in June, 1997 $300,000
the last Business Day in September, 1997 $300,000
the last Business Day in December, 1997 $300,000
the last Business Day in March, 1998 $300,000
the last Business Day in June, 1998 $300,000
the last Business Day in September, 1998 $300,000
the last Business Day in December, 1998 $300,000
the last Business Day in March, 1999 $300,000
the last Business Day in June, 1999 $300,000
the last Business Day in September, 1999 $300,000
the last Business Day in December, 1999 $300,000
the last Business Day in March, 2000 $300,000
the last Business Day in June, 2000 $300,000
the last Business Day in September, 2000 $300,000
the last Business Day in December, 2000 $300,000
the last Business Day in March, 2001 $300,000
the last Business Day in June, 2001 $300,000
the last Business Day in September, 2001 $300,000
the last Business Day in December, 2001 $300,000
the last Business Day in March, 2002 $300,000
the last Business Day in June, 2002 $300,000
the last Business Day in September, 2002 $300,000
the last Business Day in December, 2002 $300,000
the last Business Day in March, 2003 $300,000
the last Business Day in June, 2003 $300,000
the last Business Day in September, 2003 $300,000
the last Business Day in December, 2003 $300,000
the last Business Day in March, 2004 $21,650,000
the last Business Day in June, 2004 $21,650,000
the last Business Day in September, 2004 $21,650,000
D Term Loan Maturity Date $21,650,000
<PAGE>
(c) On the Business Day after the date of receipt thereof by
Holdings and/or any of its Subsidiaries of Proceeds from any Asset Sale,
an amount equal to 100% of the Net Proceeds from such Asset Sale shall
be applied as a mandatory repayment of principal of the Term Loans (with
the A TL Percentage of such amount to be applied as a repayment of the A
Term Loans, the B TL Percentage of such amount to be applied as a
repayment of the B Term Loans, the C TL Percentage of such amount to be
applied as a repayment of the C Term Loans and the D TL Percentage of
such amount to be applied as a repayment of the D Term Loans, in each
case subject to modification of such application as set forth in Section
4.02(C)), provided that (w) with respect to no more than $5,000,000 in
the aggregate of such Proceeds in any fiscal year of the Borrower
(excluding Proceeds received from any Designated Real Property Sale and
any Designated Asset Sale), the Net Proceeds therefrom shall not be
required to be so applied on such date to the extent that no payment
Default, or Event of Default, then exists and the Borrower delivers a
certificate to the Agent on or prior to such date stating that such Net
Proceeds shall be used to purchase assets used or to be used in the
businesses referred to in Section 8.01(a) (including, without
limitation, capital stock of a corporation engaged in any such business)
within 180 days following the date of such Asset Sale (which certificate
shall set forth the estimates of the proceeds to be so expended),
provided, that (1) if all or any portion of such Net Proceeds not so
applied to the repayment of Term Loans are not so used (or contractually
committed to be used) within such 180 day period, such remaining portion
shall be applied on the last day of such period as a mandatory repayment
of principal of outstanding Term Loans as provided above in this Section
4.02(A)(c) and (2) if all or any portion of such Net Proceeds are not
required to be applied on the 180th day referred to in clause (1) above
because such amount is contractually committed to be used and subsequent
to such date such contract is terminated or expires without such portion
being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal
of outstanding Term Loans as provided in this Section 4.02(A)(c); (x)
notwithstanding anything to the contrary contained above, in the event
of an Asset Sale constituting a Designated Real Property Sale, only 80%
of such Net Proceeds resulting from any such Designated Real Property
Sale shall be required to be applied as a mandatory repayment of Term
Loans as provided above in this Section 4.02(A)(c) and (y)
notwithstanding anything to the contrary contained above, in the event
of an Asset Sale constituting a Designated Asset Sale, the Net Proceeds
therefrom shall not be required to be so applied on such date to the
extent that no payment Default, or Event of Default, then exists and the
Borrower delivers a certificate to the Agent on or prior to such date
stating that such Net Proceeds shall be used to purchase assets used or
to be used in the businesses referred to in Section 8.01(a) (including,
without limitation, capital stock of a corporation engaged in any such
business) within 360 days following the date of such Designated Asset
Sale (which certificate shall set forth the estimates of the proceeds to
be so expended), provided that if all or any portion of such Net
Proceeds not so applied to the repayment of Term Loans are not so used
within such 360 day period, such remaining portion (to the extent
theretofore received by Holdings and/or any of its Subsidiaries in the
form of cash) shall be applied on the last day of such period as a
mandatory repayment of principal of outstanding Term Loans as provided
in this Section 4.02(A)(c).
<PAGE>
(d) On the Business Day after the date of the receipt thereof
by Holdings and/or any of its Subsidiaries, an amount equal to 100% of
the cash proceeds (net of underwriting discounts and commissions and
other reasonable costs associated therewith) of the sale or issuance of
preferred or common equity of (or cash capital contributions to)
Holdings or any of its Subsidiaries (other than (w) issuances of
Holdings Common Stock and Permitted Holdings PIK Securities by Holdings
as consideration in connection with any Permitted Acquisition, (x)
issuances of Holdings Common Stock or Holdings Class L Common Stock
(including as a result of the exercise of any options with regard
thereto) to management of Holdings and its Subsidiaries, (y) issuances
of Baxter Preferred Stock to Baxter in accordance with the terms of the
Baxter Acquisition Documents and this Agreement and (z) equity
contributions to any Subsidiary of the Borrower made by the Borrower or
any other Subsidiary of the Borrower) shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of
such amount to be applied as a repayment of the A Term Loans, the B TL
Percentage of such amount to be applied as a repayment of the B Term
Loans, the C TL Percentage of such amount to be applied as a repayment
of the C Term Loans and the D TL Percentage of such amount to be applied
as a repayment of the D Term Loans, in each case subject to modification
of such application as set forth in Section 4.02(C)); provided that (i)
$30,000,000 of cash equity contributions in the aggregate from Bain
Capital, GS Capital and/or their respective Related Parties made at any
time after the Original Effective Date shall not be required to be
applied as provided above in this Section 4.02(A)(d) so long as such
equity contributions are substantially contemporaneously contributed to
the capital of the Borrower as an equity contribution or loaned to the
Borrower (such loan to be evidenced by the Borrower Subordinated Note)
(the cash contributions made pursuant to this clause (i), "Permitted
Equity Proceeds"), and (ii) only 50% of such proceeds resulting from the
registered initial public offering of Holdings Common Stock, or the
issuance of Holdings common stock pursuant to a Permitted Strategic
Equity Issuance, shall be applied as provided above in this Section
4.02(A)(d).
(e) On the date of the receipt thereof by Holdings and/or any
of its Subsidiaries, an amount equal to 100% of the proceeds (net of
underwriting discounts and commissions and other reasonable costs
associated therewith) of the incurrence of Indebtedness by Holdings
and/or any of its Subsidiaries (other than Indebtedness permitted to be
incurred by Section 8.04 as in effect on the Restatement Effective Date)
shall be applied as a mandatory repayment of principal of the Term Loans
(with the A TL Percentage of such amount to be applied as a repayment of
the A Term Loans, the B TL Percentage of such amount to be applied as a
repayment of the B Term Loans, the C TL Percentage of such amount to
applied as a repayment of the C Term Loans and the D TL Percentage of
such amount to be applied as a repayment of the D Term Loans, in each
case subject to modification of such application as set forth in Section
4.02(C)).
<PAGE>
(f) On each Excess Cash Payment Date, an amount equal to 75%
of Excess Cash Flow of the Borrower and its Subsidiaries for the most
recent Excess Cash Flow Period ending prior to such Excess Cash Payment
Date shall be applied as a mandatory repayment of principal of the Term
Loans (with the A TL Percentage of such amount to be applied as a
repayment of the A Term Loans, the B TL Percentage of such amount to be
applied as a repayment of the B Term Loans, the C TL Percentage of such
amount to be applied as a repayment of the C Term Loans and the D TL
Percentage of such amount to be applied as a repayment of the D Term
Loans, in each case subject to modification of such application as set
forth in Section 4.02(C)).
(g) Within 10 days following each date on which Holdings or
any of its Subsidiaries receives any proceeds from any Recovery Event,
an amount equal to 100% of the proceeds of such Recovery Event (net of
reasonable costs and taxes incurred in connection with such Recovery
Event) shall be applied as a mandatory repayment of principal of the
Term Loans (with the A TL Percentage of such amount to be applied as a
repayment of the A Term Loans, the B TL Percentage of such amount to be
applied as a repayment of the B Term Loans, the C TL Percentage of such
amount to be applied as a repayment of the C Term Loans and the D TL
Percentage of such amount to be applied as a repayment of the D Term
Loans, in each case subject to modification of such application as set
forth in Section 4.02(C)), provided that so long as no Default or Event
of Default then exists and such proceeds do not exceed $100,000,000,
such proceeds shall not be required to be so applied on such date to the
extent that the Borrower has delivered a certificate to the Agent on or
prior to such date stating that such proceeds shall be used to replace
or restore any properties or assets in respect of which such proceeds
were paid within 360 days following the date of the receipt of such
proceeds (which certificate shall set forth the estimates of the
proceeds to be so expended), and provided further, that (i) if the
amount of such proceeds exceeds $100,000,000, then the entire amount and
not just the portion in excess of $100,000,000 shall be applied as a
mandatory repayment of Term Loans as provided above in this Section
4.02(A)(g), (ii) if all or any portion of such proceeds not required to
be applied to the repayment of Term Loans pursuant to the preceding
proviso are not so used (or contractually committed to be used) within
360 days after the date of the receipt of such proceeds, such remaining
portion shall be applied on the last day of such period as a mandatory
repayment of principal of the Term Loans as provided in this Section
4.02(A)(g) and (iii) if all or any portion of such proceeds are not
required to be applied on the 360th day referred to in clause (ii) above
because such amount is contractually committed to be used and subsequent
to such date such contract is terminated or expires without such portion
being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal
of outstanding Term Loans as provided in this Section 4.02(A)(g).
(h) On the date of the receipt thereof by Holdings and/or any
of its Subsidiaries of a Pension Plan Refund, an amount equal to 100% of
such Pension Plan Refund shall be applied as a mandatory repayment of
principal of Term Loans (with the A TL Percentage of such amount to be
applied as a repayment of the A Term Loans, the B TL Percentage of such
amount to be applied as a repayment of the B Term Loans, the C TL
Percentage of such amount to be applied as a repayment of the C Term
Loans and the D TL Percentage of such amount to be applied as a
repayment of the D Term Loans, in each case subject to modification of
such application as set forth in Section 4.02(C)).
<PAGE>
(i) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Swingline Loans
shall be repaid in full on the Swingline Expiry Date and (ii) all other
then outstanding Loans of the respective Facility shall be repaid in
full on the Maturity Date for such Facility.
(j) On the second Business Day following each date on which
the Aggregate Net Invested Amount in respect of the Accounts Receivable
Facility is increased to an amount in excess of $75,000,000, all or a
portion of such increase shall be applied as a mandatory prepayment of
the A Term Loans (as and to the extent elected by the Borrower pursuant
to Section 3.03(d)).
(B) Application:
(a) Any amount required to be applied to A Term Loans, B Term
Loans, C Term Loans or D Term Loans, as the case may be, shall apply to
the repayment of the outstanding principal amount of A Term Loans, B
Term Loans, C Term Loans and D Term Loans, respectively, of the
respective Facility.
(b) All repayments of A Term Loans, B Term Loans, C Term
Loans and D Term Loans pursuant to Section 4.02(A)(c), (d), (e), (f),
(g), (h) or (j) shall be applied to reduce the then remaining Scheduled
Repayments of the respective Facility pro rata based on the then
remaining Scheduled Repayments of the respective Facility.
(c) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans which are to
be repaid and the specific Borrowing(s) under the affected Facility
pursuant to which made; provided, that (i) Eurodollar Loans made
pursuant to a specific Facility may be designated for repayment pursuant
to this Section 4.02 only on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans made pursuant to such
Facility with Interest Periods ending on such date of required
prepayment and all Base Rate Loans made pursuant to such Facility have
been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount, such Borrowing shall be immediately converted into Base Rate
Loans; and (iii) each repayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; provided, that no
repayment pursuant to Section 4.02(A)(a) shall be applied to any
Revolving Loans of a Defaulting Bank at any time when the aggregate
amount of the Revolving Loans of any Non-Defaulting Bank exceeds such
Non-Defaulting Bank's RL Percentage of Revolving Loans then outstanding.
In the absence of a designation by the Borrower as described in the
preceding sentence, the Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11.
<PAGE>
(C) Waiver of Certain Mandatory Repayments
by B, C and D Banks
Notwithstanding anything to the contrary contained in this
Section 4.02 or elsewhere in this Agreement (including, without
limitation, in Section 12.12), the Borrower shall have the option, in
its sole discretion, to give the Banks with outstanding B Terms Loans
(the "B Banks"), C Term Loans (the "C Banks") and D Term Loans (the "D
Banks") the option to waive a mandatory repayment of such Loans pursuant
to Section 4.02(A)(c), (d), (e), (f), (g) and/or (h) (each such
repayment, a "Waivable Mandatory Repayment") upon the terms and
provisions set forth in this Section 4.02(C). If the Borrower elects to
exercise the option referred to in the preceding sentence, the Borrower
shall give to the Agent written notice of its intention to give the B
Banks, the C Banks and the D Banks the right to waive a Waivable
Mandatory Repayment at least five Business Days prior to such repayment,
which notice the Agent shall promptly forward to all B Banks, C Banks
and D Banks (indicating in such notice the amount of such repayment to
be applied to each such Bank's outstanding Term Loans under such
Facilities). The Borrower's offer to permit such Banks to waive any
such Waivable Mandatory Repayment may apply to all or part of such
repayment, provided that any offer to waive part of such repayment must
be made ratably to such Banks on the basis of their outstanding B Term
Loans, C Term Loans and D Term Loans. In the event any such B Bank, C
Bank or D Bank desires to waive such Bank's right to receive any such
Waivable Mandatory Repayment in whole or in part, such Bank shall so
advise the Agent no later than the close of business two Business Days
after the date of such notice from the Agent, which notice shall also
include the amount such Bank desires to receive in respect of such
repayment. If any Bank does not reply to the Agent within the two
Business Days, it will be deemed not to have waived any part of such
repayment. If any Bank does not specify an amount it wishes to receive,
it will be deemed to have accepted 100% of the total payment. In the
event that any such Bank waives all or part of such right to receive any
such Waivable Mandatory Repayment, the Agent shall apply 100% of the
amount so waived by such Bank to the A Term Loans in accordance with
Section 4.02(B).
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be
made to the Agent for the ratable account of the Banks entitled thereto,
not later than 12:00 Noon (New York time) on the date when due and shall
be made in immediately available funds and in U.S. Dollars at the
Payment Office, it being understood that written, telex or facsimile
transmission notice by the Borrower to the Agent to make a payment from
the funds in the Borrower's account at the Payment Office shall
constitute the making of such payment to the extent of such funds held
in such account. Any payments under this Agreement which are made later
than 12:00 Noon (New York time) shall be deemed to have been made on the
next succeeding Business Day. Whenever any payment to be made hereunder
shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during
such extension at the applicable rate in effect immediately prior to
such extension.
<PAGE>
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Section 4.04(b), all such payments
will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed
by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except
as provided in the second succeeding sentence, any tax imposed on or
measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Bank is
located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-
excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income
or net profits of such Bank pursuant to the laws of the jurisdiction in
which the principal office or applicable lending office of such Bank is
located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or
applicable lending office of such Bank is located and for any
withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank in respect of such amounts so paid to or on
behalf of such Bank pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Bank pursuant to this sentence.
The Borrower will furnish to the Agent within 45 days after the date the
payment of any Taxes is due pursuant to applicable law certified copies
of tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Bank, and reimburse such Bank
upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Bank.
<PAGE>
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to
the Borrower and the Agent on or prior to the Restatement Effective
Date, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 12.04 (unless
the respective Bank was already a Bank hereunder immediately prior to
such assignment or transfer), on the date of such assignment or transfer
to such Bank, (i) two accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit
C (any such certificate, a "Section 4.04(b)(ii) Certificate") and
(y) two accurate and complete original signed copies of Internal Revenue
Service Form W-8 (or successor form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time
after the Restatement Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate
in any material respect, it will deliver to the Borrower and the Agent
two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required
in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax
with respect to payments under this Agreement and any Note, or it shall
immediately notify the Borrower and the Agent of its inability to
deliver any such Form or Certificate. Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section 12.04(b)
and the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to
the extent that such Bank has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a
Bank in respect of income or similar taxes imposed by the United States
if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest,
to a Bank described in clause (ii) above, to the extent that such Forms
do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04 and except as set forth in
Section 12.04(b), the Borrower agrees to pay additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as
described in the immediately preceding sentence as a result of any
changes after the Restatement Effective Date in any applicable law,
<PAGE>
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of
income or similar Taxes.
SECTION 5. Conditions Precedent . The occurrence of the
Restatement Effective Date pursuant to Section 12.10 and the obligation
of each Bank to make each Loan to the Borrower hereunder, and the
obligation of any Letter of Credit Issuer to issue each Letter of Credit
hereunder, is subject, on the Restatement Effective Date or at the time
of each such Credit Event (except as otherwise hereinafter indicated),
as the case may be, to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the
Restatement Effective Date, (i) this Agreement shall have been executed
and delivered as provided in Section 12.10 and (ii) there shall have
been delivered to the Agent for the account of each Bank the appropriate
A Term Note, B Term Note, C Term Note, D Term Note and Revolving Note,
if any, and to BTCo the Swingline Note, in each case executed by the
Borrower and in the amount, maturity and as otherwise provided herein.
5.02 No Default; Representations and Warranties. At the time
of each Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein or in the other Credit Documents in
effect at such time shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, unless stated to
relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of
such earlier date.
5.03 Officer's Certificate. On the Restatement Effective
Date, the Agent shall have received a certificate dated such date signed
by an appropriate officer of the Borrower stating that all of the
applicable conditions set forth in Sections 5.02, 5.06, 5.07, 5.08 and
5.09 exist as of such date.
5.04 Notice of Borrowing; Letter of Credit Request. The
Agent shall have received a Notice of Borrowing satisfying the
requirements of Section 1.03 with respect to each incurrence of Loans,
and the Agent and the respective Letter of Credit Issuer shall have
received a Letter of Credit Request satisfying the requirements of
Section 2.02 with respect to each issuance of a Letter of Credit.
5.05 Corporate Proceedings. (a) On the Restatemen t
Effective Date, the Agent shall have received from each Credit Party a
certificate, dated the Restatement Effective Date, signed by the
chairman, a vice chairman, the president or any vice-president of such
Credit Party, and attested to by the secretary or any assistant
secretary of such Credit Party, in the form of Exhibit D with
appropriate insertions, together with copies of the Certificate of
Incorporation and By-Laws of such Credit Party and the resolutions of
such Credit Party referred to in such certificate and all of the
foregoing (including each such Certificate of Incorporation and By-Laws)
shall be reasonably satisfactory to the Agent.
<PAGE>
(b) On the Restatement Effective Date, all corporate and
legal proceedings and all instruments and agreements in connection with
the transactions contemplated by this Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and
substance to the Agent, and the Agent shall have received all
information and copies of all certificates, documents and papers,
including good standing certificates, bring-down certificates and any
other records of corporate proceedings and governmental approvals, if
any, which the Agent reasonably may have requested in connection
therewith, such documents and papers, where appropriate, to be certified
by proper corporate or governmental authorities.
5.06 Adverse Change, etc. On or prior to the Restatement
Effective Date, nothing shall have occurred since December 31, 1996 (and
neither the Banks nor the Agent shall have become aware of any facts or
conditions not previously known) which the Required Banks or the Agent
shall determine (a) has, or could reasonably be expected to have, a
material adverse effect on the rights or remedies of the Banks or the
Agent, or on the ability of any Credit Party to perform its obligations
to them hereunder or under any other Credit Document or (b) has, or
could reasonably be expected to have, a Material Adverse Effect.
5.07 Litigation. On the Restatement Effective Date, there
shall be no actions, suits or proceedings pending or threatened (a) with
respect to this Agreement or any other Document or (b) which the Agent
or the Required Banks shall determine could reasonably be expected to
(i) have a Material Adverse Effect or (ii) have a material adverse
effect on the Transaction, the rights or remedies of the Banks or the
Agent hereunder or under any other Credit Document or on the ability of
any Credit Party to perform its respective obligations to the Banks or
the Agent hereunder or under any other Credit Document.
5.08 Approvals. On or prior to the Restatement Effective
Date, all necessary governmental (domestic and foreign) and third party
approvals in connection with the Transaction, the transactions
contemplated by the Transaction Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the Transaction,
the transactions contemplated by the Transaction Documents and otherwise
referred to herein or therein. Additionally, on the Restatement
Effective Date, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief
or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the consummation of the Transaction
or the making of Loans.
<PAGE>
5.09 Consummation of the Transaction. (a) On the
Restatement Effective Date and concurrently with the initial incurrence
of Loans hereunder, (i) the total commitments in respect of the
Indebtedness to be Refinanced shall have been terminated, all Original
Loans with respect thereto shall have been repaid in full in cash and
all letters of credit issued thereunder shall have been incorporated
hereunder as Original Letters of Credit pursuant to Section 2.01(d), it
being understood and agreed, however, that any Continuing Bank may net
fund the Loans required to be made by it on the Restatement Effective
Date by permitting the principal amount of the Original Loans made by
such Continuing Bank to remain outstanding on the Restatement Effective
Date to satisfy such Continuing Bank's obligation to fund a like
principal amount of Loans to be incurred hereunder by the Borrower on
the Restatement Effective Date, and for purposes of this Section 5.09
only such outstanding principal amount shall be deemed outstanding under
this Agreement and such corresponding Original Loans shall be deemed to
have been so repaid in full, (ii) there shall have been paid in cash in
full all costs and expenses (including, without limitation, breakage
costs, if any, with respect to eurodollar rate loans) then owing to any
of the Original Banks and/or the Agent, as agent under the Original
Credit Agreement, in each case to the satisfaction of the Agent or the
Original Banks, as the case may be, regardless of whether or not such
costs and expenses would otherwise be due and payable at such time
pursuant to the terms of the Original Credit Agreement and (iii) all
outstanding Notes (as defined in the Original Credit Agreement) issued
by the Borrower to the Original Banks under the Original Credit
Agreement shall be deemed cancelled.
(b) On or prior to the Restatement Effective Date, there
shall have been delivered to the Banks true and correct copies of all
Transaction Documents, and all of the terms and conditions of such
Transaction Documents, as well as the structure of the Transaction and
the ownership interests in Holdings after giving effect to the
Transaction, shall be in form and substance reasonably satisfactory to
the Agent and the Required Banks.
(c) On the Restatement Effective Date, the Agent shall have
received evidence in form, scope and substance reasonably satisfactory
to it that the matters set forth in this Section 5.09 have been
satisfied on such date.
<PAGE>
5.10 Acknowledgements, etc. (a) On the Restatement
Effective Date, Holdings, the Borrower and each Subsidiary Guarantor
shall have (x) duly authorized, executed and delivered an assumption,
acknowledgment and amendment in the form of Exhibit E (the "Security
Documents Acknowledgment and Amendment") with respect to the Pledge
Agreement, the Security Agreement and the Mortgages, which Security
Documents Acknowledgment and Amendment shall contain, among other
things, (i) an acknowledgment that the "Obligations" (as defined in each
of such documents) include all of the Obligations under this Agreement
after giving effect to the Restatement Effective Date, (ii) an
acknowledgment that, after giving effect to the Restatement Effective
Date, each of the Pledge Agreement, the Security Agreement and each of
the Mortgages shall remain in full force and effect in accordance with
their respective terms, and (iii) all information required to be set
forth as of the Restatement Effective Date on each Annex to the Pledge
Agreement and (y) taken all actions reasonably requested by the Agent
(including, without limitation, the obtaining of UCC-11's or equivalent
reports and the filing of UCC-1's or UCC-3's) in connection with the
granting of liens pursuant to the Pledge Agreement, the Security
Agreement and the Mortgages.
(b) On the Restatement Effective Date, each Subsidiary of the
Borrower party to the Subsidiary Guaranty prior to the Restatement
Effective Date shall have duly authorized, executed and delivered an
acknowledgment in the form of Exhibit F (the "Subsidiary Guaranty
Acknowledgment"), which Subsidiary Guaranty Acknowledgment shall
contain, among other things, (i) an acknowledgment of this Agreement and
the transactions contemplated hereby, and (ii) an acknowledgment that
the "Obligations" (as defined in the Subsidiary Guaranty) include all of
the Obligations under this Agreement after giving effect to the
Restatement Effective Date, and (iii) an acknowledgment that, after
giving effect to the Restatement Effective Date, the Subsidiary Guaranty
shall remain in full force and effect in accordance with its terms.
(c) On the Restatement Effective Date, (i) the Collateral
Agent, as Pledgee, shall have in its possession all the Pledged
Securities referred to in the Pledge Agreement then owned by each Credit
Party (x) endorsed in blank in the case of promissory notes constituting
Pledged Securities and (y) together with executed and undated stock
powers in the case of capital stock constituting Pledged Securities and
(ii) the Pledge Agreement shall be in full force and effect.
(d) On the Restatement Effective Date, (i) the Security
Agreement and each of the Mortgages shall be in full force and effect
and (ii) no filings, recordings, registrations or other actions shall be
necessary or desirable to maintain (x) the perfection and priority of
the security interests granted pursuant to the Security Agreement in the
Security Agreement Collateral covered thereby and (y) first priority
mortgage Liens on each Mortgaged Property in favor of the Collateral
Agent for the benefit of the Secured Creditors, free and clear of all
defects and encumbrances except Permitted Encumbrances.
5.11 Subsidiary Guaranty. On the Restatement Effective Date,
the Subsidiary Guaranty shall be in full force and effect.
<PAGE>
5.12 Plans; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Shareholders' Agreements; Management
Agreements; Employment Agreements; Non-Compete Agreements; Tax
Allocation Agreements; Material Contracts. On or prior to the
Restatement Effective Date, there shall have been delivered to the Banks
copies, certified as true and correct by an appropriate officer of the
Borrower, of:
(a) any material Plans of Holdings or any of its Subsidiaries
after giving effect to the consummation of the Transaction and for
each such Plan (i) that is a "single-employer plan" (as defined in
Section 4001(a)(15) of ERISA) the most recently completed actuarial
valuation prepared therefor by such Plan's regular enrolled actuary
and the Schedule B, "Actuarial Information" to the IRS Form 5500
(Annual Report) most recently filed with the Internal Revenue
Service and (ii) that is a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA), each of the documents referred to in
clause (i) either in the possession of Holdings, any Subsidiary of
Holdings or any ERISA Affiliate or reasonably available thereto
from the sponsor or trustees of such Plan;
(b) any material collective bargaining agreements or any
other similar agreement or arrangement covering the employees of
Holdings or any of its Subsidiaries that are to remain in effect
after giving effect to the consummation of the Transaction
(collectively, the "Collective Bargaining Agreements");
(c) all agreements evidencing or relating to the Existing
Indebtedness that are to remain in effect after giving effect to
the consummation of the Transaction (collectively, the "Existing
Indebtedness Agreements");
(d) (A) the Stockholders' Agreement, (B) the Subscription
Agreement, (C) the Registration Rights Agreement and (D) all other
agreements entered into by Holdings or any of its Subsidiaries
governing the terms and relative rights of its capital stock, and
any agreements entered into by shareholders relating to any such
entity with respect to their capital stock, in each case that are
to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Shareholders' Agreements");
(e) (A) the Consulting Agreement and (B) any other material
agreements (or the forms thereof) with members of, or with respect
to, the management of Holdings or any of its Subsidiaries that are
to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Management Agreements");
(f) any material employment agreements entered into by
Holdings or any of its Subsidiaries (collectively, the "Employment
Agreements");
(g) any material non-compete agreement entered into by
Holdings or any of its Subsidiaries (collectively, the "Non-Compete
Agreements");
(h) any tax sharing or tax allocation agreements entered into
by Holdings or any of its Subsidiaries (collectively, the "Tax
Allocation Agreements"); and
<PAGE>
(i) all material contracts and licenses of Holdings or any of
its Subsidiaries that are to remain in effect after giving effect
to the consummation of the Transaction (collectively, the "Material
Contracts");
all of which Plans, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Shareholders' Agreements, Management
Agreements, Employment Agreements, Non-Compete Agreements, Tax
Allocation Agreements and Material Contracts shall be in form and
substance reasonably satisfactory to the Agent and shall be in full
force and effect on the Restatement Effective Date, provided, however,
that only those Plans, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Shareholders' Agreements, Management
Agreements, Employment Agreements, Non-Compete Agreements, Tax
Allocation Agreements and Material Contracts which were not in existence
on the Original Effective Date or, if in existence on the Original
Effective Date, have been modified in any material respect since such
date, shall be required to be delivered pursuant to this Section 5.12.
5.13 Existing Indebtedness. On the Restatement Effective
Date and after giving effect to the Transaction and the Loans incurred
on the Restatement Effective Date, neither Holdings nor any of its
Subsidiaries shall have any preferred stock outstanding except for the
Baxter Preferred Stock, or any Indebtedness outstanding except for
Indebtedness permitted under Section 8.04. On and as of the Restatement
Effective Date, all of the Existing Indebtedness shall remain
outstanding after giving effect to the Transaction and the other
transactions contemplated hereby without any default or events of
default existing thereunder or arising as a result of the Transaction
and the other transactions contemplated hereby (except to the extent
amended or waived by the parties thereto on terms and conditions
reasonably satisfactory to the Agent and the Required Banks). On and as
of the Restatement Effective Date, the Agent and the Required Banks
shall be satisfied with the amount of and the terms and conditions of
all Existing Indebtedness.
5.14 Payment of Fees. On the Restatement Effective Date, all
costs, fees and expenses, and all other compensation contemplated by
this Agreement, due to the Agent or the Banks (including, without
limitation, legal fees and expenses) shall have been paid to the extent
due.
The occurrence of the Restatement Effective Date and the
acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Banks
that all of the applicable conditions specified above exist as of the
Restatement Effective Date or the date of such Credit Event, as the case
may be. All of the certificates, legal opinions and other documents and
papers referred to in this Section 5, unless otherwise specified, shall
be delivered to the Agent at its Notice Office for the account of each
of the Banks and, except for the Notes, in sufficient counterparts for
each of the Banks and shall be satisfactory in form and substance to the
Agent and the Required Banks.
<PAGE>
SECTION 6. Representations, Warranties and Agreements . In
order to induce the Banks to enter into this Agreement and to make the
Loans and issue and/or participate in the Letters of Credit provided for
herein, each of Holdings and the Borrower makes the following
representations, warranties and agreements with the Banks in each case
after giving effect to the Original Transaction and the Transaction, all
of which shall survive the execution and delivery of this Agreement, the
making of the Loans and the issuance of the Letters of Credit (with the
occurrence of each Credit Event being deemed to constitute a
representation and warranty that the matters specified in this Section 6
are true and correct in all material respects on and as of the date of
each such Credit Event, unless stated to relate to a specific earlier
date in which all representations and warranties shall be true and
correct in all material respects as of such earlier date):
6.01 Corporate Status. Holdings and each of its Subsidiaries
(i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization, (ii)
has the corporate power and authority to own its property and assets and
to transact the business in which it is engaged and presently proposes
to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in all jurisdictions where it is required to be
so qualified and where the failure to be so qualified would have a
Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has
the corporate power and authority to execute, deliver and carry out the
terms and provisions of the Documents to which it is a party and has
taken all necessary corporate action to authorize the execution,
delivery and performance of the Documents to which it is a party. Each
Credit Party has duly executed and delivered each Document to which it
is a party and each such Document constitutes the legal, valid and
binding obligation of such Credit Party enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party
nor compliance by them with the terms and provisions thereof, nor the
consummation of the transactions contemplated herein or therein, (i)
will contravene any applicable provision of any law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with
or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to
the Security Documents and the Accounts Receivable Facility Documents)
result in the creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of Holdings or any
of its Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, loan agreement, credit agreement or any other material
agreement or instrument to which Holdings or any of its Subsidiaries is
a party or by which it or any of its property or assets are bound or to
which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of Holdings or any of its
Subsidiaries.
<PAGE>
6.04 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of Holdings or any of its Subsidiaries,
threatened, with respect to Holdings or any of its Subsidiaries (i) that
are likely to have a Material Adverse Effect or (ii) that could
reasonably be expected to have a material adverse effect on the rights
or remedies of the Banks or on the ability of any Credit Party to
perform its respective obligations to the Banks hereunder and under the
other Credit Documents to which it is, or will be, a party.
Additionally, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the occurrence
of any Credit Event.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds
of all Term Loans shall be utilized to finance the Refinancing and to
pay fees and expenses incurred in connection with the Transaction.
(b) The proceeds of Revolving Loans and Swingline Loans shall
be utilized for the general corporate and working capital purposes of
the Borrower and its Subsidiaries.
(c) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, will violate the provisions of Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System and no part
of the proceeds of any Loan will be used to purchase or carry any Margin
Stock or to extend credit for the purpose of purchasing or carrying any
Margin Stock.
6.06 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic governmental
or public body or authority, or any subdivision thereof, is required to
authorize or is required in connection with (i) the execution, delivery
and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document. No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or domestic
governmental or public body or authority, or any subdivision thereof, is
required to authorize or is required in connection with (i) the
execution, delivery and performance of any Document (other than any
Credit Document) or (ii) the legality, validity, binding effect or
enforceability of any Document (other than any Credit Document), except
(x) to the extent obtained or made or (y) where the failure to obtain or
make any of the foregoing, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
6.07 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act
of 1940, as amended.
6.08 Public Utility Holding Company Act. Neither Holdings
nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
<PAGE>
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on
behalf of Holdings or any of its Subsidiaries in writing to the Agent or
any Bank (including, without limitation, all information contained in
the Documents) for purposes of or in connection with this Agreement or
any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of
any such Persons in writing to the Agent or any Bank will be, true and
accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a
whole) not misleading at such time in light of the circumstances under
which such information was provided.
6.10 Financial Condition; Financial Statements. (a) On and
as of the Restatement Effective Date, on a pro forma basis after giving
effect to the Original Transaction and the Transaction and to all
Indebtedness incurred, and to be incurred (including, without
limitation, the Loans and the Senior Subordinated Notes), and Liens
created, and to be created, by each Credit Party in connection
therewith, with respect to each of Holdings and its Subsidiaries (on a
consolidated basis) and of the Borrower (on a stand-alone basis) (x) the
sum of the assets, at a fair valuation, of each of Holdings and its
Subsidiaries (on a consolidated basis), and of the Borrower (on a stand-
alone basis) will exceed its debts, (y) it has not incurred nor intended
to, nor believes that it will, incur debts beyond its ability to pay
such debts as such debts mature and (z) it will have sufficient capital
with which to conduct its business. For purposes of this Section 6.10,
"debt" means any liability on a claim, and "claim" means (i) right to
payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to
a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) The statements of financial condition of Holdings and its
Subsidiaries at December 31, 1996 and the related statements of income
and cash flows and changes in shareholders' equity of Holdings and its
Subsidiaries for the fiscal year ended as of said date, copies of which
have heretofore been furnished to each Bank, present fairly in all
material respects the consolidated financial position of Holdings and
its Subsidiaries at the date of said statements and the results for the
periods covered thereby. All such financial statements have been
prepared in accordance with GAAP consistently applied except to the
extent provided in the notes to said financial statements.
(c) The statements of net assets to be sold of the Acquired
Business at December 31, 1994 and at December 31, 1995 and the related
statements of income and supplemental cash flow information of the
Acquired Business for the fiscal years ended as of said dates, copies of
which have heretofore been furnished to each Bank, present fairly in all
material respects the net assets of the Acquired Business at the dates
of said statements and the results for the periods covered thereby. All
such financial statements have been prepared in accordance with GAAP
consistently applied except to the extent provided in the notes to said
financial statements.
<PAGE>
(d) Since December 31, 1996, nothing has occurred that has
had or could reasonably be expected to have a Material Adverse Effect.
(e) Except as fully reflected in the financial statements
described in Section 6.10(b) and the Indebtedness incurred under this
Agreement and the Senior Subordinated Notes, there were as of the
Restatement Effective Date (and after giving effect to any Loans made on
such date), no liabilities or obligations (excluding current obligations
incurred in the ordinary course of business) with respect to Holdings or
any of its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due), and neither
Holdings nor the Borrower know of any basis for the assertion against
Holdings or any of its Subsidiaries of any such liability or obligation
which, either individually or in the aggregate, are or would be
reasonably likely to have, a Material Adverse Effect.
(f) The Projections are based on good faith estimates and
assumptions made by the management of Holdings, and on the Original
Effective Date such management believed that the Projections were
reasonable and attainable, it being recognized by the Banks, however,
that projections as to future events are not to be viewed as facts and
that the actual results during the period or periods covered by the
Projections probably will differ from the projected results and that the
differences may be material. There is no fact known to Holdings or any
of its Subsidiaries which would have a Material Adverse Effect, which
has not been disclosed herein or in such other documents, certificates
and statements furnished to the Banks for use in connection with the
transactions contemplated hereby.
6.11 Security Interests. Each of the Security Documents
creates (or after the execution and delivery thereof will create), as
security for the Obligations, a valid and enforceable perfected security
interest in and Lien on all of the Collateral subject thereto, superior
to and prior to the rights of all third Persons and subject to no other
Liens (except that the Security Agreement Collateral, the Mortgaged
Properties and the collateral covered by the Additional Security
Documents may be subject to Permitted Liens relating thereto), in favor
of the Collateral Agent. No filings or recordings are required in order
to perfect the security interests created under any Security Document
except for filings or recordings required in connection with any such
Security Document which shall have been made on or prior to the
Restatement Effective Date as contemplated by Section 5.10(a) or on or
prior to the execution and delivery thereof as contemplated by Sections
7.11, 7.16 and 8.16.
6.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the other Documents were
true and correct in all material respects as of the time such
representations and warranties were made and shall be true and correct
in all material respects as of the Restatement Effective Date as if such
representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date, in each case except to the extent that
the failure of any such representation and warranty to be true and
correct in all material respects, either individually or in the
aggregate with other such representations and warranties, is not
reasonably likely to have a Material Adverse Effect.
<PAGE>
6.13 Transaction and Original Transaction. At the time of
consummation thereof, each of the Transaction and the Original
Transaction shall have been consummated in all material respects in
accordance with the terms of the applicable Documents and all applicable
laws. At the time of consummation thereof, all consents and approvals
of, and filings and registrations with, and all other actions in respect
of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Transaction and the Original
Transaction have been obtained, given, filed or taken or waived and are
or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained) except where the failure to obtain,
give, file, or take would not reasonably be expected to have a Material
Adverse Effect. All applicable waiting periods with respect thereto
have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the
Transaction and the Original Transaction. Additionally, there does not
exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the Transaction or the Original Transaction, or
the performance by Holdings and its Subsidiaries of their obligations
under the Documents and all applicable laws.
6.14 Special Purpose Corporation. Holdings has no
significant assets (other than the capital stock of the Borrower,
Borrower Subordinated Notes issued to it from time to time in accordance
with the terms of this Agreement and immaterial assets used for the
performance of those activities permitted to be performed by Holdings
pursuant to Section 8.01(b)) or liabilities (other than under this
Agreement and the other Credit Documents, those liabilities under the
other Documents and Baxter Acquisition Documents to which it is a party,
those liabilities permitted to be incurred by Holdings pursuant to
Section 8.01(b) and, as and when issued from time to time in accordance
with the terms of this Agreement, Baxter PIK Notes, Permitted Holdings
PIK Securities and Shareholder Subordinated Notes).
<PAGE>
6.15 Compliance with ERISA. (a) Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred
with respect to a Plan; no Plan is insolvent or in reorganization; no
Plan has an Unfunded Current Liability; no Plan has an accumulated or
waived funding deficiency, has permitted decreases in its funding
standard account or has applied for a waiver of the minimum funding
standard or an extension of any amortization period within the meaning
of Section 412 of the Code; all contributions required to be made with
respect to a Plan and a Foreign Pension Plan have been timely made;
neither Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate
has incurred any material liability to or on account of a Plan pursuant
to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code
or reasonably expects to incur any material liability (including any
indirect, contingent or secondary liability) under any of the foregoing
Sections with respect to any Plan (other than liabilities of any ERISA
Affiliate which could not, by operation of law or otherwise, become a
liability of Holdings or any of its Subsidiaries); no proceedings have
been instituted to terminate, or to appoint a trustee to administer, any
Plan; no condition exists which presents a material risk to Holdings or
any Subsidiary of Holdings or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; using actuarial assumptions and
computation methods consistent with subpart 1 of subtitle E of Title IV
of ERISA, the aggregate liabilities of Holdings and its Subsidiaries and
its ERISA Affiliates to all Plans which are multiemployer plans (as
defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of
each such Plan ended prior to the date of the most recent Credit Event,
would not result in a Material Adverse Effect; no lien imposed under the
Code or ERISA on the assets of Holdings or any Subsidiary of Holdings or
any ERISA Affiliate exists or is likely to arise on account of any Plan;
and Holdings and its Subsidiaries do not maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA)
which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension
benefit plan (as defined in Section 3(2) of ERISA) the obligations with
respect to which could reasonably be expected to have a Material Adverse
Effect.
(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any
and all applicable laws, statutes, rules, regulations and orders and has
been maintained, where required, in good standing with applicable
regulatory authorities. Neither Holdings nor any of its Subsidiaries
has incurred any material obligation in connection with the termination
of or withdrawal from any Foreign Pension Plan. The present value of
the accrued benefit liabilities (whether or not vested) under each
Foreign Pension Plan which is funded, determined as of the end of the
most recently ended fiscal year of the Borrower on the basis of
actuarial assumptions, each of which is reasonable, did not exceed the
current value of the assets of such Foreign Pension Plan, and for each
Foreign Pension Plan which is not funded, the obligations of such
Foreign Pension Plan are properly accrued.
<PAGE>
6.16 Capitalization. (a) On the Original Effective Date,
the authorized capital stock of Holdings shall consist of (i) 15,000,000
shares of common stock, $0.01 par value per share (such authorized
shares of common stock, together with any subsequently authorized shares
of common stock of Holdings, the "Holdings Common Stock"), of which
9,399,996 shares shall be issued and outstanding, (ii) 2,000,000 shares
of Class L common stock, $0.01 par value per share (such authorized
shares of Class L common stock, together with any subsequently
authorized shares of Class L common stock of Holdings, the "Holdings
Class L Common Stock"), of which 1,044,444 shares shall be issued and
outstanding, and (iii) 100,000 shares of Baxter Preferred Stock, of
which 10,000 shares shall be issued and outstanding and owned by Baxter.
All such outstanding shares have been duly and validly issued, are fully
paid and nonassessable. Except as set forth on Annex XIV hereto,
Holdings does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, its
capital stock.
(b) On the Restatement Effective Date and after giving effect
to the Original Transaction, the Transaction and the other transactions
contemplated hereby, the authorized capital stock of the Borrower shall
consist of 1,000 shares of common stock, $0.01 par value per share, all
of which shares shall be issued and outstanding and owned by Holdings.
All such outstanding shares have been duly and validly issued and are
fully paid and nonassessable. The Borrower does not have outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
6.17 Subsidiaries. On and as of the Restatement Effective
Date and after giving effect to the consummation of the Original
Transaction and the Transaction, Holdings has no Subsidiaries other than
the Borrower and its Subsidiaries, and the Borrower has no Subsidiaries
other than those Subsidiaries listed on Annex V. Annex V correctly sets
forth, as of the Restatement Effective Date and after giving effect to
the Original Transaction and the Transaction, the percentage ownership
(direct and indirect) of Holdings in each class of capital stock of each
of its Subsidiaries and also identifies the direct owner thereof. All
outstanding shares of capital stock of each Subsidiary of the Borrower
have been duly and validly issued, are fully paid and nonassessable and
have been issued free of preemptive rights. No Subsidiary of the
Borrower has outstanding any securities convertible into or exchangeable
for its capital stock or outstanding any right to subscribe for or to
purchase, or any options or warrants for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of or any
calls, commitments or claims of any character relating to, its capital
stock or any stock appreciation or similar rights.
6.18 Intellectual Property. Holdings and each of its
Subsidiaries owns or holds a valid license to use all the material
patents, trademarks, permits, service marks, trade names, technology,
know-how and formulas or other rights with respect to the foregoing,
free from restrictions that are materially adverse to the use thereof,
that are used in the operation of the business of Holdings and each of
its Subsidiaries as presently conducted.
<PAGE>
6.19 Compliance with Statutes, etc. Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property (including compliance
with all applicable Environmental Laws with respect to any Real Property
or governing its business and the requirements of any permits issued
under such Environmental Laws with respect to any such Real Property or
the operations of Holdings or any of its Subsidiaries), except such non-
compliance as is not likely to, individually or in the aggregate, have a
Material Adverse Effect.
6.20 Environmental Matters. (a) Holdings and each of its
Subsidiaries have complied with, and on the date of each Credit Event
are in compliance with, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There
are no pending or, to the best knowledge of Holdings and the Borrower,
past or threatened Environmental Claims against Holdings or any of its
Subsidiaries or any Real Property owned or operated by Holdings or any
of its Subsidiaries that individually or in the aggregate would
reasonably be expected to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any Real Property
owned or operated by Holdings or any of its Subsidiaries or, to the best
knowledge of Holdings and the Borrower, on any property adjoining or in
the vicinity of any such Real Property that would reasonably be expected
(i) to form the basis of an Environmental Claim against Holdings or any
of its Subsidiaries or any such Real Property that individually or in
the aggregate would reasonably be expected to have a Material Adverse
Effect or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such
Real Property by Holdings or any of its Subsidiaries under any
applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property
owned or operated by Holdings or any of its Subsidiaries where such
generation, use, treatment or storage has violated or would reasonably
be expected to violate any Environmental Law. Hazardous Materials have
not at any time been Released on or from any Real Property owned or
operated by Holdings or any of its Subsidiaries. There are not now any
underground storage tanks located on any Real Property owned or operated
by Holdings or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section
6.20, the representations made in this Section 6.20 shall only be untrue
if the aggregate effect of all restrictions, failures, noncompliance,
Environmental Claims, Releases and presence of underground storage
tanks, in each case of the types described above, would reasonably be
expected to have a Material Adverse Effect.
6.21 Properties. All Real Property owned or leased by
Holdings or any of its Subsidiaries as of the Original Effective Date
and after giving effect to the Original Transaction, and the nature of
the interest therein, is correctly set forth in Annex III. Holdings and
each of its Subsidiaries has good and marketable title to, or a validly
subsisting leasehold interest in, all material properties owned or
leased by it, including all Real Property reflected in Annex III or in
the financial statements referred to in Section 6.10(b) or (c), free and
clear of all Liens, other than Permitted Liens.
<PAGE>
6.22 Labor Relations. Neither Holdings nor any of its
Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There is (i)
no unfair labor practice complaint pending against Holdings or any of
its Subsidiaries or, to the best knowledge of Holdings and the Borrower,
threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Holdings
or any of its Subsidiaries or, to the best knowledge of Holdings and the
Borrower, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against Holdings or any of its Subsidiaries
or, to the best knowledge of Holdings and the Borrower, threatened
against Holdings or any of its Subsidiaries and (iii) to the best
knowledge of Holdings and the Borrower, no union representation question
existing with respect to the employees of Holdings or any of its
Subsidiaries and, to the best knowledge of Holdings and the Borrower, no
union organizing activities are taking place, except (with respect to
any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as is not reasonably likely to
have a Material Adverse Effect.
6.23 Tax Returns and Payments. All Federal, material state
and other material returns, statements, forms and reports for taxes (the
"Returns") required to be filed by or with respect to the income,
properties or operations of the Acquired Business and of Holdings and/or
any of its Subsidiaries have been timely filed with the appropriate
taxing authority. The Returns accurately reflect all liability for
taxes of the Acquired Business and of Holdings and its Subsidiaries, as
the case may be, for the periods covered thereby. The Acquired Business
and Holdings and each of its Subsidiaries have paid all taxes payable by
them other than taxes which are not yet due and payable, and other than
those contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP. Except
as disclosed in the financial statements referred to in Section 6.10(b),
there is no material action, suit, proceeding, investigation, audit, or
claim now pending or, to the knowledge of Holdings and the Borrower,
threatened by any authority regarding any taxes relating to the Acquired
Business or to Holdings or any of its Subsidiaries. Except as set forth
on Annex XV, as of the Restatement Effective Date, neither the Acquired
Business nor Holdings or any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Acquired Business, Holdings or any of its
Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the Acquired Business or
Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Acquired Business nor
Holdings or any of its Subsidiaries have provided, with respect to
themselves or property held by them, any consent under Section 341 of
the Code. Neither the Acquired Business nor Holdings or any of its
Subsidiaries has incurred, or will incur, any material tax liability in
connection with the Original Transaction, the Transaction and the other
transactions contemplated hereby. Notwithstanding anything contained in
this Section 6.23 to the contrary, neither Holdings nor the Borrower
will be in breach of any of the representations or warranties set forth
in this Section 6.23 to the extent that such Credit Parties have a right
to be indemnified by the Seller or any of its Affiliates under the
Acquisition Agreement in respect of such taxes or other liabilities and
then only so long as such Credit Parties are proceeding diligently to
enforce such indemnification and are so indemnified by the Seller within
90 days after requesting or demanding same.
<PAGE>
6.24 Existing Indebtedness. Annex VII sets forth a true and
complete list of all Indebtedness of Holdings and its Subsidiaries as of
the Original Effective Date and which is to remain outstanding after
giving effect to the Original Transaction and the incurrence of Original
Loans on such date (excluding Indebtedness permitted under Section
8.04(a) and Sections 8.04(c)-(t), the "Existing Indebtedness"), in each
case showing the aggregate principal amount thereof and the name of the
respective borrower and any other entity which directly or indirectly
guaranteed such debt.
6.25 Subordination. (a) The subordination provisions
contained in the Senior Subordinated Note Documents are enforceable
against the Borrower and the holders thereof, and all Obligations shall
be within the definition of "Senior Debt" included in such subordination
provisions.
(b) On and after the issuance of any Baxter PIK Notes, the
subordination provisions contained in the Baxter PIK Note Documents
shall be enforceable against Holdings and the holder thereof, and all
Obligations shall be within the definition of "Superior Debt" included
in such subordination provisions.
SECTION 7. Affirmative Covenants. Holdings and the Borrower
hereby covenant and agree that on the Restatement Effective Date and
thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes are
outstanding and the Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations (other than any indemnities described in
Section 12.13 hereof which are not then due and payable) incurred
hereunder, are paid in full:
7.01 Information Covenants. Holdings will furnish to each
Bank:
(a) Monthly Reports. Within 30 days after the end of each
fiscal month of Holdings, the consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such month and the
related consolidated statements of income and retained earnings and
of cash flows for such month and for the elapsed portion of the
fiscal year ended with the last day of such month, in the case of
financial statements delivered pursuant to this Section 7.01(a)
after June 30, 1997, setting forth comparative figures for the
corresponding month in the prior fiscal year, all of which shall be
certified by the chief financial officer or other Authorized
Officer of Holdings, subject to normal year-end audit adjustments.
(b) Quarterly Financial Statements. Within 45 days after the
close of each quarterly accounting period in each fiscal year of
Holdings, the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such quarterly accounting period and
the related consolidated statements of income and retained earnings
and of cash flows for such quarterly accounting period and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, all of which shall be in reasonable
detail and certified by the chief financial officer or other
Authorized Officer of Holdings that they fairly present the
financial condition of Holdings and its Subsidiaries as of the
dates indicated and the results of their operations and changes in
their cash flows for the periods indicated, subject to normal year-
end audit adjustments.
<PAGE>
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of Holdings, the consolidated balance
sheet of Holdings and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year (and separate
supplemental information setting forth comparable budgeted figures
for such fiscal year and, commencing with the fiscal year ending
December 31, 1997, comparative consolidated figures for the
preceding year) certified by Price Waterhouse LLP or such other
independent certified public accountants of recognized national
standing as shall be reasonably acceptable to the Agent, in each
case to the effect that such statements fairly present the
financial condition of Holdings and its Subsidiaries as of the
dates indicated and the results of their operations and changes,
together with a certificate of such accounting firm stating that in
the course of its regular audit of the business of Holdings and its
Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, no Default or Event of
Default which has occurred and is continuing has come to their
attention or, if such a Default or Event of Default has come to
their attention a statement as to the nature thereof.
(d) Budgets, etc. Not more than 60 days after the
commencement of each fiscal year of the Borrower, budgets of the
Borrower and its Subsidiaries in reasonable detail for each of the
four fiscal quarters of such fiscal year and for each of the four
fiscal quarters of the immediately succeeding fiscal year, in each
case as customarily prepared by management for its internal use
setting forth, with appropriate discussion, the principal
assumptions upon which such budgets are based. Together with each
delivery of financial statements pursuant to Section 7.01(b) and
(c) in respect of each fiscal period ending on or after March 31,
1997, a comparison of the current year to date financial results
(other than in respect of the balance sheets included therein)
against the budgets required to be submitted pursuant to this
clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Section 7.01(b) and (c), a
certificate of the chief financial officer or other Authorized
Officer of Holdings to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall
set forth the calculations required to establish whether Holdings
and its Subsidiaries were in compliance with the provisions of
Sections 8.04, 8.07(vi), (vii) and (viii) and 8.09 through and
including 8.13, as at the end of such fiscal quarter or year, as
the case may be. In addition, at the time of the delivery of the
financial statements provided for in Section 7.01(c), a certificate
of the chief financial officer or other Authorized Officer of
Holdings setting forth the amount of, and calculations required to
establish the amount of, Excess Cash Flow for the Excess Cash Flow
Period ending on the last day of the respective fiscal year.
Further, at the time that Holdings either contributes any cash to
the Borrower the proceeds of which are not required to be used to
repay Term Loans as provided in clause (i) of the final proviso to
Section 4.02(A)(d) or makes a Borrower Subordinated Loan pursuant
to Section 8.06(t), a certificate of the chief financial officer or
other Authorized Officer of Holdings setting forth the intended use
by the Borrower or its Subsidiaries of such proceeds.
<PAGE>
(f) Notice of Default or Litigation. Promptly, and in any
event within five Business Days (or 10 Business Days in the case of
clause (y) below) after any Senior Officer of Holdings or any of
its Subsidiaries obtains knowledge thereof, notice of (x) the
occurrence of any event which constitutes a Default or an Event of
Default, which notice shall specify the nature thereof, the period
of existence thereof and what action Holdings or the Borrower
proposes to take with respect thereto and shall state that such
notice is a "notice of default" and (y) the commencement of, or
threat of, or any significant development in, any litigation or
governmental proceeding pending against Holdings or any of its
Subsidiaries which is likely to have a Material Adverse Effect, or
a material adverse effect on the ability of any Credit Party to
perform its respective obligations hereunder or under any other
Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each report or "management letter" submitted to Holdings or any
of its Subsidiaries by its independent accountants in connection
with any annual, interim or special audit made by them of the books
of Holdings or any of its Subsidiaries.
(h) Environmental Matters. Promptly after obtaining
knowledge of any of the following, written notice of:
(i) any pending or threatened material Environmental
Claim against Holdings or any of its Subsidiaries or any Real
Property owned or operated by Holdings or any of its
Subsidiaries;
(ii) any condition or occurrence on any Real Property
owned or operated by Holdings or any of its Subsidiaries that
(x) results in material noncompliance by Holdings or any of
its Subsidiaries with any applicable Environmental Law or (y)
could reasonably be anticipated to form the basis of a
material Environmental Claim against Holdings or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned or operated by Holdings or any of its Subsidiaries that
could reasonably be anticipated to cause such Real Property to
be subject to any material restrictions on the ownership,
occupancy, use or transferability by Holdings or its
Subsidiary, as the case may be, of its interest in such Real
Property under any Environmental Law; and
(iv) the taking of any material removal or remedial
action in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned or operated by
Holdings or any of its Subsidiaries where Holdings or any of
its Subsidiaries is or is reasonably expected to be
responsible for the cost of such action or where the taking of
such action could reasonably be expected to materially
interfere with the operations of Holdings or any of its
Subsidiaries at such Real Property.
<PAGE>
All such notices shall describe in reasonable detail the
nature of the claim, investigation, condition, occurrence or
removal or remedial action and Holdings' or the Borrower's response
thereto. In addition, Holdings agrees to provide the Banks with
copies of all material communications by Holdings or any of its
Subsidiaries with any Person, government or governmental agency
relating to Environmental Claims, and such detailed reports of any
Environmental Claim as may reasonably be requested by the Agent or
the Required Banks.
(i) Accounts Receivable Facility Transaction Date. The
Borrower shall provide the Agent 15 Business Days' prior written
notice of the Accounts Receivable Facility Transaction Date.
(j) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the
SEC by Holdings or any of its Subsidiaries and copies of all
financial statements, proxy statements, notices and reports as
Holdings or any of its Subsidiaries shall generally send to
analysts or the holders of their capital stock or of the Baxter PIK
Notes, Permitted Holdings PIK Securities or Senior Subordinated
Notes in their capacity as such holders (in each case to the extent
not theretofore delivered to the Banks pursuant to this Agreement)
and, with reasonable promptness, such other information or
documents (financial or otherwise) as the Agent on its own behalf
or on behalf of any Bank may reasonably request from time to time.
7.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, permit, upon notice to the chief
financial officer or other Authorized Officer of Holdings or the
Borrower, (x) officers and designated representatives of the Agent or
any Bank to visit and inspect any of the properties or assets of
Holdings and any of its Subsidiaries in whomsoever's possession, and to
examine the books of account of Holdings and any of its Subsidiaries and
discuss the affairs, finances and accounts of Holdings and of any of its
Subsidiaries with, and be advised as to the same by, their officers and
independent accountants, all at such reasonable times and intervals and
to such reasonable extent as the Agent or any Bank may desire and (y)
the Agent, at the request of the Required Banks, to conduct, at
Holdings' and the Borrower's expense, an audit of the accounts
receivable and/or inventories of the Borrower and its Subsidiaries at
such times (but no more frequently than once a year unless an Event of
Default has occurred and is continuing) as the Required Banks shall
reasonably require.
<PAGE>
7.03 Insurance. Holdings will, and will cause each of its
Subsidiaries to, at all times from and after the Restatement Effective
Date maintain in full force and effect insurance with reputable and
solvent insurance carriers in such amounts, covering such risks and
liabilities and with such deductibles or self-insured retentions as are
in accordance with normal industry practice. At any time that insurance
at the levels described in Annex VI is not being maintained by Holdings
and its Subsidiaries, Holdings will notify the Banks in writing thereof
and, if thereafter notified by the Agent to do so, Holdings will obtain
insurance at such levels to the extent then generally available (but in
any event within the deductible or self-insured retention limitations
set forth in the preceding sentence) or otherwise as are acceptable to
the Agent. Holdings will furnish to the Agent on each date on which
financial statements are delivered pursuant to Section 7.01(c) a summary
of the insurance carried in respect of Holdings and its Subsidiaries and
the assets of Holdings and its Subsidiaries together with certificates
of insurance and other evidence of such insurance, if any, naming the
Collateral Agent as an additional insured and/or loss payee.
7.04 Payment of Taxes. Holdings will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to
the date on which material penalties attach thereto, and all lawful
claims for sums that have become due and payable which, if unpaid, might
become a Lien not otherwise permitted under Section 8.03(a) or charge
upon any properties of Holdings or any of its Subsidiaries; provided,
that neither Holdings nor any of its Subsidiaries shall be required to
pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
7.05 Corporate Franchises. Holdings will do, and will cause
each of its Subsidiaries to do, or cause to be done, all things
necessary to preserve and keep in full force and effect its existence
and its material rights, franchises and authority to do business;
provided, however, that any transaction permitted by Section 8.02 will
not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. Holdings will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct
of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls) other than such non-compliance as would not have
a Material Adverse Effect or a material adverse effect on the ability of
any Credit Party to perform its obligations under any Credit Document to
which it is a party.
<PAGE>
7.07 Compliance with Environmental Laws. (a) Holdings will
pay, and will cause each of its Subsidiaries to pay, all costs and
expenses incurred by it in keeping in compliance with all Environmental
Laws, and will keep or cause to be kept all Real Properties free and
clear of any Liens imposed pursuant to such Environmental Laws; and (b)
neither Holdings nor any of its Subsidiaries will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of, Hazardous Materials on any Real
Property, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, unless the failure to
comply with the requirements specified in clause (a) or (b) above,
either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. If Holdings or any of its
Subsidiaries, or any tenant or occupant of any Real Property, cause or
permit any intentional or unintentional act or omission resulting in the
presence or Release of any Hazardous Material (except in compliance with
applicable Environmental Laws), each of Holdings and the Borrower agrees
to undertake, and/or to cause any of its Subsidiaries, tenants or
occupants to undertake, at their sole expense, any clean up, removal,
remedial or other action required pursuant to Environmental Laws to
remove and clean up any Hazardous Materials from any Real Property;
provided that neither Holdings nor any of its Subsidiaries shall be
required to comply with any such order or directive which is being
contested in good faith and by proper proceedings so long as it has
maintained adequate reserves with respect to such compliance to the
extent required in accordance with GAAP.
7.08 ERISA. As soon as possible and, in any event, within 10
days after Holdings or any Subsidiary of Holdings or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following
events to the extent that one or more of such events is reasonably
likely to result in a material liability to Holdings or any Subsidiary
of Holdings, Holdings will deliver to each of the Banks a certificate of
the chief financial officer or other Authorized Officer of Holdings
setting forth details as to such occurrence and the action, if any,
which Holdings, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given to or filed with or by Holdings, such Subsidiary, such ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred, that an
accumulated funding deficiency has been incurred or an application may
be or has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code with respect to a Plan; that a contribution
required to be made to a Plan or Foreign Pension Plan has not been
timely made; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan
has an Unfunded Current Liability giving rise to a lien under ERISA or
the Code; that proceedings may be or have been instituted to terminate
or appoint a trustee to administer a Plan; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that Holdings, any Subsidiary of Holdings or any
ERISA Affiliate will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination
of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or
502(l) of ERISA; or that Holdings or any Subsidiary of Holdings has or
may incur any liability under any employee welfare benefit plan (within
the meaning of Section 3(1) of ERISA) that provides benefits to retired
<PAGE>
employees or other former employees (other than as required by Section
601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA). At the request of any Bank, Holdings will
deliver to such Bank a complete copy of the annual report (Form 5500) of
each Plan required to be filed with the Internal Revenue Service. In
addition, at the request of any Bank, copies of annual reports and any
notices received by Holdings or any Subsidiary of Holdings or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to such Bank no later than 10 days after the date of any such
request.
7.09 Good Repair. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used
in its business are kept in good repair, working order and condition,
normal wear and tear and damage by casualty excepted, and, subject to
Section 8.09, that from time to time there are made in such properties
and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the
extent and in the manner useful or customary for companies in similar
businesses.
7.10 End of Fiscal Years; Fiscal Quarters. Holdings will,
for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii)
each of its, and each of its Subsidiaries', fiscal quarters to end on
March 31, June 30, September 30 and December 31 of each year.
7.11 Additional Security; Further Assurances. (a) Holdings
will, and will cause each of its Domestic Subsidiaries (and subject to
Section 7.16, each of its Foreign Subsidiaries) to, grant to the
Collateral Agent security interests and mortgages in such assets and
properties of Holdings and its Subsidiaries as are not covered by the
Security Documents, and as may be requested from time to time by the
Agent or the Required Banks (collectively, the "Additional Security
Documents"). All such security interests and mortgages shall be granted
pursuant to documentation reasonably satisfactory in form and substance
to the Agent and shall constitute valid and enforceable perfected
security interests and mortgages superior to and prior to the rights of
all third Persons and subject to no other Liens except for Permitted
Liens. The Additional Security Documents or instruments related thereto
shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral Agent required to be granted pursuant
to the Additional Security Documents and all taxes, fees and other
charges payable in connection therewith shall have been paid in full.
(b) Holdings will, and will cause each of its Subsidiaries
to, at the expense of Holdings and the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to
time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, real property surveys, reports and other
assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents as the Collateral
Agent may reasonably require. Furthermore, Holdings shall cause to be
delivered to the Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by
the Agent to assure themselves that this Section 7.11 has been complied
with.
<PAGE>
(c) If the Agent or the Required Banks determine that they
are required by law or regulation to have appraisals prepared in respect
of the Real Property of Holdings and its Subsidiaries constituting
Collateral, the Borrower shall provide to the Agent appraisals which
satisfy the applicable requirements of the Real Estate Appraisal Reform
Amendments of the Financial Institution Reform, Recovery and Enforcement
Act of 1989 and which shall be in form and substance satisfactory to the
Agent.
(d) Holdings and the Borrower agree that each action required
above by this Section 7.11 shall be completed as soon as possible, but
in no event later than 90 days after such action is either requested to
be taken by the Agent or the Required Banks or required to be taken by
Holdings and its Subsidiaries pursuant to the terms of this Section
7.11; provided that in no event shall Holdings or the Borrower be
required to take any action, other than using its reasonable efforts, to
obtain consents from third parties with respect to its compliance with
this Section 7.11.
7.12 Interest Rate Protection. The Borrower shall no later
than 90 days following the Original Effective Date enter into, and
thereafter maintain, Interest Rate Protection Agreements, satisfactory
to the Agent, with a term of at least three years, establishing a fixed
or maximum interest rate acceptable to the Agent in respect of at least
50% of the outstanding Term Loans, it being understood and agreed that
the Interest Rate Protection Agreements entered into by the Borrower in
connection with the Existing Credit Agreement and/or the Original Credit
Agreement may remain outstanding and shall constitute a part of the
interest rate protection program required by this Section 7.12.
7.13 Register. The Borrower hereby designates the Agent to
serve as the Borrower's agent, solely for purposes of this Section 7.13,
to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by
each of the Banks and each repayment in respect of the principal amount
of the Loans of each Bank. Failure to make any such recordation, or any
error in such recordation shall not affect the Borrower's obligations in
respect of such Loans. With respect to any Bank, the transfer of the
Commitments of such Bank and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by
the Agent with respect to ownership of such Commitments and Loans and
prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part
of any Commitments and Loans shall be recorded by the Agent on the
Register only upon the acceptance by the Agent of a properly executed
and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter
as practicable, the assigning or transferor Bank shall surrender the
Note evidencing such Loan, and thereupon one or more new Notes in the
same aggregate principal amount shall be issued to the assigning or
transferor Bank and/or the new Bank. The Borrower agrees to indemnify
the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties under this
Section 7.13.
<PAGE>
7.14 Maintenance of Corporate Separateness. Holdings will,
and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the maintenance of corporate records. Neither
the Borrower nor any Subsidiary of the Borrower shall make any payment
to a creditor of Holdings (other than a Guaranteed Creditor pursuant to
any Credit Document or an Interest Rate Protection Agreement or Other
Hedging Agreement entered into with any such Guaranteed Creditor) in
respect of any liability of Holdings, and no bank account of Holdings
shall be commingled with any bank account of the Borrower or any
Subsidiary of the Borrower. Any financial statements distributed to any
creditors of Holdings shall, to the extent permitted by GAAP, clearly
establish the corporate separateness of Holdings from the Borrower and
each of the Borrower's Subsidiaries. Finally, neither the Borrower nor
any of its Subsidiaries shall take any action, or conduct its affairs in
a manner, which is likely to result in the corporate existence of
Holdings on the one hand and of the Borrower or any Subsidiary of the
Borrower on the other hand being ignored, or in the assets and
liabilities of the Borrower or any Subsidiary of the Borrower being
substantively consolidated with those of Holdings in a bankruptcy,
reorganization or other insolvency proceeding.
7.15 Baxter PIK Notes; Baxter Preferred Stock; Permitted
Holdings PIK Securities. (a) Holdings shall pay any and all interest
on any Baxter PIK Notes issued in accordance with this Agreement through
the issuance of additional Baxter PIK Notes, rather than in cash,
except to the extent cash Dividends to Holdings are otherwise permitted
to be paid in accordance with the terms of Section 8.07(v) for the
purpose of paying cash interest on the Baxter PIK Notes in accordance
with the terms thereof.
(b) Holdings shall pay all dividends on the Baxter Preferred
Stock through the issuance of additional shares of Baxter Preferred
Stock, rather than in cash, except to the extent cash dividends on the
Baxter Preferred Stock are permitted to be paid in accordance with the
terms of Section 8.07(vi); provided that in lieu of issuing additional
shares of Baxter Preferred Stock as dividends, Holdings may increase the
liquidation preference of the shares of the Baxter Preferred Stock in
respect of which such dividends have accrued.
(c) Holdings shall pay all dividends or interest, as the case
may be, on the Permitted Holdings PIK Securities through the issuance of
additional Permitted Holdings PIK Securities rather than in cash;
provided that in lieu of issuing additional Permitted Holdings PIK
Securities as dividend or interest payments, Holdings may increase the
liquidation preference or outstanding amount, as the case may be, of the
outstanding Permitted Holdings PIK Securities in respect of which such
dividends or interest have accrued.
<PAGE>
7.16 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings,
notices or other official pronouncements issued or promulgated
thereunder, counsel for the Borrower acceptable to the Agent and the
Required Banks does not within 30 days after a request from the Agent or
the Required Banks deliver evidence, in form and substance satisfactory
to the Agent and the Required Banks, with respect to any Foreign
Subsidiary which has not already had all of its stock pledged pursuant
to the Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the
total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, and (y) of any promissory note
issued by such Foreign Subsidiary to Holdings or any of its Domestic
Subsidiaries, (ii) the entering into by such Foreign Subsidiary of a
security agreement in substantially the form of the Security Agreement
and (iii) the entering into by such Foreign Subsidiary of a guaranty in
substantially the form of the Subsidiary Guaranty, in any such case
would cause the undistributed earnings of such Foreign Subsidiary as
determined for Federal income tax purposes to be treated as a deemed
dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock or any promissory notes so issued
by such Foreign Subsidiary, in each case not theretofore pledged
pursuant to the Pledge Agreement shall be pledged to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described
in clause (ii) above, such Foreign Subsidiary shall execute and deliver
the Security Agreement (or another security agreement in substantially
similar form, if needed), granting the Secured Creditors a security
interest in all of such Foreign Subsidiary's assets and securing the
Obligations of the Borrower under the Credit Documents and under any
Interest Rate Protection Agreement or Other Hedging Agreement and, in
the event the Subsidiary Guaranty shall have been executed by such
Foreign Subsidiary, the obligations of such Foreign Subsidiary
thereunder, and in the case of a failure to deliver the evidence
described in clause (iii) above, such Foreign Subsidiary shall execute
and deliver the Subsidiary Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing the Obligations of
the Borrower under the Credit Documents and under any Interest Rate
Protection Agreement or Other Hedging Agreement, in each case to the
extent that the entering into such Security Agreement or Subsidiary
Guaranty is permitted by the laws of the respective foreign jurisdiction
and with all documents delivered pursuant to this Section 7.16 to be in
form and substance reasonably satisfactory to the Agent and the Required
Banks.
7.17 Contributions; Payments. (a) Holdings will contribute
as an equity contribution to the capital of the Borrower upon its
receipt thereof, any cash proceeds (net of reasonable costs associated
with such sale or issuance) received by Holdings from any sale or
issuance of its preferred or common equity or any cash capital
contributions received by Holdings, provided that to the extent
permitted by Section 8.06(t), Holdings may lend proceeds of Permitted
Equity Proceeds to the Borrower.
(b) The Borrower will use the proceeds of all equity
contributions received by it from Holdings as provided in clause (a)
above toward the repayment of Term Loans to the extent required by
Section 4.02.
<PAGE>
7.18 Accounts Receivable Facility Transaction. On the
Accounts Receivable Facility Transaction Date, (i) there shall have been
delivered to the Agent and the Required Banks true and correct copies of
all Accounts Receivable Facility Documents, certified as such by an
officer of the Borrower, and all of the terms and conditions of the
Accounts Receivable Facility Documents shall be in form and substance
reasonably satisfactory to the Agent and the Required Banks, (ii) the
Accounts Receivable Facility Transaction, including all of the terms and
conditions thereof, shall have been duly approved by the board of
directors of the Borrower, and all Accounts Receivable Facility
Documents shall be in full force and effect, (iii) each of the
conditions precedent to the consummation of the Accounts Receivable
Facility Transaction shall have been satisfied and not waived except
with the consent of the Agent and the Required Banks to the reasonable
satisfaction of the Agent and the Required Banks, (iv) each of the
representations and warranties of the Designated Credit Parties and the
Receivables Entity contained in the Accounts Receivable Facility
Documents shall be true and correct in all material respects, (v) the
Accounts Receivable Facility Transaction shall have been consummated in
all material respects in accordance with all applicable law and the
Accounts Receivable Facility Documents and (vi) the Borrower and/or the
other Designated Credit Parties shall have received the Accounts
Receivable Facility Proceeds and used the same to make any prepayment
and/or satisfy any cash collateral requirement required under Section
4.02(A)(a) as a result of the reduction to the Total Revolving Loan
Commitment on such date under Section 3.03(d).
SECTION 8. Negative Covenants . Holdings and the Borrower
hereby covenant and agree that as of the Restatement Effective Date and
thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit (other than Letters of
Credit, together with all Fees that have accrued and will accrue thereon
through the stated termination date of such Letters of Credit, which
have been supported in a manner satisfactory to the respective Letter of
Credit Issuer in its sole and absolute discretion) or Notes are
outstanding and the Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations (other than any indemnities described in
Section 12.13 hereof which are not then due and payable) incurred
hereunder, are paid in full:
8.01 Changes in Business. (a) Holdings and its Subsidiaries
will not engage in any business other than the business engaged in by
the Acquired Business and Holdings and its Subsidiaries as of the
Original Effective Date and activities directly related thereto, and
similar or related businesses.
<PAGE>
(b) Notwithstanding the foregoing, Holdings will engage in no
business other than (i) its ownership of the capital stock of the
Borrower, Borrower Subordinated Notes and those obligations of officers
and employees of Holdings and its Subsidiaries to the extent permitted
by Section 8.06(e) and having those liabilities which it is responsible
for under this Agreement and the other Documents to which it is a party,
(ii) the issuance of the Shareholder Subordinated Notes, the Baxter
Preferred Stock, the Baxter PIK Notes, the Permitted Holdings PIK
Securities, shares of Holdings Common Stock and options and warrants to
purchase Holdings Common Stock and shares of Holdings Class L Common
Stock and options and warrants to purchase Holdings Class L Common
Stock, (iii) Permitted Strategic Equity Issuances and (iv) activities
associated with expenses paid with dividends made by the Borrower
pursuant to Section 8.07(iii). Notwithstanding the foregoing, Holdings
may engage in those activities that are incidental to (a) the
maintenance of its corporate existence in compliance with applicable
law, (b) legal, tax and accounting matters in connection with any of the
foregoing activities and (c) the entering into, and performing its
obligations under, this Agreement and the other Documents to which it is
a party.
(c) Notwithstanding the foregoing, the Receivables Entity
will not engage in any business other than purchasing accounts
receivable and related assets from the Designated Credit Parties and the
related transactions pursuant to the terms of the Accounts Receivable
Facility Documents.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of
all or any part of its property or assets (other than inventory in the
ordinary course of business through distribution arrangements, vendor
financial service programs or otherwise), or enter into any
partnerships, joint ventures or sale-leaseback transactions, or purchase
or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary
course of business) of any Person (or agree to do any of the foregoing
at any future time), except that the following shall be permitted:<PAGE>
(a) the Acquisition;
(b) the Borrower and its Subsidiaries may lease as lessee or
lessor or license as licensee or licensor real or personal property
(including, without limitation, the real property subject to any
Designated Real Property Sale after the consummation thereof
pursuant to clause (s) below) in the ordinary course of business
and otherwise in compliance with this Agreement, so long as any
such lease or license by the Borrower or any of its Subsidiaries in
its capacity as lessor or licensor, as the case may be, does not
prohibit the granting of a Lien by the Borrower or any of its
Subsidiaries pursuant to the Mortgages in the real property covered
by such lease or pursuant to the Security Agreement in the personal
property covered by such lease or license, as the case may be;
(c) Capital Expenditures by the Borrower and its Subsidiaries
to the extent not in violation of Section 8.09;
(d) the advances, investments and loans permitted pursuant to
Section 8.06;
<PAGE>
(e) the Borrower and its Subsidiaries may sell or discount,
in each case without recourse, accounts receivables arising in the
ordinary course of business, but only in connection with the
compromise or collection thereof;
(f) the Borrower and its Subsidiaries may sell or exchange
specific items of equipment, so long as the purpose of each such
sale or exchange is to acquire (and results within 90 days of such
sale or exchange in the acquisition of) replacement items of
equipment which are the functional equivalent of the item of
equipment so sold or exchanged;
(g) the Borrower and its Subsidiaries may, in the ordinary
course of business, license as licensee or licensor patents,
trademarks, copyrights and know-how to or from third Persons, so
long as any such license by the Borrower or any of its Subsidiaries
in its capacity as licensor is permitted to be assigned pursuant to
the Security Agreement (to the extent that a security interest in
such patents, trademarks, copyrights and know-how is granted
thereunder) and does not otherwise prohibit the granting of a Lien
by the Borrower or any of its Subsidiaries pursuant to the Security
Agreement in the intellectual property covered by such license;
(h) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any
Wholly-Owned Foreign Subsidiary (other than the Receivables Entity)
so long as (i) such Wholly-Owned Foreign Subsidiary is the
surviving corporation of any such merger, dissolution or
liquidation and (ii) in each case at least 65% of the total
combined voting power of all classes of capital stock of all first-
tier Foreign Subsidiaries are pledged pursuant to the Pledge
Agreement;
(i) the assets of any Foreign Subsidiary may be transferred
to the Borrower or any of its Wholly-Owned Domestic Subsidiaries
(other than the Receivables Entity), and any Foreign Subsidiary may
be merged with and into, or be dissolved or liquidated into, the
Borrower or any of its Wholly-Owned Domestic Subsidiaries (other
than the Receivables Entity) so long as the Borrower or such
Wholly-Owned Domestic Subsidiary is the surviving corporation of
any such merger, dissolution or liquidation;
(j) the Borrower or any of its Wholly-Owned Domestic
Subsidiaries (other than the Receivables Entity) may transfer to
one or more Wholly-Owned Foreign Subsidiaries those assets
theretofore transferred to the Borrower or such Wholly-Owned
Domestic Subsidiary by a Foreign Subsidiary (whether by merger,
liquidation, dissolution or otherwise) pursuant to clause (i) of
this Section 8.02;
(k) the Borrower and its Subsidiaries (other than the
Receivables Entity) may sell or otherwise transfer inventory to
their respective Subsidiaries for resale by such Subsidiaries, and
Subsidiaries of the Borrower may sell or otherwise transfer
inventory to the Borrower for resale by the Borrower so long as the
security interest granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Agreement in the
inventory so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately
prior to such transfer);
<PAGE>
(l) the Borrower may contribute cash to (x) one or more
Wholly-Owned Domestic Subsidiaries (other than the Receivables
Entity) formed in accordance with Section 8.16, so long as the
aggregate amount of such cash so contributed to all such Domestic
Subsidiaries on and after the Original Effective Date does not
exceed $5,000,000 and (y) the Receivables Entity, so long as the
aggregate amount of such cash so contributed to the Receivables
Entity on and after the Original Effective Date does not exceed
$500,000;
(m) the Borrower and its Domestic Subsidiaries may transfer
assets (other than inventory) to Wholly-Owned Foreign Subsidiaries
(other than the Receivables Entity) so long as (x) the aggregate
fair market value of all such assets (other than intellectual
property) so transferred (determined in good faith by the Board of
Directors or senior management of the Borrower) to all such Foreign
Subsidiaries on and after the Original Effective Date does not
exceed $20,000,000 and (y) the aggregate fair market value of all
such intellectual property so transferred (determined in good faith
by the Board of Directors or senior management of the Borrower) to
all such Foreign Subsidiaries on and after the Original Effective
Date does not exceed $20,000,000;
(n) assets of the Borrower and its Domestic Subsidiaries
(other than Dade Diagnostics P.R., Inc. and any other Domestic
Subsidiary owning assets or having operations in Puerto Rico)
constituting non-U.S. operations may be transferred to Wholly-Owned
Foreign Subsidiaries of the Borrower;
(o) (x) the Borrower and/or its Subsidiaries may enter into
factoring arrangements with respect to accounts receivable arising
in Japan, Spain or Italy in connection with business activities in
any such country and (y) the Borrower and its Domestic Subsidiaries
may sell or otherwise transfer accounts receivable between or among
themselves in the ordinary course of business;
(p) each of the Borrower and its Subsidiaries may sell
assets, provided that (x) the aggregate sale proceeds from all
assets subject to such sales pursuant to this clause (p) shall not
exceed $5,000,000 in any fiscal year of the Borrower and (y) the
Net Proceeds therefrom are either applied to repay Term Loans as
provided in Section 4.02(A)(c) or reinvested to the extent
permitted by Section 4.02(A)(c);
(q) each of the Borrower and its Subsidiaries may sell other
assets, provided that the aggregate sale proceeds from all assets
subject to such sales pursuant to this clause (q) shall not exceed
$500,000 in any fiscal year of the Borrower;
(r) the Borrower and its Subsidiaries may effect any
Designated Asset Sale, provided that (x) any such Designated Asset
Sale is at fair market value (as determined in good faith by the
Board of Directors or senior management of the Borrower) and (y)
the Net Proceeds therefrom are either applied to repay Term Loans
as provided in Section 4.02(A)(c) or reinvested to the extent
permitted by Section 4.02(A)(c);
<PAGE>
(s) the Borrower may effect any Designated Real Property
Sale, provided that (x) any such Designated Real Property Sale is
for at least 80% in cash and at fair market value (as determined in
good faith by the Board of Directors or senior management of the
Borrower), (y) the Net Proceeds therefrom are applied to repay Term
Loans to the extent required by Section 4.02(A)(c), and (z) no
payment Default or Event of Default then exists or would result
therefrom;
(t) the Borrower and its Subsidiaries may put or otherwise
transfer accounts receivables to Baxter and/or its Affiliates in
accordance with the terms of the Baxter Acquisition Documents;
(u) so long as no Default or Event of Default then exists or
would result therefrom, the Borrower may acquire assets or the
capital stock of any Person (any such acquisition permitted by this
clause (u), a "Permitted Acquisition"), provided, that (i) such
Person (or the assets so acquired) was, immediately prior to such
acquisition, engaged (or used) primarily in the businesses
permitted pursuant to Section 8.01(a), (ii) if such acquisition is
structured as a stock acquisition, then either (A) the Person so
acquired becomes a Wholly-Owned Subsidiary of the Borrower or (B)
such Person is merged with and into the Borrower or a Wholly-Owned
Subsidiary of the Borrower (with the Borrower or such Wholly-Owned
Subsidiary being the surviving corporation of such merger), and in
any case, all of the provisions of Section 8.16 have been complied
with in respect of such Person, (iii) any Liens or Indebtedness
assumed or issued in connection with such acquisition are otherwise
permitted under Section 8.03 or 8.04, as the case may be, (iv) the
only consideration paid in connection with such Permitted
Acquisition consists of cash, Holdings Common Stock and/or
Permitted Holdings PIK Securities, (v) the aggregate amount of
cash, Holdings Common Stock (valued by an independent financial
institution or appraisal firm reasonably satisfactory to the Agent
or, after the initial public offering of Holdings Common Stock,
based on the then current trading price for such Holdings Common
Stock) and Permitted Holdings PIK Securities (valued at the
aggregate liquidation preference thereof in the case of preferred
stock and the aggregate face amount thereof in the case of
indebtedness) expended by the Borrower in connection with any such
acquisition (or series of related acquisitions) shall not exceed
$40,000,000 and (vi) the aggregate amount of cash expended by the
Borrower in connection with any such acquisition (or series of
related acquisitions) shall not exceed an amount equal to the
lesser of (I) $25,000,000 and (II) the sum of (x) $10,000,000 less
the aggregate amount of such $10,000,000 previously utilized to
make Permitted Acquisitions on and after the Original Effective
Date plus (y) the Excess Proceeds Amount at the time of such
acquisition;
(v) the Borrower may transfer assets (other than accounts
receivable and inventory) to Dade Diagnostics P.R., Inc. so long as
(x) the aggregate fair market value of all such assets so
transferred (determined in good faith by the Board of Directors or
senior management of the Borrower) to Dade Diagnostics P.R., Inc.
on and after the Original Effective Date does not exceed
$10,000,000 and (y) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets so transferred shall remain
in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such transfer);
<PAGE>
(w) the Borrower may lease as lessor equipment, machinery or
its Real Property to one or more Wholly-Owned Domestic Subsidiaries
of the Borrower so long as (x) such lease is for fair market value
(determined in good faith by the Board of Directors or senior
management of the Borrower) and (y) the security interests granted
to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets so leased shall
remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such transfer);
(x) any Domestic Subsidiary of the Borrower may transfer
assets (other than accounts receivable and inventory) to the
Borrower or to any other Wholly-Owned Domestic Subsidiary of the
Borrower (other than the Receivables Entity) so long as the
security interests granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Documents in the
assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately
prior to such transfer);
(y) any Wholly-Owned Domestic Subsidiary of the Borrower
(other than the Receivables Entity) may merge with and into the
Borrower so long as (i) the Borrower is the surviving corporation
of such merger and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets of such Wholly-Owned
Domestic Subsidiary so merged shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately
prior to such merger);
(z) any Domestic Subsidiary of the Borrower (other than the
Receivables Entity) may merge with and into, or be dissolved or
liquidated into, any other Wholly-Owned Domestic Subsidiary of the
Borrower (other than the Receivables Entity) so long as (i) such
Wholly-Owned Domestic Subsidiary of the Borrower is the surviving
corporation of such merger, dissolution or liquidation and (ii) the
security interests granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Documents in the
assets of such Domestic Subsidiary shall remain in full force and
effect and perfected (to at least the same extent as in effect
immediately prior to such merger, dissolution or liquidation);
(aa) on and after the Accounts Receivable Facility
Transaction Date, the Designated Credit Parties may (x) contribute
cash to the Receivables Entity the proceeds of which are used to
acquire accounts receivable and related assets from the Designated
Credit Parties or to fund the Seller Account and (y) transfer and
reacquire accounts receivable and related assets to and from the
Receivables Entity, in each case pursuant to, and in accordance
with the terms of, the Accounts Receivable Facility Documents;
(bb) on and after the Accounts Receivable Facility
Transaction Date, the Receivables Entity may transfer and reacquire
accounts receivable and related assets (to the extent acquired from
Designated Credit Parties as provided in clause (aa) above)
pursuant to, and in accordance with the terms of, the Accounts
Receivable Facility Documents;
<PAGE>
(cc) the Borrower and any of its Subsidiaries may sell,
transfer or otherwise dispose of assets (including patents,
trademarks, copyrights and know-how) in the ordinary course of
business that, in the reasonable business judgment of the Borrower
or such Subsidiary, are determined to be uneconomical, negligible
or obsolete in the conduct of its business;
(dd) the Borrower and any of its Subsidiaries may (x) effect
Seeded Instrument Sales in connection with its Vendor Financing
Program and (y) effect Seeded Instrument Transactions in connection
with its Alternate Vendor Financing Program, so long as the
aggregate outstanding amount of Capitalized Lease Obligations of
the Borrower and its Subsidiaries under such Seeded Instrument
Transactions shall not exceed $20,000,000 at any time; and
(ee) upon the termination of the Distribution Agreement or
any other distribution agreement in effect as of the Original
Effective Date between the Borrower and/or any of its Subsidiaries
and Baxter and/or any of its Affiliates or VWR, the Borrower and/or
any such Subsidiary may repurchase inventory transferred to Baxter,
any such Affiliate or VWR but not yet distributed at the time of
such termination.
To the extent the Required Banks waive the provisions of this Section
8.02 with respect to the sale or other disposition of any Collateral, or
any Collateral is sold as permitted by this Section 8.02 (and such
Collateral is permitted to be released from the Liens created by the
respective Security Document), such Collateral in each case shall be
sold or otherwise disposed of free and clear of the Liens created by the
Security Documents and the Agent shall take such actions (including,
without limitation, directing the Collateral Agent to take such actions)
as are appropriate in connection therewith.
8.03 Liens. Holdings will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of any kind (real or
personal, tangible or intangible) of Holdings or any of its
Subsidiaries, whether now owned or hereafter acquired, or sell any such
property or assets subject to an understanding or agreement, contingent
or otherwise, to repurchase such property or assets (including sales of
accounts receivable or notes with recourse to Holdings or any of its
Subsidiaries) or assign any right to receive income, except for the
following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
<PAGE>
(b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law which were incurred in the
ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money, such as carriers', warehousemen's
and mechanics' Liens, statutory landlord's Liens, and other similar
Liens arising in the ordinary course of business, and which either
(x) do not in the aggregate materially detract from the value of
such property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any of its
Subsidiaries or (y) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject
to such Lien;
(c) Liens created by or pursuant to this Agreement and the
Security Documents;
(d) Liens in existence on the Original Effective Date which
are listed, and the property subject thereto described, in Annex
VIII, without giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section
9.09;
(f) Liens incurred or deposits made (x) in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of
the payment for borrowed money); and (y) to secure the performance
of leases of Real Property, to the extent incurred or made in the
ordinary course of business consistent with past practices;
(g) licenses, leases or subleases granted to third Persons
not interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances
not interfering in any material respect with the ordinary conduct
of the business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) any interest or title of a licensor, lessor or sublessor
under any lease permitted by this Agreement;
(k) Liens created pursuant to Capital Leases permitted
pursuant to Section 8.04(f);
(l) Permitted Encumbrances;
<PAGE>
(m) Liens arising pursuant to purchase money mortgages or
security interests securing Indebtedness representing the purchase
price (or financing of the purchase price within 90 days after the
respective purchase) of assets acquired after the Original
Effective Date, provided that (i) any such Liens attach only to the
assets so purchased, (ii) the Indebtedness secured by any such Lien
does not exceed 100%, nor is less than 70%, of the lesser of the
fair market value or the purchase price of the property being
purchased at the time of the incurrence of such Indebtedness and
(iii) the Indebtedness secured thereby is permitted to be incurred
pursuant to Section 8.04(f);
(n) any lease by the Borrower or any of its Subsidiaries (as
lessee) of the property sold pursuant to any Designated Real
Property Sale;
(o) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of
the Borrower in existence at the time such Subsidiary is acquired
pursuant to a Permitted Acquisition, provided that (i) any
Indebtedness that is secured by such Liens is permitted to exist
under Section 8.04(l), and (ii) such Liens are not incurred in
contemplation of such Permitted Acquisition and do not attach to
any other asset of the Borrower or any of its Subsidiaries;
(p) Liens (i) granted by the Designated Credit Parties in
favor of the Receivables Entity consisting of UCC-1 financing
statements filed to effect the sale of accounts receivable and
related assets pursuant to the Accounts Receivable Facility
Documents, (ii) granted by the Receivables Entity on those accounts
receivable and related assets acquired by it pursuant to the
Accounts Receivable Facility Documents to the extent that such
Liens are created by the Accounts Receivable Facility Documents and
(iii) consisting of the right of setoff granted to any financial
institution acting as a lockbox bank in connection with the
Accounts Receivable Facility;
(q) Liens securing Indebtedness permitted pursuant to clause
(x) of Section 8.04(j), so long as any such Lien attaches only to
the assets of the respective Foreign Subsidiary which is the
obligor under such Indebtedness;
(r) Liens on any interest of the Borrower or any of its
Subsidiaries in the equipment subject to the Vendor Financing
Program securing the recourse obligations owing to a financial
institution party to the Vendor Financing Program, to the extent
such obligations are permitted under Section 8.04(s); and
(s) additional Liens incurred by the Borrower and its
Subsidiaries so long as the value of the property subject to such
Liens, and the Indebtedness and other obligations secured thereby,
do not exceed $5,000,000.
8.04 Indebtedness. Holdings will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
<PAGE>
(b) Existing Indebtedness outstanding on the Original
Effective Date and listed on Annex VII, without giving effect to
any subsequent extension, renewal or refinancing thereof except as
permitted pursuant to Section 8.06(l);
(c) Indebtedness of Holdings incurred under Baxter PIK Notes
(1) issued (x) as payment for indemnity obligations of Holdings
under the Tax Indemnity Letter and (y) after December 20, 1999 (so
long as no Default or Event of Default exists at such time or would
result therefrom) in exchange for outstanding shares of Baxter
Preferred Stock in accordance with the terms thereof, provided, in
the case of this clause (y) that the aggregate principal amount of
such Baxter PIK Notes shall not exceed the aggregate liquidation
preference of the Baxter Preferred Stock so exchanged and (2)
representing interest payments on Baxter PIK Notes previously
issued under clause (1) above (whether or not represented by the
issuance of additional Baxter PIK Notes), as issued in accordance
with the terms thereof;
(d) Indebtedness of the Borrower incurred under the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$350,000,000 (as reduced by any repayments of principal thereof);
(e) Indebtedness under Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in
interest rates in respect of the Obligations;
(f) Capitalized Lease Obligations and Indebtedness of the
Borrower and its Subsidiaries incurred pursuant to purchase money
Liens, provided, that (x) all such Capitalized Lease Obligations
are permitted under Section 8.09 and (y) the sum of (i) the
aggregate Capitalized Lease Obligations (other than up to
$20,000,000 of outstanding Capitalized Lease Obligations
outstanding at any time in connection with the Alternate Vendor
Financing Program) plus (ii) the aggregate principal amount of such
purchase money Indebtedness outstanding at any time during any
fiscal year of the Borrower shall not exceed the amount set forth
opposite such fiscal year as set forth below:
Fiscal Year Ending Amount
December 31, 1997 $15,500,000
December 31, 1998 $16,000,000
December 31, 1999 $16,500,000
December 31, 2000 $17,000,000
December 31, 2001 $17,500,000
December 31, 2002 $18,000,000
December 31, 2003 $18,500,000
December 31, 2004 $19,000,000
(g) Indebtedness constituting Intercompany Loans to the
extent permitted by Section 8.06(g);
(h) Indebtedness of Holdings under the Shareholder
Subordinated Notes;
(i) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection
with the Borrower's or any of its Subsidiaries' operations so long
as management of the Borrower or such Subsidiary, as the case may
be, has determined that the entering into of such Other Hedging
Agreements are bona fide hedging activities;
<PAGE>
(j) Indebtedness (x) of Foreign Subsidiaries under lines of
credit extended by third Persons to any such Foreign Subsidiary the
proceeds of which Indebtedness are used for such Foreign
Subsidiary's working capital purposes, provided that the aggregate
principal amount of all such Indebtedness outstanding at any time
for all Foreign Subsidiaries shall not exceed $35,000,000 (the
"Foreign Subsidiary Working Capital Indebtedness") and (y)
consisting of guaranties by the Borrower of any such Foreign
Subsidiary Working Capital Indebtedness (including, without
limitation, letters of credit issued for the account of the
Borrower and its Subsidiaries and in favor of lenders in respect of
any such Foreign Subsidiary Working Capital Indebtedness);
(k) Indebtedness of Foreign Subsidiaries to the Borrower and
its Domestic Subsidiaries (other than the Receivables Entity) as a
result of any investment made pursuant to Section 8.06(o);
(l) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an asset securing such Indebtedness),
provided that (i) such Indebtedness was not incurred in connection
with or in anticipation of such Permitted Acquisition, (ii) such
Indebtedness does not constitute debt for borrowed money (other
than debt for borrowed money incurred in connection with industrial
revenue or industrial development bond financings), it being
understood and agreed that Capitalized Lease Obligations and
purchase money Indebtedness shall not constitute debt for borrowed
money for purposes of this clause (l), and (iii) at the time of
such Permitted Acquisition such Indebtedness does not exceed 10% of
the total value of the assets of the Subsidiary so acquired, or of
the asset so acquired, as the case may be;
(m) Indebtedness consisting of guaranties (x) by the Borrower
of Indebtedness, leases and other contractual obligations permitted
to be incurred by Domestic Wholly-Owned Subsidiaries (other than
the Receivables Entity), (y) by Domestic Subsidiaries (other than
the Receivables Entity) of Indebtedness (other than the Senior
Subordinated Notes), leases and other contractual obligations
permitted to be incurred by the Borrower or other Domestic Wholly-
Owned Subsidiaries and (z) by Foreign Subsidiaries of Indebtedness,
leases and other contractual obligations permitted to be incurred
by other Foreign Wholly-Owned Subsidiaries;
(n) Indebtedness consisting of a guaranty by the Borrower of
the severance obligations of Dade Diagnostika GmbH, a German
Subsidiary of the Borrower, as required by the German Workers'
Council;
(o) Indebtedness of the Borrower constituting Borrower
Subordinated Loans to the extent permitted by Section 8.06(t) and
to the extent permitted by Section 4.12 of the Senior Subordinated
Note Indenture (without giving effect to clause (xvi) of the
definition of Permitted Indebtedness contained therein);
(p) Indebtedness of the Receivables Entity under the Accounts
Receivable Facility Documents;
(q) Indebtedness consisting of a guaranty by the Borrower of
the obligations of the other Designated Credit Parties under the
Accounts Receivable Facility Documents;
<PAGE>
(r) Indebtedness of the Borrower or any of its Subsidiaries
arising in the ordinary course of business of the Borrower or such
Subsidiary and owing to a financial institution providing netting
services to the Borrower and its Subsidiaries, provided that (i)
such Indebtedness was incurred in respect of the provision of such
netting services with respect to intercompany Indebtedness
permitted to be made pursuant to this Agreement and (ii) such
Indebtedness does not remain outstanding for more than 3 days from
the date of its incurrence;
(s) Indebtedness consisting of the recourse to the Borrower
and its Subsidiaries by financial institutions party to the Vendor
Financing Program for lease obligations owing to such financial
institutions by third party customers of the Borrower and/or such
Subsidiaries, provided that the aggregate amount of such
Indebtedness outstanding at any time shall not exceed $10,000,000;
(t) Indebtedness of the Borrower or any of its Subsidiaries
consisting of the financing of insurance premiums in the ordinary
course of business;
(u) Indebtedness of the Borrower or any of its Subsidiaries
consisting of take-or-pay obligations contained in supply
agreements entered into in the ordinary course of business;
(v) Indebtedness of Holdings incurred under Permitted
Holdings PIK Securities, provided that the aggregate outstanding
principal amount of Permitted Holdings PIK Securities constituting
Indebtedness shall not exceed $10,000,000 plus the amount of
interest on such Permitted Holdings PIK Securities paid in kind or
through accretion; and
(w) additional Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted hereunder not exceeding
$15,000,000 in aggregate principal amount at any time outstanding.
8.05 Designated Senior Debt. Holdings will not, and will not
permit any of its Subsidiaries to (i) designate any Indebtedness (other
than the Obligations) as "Designated Senior Debt" for purposes of, and
as defined in, the Senior Subordinated Note Indenture or (ii) designate
any documents with respect to any Indebtedness (other than this
Agreement) as the "Bank Credit Agreement" as defined in the Senior
Subordinated Note Indenture for purposes of the receipt of notices by
the Agent, and delivery of blockage notices pursuant to the
subordination provisions of the Senior Subordinated Note Documents.
8.06 Advances, Investments and Loans. Holdings will not, and
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital
contribution to, any Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or
hold any cash, Cash Equivalents or Foreign Cash Equivalents, except:
(a) the Borrower and its Subsidiaries may invest in cash and
Cash Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms of the Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers
and in good faith settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the
ordinary course of business;
(d) Interest Rate Protection Agreements entered into in
compliance with Section 8.04(e) shall be permitted;
(e) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or its Subsidiaries in
connection with such officers' or employees' acquisition of shares
of Holdings Common Stock or Holdings Class L Common Stock so long
as no cash is paid by Holdings or any of its Subsidiaries in
connection with the acquisition of any such obligations;
(f) deposits made in the ordinary course of business
consistent with past practices to secure the performance of leases
shall be permitted;
<PAGE>
(g) the Borrower may make intercompany loans and advances to
any of its Subsidiaries (other than the Receivables Entity) and any
Subsidiary of the Borrower (other than the Receivables Entity) may
make intercompany loans and advances to the Borrower or any other
Subsidiary of the Borrower (collectively, "Intercompany Loans"),
provided, that (w) at no time shall the aggregate outstanding
principal amount of all Intercompany Loans made pursuant to this
clause (g) by the Borrower and its Domestic Subsidiaries to Foreign
Subsidiaries, when added to the amount of contributions,
capitalizations and forgiveness theretofore made pursuant to
Section 8.06(m)(1), exceed $50,000,000 (determined without regard
to any write-downs or write-offs of such loans and advances),
provided that, in addition to such $50,000,000, Intercompany Loans
may also be made by the Borrower and its Domestic Subsidiaries to
Foreign Subsidiaries in an amount up to the Excess Proceeds Amount
at the time of any such loan, (x) each Intercompany Loan made by a
Foreign Subsidiary to the Borrower or a Domestic Subsidiary shall
contain the subordination provisions set forth on Exhibit G, (y)
each Intercompany Loan shall be evidenced by an Intercompany Note
and (z) each such Intercompany Note (other than (1) Intercompany
Notes issued by Foreign Subsidiaries to the Borrower or Domestic
Subsidiaries and (2) Intercompany Notes held by Foreign
Subsidiaries) shall be pledged to the Collateral Agent pursuant to
the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries
to employees of Holdings and its Subsidiaries for moving and travel
expenses and other similar expenses, in each case incurred in the
ordinary course of business, in an aggregate outstanding principal
amount not to exceed $6,000,000 at any time (determined without
regard to any write-down or write-offs of such loans and advances)
shall be permitted;
(i) Holdings may make equity contributions to the capital of
the Borrower;
(j) Foreign Subsidiaries may invest in Foreign Cash
Equivalents;
(k) Other Hedging Agreements may be entered into in
compliance with Section 8.04(i);
(l) advances, loans and investments in existence on the
Original Effective Date and listed on Annex XI shall be permitted,
without giving effect to any additions thereto or replacements
thereof (except those additions or replacements which are existing
obligations as of the Original Effective Date), provided that those
loans outstanding to Subsidiaries on the Original Effective Date
may be repaid and reborrowed (including after any such loans may
have been capitalized or forgiven as permitted by clause (m) of
this Section 8.06) so long as the aggregate outstanding principal
amount of all such loans does not exceed that aggregate principal
amount outstanding on the Original Effective Date;
<PAGE>
(m) the Borrower and its Domestic Subsidiaries (other than
the Receivables Entity) may (1) make cash capital contributions to
Foreign Subsidiaries, and may capitalize or forgive any
Indebtedness owed to them by a Foreign Subsidiary and outstanding
under clause (g) of this Section 8.06, provided that the aggregate
amount of such contributions, capitalizations and forgiveness on
and after the Original Effective Date, when added to the aggregate
outstanding principal amount of Intercompany Loans made to Foreign
Subsidiaries under such clause (g) (determined without regard to
any write-downs or write-offs thereof) shall not exceed an amount
equal to $50,000,000, provided that, in addition to such
$50,000,000, such contributions, capitalizations and forgiveness
may be made at any time in an amount up to the Excess Proceeds
Amount at such time, and (2) capitalize or forgive any Indebtedness
owed to them by a Foreign Subsidiary and outstanding under clause
(l) of this Section 8.06;
(n) Permitted Acquisitions shall be permitted;
(o) the Borrower and its Subsidiaries may make investments in
their respective Subsidiaries in connection with the transfers of
those assets permitted to be transferred pursuant to Sections
8.02(h), (i) and (j), it being understood that the Borrower and its
Subsidiaries may convert any investment initially made as an equity
investment to intercompany Indebtedness held by the Borrower or
such Subsidiary;
(p) the Borrower and its Domestic Subsidiaries may make and
hold investments in their respective Foreign Subsidiaries to the
extent that such investments arise from the sale of inventory in
the ordinary course of business by the Borrower or such Domestic
Subsidiary to such Foreign Subsidiaries for resale by such Foreign
Subsidiaries (including any such investments resulting from the
extension of the payment terms with respect to such sales);
(q) the Borrower and its Subsidiaries may hold additional
investments in their respective Subsidiaries to the extent that
such investments reflect an increase in the value of such
Subsidiaries;
(r) the Borrower and its Subsidiaries may capitalize one or
more foreign sales corporations created in accordance with Section
8.16 with cash contributions in an aggregate amount not to exceed
$200,000 for all such foreign sales corporations made on and after
the Original Effective Date;
(s) the Borrower and its Subsidiaries may make transfers of
assets to their respective Subsidiaries in accordance with Section
8.02(k), (l), (m), (n), (v) and (x);
(t) Holdings may make intercompany loans to the Borrower on a
subordinated basis (collectively, "Borrower Subordinated Loans") so
long as (x) all such Borrower Subordinated Loans are evidenced by a
Borrower Subordinated Note and (y) the proceeds used by Holdings to
make such Borrower Subordinated Loans come from the Permitted
Equity Proceeds;
(u) the Borrower and its Subsidiaries may acquire and hold
debt and/or equity securities as partial consideration for (x) a
sale of assets pursuant to Section 8.02(r) or (s) to the extent
permitted by any such Section and (y) the B&J Asset Sale;
<PAGE>
(v) the Borrower and the other Designated Credit Parties may
make an initial cash capital contribution to the Receivables Entity
on the Accounts Receivable Facility Transaction Date as provided in
the Accounts Receivable Facility Documents, so long as the
Receivables Entity uses all of the proceeds of such contribution on
such date to purchase accounts receivable from the Borrower and the
other Designated Credit Parties and/or to fund the Seller Account,
and the Borrower and/or such other Designated Credit Parties may
hold the capital stock of the Receivables Entity issued to them so
long as such capital stock has been duly pledged and delivered to
the Collateral Agent pursuant to the Pledge Agreement;
(w) on or after the Accounts Receivable Facility Transaction
Date, the Borrower and the other Designated Credit Parties may hold
one or more Receivables Purchase Money Notes issued by the
Receivables Entity and may maintain the Seller Account with the
Receivables Entity and may make extensions of credit to the
Receivables Entity pursuant to such Receivables Purchase Money
Notes and Seller Account for the purpose of enabling the
Receivables Entity to purchase accounts receivables pursuant to the
Accounts Receivable Facility Documents so long as such Receivables
Purchase Money Notes have been duly pledged and delivered to the
Collateral Agent pursuant to the Pledge Agreement;
(x) on or after the Accounts Receivable Facility Transaction
Date, the Receivables Entity may invest those accounts receivable
purchased from the Designated Credit Parties in the master trust
for the Accounts Receivable Facility pursuant to, and in accordance
with the terms of, the Accounts Receivable Facility Documents; and
(y) in addition to investments permitted by clauses (a)
through (x) above, so long as no Default or Event of Default then
exists or would result therefrom, the Borrower and its Subsidiaries
(other than the Receivables Entity) may make additional loans,
advances and investments to or in a Person so long as the amount of
any such loan, advance or investment (at the time of the making
thereof) made after the Original Effective Date does not exceed an
amount equal to (x) $7,500,000 less the aggregate amount of such
$7,500,000 previously used to make loans, advances and investments
pursuant to this clause (y) or Section 8.06(y) of the Original
Credit Agreement to the extent same are then still outstanding
(determined without regard to any write-downs or write-offs thereof
and net of cash repayments of principal in the case of loans and
cash equity returns (whether as a dividend or redemption) in the
case of equity investments) plus (y) the Excess Proceeds Amount at
the time of such loan, advance or investment; provided, that (1) no
single loan, advance or investment (or series of related loans,
advances or investments) in excess of $20,000,000 may be made, (2)
any loan, advance or investment made with Excess Proceeds shall be
in or to a Person of which the Borrower owns (directly or
indirectly) at least a majority economic and voting interest
(including the interest purchased or to be purchased with the
respective investment) and (3) neither the Borrower nor any of its
Subsidiaries may make or own any investment in Margin Stock.
<PAGE>
8.07 Dividends, etc. Holdings will not, and will not permit
any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in common stock of Holdings or any such
Subsidiary, as the case may be) or return any capital to, its
stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any shares of any class of its capital stock, now or
hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, and Holdings will not permit
any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of Holdings
or any other Subsidiary, as the case may be, now or hereafter
outstanding (or any options or warrants or stock appreciation rights
issued by such Person with respect to its capital stock) (all of the
foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) (a) Holdings may redeem or purchase shares of Holdings
Common Stock or Holdings Class L Common Stock or options to
purchase Holdings Common Stock or Holdings Class L Common Stock,
respectively, held by former employees of Holdings or any of its
Subsidiaries following the termination of their employment,
provided that (w) the only consideration paid by Holdings in
respect of such redemptions and/or purchases shall be cash and
Shareholder Subordinated Notes, (x) the sum of (A) the aggregate
amount paid by Holdings in cash in respect of all such redemptions
and/or purchases plus (B) the aggregate amount of all principal and
interest payments made on Shareholder Subordinated Notes, shall not
exceed $1,000,000 in any fiscal year of Holdings, provided that
such amount shall be increased by an amount equal to the proceeds
received by Holdings after December 20, 1994 from the sale or
issuance of Holdings Common Stock or Holdings Class L Common Stock,
as the case may be, to management of Holdings or any of its
Subsidiaries and (y) at the time of any cash payment permitted to
be made pursuant to this Section 8.07(ii), including any cash
payment under a Shareholder Subordinated Note, no Default or Event
of Default shall then exist or result therefrom; and (b) so long as
no Default or Event of Default then exists or would result
therefrom, the Borrower may pay cash Dividends to Holdings so long
as Holdings promptly uses such proceeds for the purposes described
in clause (ii)(a) of this Section 8.07;
(iii) the Borrower may pay cash Dividends to Holdings so long
as the proceeds thereof are promptly used by Holdings to (x) pay
operating expenses in the ordinary course of business (including,
without limitation, professional fees and expenses) and other
similar corporate overhead costs and expenses, provided that the
aggregate amount of cash Dividends paid pursuant to this clause (x)
shall not during any fiscal year of the Borrower exceed $1,500,000
or (y) pay salaries or other compensation of employees who perform
services for Holdings and the Borrower, provided that the aggregate
amount of cash Dividends paid pursuant to this clause (y) shall not
during any fiscal year of the Borrower exceed $2,000,000;
<PAGE>
(iv) the Borrower may pay cash Dividends to Holdings in the
amounts and at the times of any payment by Holdings in respect of
taxes, provided that (x) the amount of cash Dividends paid pursuant
to this clause (v) to enable Holdings to pay federal income taxes
at any time shall not exceed the lesser of (A) the amount of such
federal income taxes owing by Holdings at such time for the
respective period and (B) the amount of such federal income taxes
that would be owing by the Borrower and its Subsidiaries on a
consolidated basis for such period if determined without regard to
Holdings' ownership of the Borrower and (y) any refunds shall
promptly be returned by Holdings to the Borrower;
(v) after December 20, 1999, on the Business Day immediately
preceding the date on which a scheduled interest payment is due on
any outstanding Baxter PIK Notes (or, in the event that a Default
or Event of Default shall then exist, on the first Business Day
when no Default or Event of Default shall be continuing), the
Borrower may pay a cash Dividend to Holdings in an amount not to
exceed the aggregate amount of the interest payment due as provided
in the Baxter PIK Notes, so long as (w) on the Business Day
immediately after the receipt of such cash Dividends Holdings
utilizes the full amount thereof to make such required interest
payment on the Baxter PIK Notes to the extent then due and payable
in accordance with the terms of the Baxter PIK Notes, (x) no
Default or Event of Default then exists or would result therefrom,
(y) such cash Dividends are otherwise not prohibited to be made at
such time pursuant to Senior Subordinated Notes, and (z) at the
time of any such proposed cash Dividends, the Borrower's Interest
Coverage Ratio shall have been no less than, and the Borrower's
Leverage Ratio shall have been no greater than, the applicable
target ratios set forth on Annex X hereto for the then most
recently ended Test Period, in each case determined on a pro forma
basis as if such cash dividends constituted cash interest expense
of the Borrower and had been paid during such period;
(vi) Holdings may pay regularly scheduled Dividends on the
Baxter Preferred Stock pursuant to the terms thereof solely through
the issuance of additional shares of Baxter Preferred Stock,
provided that in lieu of issuing additional shares of Baxter
Preferred Stock as Dividends, Holdings may increase the liquidation
preference of the shares of the Baxter Preferred Stock in respect
of which such Dividends have accrued, provided further, that after
December 20, 1999, on the Business Day immediately preceding the
date on which a scheduled dividend payment is due on the Baxter
Preferred Stock (or, in the event that a Default or Event of
Default shall then exist, on the first Business Day when no Default
or Event of Default shall be continuing), the Borrower may pay a
cash Dividend to Holdings in an amount not to exceed the aggregate
amount of the dividend payment due as provided in the Baxter
Preferred Stock, so long as (w) on the Business Day immediately
after the receipt of such cash Dividends Holdings utilizes the full
amount thereof to make such required dividend payment on the Baxter
Preferred Stock to the extent then due and payable in accordance
with the terms of the Baxter Preferred Stock, (x) no Default or
Event of Default then exists or would result therefrom, (y) such
cash Dividends are otherwise not prohibited to be made at such time
pursuant to the Senior Subordinated Notes, and (z) at the time of
any such proposed cash Dividends, the Borrower's Interest Coverage
Ratio shall have been no less than, and the Borrower's Leverage
<PAGE>
Ratio shall have been no greater than, the applicable target ratios
set forth on Annex X hereto for the then most recently ended Test
Period, in each case determined on a pro forma basis as if such
cash dividends constituted cash interest of the Borrower and had
been paid during such period;
(vii) after December 20, 1999, so long as no Default or Event
of Default then exists or would result therefrom, Holdings may
issue Baxter PIK Notes in exchange for its then outstanding Baxter
Preferred Stock, provided that the aggregate principal amount of
Baxter PIK Notes so issued shall not exceed the aggregate
liquidation preference of such Baxter Preferred Stock at such time;
(viii) so long as no Default or Event of Default then exists or
would result therefrom, (x) Holdings may use cash to repurchase or
redeem shares of Baxter Preferred Stock, together with all accrued
dividends thereon, so long as (I) the shares of Baxter Preferred
Stock so repurchased or redeemed are retired and not thereafter
resold or reissued and (II) the aggregate amount expended pursuant
to any such repurchase or redemption of shares of Baxter Preferred
Stock by Holdings shall not exceed an amount equal to 80% of the
total accreted value of the Baxter Preferred Stock so repurchased
or redeemed at the time of such repurchase or redemption and (y)
the Borrower may pay cash Dividends to Holdings to enable Holdings
to repurchase or redeem Baxter Preferred Stock as permitted in the
immediately preceding clause (x), so long as the proceeds thereof
are promptly used by Holdings to effect such repurchase or
redemption; and
(ix) Holdings may pay regularly scheduled Dividends on the
Permitted Holdings PIK Securities (to the extent issued as
preferred stock) pursuant to the terms thereof solely through the
issuance of additional shares of such Permitted Holdings PIK
Securities, provided that in lieu of issuing additional shares of
such Permitted Holdings PIK Securities as Dividends, Holdings may
increase the liquidation preference of the shares of Permitted
Holdings PIK Securities in respect of which such Dividends have
accrued.
8.08 Transactions with Affiliates. Holdings will not, and
will not permit any of its Subsidiaries to, enter into any transaction
or series of transactions with any Affiliate other than in the ordinary
course of business and on terms and conditions substantially as
favorable to Holdings or such Subsidiary as would be obtainable by
Holdings or such Subsidiary at the time in a comparable arm's-length
transaction with a Person other than an Affiliate; provided, that the
following shall in any event be permitted: (i) the Original Transaction
and the Transaction; (ii) the payment, on a quarterly basis, of
management fees to Bain Capital and GS Capital and their respective
Related Parties in an aggregate amount (for all such Persons taken
together) not to exceed $750,000 in any fiscal quarter of the Borrower,
provided that if during any fiscal quarter of the Borrower a Default or
Event of Default exists, only one-half of such fee for such fiscal
quarter may be paid; (iii) the reimbursement of Bain Capital and GS
Capital and their respective Related Parties for their reasonable out-
of-pocket expenses incurred by them in connection with performing
management services to the Borrower and its Subsidiaries under the
Consulting Agreement; (iv) Holdings and the Borrower and its Domestic
<PAGE>
Subsidiaries may make any payments required under the Holdings Tax
Allocation Agreement; and (v) the transactions contemplated by the
Accounts Receivable Facility Documents. Notwithstanding anything to the
contrary contained in this Section 8.08, at no time will Holdings or any
of its Subsidiaries make any payments to Bain Capital, GS Capital or any
of their respective Related Parties in an amount which would exceed that
amount permitted to be paid pursuant to the Senior Subordinated Note
Indenture at such time.
8.09 Capital Expenditures. (a) (i) Holdings will not, and
will not permit any of its Subsidiaries to, make any Capital
Expenditures, except that, subject to clause (ii) below, during any
fiscal year the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of such Capital
Expenditures does not exceed in any such fiscal year set forth below the
amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
December 31, 1996 $74,000,000
December 31, 1997 $62,000,000
December 31, 1998 $56,000,000
December 31, 1999 $60,000,000
December 31, 2000 $61,000,000
December 31, 2001 $63,000,000
December 31, 2002 $66,000,000
December 31, 2003 $69,000,000
December 31, 2004 $71,000,000
; provided, that (x) in the event that the aggregate amount of Capital
Expenditures made in fiscal year 1996 constituting Stand Alone
Expenditures and TOA Expenditures exceeds $24,000,000, then Capital
Expenditures in such fiscal year may exceed $74,000,000 by an amount
equal to such excess (but in any event not to exceed $87,000,000); and
(y) in the event that Capital Expenditures in fiscal year 1996 exceed
$74,000,000 as a result of preceding clause (x), the amount of Capital
Expenditures otherwise permitted to be made pursuant to this Section
8.09(a)(i) in fiscal year 1997 shall be reduced by the excess amount so
expended in 1996.
(ii) Subject to Section 8.09(g), if for any fiscal year of
the Borrower commencing with the fiscal year ending on December 31,
1998, (x) the Consolidated EBITDA of Holdings for the immediately
preceding fiscal year is less than the projected Consolidated EBITDA of
Holdings set forth on Annex IX for such immediately preceding fiscal
year (the amount by which such actual Consolidated EBITDA is less than
such projected Consolidated EBITDA, the "Deficiency"), then the amount
of Capital Expenditures permitted to be made in such fiscal year
pursuant to this Section 8.09(a) shall be (A) the amount set forth in
clause (a)(i) above opposite such fiscal year (as same may have been
modified by the proviso to such clause (a)(i)) minus (B) the Deficiency
multiplied by 0.25 and (y) the Consolidated EBITDA of Holdings for the
immediately preceding fiscal year is more than the projected
Consolidated EBITDA of Holdings set forth on Annex IX for such
immediately preceding fiscal year (the amount by which such actual
Consolidated EBITDA exceeds such projected Consolidated EBITDA, the
"Surplus"), then the amount of Capital Expenditures permitted to be made
in such fiscal year pursuant to this Section 8.09(a) shall be (A) the
amount set forth in clause (a)(i) above opposite such fiscal year (as
same may have been modified by the proviso to such clause (a)(i)) plus
(B) the Surplus multiplied by 0.25.
<PAGE>
(b) Notwithstanding the foregoing, (i) in the event that the
amount of Capital Expenditures made in fiscal year 1996 and constituting
Stand Alone Expenditures and TOA Expenditures is less than $24,000,000,
100% of such unutilized amount may be carried forward and utilized to
make Capital Expenditures in fiscal year 1997; (ii) in the event that
the amount of Capital Expenditures made in fiscal year 1996 and not
constituting Stand Alone Expenditures or TOA Expenditures is less than
$50,000,000, such unutilized amount may be carried forward and utilized
to make Capital Expenditures in succeeding years; (iii) in the event
that the amount of Capital Expenditures made in fiscal years 1996 and
1997 and constituting Stand Alone Expenditures and TOA Expenditures is
less than $37,000,000, 100% of such unutilized amount may be carried
forward and utilized to make Capital Expenditures in fiscal year 1998;
(iv) in the event that the amount of Capital Expenditures made in fiscal
year 1997 and not constituting Stand Alone Expenditures or TOA
Expenditures is less than $50,000,000, such unutilized amount may be
carried forward and utilized to make Capital Expenditures in succeeding
years; and (v) in the event that the amount of Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries pursuant to
clause (a) above in any fiscal year commencing with fiscal year 1998
(before giving effect to any increase in such permitted expenditure
amount pursuant to this clause (b)) is greater than the amount of such
Capital Expenditures made by the Borrower and its Subsidiaries during
such fiscal year, such excess may be carried forward and utilized to
make Capital Expenditures in succeeding fiscal years. The aggregate
amount of unutilized Capital Expenditures carried forward from one
fiscal year to one or more later fiscal years is called the "Rollover
Amount." Notwithstanding the foregoing, (x) in no event shall the
aggregate Rollover Amount permitted to be carried forward from a fiscal
year exceed the amount of Capital Expenditures permitted to be made in
such fiscal year under clause (a) above minus the amount of Capital
Expenditures made during such fiscal year under such clause (a), and (y)
in no event shall the aggregate amount of Capital Expenditures made by
the Borrower and its Subsidiaries during any fiscal year (commencing
with fiscal year 1997) pursuant to Section 8.09(a) exceed the sum of (I)
125% of the amount set forth opposite such fiscal year as set forth in
the table in such Section 8.09(a) (as modified by the proviso to clause
(i) of such Section 8.09(a) and clause (ii) of such Section plus (II)
for fiscal years 1997 and 1998 only, the amount of the unutilized Stand
Alone Expenditures and TOA Expenditures carried forward to such fiscal
year from the prior fiscal year as provided above in this Section
8.09(b).
(c) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures (which Capital Expenditures
will not be included in any determination under the foregoing clause
(a)) with the insurance proceeds received by the Borrower or any of its
Subsidiaries from any Recovery Event so long as such Capital
Expenditures are to replace or restore any properties or assets in
respect of which such proceeds were paid within 360 days following the
date of the receipt of such insurance proceeds to the extent such
insurance proceeds are not required to be applied to repay Term Loans
pursuant to Section 4.02(A)(g).
(d) Notwithstanding the foregoing, but subject to Section
8.09(g), the Borrower and its Subsidiaries may make Capital Expenditures
(which Capital Expenditures will not be included in any determination
under the foregoing clause (a)) with the net cash proceeds of Asset
Sales (including Designated Asset Sales), to the extent such net cash
proceeds are not required to be applied to repay Term Loans pursuant to
Section 4.02(A)(c) and are not added to the Excess Proceeds Amount.
<PAGE>
(e) Notwithstanding the foregoing, but subject to Section
8.09(g), the Borrower and its Subsidiaries may make Capital Expenditures
at any time in an aggregate amount equal to the Excess Proceeds Amount
at such time (which Capital Expenditures will not be included in any
determination under the foregoing clause (a)).
(f) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may incur Capitalized Lease Obligations under and in
connection with the Alternate Vendor Financing Program in an aggregate
outstanding amount not to exceed $20,000,000 at any time (which
Capitalized Lease Obligations will not be included in any determination
under the foregoing clause (a)).
(g) Notwithstanding the foregoing, in no event shall the
aggregate amount of additional Capital Expenditures permitted to be made
in any fiscal year as a result of the operation of Section 8.09(a)(ii),
(d) and (e) exceed $15,000,000.
8.10 Minimum Consolidated EBITDA. The Borrower will not
permit Consolidated EBITDA for any Test Period ending on a date set
forth below to be less than the amount set forth opposite such date:
Minimum Consolidated
Date EBITDA
March 31, 1997 $111,300,000
June 30, 1997 $152,300,000
September 30, 1997 $154,100,000
December 31, 1997 $164,100,000
March 31, 1998 $165,000,000
June 30, 1998 $166,200,000
September 30, 1998 $167,300,000
December 31, 1998 $168,600,000
March 31, 1999 $171,500,000
June 30, 1999 $175,200,000
September 30, 1999 $178,800,000
December 31, 1999 $183,200,000
March 31, 2000 $186,400,000
June 30, 2000 $190,400,000
September 30, 2000 $194,400,000
December 31, 2000 $199,100,000
March 31, 2001 $203,600,000
June 30, 2001 $209,300,000
September 30, 2001 $214,900,000
December 31, 2001 $221,700,000
March 31, 2002 $223,900,000
June 30, 2002 $226,700,000
September 30, 2002 $229,600,000
December 31, 2002 $233,000,000
March 31, 2003 $235,400,000
June 30, 2003 $238,300,000
September 30, 2003 $241,300,000
December 31, 2003 $244,900,000
March 31, 2004 $247,400,000
June 30, 2004 $250,500,000
September 30, 2004 $253,700,000
<PAGE>
8.11 Interest Coverage Ratio. The Borrower will not permit
the Interest Coverage Ratio for any Test Period ending on a date set
forth below to be less than the ratio set forth opposite such date:
Date Ratio
March 31, 1997 1.50:1.0
June 30, 1997 1.55:1.0
September 30, 1997 1.55:1.0
December 31, 1997 1.65:1.0
March 31, 1998 1.70:1.0
June 30, 1998 1.70:1.0
September 30, 1998 1.75:1.0
December 31, 1998 1.75:1.0
March 31, 1999 1.80:1.0
June 30, 1999 1.85:1.0
September 30, 1999 1.90:1.0
December 31, 1999 1.95:1.0
March 31, 2000 2.00:1.0
June 30, 2000 2.05:1.0
September 30, 2000 2.10:1.0
December 31, 2000 2.20:1.0
March 31, 2001 2.25:1.0
June 30, 2001 2.35:1.0
September 30, 2001 2.45:1.0
December 31, 2001 2.55:1.0
March 31, 2002 2.65:1.0
June 30, 2002 2.70:1.0
September 30, 2002 2.80:1.0
December 31, 2002 2.90:1.0
March 31, 2003 3.00:1.0
June 30, 2003 3.15:1.0
September 30, 2003 3.25:1.0
December 31, 2003 3.40:1.0
March 31, 2004 3.55:1.0
June 30,2004 3.75:1.0
September 30, 2004 3.75:1.0
8.12 Current Ratio. The Borrower will not permit the Current
Ratio at any time to be less than 1.25: 1.0.
<PAGE>
8.13 Leverage Ratio. The Borrower will not permit the
Leverage Ratio at any time during a fiscal quarter set forth below to be
more than the ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
March 31, 1997 8.40:1.0
June 30, 1997 6.00:1.0
September 30, 1997 5.95:1.0
December 31, 1997 5.55:1.0
March 31, 1998 5.50:1.0
June 30, 1998 5.40:1.0
September 30, 1998 5.30:1.0
December 31, 1998 5.20:1.0
March 31, 1999 5.10:1.0
June 30, 1999 4.95:1.0
September 30, 1999 4.80:1.0
December 31, 1999 4.65:1.0
March 31, 2000 4.50:1.0
June 30, 2000 4.35:1.0
September 30, 2000 4.20:1.0
December 31, 2000 4.05:1.0
March 31, 2001 3.85:1.0
June 30, 2001 3.70:1.0
September 30, 2001 3.50:1.0
December 31, 2001 3.30:1.0
March 31, 2002 3.20:1.0
June 30, 2002 3.05:1.0
September 30, 2002 2.95:1.0
December 31, 2002 2.80:1.0
March 31, 2003 2.65:1.0
June 30, 2003 2.55:1.0
September 30, 2003 2.40:1.0
December 31, 2003 2.25:1.0
March 31, 2004 2.15:1.0
June 30, 2004 2.00:1.0
September 30, 2004 2.00:1.0
8.14 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; Issuance of Capital Stock; etc. Holdings will
not, and will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for
value of any Senior Subordinated Note, any Permitted Holdings PIK
Security or any Baxter PIK Note or make any interest payment on any
Baxter PIK Note except to the extent permitted by Section 8.07(v);
provided, that the Series B Senior Subordinated Notes may be issued
in exchange for the Series A Senior Subordinated Notes in
accordance with the terms of the Senior Subordinated Note
Indenture;
(ii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of,
any Shareholder Subordinated Note, except to the extent permitted
by Section 8.07(ii);
(iii) amend or modify, or permit the amendment or modification
of, any provision of any Senior Subordinated Note Document, any
Baxter PIK Note Document, any Borrower Subordinated Note or any
Shareholder Subordinated Note;
<PAGE>
(iv) amend or modify, or permit the amendment or modification
of, or terminate or permit the termination of, the Distribution
Agreement, except that (x) the Distribution Agreement may be
terminated as to one or more businesses or product lines pursuant
to the terms of the Distribution Agreement in connection with the
sale of such business or product line in accordance with the terms
of this Agreement and (y) Holdings and/or the Borrower may make any
such amendment or modification or effect any such termination so
long as in the good faith judgment of the Board of Directors or
senior management of the Borrower, after giving effect to any such
amendment, modification or termination, the Borrower and its
Subsidiaries will have a distribution network which, taken as a
whole (taking into account all other contemporaneous actions in
respect of other arrangements with Baxter), is substantially as
advantageous to the Borrower, and in no event materially more
expensive taken as a whole, as the distribution network of the
Borrower and its Subsidiaries in effect immediately prior to any
such amendment, modification or termination, provided that Holdings
or the Borrower shall promptly notify, in writing, the Agent of any
such amendment, modification or termination and shall deliver
together with any such notice a copy of such executed amendment,
modification or termination;
(v) amend, modify or change in any way adverse to the
interests of the Banks, any Management Agreement (including,
without limitation, the Consulting Agreement), the terms of any
Baxter Preferred Stock, the Services Agreement, any Tax Allocation
Agreement, the Tax Indemnity Letter, its Certificate of
Incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or By-Laws, or any
agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement (including, without
limitation, the Stockholders' Agreement, the Subscription Agreement
and the Registration Rights Agreement)), or enter into any new
agreement with respect to its capital stock which would be adverse
to the interests of the Banks;
(vi) amend or modify, or permit the amendment or modification
of, any provision of any Permitted Holdings PIK Security in any
manner inconsistent with the definition of Permitted Holdings PIK
Security;
(vii) issue any class of capital stock other than (x) in the
case of the Borrower and its Subsidiaries, non-redeemable common
stock and (y) in the case of Holdings, (1) the issuance of Baxter
Preferred Stock as permitted pursuant to Section 8.07(vi), (2) the
issuance of Holdings Common Stock or Permitted Holdings PIK
Securities as consideration for a Permitted Acquisition pursuant to
Section 8.02(u) and (3) issuances of Holdings Common Stock or
Holdings Class L Common Stock where, after giving effect to such
issuance, no Event of Default will exist under Section 9.10 and to
the extent the proceeds thereof are applied in accordance with
Sections 4.02(A)(d) and 7.17;
(viii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of,
any Borrower Subordinated Note; or
(ix) at any time after the Accounts Receivable Facility
Transaction Date, amend or modify, or permit the amendment or
modification of, any provision of any Accounts Receivable Facility
Document, except as permitted by the definition thereof.
<PAGE>
8.15 Limitation on Certain Restrictions on Subsidiaries.
Holdings will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profits
owned by Holdings or any Subsidiary of Holdings, or pay any Indebtedness
owed to Holdings or a Subsidiary of Holdings, (b) make loans or advances
to Holdings or any of Holdings' Subsidiaries or (c) transfer any of its
properties or assets to Holdings or any of Holdings' Subsidiaries,
except for such encumbrances or restrictions existing under or by reason
of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower
or a Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any licensing agreement entered into by the Borrower or a
Subsidiary of the Borrower in the ordinary course of business, (v) the
Senior Subordinated Note Documents, (vi) customary provisions
restricting the transfer of assets subject to Liens permitted under
Sections 8.03(k), (m) and (o), (vii) any document or instrument
evidencing Foreign Subsidiary Working Capital Indebtedness so long as
such encumbrance or restriction only applies to the Foreign Subsidiary
incurring such Indebtedness and (viii) the Accounts Receivable Facility
Documents.
8.16 Limitation on the Creation of Subsidiaries .
Notwithstanding anything to the contrary contained in this Agreement,
Holdings will not, and will not permit any of its Subsidiaries to,
establish, create or acquire after the Restatement Effective Date any
Subsidiary; provided that, (a) the Borrower and its Wholly-Owned
Subsidiaries (other than the Receivables Entity) shall be permitted to
establish or create (x) Subsidiaries as a result of investments made
pursuant to Section 8.06(r) and (y) Wholly-Owned Subsidiaries so long as
(i) at least 30 days' prior written notice thereof (or such lesser
notice as is acceptable to the Agent) is given to the Agent, (ii) the
capital stock of such new Subsidiary is pledged pursuant to, and to the
extent required by, this Agreement and the Pledge Agreement and the
certificates, if any, representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent,
(iii) such new Subsidiary (other than a Foreign Subsidiary except to the
extent otherwise required pursuant to Section 7.16) executes a
counterpart of the Subsidiary Guaranty, the Pledge Agreement and the
Security Agreement, and (iv) to the extent requested by the Agent or the
Required Banks, takes all actions required pursuant to Section 7.11 and
(b) the Receivables Entity may become a Subsidiary of the Borrower. In
addition, each new Wholly-Owned Subsidiary (other than the Receivables
Entity) shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in
Section 5 as such new Subsidiary would have had to deliver if such new
Subsidiary were a Credit Party on the Restatement Effective Date.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each, an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default
shall continue for three or more days, in the payment when due of any
Unpaid Drawing, any interest on the Loans or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
<PAGE>
9.02 Representations, etc. Any representation, warranty or
statement made by Holdings, the Borrower or any other Credit Party
herein or in any other Credit Document or in any statement or
certificate delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made or deemed
made; or
9.03 Covenants. Any Credit Party shall (a) default in the
due performance or observance by it of any term, covenant or agreement
contained in Sections 7.11, 7.14, 7.17, 7.18 or 8, or (b) default in the
due performance or observance by it of any term, covenant or agreement
(other than those referred to in Section 9.01, 9.02 or clause (a) of
this Section 9.03) contained in this Agreement and such default shall
continue unremedied for a period of at least 30 days after notice to the
defaulting party by the Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) Holdings or any of
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if
any, provided in the instrument or agreement under which Indebtedness
was created or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause any such Indebtedness to become due prior to
its stated maturity; or (b) any Indebtedness (other than the
Obligations) of Holdings or any of its Subsidiaries shall be declared to
be due and payable, or shall be required to be prepaid other than by a
regularly scheduled required prepayment or as a mandatory prepayment
(unless such required prepayment or mandatory prepayment results from a
default thereunder or an event of the type that constitutes an Event of
Default), prior to the stated maturity thereof; provided, that it shall
not constitute an Event of Default pursuant to clause (a) or (b) of this
Section 9.04 unless the principal amount of any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred
to in clauses (a) and (b) above, exceeds $10,000,000 at any one time; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect,
or any successor thereto (the "Bankruptcy Code"); or an involuntary case
is commenced against Holdings or any of its Subsidiaries and the
petition is not controverted within 10 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of Holdings or any of its
Subsidiaries; or Holdings or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction whether now or hereafter in effect relating to
Holdings or any of its Subsidiaries; or there is commenced against
Holdings or any of its Subsidiaries any such proceeding which remains
undismissed for a period of 60 days; or Holdings or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered;
or Holdings or any of its Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to
<PAGE>
continue undischarged or unstayed for a period of 60 days; or Holdings
or any of its Subsidiaries makes a general assignment for the benefit of
creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver
of such standard or extension of any amortization period is sought or
granted under Section 412 of the Code, any Plan shall have had or is
likely to have a trustee appointed to administer such Plan, any Plan is,
shall have been or is likely to be terminated or the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded
Current Liability, a contribution required to be made to a Plan or a
Foreign Pension Plan has not been timely made, Holdings or any
Subsidiary of Holdings or any ERISA Affiliate has incurred or is likely
to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or Holdings or
any Subsidiary of Holdings has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) which provide benefits to retired
employees or other former employees (other than as required by Section
601 of ERISA) or employee pension benefit plans (as defined in Section
3(2) of ERISA) or Foreign Pension Plans; (b) there shall result from any
such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a
liability; and (c) which lien, security interest or liability which
arises from such event or events, in the opinion of the Required Banks,
will have a Material Adverse Effect; or
9.07 Security Documents. (a) Except in each case to the
extent resulting from the failure of the Collateral Agent to retain
possession of the applicable Pledged Securities, any Security Document
shall cease to be in full force and effect, or shall cease to give the
Collateral Agent the Liens, rights, powers and privileges purported to
be created thereby in favor of the Collateral Agent, or (b) any Credit
Party shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant
to any such Security Document and such default shall continue beyond any
cure or grace period specifically applicable thereto pursuant to the
terms of such Security Document; or
9.08 Guaranties. The Guaranties or any provision thereof
shall cease to be in full force and effect, or any Guarantor or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Guarantor's obligations under any Guaranty or any Guarantor shall
default in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant
to any Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries involving a
liability (not paid or not fully covered by insurance) in excess of
$10,000,000 for all such judgments and decrees and all such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days from the entry thereof; or
9.10 Ownership. A Change of Control Event shall have
occurred; or
<PAGE>
9.11 Distribution Agreement. The Distribution Agreement or
any material provision thereof shall cease to be in full force and
effect as a result of a default thereunder by Holdings, the Borrower or
any of their respective Subsidiaries in the payment or performance of
any of their obligations thereunder; provided that (i) no Event of
Default shall exist hereunder as a result of the Distribution Agreement
or a material portion thereof no longer being in full force or effect as
a result of such a default, which default is being contested in good
faith by the Borrower so long as during the period while such contest is
pending the Borrower either has the benefit of the Distribution
Agreement or has arranged for an alternate distribution network
providing substantially equivalent benefits to the Borrower and its
Subsidiaries and (ii) this Section 9.11 shall cease to have any effect
after the first consecutive four fiscal quarter period (taken as one
accounting period) during which the percentage of the gross revenues of
the Borrower and its Subsidiaries which are subject to or obtained
through the Distribution Agreement is less than 15%; or
9.12 Accounts Receivable Facility. At any time after the
Accounts Receivable Facility Transaction Date, an early amortization
event shall occur under the Accounts Receivable Facility Documents;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of
the Agent or any Bank to enforce its claims against any Guarantor or the
Borrower, except as otherwise specifically provided for in this
Agreement (provided, that if an Event of Default specified in Section
9.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving
of any such notice): (i) declare the Total Commitment (or the
unutilized portion thereof) terminated, whereupon the Commitment of each
Bank (or the unutilized portion thereof) shall forthwith terminate
immediately and any Commitment Fees shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and all Obligations
owing hereunder (including Unpaid Drawings) to be, whereupon the same
shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Borrower; (iii) enforce, as Collateral Agent (or direct the
Collateral Agent to enforce), any or all of the Liens and security
interests created pursuant to the Security Documents; (iv) terminate any
Letter of Credit which may be terminated in accordance with its terms;
and (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default
specified in Section 9.05, to pay) to the Collateral Agent at the
Payment Office such additional amounts of cash, to be held as security
for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding, equal to the aggregate Stated Amount of all
Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular:
"A Term Loan" shall have the meaning provided in Section
1.01(A)(a).
<PAGE>
"A Term Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly
below the column entitled "A Term Loan Commitment," as the same may be
reduced or terminated pursuant to Section 3.03 and/or 9 or otherwise
modified pursuant to Section 1.13 and/or 12.04(b).
"A Term Loan Facility" shall mean the Facility evidenced by
the Total A Term Loan Commitment.
"A Term Loan Maturity Date" shall mean December 31, 2001.
"A Term Note" shall have the meaning provided in Section
1.05(a).
"A TL Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of all A Term Loans outstanding at such time
and the denominator of which is equal to the aggregate principal amount
of all Term Loans outstanding at such time.
"Accounts Receivable Facility" shall mean the transactions
contemplated by the Accounts Receivable Facility Purchase Agreement.
"Accounts Receivable Facility Documents" shall mean the
Accounts Receivable Facility Pooling and Servicing Agreement, the
Accounts Receivable Facility Purchase Agreement, the Accounts Receivable
Facility Revolving Certificate Purchase Agreement and each of the other
documents and agreements entered into in connection therewith, including
all documents and agreements relating to the issuance, funding and/or
purchase of Investor Certificates and Purchased Interests, in each case
as such documents and agreements may be amended, modified, supplemented,
refinanced or replaced from time to time so long as (i) any such
amendments, modifications, supplements, refinancing or replacements do
not impose any conditions or requirements on Holdings or any of its
Subsidiaries that are more restrictive in any material respect than
those in existence on the Accounts Receivable Facility Transaction Date,
(ii) any such amendments, modifications, supplements, refinancings or
replacements are not adverse to the interests of the Banks and (iii) any
such amendments, modifications, supplements, refinancing or replacements
are otherwise in form and substance reasonably satisfactory to the
Agent.
"Accounts Receivable Facility Pooling and Servicing Agreement"
shall mean the Pooling and Servicing Agreement, among the Receivables
Entity, as transferor, the Borrower, as servicer, and the Trustee, as
the same may be amended, modified, supplemented, refinanced or replaced
from time to time in accordance with the terms thereof and hereof, which
Accounts Receivable Facility Pooling and Servicing Agreement shall be in
form and substance reasonably satisfactory to the Agent and the Required
Banks.
"Accounts Receivable Facility Proceeds" shall mean the initial
net invested amount of Investor Certificates in respect of the Accounts
Receivable Facility on the Accounts Receivable Facility Transaction
Date, which amount shall be satisfactory to the Agent and the Required
Banks.
<PAGE>
"Accounts Receivable Facility Purchase Agreement" shall mean
the Receivables Purchase Agreement, among the Borrower and the other
Designated Credit Parties, as sellers, and the Receivables Entity, as
buyer, as the same may be amended, modified, supplemented, refinanced or
replaced from time to time in accordance with the terms thereof and
hereof, which Accounts Receivable Facility Purchase Agreement shall be
in form and substance reasonably satisfactory to the Agent and the
Required Banks.
"Accounts Receivable Facility Revolving Certificate Purchase
Agreement" shall mean the Revolving Certificate Purchase Agreement,
among the Receivables Entity, the Borrower, as the initial servicer, the
purchasers party thereto, and BTCo, as Agent, as the same may be
amended, modified, supplemented, refinanced or replaced from time to
time in accordance with the terms thereof and hereof, which Revolving
Certificate Purchase Agreement shall be in form and substance reasonably
satisfactory to the Agent and the Required Banks.
"Accounts Receivable Facility Transaction" shall mean the
consummation of the Accounts Receivable Facility and related
transactions contemplated by the Accounts Receivable Facility Documents.
"Accounts Receivable Facility Transaction Date" shall mean the
date of the consummation of the Accounts Receivable Facility Transaction
in accordance with the requirements of Section 7.18.
"Acquired Business" shall mean the assets acquired by the
Borrower pursuant to the Acquisition Documents.
"Acquisition" shall mean the acquisition by the Borrower for
cash of the assets of the in vitro diagnostics division of the Seller
pursuant to, and in accordance with the terms of, the Acquisition
Documents.
"Acquisition Agreements" shall mean (i) the Asset Purchase and
Sale Agreement, dated as of December 11, 1995, as in effect on the
Original Effective Date, between Dade Chemistry Systems Inc. and the
Seller, as amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof and (ii) each of the
agreements listed on Annex XIII hereto.
"Acquisition Documents" shall mean the Acquisition Agreement,
the IVD Services Agreement and all other purchase and other agreements,
instruments and documents relating to the Acquisition.
"Additional Security Documents" shall have the meaning
provided in Section 7.11.
<PAGE>
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for
negotiable certificates of deposit with a three-month maturity in the
secondary market as published in the most recent Federal Reserve System
publication entitled "Select Interest Rates," published weekly on Form
H.15 as of the date hereof, or if such publication or a substitute
containing the foregoing rate information shall not be published by the
Federal Reserve System for any week, the weekly average offering rate
determined by the Agent on the basis of quotations for such certificates
received by it from three certificate of deposit dealers in New York of
recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal
Reserve System in excess of $100,000 (including, without limitation, any
marginal, emergency, supplemental, special or other reserves), plus (2)
the then daily net annual assessment rate as estimated by the Agent for
determining the current annual assessment payable by BTCo to the Federal
Deposit Insurance Corporation for insuring three month certificates of
deposit.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities having
ordinary voting power for the election of directors of such corporation
or (ii) to direct or cause the direction of the management and policies
of such corporation, whether through the ownership of voting securities,
by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph
of this Agreement and shall include any successor to the Agent appointed
pursuant to Section 11.10.
"Aggregate Net Invested Amount" shall have the meaning
provided in Section 3.03(d).
"Aggregate Unutilized Commitment" with respect to any Bank at
any time shall mean the sum of (i) such Bank's A Term Loan Commitment at
such time, if any, (ii) such Bank's B Term Loan Commitment at such time,
if any, (iii) such Bank's C Term Loan Commitment at such time, if any,
(iv) such Bank's D Term Loan Commitment at such time, if any, and (v)
such Bank's Revolving Loan Commitment at such time less the sum of (x)
the aggregate outstanding principal amount of all Revolving Loans made
by such Bank and (y) such Bank's RL Percentage of the Letter of Credit
Outstandings at such time.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended and/or supplemented.
"Alternate Vendor Financing Program" shall mean a vendor
financial services program between the Borrower and/or one or more
Subsidiaries of the Borrower and a financial institution pursuant to
which the Borrower and/or such Subsidiary effects Seeded Instrument
Transactions with such financial institution and third party customers
of the Borrower and/or such Subsidiary conducting business in Spain,
Italy or Japan.
<PAGE>
"Applicable Base Rate Margin" shall mean (i) in the case of A
Term Loans and Revolving Loans, 1.25%, less the then applicable Interest
Reduction Discount, if any, (ii) in the case of B Term Loans, 1.50%,
(iii) in the case of C Term Loans, 1.75% and (iv) in the case of D Term
Loans, 2.00%.
"Applicable Eurodollar Margin" shall mean (i) in the case of A
Term Loans and Revolving Loans, 2.25%, less the then applicable Interest
Reduction Discount, if any, (ii) in the case of B Term Loans, 2.50%,
(iii) in the case of C Term Loans, 2.75%, and (iv) in the case of D Term
Loans, 3.00%.
"Asset Sale" shall mean any sale, transfer or other
disposition by Holdings or any of its Subsidiaries to any Person other
than the Borrower or any Wholly-Owned Subsidiary of the Borrower of any
asset (including, without limitation, any capital stock or other
securities of another Person) of Holdings or such Subsidiary other than
(i) sales, transfers or other dispositions of inventory made in the
ordinary course of business and (ii) sales of assets pursuant to Section
8.02(e), (f), (g), (o), (q), (t), (aa), (bb), (cc) and (dd).
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit
H (appropriately completed).
"Authorized Officer" shall mean the Chief Executive Officer,
President, Chief Financial Officer, Treasurer, Controller or Secretary
or any other senior officer of Holdings or the Borrower designated as
such in writing to the Agent by Holdings or the Borrower, in each case
to the extent reasonably acceptable to the Agent.
"B Banks" shall have the meaning provided in Section 4.02(C).
"B Term Loan" shall have the meaning provided in Section
1.01(A)(b).
"B Term Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly
below the column entitled "B Term Loan Commitment," as the same may be
terminated pursuant to Section 3.03 and/or 9 or otherwise modified
pursuant to Section 1.13 and/or 12.04(b).
"B Term Loan Facility" shall mean the Facility evidenced by
the Total B Term Loan Commitment.
"B Term Loan Maturity Date" shall mean December 31, 2002.
"B Term Note" shall have the meaning provided in Section
1.05(a).
"B TL Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of all B Term Loans outstanding at such time
and the denominator of which is equal to the aggregate principal amount
of all Term Loans outstanding at such time.
"B&J" shall mean Burdick & Jackson, Inc., a former Wholly-
Owned Subsidiary of the Borrower sold pursuant to the B&J Asset Sale.
"B&J Asset Sale" shall mean the sale by the Borrower of all of
the capital stock of B&J.
<PAGE>
"Bain Capital" shall mean Bain Capital, Inc. a Delaware
corporation.
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of an RL Bank to make available its portion of any Borrowing
(including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) an RL Bank having
notified the Agent and/or the Borrower that it does not intend to comply
with the obligations under Section 1.01(A)(e), 1.01(C) or 2.04(c), in
the case of either clause (i) or (ii) above as a result of the
appointment of a receiver or conservator with respect to such Bank at
the direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" at any time shall mean the higher of (x) the rate
which is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate
and (y) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Baxter" shall mean Baxter Healthcare Corporation, a Delaware
corporation.
"Baxter Acquisition" shall mean the Acquisition under, and as
defined in, the Existing Credit Agreement.
"Baxter Acquisition Documents" shall mean the Acquisition
Documents under, and as defined in, the Existing Credit Agreement.
"Baxter PIK Note Documents" shall mean and include each of the
documents and other agreements entered into (including, without
limitation, the Baxter PIK Notes) relating to the issuance by Holdings
of the Baxter PIK Notes, as in effect on December 20, 1994 (to the
extent thereof) and as the same may be entered into, modified,
supplemented or amended from time to time pursuant to the terms hereof
and thereof.
"Baxter PIK Notes" shall mean unsecured junior subordinated
notes issued by Holdings (and not guaranteed or supported in any way by
the Borrower or any of its Subsidiaries or any other Person) in favor of
Baxter, in the form of Exhibit J.
"Baxter Preferred Stock" shall mean the preferred stock of
Holdings held by Baxter and having an original aggregate liquidation
preference of not more than $40,000,000 and an aggregate liquidation
preference as of the Original Effective Date of not more than
$13,000,000, in the form attached hereto as Exhibit L, as amended
modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrower Subordinated Loans" shall have the meaning provided
in Section 8.06(t).
<PAGE>
"Borrower Subordinated Note" shall mean an unsecured junior
subordinated Note issued by the Borrower (and not guaranteed or
supported in any way by any Subsidiary of the Borrower) in the form of
Exhibit M, as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"Borrowing" shall mean the incurrence of one Type of Loan
pursuant to a single Facility by the Borrower from all of the Banks
having Commitments with respect to such Facility on a pro rata basis on
a given date (or resulting from conversions on a given date), having in
the case of Eurodollar Loans the same Interest Period; provided, that
Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered
part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation
or otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any
day which shall be in the City of New York a legal holiday or a day on
which banking institutions are authorized by law or other governmental
actions to close and (ii) with respect to all notices and determinations
in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in U.S.
dollar deposits in the interbank Eurodollar market.
"C Banks" shall have the meaning provided in Section 4.02(C).
"C Term Loan" shall have the meaning provided in Section
1.01(A)(c).
"C Term Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly
below the column entitled "C Term Loan Commitment," as the same may be
terminated pursuant to Section 3.03 and/or 9 or otherwise modified
pursuant to Section 1.13 and/or 12.04(b).
"C Term Loan Facility" shall mean the Facility evidenced by
the Total C Term Loan Commitment.
"C Term Loan Maturity Date" shall mean December 31, 2003.
"C Term Note" shall have the meaning provided in Section
1.05(a).
"C TL Percentage" shall mean, at any time a fraction
(expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of all C Term Loans outstanding at such time
and the denominator of which is equal to the aggregate principal amount
of all Term Loans outstanding at such time.
"Capital Expenditures" shall mean, with respect to any Person,
without duplication, all expenditures by such Person which should be
capitalized in accordance with GAAP, including, without duplication, all
such expenditures with respect to fixed or capital assets (including,
without limitation, expenditures for maintenance and repairs which
should be capitalized in accordance with GAAP), all such expenditures
relating to instruments leased to, rented to, or otherwise seeded to,
customers, and the amount of all Capitalized Lease Obligations incurred
by such Person.
<PAGE>
"Capital Lease," as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person
as lessee which, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Borrower or any of its Subsidiaries in each
case taken at the amount thereof accounted for as liabilities in
accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America
or any agency or instrumentality thereof (provided, that the full faith
and credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the date
of acquisition, (ii) U.S. dollar denominated time deposits, certificates
of deposit and bankers acceptances of (x) any Bank or (y) any bank whose
short-term commercial paper rating from Standard & Poor's Corporation
("S&P") is at least A-1 or the equivalent thereof or from Moody's
Investors Service, Inc. ("Moody's") is at least P-1 or the equivalent
thereof (any such bank or Bank, an "Approved Bank"), in each case with
maturities of not more than twelve months from the date of acquisition,
(iii) commercial paper issued by any Approved Bank or by the parent
company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-1 or the equivalent thereof by S&P
or at least P-1 or the equivalent thereof by Moody's, or guaranteed by
any industrial company with a long term unsecured debt rating of at
least A or A2, or the equivalent of each thereof, from S&P or Moody's,
as the case may be, and in each case maturing within twelve months after
the date of acquisition, (iv) marketable direct obligations issued by
any state of the United States of America or any political subdivision
of any such state or any public instrumentality thereof maturing within
twelve months from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from
either S&P or Moody's and (v) investments in money market funds
substantially all the assets of which are comprised of securities of the
types described in clauses (i) through (iv) above.
"Change of Control Event" shall mean (a) Holdings shall cease
to own directly 100% on a fully diluted basis of the economic and voting
interest in the Borrower's capital stock or (b) Bain Capital, GS Capital
and/or their respective Related Parties shall cease to own on a fully
diluted basis in the aggregate at least 51% of the economic and voting
interest in Holdings' capital stock or (c) Bain Capital shall cease to
own on a fully diluted basis in the aggregate at least 51% of the
economic and voting interest in Holdings' capital stock owned by Bain
Capital, GS Capital and their respective Related Parties or (d) a
"Change of Ownership" or similar event shall occur as provided in the
Baxter PIK Notes or the Baxter Preferred Stock, so long as any Baxter
PIK Notes or any Baxter Preferred Stock, as the case may be, is
outstanding or (e) any "Change of Control" as such term is defined in
the Senior Subordinated Note Indenture, or any successor or similar
provision, shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to the Code are to the Code, as
in effect at the date of this Agreement and any subsequent provisions of
the Code amendatory thereof, supplemental thereto or substituted
therefor.
<PAGE>
"Collateral" shall mean all of the Collateral as defined in
each of the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.12.
"Commitment" shall mean, with respect to each Bank, such
Bank's A Term Loan Commitment, B Term Loan Commitment, C Term Loan
Commitment, D Term Loan Commitment and Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section
3.01(a).
"Consolidated Current Assets" shall mean, at any time, the
current assets (other than cash, Cash Equivalents and deferred income
taxes to the extent included in current assets) of the Borrower and its
Subsidiaries (including, without duplication, the interests in accounts
receivable represented by the transferor certificate held by the
Receivables Entity) at such time determined on a consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time,
the current liabilities of the Borrower and its Subsidiaries determined
on a consolidated basis, but excluding (i) deferred income taxes, (ii)
the current portion of and accrued but unpaid interest on any
Indebtedness under this Agreement and any other long-term Indebtedness
which would otherwise be included therein and (iii) short-term
borrowings of Foreign Subsidiaries unless the proceeds thereof are used
to finance current assets of such Foreign Subsidiaries.
"Consolidated Debt" shall mean, at any time, all Indebtedness
of the Borrower and its Subsidiaries determined on a consolidated basis
(excluding Indebtedness arising pursuant to deferred warranties or
contracts or other similar obligations and any deferred revenue under
the Vendor Financing Program or the Alternate Vendor Financing Program).
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income, before (i) total interest expense (inclusive of amortization
of deferred financing fees and any other original issue discount) of the
Borrower and its Subsidiaries determined on a consolidated basis, (ii)
the write-off of inventory step-up and in-process research and
development costs in accordance with purchase accounting, (iii) the
documented incurrence of duplicate transition costs arising from the
Acquisition and the Baxter Acquisition not in excess of $6,000,000 per
year in the aggregate during the term of the Services Agreement, the
Distribution Agreement and the distribution and transition services
agreements between the Borrower or its Subsidiaries and the Seller or
its Affiliates, (iv) any non-cash charges deducted in determining
Consolidated Net Income for such period and related to the issuance by
Holdings of stock, warrants or options to management (or any exercise of
any such warrants or options), (v) any non-recurring cash charges and
non-cash provisions deducted in determining Consolidated Net Income for
such period and related to the Borrower's integration plan during the
three-year period following the Original Effective Date, provided that
the aggregate amount of charges and provisions added back pursuant to
this clause (v) for all periods shall not exceed $15,000,000 (it being
<PAGE>
understood and agreed that these charges and provisions are considered
part of, and not additive to, the Restructuring Reserves), (vi) any net
non-cash charges in each period, including, without limitation, those
non-cash charges with respect to provisions required for recourse terms
under the Vendor Financing Program and (vii) provisions for taxes based
on income and foreign withholding taxes, and determined without giving
effect to any extraordinary gains or losses but with giving effect to
gains or losses from sales of assets sold in the ordinary course of
business.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT, adjusted by adding thereto the amount of all depreciation expense
and amortization expense that were deducted in determining Consolidated
EBIT for such period.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capital Leases in
accordance with GAAP) of the Borrower and its Subsidiaries determined on
a consolidated basis with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs or
benefits under Interest Rate Protection Agreements, but excluding,
however, amortization of any payments made to obtain any Interest Rate
Protection Agreements and deferred financing costs and any interest
expense on deferred compensation arrangements to the extent included in
total interest expense.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss), after provision for taxes, of the Borrower and its
Subsidiaries (including as a Subsidiary for this purpose the Receivables
Entity although the definition of Subsidiary might require otherwise) on
a consolidated basis for such period taken as a single accounting period
but excluding any unrealized losses and gains for such period resulting
from mark-to-market of Other Hedging Agreements and any tender premiums
or consent fees paid and any write-off of deferred financing costs
incurred as a result of the contemplated refinancing of the Existing
Senior Subordinated Notes, the Existing Credit Agreement and the
Original Credit Agreement.
"Consulting Agreement" shall mean, collectively, (i) the
Advisory Agreement, dated as of December 20, 1994, by and among
Holdings, the Borrower and Bain Capital, as amended, modified or
supplemented from time to time, in accordance with the terms hereof and
thereof and (ii) the Advisory Agreement, dated as of December 20, 1994,
by and among Holdings, the Borrower and GS Capital, as amended, modified
or supplemented from time to time, in accordance with the terms hereof
and thereof.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to
<PAGE>
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the
term Contingent Obligation shall not include endorsements of instruments
for deposit or collection or standard contractual indemnities entered
into, in each case in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"Continuing Bank" shall mean each Original Bank with a
Commitment under this Agreement.
"Credit Documents" shall mean this Agreement, the Notes, the
Guaranties, the Subsidiary Guaranty Acknowledgment and each Security
Document.
"Credit Event" shall mean the making of a Loan (other than a
Revolving Loan made pursuant to a Mandatory Borrowing) or the issuance
of a Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and each
Subsidiary Guarantor.
"Current Ratio" shall mean the ratio of Consolidated Current
Assets to Consolidated Current Liabilities.
"D Banks" shall have the meaning provided in Section 4.02(C).
"D Term Loan" shall have the meaning provided in Section
1.01(A)(d).
"D Term Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly
below the column entitled "D Term Loan Commitment," as the same may be
terminated pursuant to Section 3.03 and/or 9 or otherwise modified
pursuant to Section 1.13 and/or 12.04(b).
"D Term Loan Facility" shall mean the Facility evidenced by
the Total D Term Loan Commitment.
"D Term Loan Maturity Date" shall mean December 31, 2004.
"D Term Note" shall have the meaning provided in Section
1.05(a).
"D TL Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of all D Term Loans outstanding at such time
and the denominator of which is equal to the aggregate principal amount
of all Term Loans outstanding at such time.
"Dade Diagnostics P.R., Inc." shall mean Dade Diagnostics
P.R., Inc., a Delaware corporation.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
<PAGE>
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Designated Asset Sale" shall mean a sale by the Borrower or
any of its Subsidiaries of (i) all or substantially all of the assets
used primarily in the Borrower's immunohematology product line and (ii)
their existing investment in Spectral Diagnostics, Inc.
"Designated Credit Parties" shall mean the Borrower and those
Subsidiary Guarantors that are from time to time party to the Accounts
Receivable Facility Documents.
"Designated Real Property Sale" shall mean a sale by the
Borrower or any of its Subsidiaries of (i) the Real Property owned by
the Borrower or any such Subsidiary located adjacent to 1584 Raley Ct.,
Sacramento, California and/or (ii) any other undeveloped Real Property
owned by the Borrower or any of its Subsidiaries as of the Original
Effective Date (after giving effect to the consummation of the Original
Transaction on such date).
"Distribution Agreement" shall mean the Amended and Restated
Exclusive Distribution Agreement, dated as of December 19, 1994, as
amended and restated in its entirety as of September 15, 1995, by and
between the Borrower and Baxter, as the same may be amended, modified or
supplemented from time to time, in accordance with the terms hereof and
thereof.
"Dividends" shall have the meaning provided in Section 8.07.
"Documents" shall mean the Transaction Documents, the
Acquisition Documents, the Original Refinancing Documents, the Senior
Subordinated Note Documents, and, on and after the Accounts Receivable
Facility Transaction Date, the Accounts Receivable Facility Documents.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower which is not a Foreign Subsidiary.
"Eligible Transferee" shall mean and include a commercial
bank, investment company, financial institution or other "accredited
investor" (as defined in Regulation D of the Securities Act).
"Employment Agreements" shall have the meaning provided in
Section 5.12.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of non-compliance or violation, investigations or
proceedings relating in any way to any violation (or alleged violation)
by Holdings or any of its Subsidiaries under any Environmental Law
(hereafter "Claims") or any permit issued under any such law, including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law,
and (b) any and all Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials or arising from alleged injury
or threat of injury to health, safety or the environment.
<PAGE>
"Environmental Law" shall mean any federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of
common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment (for
purposes of this definition (collectively, "Laws")), relating to the
environment or Hazardous Materials or health and safety to the extent
health and safety issues arise under the Occupational Safety and Health
Act of 1970, as amended, or any such similar Laws.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated
and the rulings issued thereunder. Section references to ERISA are to
ERISA as in effect at the date of this Agreement and any subsequent
provisions of ERISA amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or any Subsidiary of
Holdings would be deemed to be a "single employer" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean, with respect to each Interest
Period for a Eurodollar Loan, (i) the arithmetic average (rounded to the
nearest 1/100 of 1%) of the offered quotation to first-class banks in
the interbank Eurodollar market by the Agent for U.S. dollar deposits of
amounts in same day funds comparable to the outstanding principal amount
of the Eurodollar Loan of the Agent for which an interest rate is then
being determined with maturities comparable to the Interest Period to be
applicable to such Eurodollar Loan, determined as of 10:00 A.M. (New
York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the
next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation
D).
"Event of Default" shall have the meaning provided in Section
9.
"Excess Cash Flow" shall mean, for any period, (i) the sum of
(A) Consolidated Net Income for such period, plus (B) the amount of all
non-cash charges (including, without limitation or duplication,
depreciation, amortization and non-cash interest expense) included in
determining Consolidated Net Income for such period, plus (C) the
decrease, if any, in Working Capital from the first day to the last day
of such period (except to the extent that such decrease occurs as a
result of an increase in the Accounts Receivable Facility or as a result
of the put or other transfer of accounts receivable to Baxter and/or its
Affiliates pursuant to Section 8.02(t), plus (D) any cash reimbursement
from the Seller required pursuant to the Acquisition Agreement for
purchase price adjustments, minus (ii) the sum of (A) any non-cash
credits (including from sales of assets) included in determining
Consolidated Net Income for such period, (B) gains from sales of assets
(other than sales of inventory in the ordinary course of business)
<PAGE>
included in determining Consolidated Net Income for such period, (C) an
amount equal to (1) all Capital Expenditures (excluding Capital
Expenditures made pursuant to Section 8.09(c), (d) or (e)) made during
such period that are not financed by Indebtedness (including Capitalized
Lease Obligations but excluding Loans hereunder) plus (or minus, if
negative) (2) the Rollover Amount for such period to be carried forward
to the next period less the Rollover Amount (if any) for the preceding
period carried forward to the current period, (D) the aggregate
principal amount of permanent principal payments of Indebtedness for
borrowed money of the Borrower and its Subsidiaries (other than
repayments of Loans, provided that repayments of Loans shall be deducted
in determining Excess Cash Flow if such repayments were (x) required as
a result of a Scheduled A Repayment, a Scheduled B Repayment, a
Scheduled C Repayment or a Scheduled D Repayment under Section
4.02(A)(b) or (y) made as a voluntary prepayment with internally
generated funds (but in the case of a voluntary prepayment of Revolving
Loans, only to the extent accompanied by a voluntary reduction to the
Total Revolving Loan Commitment)) during such period, (E) non-cash
charges added back in a previous period pursuant to clause (i)(B) above
to the extent any such charge has become a cash item in the current
period, (F) the increase, if any, in Working Capital from the first day
to the last day of such period, (G) costs incurred by Holdings during
such period and paid for with the proceeds of dividends paid by the
Borrower pursuant to Section 8.07(iii), to the extent not deducted in
determining Consolidated Net Income for such period, (H) any cash
payment to the Seller required pursuant to the Acquisition Agreement for
purchase price adjustments, (I) cash expenses incurred by the Borrower
during such period in connection with its offer to exchange its Series B
Senior Subordinated Notes for its Series A Senior Subordinated Notes to
the extent not deducted in determining Consolidated Net Income for such
period, (J) any cash Restructuring Expenditures incurred during such
period to the extent not deducted in determining Consolidated Net Income
for such period, (K) any Restructuring Reserves maintained on the
consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such period, (L) any tender premiums or consent fees paid by
Holdings or any of its Subsidiaries during such period as a result of
the contemplated refinancing of the Existing Senior Subordinated Notes,
Existing Credit Agreement and the Original Credit Agreement and (M) any
cash disbursements made during such period against non-current
liabilities (such as transition reserves and deferred taxes) to the
extent not deducted in determining Consolidated Net Income.
"Excess Cash Flow Period" shall mean (i) the period from and
including the day following the Original Effective Date to and including
December 31, 1997 and (ii) with respect to each fiscal year thereafter,
such fiscal year.
"Excess Cash Payment Date" shall mean the date occurring 90
days after the last day of a fiscal year of the Borrower (beginning with
its fiscal year ending on December 31, 1997).
"Excess Proceeds" shall mean (i) the portion of the net
proceeds received by Holdings after the Original Effective Date from the
registered initial public offering of Holdings Common Stock and/or from
the issuance of Holdings common stock pursuant to a Permitted Strategic
Equity Issuance, in each case which is permitted to be retained by
Holdings pursuant to Section 4.02(A)(d), to the extent contributed to
the Borrower in accordance with Section 7.17, (ii) the portion of Net
Proceeds received by the Borrower after the Original Effective Date from
any Designated Real Property Sale which is permitted to be retained by
the Borrower pursuant to Section 4.02(A)(c), in each case as and when
received in the form of cash, (iii) the portion of Excess Cash Flow of
<PAGE>
the Borrower and its Subsidiaries which is permitted to be retained by
the Borrower pursuant to Section 4.02(A)(f), (iv) the portion of Net
Proceeds received by the Borrower after the Original Effective Date from
the B&J Asset Sale which is permitted to be retained by the Borrower
pursuant to Section 4.02(A)(c) of the Original Credit Agreement, as and
when received in the form of cash and (v) 100% of the Permitted Equity
Proceeds received by Holdings from time to time, to the extent
contributed or loaned to the Borrower in accordance with Section
4.02(A)(d).
"Excess Proceeds Amount" shall initially be $0, which amount
shall be (A) increased (i) on each Excess Cash Payment Date so long as
any repayment required pursuant to Section 4.02(A)(f) has been made, by
an amount equal to 25% of Excess Cash Flow for the immediately preceding
Excess Cash Flow Period, (ii) on the date of the receipt by Holdings of
the proceeds from the registered initial public offering of Holdings
Common Stock and/or from the issuance of Holdings common stock pursuant
to a Permitted Strategic Equity Issuance, in each case so long as any
repayment pursuant to Section 4.02(A)(d) has been made and Holdings has
contributed such proceeds to the Borrower in accordance with Section
7.17, by an amount equal to 50% of the net proceeds from such offering,
(iii) on the date of receipt by the Borrower or any of its Subsidiaries
of the Net Proceeds from the B&J Asset Sale so long as any repayment
pursuant to Section 4.02(A)(c) of the Original Credit Agreement has been
made, by an amount equal to the portion of such Net Proceeds permitted
to be retained by the Borrower pursuant to Section 4.02(A)(c) of the
Original Credit Agreement (to the extent in the form of cash, including
cash received upon the liquidation of or principal payment on any non-
cash asset previously received), (iv) on each date of receipt by the
Borrower or any of its Subsidiaries of the Net Proceeds from any
Designated Real Property Sale so long as any repayment pursuant to
Section 4.02(A)(c) has been made, by an amount equal to 20% of such Net
Proceeds (to the extent in the form of cash, including cash received
upon the liquidation of or principal payment on any non-cash asset
previously received), and (v) on the date of the receipt by Holdings of
any Permitted Equity Proceeds so long as Holdings has contributed or
loaned such Permitted Equity Proceeds to the Borrower in accordance with
Section 4.02(A)(d), by an amount equal to 100% of such Permitted Equity
Proceeds, and (B) reduced (i) on each Excess Cash Payment Date where
Excess Cash Flow for the immediately preceding Excess Cash Flow Period
is a negative number, by such amount, (ii) at the time any Capital
Expenditure is made pursuant to Section 8.09(d), by the amount thereof,
(iii) at the time any Permitted Acquisition is made, by the amount of
Excess Proceeds expended in connection therewith, (iv) at the time any
investment is made pursuant to Section 8.06(y), by the amount of Excess
Proceeds expended in connection therewith, (v) at the time when Holdings
redeems or repurchases Baxter Preferred Stock pursuant to Section
8.07(viii), by the aggregate amount so expended by Holdings in
connection therewith, (vi) at the time when the Borrower or any Domestic
Subsidiary makes an Intercompany Loan to a Foreign Subsidiary pursuant
to Section 8.06(g), by the amount (if any) of Excess Proceeds expended
in connection therewith, and (vii) at the time when the Borrower or any
Domestic Subsidiary makes a contribution to or a capitalization or
forgiveness of Indebtedness of any Foreign Subsidiary pursuant to
Section 8.06(m), by the amount (if any) of Excess Proceeds expended in
connection therewith (it being understood that the Excess Proceeds
Amount may be reduced to an amount below zero after giving effect to the
reductions enumerated in clause (B) above).
<PAGE>
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of December 20, 1994, among Holdings, the Borrower, the
financial institutions from time to time party thereto and BTCo, as
Agent.
"Existing Indebtedness" shall have the meaning provided in
Section 6.24.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.12.
"Existing Senior Subordinated Notes" shall have the meaning
provided such term in the Original Credit Agreement.
"Facility" shall mean any of the credit facilities established
under this Agreement, i.e., the A Term Loan Facility, the B Term Loan
Facility, the C Term Loan Facility, the D Term Loan Facility or the
Revolving Loan Facility.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Foreign Cash Equivalents" shall mean certificates of deposit
or bankers acceptances of any bank organized under the laws of Canada,
Japan or any country that is a member of the European Economic Community
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof, in each case with maturities of not more than twelve months
from the date of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by
Holdings or any one or more of its Subsidiaries primarily for the
benefit of employees of Holdings or such Subsidiaries residing outside
the United States of America, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower that is incorporated under the laws of any jurisdiction other
than the United States of America, any State thereof, or any territory
thereof.
"Foreign Subsidiary Working Capital Indebtedness" shall have
the meaning provided in Section 8.04(j).
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being
understood and agreed that determinations in accordance with GAAP for
purposes of Section 8, including defined terms as used therein, are
subject (to the extent provided therein) to Section 12.07(a).
"GS Capital" shall mean G.S. Capital Partners, L.P., a
Delaware limited partnership.
<PAGE>
"Guaranteed Creditors" shall mean and include each of the
Agent, the Collateral Agent, the Banks and each party (other than any
Credit Party) party to an Interest Rate Protection Agreement or Other
Hedging Agreement to the extent such party constitutes a Secured
Creditor under the Security Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of the principal and interest on each Note issued by the
Borrower to each Bank, and Loans made, under this Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit, together with all the other obligations (including obligations
which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities (including, without limitation,
indemnities, fees and interest thereon) of the Borrower to such Bank now
existing or hereafter incurred under, arising out of or in connection
with this Agreement or any other Credit Document and the due performance
and compliance with all the terms, conditions and agreements contained
in the Credit Documents by the Borrower and (ii) the full and prompt
payment when due (whether by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) of the
Borrower owing under any such Interest Rate Protection Agreement or
Other Hedging Agreement entered into by the Borrower or any of its
Subsidiaries with any Bank or any affiliate thereof (even if such Bank
subsequently ceases to by a Bank under this Agreement for any reason) so
long as such Bank or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent
assigns, if any, whether now in existence or hereafter arising, and the
due performance and compliance with all terms, conditions and agreements
contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Guaranty" shall mean and include each of the Holdings
Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation, transformers
or other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; and (b) any chemicals,
materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and
regulatory effect.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
"Holdings Class L Common Stock" shall have the meaning
provided in Section 6.16.
"Holdings Common Stock" shall have the meaning provided in
Section 6.16.
"Holdings Guaranty" shall mean the guaranty of Holdings
pursuant to Section 13.
<PAGE>
"Holdings Tax Allocation Agreement" shall mean the Tax Sharing
Agreement, dated as of December 20, 1994, among Holdings and the
Borrower and its Domestic Subsidiaries.
"Indebtedness" of any Person shall mean without duplication
(i) all indebtedness of such Person for borrowed money, (ii) the
deferred purchase price of assets or services payable to the sellers
thereof or any of such seller's assignees which in accordance with GAAP
would be shown on the liability side of the balance sheet of such Person
but excluding deferred rent as determined in accordance with GAAP, (iii)
the face amount of all letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder, (iv) all
Indebtedness of a second Person secured by any Lien on any property
owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods
or services whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vii) all obligations under Interest Rate
Protection Agreements and Other Hedging Agreements and (viii) all
Contingent Obligations of such Person, provided, that Indebtedness shall
not include trade payables and accrued expenses, in each case arising in
the ordinary course of business.
"Indebtedness to be Refinanced" shall mean the indebtedness
arising pursuant to the Original Credit Agreement.
"Intercompany Loan" shall have the meaning provided in Section
8.06(g).
"Intercompany Notes" shall mean promissory notes evidencing
Intercompany Loans (x) at any time prior to the Restatement Effective
Date, in the form of Exhibit M to the Original Credit Agreement and (y)
thereafter, in the form of Exhibit I.
"Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such
period.
"Interest Period," with respect to any Eurodollar Loan, shall
mean the interest period applicable thereto, as determined pursuant to
Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Interest Reduction Discount" shall mean initially zero,
provided that from and after the first day of any Margin Reduction
Period (the "Start Date") to and including the last day of such Margin
Reduction Period (the "End Date"), the Interest Reduction Discount shall
be the respective percentage per annum set forth in clause (A), (B) or
(C) below if, but only if, as of the last day of the most recent fiscal
quarter or year, as the case may be, ended immediately prior to such
Start Date (the "Test Date"), the condition set forth in clause (A), (B)
or (C) below is met:
(A) 1/4 of 1% if the Leverage Ratio on such Test Date is
less than 3.5:1.0;
(B) 1/2 of 1% if the Leverage Ratio on such Test Date is
less than 3.00:1.00; or
<PAGE>
(C) 3/4 of 1% if the Leverage Ratio on such Test Date is
less than 2.5:1.00.
Notwithstanding anything to the contrary contained above in this
definition, the Interest Reduction Discount shall be zero at any time
when an Event of Default shall exist.
"Investor Certificate" shall have the meaning provided in the
Accounts Receivable Pooling and Servicing Agreement.
"IVD Services Agreement" shall mean the Transition Services
Agreement, dated as of the Original Effective Date, between the Borrower
and the Seller, as amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.
"L/C Supportable Indebtedness" shall mean (i) Foreign
Subsidiary Working Capital Indebtedness, (ii) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers' compensation, surety
bonds and other similar statutory obligations and (iii) such other
obligations of the Borrower or any of its Subsidiaries as are reasonably
acceptable to the Agent and the respective Letter of Credit Issuer and
otherwise permitted to exist pursuant to the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title
and interest of such Person as lessee or licensee in, to and under
leases or licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean BTCo, and any RL Bank
which at the request of the Borrower and with the consent of the Agent
agrees, in such RL Bank's sole discretion, to become a Letter of Credit
Issuer for the purpose of issuing Letters of Credit pursuant to Section
2.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all
outstanding Letters of Credit and (ii) the aggregate amount of all
Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Debt at such time (excluding any Indebtedness under the
Accounts Receivable Facility to the extent otherwise included in
Consolidated Debt) to Consolidated EBITDA for the Test Period then last
ended.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
UCC or any similar recording or notice statute, and any lease having
substantially the same effect as the foregoing).
<PAGE>
"Loan" shall mean each and every Loan made by any Bank
hereunder, including A Term Loans, B Term Loans, C Term Loans, D Term
Loans, Revolving Loans or Swingline Loans.
"Majority Banks" of any Facility shall mean those Non-
Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if all outstanding Obligations of the other
Facilities under this Agreement were repaid in full and all Commitments
with respect thereto were terminated.
"Management Agreements" shall have the meaning provided in
Section 5.12.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(C).
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the financial statements are delivered
pursuant to Section 7.01(b) or (c), as the case may be, and which shall
end on the earlier of (i) the date of actual delivery of the next
financial statements pursuant to Section 7.01(b) or (c), as the case may
be, and (ii) the latest date on which the next financial statements are
required to be delivered pursuant to Section 7.01(b) or (c), as the case
may be; provided that no Margin Reduction Period shall commence on a
date occurring prior to the date of delivery of financial statements
pursuant to Section 7.01(b) in respect of the fiscal quarter ending June
30, 1997.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, properties, assets, liabilities, condition (financial
or otherwise) or prospects of the Acquired Business, the Borrower,
Holdings, Holdings and its Subsidiaries taken as a whole or the Borrower
and its Subsidiaries taken as a whole.
"Material Contracts" shall have the meaning provided in
Section 5.12.
"Maturity Date" with respect to any Facility shall mean either
the A Term Loan Maturity Date, the B Term Loan Maturity Date, the C Term
Loan Maturity Date, the D Term Loan Maturity Date or the Revolving Loan
Maturity Date, as the case may be.
"Maximum Funding Amount" shall mean the sum of (x) with
respect to outstanding Investor Certificates and Purchased Interests
that have fixed principal amounts, such principal amounts and (y) with
respect to Investor Certificates or Purchased Interests that have
variable principal amounts, the Receivables Stated Amounts thereof.
"Maximum Swingline Amount" shall mean $10,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans
(other than Swingline Loans), $1,000,000; (ii) for Eurodollar Loans,
$2,000,000 and (iii) for Swingline Loans, $500,000.
"Mortgages" shall mean all Mortgages (as defined in the
Original Credit Agreement) granted by the Borrower and its Subsidiaries
pursuant to the Original Credit Agreement and which have not been
released prior to the Restatement Effective Date.
<PAGE>
"Mortgage Policies" shall mean the Mortgage Policies under,
and as defined in, the Original Credit Agreement.
"Mortgaged Properties" shall mean and include (i) all Real
Properties owned and leased by Holdings and its Domestic Subsidiaries to
the extent designated as such on Annex III and (ii) each Real Property
subjected to a mortgage in favor of the Collateral Agent for the benefit
of the Secured Creditors pursuant to Section 7.11.
"NAIC" shall have the meaning provided in Section 1.10(c).
"Net Proceeds" shall mean, with respect to any Asset Sale, the
Proceeds resulting therefrom net of (a) cash expenses of sale (including
brokerage fees, if any, transfer taxes and payment of principal, premium
and interest of Indebtedness other than the Loans required to be repaid
as a result of such Asset Sale) and (b) incremental income taxes paid or
payable as a result thereof.
"New Banks" shall mean each of the Persons listed on Annex I
hereto which is not a Continuing Bank.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.12.
"Non-Continuing Bank" shall have the meaning provided in
Section 12.17.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall mean each A Term Note, each B Term Note, C Term
Note, D Term Note, each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, New York, New York 10006 or such other office
as the Agent may designate to Holdings, the Borrower and the Banks from
time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time
existing, owing to the Agent, the Collateral Agent or any Bank pursuant
to the terms of this Agreement or any other Credit Document.
"Original Bank" shall mean each Person which was a Bank under,
and as defined in, the Original Credit Agreement.
"Original Credit Agreement" shall have the meaning provided in
the first "Whereas" clause of this Agreement.
"Original Effective Date" shall mean the Effective Date under,
and as defined in, the Original Credit Agreement.
"Original Letters of Credit" shall have the meaning provided
in Section 2.01(d).
<PAGE>
"Original Loans" shall mean the Loans under, and as defined
in, the Original Credit Agreement.
"Original Refinancing" shall mean the Refinancing as such term
is defined in the Original Credit Agreement.
"Original Refinancing Documents" shall mean the Refinancing
Documents as such term is defined in the Original Credit Agreement.
"Original Transaction" shall mean the Transaction as such term
is defined in the Original Credit Agreement.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency
values.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, New York, New York 10006 or such other office
as the Agent may designate to Holdings, the Borrower and the Banks from
time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments (net of
reasonable costs associated therewith, including income, excise and
other taxes payable thereon) received by Holdings and/or of its
Subsidiaries from any return of any surplus assets from any single Plan
or Foreign Pension Plan.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(u).
"Permitted Covenant" shall mean (i) any periodic reporting
covenant, (ii) any covenant restricting payments by Holdings with
respect to any securities of Holdings which are junior to the Permitted
Holdings PIK Securities, (iii) any covenant the default of which can
only result in an increase in the amount of any redemption price,
repayment amount, dividend rate or interest rate, (iv) any covenant the
default of which gives rise only to rights or remedies which are subject
to subordination terms reasonably acceptable to the Agent, (v) any
covenant providing board observance rights with respect to Holdings'
board of directors and (vi) any other covenant that does not adversely
affect the interests of the Banks (as reasonably determined by the
Agent).
<PAGE>
"Permitted Encumbrances" shall mean (i) those liens,
encumbrances and other matters affecting title to any Mortgaged Property
listed in the Mortgage Policies in respect thereof and found, on the
date of delivery of such Mortgage Policies to the Agent in accordance
with the terms hereof, reasonably acceptable by the Agent, (ii) as to
any particular Mortgaged Property at any time, such easements,
encroachments, covenants, rights of way, minor defects, irregularities
or encumbrances on title which do not, in the reasonable opinion of the
Agent, materially impair such Mortgaged Property for the purpose for
which it is held by the mortgagor thereof, or the lien held by the
Collateral Agent, (iii) municipal and zoning ordinances, which are not
violated in any material respect by the existing improvements and the
present use made by the mortgagor thereof of the Premises (as defined in
the respective Mortgage), (iv) general real estate taxes and assessments
not yet delinquent, and (v) such other items as the Agent may consent to
(such consent not to be unreasonably withheld).
"Permitted Equity Proceeds" shall have the meaning provided in
Section 4.02(A)(d).
"Permitted Holdings PIK Securities" shall mean any preferred
stock or subordinated promissory note of Holdings (or any security of
Holdings that is convertible or exchangeable into any preferred stock or
subordinated promissory note of Holdings), so long as the terms of any
such preferred stock, subordinated promissory note or security of
Holdings (i) do not provide any collateral security, (ii) do not provide
any guaranty or other support by the Borrower or any Subsidiaries of the
Borrower, (iii) do not contain any mandatory put, redemption, repayment,
sinking fund or other similar provision occurring before the eleventh
anniversary of the Original Effective Date, (iv) do not require the cash
payment of dividends or interest before the eleventh anniversary of the
Original Effective Date, (v) do not contain any covenants other than any
Permitted Covenant, (vi) do not grant the holders thereof any voting
rights except for (x) voting rights required to be granted to such
holders under applicable law and (y) limited customary voting rights on
fundamental matters such as mergers, consolidations, sales of
substantial assets, or liquidations involving Holdings, and (vii) are
otherwise reasonably satisfactory to the Agent.
"Permitted Liens" shall have the meaning provided in Section
8.03.
"Permitted Strategic Equity Issuance" shall mean any issuance
of Holdings common stock to a Person, so long as (i) the purpose of such
investment in Holdings by such Person is to form or enhance a strategic
alliance or relationship with Holdings and/or its Subsidiaries and (ii)
after giving effect to any such issuance of Holdings common stock, such
Person and its Affiliates shall not own more than 20% of the common
stock of Holdings on a fully diluted basis.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association,
trust or other enterprise or any government or political subdivision or
any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute of) Holdings, any
of its Subsidiaries or any ERISA Affiliate and each such plan for the
five calendar year period immediately following the latest date on which
Holdings, any of its Subsidiaries or any ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
<PAGE>
"Pledge Agreement" shall mean the Pledge Agreement, dated as
of May 7, 1996, made by Holdings, the Borrower, and each Subsidiary
Guarantor in favor of Bankers Trust Company, as Collateral Agent, as
such agreement may be modified, amended or supplemented from time to
time, including, without limitation, as modified by the Security
Documents Acknowledgment and Amendment.
"Pledged Securities" shall mean all the Pledged Securities as
defined the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. BTCo may make commercial
loans or other loans at rates of interest at, above or below the Prime
Lending Rate.
"Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such
Asset Sale, other than the portion of such deferred payment constituting
interest, but only as and when so received) received by Holdings and/or
any of its Subsidiaries from such Asset Sale.
"Projections" shall mean the Projections as defined in, and
delivered pursuant to the requirements of, the Original Credit
Agreement.
"Purchased Interest" shall have the meaning provided in the
Accounts Receivable Pooling and Servicing Agreement.
"Quarterly Payment Date" shall mean the last Business Day of
each March, June, September and December.
"Real Property" of any Person shall mean all of the right,
title and interest of such Person in and to land, improvements and
fixtures, including Leaseholds.
"Receivables Entity" shall mean a Wholly-Owned Subsidiary of
the Borrower which engages in no activities other than in connection
with the financing of accounts receivable of the Designated Credit
Parties and which is designated (as provided below) as the Receivables
Entity (a) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which (i) is guaranteed by Holdings or any
other Subsidiary of Holdings (excluding guarantees of obligations (other
than the principal of, and interest on, Indebtedness)) pursuant to
Standard Securitization Undertakings, (ii) is recourse to or obligates
Holdings or any other Subsidiary of Holdings in any way other than
pursuant to Standard Securitization Undertakings or (iii) subjects any
property or asset of Holdings or any other Subsidiary of Holdings,
directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings,
(b) with which neither Holdings nor any of its Subsidiaries has any
contract, agreement, arrangement or understanding (other than pursuant
to the Accounts Receivable Facility Documents (including with respect to
fees payable in the ordinary course of business in connection with the
servicing of accounts receivable and related assets)) on terms less
favorable to Holdings or such Subsidiary than those that might be
obtained at the time from persons that are not Affiliates of Holdings,
and (c) to which neither Holdings nor any other Subsidiary of Holdings
has any obligation to maintain or preserve such entity's financial
<PAGE>
condition or cause such entity to achieve certain levels of operating
results. Any such designation shall be evidenced to the Agent by filing
with the Agent an officer's certificate of the Borrower certifying that,
to the best of such officer's knowledge and belief after consultation
with counsel, such designation complied with the foregoing conditions.
"Receivables Purchase Money Note" shall mean those purchase
money notes issued by the Receivables Entity to the Designated Credit
Parties pursuant to the terms of the Accounts Receivable Facility
Documents.
"Receivable Stated Amount" shall mean, with respect to an
Investor Certificate or a Purchased Interest, the maximum amount of the
funding commitment with respect thereto.
"Recovery Event" shall mean the receipt by Holdings or any of
its Subsidiaries of any insurance or condemnation proceeds payable (i)
by reason of any theft, physical destruction or damage or any other
similar event with respect to any properties or assets of Holdings or
any of its Subsidiaries, (ii) by reason any condemnation, taking,
seizing or similar event with respect to any properties or assets of
Holdings or any of its Subsidiaries and (iii) under any policy of
insurance required to be maintained under Section 7.03.
"Refinancing" shall mean the refinancing and repayment in full
of all amounts outstanding under, and the termination in full of all
commitments and letters of credit (other than letters of credit
incorporated hereunder as Original Letters of Credit pursuant to Section
2.01(d)) in respect of, the Indebtedness to be Refinanced, in each case
in accordance with the provisions of Section 5.09(a).
"Refinancing Documents" shall mean each of the agreements,
documents and instruments entered into in connection with the
Refinancing.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of December 20, 1994, among Holdings, the
Borrower, Bain Capital and GS Capital, as the same may be amended,
modified or supplemented from time to time, in accordance with the terms
hereof and thereof.
"Register" shall have the meaning provided in Section 7.13.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing reserve
requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing margin
requirements.
"Related Fund" shall mean, with respect to any Bank that is a
fund that invests in loans, any other fund that invests in loans and is
managed by the same investment advisor as such Bank or by an Affiliate
of such investment advisor.
<PAGE>
"Related Party" shall mean (i) in the case of GS Capital, (a)
stockholders or partners of GS Capital or (b) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners,
owners or Persons beneficially holding an 80% or more controlling
interest of which consist of GS Capital and/or such other Persons
referred to in the immediately preceding clause (i)(a), and (ii) in the
case of Bain Capital, any Affiliate of Bain Capital on the Effective
Date, provided that for purposes of the definition of "Change of Control
Event," the term Related Party shall not include (x) any portfolio
company of Bain Capital or any Affiliate of Bain Capital or (y) any
officer or director of Holdings or any of its Subsidiaries if not also a
partner or stockholder of Bain Capital.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying,
seeping, placing, pouring and the like, into or upon any land or water
or air, or otherwise entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan other than those events as to
which the 30-day notice period is waived under subsection .13, .14, .16,
.18, .19 or .20 of PBGC Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose outstanding Term Loans and Revolving Loan Commitments (or, if
after the Total Revolving Loan Commitment has been terminated,
outstanding Revolving Loans and RL Percentages of outstanding Swingline
Loans and Letter of Credit Outstandings) constitute greater than 50% of
the sum of (i) the total outstanding Term Loans of Non-Defaulting Banks
and (ii) the Total Revolving Loan Commitment less the aggregate
Revolving Loan Commitments of Defaulting Banks (or, if after the Total
Revolving Loan Commitment has been terminated, the total outstanding
Revolving Loans of Non-Defaulting Banks and the aggregate RL Percentages
of all Non-Defaulting Banks of the total outstanding Swingline Loans and
Letter of Credit Outstandings at such time).
"Restatement Effective Date" shall have the meaning provided
in Section 12.10.
"Restructuring Expenditures" shall mean nonrecurring charges
arising out of the restructuring, consolidation, severance or
discontinuance of any portion of the operations of any entities or
businesses of Holdings and its Subsidiaries in connection with the
Acquisition and the Baxter Acquisition.
"Restructuring Reserves" shall mean reserves maintained on the
consolidated balance sheet of Holdings and its Subsidiaries with respect
to Restructuring Expenditures.
"Returns" shall have the meaning provided in Section 6.23.
"Revolving Loan" shall have the meaning provided in Section
1.01(A)(e).
<PAGE>
"Revolving Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly
below the column entitled "Revolving Loan Commitment," as the same may
be reduced from time to time pursuant to Section 3.02, 3.03, 4.01(b)
and/or 9 or otherwise modified pursuant to Section 1.13 and/or 12.04(b).
"Revolving Loan Facility" shall mean the Facility evidenced by
the Total Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean December 31, 2001.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RL Bank" shall mean at any time each Bank with a Revolving
Loan Commitment or with outstanding Revolving Loans.
"RL Percentage" shall mean at any time for each RL Bank, the
percentage obtained by dividing such RL Bank's Revolving Loan Commitment
by the Total Revolving Loan Commitment; provided, that if the Total
Revolving Loan Commitment has been terminated, the RL Percentage of each
RL Bank shall be determined by dividing such RL Bank's Revolving Loan
Commitment immediately prior to such termination by the Total Revolving
Loan Commitment immediately prior to such termination.
"Rollover Amount" shall have the meaning provided in Section
8.09(b).
"Scheduled A Repayment" shall have the meaning provided in
Section 4.02(A)(b)(i).
"Scheduled B Repayment" shall have the meaning provided in
Section 4.02(A)(b)(ii).
"Scheduled C Repayment" shall have the meaning provided in
Section 4.02(A)(b)(iii).
"Scheduled D Repayment" shall have the meaning provided in
Section 4.02(A)(b)(iv).
"Scheduled Repayment" shall mean any Scheduled A Repayment,
Scheduled B Repayment, Scheduled C Repayment and Scheduled D Repayment.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the
respective Security Documents.
"Security Agreement" shall mean the Security Agreement, dated
as of May 7, 1996, made by Holdings, the Borrower, and each Subsidiary
Guarantor in favor of Bankers Trust Company, as the Collateral Agent, as
such agreement may be modified, amended or supplemented from time to
time, including, without limitation, as modified by the Security
Documents Acknowledgment and Amendment.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
<PAGE>
"Security Documents" shall mean and include the Security
Documents Acknowledgment and Amendment, the Security Agreement, the
Pledge Agreement, each Mortgage, each Additional Security Document, if
any and each other document or instrument entered into pursuant to
Sections 5.10 and 7.16, if any, in each case as and when executed and
delivered in accordance with the terms of this Agreement and as the same
may be amended, modified or supplemented from time to time in accordance
with the terms thereof and hereof.
"Security Documents Acknowledgment and Amendment" shall have
the meaning provided in Section 5.10(a).
"Seeded Instrument Sale" shall mean the sale, transfer or
other disposition of seeded instruments of the Borrower and/or one or
more of its Subsidiaries to a financial institution.
"Seeded Instrument Transaction" shall mean a transaction in
which (i) the Borrower and/or one or more of its Subsidiaries sells a
seeded instrument to a financial institution, (ii) such financial
institution leases such instrument back to the Borrower or such
Subsidiary and (iii) the Borrower or such Subsidiary subleases such
seeded instruments to third party customers of the Borrower or such
Subsidiary conducting business in Spain, Italy or Japan.
"Seller" shall mean, collectively, E.I. du Pont de Nemours &
Co., a Delaware corporation, and its Affiliates.
"Seller Account" shall have the meaning provided in the
Accounts Receivable Facility Documents.
"Senior Officer" shall mean Chief Executive Officer,
President, Chief Financial Officer, Treasurer, Controller or Secretary
or any other senior officer of Holdings or any of its Subsidiaries with
knowledge of, or responsibility for, the financial affairs of such
Person.
"Senior Subordinated Note Documents" shall mean and include
each of the documents and other agreements entered into (including,
without limitation, the Senior Subordinated Note Indenture) relating to
the issuance by the Borrower of the Senior Subordinated Notes, as in
effect on the Original Effective Date (to the extent thereof) and as the
same may be entered into, modified, supplemented or amended from time to
time pursuant to the terms hereof and thereof.
"Senior Subordinated Note Indenture" shall mean the Indenture
entered into by and between the Borrower and IBJ Schroder Bank & Trust
Company, as trustee thereunder, as in effect on the Original Effective
Date and as the same may be modified, amended or supplemented from time
to time in accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Series A Senior
Subordinated Notes and any Series B Senior Subordinated Notes issued in
exchange therefor in accordance with the terms of the Senior
Subordinated Note Indenture.
"Series A Senior Subordinated Notes" shall mean the Borrower's
11-1/8% Senior Subordinated Notes due 2006, as in effect on the Original
Effective Date and as the same may be modified, supplemented or amended
from time to time pursuant to the terms hereof and thereof.
<PAGE>
"Series B Senior Subordinated Notes" shall mean the Borrower's
11-1/8% Series B Senior Subordinated Notes due 2006 issued in exchange
for Series A Senior Subordinated Notes, in the form set forth in the
Senior Subordinated Note Indenture as in effect on the Original
Effective Date, and as such Series B Senior Subordinated Notes may be
modified, supplemented or amended from time to time, pursuant to the
terms hereof and thereof.
"Services Agreement" shall mean, collectively, (i) the
Transition Services Agreement, dated as of December 20, 1994, among
Holdings, the Borrower and Baxter, as amended, modified or supplemented
from time to time, in accordance with the terms hereof and thereof and
(ii) the IVD Services Agreement.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in
any way by the Borrower or any of its Subsidiaries) in the form of
Exhibit K, as the same may be amended, modified or supplemented from
time to time pursuant to the terms hereof and thereof.
"Shareholders' Agreements" shall have the meaning set forth in
Section 5.12.
"Stand Alone Expenditures" shall mean Capital Expenditures
made by the Borrower or any of its Subsidiaries to achieve stand alone
functionality with respect to the entities or businesses acquired
pursuant to the Acquisition or the Baxter Acquisition and any relocation
expenditures made in connection with the Acquisition or the Baxter
Acquisition.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Holdings or any
Subsidiary thereof in connection with the Accounts Receivable Facility
which are reasonably customary in an off-balance-sheet accounts
receivable transaction.
"Stated Amount" of each Letter of Credit shall mean at any
time the maximum amount available to be drawn thereunder (regardless of
whether any conditions for drawing could then be met).
"Stockholders' Agreement" shall mean the Stockholders'
Agreement, dated as of December 20, 1994 among GS Capital, Holdings,
Bain Capital Fund IV, L.P., Bain Capital Fund IV-B, L.P., BCIP
Associates, BCIP Trust Associates, L.P., Bridge Street Fund 1994, L.P.,
Stone Street Fund 1994, L.P. and Randolph Street Partners, as amended,
modified or supplemented from time to time, in accordance with the terms
hereof and thereof.
"Subscription Agreement" shall mean the Subscription Agreement
dated as of December 20, 1994 among Holdings, Bain Capital Fund IV,
L.P., Bain Capital Fund IV-B, L.P., BCIP Associates, BCIP Trust
Associates, L.P., Randolph Street Partners, GS Capital Partners, L.P.,
Bridge Street Fund 1994, L.P. and Stone Street Fund 1994, L.P., as
amended, modified or supplemented from time to time, in accordance with
the terms hereof and thereof.
<PAGE>
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency)
is at the time owned by such Person directly or indirectly through
Subsidiaries and (ii) any partnership, association, joint venture or
other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower (other than a Foreign Subsidiary except to the extent otherwise
provided in Section 7.16) that is or becomes a party to the Subsidiary
Guaranty.
"Subsidiary Guaranty" shall mean the Subsidiary Guaranty,
dated as of May 7, 1996, made by each Subsidiary Guarantor, as such
agreement may be modified, amended or supplemented from time to time,
including, without limitation, as modified by the Subsidiary Guaranty
Acknowledgment.
"Subsidiary Guaranty Acknowledgment" shall have the meaning
provided in Section 5.10(b).
"Supermajority Banks" of any Facility shall mean those Non-
Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if (x) all outstanding Obligations of the
other Facilities under this Agreement were repaid in full and all
Commitments with respect thereto were terminated and (y) the percentage
"50%" contained therein were changed to "66-2/3%."
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(B).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall have the meaning provided in Section
1.01(A)(a).
"Tax Allocation Agreements" shall have the meaning provided in
Section 5.12.
"Tax Indemnity Letter" shall mean the Tax Law Change Indemnity
Letter, dated December 16, 1994, between Holdings and Baxter
International Inc.
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loan" shall mean each A Term Loan, each B Term Loan,
each C Term Loan and each D Term Loan.
"Term Loan Commitment" shall mean, with respect to each Bank
at any time, the sum of the A Term Loan Commitment, the B Term Loan
Commitment, the C Term Loan Commitment and the D Term Loan Commitment of
such Bank at such time.
<PAGE>
"Term Loan Facilities" shall mean the A Term Loan Facility,
the B Term Loan Facility, the C Term Loan Facility and the D Term Loan
Facility.
"Test Period" shall mean (i) for any determination made prior
to June 30, 1997, the period from July 1, 1996 to the last day of the
fiscal quarter of the Borrower then last ended and (ii) for any
determination made thereafter, the four consecutive fiscal quarters of
the Borrower then last ended.
"TOA Expenditures" shall mean the expenditures intended to be
made by the Borrower and its Subsidiaries in 1996 and 1997 to replace
existing MLA instruments held by customers with TOA instruments.
"Total A Term Loan Commitment" shall mean the sum of the A
Term Loan Commitments of each of the Banks.
"Total B Term Loan Commitment" shall mean the sum of the B
Term Loan Commitments of each of the Banks.
"Total C Term Loan Commitment" shall mean the sum of the C
Term Loan Commitments of each of the Banks.
"Total Commitment" shall mean the sum of the Total Term Loan
Commitment and the Total Revolving Loan Commitment.
"Total D Term Loan Commitment" shall mean the sum of the D
Term Loan Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the RL Banks.
"Total Term Loan Commitment" shall mean the sum of the Total A
Term Loan Commitment, the Total B Term Loan Commitment, the Total C Term
Loan Commitment and the Total D Term Loan Commitment.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, (i) the Total Revolving Loan Commitment at such time less (ii)
the sum of the aggregate principal amount of all Revolving Loans and
Swingline Loans at such time plus the Letter of Credit Outstandings at
such time.
"Transaction" shall mean, collectively, (i) the consummation
of the Refinancing, (ii) the occurrence of the Restatement Effective
Date and the Credit Events hereunder on such date, (iii) such other
transactions as contemplated by the Credit Documents and the Refinancing
Documents and (iv) the payment of fees and expenses in connection with
the foregoing.
"Transaction Documents" shall mean, collectively, the Credit
Documents and the Refinancing Documents.
"Trustee" shall mean the trustee under the Accounts Receivable
Facility, the Supplement to the Accounts Receivable Pooling and
Servicing Agreement and the Accounts Receivable Facility Pooling and
Servicing Agreement, which trustee shall be satisfactory to the Agent in
its reasonable discretion.
"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Loan.
<PAGE>
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated
plan benefits under the Plan as of the close of its most recent plan
year exceeds the fair market value of the assets allocable thereto, each
determined in accordance with Statement of Financial Accounting
Standards No. 35, based upon the actuarial assumptions used by the
Plan's actuary in the most recent annual valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section
2.03(a).
"U.S. Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States of America.
"Vendor Financing Program" shall mean a vendor financial
services program between the Borrower and/or one or more of its
Subsidiaries and a financial institution pursuant to which (i) the
Borrower and/or such Subsidiary effects Seeded Instrument Sales to such
financial institution and (ii) such financial institution leases the
seeded instruments so acquired to third party customers of the Borrower
and/or such Subsidiary.
"VWR" shall mean VWR Scientific Products Corporation.
"Waivable Mandatory Repayment" shall have the meaning provided
in Section 4.02(C).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's
qualifying shares and/or other nominal amounts of shares required to be
held other than by such Person under applicable law) is at the time
owned by such Person and/or one or more Wholly-Owned Subsidiaries of
such Person and (ii) any partnership, association, joint venture or
other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
"Working Capital" shall mean the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"Written," "written" or "in writing" shall mean any form of
written communication or a communication by means of telex, facsimile
device, telegraph or cable.
SECTION 11. The Agent.
11.01 Appointment. Each Bank hereby irrevocably designates
and appoints BTCo as Agent of such Bank (such term to include for
purposes of this Section 11, BTCo acting as Collateral Agent) to act as
specified herein and in the other Credit Documents, and each such Bank
hereby irrevocably authorizes BTCo as the Agent to take such action on
its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the
express conditions contained in this Section 11. Notwithstanding any
provision to the contrary elsewhere in this Agreement or in any other
Credit Document, the Agent shall not have any duties or
<PAGE>
responsibilities, except those expressly set forth herein or in the
other Credit Documents, or any fiduciary relationship with any Bank, and
no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist
against the Agent. The provisions of this Section 11 are solely for the
benefit of the Agent and the Banks, and neither Holdings nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under
this Agreement, the Agent shall act solely as agent of the Banks and the
Agent does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for Holdings or
any of its Subsidiaries.
11.02 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the
extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted
to be taken by it or such Person in its capacity as Agent under or in
connection with this Agreement or the other Credit Documents (except for
its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by Holdings, any of its
Subsidiaries or any of their respective officers contained in this
Agreement or the other Credit Documents, any other Document or in any
certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this
Agreement or any other Document or for any failure of Holdings or any of
its Subsidiaries or any of their respective officers to perform its
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of,
this Agreement or the other Documents, or to inspect the properties,
books or records of Holdings or any of its Subsidiaries. The Agent
shall not be responsible to any Bank for the effectiveness, genuineness,
validity, enforceability, collectability or sufficiency of this
Agreement or any other Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or
oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by the Agent to the Banks or by or on behalf
of Holdings or any of its Subsidiaries to the Agent or any Bank or be
required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the
Loans or of the existence or possible existence of any Default or Event
of Default.
<PAGE>
11.04 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without
limitation, counsel to Holdings or any of its Subsidiaries), independent
accountants and other experts selected by the Agent. The Agent shall be
fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive
such advice or concurrence of the Required Banks as it deems appropriate
or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Credit Documents in accordance with a
request of the Required Banks (or all of the Banks, to the extent
required by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks.
11.05 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has actually received notice from a
Bank, Holdings or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Banks. The
Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Banks; provided,
that, unless and until 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 interests of the
Banks.
11.06 Non-Reliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates
have made any representations or warranties to it and that no act by the
Agent hereinafter taken, including any review of the affairs of Holdings
or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance
upon the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial
and other condition, prospects and creditworthiness of Holdings and its
Subsidiaries and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement, and to
make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other condition,
prospects and creditworthiness of Holdings and its Subsidiaries. The
Agent shall not have any duty or responsibility to provide any Bank with
any credit or other information concerning the business, operations,
assets, property, financial and other condition, prospects or
<PAGE>
creditworthiness of Holdings or any of its Subsidiaries which may come
into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify the
Agent in its capacity as such ratably according to their respective
"percentages" as used in determining the Required Banks at such time,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent in
its capacity as such in any way relating to or arising out of this
Agreement or any other Credit Document, or any documents contemplated by
or referred to herein or the transactions contemplated hereby or any
action taken or omitted to be taken by the Agent under or in connection
with any of the foregoing, but only to the extent that any of the
foregoing is not paid by Holdings or any of its Subsidiaries; provided,
that no Bank shall be liable to the Agent for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting primarily
from the gross negligence or willful misconduct of the Agent. To the
extent any Bank would be required to indemnify the Agent pursuant to the
immediately preceding sentence but for the fact that it is a Defaulting
Bank, such Defaulting Bank shall not be entitled to receive any portion
of any payment or other distribution hereunder until each other Bank
shall have been reimbursed for the excess, if any, of the aggregate
amount paid by such Bank under this Section 11.07 over the aggregate
amount such Bank would have been obligated to pay had such first Bank
not been a Defaulting Bank. If any indemnity furnished to the Agent for
any purpose shall, in the opinion of the Agent be insufficient or become
impaired (other than as a result of the gross negligence or willful
misconduct of the Agent), the Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section
11.07 shall survive the payment of all Obligations.
11.08 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage
in any kind of business with Holdings and its Subsidiaries as though the
Agent were not the Agent hereunder. With respect to the Loans made by
it and all Obligations owing to it, the Agent shall have the same rights
and powers under this Agreement as any Bank and may exercise the same as
though it were not the Agent and the terms "Bank" and "Banks" shall
include the Agent in its individual capacity.
11.09 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Agent. Any request,
authority or consent of any Person or entity who, at the time of making
such request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of
any Note or Notes issued in exchange therefor.
<PAGE>
11.10 Resignation of the Agent; Successor Agent. The Agent
may resign as the Agent upon 20 days' notice to the Banks. Upon the
resignation of the Agent, the Required Banks shall appoint from among
the Banks a successor Agent which is a bank or a trust company for the
Banks subject, to the extent that no payment Default or Event of Default
has occurred and is then continuing, to prior approval by the Borrower
(such approval not to be unreasonably withheld or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall include such successor agent
effective upon its appointment, and the resigning Agent's rights, powers
and duties as the Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the
parties to this Agreement. If a successor Agent shall not have been so
appointed within such 20 day period after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all duties of the Agent
hereunder and/or under any other Credit Documents until such time, if
any, as the Required Banks appoint a successor Agent as provided above.
After the resignation of the Agent hereunder, the provisions of this
Section 11 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower hereby agrees
to: (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Agent (including, without limitation, the reasonable fees and
disbursements of White & Case and local counsel) in connection with the
negotiation, preparation, execution and delivery of the Credit Documents
and the documents and instruments referred to therein and any amendment,
waiver or consent relating thereto and in connection with the Agent's
syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent and each of the
Banks in connection with the enforcement of the Credit Documents and the
documents and instruments referred to therein and, after an Event of
Default shall have occurred and be continuing, the protection of the
rights of the Agent and each of the Banks thereunder (including, without
limitation, the reasonable fees and disbursements of counsel (including
in-house counsel) for the Agent and for each of the Banks); (iii) pay
and hold each of the Banks harmless from and against any and all present
and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Bank) to pay such taxes;
and (iv) indemnify the Agent, the Collateral Agent and each Bank, its
officers, directors, trustees, employees, representatives and agents
from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of,
(a) any investigation, litigation or other proceeding (whether or not
the Agent, the Collateral Agent or any Bank is a party thereto and
whether or not any such investigation, litigation or other proceeding is
between or among the Agent, the Collateral Agent, any Bank, any Credit
Party or any third Person or otherwise) related to the entering into
and/or performance of this Agreement or any other Document or the use of
the proceeds of any Loans hereunder or the Transaction or the Original
Transaction or the consummation of any other transactions contemplated
in any Document (but excluding any such losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross
<PAGE>
negligence or willful misconduct of the Person to be indemnified), or
(b) the actual or alleged presence of Hazardous Materials in the air,
surface water or groundwater or on the surface or subsurface of any Real
Property or any Environmental Claim, in each case, including, without
limitation, the reasonable fees and disbursements of counsel and
independent consultants incurred in connection with any such
investigation, litigation or other proceeding.
12.02 Right of Setoff; Collateral Matters. (a) In addition
to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Bank is hereby authorized at any
time or from time to time, without presentment, demand, protest or other
notice of any kind to Holdings or any of its Subsidiaries or to any
other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank
wherever located) to or for the credit or the account of Holdings or any
of its Subsidiaries against and on account of the Obligations of
Holdings or any of its Subsidiaries to such Bank under this Agreement or
under any of the other Credit Documents, including, without limitation,
all interests in Obligations of Holdings or any of its Subsidiaries
purchased by such Bank pursuant to Section 12.06(b), and all other
claims of any nature or description arising out of or connected with
this Agreement or any other Credit Document, irrespective of whether or
not such Bank shall have made any demand hereunder and although said
Obligations shall be contingent or unmatured.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME
THAT THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY
LOCATED IN CALIFORNIA, NO BANK SHALL EXERCISE A RIGHT OF SETOFF,
BANKER'S LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION
OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT
OR ANY NOTE THAT IS NOT TAKEN BY THE REQUIRED BANKS OR APPROVED IN
WRITING BY THE REQUIRED BANKS IF SUCH SETOFF OR ACTION OR PROCEEDING
WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA
CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY,
PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE COLLATERAL AGENT
PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES
AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY BANK
OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED BANKS
SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE
BENEFIT OF EACH OF THE BANKS HEREUNDER.
12.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered, if to any Credit Party, at the address specified opposite its
signature below or in the other relevant Credit Documents, as the case
may be; if to any Bank, at its address specified for such Bank on Annex
II; or, at such other address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied or
cabled or sent by overnight courier, and shall be effective when
received.
<PAGE>
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto; provided,
however, no Credit Party may assign or transfer any of its rights,
obligations or interest hereunder or under any other Credit Document
without the prior written consent of all of the Banks and, provided
further, that (x) no Bank may transfer or assign all or any portion of
its Commitments hereunder except as provided in Section 12.04(b), and
(y) although any Bank may grant participations in its rights hereunder
pursuant to this Section 12.04(a), such Bank shall remain a "Bank" for
all purposes hereunder and the participant shall not constitute a "Bank"
hereunder and, provided further, that no Bank shall grant any
participation under which the participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Loan
Maturity Date) in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except
in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or
increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitment
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement or (iii) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the
Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation,
the participant shall not have any rights under this Agreement or any of
the other Credit Documents (the participant's rights against such Bank
in respect of such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto) and
all amounts payable by the Borrower hereunder shall be determined as if
such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion
of its Revolving Loan Commitment (and related outstanding Obligations
hereunder) and/or its outstanding Term Loans to its parent company
and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or a Related Fund of such Bank or to one or
more Banks or (y) assign all, or if less than all, a portion equal to at
least $5,000,000 in the aggregate for the assigning Bank or assigning
Banks, of such Revolving Loan Commitments and outstanding principal
amount of Term Loans hereunder to one or more Eligible Transferees, each
of which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that (i)
at such time Annex I shall be deemed modified to reflect the Commitments
(and/or outstanding Term Loans, as the case may be) of such new Bank and
of the existing Banks, (ii) upon surrender of the old Notes, new Notes
will be issued, at the Borrower's expense, to such new Bank and to the
assigning Bank, such new Notes to be in conformity with the requirements
of Section 1.05 (with appropriate modifications) to the extent needed to
reflect the revised Commitments (and/or outstanding Term Loans, as the
case may be), (iii) the consent of the Agent shall be required in
connection with any such assignment pursuant to clause (y) of this
Section 12.04(b) (which consent shall not be unreasonably withheld or
<PAGE>
delayed) and (iv) the Agent shall receive at the time of each such
assignment, from the assigning or assignee Bank, the payment of a non-
refundable assignment fee of $2,500 and, provided further, that such
transfer or assignment will not be effective until recorded by the Agent
on the Register pursuant to Section 7.13 hereof. To the extent of any
assignment pursuant to this Section 12.04(b), the assigning Bank shall
be relieved of its obligations hereunder. At the time of each
assignment pursuant to this Section 12.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Bank shall provide to the
Borrower and the Agent the appropriate Internal Revenue Service Forms
(and, if applicable a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b). To the extent that an assignment of all or any portion
of a Bank's Commitments and related outstanding Obligations pursuant to
Section 1.13 or this Section 12.04(b) would, at the time of such
assignment, result in increased costs under Section 1.10 or 1.11 from
those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower shall be obligated to pay any
other increased costs of the type described above resulting from changes
after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve
Bank in support of borrowings made by such Bank from such Federal
Reserve Bank.
(d) Notwithstanding anything to the contrary contained in
this Section 12.04, any Bank which is a fund may, with the consent of
the Borrower and the Agent, pledge all or any portion of its Notes or
Loans to a trustee for the benefit of investors and in support of its
obligations to such investors.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of
dealing between any Credit Party and the Agent or any Bank shall operate
as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of
any rights or remedies which the Agent or any Bank would otherwise have.
No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Agent or
the Banks to any other or further action in any circumstances without
notice or demand.
12.06 Payments Pro Rata. (a) The Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the
Banks (other than any Bank that has consented in writing to waive its
pro rata share of such payment) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment
was received.
<PAGE>
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise) which is applicable to the payment of
the principal of, or interest on, the Loans, Unpaid Drawings or Fees, of
a sum which with respect to the related sum or sums received by other
Banks is in a greater proportion than the total of such Obligation then
owed and due to such Bank bears to the total of such Obligation then
owed and due to all of the Banks immediately prior to such receipt, then
such Bank receiving such excess payment shall purchase for cash without
recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall
result in a proportional participation by all of the Banks in such
amount; provided, that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but
without interest.
12.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with GAAP consistently applied throughout the
periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by Holdings or the Borrower to the
Banks); provided, that except as otherwise specifically provided herein,
all computations determining compliance with Sections 4.02 and 8,
including definitions used therein, shall utilize accounting principles
and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the December 31, 1996 financial
statements delivered to the Banks pursuant to Section 6.10(b), but shall
not give effect to purchase accounting adjustments required or permitted
by APB 16 (including non-cash write-ups and non-cash charges relating to
inventory, fixed assets and in-process research and development, in each
case arising in connection with the Acquisition) and APB 17 (including
non-cash charges relating to intangibles and goodwill arising in
connection with the Acquisition).
(b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED
IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the State of New
York or of the United States for the Southern District of New York, and,
by execution and delivery of this Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. Each
Credit Party hereby further irrevocably waives any claim that any such
courts lack jurisdiction over such Credit Party, and agrees not to plead
or claim, in any legal action or proceeding with respect to this
Agreement or any other Credit Document brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such Credit Party.
Each Credit Party irrevocably consents to the service of process in any
such action or proceeding by the mailing of copies thereof by registered
<PAGE>
or certified mail, postage prepaid, to such Credit Party, at its address
for notices pursuant to Section 12.03, such service to become effective
30 days after such mailing. Each Credit Party hereby irrevocably waives
any objection to such service of process and further irrevocably waives
and agrees not to plead or claim in any action or proceeding commenced
hereunder or under any other Credit Document that service of process was
in any way invalid or ineffective. Nothing herein shall affect the
right of the Agent, any Bank or the holder of any Note to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Agreement or any other Credit Document brought in the courts
referred to in clause (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an
inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts executed by all the parties
hereto shall be lodged with Holdings, the Borrower and the Agent.
12.10 Effectiveness. (a) This Agreement shall become
effective on the date (the "Restatement Effective Date") on which (i)
Holdings, the Borrower, the Agent, each Continuing Bank and each New
Bank shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Agent
at its Notice Office or, in the case of the Banks, shall have given to
the Agent telephonic (confirmed in writing), written, telex or facsimile
notice (actually received) at such office that the same has been signed
and mailed to it and (ii) the conditions contained in Sections 5 and
12.10(b) are met to the satisfaction of the Agent and the Required Banks
(determined immediately after the occurrence of the Restatement
Effective Date). Unless the Agent has received actual notice from any
Bank that the conditions contained in Section 5 have not been met to its
satisfaction, upon the satisfaction of the condition described in clause
(i) of the immediately preceding sentence and upon the Agent's good
faith determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Restatement
Effective Date shall be deemed to have occurred, regardless of any
subsequent determination that one or more of the conditions thereto had
not been met (although the occurrence of the Restatement Effective Date
shall not release Holdings or the Borrower from any liability for
failure to satisfy one or more of the applicable conditions contained in
Section 5). The Agent will give Holdings, the Borrower and each Bank
prompt written notice of the occurrence of the Restatement Effective
Date.
<PAGE>
(b) On the Restatement Effective Date, each New Bank and each
Continuing Bank shall have delivered to the Agent for the account of the
Borrower an amount equal to (i) in the case of each New Bank, the Term
Loans and Revolving Loans to be made by such New Bank on the Restatement
Effective Date and (ii) in the case of each Continuing Bank, the amount,
if any, by which the principal amount of Loans to be made by such
Continuing Bank on the Restatement Effective Date exceeds the amount of
the Original Loans of such Continuing Bank outstanding on the
Restatement Effective Date. Notwithstanding anything to the contrary
contained in this Section 12.10(b), in satisfying the foregoing
condition, unless the Agent shall have been notified by any Bank prior
to the occurrence of the Restatement Effective Date that such Bank does
not intend to make available to the Agent such Bank's Loans required to
be made by it on such date, then the Agent may, in reliance on such
assumption, make available to the Borrower the corresponding amounts in
accordance with the provisions of Section 1.04 of this Agreement, and
the making available by the Agent of such amounts shall satisfy the
condition contained in this Section 12.10(b). Promptly following the
Restatement Effective Date, each Original Bank shall surrender to the
Agent for cancellation the promissory notes issued to it in respect of
its Original Loans pursuant to the Original Credit Agreement, and, upon
its receipt thereof, the Agent shall promptly return such promissory
notes to the Borrower.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be
changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by the respective Credit
Parties party thereto and the Required Banks, provided that no such
change, waiver, discharge or termination shall, without the consent of
each Bank (other than a Defaulting Bank) (with Obligations being
directly affected in the case of following clause (i)), (i) extend the
final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Revolving Loan Maturity
Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof, (ii) release all
or substantially all of the Collateral (except as expressly provided in
the Security Documents) under all the Security Documents, (iii) amend,
modify or waive any provision of this Section 12.12, (iv) reduce the
percentage specified in the definition of Required Banks (it being
understood that, with the consent of the Required Banks, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Banks on substantially the same basis as
the extensions of Term Loans and Revolving Loan Commitments are included
on the Restatement Effective Date) or (v) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement; provided further, that no such change, waiver, discharge or
termination shall (1) increase the Commitments of any Bank over the
amount thereof then in effect without the consent of such Bank (it being
understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in
the Total Commitment shall not constitute an increase of the Commitment
of any Bank, and that an increase in the available portion of any
Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank), (2) without the consent of BTCo, amend, modify
or waive any provision of Section 2 or alter its rights or obligations
with respect to Letters of Credit or Swingline Loans, (3) without the
<PAGE>
consent of the Agent, amend, modify or waive any provision of Section 11
as same applies to the Agent or any other provision as same relates to
the rights or obligations of the Agent, (4) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent, (5) without the consent
of the Majority Banks of each Facility which is being allocated a lesser
prepayment, repayment or commitment reduction as a result of the actions
described below (or without the consent of the Majority Banks of each
Facility in the case of an amendment to the definition of Majority
Banks), amend the definition of Majority Banks or alter the required
application of any prepayments or repayments (or commitment reduction),
as between the various Facilities pursuant to Section 4.01(a) or
4.02(B)(b) (although the Required Banks may waive, in whole or in part,
any such prepayment, repayment or commitment reduction so long as the
application, as amongst the various Facilities, of any such prepayment,
repayment or commitment reduction which is still required to be made is
not altered) or (6) without the consent of the Supermajority Banks of
the respective Facility, amend the definition of Supermajority Banks or
amend downward, waive or reduce any Scheduled Repayment of such affected
Facility.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clause (a)(i) through (v), inclusive, of the first
proviso to Section 12.12(a), the consent of the Required Banks is
obtained but the consent of one or more of such other Banks whose
consent is required is not obtained, then the Borrower shall have the
right, so long as all non-consenting banks whose individual consent is
required are treated as described in either clause (A) or (B) below, to
either (A) replace each such non-consenting Bank or Banks with one or
more Replacement Banks pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Bank consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-
consenting Bank's Commitments and repay in full its outstanding Loans,
in accordance with Sections 3.02(b) and/or 4.01(b), provided that,
unless the Commitments terminated and Loans repaid pursuant to preceding
clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Commitments and/or
outstanding Loans of existing Banks (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding
clause (B) the Required Banks (determined before giving effect to the
proposed action) shall specifically consent thereto, provided further,
that the Borrower shall not have the right to replace a Bank solely as a
result of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to the second proviso to Section
12.12(a).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01,
shall survive the execution and delivery of this Agreement and the
making and repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Bank; provided, that the Borrower shall not be
responsible for costs arising under Section 1.10, 1.11, 2.05 or 4.04
resulting from any such transfer (other than a transfer pursuant to
Section 1.12) to the extent such costs would not otherwise be applicable
to such Bank in the absence of such transfer.
<PAGE>
12.15 Confidentiality. (a) Each of the Banks agrees that it
will use its best efforts not to disclose without the prior consent of
the Borrower (other than to its employees, auditors, counsel or other
professional advisors, to affiliates or to another Bank if the Bank or
such Bank's holding or parent company in its sole discretion determines
that any such party should have access to such information) any
information with respect to Holdings, the Borrower or any of its
Subsidiaries which is furnished pursuant to this Agreement; provided,
that any Bank may disclose any such information (a) as has become
generally available to the public or has become available to such Bank
on a non-confidential basis, (b) as may be required or appropriate in
any report, statement or testimony submitted to any municipal, state or
Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board, the Federal Deposit Insurance
Corporation, the NAIC or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or
appropriate in response to any summons or subpoena or in connection with
any litigation, (d) in order to comply with any law, order, regulation
or ruling applicable to such Bank, and (e) to any prospective transferee
in connection with any contemplated transfer of any of the Notes or any
interest therein by such Bank; provided, that such prospective
transferee agrees to be bound by the provisions of this Section 12.15 to
the same extent as such Bank.
(b) Each of Holdings and the Borrower hereby acknowledges and
agrees that each Bank may share with any of its affiliates any
information related to Holdings or any of its Subsidiaries (including,
without limitation, any nonpublic customer information regarding the
creditworthiness of Holdings and its Subsidiaries, provided that such
Persons shall be subject to the provisions of this Section 12.15 to the
same extent as such Bank).
12.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
12.17 Additions of New Banks, etc. (a) On and as of the
occurrence of the Restatement Effective Date in accordance with Section
12.10 hereof, each New Bank shall become a "Bank" under, and for all
purposes of, this Agreement and the other Credit Documents.
(b) The parties hereto acknowledge that each Original Bank
has been offered the opportunity to participate in this Agreement, after
the occurrence of the Restatement Effective Date, as a Continuing Bank
thereunder, but that no Original Bank is obligated to be a Continuing
Bank. Concurrently with the occurrence of the Restatement Effective
Date, each Original Bank which has not elected to become a Continuing
Bank (each such Bank, a "Non-Continuing Bank") shall no longer
constitute a "Bank" under this Agreement and the other Credit Documents,
provided that all indemnities of the Credit Parties under the Original
Credit Agreement and the other Credit Documents (as in effect prior to
the Restatement Effective Date) for the benefit of such Non-Continuing
Bank shall survive in accordance with the terms thereof.
<PAGE>
SECTION 13. Holdings Guaranty.
13.01 The Guaranty. In order to induce the Banks to enter
into this Agreement and to extend credit hereunder and in recognition of
the direct benefits to be received by Holdings from the proceeds of the
Loans and the issuance of the Letters of Credit, Holdings hereby agrees
with the Banks as follows: Holdings hereby unconditionally and
irrevocably guarantees as primary obligor and not merely as surety the
full and prompt payment when due, whether upon maturity, acceleration or
otherwise, of any and all of the Guaranteed Obligations of the Borrower
to the Guaranteed Creditors. If any or all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors becomes due and
payable hereunder, Holdings unconditionally promises to pay such
indebtedness to the Agent and/or the Banks, or order, on demand,
together with any and all expenses which may be incurred by the Agent or
the Banks in collecting any of the Guaranteed Obligations. If claim is
ever made upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or
part of said amount by reason of (i) any judgment, decree or order of
any court or administrative body having jurisdiction over such payee or
any of its property or (ii) any settlement or compromise of any such
claim effected by such payee with any such claimant (including the
Borrower), then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty other
instrument evidencing any liability of the Borrower, and Holdings shall
be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors whether or not
due or payable by the Borrower upon the occurrence of any of the events
specified in Section 9.05, and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, in lawful
money of the United States.
13.03 Nature of Liability. The liability of Holdings
hereunder is exclusive and independent of any security for or other
guaranty of the Guaranteed Obligations of the Borrower whether executed
by Holdings, any other guarantor or by any other party, and the
liability of Holdings hereunder is not affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by
the Borrower, or (e) any payment made to any Guaranteed Creditor on the
Guaranteed Obligations which any such Guaranteed Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and Holdings
waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
<PAGE>
13.04 Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor, any
other party or the Borrower, and a separate action or actions may be
brought and prosecuted against Holdings whether or not action is brought
against any other guarantor, any other party or the Borrower and whether
or not any other guarantor, any other party or the Borrower be joined in
any such action or actions. Holdings waives, to the full extent
permitted by law, the benefit of any statute of limitations affecting
its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of
limitations as to the Borrower shall operate to toll the statute of
limitations as to any Guarantor.
13.05 Authorization. Holdings authorizes the Guaranteed
Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase,
accelerate or alter, any of the Guaranteed Obligations (including
any increase or decrease in the rate of interest thereon), any
security therefor, or any liability incurred directly or indirectly
in respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including
any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof
to the payment of any liability (whether due or not) of the
Borrower to its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of Holdings
or the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, this Agreement or any of the instruments or
agreements referred to herein, or otherwise amend, modify or
supplement this Agreement or any of such other instruments or
agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or
equitable discharge of Holdings from its liabilities under this
Guaranty.
<PAGE>
13.06 Reliance. It is not necessary for any Guaranteed
Creditor to inquire into the capacity or powers of the Borrower or the
officers, directors, partners or agents acting or purporting to act on
their behalf, and any Guaranteed Obligations made or created in reliance
upon the professed exercise of such powers shall be guaranteed
hereunder.
13.07 Subordination. Any of the indebtedness of the Borrower
relating to the Guaranteed Obligations now or hereafter owing to
Holdings is hereby subordinated to the Guaranteed Obligations of the
Borrower owing to the Guaranteed Creditors; and if the Agent so requests
at a time when an Event of Default exists, all such indebtedness
relating to the Guaranteed Obligations of the Borrower to Holdings shall
be collected, enforced and received by Holdings for the benefit of the
Guaranteed Creditors and be paid over to the Agent on behalf of the
Guaranteed Creditors on account of the Guaranteed Obligations of the
Borrower to the Guaranteed Creditors, but without affecting or impairing
in any manner the liability of Holdings under the other provisions of
this Guaranty. Prior to the transfer by Holdings of any note or
negotiable instrument evidencing any of the indebtedness relating to the
Guaranteed Obligations of the Borrower to Holdings, Holdings shall mark
such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the
foregoing, Holdings hereby agrees with the Guaranteed Creditors that it
will not exercise any right of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
13.08 Waiver. (a) Holdings waives any right (except as
shall be required by applicable statute and cannot be waived) to require
any Guaranteed Creditor to (i) proceed against the Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any
security held from the Borrower, any other guarantor or any other party
or (iii) pursue any other remedy in any Guaranteed Creditor's power
whatsoever. Holdings waives any defense based on or arising out of any
defense of the Borrower, any other guarantor or any other party, other
than payment in full of the Guaranteed Obligations, based on or arising
out of the disability of the Borrower, any other guarantor or any other
party, or the validity, legality or unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of
the Guaranteed Obligations. The Guaranteed Creditors may, at their
election, foreclose on any security held by the Agent, the Collateral
Agent or any other Guaranteed Creditor by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Guaranteed
Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of
Holdings hereunder except to the extent the Guaranteed Obligations have
been paid. Holdings waives any defense arising out of any such election
by the Guaranteed Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other
right or remedy of Holdings against the Borrower or any other party or
any security.
<PAGE>
(b) Holdings waives all presentments, demands for
performance, protests and notices, including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional Guaranteed Obligations.
Holdings assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks
which Holdings assumes and incurs hereunder, and agrees that the Agent
and the Banks shall have no duty to advise Holdings of information known
to them regarding such circumstances or risks.
(c) Holdings hereby acknowledges and affirms that it
understands that to the extent the Guaranteed Obligations are secured by
real property located in the State of California, Holdings shall be
liable for the full amount of its liability hereunder notwithstanding
foreclosure on such real property by trustee sale or any other reason
impairing Holdings' or any secured creditor's right to proceed against
the Borrower or any other guarantor of the Guaranteed Obligations.
(d) Holdings hereby waives, to the fullest extent permitted
by applicable law, all rights and benefits under Sections 580a, 580b,
580d and 726 of the California Code of Civil Procedure. Holdings hereby
further waives, to the fullest extent permitted by applicable law,
without limiting the generality of the foregoing or any other provision
hereof, all rights and benefits which might otherwise be available to
Holdings under Sections 2787 through 2855, inclusive, 2899 and 3433 of
the California Civil Code.
(e) Holdings further understands, is aware and hereby
acknowledges that if the Guaranteed Creditors elect to nonjudicially
foreclose on any real property security located in the State of
California any right of subrogation of Holdings against any Credit Party
may be impaired or extinguished and that as a result of such impairment
or extinguishment of subrogation rights, Holdings may have a defense to
a deficiency judgment arising out of the operation of Section 580d of
the California Code of Civil Procedure and related principles of
estoppel. Holdings waives all rights and defenses arising out of an
election of remedies by the Banks, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for
a guaranteed obligation, has destroyed the guarantor's rights of
subrogation and reimbursement against the principal by the operation of
Section 580d of the Code of Civil Procedure or otherwise.
13.09 Nature of Liability. It is the desire and intent of
Holdings and the Secured Creditors that this Guaranty shall be enforced
against Holdings to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is
sought. If, however, and to the extent that, the obligations of
Holdings under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of
any applicable state or federal law relating to fraudulent conveyances
<PAGE>
or transfers), then the amount of the Guaranteed Obligations of Holdings
shall be deemed to be reduced and Holdings shall pay the maximum amount
of the Guaranteed Obligations which would be permissible under
applicable law.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
Address:
1717 Deerfield Road DIAGNOSTICS HOLDING, INC.
Deerfield, Illinois 60015
Attention: Treasurer
General Counsel
By /S/
Title:
1717 Deerfield Road DADE INTERNATIONAL INC.
Deerfield, Illinois 60015
Attention: Treasurer
General Counsel
By /S/
Title:
BANKERS TRUST COMPANY,
Individually and as Agent
By /S/
Title:
THE BANK OF NOVA SCOTIA
By /S/
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By /S/
Title:
THE FIRST NATIONAL BANK OF BOSTON
By /S/
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By /S/
Title:
SANWA BUSINESS CREDIT
By /S/
Title:
ABN AMRO BANK N.V., Chicago Branch
By /S/
Title:
By /S/
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By /S/
Title:
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO, a Unit of The Chase
Manhattan Bank
By /S/
Title:
CITIBANK, N.A.
By /S/
Title:
CRESCENT/MACH I PARTNERS, L.P.
By TCW Asset Management Company,
its Investment Manager
By /S/
Title:
DAI-ICHI KANGYO BANK
By /S/
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By /S/
Title:
THE FUJI BANK LIMITED
By /S/
Title:
IMPERIAL BANK
By /S/
Title:
MERRILL LYNCH
SENIOR FLOATING RATE FUND, INC.
By /S/
Title:
THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY
By /S/
Title:
PILGRIM AMERICA PRIME RATE TRUST
By /S/
Title:
PRIME INCOME TRUST
By /S/
Title:
ML CBO IV (CAYMAN) LTD.
BY: PROTECTIVE ASSET MANAGEMENT, LLC,
as Collateral Manager
By /S/
Title:
SAKURA BANK
By /S/
Title:
SOCIETE GENERALE
By /S/
Title:
SOUTHERN PACIFIC THRIFT AND LOAN
By /S/
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /S/
Title:
MERRILL LYNCH SENIOR HIGH
INCOME PORTFOLIO, INC.
By /S/
Title:
KEYPORT LIFE INSURANCE COMPANY
By /S/
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,000
<SECURITIES> 0
<RECEIVABLES> 175,900
<ALLOWANCES> 0
<INVENTORY> 164,800
<CURRENT-ASSETS> 401,900
<PP&E> 180,600
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,004,200
<CURRENT-LIABILITIES> 203,500
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (31,400)
<TOTAL-LIABILITY-AND-EQUITY> 1,004,200
<SALES> 200,600
<TOTAL-REVENUES> 200,600
<CGS> 97,300
<TOTAL-COSTS> 178,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (21,400)
<INCOME-PRETAX> 1,600
<INCOME-TAX> 600
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,000
<EPS-PRIMARY> .00<F1>
<EPS-DILUTED> .00<F1>
<FN>
<F1>Earnings per share are not calculated because the Company's common stock
is not publicly traded.
</FN>
</TABLE>
