UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
|
|
þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED
March 31, 2010
OR
|
|
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
FOR THE TRANSITION PERIOD FROM
TO
Commission file number 1-16671
AMERISOURCEBERGEN CORPORATION
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
|
23-3079390
|
|
|
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
|
|
|
1300 Morris Drive, Chesterbrook, PA
|
|
19087-5594
|
|
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(610) 727-7000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes
þ
No
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the
Exchange Act).
|
|
|
|
|
|
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).
Yes
o
No
þ
The number of shares of common stock of AmerisourceBergen Corporation outstanding as of
April 30, 2010 was 282,520,332.
AMERISOURCEBERGEN CORPORATION
TABLE OF CONTENTS
1
PART I. FINANCIAL INFORMATION
ITEM I. Financial Statements (Unaudited)
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
September 30,
|
|
(in thousands, except share and per share data)
|
|
2010
|
|
|
2009
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,199,872
|
|
|
$
|
1,009,368
|
|
Accounts receivable, less allowances for returns and doubtful accounts:
|
|
|
|
|
|
|
|
|
$350,427 at March 31, 2010 and $370,303 at September 30, 2009
|
|
|
3,948,478
|
|
|
|
3,916,509
|
|
Merchandise inventories
|
|
|
4,980,895
|
|
|
|
4,972,820
|
|
Prepaid expenses and other
|
|
|
37,785
|
|
|
|
55,056
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
10,167,030
|
|
|
|
9,953,753
|
|
|
|
|
|
|
|
|
Property and equipment, at cost:
|
|
|
|
|
|
|
|
|
Land
|
|
|
36,067
|
|
|
|
35,665
|
|
Buildings and improvements
|
|
|
295,685
|
|
|
|
292,903
|
|
Machinery, equipment and other
|
|
|
770,014
|
|
|
|
694,555
|
|
|
|
|
|
|
|
|
Total property and equipment
|
|
|
1,101,766
|
|
|
|
1,023,123
|
|
Less accumulated depreciation
|
|
|
(435,965
|
)
|
|
|
(403,885
|
)
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
665,801
|
|
|
|
619,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible assets
|
|
|
2,854,637
|
|
|
|
2,859,064
|
|
Other assets
|
|
|
134,820
|
|
|
|
140,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
13,822,288
|
|
|
$
|
13,572,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
8,434,934
|
|
|
$
|
8,517,162
|
|
Accrued expenses and other
|
|
|
312,169
|
|
|
|
315,657
|
|
Current portion of long-term debt
|
|
|
503
|
|
|
|
1,068
|
|
Deferred income taxes
|
|
|
678,792
|
|
|
|
645,723
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
9,426,398
|
|
|
|
9,479,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
|
1,358,505
|
|
|
|
1,176,933
|
|
Other liabilities
|
|
|
205,463
|
|
|
|
199,728
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value authorized: 600,000,000 shares; issued and
outstanding: 486,662,447 shares and 281,578,939 shares at March 31, 2010,
respectively, and 482,941,212 shares and 287,922,263 shares
at September 30, 2009, respectively
|
|
|
4,867
|
|
|
|
4,829
|
|
Additional paid-in capital
|
|
|
3,817,201
|
|
|
|
3,737,835
|
|
Retained earnings
|
|
|
3,206,322
|
|
|
|
2,919,760
|
|
Accumulated other comprehensive loss
|
|
|
(38,293
|
)
|
|
|
(46,096
|
)
|
|
|
|
|
|
|
|
|
|
|
6,990,097
|
|
|
|
6,616,328
|
|
Treasury stock, at cost: 205,083,508 shares at March 31, 2010 and 195,018,949
shares at September 30, 2009
|
|
|
(4,158,175
|
)
|
|
|
(3,899,859
|
)
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
2,831,922
|
|
|
|
2,716,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
|
|
$
|
13,822,288
|
|
|
$
|
13,572,740
|
|
|
|
|
|
|
|
|
See notes to consolidated financial statements.
2
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
(in thousands, except per share data)
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
19,300,627
|
|
|
$
|
17,311,651
|
|
|
$
|
38,636,486
|
|
|
$
|
34,650,028
|
|
Cost of goods sold
|
|
|
18,688,559
|
|
|
|
16,759,180
|
|
|
|
37,461,048
|
|
|
|
33,607,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
612,068
|
|
|
|
552,471
|
|
|
|
1,175,438
|
|
|
|
1,042,319
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
|
279,491
|
|
|
|
279,209
|
|
|
|
559,730
|
|
|
|
551,235
|
|
Depreciation
|
|
|
16,601
|
|
|
|
15,607
|
|
|
|
33,259
|
|
|
|
30,660
|
|
Amortization
|
|
|
4,086
|
|
|
|
3,827
|
|
|
|
8,225
|
|
|
|
7,683
|
|
Facility consolidations, employee severance and other
|
|
|
(37
|
)
|
|
|
4,262
|
|
|
|
(85
|
)
|
|
|
5,291
|
|
Intangible asset impairments
|
|
|
700
|
|
|
|
1,300
|
|
|
|
700
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
311,227
|
|
|
|
248,266
|
|
|
|
573,609
|
|
|
|
446,150
|
|
Other loss
|
|
|
268
|
|
|
|
504
|
|
|
|
545
|
|
|
|
933
|
|
Interest expense, net
|
|
|
19,279
|
|
|
|
14,521
|
|
|
|
36,546
|
|
|
|
28,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
291,680
|
|
|
|
233,241
|
|
|
|
536,518
|
|
|
|
416,513
|
|
Income taxes
|
|
|
110,672
|
|
|
|
89,199
|
|
|
|
204,203
|
|
|
|
159,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
181,008
|
|
|
|
144,042
|
|
|
|
332,315
|
|
|
|
256,571
|
|
Loss from discontinued operations, net of income taxes
|
|
|
|
|
|
|
(655
|
)
|
|
|
|
|
|
|
(2,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
181,008
|
|
|
$
|
143,387
|
|
|
$
|
332,315
|
|
|
$
|
254,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.64
|
|
|
$
|
0.48
|
|
|
$
|
1.17
|
|
|
$
|
0.84
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
Rounding
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
0.64
|
|
|
$
|
0.47
|
|
|
$
|
1.17
|
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.63
|
|
|
$
|
0.47
|
|
|
$
|
1.15
|
|
|
$
|
0.83
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
Rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
0.63
|
|
|
$
|
0.47
|
|
|
$
|
1.15
|
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
281,926
|
|
|
|
302,446
|
|
|
|
284,478
|
|
|
|
305,586
|
|
Diluted
|
|
|
287,162
|
|
|
|
304,584
|
|
|
|
289,262
|
|
|
|
307,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share of common stock
|
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.16
|
|
|
$
|
0.10
|
|
See notes to consolidated financial statements.
3
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
March 31,
|
|
(in thousands)
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
332,315
|
|
|
$
|
254,443
|
|
Loss from discontinued operations
|
|
|
|
|
|
|
2,128
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
332,315
|
|
|
|
256,571
|
|
Adjustments to reconcile income from continuing operations to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation, including amounts charged to cost of goods sold
|
|
|
39,607
|
|
|
|
36,131
|
|
Amortization, including amounts charged to interest expense
|
|
|
10,785
|
|
|
|
9,712
|
|
Provision for doubtful accounts
|
|
|
16,758
|
|
|
|
16,359
|
|
Provision for deferred income taxes
|
|
|
41,475
|
|
|
|
26,142
|
|
Share-based compensation
|
|
|
16,791
|
|
|
|
14,599
|
|
Other
|
|
|
3,379
|
|
|
|
(910
|
)
|
Changes in operating assets and liabilities, excluding the effects of
acquisitions and dispositions:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(21,006
|
)
|
|
|
(290,245
|
)
|
Merchandise inventories
|
|
|
(22,943
|
)
|
|
|
(385,242
|
)
|
Prepaid expenses and other assets
|
|
|
23,749
|
|
|
|
25,855
|
|
Accounts payable, accrued expenses, and income taxes
|
|
|
(94,583
|
)
|
|
|
322,296
|
|
Other liabilities
|
|
|
66
|
|
|
|
2,056
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities-continuing operations
|
|
|
346,393
|
|
|
|
33,324
|
|
Net cash used in operating activities-discontinued operations
|
|
|
|
|
|
|
(906
|
)
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
346,393
|
|
|
|
32,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(88,037
|
)
|
|
|
(68,587
|
)
|
Proceeds from sale of PMSI
|
|
|
|
|
|
|
14,936
|
|
Other
|
|
|
134
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities-continuing operations
|
|
|
(87,903
|
)
|
|
|
(53,651
|
)
|
Net cash used in investing activities-discontinued operations
|
|
|
|
|
|
|
(1,138
|
)
|
|
|
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
|
(87,903
|
)
|
|
|
(54,789
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Long-term debt borrowings
|
|
|
396,696
|
|
|
|
|
|
Borrowings under revolving and securitization credit facilities
|
|
|
561,459
|
|
|
|
1,604,658
|
|
Repayments under revolving and securitization credit facilities
|
|
|
(780,637
|
)
|
|
|
(1,596,360
|
)
|
Purchases of common stock
|
|
|
(255,199
|
)
|
|
|
(179,879
|
)
|
Exercises of stock options, including excess tax benefits of $9,454 and $617
in fiscal 2010 and 2009, respectively
|
|
|
64,496
|
|
|
|
4,415
|
|
Cash dividends on common stock
|
|
|
(45,754
|
)
|
|
|
(30,798
|
)
|
Debt issuance costs and other
|
|
|
(9,047
|
)
|
|
|
(2,450
|
)
|
|
|
|
|
|
|
|
NET CASH USED IN FINANCING ACTIVITIES
|
|
|
(67,986
|
)
|
|
|
(200,414
|
)
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
190,504
|
|
|
|
(222,785
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
1,009,368
|
|
|
|
878,114
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
1,199,872
|
|
|
$
|
655,329
|
|
|
|
|
|
|
|
|
See notes to consolidated financial statements.
4
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements present the consolidated financial position, results of
operations and cash flows of AmerisourceBergen Corporation and its wholly owned subsidiaries (the
Company) as of the dates and for the periods indicated. All intercompany accounts and
transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared in conformity
with U.S. generally accepted accounting principles (GAAP) for interim financial information, the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all
adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein)
considered necessary to present fairly the financial position as of March 31, 2010 and the results
of operations and cash flows for the interim periods ended March 31, 2010 and 2009 have been
included. Certain information and footnote disclosures normally included in financial statements
presented in accordance with U.S. GAAP, but which are not required for interim reporting purposes,
have been omitted. The accompanying unaudited consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in the Companys Annual Report
on Form 10-K for the fiscal year ended September 30, 2009.
The preparation of financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual amounts could differ from these estimated amounts.
The Company has three operating segments, which include the operations of AmerisourceBergen
Drug Corporation (ABDC), AmerisourceBergen Specialty Group (ABSG), and AmerisourceBergen
Packaging Group (ABPG). The Company has aggregated the operating results of ABDC, ABSG, and ABPG
into one reportable segment, Pharmaceutical Distribution, which represents the consolidated
operating results of the Company. The businesses of the Pharmaceutical Distribution operating
segments are similar in that they service both healthcare providers and pharmaceutical
manufacturers in the pharmaceutical supply channel. Prior to October 1, 2009, management
considered gains on antitrust litigation settlements and costs related to facility consolidations,
employee severance and other, to be reconciling items between the operating results of
Pharmaceutical Distribution and the Company.
On June 15, 2009, the Company effected a two-for-one stock split of its outstanding shares of
common stock in the form of a 100% stock dividend to stockholders of record at the close of
business on May 29, 2009. All applicable share and per-share amounts in the consolidated financial
statements and related disclosures have been retroactively adjusted to reflect this stock split.
Certain reclassifications have been made to prior year amounts in order to conform to the
current year presentation.
Recent Accounting Pronouncements
Effective October 1, 2009, the Company adopted the applicable sections of Accounting Standards
Codification (ASC) 805, Business Combinations, which provides revised guidance for recognizing
and measuring identifiable assets and goodwill acquired, liabilities assumed, and any
non-controlling interest in the acquiree. Additionally, this ASC provides disclosure requirements
to enable users of financial statements to evaluate the nature and financial effects of a business
combination. The Company also adopted certain other applicable sections that address application
issues raised on the initial recognition and measurement, subsequent measurement, and accounting
and disclosure of assets and liabilities from contingencies from a business combination. The
application of ASC 805 relating to a future acquisition or divestiture may have an impact to the Companys
financial position and/or results of operations.
5
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 2. Discontinued Operations
In October 2008, the Company completed the divestiture of its workers compensation business,
PMSI, for approximately $31 million, net of a final working capital adjustment, including a $19
million subordinated note due from PMSI on the fifth anniversary of the closing date, of which $4
million may be payable in October 2010 if PMSI achieves certain revenue targets with respect to its
largest customer during the twelve months ending September 30, 2010. Interest on the note accrues
at an annual rate of LIBOR plus 4% (not to exceed 8%).
PMSIs revenue and loss before income taxes were $29.0 million and $1.1 million, respectively,
for the six months ended March 31, 2009. The Company classified PMSIs October 2008 operating
results and cash flows as discontinued in the consolidated financial statements. Loss from
discontinued operations, net of income taxes, for the three and six months ended March 31, 2009
also included a charge of $0.7 million related to a prior period business disposition.
Note 3. Income Taxes
The Company files income tax returns in U.S. federal and state jurisdictions as well as
various foreign jurisdictions. The U.S. Internal Revenue Service (IRS) completed its examination
of the Companys U.S. federal income tax returns for fiscal 2006 and 2007. In Canada, the Company
is currently under examination for fiscal years 2007 and 2008.
As of March 31, 2010, the Company had unrecognized tax benefits, defined as the aggregate tax
effect of differences between tax return positions and the benefits recognized in the Companys
financial statements, of $55.1 million ($38.1 million net of federal benefit, which, if recognized,
would reduce income tax expense). Included in this amount is $18.2 million of interest and
penalties, which the Company records in income tax expense. During the six months ended March 31,
2010, unrecognized tax benefits increased by $0.7 million. During the next 12 months, it is
reasonably possible that audit resolutions and the expiration of statutes of limitations could
result in a reduction of unrecognized tax benefits by approximately $5.4 million.
Note 4. Goodwill and Other Intangible Assets
Following is a summary of the changes in the carrying value of goodwill for the six months
ended March 31, 2010 (in thousands):
|
|
|
|
|
Goodwill at September 30, 2009
|
|
$
|
2,542,352
|
|
Foreign currency translation
|
|
|
2,768
|
|
Other
|
|
|
(707
|
)
|
|
|
|
|
Goodwill at March 31, 2010
|
|
$
|
2,544,413
|
|
|
|
|
|
6
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Following is a summary of other intangible assets (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
|
|
|
September 30, 2009
|
|
|
|
Gross
|
|
|
|
|
|
|
Net
|
|
|
Gross
|
|
|
|
|
|
|
Net
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Carrying
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Carrying
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Indefinite-lived
intangibles-trade
names
|
|
$
|
240,733
|
|
|
$
|
|
|
|
$
|
240,733
|
|
|
$
|
241,554
|
|
|
$
|
|
|
|
$
|
241,554
|
|
Finite-lived
intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer
relationships
|
|
|
121,977
|
|
|
|
(63,142
|
)
|
|
|
58,835
|
|
|
|
121,419
|
|
|
|
(56,679
|
)
|
|
|
64,740
|
|
Other
|
|
|
35,442
|
|
|
|
(24,786
|
)
|
|
|
10,656
|
|
|
|
33,100
|
|
|
|
(22,682
|
)
|
|
|
10,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
intangible
assets
|
|
$
|
398,152
|
|
|
$
|
(87,928
|
)
|
|
$
|
310,224
|
|
|
$
|
396,073
|
|
|
$
|
(79,361
|
)
|
|
$
|
316,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense for other intangible assets was $8.2 million and $7.7 million in the six
months ended March 31, 2010 and 2009, respectively. Amortization expense for other intangible
assets is estimated to be $16.3 million in fiscal 2010, $15.7 million in fiscal 2011, $13.3 million
in fiscal 2012, $11.2 million in fiscal 2013, $8.0 million in fiscal 2014, and $13.2 million
thereafter.
Note 5. Debt
Debt consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Blanco revolving credit facility at 2.23% and 2.25%, respectively, due 2011
|
|
$
|
55,000
|
|
|
$
|
55,000
|
|
Receivables securitization facility due 2011
|
|
|
|
|
|
|
|
|
Multi-currency revolving credit facility at 2.25% and 0.92%, respectively, due 2011
|
|
|
8,790
|
|
|
|
224,026
|
|
$400,000, 5 5/8% senior notes due 2012
|
|
|
399,206
|
|
|
|
399,058
|
|
$500,000, 5 7/8% senior notes due 2015
|
|
|
498,457
|
|
|
|
498,339
|
|
$400,000, 4 7/8% senior notes due 2019
|
|
|
396,804
|
|
|
|
|
|
Other
|
|
|
751
|
|
|
|
1,578
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
1,359,008
|
|
|
|
1,178,001
|
|
Less current portion
|
|
|
503
|
|
|
|
1,068
|
|
|
|
|
|
|
|
|
Total, net of current portion
|
|
$
|
1,358,505
|
|
|
$
|
1,176,933
|
|
|
|
|
|
|
|
|
7
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company has a $695 million multi-currency senior unsecured revolving credit facility,
which expires in November 2011, (the Multi-Currency Revolving Credit Facility) with a syndicate
of lenders. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at
specified rates based on the Companys debt rating and ranges from 19 basis points to 60 basis
points over LIBOR/EURIBOR/Bankers Acceptance Stamping Fee, as applicable (40 basis points over
LIBOR/EURIBOR/Bankers Acceptance Stamping Fee at March 31, 2010). Additionally, interest on
borrowings denominated in Canadian dollars may accrue at the greater of the Canadian prime rate or
the CDOR rate. The Company pays quarterly facility fees to maintain the availability under the
Multi-Currency Revolving Credit Facility at specified rates based on the Companys debt rating,
ranging from 6 basis points to 15 basis points of the total commitment (10 basis points at March
31, 2010). The Company may choose to repay or reduce its commitments under the Multi-Currency
Revolving Credit Facility at any time. The Multi-Currency Revolving Credit Facility contains
covenants, including compliance with a financial leverage ratio test, as well as others that impose
limitations on, among other things, indebtedness of excluded subsidiaries and asset sales.
The Company has a $700 million receivables securitization facility (Receivables
Securitization Facility). In April 2010, the Company amended this facility, which now expires in
April 2011. The Company continues to have available to it an accordion feature whereby the
commitment on the Receivables Securitization Facility may be increased by up to $250 million,
subject to lender approval, for seasonal needs during the December and March quarters. Interest
rates are based on prevailing market rates for short-term commercial paper or LIBOR plus a program
fee. The Company pays a commitment fee to maintain the availability under the Receivables
Securitization Facility. In connection with the April 2010 amendment, the program fee and the
commitment fee were reduced to 125 basis points and 60 basis points, respectively. At March 31,
2010, there were no borrowings outstanding under the Receivables Securitization Facility. The
Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving
Credit Facility.
In April 2010, the Company amended the $55 million Blanco revolving credit facility (the
Blanco Credit Facility) to, among other things, extend the maturity date of the Blanco Credit
Facility to April 2011. Borrowings under the Blanco Credit Facility are guaranteed by the Company.
In connection with the April 2010 amendment, interest on borrowings under this facility continues
to be 200 basis points over LIBOR.
In November 2009, the Company issued $400 million of 4 7/8% senior notes due November 15, 2019
(the 2019 Notes). The 2019 Notes were sold at 99.174% of the principal amount and have an
effective yield of 4.98%. The interest on the 2019 Notes is payable semiannually, in arrears,
commencing May 15, 2010. The 2019 Notes rank pari passu to the Multi-Currency Revolving Credit
Facility, the 5 5/8% senior notes due 2012, and the 5 7/8% senior notes due 2015. The Company used
the net proceeds of the 2019 Notes to repay substantially all amounts then outstanding under its
Multi-Currency Revolving Credit Facility, and the remaining net proceeds were used for general
corporate purposes. Costs incurred in connection with the issuance of the 2019 Notes were deferred
and are being amortized over the 10-year term of the notes.
8
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 6. Stockholders Equity and Earnings per Share
The following table illustrates comprehensive income for the three and six months ended March
31, 2010 and 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Net income
|
|
$
|
181,008
|
|
|
$
|
143,387
|
|
|
$
|
332,315
|
|
|
$
|
254,443
|
|
Foreign currency translation adjustments and other
|
|
|
4,525
|
|
|
|
(1,175
|
)
|
|
|
7,803
|
|
|
|
(11,241
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
$
|
185,533
|
|
|
$
|
142,212
|
|
|
$
|
340,118
|
|
|
$
|
243,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In May 2009, the Company declared a two-for-one split of the Companys outstanding shares of
common stock.
In November 2008, the Companys board of directors increased the quarterly dividend by 33% to
$0.05 per common share. In May 2009, the Companys board of directors increased the quarterly
dividend by 20% to $0.06 per common share. In November 2009, the Companys board of directors
authorized another increase in the quarterly dividend by 33% to $0.08 per share.
In November 2008, the Companys board of directors authorized a program allowing the Company
to purchase up to $500 million of its outstanding shares of common stock, subject to market
conditions. During the six months ended March 31, 2009, the Company purchased 9.8 million shares
under this program for $161.7 million and another 1.2 million shares for $18.1 million to complete
its authorization under a prior share repurchase program.
In November 2009, the Companys board of directors authorized a new program allowing the
Company to purchase up to $500 million of its outstanding shares of common stock, subject to market
conditions. During the six months ended March 31, 2010, the Company purchased 2.8 million shares
for $68.1 million to complete its authorization under the November 2008 program. During the six
months ended March 31, 2010, the Company purchased 7.2 million shares for $186.9 million under the
new program.
Basic earnings per share is computed on the basis of the weighted average number of shares of
common stock outstanding during the periods presented. Diluted earnings per share is computed on
the basis of the weighted average number of shares of common stock outstanding during the periods
presented plus the dilutive effect of stock options, restricted stock, and restricted stock units.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
(in thousands)
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Weighted average common shares outstanding-basic
|
|
|
281,926
|
|
|
|
302,446
|
|
|
|
284,478
|
|
|
|
305,586
|
|
Effect of dilutive securities: stock options,
restricted stock, and restricted stock units
|
|
|
5,236
|
|
|
|
2,138
|
|
|
|
4,784
|
|
|
|
1,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding-diluted
|
|
|
287,162
|
|
|
|
304,584
|
|
|
|
289,262
|
|
|
|
307,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The potentially dilutive stock options that were antidilutive for the three months ended March
31, 2010 and 2009 were 1.1 million and 12.2 million, respectively, and for the six months ended
March 31, 2010 and March 31, 2009 were 0.6 million and 11.5 million, respectively.
9
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 7. Facility Consolidations, Employee Severance and Other
During fiscal 2008, the Company announced a more streamlined organizational structure and
introduced an initiative (cE2) designed to drive increased customer efficiency and cost
effectiveness. In connection with these efforts, the Company reduced various operating costs and
terminated certain positions. During the six months ended March 31, 2009, the Company terminated
183 employees and incurred $2.9 million of employee severance costs. Additionally, during the
three months ended March 31, 2009, the Company recorded $2.2 million of additional costs relating
to the Bergen Brunswig Matter as described in Note 8. Employees receive their severance benefits
over a period of time, generally not in excess of 12 months, or in the form of a lump-sum payment.
The following table displays the activity in accrued expenses and other from September 30,
2009 to March 31, 2010 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
|
|
|
Lease Cancellation
|
|
|
|
|
|
|
Severance
|
|
|
Costs and Other
|
|
|
Total
|
|
Balance as of September 30, 2009
|
|
$
|
7,876
|
|
|
$
|
3,549
|
|
|
$
|
11,425
|
|
Expense recorded during the period
|
|
|
(85
|
)
|
|
|
|
|
|
|
(85
|
)
|
Payments made during the period
|
|
|
(1,947
|
)
|
|
|
(411
|
)
|
|
|
(2,358
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2010
|
|
$
|
5,844
|
|
|
$
|
3,138
|
|
|
$
|
8,982
|
|
|
|
|
|
|
|
|
|
|
|
The employee severance balance set forth in the above table as of March 31, 2010 includes an
accrual for the Bergen Brunswig Matter as described in Note 8. The lease cancellation costs and
other balance set forth in the above table as of March 31, 2010 primarily consists of an accrual
for information technology transition costs payable to IBM Global Services.
Note 8. Legal Matters and Contingencies
In the ordinary course of its business, the Company becomes involved in lawsuits,
administrative proceedings, government subpoenas, and government investigations, including
antitrust, commercial, environmental, product liability, intellectual property, regulatory,
employment discrimination, and other matters. Significant damages or penalties may be sought from
the Company in some matters, and some matters may require years for the Company to resolve. The
Company establishes reserves based on its periodic assessment of estimates of probable losses.
There can be no assurance that an adverse resolution of one or more matters during any subsequent
reporting period will not have a material adverse effect on the Companys results of operations for
that period or on the Companys financial condition.
10
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Bergen Brunswig Matter
A former Bergen Brunswig chief executive officer who was terminated in 1999 filed an action
that year in the Superior Court of the State of California, County of Orange (the Superior Court)
claiming that Bergen Brunswig (predecessor in interest to AmerisourceBergen Corporation) had
breached its obligations to him under his employment agreement. Shortly after the filing of the
lawsuit, Bergen Brunswig made a California Civil Procedure Code § 998 Offer of Judgment to the
executive, which the executive accepted. The resulting judgment awarded the executive damages and
the continuation of certain employment benefits. Since then, the Company and the executive have
engaged in litigation as to what specific benefits were included in the scope of the Offer of
Judgment and the value of those benefits. The Superior Court entered an Order in Implementation of
Judgment on June 7, 2001, which identified the specific benefits encompassed by the Offer of
Judgment. Following submission by the executive of a claim for benefits pursuant to the Bergen
Brunswig Supplemental Executive Retirement Plan (the Plan), the Company followed the
administrative procedure set forth in the Plan. This procedure involved separate reviews by two
independent parties, the first by the Review Official appointed by the Plan Administrator and
second by the Plan Trustee, and resulted in a determination that the executive was entitled to a
$1.9 million supplemental retirement benefit and such amount was paid. The executive challenged
this award and on July 7, 2006, the Superior Court entered a Second Order in Implementation of
Judgment determining that the executive was entitled to a supplemental retirement benefit, net of
the $1.9 million previously paid to him, in the amount of $19.4 million, which included interest at
the rate of ten percent per annum from August 29, 2001. The Company recorded a charge of $13.9
million in June 2006 to establish the total liability of $19.4 million on its balance sheet. Both
the executive and the Company appealed the ruling of the Superior Court. On October 12, 2007, the
Court of Appeal for the State of California, Fourth Appellate District (the Court of Appeal) made
certain rulings, and reversed certain portions of the July 2006 decision of the Superior Court in a
manner that was favorable to the Company. As a result, in fiscal 2007, the Company reduced its
total liability to the executive by $10.4 million. The parties then entered into a stipulation to
remand the calculation of the executives supplemental retirement benefit to the Plan Administrator
in accordance with the Court of Appeals decision of October 12, 2007. On June 10, 2008, the Plan
Administrator issued a decision that the executive was entitled to receive approximately $6.9
million in supplemental retirement benefits plus interest, less the $1.9 million already paid to
the executive under the Plan. The executive appealed this determination and a hearing on his
appeal was held in August 2008 before a Review Official appointed by the Plan Administrator. On
October 31, 2008, the Review Official issued a decision affirming in most respects the Plan
Administrators determination of the executives supplemental retirement benefit. On November 17,
2008, the executive filed a motion for a Third Order in Implementation of Judgment with the
Superior Court asking the court to overturn the decision of the Review Official. On March 9, 2009,
the Company paid the executive approximately $5.6 million, plus interest, for the executives
supplemental retirement benefit, as determined by the Review Official. On April 9, 2009, the
Superior Court affirmed most aspects of the Review Officials determination of decision, but held
that the Review Official had abused his discretion by discounting the executives supplemental
retirement benefit to its present value. As a result, the Superior Court held that the executive
was entitled to an additional supplemental retirement benefit of approximately $6.6 million, plus
interest, beyond what has already been paid by the Company. During the fiscal year ended September
30, 2009, the Company accrued an additional $2.2 million related to this matter. The Company
believes that the Superior Courts holding is inconsistent with the 2007 Court of Appeal decision
and on May 4, 2009, filed a Notice of Appeal appealing the Superior Courts holding. The executive
also appealed the Superior Courts holding. The Court of Appeal will hold argument on the appeal
on May 17, 2010.
11
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Ontario Ministry of Health and Long-Term Care Civil Rebate Payment Order and Civil Complaint
On April 27, 2009, the Ontario Ministry of Health and Long-Term Care (OMH) notified the
Companys Canadian subsidiary, AmerisourceBergen Canada Corporation (ABCC), that it had entered a
Rebate Payment Order requiring ABCC to pay C$5.8 million to the Ontario Ministry of Finance. OMH
maintains that it has reasonable grounds to believe that ABCC accepted rebates, directly or
indirectly, in violation of the Ontario Drug Interchangeability and Dispensing Fee Act. OMH at the
same time announced similar rebate payment orders against other wholesalers, generic manufacturers,
pharmacies, and individuals. ABCC was cooperating fully with OMH prior to the entry of the Order
by responding fully to requests for information and/or documents and will continue to cooperate.
ABCC filed an appeal of the Order pursuant to OMH procedures in May 2009. In addition, on the same
day that the Order was issued, OMH notified ABCC that it had filed a civil complaint with Health
Canada (department of the Canadian government responsible for national public health) against ABCC
for potential violations of the Canadian Food and Drug Act. Health Canada subsequently conducted
an audit of ABCC, and ABCC has cooperated fully with Health Canada in the conduct of the audit.
The Company has met several times with representatives of OMH to present its position on the Rebate
Payment Order. Although the Company believes that ABCC has not violated the relevant statutes and
regulations and has conducted its business consistent with widespread industry practices, the
Company cannot predict the outcome of these matters.
Qui Tam Matter and Related Shareholder Derivative Action
On October 30, 2009, 14 states (including New York and Florida) and the District of Columbia
filed a complaint (the Intervention Complaint) in the United States District Court for the
District of Massachusetts (the Federal District Court) naming Amgen Inc. as well as two business
units of AmerisourceBergen Specialty Group, AmerisourceBergen Specialty Group, and
AmerisourceBergen Corporation as defendants. The Intervention Complaint was filed to intervene in
a pending civil case against the defendants filed under the qui tam provisions of the federal and
various state civil False Claims Acts (the Original Qui Tam Complaint). The qui tam provisions
permit a private person, known as a relator (i.e. whistleblower), to file civil actions under
these statutes on behalf of the federal and state governments. The relator in the Original
Complaint is a former Amgen employee. The Office of the New York Attorney General is leading the
intervention on behalf of the state governments.
The Original Qui Tam Complaint was initially filed under seal. On January 21, 2009, the
Company learned that the United States Attorney for the Eastern District of New York (the DOJ)
was investigating allegations in a sealed civil complaint filed in the Federal District Court under
the qui tam provisions of the federal civil False Claims Act. In February 2009, the Company
received a redacted copy of the then current version of the Original Qui Tam Complaint, pursuant to
a court order. However, the Company was never served with the Original Qui Tam Complaint. Based
upon the disclosed portions of the redacted complaint, it appears that the relator initially filed
the action on or about June 5, 2006 and a first amendment thereto on or about July 2, 2007. On May
18, 2009, the Federal District Court extended the time period for federal and state government
authorities to conduct their respective investigations and to decide whether to intervene in the
civil action. On September 1, 2009, 14 states and the District of Columbia filed notices of their
intent to intervene. The 14 states and the District of Columbia were given leave by the Federal
District Court to file a complaint within 60 days, or by October 30, 2009. The DOJ filed a notice
that it was not intervening as of September 1, 2009, but stated that its investigation is
continuing. The Company has received subpoenas for records issued by the DOJ in connection with
its investigation. The Company has been cooperating with the DOJ and is producing records in
response to the subpoenas.
Both the Intervention Complaint and the Original Qui Tam Complaint, as amended on October 30,
2009, allege that from 2002 through 2009, Amgen offered remuneration to medical providers in
violation of federal and state health laws to increase purchases and prescriptions of Amgens
anemia drug, Aranesp. Specifically with regard to the Companys business units, the complaints
allege that ASD Specialty Healthcare, Inc., which is a distributor of pharmaceuticals to physician
practices (ASD), and International Nephrology Network, which was a business name for one of the
Companys subsidiaries and a group purchasing organization for nephrologists and nephrology
practices (INN), conspired with Amgen to promote Aranesp in violation of federal and state health
laws. The complaints further allege that the defendants caused medical providers to submit to
state Medicaid programs false certifications and false claims for payment for Aranesp. According
to the complaints, the latter conduct allegedly violated state civil False Claims Acts and
constituted fraud and unjust enrichment. The Original Qui Tam Complaint, as amended, also alleges
that the defendants caused medical providers to submit to other federal health programs, including
Medicare, false certifications and false claims for payment for Aranesp.
12
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On December 17, 2009, the states and the relator both filed amended complaints. The State of
Texas, which was not one of the original 14 states intervening in the action, joined in the amended
complaint. Between January 20, 2010 and February 23, 2010, the States of Florida, Texas, New
Hampshire, Louisiana, Nevada and Delaware filed notices to voluntarily dismiss the Intervention
Complaint, leaving 9 states and the District of Columbia as intervenors. On February 1, 2010, the
Company filed a motion to dismiss the complaints. Amgen, Inc. filed a motion to dismiss as well.
On April 23, 2010, the Federal District Court issued a written opinion and order dismissing the
Original Qui Tam Complaint, as amended, and the Intervention Complaint. The relator and the
intervenors may seek to appeal the order of the Federal District Court.
The Company has learned that there are prior filings in another federal district, which are
under seal, that contain allegations similar to those in the Federal District Court action,
including allegations against the same, additional and/or subsidiaries or businesses of the Company
as are defendants in the Federal District Court action. The DOJ investigation of the allegations
contained in the Original Qui Tam Complaint appears to include investigation of allegations
contained in the prior filings.
The Company intends to continue to defend itself vigorously against the allegations contained
in the Original Qui Tam Complaint, as amended, and the Intervention Complaint and against any
appeal. The Company cannot predict the outcome of either the Federal District Court action (or any
appeal thereof) or the DOJ investigation or the potential outcome of any other action involving
similar allegations in which any AmerisourceBergen entity is or may become a defendant.
The Company was named as a nominal defendant in an alleged shareholder derivative action that
was filed on March 26, 2010 in the U.S. District Court for the Eastern District of Pennsylvania.
Also named as defendants in the action were all of the individuals who were serving as directors of
the Company immediately prior to the date of filing of the action and certain current and former
officers and directors of the Company. The derivative action alleges breach of fiduciary duty
against all the individual defendants arising from the allegations contained in the complaints
filed in the Qui Tam Matter described above. The derivative action seeks compensatory damages in
favor of the Company, attorneys fees and costs, and further relief as may be determined by the
court. Although the Company and the other defendants believe that the derivative action is wholly
without merit and intend to defend themselves vigorously against the claims raised in this action,
the Company cannot predict the outcome of this matter.
13
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 9. Litigation Settlements
Antitrust Settlements
During the last several years, numerous class action lawsuits have been filed against certain
brand pharmaceutical manufacturers alleging that the manufacturer, by itself or in concert with
others, took improper actions to delay or prevent generic drugs from entering the market. The
Company has not been a named plaintiff in any of these class actions, but has been a member of the
direct purchasers class (i.e., those purchasers who purchase directly from these pharmaceutical
manufacturers). None of the class actions has gone to trial, but some have settled in the past
with the Company receiving proceeds from the settlement funds. Currently, there are several such
class actions pending in which the Company is a class member. During the six months ended March
31, 2010, the Company recognized a gain of $1.5 million relating to the above-mentioned class
action lawsuits. The gain, which was net of attorney fees and estimated payments due to other
parties, was recorded as a reduction to cost of goods sold in the Companys consolidated statements
of operations.
Note 10. Financial Instruments
The carrying amounts of the Companys cash and cash equivalents, accounts receivable and
accounts payable at March 31, 2010 and September 30, 2009 approximated their fair values due to the
short-term nature of these financial instruments. Included in cash and cash equivalents at March
31, 2010 and September 30, 2009 are money market fund investments of $1,106.0 million and $928.3
million, respectively, which are reported at fair value. The fair value of these investments was
determined by using quoted prices for identical investments in active markets, which are considered
Level 1 inputs under ASC 820-10, Fair Value Measurements and Disclosures.
The carrying amounts and fair values of the Companys debt were $1,359.0 million and $1,442.1
million at March 31, 2010 and $1,178.0 million and $1,246.4 million at September 30, 2009. The
fair value of the Companys debt was determined using quoted market prices that were derived from
available market information.
Note
11. Subsequent Event
On May 5, 2010, the Company received a cash settlement from a
pharmaceutical manufacturer relating to an antitrust litigation
settlement and expects to realize a gain of $18.8 million (net
of attorney fees and estimated payments due to other parties) in the
quarter ending June 30, 2010.
Note 12. Selected Consolidating Financial Statements of Parent, Guarantors and Non-Guarantors
The Companys 5 5/8% senior notes due September 15, 2012 (the 2012 Notes), 5 7/8% senior
notes due September 15, 2015 (the 2015 Notes), and 4 7/8% senior notes due November 15, 2019 (the
2019 Notes and, together with the 2012 Notes and 2015 Notes, the Notes) each are fully and
unconditionally guaranteed on a joint and several basis by certain of the Companys subsidiaries
(the subsidiaries of the Company that are guarantors of any of the Notes being referred to
collectively as the Guarantor Subsidiaries). The total assets, stockholders equity, revenue,
earnings, and cash flows from operating activities of the Guarantor Subsidiaries reflect the
majority of the consolidated total of such items as of or for the periods reported. The only
consolidated subsidiaries of the Company that are not guarantors of the Notes (the Non-Guarantor
Subsidiaries) are: (a) the receivables securitization special purpose entity, (b) the foreign
operating subsidiaries, and (c) certain smaller operating subsidiaries. The following tables
present condensed consolidating financial statements including AmerisourceBergen Corporation (the
Parent), the Guarantor Subsidiaries, and the Non-Guarantor Subsidiaries. Such financial
statements include balance sheets as of March 31, 2010 and September 30, 2009, statements of
operations for the three and six months ended March 31, 2010 and 2009, and statements of cash flows
for the six months ended March 31, 2010 and 2009.
14
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SUMMARY CONSOLIDATING BALANCE SHEETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,115,717
|
|
|
$
|
56,383
|
|
|
$
|
27,772
|
|
|
$
|
|
|
|
$
|
1,199,872
|
|
Accounts receivable, net
|
|
|
128
|
|
|
|
1,275,592
|
|
|
|
2,672,758
|
|
|
|
|
|
|
|
3,948,478
|
|
Merchandise inventories
|
|
|
|
|
|
|
4,863,790
|
|
|
|
117,105
|
|
|
|
|
|
|
|
4,980,895
|
|
Prepaid expenses and other
|
|
|
180
|
|
|
|
35,647
|
|
|
|
1,958
|
|
|
|
|
|
|
|
37,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,116,025
|
|
|
|
6,231,412
|
|
|
|
2,819,593
|
|
|
|
|
|
|
|
10,167,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
|
|
637,070
|
|
|
|
28,731
|
|
|
|
|
|
|
|
665,801
|
|
Goodwill and other intangible assets
|
|
|
|
|
|
|
2,716,667
|
|
|
|
137,970
|
|
|
|
|
|
|
|
2,854,637
|
|
Other assets
|
|
|
11,848
|
|
|
|
122,421
|
|
|
|
551
|
|
|
|
|
|
|
|
134,820
|
|
Intercompany investments and
advances
|
|
|
2,723,824
|
|
|
|
1,953,282
|
|
|
|
(144,753
|
)
|
|
|
(4,532,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,851,697
|
|
|
$
|
11,660,852
|
|
|
$
|
2,842,092
|
|
|
$
|
(4,532,353
|
)
|
|
$
|
13,822,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
|
|
|
$
|
8,272,750
|
|
|
$
|
162,184
|
|
|
$
|
|
|
|
$
|
8,434,934
|
|
Accrued expenses and other
|
|
|
(274,692
|
)
|
|
|
578,683
|
|
|
|
8,178
|
|
|
|
|
|
|
|
312,169
|
|
Current portion of long-term
debt
|
|
|
|
|
|
|
346
|
|
|
|
157
|
|
|
|
|
|
|
|
503
|
|
Deferred income taxes
|
|
|
|
|
|
|
678,792
|
|
|
|
|
|
|
|
|
|
|
|
678,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
(274,692
|
)
|
|
|
9,530,571
|
|
|
|
170,519
|
|
|
|
|
|
|
|
9,426,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
|
1,294,467
|
|
|
|
249
|
|
|
|
63,789
|
|
|
|
|
|
|
|
1,358,505
|
|
Other liabilities
|
|
|
|
|
|
|
203,166
|
|
|
|
2,297
|
|
|
|
|
|
|
|
205,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
2,831,922
|
|
|
|
1,926,866
|
|
|
|
2,605,487
|
|
|
|
(4,532,353
|
)
|
|
|
2,831,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders equity
|
|
$
|
3,851,697
|
|
|
$
|
11,660,852
|
|
|
$
|
2,842,092
|
|
|
$
|
(4,532,353
|
)
|
|
$
|
13,822,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SUMMARY CONSOLIDATING BALANCE SHEETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
927,049
|
|
|
$
|
58,900
|
|
|
$
|
23,419
|
|
|
$
|
|
|
|
$
|
1,009,368
|
|
Accounts receivable, net
|
|
|
66
|
|
|
|
1,292,822
|
|
|
|
2,623,621
|
|
|
|
|
|
|
|
3,916,509
|
|
Merchandise inventories
|
|
|
|
|
|
|
4,856,637
|
|
|
|
116,183
|
|
|
|
|
|
|
|
4,972,820
|
|
Prepaid expenses and other
|
|
|
67
|
|
|
|
52,816
|
|
|
|
2,173
|
|
|
|
|
|
|
|
55,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
927,182
|
|
|
|
6,261,175
|
|
|
|
2,765,396
|
|
|
|
|
|
|
|
9,953,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
|
|
589,838
|
|
|
|
29,400
|
|
|
|
|
|
|
|
619,238
|
|
Goodwill and other intangible assets
|
|
|
|
|
|
|
2,719,324
|
|
|
|
139,740
|
|
|
|
|
|
|
|
2,859,064
|
|
Other assets
|
|
|
9,645
|
|
|
|
129,817
|
|
|
|
1,223
|
|
|
|
|
|
|
|
140,685
|
|
Intercompany investments and advances
|
|
|
2,405,087
|
|
|
|
1,938,742
|
|
|
|
(152,302
|
)
|
|
|
(4,191,527
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,341,914
|
|
|
$
|
11,638,896
|
|
|
$
|
2,783,457
|
|
|
$
|
(4,191,527
|
)
|
|
$
|
13,572,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
|
|
|
$
|
8,360,776
|
|
|
$
|
156,386
|
|
|
$
|
|
|
|
$
|
8,517,162
|
|
Accrued expenses and other
|
|
|
(271,952
|
)
|
|
|
581,354
|
|
|
|
6,255
|
|
|
|
|
|
|
|
315,657
|
|
Current portion of long-term debt
|
|
|
|
|
|
|
346
|
|
|
|
722
|
|
|
|
|
|
|
|
1,068
|
|
Deferred income taxes
|
|
|
|
|
|
|
645,723
|
|
|
|
|
|
|
|
|
|
|
|
645,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
(271,952
|
)
|
|
|
9,588,199
|
|
|
|
163,363
|
|
|
|
|
|
|
|
9,479,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
|
897,397
|
|
|
|
412
|
|
|
|
279,124
|
|
|
|
|
|
|
|
1,176,933
|
|
Other liabilities
|
|
|
|
|
|
|
197,496
|
|
|
|
2,232
|
|
|
|
|
|
|
|
199,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
2,716,469
|
|
|
|
1,852,789
|
|
|
|
2,338,738
|
|
|
|
(4,191,527
|
)
|
|
|
2,716,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders equity
|
|
$
|
3,341,914
|
|
|
$
|
11,638,896
|
|
|
$
|
2,783,457
|
|
|
$
|
(4,191,527
|
)
|
|
$
|
13,572,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2010
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
18,884,847
|
|
|
$
|
446,948
|
|
|
$
|
(31,168
|
)
|
|
$
|
19,300,627
|
|
Cost of goods sold
|
|
|
|
|
|
|
18,292,376
|
|
|
|
396,183
|
|
|
|
|
|
|
|
18,688,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
592,471
|
|
|
|
50,765
|
|
|
|
(31,168
|
)
|
|
|
612,068
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
|
|
|
|
|
300,865
|
|
|
|
9,794
|
|
|
|
(31,168
|
)
|
|
|
279,491
|
|
Depreciation
|
|
|
|
|
|
|
15,750
|
|
|
|
851
|
|
|
|
|
|
|
|
16,601
|
|
Amortization
|
|
|
|
|
|
|
3,241
|
|
|
|
845
|
|
|
|
|
|
|
|
4,086
|
|
Facility consolidations, employee severance
and other
|
|
|
|
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
|
(37
|
)
|
Intangible asset impairments
|
|
|
|
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
271,952
|
|
|
|
39,275
|
|
|
|
|
|
|
|
311,227
|
|
Other loss (income)
|
|
|
|
|
|
|
271
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
268
|
|
Interest expense, net
|
|
|
675
|
|
|
|
15,815
|
|
|
|
2,789
|
|
|
|
|
|
|
|
19,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes and equity in
earnings of subsidiaries
|
|
|
(675
|
)
|
|
|
255,866
|
|
|
|
36,489
|
|
|
|
|
|
|
|
291,680
|
|
Income taxes
|
|
|
(236
|
)
|
|
|
98,105
|
|
|
|
12,803
|
|
|
|
|
|
|
|
110,672
|
|
Equity in earnings of subsidiaries
|
|
|
181,447
|
|
|
|
|
|
|
|
|
|
|
|
(181,447
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
181,008
|
|
|
$
|
157,761
|
|
|
$
|
23,686
|
|
|
$
|
(181,447
|
)
|
|
$
|
181,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2009
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
16,974,495
|
|
|
$
|
364,649
|
|
|
$
|
(27,493
|
)
|
|
$
|
17,311,651
|
|
Cost of goods sold
|
|
|
|
|
|
|
16,437,775
|
|
|
|
321,405
|
|
|
|
|
|
|
|
16,759,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
536,720
|
|
|
|
43,244
|
|
|
|
(27,493
|
)
|
|
|
552,471
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling,
and administrative
|
|
|
|
|
|
|
293,287
|
|
|
|
13,415
|
|
|
|
(27,493
|
)
|
|
|
279,209
|
|
Depreciation
|
|
|
|
|
|
|
14,922
|
|
|
|
685
|
|
|
|
|
|
|
|
15,607
|
|
Amortization
|
|
|
|
|
|
|
3,149
|
|
|
|
678
|
|
|
|
|
|
|
|
3,827
|
|
Facility consolidations,
employee severance
and other
|
|
|
|
|
|
|
4,262
|
|
|
|
|
|
|
|
|
|
|
|
4,262
|
|
Intangible asset impairments
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
219,800
|
|
|
|
28,466
|
|
|
|
|
|
|
|
248,266
|
|
Other loss
|
|
|
|
|
|
|
503
|
|
|
|
1
|
|
|
|
|
|
|
|
504
|
|
Interest (income) expense, net
|
|
|
(890
|
)
|
|
|
12,389
|
|
|
|
3,022
|
|
|
|
|
|
|
|
14,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before
income taxes and equity
in earnings of subsidiaries
|
|
|
890
|
|
|
|
206,908
|
|
|
|
25,443
|
|
|
|
|
|
|
|
233,241
|
|
Income taxes
|
|
|
311
|
|
|
|
80,172
|
|
|
|
8,716
|
|
|
|
|
|
|
|
89,199
|
|
Equity in earnings of subsidiaries
|
|
|
142,808
|
|
|
|
|
|
|
|
|
|
|
|
(142,808
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
143,387
|
|
|
|
126,736
|
|
|
|
16,727
|
|
|
|
(142,808
|
)
|
|
|
144,042
|
|
Loss from discontinued operations
|
|
|
|
|
|
|
(655
|
)
|
|
|
|
|
|
|
|
|
|
|
(655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
143,387
|
|
|
$
|
126,081
|
|
|
$
|
16,727
|
|
|
$
|
(142,808
|
)
|
|
$
|
143,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended March 31, 2010
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
37,791,819
|
|
|
$
|
906,776
|
|
|
$
|
(62,109
|
)
|
|
$
|
38,636,486
|
|
Cost of goods sold
|
|
|
|
|
|
|
36,655,488
|
|
|
|
805,560
|
|
|
|
|
|
|
|
37,461,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
1,136,331
|
|
|
|
101,216
|
|
|
|
(62,109
|
)
|
|
|
1,175,438
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling,
and administrative
|
|
|
|
|
|
|
594,460
|
|
|
|
27,379
|
|
|
|
(62,109
|
)
|
|
|
559,730
|
|
Depreciation
|
|
|
|
|
|
|
31,577
|
|
|
|
1,682
|
|
|
|
|
|
|
|
33,259
|
|
Amortization
|
|
|
|
|
|
|
6,501
|
|
|
|
1,724
|
|
|
|
|
|
|
|
8,225
|
|
Facility consolidations,
employee severance
and other
|
|
|
|
|
|
|
(85
|
)
|
|
|
|
|
|
|
|
|
|
|
(85
|
)
|
Intangible asset impairments
|
|
|
|
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
503,178
|
|
|
|
70,431
|
|
|
|
|
|
|
|
573,609
|
|
Other loss (income)
|
|
|
|
|
|
|
550
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
545
|
|
Interest expense, net
|
|
|
1,225
|
|
|
|
29,400
|
|
|
|
5,921
|
|
|
|
|
|
|
|
36,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income
taxes and equity in
earnings of subsidiaries
|
|
|
(1,225
|
)
|
|
|
473,228
|
|
|
|
64,515
|
|
|
|
|
|
|
|
536,518
|
|
Income taxes
|
|
|
(429
|
)
|
|
|
181,640
|
|
|
|
22,992
|
|
|
|
|
|
|
|
204,203
|
|
Equity in earnings of subsidiaries
|
|
|
333,111
|
|
|
|
|
|
|
|
|
|
|
|
(333,111
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
332,315
|
|
|
$
|
291,588
|
|
|
$
|
41,523
|
|
|
$
|
(333,111
|
)
|
|
$
|
332,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended March 31, 2009
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
33,949,092
|
|
|
$
|
755,922
|
|
|
$
|
(54,986
|
)
|
|
$
|
34,650,028
|
|
Cost of goods sold
|
|
|
|
|
|
|
32,940,994
|
|
|
|
666,715
|
|
|
|
|
|
|
|
33,607,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
1,008,098
|
|
|
|
89,207
|
|
|
|
(54,986
|
)
|
|
|
1,042,319
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling,
and administrative
|
|
|
|
|
|
|
578,133
|
|
|
|
28,088
|
|
|
|
(54,986
|
)
|
|
|
551,235
|
|
Depreciation
|
|
|
|
|
|
|
29,271
|
|
|
|
1,389
|
|
|
|
|
|
|
|
30,660
|
|
Amortization
|
|
|
|
|
|
|
6,295
|
|
|
|
1,388
|
|
|
|
|
|
|
|
7,683
|
|
Facility consolidations,
employee severance
and other
|
|
|
|
|
|
|
5,291
|
|
|
|
|
|
|
|
|
|
|
|
5,291
|
|
Intangible asset impairments
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
387,808
|
|
|
|
58,342
|
|
|
|
|
|
|
|
446,150
|
|
Other loss
|
|
|
|
|
|
|
932
|
|
|
|
1
|
|
|
|
|
|
|
|
933
|
|
Interest (income) expense, net
|
|
|
(3,061
|
)
|
|
|
24,843
|
|
|
|
6,922
|
|
|
|
|
|
|
|
28,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before
income taxes and equity
in earnings of subsidiaries
|
|
|
3,061
|
|
|
|
362,033
|
|
|
|
51,419
|
|
|
|
|
|
|
|
416,513
|
|
Income taxes
|
|
|
1,071
|
|
|
|
140,873
|
|
|
|
17,998
|
|
|
|
|
|
|
|
159,942
|
|
Equity in earnings of subsidiaries
|
|
|
252,453
|
|
|
|
|
|
|
|
|
|
|
|
(252,453
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
254,443
|
|
|
|
221,160
|
|
|
|
33,421
|
|
|
|
(252,453
|
)
|
|
|
256,571
|
|
Loss from discontinued operations
|
|
|
|
|
|
|
(2,128
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
254,443
|
|
|
$
|
219,032
|
|
|
$
|
33,421
|
|
|
$
|
(252,453
|
)
|
|
$
|
254,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
months ended March 31, 2010
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
332,315
|
|
|
$
|
291,588
|
|
|
$
|
41,523
|
|
|
$
|
(333,111
|
)
|
|
$
|
332,315
|
|
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities
|
|
|
(334,544
|
)
|
|
|
53,515
|
|
|
|
(38,004
|
)
|
|
|
333,111
|
|
|
|
14,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating
activities
|
|
|
(2,229
|
)
|
|
|
345,103
|
|
|
|
3,519
|
|
|
|
|
|
|
|
346,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
(86,157
|
)
|
|
|
(1,880
|
)
|
|
|
|
|
|
|
(88,037
|
)
|
Other
|
|
|
|
|
|
|
22
|
|
|
|
112
|
|
|
|
|
|
|
|
134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
|
|
|
|
|
|
(86,135
|
)
|
|
|
(1,768
|
)
|
|
|
|
|
|
|
(87,903
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt borrowings
|
|
|
396,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
396,696
|
|
Net repayments under revolving and
securitization credit facilities
|
|
|
|
|
|
|
|
|
|
|
(219,178
|
)
|
|
|
|
|
|
|
(219,178
|
)
|
Purchases of common stock
|
|
|
(255,199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(255,199
|
)
|
Exercise of stock options, including
excess tax benefit
|
|
|
64,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,496
|
|
Cash dividends on common stock
|
|
|
(45,754
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(45,754
|
)
|
Debt issuance costs and other
|
|
|
(8,687
|
)
|
|
|
(357
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
(9,047
|
)
|
Intercompany financing and advances
|
|
|
39,345
|
|
|
|
(261,128
|
)
|
|
|
221,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing
activities
|
|
|
190,897
|
|
|
|
(261,485
|
)
|
|
|
2,602
|
|
|
|
|
|
|
|
(67,986
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents
|
|
|
188,668
|
|
|
|
(2,517
|
)
|
|
|
4,353
|
|
|
|
|
|
|
|
190,504
|
|
Cash and cash equivalents at beginning
of period
|
|
|
927,049
|
|
|
|
58,900
|
|
|
|
23,419
|
|
|
|
|
|
|
|
1,009,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,115,717
|
|
|
$
|
56,383
|
|
|
$
|
27,772
|
|
|
$
|
|
|
|
$
|
1,199,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended March 31, 2009
|
|
|
|
|
|
|
|
Guarantor
|
|
|
Non-Guarantor
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands)
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
254,443
|
|
|
$
|
219,032
|
|
|
$
|
33,421
|
|
|
$
|
(252,453
|
)
|
|
$
|
254,443
|
|
Loss from discontinued operations
|
|
|
|
|
|
|
2,128
|
|
|
|
|
|
|
|
|
|
|
|
2,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
254,443
|
|
|
|
221,160
|
|
|
|
33,421
|
|
|
|
(252,453
|
)
|
|
|
256,571
|
|
Adjustments to reconcile income from
continuing operations to net cash
provided by (used in) operating activities
|
|
|
(188,879
|
)
|
|
|
11,244
|
|
|
|
(298,065
|
)
|
|
|
252,453
|
|
|
|
(223,247
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities continuing operations
|
|
|
65,564
|
|
|
|
232,404
|
|
|
|
(264,644
|
)
|
|
|
|
|
|
|
33,324
|
|
Net cash used in operating activities
discontinued operations
|
|
|
|
|
|
|
(906
|
)
|
|
|
|
|
|
|
|
|
|
|
(906
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities
|
|
|
65,564
|
|
|
|
231,498
|
|
|
|
(264,644
|
)
|
|
|
|
|
|
|
32,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
(62,911
|
)
|
|
|
(5,676
|
)
|
|
|
|
|
|
|
(68,587
|
)
|
Proceeds from the sale of PMSI
|
|
|
|
|
|
|
14,936
|
|
|
|
|
|
|
|
|
|
|
|
14,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities continuing operations
|
|
|
|
|
|
|
(47,975
|
)
|
|
|
(5,676
|
)
|
|
|
|
|
|
|
(53,651
|
)
|
Net cash used in investing activities
discontinued operations
|
|
|
|
|
|
|
(1,138
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
(49,113
|
)
|
|
|
(5,676
|
)
|
|
|
|
|
|
|
(54,789
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under revolving and
securitization credit facilities
|
|
|
|
|
|
|
|
|
|
|
8,298
|
|
|
|
|
|
|
|
8,298
|
|
Purchases of common stock
|
|
|
(179,879
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(179,879
|
)
|
Debt issuance costs and other
|
|
|
(2,890
|
)
|
|
|
601
|
|
|
|
(161
|
)
|
|
|
|
|
|
|
(2,450
|
)
|
Exercise of stock options, including
excess tax benefit
|
|
|
4,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,415
|
|
Cash dividends on common stock
|
|
|
(30,798
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,798
|
)
|
Intercompany financing and advances
|
|
|
(51,166
|
)
|
|
|
(203,237
|
)
|
|
|
254,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
financing activities
|
|
|
(260,318
|
)
|
|
|
(202,636
|
)
|
|
|
262,540
|
|
|
|
|
|
|
|
(200,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(194,754
|
)
|
|
|
(20,251
|
)
|
|
|
(7,780
|
)
|
|
|
|
|
|
|
(222,785
|
)
|
Cash and cash equivalents at beginning of
period
|
|
|
719,570
|
|
|
|
100,623
|
|
|
|
57,921
|
|
|
|
|
|
|
|
878,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
at end of period
|
|
$
|
524,816
|
|
|
$
|
80,372
|
|
|
$
|
50,141
|
|
|
$
|
|
|
|
$
|
655,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Overview
The following discussion should be read in conjunction with the Consolidated Financial
Statements and notes thereto contained herein and in conjunction with the financial statements and
notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30,
2009.
In May 2009, we declared a two-for-one stock split of our outstanding shares of common stock.
The stock split occurred in the form of a 100% stock dividend, whereby each stockholder received
one additional share for each share owned. The shares were distributed on June 15, 2009 to
stockholders of record at the close of business on May 29, 2009. All applicable share and per
share data in this Managements Discussion and Analysis of Financial Condition and Results of
Operations have been retroactively adjusted to give effect to this stock split.
We are a pharmaceutical services company providing drug distribution and related healthcare
services and solutions to our pharmacy, physician, and manufacturer customers, which are based
primarily in the United States and Canada. Substantially all of our operations are located in the
United States and Canada. We also have a pharmaceutical packaging operation in the United Kingdom.
We have three operating segments, which include the operations of AmerisourceBergen Drug
Corporation (ABDC), AmerisourceBergen Specialty Group (ABSG), and AmerisourceBergen Packaging
Group (ABPG). We have aggregated the operating results of ABDC, ABSG, and ABPG into one
reportable segment, Pharmaceutical Distribution, which represents the consolidated operating
results of the Company. Servicing both healthcare providers and pharmaceutical manufacturers in
the pharmaceutical supply channel, the Pharmaceutical Distribution segments operations provide
drug distribution and related services designed to reduce healthcare costs and improve patient
outcomes.
Prior to October 1, 2009, management considered gains on antitrust litigation settlements and
costs related to facility consolidations, employee severance and other, to be reconciling items
between the operating results of Pharmaceutical Distribution and the Company.
ABDC distributes a comprehensive offering of brand-name and generic pharmaceuticals,
over-the-counter healthcare products, home healthcare supplies and equipment, and related services
to a wide variety of healthcare providers, including acute care hospitals and health systems,
independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and
other alternate site pharmacies, and other customers. ABDC also provides pharmacy management,
staffing and other consulting services; scalable automated pharmacy dispensing equipment;
medication and supply dispensing cabinets; and supply management software to a variety of retail
and institutional healthcare providers.
ABSG, through a number of individual operating businesses, provides pharmaceutical
distribution and other services primarily to physicians who specialize in a variety of disease
states, especially oncology, and to other healthcare providers, including dialysis clinics. ABSG
also distributes vaccines, other injectables, and plasma and other blood products. In addition,
through its specialty services businesses, ABSG provides drug commercialization services, third
party logistics, and other services for biotech and other pharmaceutical manufacturers, as well as
reimbursement consulting, data analytics, outcomes research, practice management, and group
purchasing services for physician practices.
ABPG consists of American Health Packaging, Anderson Packaging (Anderson), and Brecon
Pharmaceuticals Limited (Brecon). American Health Packaging delivers unit dose, punch card,
unit-of-use, and other packaging solutions to institutional and retail healthcare providers.
American Health Packagings largest customer is ABDC and, as a result, its operations are closely
aligned with the operations of ABDC. Anderson is a leading provider of contract packaging services
for pharmaceutical manufacturers. Brecon is a United Kingdom-based provider of contract packaging
and clinical trials materials services for pharmaceutical manufacturers.
23
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Summary Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
(dollars in thousands)
|
|
2010
|
|
|
2009
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
19,300,627
|
|
|
$
|
17,311,651
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
612,068
|
|
|
$
|
552,471
|
|
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
311,227
|
|
|
$
|
248,266
|
|
|
|
25.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
3.17
|
%
|
|
|
3.19
|
%
|
|
|
|
|
Operating expenses
|
|
|
1.56
|
%
|
|
|
1.76
|
%
|
|
|
|
|
Operating income
|
|
|
1.61
|
%
|
|
|
1.43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended March 31,
|
|
|
|
|
(dollars in thousands)
|
|
2010
|
|
|
2009
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
38,636,486
|
|
|
$
|
34,650,028
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,175,438
|
|
|
$
|
1,042,319
|
|
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
573,609
|
|
|
$
|
446,150
|
|
|
|
28.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
3.04
|
%
|
|
|
3.01
|
%
|
|
|
|
|
Operating expenses
|
|
|
1.56
|
%
|
|
|
1.72
|
%
|
|
|
|
|
Operating income
|
|
|
1.48
|
%
|
|
|
1.29
|
%
|
|
|
|
|
Results of Operations
Revenue of $19.3 billion, which included bulk deliveries to customer warehouses of $351.3
million, in the quarter ended March 31, 2010 increased 11.5% from the prior year quarter. The
increase in revenue was due to the 13% growth of ABDC and the 5% growth of ABSG. During the
quarter ended March 31, 2010, 68% of revenue was from sales to institutional customers and 32% was
from sales to retail customers; this compared to a customer mix in the prior year quarter of 67%
institutional and 33% retail. Sales to institutional customers increased 13% in the current year
quarter due to the above market growth of a few of our largest customers, the April 2009 addition
of a new large hospital buying group customer, and overall market growth. Sales to retail
customers increased 9% in the current year quarter primarily due to the March 2009 addition of a
new large independent retail buying group customer. Revenue of $38.6 billion, which included bulk
deliveries to customer warehouses of $776.4 million, in the six months ended March 31, 2010
increased 11.5% from the prior year period as ABDCs revenue grew 13% and ABSGs revenue grew 6%.
ABDCs revenue increased by 13% from the prior year quarter and six month period due to
revenue from our new customers, primarily the new buying group customers with which we started
doing business in March and April of 2009 (representing approximately 5.5% and 6.4% of ABDCs
revenue growth in the quarter and six month period, respectively), the above market growth of a few
of our largest customers, and overall market growth.
24
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
ABSGs revenue of $3.9 billion and $8.0 billion in the quarter and six months ended March 31,
2010 increased 5% and 6%, respectively, from the prior year periods due to growth of its
distribution businesses, primarily relating to the distribution of nephrology and blood products
and its third party logistics business. The majority of ABSGs revenue is generated from the
distribution of pharmaceuticals to physicians who specialize in a variety of disease states,
especially oncology. ABSG also distributes vaccines, plasma, and other blood products. ABSGs
business may be adversely impacted in the future by changes in medical guidelines and the Medicare
reimbursement rates for certain pharmaceuticals, including oncology drugs administered by
physicians and anemia drugs. Since ABSG provides a number of services to or through physicians,
any changes affecting this service channel could result in slower or reduced growth in revenues.
We currently expect to grow our revenues between 7% and 8% in fiscal 2010. As we have reached
the anniversary date of the addition of our new significant customers, which we added primarily in
March and April of 2009, we expect revenue growth will be lower in the second half of fiscal 2010
than it was in the first half. Our expected growth reflects U.S. pharmaceutical industry
conditions, including increases in prescription drug utilization, the introduction of new products,
and higher branded pharmaceutical prices, offset, in part, by the increased use of lower-priced
generics. Our growth also may be impacted, among other things, by industry competition and changes
in customer mix. Industry sales in the United States, as recently estimated by industry data firm
IMS Healthcare, Inc. (IMS), are expected to grow between 3% and 5% in calendar 2010. IMS expects
that certain sectors of the market, such as biotechnology and other specialty and generic
pharmaceuticals, will grow faster than the overall market. Additionally, IMS expects the U.S.
pharmaceutical industry to grow annually in the low to mid-single digit percentages through 2013.
Our future revenue growth will continue to be affected by various factors such as industry growth
trends, including the likely increase in the number of generic drugs that will be available over
the next few years as a result of the expiration of certain drug patents held by brand-name
pharmaceutical manufacturers, general economic conditions in the United States, competition within
the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and
distribution policies and practices, increased downward pressure on reimbursement rates, and
changes in Federal government rules and regulations.
Gross profit of $612.1 million in the quarter ended March 31, 2010 increased by $59.6 million
or 11% from the prior year quarter. Gross profit of $1.2 billion in the six months ended March 31,
2010 increased by $133.1 million or 13% from the prior year period. Slightly more than one-half
and approximately two-thirds, respectively, of the gross profit increases for the quarter and six
months ended March 31, 2010 were derived from new generic product introductions (generic launches).
The remaining increases were attributable to the continued strong growth and profitability of our
generic programs (with generic revenue increasing by more than 20% in comparison to the prior year
periods) and increased contributions from our branded fee-for-service agreements. The amount of
gross profit attributable to generic launches can vary significantly depending on the individual
characteristics of each new product and, as a result, generic launches can cause significant
variability in our quarterly results of operations. In August 2009, a generic oncology drug was
launched and ABSGs gross profit significantly benefited from this generic launch in the six months
ended March 31, 2010. The gross profit benefit received from this and other generic launches in
the six months ended March 31, 2010 significantly exceeded the typical benefit we have experienced
in the past from these product introductions. We expect the gross profit contribution from generic
launches in the second half of fiscal 2010 will be significantly less than the benefit received in
the first half of fiscal 2010. There can be no assurance that future generic launches will
contribute significantly to our gross profit as they did in the six months ended March 31, 2010.
Additionally, in the quarter ended March 31, 2010, we completed a reconciliation with one of our
generic suppliers relating to rebate incentives owed to us. Our gross profit benefited by
approximately $12 million in the current quarter as a result of having completed this
reconciliation. Gross profit in the prior year quarter benefited from a settlement of $1.8 million
with a former customer.
As a percentage of revenue, our gross profit margin of 3.17% in the quarter ended March 31,
2010 declined by 2 basis points from the prior year quarter as the contributions from the generic
launches, the strong growth and profitability of our generic programs, and branded fee-for-service
agreements largely offset the above market growth of some of our largest customers, who benefit
from our best pricing, and normal competitive pressures on customer margins. As a percentage of
revenue, our gross profit margin of 3.04% in the six months ended March 31, 2010 improved by 3
basis points from the prior year period due to generic launches, the strong growth and
profitability of our generic programs, and increased contributions from our branded fee-for-service
agreements. All of these factors more than offset the above market growth of some of our largest
customers and normal competitive pressures on customer margins.
25
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
In the current year six-month period, we recognized a gain of $1.5 million from antitrust
litigation settlements with pharmaceutical manufacturers. This gain was recorded as a reduction to
cost of goods sold. We are unable to estimate future gains, if any, we will recognize as a result
of antitrust settlements (see Note 9 of the Notes to Consolidated Financial Statements).
Our cost of goods sold for interim periods includes a last-in, first-out (LIFO) provision
that is based on our estimated annual LIFO provision. We recorded a LIFO charge of $10.7 million
and $11.6 million in the quarters ended March 31, 2010 and 2009, respectively. Our LIFO charge was
$18.5 million and $16.6 million in the six months ended March 31, 2010 and 2009, respectively. The
annual LIFO provision is affected by changes in inventory quantities, product mix, and manufacturer
pricing practices, which may be impacted by market and other external influences.
Operating expenses of $300.8 million in the quarter ended March 31, 2010 decreased by 1% from
the prior year quarter. Operating expenses in the prior year quarter included costs related to
facility consolidations and employee severance totaling $4.3 million. Operating expenses in the
quarters ended March 31, 2010 and 2009 included certain intangible and other asset impairment
charges totaling $0.7 million and $4.1 million, respectively. Operating expenses of $601.8 million
in the six months ended March 31, 2010 increased by 1% from the prior year period due to an
increase in incentive compensation and health benefit costs, both of which were largely offset by a
$5.4 million reduction in facility consolidations and employee severance costs and a $3.4 million
reduction in asset impairment charges. We expect that our operating expenses will increase in the
second half of fiscal 2010 when compared to the first half of the fiscal year primarily due to
anticipated increases in employee compensation arising from our annual merit review cycle and
expenses related to our Business Transformation project, which includes a new enterprise resource
planning (ERP) platform. As a percentage of revenue, operating expenses were 1.56% in the
quarter and six months ended March 31, 2010 and represented a significant 20 basis point and 16
basis point decline in our operating expense ratios from the prior year periods, reflecting our
strong operating leverage particularly within ABDC as revenue increased by 11.5% from the prior
year periods. Our operating leverage has benefited from significant productivity increases
achieved from our highly automated distribution facilities and our cE2 initiative, as described
below.
In fiscal 2008, we announced a more streamlined organizational structure and introduced an
initiative (cE2) designed to drive increased customer efficiency and cost effectiveness. In
connection with these efforts, we reduced various operating costs and terminated certain positions.
During the six months ended March 31, 2009, we terminated 183 employees and incurred $2.9 million
of employee severance costs relating to our cE2 initiative. Additionally, during the quarter ended
March 31, 2009, we recorded $2.2 million of additional expense relating to the Bergen Brunswig
Matter as described in Note 8 (Legal Matters and Contingencies) of the Notes to the Consolidated
Financial Statements.
We paid a total of $2.4 million and $12.3 million for employee severance, lease cancellation
and other costs during the six months ended March 31, 2010 and 2009, respectively. Remaining
unpaid amounts of $9.0 million for employee severance, lease cancellation and other costs are
included in accrued expenses and other in the accompanying balance sheet at March 31, 2010.
Employees receive their severance benefits over a period, generally not in excess of 12 months, or
in the form of a lump-sum payment.
Operating income of $311.2 million and $573.6 million in the quarter and six months ended
March 31, 2010 increased 25% and 29%, respectively, from the prior year periods primarily due to
the increases in our gross profit. As a percentage of revenue, operating income increased 18 basis
points to 1.61% and 19 basis points to 1.48% in the quarter and six months ended March 31, 2010,
respectively, from the prior year periods primarily due to the decrease in our operating expense
ratios.
26
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Interest expense, interest income, and the respective weighted-average interest rates in the
quarters ended March 31, 2010 and 2009 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
Amount
|
|
|
Interest Rate
|
|
|
Amount
|
|
|
Interest Rate
|
|
Interest expense
|
|
$
|
19,598
|
|
|
|
5.31
|
%
|
|
$
|
15,900
|
|
|
|
4.83
|
%
|
Interest income
|
|
|
(319
|
)
|
|
|
0.16
|
%
|
|
|
(1,379
|
)
|
|
|
1.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
$
|
19,279
|
|
|
|
|
|
|
$
|
14,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense increased from the prior year quarter primarily due to an increase of $181.4
million in average borrowings. Interest income decreased from the prior year quarter primarily due
to a decline in the weighted-average interest rate, offset in part, by an increase in average
invested cash of $543.6 million.
Interest expense, interest income, and the respective weighted-average interest rates in the
six months ended March 31, 2010 and 2009 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
Amount
|
|
|
Interest Rate
|
|
|
Amount
|
|
|
Interest Rate
|
|
Interest expense
|
|
$
|
37,240
|
|
|
|
5.04
|
%
|
|
$
|
32,262
|
|
|
|
5.06
|
%
|
Interest income
|
|
|
(694
|
)
|
|
|
0.17
|
%
|
|
|
(3,558
|
)
|
|
|
1.76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
$
|
36,546
|
|
|
|
|
|
|
$
|
28,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense increased from the prior year six-month period due to an increase of $186.6
million in average borrowings, offset in part, by a decrease in the weighted-average variable
interest rate on borrowings under our revolving credit facilities to 1.46% from 2.82% in the prior
year period. Interest income decreased from the prior year six-month period primarily due to a
decrease in the weighted-average interest rate, offset in part, by an increase in average invested
cash of $504.7 million.
Average borrowings increased in the current year quarter and six months ended March 31, 2010
resulting from the issuance of our new 10-year, $400 million senior notes, offset, in part, by the
repayment of substantially all amounts then outstanding under our multi-currency revolving credit
facility (both described in Liquidity and Capital Resources on the following page). Our interest
expense in fiscal 2010 will exceed our interest expense in the prior fiscal year due to the
issuance of our new 10-year senior notes. However, our financial position has been improved by
extending our debt maturities, increasing our liquidity, and securing attractive long-term debt
rates.
Income taxes in the quarter ended March 31, 2010 reflect an effective income tax rate of
37.9%, compared to 38.2% in the prior year quarter. Income taxes in the six months ended March 31,
2010 and 2009 reflect an effective income tax rate of 38.1% and 38.4%, respectively.
Income from continuing operations of $181.0 million in the quarter ended March 31, 2010
increased 26% from the prior year quarter primarily due to the increase in operating income.
Diluted earnings per share from continuing operations of $0.63 in the quarter ended March 31, 2010
increased 34% from $0.47 per share in the prior year quarter. Income from continuing operations of
$332.3 million in the six months ended March 31, 2010 increased 30% from the prior year period due
to the increase in operating income. Diluted earnings per share from continuing operations of
$1.15 in the six months ended March 31, 2010 increased 39% from $0.83 per share in the prior year
period. The differences between diluted earnings per share growth and the increase in income from
continuing operations for the quarter and six months ended March 31, 2010 was primarily due to the
6% reduction in weighted average common shares outstanding in both periods, primarily from
purchases of our common stock, net of the impact of stock option exercises.
27
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Loss from discontinued operations, net of income taxes, for the six months ended March 31,
2009 primarily related to the PMSI business, which was sold in October 2008. Loss from
discontinued operations, net of income taxes, in the quarter and six months ended March 31, 2009
also included a charge of $0.7 million related to a prior period business disposition.
Liquidity and Capital Resources
The following table illustrates our debt structure at March 31, 2010, including availability
under revolving credit facilities and the receivables securitization facility (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
Additional
|
|
|
|
Balance
|
|
|
Availability
|
|
|
|
|
|
|
|
|
|
|
Fixed-Rate Debt:
|
|
|
|
|
|
|
|
|
$400,000, 5 5/8% senior notes due 2012
|
|
$
|
399,206
|
|
|
$
|
|
|
$500,000, 5 7/8% senior notes due 2015
|
|
|
498,457
|
|
|
|
|
|
$400,000, 4 7/8% senior notes due 2019
|
|
|
396,804
|
|
|
|
|
|
Other
|
|
|
751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed-rate debt
|
|
|
1,295,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable-Rate Debt:
|
|
|
|
|
|
|
|
|
Blanco revolving credit facility due 2011
|
|
|
55,000
|
|
|
|
|
|
Multi-currency revolving credit facility due 2011
|
|
|
8,790
|
|
|
|
672,706
|
|
Receivables securitization facility due 2011
|
|
|
|
|
|
|
700,000
|
|
Other
|
|
|
|
|
|
|
1,518
|
|
|
|
|
|
|
|
|
Total variable-rate debt
|
|
|
63,790
|
|
|
|
1,374,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt, including current portion
|
|
$
|
1,359,008
|
|
|
$
|
1,374,224
|
|
|
|
|
|
|
|
|
Along with our cash balances, our aggregate availability under our revolving credit facilities
and our receivables securitization facility provides us sufficient sources of capital to fund our
working capital requirements.
We have a $695 million multi-currency senior unsecured revolving credit facility, which
expires in November 2011, (the Multi-Currency Revolving Credit Facility) with a syndicate of
lenders. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at
specified rates based on our debt rating and ranges from 19 basis points to 60 basis points over
LIBOR/EURIBOR/Bankers Acceptance Stamping Fee, as applicable (40 basis points over
LIBOR/EURIBOR/Bankers Acceptance Stamping Fee at March 31, 2010). Additionally, interest on
borrowings denominated in Canadian dollars may accrue at the greater of the Canadian prime rate or
the CDOR rate. We pay quarterly facility fees to maintain the availability under the
Multi-Currency Revolving Credit Facility at specified rates based on our debt rating, ranging from
6 basis points to 15 basis points of the total commitment (10 basis points at March 31, 2010). We
may choose to repay or reduce our commitments under the Multi-Currency Revolving Credit Facility at
any time. The Multi-Currency Revolving Credit Facility contains covenants, including compliance
with a financial leverage ratio test, as well as others that impose limitations on, among other
things, indebtedness of excluded subsidiaries and asset sales.
28
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
We have a $700 million receivables securitization facility (Receivables Securitization
Facility). In April 2010, we amended this facility, which now expires in April 2011. We continue
to have available to us an accordion feature whereby the commitment on the Receivables
Securitization Facility may be increased by up to $250 million, subject to lender approval, for
seasonal needs during the December and March quarters. Interest rates are based on prevailing
market rates for short-term commercial paper or LIBOR plus a program fee. We pay a commitment fee
to maintain the availability under the Receivables Securitization Facility. In connection with the
April 2010 amendment, the program fee and commitment fee were reduced to 125 basis points and 60
basis points, respectively. At March 31, 2010, there were no borrowings outstanding under the
Receivables Securitization Facility. The Receivables Securitization Facility contains similar
covenants to the Multi-Currency Revolving Credit Facility.
In April 2010, we amended the $55 million Blanco revolving credit facility (the Blanco Credit
Facility) to, among other things, extend the maturity date of the Blanco Credit Facility to April
2011. Borrowings under the Blanco Credit Facility are guaranteed by us. In connection with the
April 2010 amendment, interest on borrowings under this facility continues to be 200 basis points
over LIBOR.
In November 2009, we issued $400 million of 4 7/8% senior notes due November 15, 2019 (the
2019 Notes). The 2019 Notes were sold at 99.174% of the principal amount and have an effective
yield of 4.98%. The interest on the 2019 Notes is payable semiannually, in arrears, commencing May
15, 2010. The 2019 Notes rank pari passu to the Multi-Currency Revolving Credit Facility, the 5
5/8% senior notes due 2012, and the 5 7/8% senior notes due 2015. We used the net proceeds of the
2019 Notes to repay substantially all amounts then outstanding under our Multi-Currency Revolving
Credit Facility, and the remaining net proceeds were used for general corporate purposes. Costs
incurred in connection with the issuance of the 2019 Notes were deferred and are being amortized
over the 10-year term of the notes.
Our operating results have generated cash flow, which, together with availability under our
debt agreements and credit terms from suppliers, has provided sufficient capital resources to
finance working capital and cash operating requirements, and to fund capital expenditures,
acquisitions, repayment of debt, the payment of interest on outstanding debt, dividends, and
repurchases of shares of our common stock.
Deterioration in general economic conditions could adversely affect the amount of
prescriptions that are filled and the amount of pharmaceutical products purchased by consumers and,
therefore, reduces purchases by our customers. In addition, volatility in financial markets may
also negatively impact our customers ability to obtain credit to finance their businesses on
acceptable terms. Reduced purchases by our customers or changes in the ability of our customers to
remit payments to us could adversely affect our revenue growth, our profitability, and our cash
flow from operations.
We monitor the creditworthiness of our lenders and while we do not currently anticipate the
failure of any lenders under our revolving credit facilities and/or our receivables securitization
facility, the failure of any lender could have an adverse effect on our ability to finance our
business operations.
Our primary ongoing cash requirements will be to finance working capital, fund the payment of
interest on debt, fund repurchases of our common stock, fund the payment of dividends, finance
acquisitions, and fund capital expenditures (including our Business Transformation project, which
involves the implementation of our new enterprise resource planning platform) and routine growth
and expansion through new business opportunities. In November 2009, our board of directors
approved a new program allowing us to purchase up to $500 million of our outstanding shares of
common stock, subject to market conditions. We expect to purchase approximately $350 million of
our common stock in fiscal 2010. During the six months ended March 31, 2010, we purchased $255.0
million of our common stock, of which $68.1 million was purchased to close out our prior November
2008 share repurchase program and $186.9 million was purchased under the current $500 million share
repurchase program. As of March 31, 2010, we had $313.1 million of availability remaining on our
current $500 million share repurchase program. Future cash flows from operations and borrowings
are expected to be sufficient to fund our ongoing cash requirements.
29
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Our most significant market risk historically has been the effect of fluctuations in interest
rates related to our debt. We manage interest rate risk by using a combination of fixed-rate and
variable-rate debt. At March 31, 2010, we had $63.8 million of variable-rate debt outstanding.
The amount of variable-rate debt fluctuates during the year based on our working capital
requirements. We periodically evaluate financial instruments to manage our exposure to fixed and
variable interest rates. However, there are no assurances that such instruments will be available
in the combinations we want and on terms acceptable to us. There were no such financial
instruments in effect at March 31, 2010.
We also have market risk exposure to interest rate fluctuations relating to our cash and cash
equivalents. We had $1.2 billion in cash and cash equivalents at March 31, 2010. The unfavorable
impact of a hypothetical decrease in interest rates on cash and cash equivalents would be partially
offset by the favorable impact of such a decrease on variable-rate debt. For every $100 million of
cash invested that is in excess of variable-rate debt, a 10 basis point decrease in interest rates
would increase our annual net interest expense by $0.1 million.
We are exposed to foreign currency and exchange rate risk from our non-U.S. operations. Our
largest exposure to foreign exchange rates exists primarily with the Canadian Dollar. We may
utilize foreign currency denominated forward contracts to hedge against changes in foreign exchange
rates. Such contracts generally have durations of less than one year. We had no foreign currency
denominated forward contracts at March 31, 2010. We may use derivative instruments to hedge our
foreign currency exposure, but not for speculative or trading purposes.
Following is a summary of our contractual obligations for future principal and interest
payments on our debt, minimum rental payments on our noncancelable operating leases and minimum
payments on our other commitments at March 31, 2010 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
|
|
|
|
|
|
|
Within 1
|
|
|
|
|
|
|
|
|
|
|
After 5
|
|
|
|
Total
|
|
|
Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
Years
|
|
Debt, including interest payments
|
|
$
|
1,777,784
|
|
|
$
|
127,171
|
|
|
$
|
540,675
|
|
|
$
|
97,750
|
|
|
$
|
1,012,188
|
|
Operating leases
|
|
|
242,982
|
|
|
|
52,071
|
|
|
|
73,490
|
|
|
|
37,482
|
|
|
|
79,939
|
|
Other commitments
|
|
|
518,319
|
|
|
|
222,635
|
|
|
|
240,851
|
|
|
|
46,912
|
|
|
|
7,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,539,085
|
|
|
$
|
401,877
|
|
|
$
|
855,016
|
|
|
$
|
182,144
|
|
|
$
|
1,100,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We have commitments to purchase product from influenza vaccine manufacturers for the 2010/2011
flu season. In our current fiscal year, we reduced our purchase commitment to only the 2010/2011
flu season. We are required to purchase doses at prices that we believe will represent market
prices. We currently estimate our remaining purchase commitment under these agreements, as
amended, will be approximately $70.0 million as of March 31, 2010. These influenza vaccine
commitments are included in Other commitments in the above table.
We have commitments to purchase blood products from suppliers through December 31, 2012. We
are required to purchase quantities at prices that we believe will represent market prices. We
currently estimate our remaining purchase commitment under these agreements will be approximately
$273.6 million as of March 31, 2010. These blood product commitments are included in Other
commitments in the above table.
We have outsourced to IBM Global Services (IBM) a significant portion of our corporate and
ABDC information technology activities, including assistance with the implementation of our new
enterprise resource planning (ERP) platform. The remaining commitment under our 10-year
arrangement, as amended, which expires in June 2015, is approximately $154.8 million as of March
31, 2010 and is included in Other commitments in the above table.
30
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Our liability for uncertain tax positions was $55.1 million as of March 31, 2010. This
liability represents an estimate of tax positions that we have taken in our tax returns, which may
ultimately not be sustained upon examination by taxing authorities. Since the amount and timing of
any future cash settlements cannot be predicted with reasonable certainty, the estimated liability
has been excluded from the above contractual obligations table.
During the six months ended March 31, 2010, our operating activities provided $346.4 million
of cash in comparison to cash provided of $32.4 million in the prior year period. Cash provided by
operations during the six months ended March 31, 2010 was principally the result of income from
continuing operations of $332.3 million and non-cash items of $128.8 million, offset, in part, by a
decrease in accounts payable, accrued expenses and income taxes of $94.6 million, an increase in
merchandise inventories of $22.9 million, and an increase in accounts receivable of $21.0 million.
Despite the significant increase in revenue in the six months ended March 31, 2010, accounts
receivable increased by less than 1% from September 30, 2009 as the average number of days sales
outstanding during the current year six-month period decreased by one day to 17.2 days from the
prior year period, reflecting improved cash collection efforts and timing of customer receipts.
Our accounts payable and inventory balances at September 30, 2009 were higher than normal as we
made inventory purchases of approximately $400 million in the month of September 2009, primarily
relating to the purchase of generic products due to a recent product launch and purchases made in
advance of a manufacturers temporary plant shutdown in connection with its facility consolidation
efforts. Despite our higher than normal accounts payable balance at September 30, 2009, accounts
payable, accrued expenses and income taxes decreased only by 1% from September 30, 2009 to March
31, 2010 due to the growth in our business. Our merchandise inventories at March 31, 2010 remained
relatively flat when compared to September 30, 2009 as our strong revenue growth was offset by the
reduction in the higher than normal September 30, 2009 inventory balance. The average number of
inventory days on hand in the six months ended March 31, 2010 was slightly lower when compared to
the prior year period. Operating cash uses during the six months ended March 31, 2010 included
$27.4 million in interest payments and $126.4 million of income tax payments, net of refunds.
During the six months ended March 31, 2009, our operating activities provided $32.4 million of
cash in comparison to cash provided of $92.3 million in the prior year period. Cash provided by
operations during the six months ended March 31, 2009 was principally the result of income from
continuing operations of $256.6 million, an increase in accounts payable, accrued expense and
income taxes of $322.3 million, and non-cash items of $102.0 million, primarily offset by an
increase in merchandise inventories of $385.2 million and an increase in accounts receivable of
$290.2 million. Although accounts receivable increased by 7% during the six month period due to a
9% increase in sales in the month of March 2009 compared to sales in the month of September 2008,
the average number of days sales outstanding during the six months ended March 31, 2009 decreased
by one-half day from the prior year six month period. The decline in average days sales
outstanding was primarily due to favorable customer mix within ABDC. Merchandise inventories
increased by 9% during the six month period due to timing and normal seasonal increases as the
average number of days on hand in the six months ended March 31, 2009 was essentially the same as
the prior year period. The increase in accounts payable, accrued expenses and income taxes was
primarily driven by the increase in merchandise inventories. Operating cash uses during the six
months ended March 31, 2009 included $28.9 million in interest payments and $114.3 million of
income tax payments, net of refunds.
Capital expenditures for the six months ended March 31, 2010 and 2009 were $88.0 million and
$68.6 million, respectively, and related principally to our Business Transformation project, which
includes a new ERP platform that will be implemented in ABDC and our corporate office. Capital
expenditures in the six months ended March 31, 2010 also included improvements made to our
operating facilities and other information technology initiatives. We continue to expect that we
will spend approximately $140 million for capital expenditures during fiscal 2010; however, we may
spend more than the expected amount depending on the timing of certain expenditures related to our
Business Transformation project.
In October 2008, we sold PMSI for approximately $31 million, net of a final working capital
adjustment, including a $19 million subordinated note due from PMSI on the fifth anniversary of the
closing date.
31
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
In November 2009, we issued our 2019 Notes for net proceeds of $396.7 million. We used the
net proceeds of the 2019 Notes to repay substantially all amounts then outstanding under our
Multi-Currency Revolving Credit Facility and the remaining net proceeds were used for general
corporate purposes.
During the six months ended March 31, 2010, we purchased 10.0 million shares of our common
stock for a total of $255.2 million. During the six months ended March 31, 2009, we purchased 11.0
million shares of our common stock for a total of $179.9 million.
In November 2008, our board of directors increased the quarterly dividend by 33% to $0.05 per
share and in May 2009, our board of directors increased the quarterly cash dividend by 20% to $0.06
per share. On November 12, 2009, our board of directors increased the quarterly cash dividend
again by 33% to $0.08 per share. We anticipate that we will continue to pay quarterly cash
dividends in the future. However, the payment and amount of future dividends remains within the
discretion of our board of directors and will depend upon our future earnings, financial condition,
capital requirements, and other factors.
Recent Accounting Pronouncements
Effective October 1, 2009, we adopted the applicable sections of Accounting Standards
Codification (ASC) 805, Business Combinations, which provides revised guidance for recognizing
and measuring identifiable assets and goodwill acquired, liabilities assumed, and any
non-controlling interest in the acquiree. Additionally, this ASC provides disclosure requirements
to enable users of financial statements to evaluate the nature and financial effects of a business
combination. We also adopted certain other applicable sections that address application issues
raised on the initial recognition and measurement, subsequent measurement and accounting and
disclosure of assets and liabilities from contingencies from a business combination. The
application of ASC 805 relating to an acquisition or divestiture subsequent to September 30, 2009
may have an impact to our financial position and/or results of operations.
32
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain of the statements contained in this Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this report are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act). These statements are based on managements
current expectations and are subject to uncertainty and changes in circumstances. Actual results
may vary materially from the expectations contained in the forward-looking statements. The
following factors, among others, could cause actual results to differ materially from those
described in any forward-looking statements: changes in pharmaceutical market growth rates; the
loss of one or more key customer or supplier relationships; changes in customer mix; customer
delinquencies, defaults or insolvencies; supplier defaults or insolvencies; changes in
pharmaceutical manufacturers pricing and distribution policies or practices; adverse resolution of
any contract or other dispute with customers or suppliers; federal and state government enforcement
initiatives to detect and prevent suspicious orders of controlled substances and the diversion of
controlled substances; qui tam litigation for alleged violations of laws and regulations governing
the marketing, sale and purchase of pharmaceutical products or any related litigation, including
shareholder derivative lawsuits; changes in U.S. legislation or regulatory action affecting
pharmaceutical product pricing or reimbursement policies, including under Medicaid and Medicare;
changes in regulatory or clinical medical guidelines and/or labeling for the pharmaceuticals we
distribute, including certain anemia products; price inflation in branded pharmaceuticals and price
deflation in generics; greater or less than anticipated benefit from launches of the generic
versions of previously patented pharmaceutical products; significant breakdown or interruption of
our information technology systems; our inability to implement an enterprise resource planning
(ERP) system to handle business and financial processes within AmerisourceBergen Drug Corporations
operations and our corporate functions without operating problems and/or cost overruns; success of
integration, restructuring or systems initiatives; interest rate and foreign currency exchange rate
fluctuations; economic, business, competitive and/or regulatory developments in Canada, the United
Kingdom and elsewhere outside of the United States, including potential changes in Canadian
provincial legislation affecting pharmaceutical product pricing or service fees or regulatory
action by provincial authorities in Canada to lower pharmaceutical product pricing and service
fees; the impact of divestitures or the acquisition of businesses that do not perform as we expect
or that are difficult for us to integrate or control; our inability to successfully complete any
other transaction that we may wish to pursue from time to time; changes in tax legislation or
adverse resolution of challenges to our tax positions; increased costs of maintaining, or
reductions in our ability to maintain, adequate liquidity and financing sources; volatility and
deterioration of the capital and credit markets; and other economic, business, competitive, legal,
tax, regulatory and/or operational factors affecting our business generally. Certain additional
factors that management believes could cause actual outcomes and results to differ materially from
those described in forward-looking statements are set forth (i) elsewhere in this report, (ii) in
Item 1A (Risk Factors) in the Companys Annual Report on Form 10-K for the fiscal year ended
September 30, 2009 and elsewhere in that report and (iii) in other reports filed by the Company
pursuant to the Exchange Act.
33
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
The Companys most significant market risks are the effects of changing interest rates and
foreign currency risk. See the discussion under Liquidity and Capital Resources in Item 2 on
page 30.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are intended to ensure that
information required to be disclosed in the Companys reports submitted under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the SEC. These controls and procedures also are intended to ensure that information
required to be disclosed in such reports is accumulated and communicated to management to allow
timely decisions regarding required disclosures.
The Companys Chief Executive Officer and Chief Financial Officer, with the participation of
other members of the Companys management, have evaluated the effectiveness of the Companys
disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d 15(e)
under the Exchange Act) and have concluded that the Companys disclosure controls and procedures
were effective for their intended purposes as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There were no changes during the fiscal quarter ended March 31, 2010 in the Companys internal
control over financial reporting that materially affected, or are reasonably likely to materially
affect, those controls.
34
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
See Note 8 (Legal Matters and Contingencies) of the Notes to the Consolidated Financial
Statements set forth under Item 1 of Part I of this report for the Companys current description of
legal proceedings.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Issuer Purchases of Equity Securities
The following table sets forth the number of shares purchased, the average price paid per
share, the total number of shares purchased as part of publicly announced programs, and the
approximate dollar value of shares that may yet be purchased under the programs during each month
in the quarter ended March 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number of
|
|
|
Approximate Dollar
|
|
|
|
Total
|
|
|
|
|
|
|
Shares Purchased
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Average Price
|
|
|
as Part of Publicly
|
|
|
Shares that May Yet Be
|
|
|
|
Shares
|
|
|
Paid per
|
|
|
Announced
|
|
|
Purchased
|
|
Period
|
|
Purchased
|
|
|
Share
|
|
|
Programs
|
|
|
Under the Programs
|
|
January 1 to January 31
|
|
|
1,654,827
|
|
|
$
|
25.93
|
|
|
|
1,654,827
|
|
|
$
|
380,658,677
|
|
February 1 to February 28
|
|
|
2,326,638
|
|
|
$
|
27.00
|
|
|
|
2,213,035
|
|
|
$
|
320,950,633
|
|
March 1 to March 31
|
|
|
282,000
|
|
|
$
|
27.92
|
|
|
|
282,000
|
|
|
$
|
313,078,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,263,465
|
|
|
|
|
|
|
|
4,149,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a)
|
|
In November 2008, the Company announced a program to purchase up to $500 million of its
outstanding shares of common stock, subject to market conditions. During the six months
ended March 31, 2010, the Company purchased 2.8 million shares for $68.1 million to complete
its authorization under this program.
|
|
b)
|
|
In November 2009, the Company announced a new program to purchase up to $500 million of
its outstanding shares of common stock, subject to market conditions. During the six months
ended March 31, 2010, the Company purchased 7.2 million shares under this program for $186.9
million. There is no expiration date related to this new program.
|
|
c)
|
|
Employees surrendered 113,603 shares in February 2010 to meet tax-withholding obligations
upon vesting of restricted stock.
|
35
ITEM 6. Exhibits
(a) Exhibits:
The Registrant is filing Exhibits 10.2, 10.3 and 10.4 to this Report in order to include certain schedules and exhibits to those Exhibits that were not previously filed with the Exhibits.
|
|
|
|
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation of the Registrant.
|
|
|
|
|
|
|
3.2
|
|
|
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2
to the Registrants Current Report on Form 8-K filed on March 9, 2010).
|
|
|
|
|
|
|
10.1
|
|
|
Registrants 2002 Employee Stock Purchase Plan, as amended, dated as of January 1, 2010.
|
|
|
|
|
|
|
10.2
|
|
|
Receivables Sale Agreement, dated as of July 10, 2003, between AmerisourceBergen Drug
Corporation, as Originator, and Amerisource Receivables Financial Corporation, as Buyer.*
|
|
|
|
|
|
|
10.3
|
|
|
Receivables Purchase Agreement, dated as of July 10, 2003, among Amerisource Receivables
Financial Corporation, as Seller, AmerisourceBergen Drug Corporation, as Initial Servicer,
Wachovia Bank, National Association, as Administrator and various purchaser groups.*
|
|
|
|
|
|
|
10.4
|
|
|
Credit Agreement, dated as of November 14, 2006, among Registrant, JP Morgan Chase Bank,
N.A., J.P. Morgan Europe Limited, The Bank of Nova Scotia and the other financial
institutions party thereto.
|
|
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
|
|
|
|
|
32.1
|
|
|
Section 1350 Certification of Chief Executive Officer
|
|
|
|
|
|
|
32.2
|
|
|
Section 1350 Certification of Chief Financial Officer
|
|
|
|
|
|
|
101
|
|
|
Financial statements from the Quarterly Report on Form 10-Q of AmerisourceBergen
Corporation for the quarter ended March 31, 2010, formatted in Extensible Business
Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated
Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the
Notes to Consolidated Statements tagged as blocks of text.
|
|
|
|
|
|
Each marked exhibit is a management contract or a compensatory plan, contract or
arrangement in which a director or executive officer of the Registrant participates or has
participated.
|
|
*
|
|
Portions of certain exhibits to this agreement have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. Such information
has been filed separately with the Securities and Exchange Commission.
|
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
May 7, 2010
|
/s/ R. David Yost
|
|
|
R. David Yost
|
|
|
President and Chief Executive Officer
|
|
|
|
|
May 7, 2010
|
/s/ Michael D. DiCandilo
|
|
|
Michael D. DiCandilo
|
|
|
Executive Vice President and Chief Financial Officer
|
|
37
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
|
|
The Registrant is filing Exhibits 10.2, 10.3 and 10.4 to this Report in order to include certain
schedules and exhibits to those Exhibits that were not previously filed with the Exhibits.
|
|
|
|
|
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation of the Registrant.
|
|
|
|
|
|
|
3.2
|
|
|
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2
to the Registrants Current Report on Form 8-K filed on March 9, 2010).
|
|
|
|
|
|
|
10.1
|
|
|
Registrants 2002 Employee Stock Purchase Plan, as amended, dated as of January 1, 2010.
|
|
|
|
|
|
|
10.2
|
|
|
Receivables Sale Agreement, dated as of July 10, 2003, between AmerisourceBergen Drug
Corporation, as Originator, and Amerisource Receivables Financial Corporation, as Buyer.*
|
|
|
|
|
|
|
10.3
|
|
|
Receivables Purchase Agreement, dated as of July 10, 2003, among AmeriSource Receivables
Financial Corporation, as Seller, AmerisourceBergen Drug Corporation, as Initial Servicer,
Wachovia Bank, National Association, as Administrator and various purchaser groups.*
|
|
|
|
|
|
|
10.4
|
|
|
Credit Agreement, dated as of November 14, 2006, among Registrant, JP Morgan Chase Bank,
N.A., J.P. Morgan Europe Limited, The Bank of Nova Scotia and the other financial
institutions party thereto.
|
|
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
|
|
|
|
|
32.1
|
|
|
Section 1350 Certification of Chief Executive Officer
|
|
|
|
|
|
|
32.2
|
|
|
Section 1350 Certification of Chief Financial Officer
|
|
|
|
|
|
|
101
|
|
|
Financial statements from the Quarterly Report on Form 10-Q of AmerisourceBergen
Corporation for the quarter ended March 31, 2010, formatted in Extensible Business Reporting
Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of
Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to
Consolidated Statements tagged as blocks of text.
|
|
|
|
|
|
Each marked exhibit is a management contract or a compensatory plan, contract or
arrangement in which a director or executive officer of the Registrant participates or has
participated.
|
|
*
|
|
Portions of certain exhibits to this agreement have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission. Such
information has been filed separately with the Securities and Exchange Commission.
|
38
PORTIONS
OF CERTAIN EXHIBITS TO THIS AGREEMENT HAVE BEEN OMITTED AND WILL BE
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A CONFIDENTIAL TREATMENT REQUEST
EXHIBIT 10.2
RECEIVABLES SALE AGREEMENT
DATED AS OF JULY 10, 2003
between
AMERISOURCEBERGEN DRUG CORPORATION,
as
O
riginator
,
and
AMERISOURCE RECEIVABLES FINANCIAL CORPORATION,
as
B
uyer
|
|
|
|
|
ARTICLE 1 AMOUNTS AND TERMS OF THE PURCHASE
|
|
|
1
|
|
Section 1.1 Initial Contribution of Receivables
|
|
|
1
|
|
Section 1.2 Purchase of Receivables
|
|
|
1
|
|
Section 1.3 Payment for the Purchases
|
|
|
2
|
|
Section 1.4 Purchase Price Credit Adjustments
|
|
|
3
|
|
Section 1.5 Payments and Computations, Etc
|
|
|
4
|
|
Section 1.6 License of Software
|
|
|
4
|
|
Section 1.7 Characterization
|
|
|
5
|
|
ARTICLE 2 REPRESENTATIONS AND WARRANTIES
|
|
|
5
|
|
Section 2.1 Representations and Warranties of Originator
|
|
|
5
|
|
Section 2.2 Representations and Warranties of Originator Concerning the Receivables
|
|
|
8
|
|
ARTICLE 3 CONDITIONS OF PURCHASE
|
|
|
9
|
|
Section 3.1 Conditions Precedent to Purchase
|
|
|
9
|
|
Section 3.2 Conditions Precedent to Subsequent Payments
|
|
|
10
|
|
ARTICLE 4 COVENANTS
|
|
|
10
|
|
Section 4.1 Covenants of Originator
|
|
|
10
|
|
Section 4.2 Negative Covenants of Originator
|
|
|
14
|
|
ARTICLE 5 TERMINATION EVENTS
|
|
|
16
|
|
Section 5.1 Termination Events
|
|
|
16
|
|
Section 5.2 Remedies
|
|
|
17
|
|
ARTICLE 6 INDEMNIFICATION
|
|
|
17
|
|
Section 6.1 Indemnities by Originator
|
|
|
17
|
|
Section 6.2 Other Costs and Expenses
|
|
|
19
|
|
ARTICLE 7 MISCELLANEOUS
|
|
|
19
|
|
Section 7.1 Waivers and Amendments
|
|
|
19
|
|
Section 7.2 Notices
|
|
|
19
|
|
Section 7.3 Protection of Ownership Interests of Buyer
|
|
|
19
|
|
Section 7.4 Confidentiality
|
|
|
20
|
|
Section 7.5 Bankruptcy Petition
|
|
|
21
|
|
Section 7.6 Limitation of Liability
|
|
|
21
|
|
Section 7.7 CHOICE OF LAW
|
|
|
21
|
|
Section 7.8 CONSENT TO JURISDICTION
|
|
|
21
|
|
Section 7.9 WAIVER OF JURY TRIAL
|
|
|
21
|
|
Section 7.10 Integration; Binding Effect; Survival of Terms
|
|
|
22
|
|
Section 7.11 Counterparts; Severability; Section References
|
|
|
22
|
|
i
E
xhibits and
S
chedules
|
|
|
|
|
|
|
|
|
Exhibit I
|
|
|
|
|
|
Definitions
|
Exhibit II
|
|
|
|
|
|
Principal Place of Business; Location(s) of Records; Federal Employer Identification Number; Other Names
|
Exhibit III
|
|
|
|
|
|
Lock-Boxes; Collection Accounts; Collection Banks
|
Exhibit IV
|
|
|
|
|
|
Form of Compliance Certificate
|
Exhibit V
|
|
|
|
|
|
Copy of Credit and Collection Policy
|
Exhibit VI
|
|
|
|
|
|
Form of Subordinated Note
|
Exhibit VII
|
|
|
|
|
|
Form of Purchase Report
|
Exhibit VIII
|
|
|
|
|
|
Pending or Threatened Actions, Suits, Investigations or Proceedings
|
Schedule A
|
|
|
|
|
|
List of Documents to be Delivered to Buyer Prior to the Purchases
|
ii
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT,
dated as of July 10, 2003, is by and between
AmerisourceBergen Drug Corporation, a Delaware corporation (
Originator
), and Amerisource
Receivables Financial Corporation, a Delaware corporation (
Buyer
).
Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in
Exhibit I
hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such term
in Exhibit I to the Purchase Agreement).
PRELIMINARY STATEMENTS
Originator now owns, and from time to time hereafter will own, Receivables. Originator
wishes to sell and assign to Buyer, and Buyer wishes to purchase from Originator, all of
Originators right, title and interest in and to its Receivables, together with the Related
Security and Collections with respect thereto.
Originator and Buyer intend the transactions contemplated hereby to be true sales to
Buyer by Originator of the Receivables originated by it, providing Buyer with the full
benefits of ownership of such Receivables, and neither the Originator nor Buyer intends these
transactions to be, or for any purpose to be characterized as, loans from Buyer to Originator.
Following the purchase of Receivables from Originator, Buyer will sell undivided
interests therein and in the associated Related Security and Collections pursuant to that
certain Receivables Purchase Agreement dated as of July 10, 2003 (as the same may from time to
time hereafter be amended, supplemented, restated or otherwise modified, the
Purchase
Agreement
) among Buyer, Originator, as initial Servicer, the various Purchaser Groups from
time to time party thereto (collectively, the
Purchasers
), and Wachovia Bank, National
Association, as administrator for each Purchaser Group, or any successor administrator
appointed pursuant to the terms of the Purchase Agreement, (in such capacity, the
Administrator
).
NOW, THEREFORE,
in consideration of the foregoing premises and the mutual agreements herein
contained and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1
Initial Contribution of Receivables
. On the date hereof, Originator does
hereby contribute, assign, transfer, set-over and otherwise convey to Buyer, and Buyer does hereby
accept from Originator, Receivables originated by Originator and existing as of the close of
business on the Business Day immediately prior to the date hereof (the
Initial Cutoff Date
)
having an aggregate Outstanding Balance of $2,019,745,773 (the
Initial Contributed Receivables
),
together with all Related Security relating thereto and all Collections thereof.
Section 1.2
Purchase of Receivables
. (a) Effective on the date hereof, in
consideration for the Purchase Price paid to Originator and upon the terms and subject to the
conditions set forth herein, Originator does hereby sell, assign, transfer, set-over and otherwise
convey to Buyer, without recourse (except to the extent expressly provided herein), and Buyer does
hereby purchase from Originator, all of Originators right, title and interest in and to all
Receivables originated by Originator and existing as of the close of business on the Initial Cutoff
Date (other than the Initial Contributed Receivables) and all Receivables thereafter originated by
Originator through and including the Termination Date, together, in each case, with all Related
Security relating thereto and all Collections thereof. In accordance with the preceding sentence,
on the date hereof Buyer shall acquire all of Originators right, title and interest in and to all
Receivables existing as of the Initial Cutoff Date (other than the Initial Contributed Receivables)
and thereafter arising through and including the Termination Date, together with all Related
Security relating thereto and all Collections thereof. Buyer shall be obligated to pay the Purchase
Price for the Receivables purchased hereunder from Originator in accordance with
Section
1.3
.
1
(b) On the 20
th
day of each month hereafter (or if any such day is not a Business
Day, on the next succeeding Business Day thereafter, Originator shall (or shall require the
Servicer to) deliver to Buyer a report in substantially the form of Exhibit VII hereto (each such
report being herein called a
Purchase Report
) with respect to the Receivables sold by Originator
to Buyer during the Settlement Period then most recently ended. In addition to, and not in
limitation of, the foregoing, in connection with the payment of the Purchase Price for any
Receivables purchased hereunder, Buyer may request that Originator deliver, and Originator shall
deliver, such approvals, opinions, information or documents as Buyer may reasonably request.
(c) It is the intention of the parties hereto that each Purchase of Receivables from
Originator made hereunder shall constitute a sale, which sale is absolute and irrevocable and
provides Buyer with the full benefits of ownership of the Receivables originated by Originator.
Except for the Purchase Price Credits owed to Buyer pursuant to
Section 1.4
, the sale of
Receivables hereunder by Originator is made without recourse to Originator;
provided, however,
that
(i) Originator shall be liable to Buyer for all representations, warranties, covenants and
indemnities made by Originator pursuant to the terms of the Transaction Documents to which
Originator is a party, and (ii) such sale does not constitute and is not intended to result in an
assumption by Buyer or any assignee thereof of any obligation of Originator or any other Person
arising in connection with the Receivables, the related Contracts and/or other Related Security or
any other obligations of Originator. In view of the intention of the parties hereto that each
Purchase of Receivables made hereunder shall constitute a sale of such Receivables rather than
loans secured thereby, Originator agrees that it will, on or prior to the date hereof and in
accordance with
Section 4.1(e)(B)(x)
, mark its Aged Trial Balance with a legend in
substantially the form set forth on Exhibit XVI to the Purchase Agreement, evidencing that Buyer
has purchased such Receivables as provided in this Agreement and to note in its financial
statements that its Receivables have been sold to Buyer. Upon the request of Buyer or the
Administrator (as Buyers assignee), Originator will execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such other instruments
or notices, as may be necessary or appropriate to perfect and maintain the perfection of Buyers
ownership interest in the Receivables originated by Originator and the Related Security and
Collections with respect thereto, or as Buyer or the Administrator (as Buyers assignee) may
reasonably request.
Section 1.3
Payment for the Purchases
. (a) The Purchase Price for the Purchase from
Originator of its Receivables in existence as of the close of business on the Initial Cutoff Date
(other than the Initial Contributed Receivables) shall be payable in full by Buyer to Originator on
the date hereof, and shall be paid to Originator in the following manner:
(i) by delivery of immediately available funds, to the extent of funds made available to
Buyer in connection with its subsequent sale of an interest in such Receivables to the
Purchasers under the Purchase Agreement;
provided that
a portion of such funds shall be offset
by amounts owed by Originator to Buyer on account of the issuance of equity having a total
value of not less than the Required Capital Amount, and
(ii) the balance, by delivery of the proceeds of a subordinated revolving loan from
Originator to Buyer (a
Subordinated Loan
) in an amount not to exceed the least of (A) the
remaining unpaid portion of such Purchase Price, (B) the maximum Subordinated Loan that could
be borrowed without rendering Buyers Net Worth less than the Required Capital Amount, and (C)
fifteen percent (15%) of such Purchase Price. Originator is hereby authorized by Buyer to
endorse on the schedule attached to its Subordinated Note an appropriate notation evidencing
the date and amount of each advance thereunder, as well as the date of each payment with
respect thereto,
provided that
the failure to make such notation shall not affect any
obligation of Buyer thereunder.
2
The Purchase Price for each Receivable coming into existence after the Initial Cutoff Date shall be
due and owing in full by Buyer to Originator or its designee on the date each such Receivable came
into existence (except that Buyer may, with respect to any such Purchase Price, offset against such
Purchase Price any amounts owed by Originator to Buyer hereunder and which have become due but
remain unpaid) and shall be paid to Originator in the manner provided in the following paragraphs
(b), (c) and (d).
(b) With respect to any Receivables coming into existence after the Initial Cutoff Date, on
each Settlement Date, Buyer shall pay Originator the Purchase Price therefor in accordance with
Section 1.3(d)
and in the following manner:
first
, by delivery to Originator or its designee of immediately available funds, to the
extent of funds available to Buyer from its subsequent sale of an interest in all of the
Receivables to the Administrator for the benefit of the Purchasers under the Purchase
Agreement or other cash on hand;
second
, by delivery to Originator or its designee of the proceeds of a Subordinated Loan,
provided that
the making of any such Subordinated Loan shall be subject to the provisions set
forth in
Section 1.3(a)(ii)
; and
third
, solely in the case of Receivables originated by Originator, unless the Termination
Date has occurred in accordance with this Agreement, by accepting a contribution to its
capital in an amount equal to the remaining unpaid balance of such Purchase Price.
Subject to the limitations set forth in
Section 1.3(a)(ii)
, Originator irrevocably agrees
to advance each Subordinated Loan requested by Buyer on or prior to the Termination Date. The
Subordinated Loans owing to Originator shall be evidenced by, and shall be payable in accordance
with the terms and provisions of its Subordinated Note and shall be payable solely from funds which
Buyer is not required under the Purchase Agreement to set aside for the benefit of, or otherwise
pay over to, the Purchasers.
(c) From and after the Termination Date, (i) Originator shall not be obligated to (but may, at
its option) sell Receivables to Buyer, or (ii) Originator shall not be obligated to (but may, at
its option) contribute Receivables to Buyers capital pursuant to clause
third
of
Section
1.3(b)
.
(d) Although the Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and payable in full by Buyer to Originator on the date such Receivable
came into existence, settlement of the Purchase Price between Buyer and Originator shall be
effected on a monthly basis on Settlement Dates with respect to all Receivables originated by
Originator during the same Calculation Period and based on the information contained in the
Purchase Report delivered by Originator for the Calculation Period then most recently ended.
Although settlement shall be effected on Settlement Dates, increases or decreases in the amount
owing under the Subordinated Note made pursuant to
Section 1.3
and any contribution of
capital by Originator to Buyer made pursuant to
Section 1.3(b)
shall be deemed to have
occurred and shall be effective as of the last Business Day of the Calculation Period to which such
settlement relates.
Section 1.4
Purchase Price Credit Adjustments
. If on any day:
(a) the Outstanding Balance of any Receivable is reduced or cancelled as a result of any
credit issued for returned or repossessed goods, any shortages, any pricing adjustment, any volume
rebate or any other allowance, adjustment or deduction by Originator or any Affiliate thereof, or
as a result of any governmental or regulatory action, or
3
(b) the Outstanding Balance of any Receivable is reduced or canceled as a result of a setoff
in respect of any claim by the Obligor thereof (whether such claim arises out of the same or a
related or an unrelated transaction), or
(c) the Outstanding Balance of any Receivable is reduced on account of the obligation of
Originator or any Affiliate thereof to pay to the related Obligor any rebate or refund, or
(d) the Outstanding Balance of any Receivable is less than the amount included in calculating
the Net Pool Balance for purposes of any Settlement Report (for any reason other than receipt of
Collections or such Receivable becoming a Defaulted Receivable), or
(e) any of the representations or warranties of Originator with respect to any Receivable set
forth in Article II were not true when made,
then, in such event, Buyer shall be entitled to a credit (each, a
Purchase Price Credit
) against
the Purchase Price otherwise payable to Originator hereunder equal to the Outstanding Balance of
such Receivable (calculated before giving effect to the applicable reduction or cancellation). If
such Purchase Price Credit exceeds the Original Balance of the Receivables originated by Originator
on any day, Originator shall pay the remaining amount of such Purchase Price Credit in cash
immediately,
provided that
if the Termination Date has not occurred, Originator shall be allowed to
deduct the remaining amount of such Purchase Price Credit from any indebtedness owed to it under
its Subordinated Note.
Section 1.5
Payments and Computations, Etc
. All amounts to be paid or deposited by
Buyer hereunder shall be paid or deposited in accordance with the terms hereof on the day when due
in immediately available funds to the account of Originator designated from time to time by
Originator or as otherwise directed by Originator. In the event that any payment owed by any Person
hereunder becomes due on a day that is not a Business Day, then such payment shall be made on the
next succeeding Business Day. If any Person fails to pay any amount hereunder when due, such Person
agrees to pay, on demand, the Default Fee in respect thereof until paid in full;
provided, however,
that such Default Fee shall not at any time exceed the maximum rate permitted by applicable law.
All computations of interest payable hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the last day) elapsed.
Section 1.6
License of Software
. (a) To the extent that any software used by
Originator to account for the Receivables originated by it is non-transferable, Originator hereby
grants to each of Buyer, the Administrator and the Servicer an irrevocable, non-exclusive license
to use, without royalty or payment of any kind, all such software used by Originator to account for
such Receivables, to the extent necessary to administer such Receivables, whether such software is
owned by Originator or is owned by others and used by Originator under license agreements with
respect thereto,
provided that
should the consent of any licensor of such software be required for
the grant of the license described herein, to be effective, Originator hereby agrees that upon the
request of Buyer (or Buyers assignee), Originator will use its reasonable efforts to obtain the
consent of such third-party licensor. The license granted hereby shall be irrevocable until the
later to occur of (i) indefeasible payment in full of the Aggregate Unpaids (as defined in the
Purchase Agreement), and (ii) the date each of this Agreement and the Purchase Agreement terminates
in accordance with its terms.
(b) Originator (i) shall take such action requested by Buyer and/or the Administrator (as
Buyers assignee), from time to time hereafter, that may be necessary or appropriate to ensure that
Buyer and its assigns under the Purchase Agreement have an enforceable ownership interest in the
Records relating to the Receivables purchased from Originator hereunder, and (ii) shall use its
reasonable efforts to ensure that Buyer, the Administrator and the Servicer each has an enforceable
right (whether by license or sublicense or otherwise) to use all of the computer software used to
account for such Receivables and/or to recreate such Records.
4
Section 1.7
Characterization
. If, notwithstanding the intention of the parties
expressed in
Section 1.2(c)
, any sale or contribution by Originator to Buyer of Receivables
hereunder shall be characterized as a secured loan and not a sale or such sale shall for any reason
be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without being in derogation
of the parties intention that the sale of Receivables by Originator hereunder shall constitute a
true sale thereof, Originator hereby grants to Buyer a duly perfected security interest in all of
Originators right, title and interest in, to and under all Receivables of Originator which are now
existing or hereafter arising, all Collections and Related Security with respect thereto, each
Lock-Box and Collection Account, all other rights and payments relating to such Receivables and all
proceeds of the foregoing to secure the prompt and complete payment of a loan deemed to have been
made in an amount equal to the Purchase Price of the Receivables purchased from Originator together
with all other obligations of Originator hereunder, which security interest shall be prior to all
other Adverse Claims thereto. Buyer and its assigns shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies provided to a
secured creditor under the UCC and other applicable law, which rights and remedies shall be
cumulative.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Section 2.1
Representations and Warranties of Originator
. Originator hereby represents
and warrants to Buyer on the date hereof, on the date of the Purchase from Originator hereunder and
on each date that any Receivable is originated by Originator or on or after the date of such
Purchase, that:
(a)
Organization and Qualification
. Originator is a corporation duly organized,
validly existing and in good standing under the Laws of Delaware. Originator is duly qualified to
do business as a foreign corporation in good standing in each jurisdiction in which the ownership
of its properties or the nature of its activities (including transactions giving rise to
Receivables), or both, requires it to be so qualified or, if not so qualified, the failure to so
qualify would not have a material adverse effect on its financial condition or results of
operations or any Receivables.
(b)
Authority
. Originator has the legal power and authority to execute and deliver
this Agreement and each other Transaction Document, to make the sales provided for herein and to
perform its obligations under this Agreement and the other Transaction Documents.
(c)
Execution and Binding Effect
. Each of this Agreement and the other Transaction
Documents to which Originator is a party has been duly executed and delivered by Originator and
(assuming the due and valid execution and delivery thereof by the other parties thereto),
constitutes the legal, valid and binding obligation of Originator, enforceable against Originator
in accordance with their respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other similar Laws of general application relating to or
affecting the enforcement of creditors rights generally or by general principles of equity and
will vest absolutely and unconditionally in the Buyer, a valid undivided ownership interest in the
Receivables, the Related Security, the Collections and the related Proceeds (the
Purchased
Assets
) purported to be assigned thereby, subject to no Liens whatsoever. Upon the filing of
the necessary financing statements under the UCC as in effect in the jurisdiction whose Law governs
the perfection of the Buyers ownership interests in the Purchased Assets, the Buyers ownership
interests in the Purchased Assets will be perfected under Article Nine of such UCC, prior to and
enforceable against all creditors of and purchasers from Originator and all other Persons
whatsoever (other than the Buyer and its successors and assigns).
5
(d)
Authorizations and Filings
. No authorization, consent, approval, license,
exemption or other action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary or, in the opinion of Originator, advisable
in connection with the execution and delivery by Originator of this Agreement and each of the other
Transaction Documents to which Originator is a party, the consummation by Originator of the
transactions herein or therein contemplated or the performance by Originator of or the compliance
by Originator with the terms and conditions hereof or thereof, to ensure the legality, validity or
enforceability hereof or thereof, or to ensure that the Buyer will have a valid undivided ownership
interest in and to the Receivables, the Related Security, the Collections and the related Proceeds
which is perfected and prior to all other Liens (including competing ownership interests), other
than the filing of financing statements under the UCC in the jurisdiction of Originators Location.
(e)
Location of Chief Executive Office, etc
. As of the date hereof: (i) Originators
Chief Executive Office is located at the address for notices set forth on the signature page
hereof; (ii) Originator has only the Subsidiaries and divisions listed on Exhibit II hereto; (iii)
the offices where Originator keeps all of its Records with respect to any Receivables are listed on
Exhibit II hereto; and (iv) Originator has, within the last 5 years, operated only under the trade
names identified in Exhibit II hereto, and, within the last 5 years, has not changed its name,
merged or consolidated with any other corporation or been the subject of any proceeding under Title
11, United States Code (Bankruptcy), except as disclosed in Exhibit II hereto.
(f)
Perfection
. This Agreement, together with the filing of the financing statements
contemplated hereby, is effective to transfer to Buyer (and Buyer shall acquire from Originator)
(i) legal and equitable title to, with the right to sell and encumber each Receivable, its Related
Security, Collections and related Proceeds originated by Originator, whether now existing and
hereafter arising, together with the Collections with respect thereto, and (ii) all of Originators
right, title and interest in the Related Security associated with each such Receivable, in each
case, free and clear of any Adverse Claim, except as created by the Transactions Documents. There
have been duly filed all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyers ownership
interest in such Receivables, the Related Security, Collections and Proceeds. Originators
jurisdiction of organization is a jurisdiction whose law generally requires information concerning
the existence of a nonpossessory security interest to be made generally available in a filing,
record or registration system as a condition or result of such a security interests obtaining
priority over the rights of a lien creditor which respect to collateral.
(g)
Absence of Conflicts
. Neither the execution and delivery by Originator of this
Agreement and each of the Transaction Documents to which it is a party, nor the consummation by
Originator of the transactions herein or therein contemplated, nor the performance by Originator of
or the compliance by Originator with the terms and conditions hereof or thereof, will (i) violate
any Law or (ii) conflict with or result in a breach of or a default under (A) the certificate of
incorporation or by-laws of Originator or (B) any agreement or instrument, including, without
limitation, any and all indentures, debentures, loans or other agreements to which Originator is a
party or by which it or any of its properties (now owned or hereafter acquired) may be subject or
bound, which would have a material adverse effect on the financial position or results of
operations of Originator or result in rendering any debt evidenced thereby due and payable prior to
its maturity or result in the creation or imposition of any Lien pursuant to the terms of any such
instrument or agreement upon any property (now owned or hereafter acquired) of Originator.
Originator has not entered into any agreement with any Obligor prohibiting, restricting or
conditioning the assignment of any portion of the Receivables.
(h)
Accurate and Complete Disclosure
. No information furnished in writing by a
Responsible Officer of Originator pursuant to or in connection with this Agreement or any
transaction contemplated hereby is false or misleading in any material respect as of the date of
which such information was furnished (including by omission of material information necessary to
make such information not misleading).
6
(i)
No Proceedings
. Except as set forth in Exhibit VIII, there are no actions, suits,
investigations or proceedings pending, or to the knowledge of Originator, threatened, against or
affecting Originator or its properties in or before any Official Body which (i) seeks any
determination or ruling that might materially adversely affect (A) the performance by Originator of
its obligations under this Agreement or the Transaction Documents or (B) the validity or
enforceability of this Agreement, the Transaction Documents, the Contracts or any material amount
of the Receivables, (ii) asserts the invalidity of this Agreement or any of the other Transaction
Documents, or (iii) seeks to prevent the consummation of the transactions contemplated hereby or
thereby.
(j)
Bulk Sales Act
. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(k)
Litigation
. No injunction, decree or other decision has been issued or made by any
Official Body that prevents, and to the knowledge of Originator, no threat by any Person has been
made to attempt to obtain any such decision that would have a material adverse impact on, the
conduct by Originator of a significant portion of Originators business operations or any portion
of its business operations affecting the Receivables, the Related Security, the Collections and the
related Proceeds, and no litigation, investigation or proceeding exists asserting the invalidity of
the Transaction Documents, seeking to prevent the consummation of any transactions contemplated by
the Transaction Documents, or seeking any determination or ruling that might materially and
adversely affect (A) the performance by Originator of its obligations under the Transaction
Documents or (B) the validity or enforceability of the Transaction Documents, the Contracts or a
material amount of the Receivables. Originator has paid on a timely basis all of its obligations
arising out of judgments, proceedings or investigations except those which it is appealing in good
faith.
(l)
Margin Regulations
. The use of all funds acquired by Originator under this
Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the
Board of Governors of the Federal Reserve System as the same may be amended, supplemented or
otherwise modified from time to time.
(m)
Taxes
. Originator has timely filed all United States federal income tax returns
and all other material tax returns which are required to be filed by it and has paid all taxes due
pursuant to such returns and paid or contested any assessment received by Originator related to
such returns.
(n)
Books and Records
. Originator has indicated on its books and records (including
any computer files) that the Receivables, the Related Security, the Collections and the related
Proceeds are the property of the Buyer. Originator maintains at, or shall cause the Servicer to
maintain at, one or more of their respective offices listed on Exhibit II hereto the complete
records for the Receivables.
(o)
Creditor Approval
. Originator has obtained from its creditors (i) all approvals
necessary to sell and assign the Receivables, the Related Security, the Collections and the related
Proceeds and (ii) releases of any security interests in the Receivables, the Related Security, the
Collections and the related Proceeds.
(p)
Financial Condition
. Originator is not insolvent or the subject of any Event of
Bankruptcy and the sale of the Receivables on such day will not be made in contemplation of the
occurrence thereof.
(q)
Financial Information
. If and when produced in accordance with the terms of this
Agreement, the consolidated balance sheet of Originator as of the most recent Fiscal Year end and
the related statements of income of Originator for the Fiscal Year then ended, fairly present the
consolidated financial position of Originator as of such date and the consolidated results of the
operations, all in accordance with GAAP.
7
(r)
Investment Company
. Originator is not an investment company or a company
controlled by an investment company within the meaning of the Investment Company Act of 1940,
as amended. Originator is not a
holding company
or a
subsidiary holding company
of a
holding
company
within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any
successor statute.
(s)
ERISA
. No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is reasonably expected to
occur, could reasonably be expected to result in a material adverse effect on the business,
financial condition, operations or properties of the Originator and ERISA Affiliates taken as a
whole. The present value of all accumulated benefit obligations under each Pension Plan (based on
the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such amounts, exceed by more than
$25,000,000 the fair market value of the assets of such Pension Plan, and the present value of all
accumulated benefit obligations of all underfunded Pension Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Pension Plans.
(t)
Separate Corporate Existence
. Originator is entering into the transactions
contemplated by this Agreement in reliance on the Buyers identity as a separate legal entity from
Originator and each of its Affiliates, and acknowledges that the Buyer and the other parties to the
Transaction Documents are similarly entering into the transactions contemplated by the other
Transaction Documents in reliance on the Buyers identity as a separate legal entity from
Originator and each such other Affiliate. Originator has at all times complied with Section 4.1(r).
(u)
No Fraudulent Conveyance
. The transactions contemplated by this Agreement and by
each of the Facility Documents are being consummated by Originator in furtherance of Originators
ordinary business, with no contemplation of insolvency and with no intent to hinder, delay or
defraud any of its present or future creditors. By its receipt of the Purchase Price hereunder and
its ownership of the capital stock of the Buyer, Originator shall have received reasonably
equivalent value for the Purchased Assets sold or otherwise conveyed to the Buyer under this
Agreement. No transfer hereunder by Originator of any Receivable originated by Originator is or may
be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101
et seq.
), as
amended.
(v)
Ownership of Buyer
. Originator owns, directly or indirectly, 100% of the issued
and outstanding equity interests of Buyer. Such equity interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire securities of Buyer.
(w)
Compliance with Law
. Originator has complied in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may
be subject, except where the failure to so comply could not reasonably be expected to have a
material adverse effect on its financial condition or results of operations or any Receivables.
Section 2.2
Representations and Warranties of Originator Concerning the Receivables
.
By selling Receivables to the Buyer on each Purchase Date, Originator hereby represents and
warrants to Buyer on the date hereof, on the date of the Purchase from Originator hereunder and on
each date that any Receivable is originated by Originator or on or after the date of such Purchase,
that:
(a)
Assignment
. This Agreement vests in the Buyer all the right, title and interest of
Originator in and to the Receivables, the Related Security, the Collections and Proceeds, and
constitutes a valid sale of the Receivables, enforceable against, and creating an interest prior in
right to, all creditors of and purchasers from Originator.
8
(b)
No Liens
. Each Receivable, together with the related Contract and all purchase
orders and other agreements related to such Receivable, is owned by Originator free and clear of
any Lien. When the Buyer makes a purchase of a Receivable it shall have acquired and shall continue
to have maintained an ownership interest in such Receivable and in the Related Security, the
Collections and Proceeds with respect thereto free and clear of any Lien (other than the Lien
arising in connection with this Agreement). Originator has not and will not prior to the time of
the sale of any such interest to the Buyer have sold, pledged, assigned, transferred or subjected
to a Lien any of the Receivables, the Related Security, the Collections, and Proceeds other than in
accordance with the terms of this Agreement.
(c)
Filings
. On or prior to each Purchase Date, all financing statements and other
documents required to be recorded or filed in order to perfect and protect the Receivables, the
Related Security, the Collections, and Proceeds against all creditors of and purchasers from
Originator and all other Persons whatsoever have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any, payable in connection with such filings
have been paid in full.
(d)
Credit and Collection Policy
. Originators Credit and Collection Policy has been
complied with in all material respects in regard to each Receivable and related Contract. Neither
Originator nor any other Person has extended or modified the terms of any Receivable or the related
Contract except in accordance with Originators Credit and Collection Policy.
(e)
Nature of Receivables
. Each Receivable is, or will be, an eligible asset within
the meaning of Rule 3a-7 promulgated under the Investment Company Act of 1940, as amended from time
to time.
(f)
Bona Fide Receivables
. Each Receivable is an obligation of an Obligor arising out
of a past, current or future sale or performance by Originator, in accordance with the terms of the
Contract giving rise to such Receivable. Originator has no knowledge of any fact that should have
led it to expect at the time of the initial creation of an interest in any Receivable hereunder
that such Receivable would not be paid in full when due except with respect to any Dilution. Each
Receivable classified as an Eligible Receivable by Originator in any document or report delivered
hereunder satisfies the requirements of eligibility contained in the definition of Eligible
Receivable at the time such document or report was delivered.
(g)
Collections
. The conditions and requirements set forth in
Section 4.1(x)
have at all times been satisfied and duly performed. The names and addresses of all Collection
Banks, together with the account numbers of the Collection Accounts of Originator at each
Collection Bank and the post office box number of each Lock-Box, are listed on
Exhibit III
.
Originator has not granted any Person, other than Buyer (and its assigns) dominion and control of
any Lock-Box or Collection Account, or the right to take dominion and control of any such Lock-Box
or Collection Account at a future time or upon the occurrence of a future event.
(h)
Eligible Receivables
. Each Receivable reflected in any Purchase Report as an
Eligible Receivable was an Eligible Receivable on the date of its acquisition by Buyer hereunder.
ARTICLE 3
CONDITIONS OF PURCHASE
Section 3.1
Conditions Precedent to Purchase
. The Purchases under this Agreement is
subject to the conditions precedent that (a) Buyer shall have been capitalized with the Initial
Contributed Receivables, (b) Buyer shall have received on or before the date of such purchase those
documents listed on
Schedule A
and (c) all of the conditions to the initial purchase under
the Purchase Agreement shall have been satisfied or waived in accordance with the terms thereof.
9
Section 3.2
Conditions Precedent to Subsequent Payments
. Buyers obligation to pay for
Receivables coming into existence after the Initial Cutoff Date shall be subject to the further
conditions precedent that: (a) the Facility Termination Date shall not have occurred under the
Purchase Agreement; (b) Buyer (or its assigns) shall have received such other approvals, opinions
or documents as it may reasonably request and (c) on the date such Receivable came into existence,
the following statements shall be true (and acceptance of the proceeds of any payment for such
Receivable shall be deemed a representation and warranty by Originator that such statements are
then true):
(i) the representations and warranties set forth in
Article II
are true and
correct on and as of the date such Receivable came into existence as though made on and as of
such date; and
(ii) no event has occurred and is continuing that will constitute a Termination Event or
an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase Price for any
Receivable (whether by payment of cash, through an increase in the amounts outstanding under the
Subordinated Note, by offset of amounts owed to Buyer and/or by offset of capital contributions),
title to such Receivable and the Related Security and Collections with respect thereto shall vest
in Buyer, whether or not the conditions precedent to Buyers obligation to pay for such Receivable
were in fact satisfied. The failure of Originator to satisfy any of the foregoing conditions
precedent, however, shall give rise to a right of Buyer to rescind the related purchase and direct
Originator to pay to Buyer an amount equal to the Purchase Price payment that shall have been made
with respect to any Receivables related thereto.
ARTICLE 4
COVENANTS
Section 4.1
Covenants of Originator
. Until the date on which this Agreement terminates
in accordance with its terms, Originator hereby covenants as set forth below:
(a)
Notice of Material Adverse Change
. Promptly upon becoming aware thereof,
Originator shall give the Buyer notice of any material adverse change in the business, operations
or financial condition of Originator which reasonably could affect adversely the collectibility of
the Receivables.
(b)
Preservation of Corporate Existence
. Originator shall preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation,
and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of the Buyer hereunder or (ii)
the ability of Originator to perform its obligations under the Transaction Documents.
(c)
Compliance with Laws
. Originator shall comply in all material respects with all
Laws applicable to Originator, its business and properties, and all Receivables.
(d)
Enforceability of Obligations
. Originator shall take such actions as are
reasonable and within its power to ensure that, with respect to each Receivable, the obligation of
any related Obligor to pay the unpaid balance of such Receivable in accordance with the terms of
the related Contract remains legal, valid, binding and enforceable against such Obligor.
10
(e)
Books and Records
. Originator shall, to the extent practicable, maintain and
implement administrative and operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables in the event of the destruction of the originals thereof),
and keep and maintain or obtain, as and when required, all documents, books, records and other
information reasonably necessary or advisable for the collection of all Receivables (including,
without limitation, records adequate to permit the daily identification of all Collections of and
adjustments to each existing Receivable). Originator will (A) on or prior to the date hereof, mark
its Aged Trial Balance with a legend in substantially the form set forth on Exhibit XVI to the
Purchase Agreement and (B) upon the request of the Administrator or any Purchaser Agent following
the occurrence of a Termination Event: (x) mark each Contract with a legend describing the
Administrators security interest and (y) deliver to the Administrator all Contracts (including,
without limitation, all multiple originals of any such Contract constituting an instrument, a
certificated security or chattel paper) relating to the Receivables.
(f)
Obligor List
. Originator shall at all times maintain a current list (which may be
stored on magnetic tapes or disks) of all Obligors under Contracts related to Receivables,
including the name, address and account number of each such Obligor.
(g)
Litigation
. As soon as possible, and in any event within ten Business Days of
Originators knowledge thereof, Originator shall give the Buyer notice of (i) any litigation,
investigation or proceeding against Originator which may exist at any time which could have a
material adverse effect on the financial condition or results of operations of Originator,
materially impair the ability of Originator to perform its obligations under this Agreement, or
materially adversely affect the collectibility of the Receivables and (ii) any material adverse
development in any such previously disclosed litigation.
(h)
Notice of Relocation
. Originator shall give the Buyer and the Administrator 45
days prior written notice of any relocation of its Chief Executive Office or any office where
records are kept;
provided
that such 45 day notice need not be given by Originator in
connection with the relocation of Originators Chief Executive Office to 1300 Morris Drive,
Chesterbrook, PA 19087. Originator will at all times maintain its Chief Executive Office within a
jurisdiction in the United States in which Article Nine of the UCC (1972 or later version) is in
effect as of the date hereof or the date of any such relocation and in the event it moves its Chief
Executive Office to a location which may charge taxes, fees, costs, expenses or other charges to
perfect the interests of the Buyer in the Receivables, it shall pay all taxes, fees, costs,
expenses and other charges associated with perfecting the interests of the Buyer in the Receivables
and any other costs and expenses incurred in order to maintain the enforceability of this Agreement
and the interest of the Buyer in the Receivables.
(i)
Further Information
. Originator shall furnish or cause to be furnished to the
Buyer such other information as promptly as practicable, and in such form and detail, as the Buyer
may reasonably request.
(j)
Fees, Taxes and Expenses
. Originator shall pay all filing fees, stamp taxes, other
taxes (other than taxes imposed directly on the overall net income of the Buyer) and expenses,
including the fees and expenses set forth in Section 6.2 hereof, if any, which are incurred or
assessed on account of or arise out of this Agreement and the documents and transactions entered
into pursuant to this Agreement.
(k)
Subordinated Note
. Originator shall not transfer its Subordinated Note to any
Person.
(l)
Fulfillment of Obligations
. Originator shall duly observe and perform, or cause to
be observed or performed, all material obligations and undertakings on its part to be observed and
performed under or in connection with this Agreement and the Receivables, shall duly observe and
perform all material provisions, covenants and other promises required to be observed by it under
the Contracts related to the Receivables, shall do nothing to materially impair the rights, title
and interest of the Buyer in and to the Receivables, and shall pay when due (or contest in good
faith) any taxes, including without limitation any sales tax, excise tax or other similar tax or
charge, payable in connection with the Receivables and their creation and satisfaction.
11
(m)
Copies of Reports, Filings, Etc
. Originator shall furnish to the Buyer, upon
written request, as soon as practicable after the issuance, sending or filing thereof, copies of
all proxy statements, financial statements, reports and other communications which Originator sends
to its security holders generally, and, if Originator is required to file reports with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
copies of all regular, periodic and special reports which Originator files with the Securities and
Exchange Commission or with any securities exchange on Forms 10-K, 10-Q, 8-K or any successor forms
thereto. Originator agrees that the Buyer may furnish any such reports to the Administrator and the
Buyer agrees that it shall, promptly upon receipt of such reports, deliver such reports to the
Administrator.
(n)
Compliance with Credit and Collection Policy
. The Credit and Collection Policy
shall be complied with in all material respects with respect to each Receivable and related
Contract.
(o)
Insurance
. Originator shall keep insured all property of a character usually
insured by corporations engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such corporations and carry
such other insurance as is usually carried by such corporations.
(p)
Audits
. At any reasonable time, and from time to time at the Buyers reasonable
request upon notice Originator shall permit the Buyer, or its agents or representatives, (i) to
examine and make copies of and extracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the control of Originator relating
to the Receivables, including, without limitation, the related Contracts and Related Security, and
(ii) to visit the offices and properties of Originator for the purpose of examining the materials
described in clause (i) above, and to discuss matters relating to the Receivables, and Originators
performance under this Agreement with any of the officers, employees, or independent accountants of
Originator having knowledge of such matters. Following the occurrence of a Amortization Event (as
defined in the Purchase Agreement), Originator shall reimburse the Buyer for all reasonable fees,
costs and out-of-pocket expenses incurred by or on behalf of the Buyer promptly upon receipt of a
written notice therefor.
(q)
ERISA Events
.
Promptly upon becoming aware of the occurrence or likely occurrence of any ERISA Event that,
alone or together with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of Originator and its ERISA Affiliates in an aggregate amount exceeding
$25,000,000. Originator shall give the Buyer a written notice specifying the nature thereof, what
action Originator or any ERISA Affiliate has taken and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto.
(r)
Separate Identity
. Originator acknowledges that the Administrator, the Purchaser
Agents and the Purchasers are entering into the transactions contemplated by the Purchase Agreement
in reliance upon Buyers identity as a legal entity that is separate from Originator and any
Affiliates thereof. Originator shall take all actions required to maintain the Buyers status as a
separate legal entity, including, without limitation,
(i) not anticipating any need for its having to extend advances to Buyer except for those
described in the Transaction Documents, if any;
(ii) not conducting its business in the name of Buyer;
(iii) having a telephone number, stationery and business forms separate from those of
Buyer;
(iv) not providing for its expenses and liabilities from the funds of Buyer;
12
(v) notwithstanding certain limited liabilities of Buyer to Administrator, which are
indemnified by an affiliate of Originator, not being liable for the payment of any liability
of Buyer;
(vi) holding out either the assets or the creditworthiness of itself as being available
for the payment of any liability of Buyer;
(vii) maintaining an arms-length relationship with Buyer; and
(viii) not transferring assets from itself to Buyer without fair consideration or with
the intent to hinder, delay or defraud the creditors of either itself or Buyer.
(s)
Software
. Originator shall use its reasonable efforts to enable each of the Buyer,
any agent of the Buyer and the Servicer (whether by license, sublicense, assignment or otherwise)
to use all of the computer software used to account for the Receivables to the extent necessary to
administer the Receivables.
(t) [Intentionally Omitted.]
(u)
Financial Reporting
. Originator will maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in accordance with GAAP, and
cause AmerisourceBergen to make its balance sheet and statement of income and cash flows publicly
available as described in Section 5.3(k) of the Purchase Agreement and furnish, or cause to be
furnished, to Buyer (or its assigns):
(i)
Accounting Certificate
. The certificate described in Section 5.3(k) of the
Purchase Agreement.
(ii) [Intentionally Omitted.]
(iii)
Compliance Certificate
. On the date of public filing (or the next
succeeding Business Day) of the financial statements described above, a compliance certificate
in substantially the form of
Exhibit IV
signed by an Authorized Officer of Originator
and dated the date of such annual financial statement or such quarterly financial statement,
as the case may be.
(iv)
S.E.C. Filings
. Promptly upon the written request of the Administrator or
any Purchaser Agent, copies of all registration statements and annual, quarterly, monthly or
other regular reports which Originator files with the Securities and Exchange Commission.
(v)
Copies of Notices
. Promptly upon its receipt of any notice under or in
connection with any Transaction Document from any Person other than Buyer, the Administrator,
any Purchaser Agent or any Purchaser, copies of the same.
(vi)
Other Information
. Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables originated by Originator as Buyer
(or its assigns) may from time to time reasonably request in order to protect the interests of
Buyer (and its assigns) under or as contemplated by this Agreement.
13
(v)
Notices
. Originator will notify Buyer (or its assigns) in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same and, if applicable,
the steps being taken with respect thereto:
(i)
Termination Events or Unmatured Termination Events
. The occurrence of each
Termination Event and each Unmatured Termination Event, by a statement of an Authorized
Officer of Originator.
(ii)
Judgment and Proceedings
. (1) The entry of any judgment or decree against
Originator or any of its Subsidiaries if the aggregate amount of all judgments and decrees
then outstanding against Originator and its Subsidiaries exceeds $25,000,000 after deducting
(a) the amount with respect to which Originator or Subsidiary is insured and with respect to
which the insurer has assumed responsibility in writing, and (b) the amount for which
Originator or Subsidiary is otherwise indemnified if the terms of such indemnification are
satisfactory to Buyer (or its assigns), and (2) the institution of any litigation, arbitration
proceeding or governmental proceeding against Originator which, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on its financial
condition or results of operations or any Receivables.
(iii)
Defaults Under Other Agreements
. The occurrence of a default or an event of
default under any other financing arrangement for an aggregate principal amount exceeding
$25,000,000 pursuant to which Originator is a debtor or an obligor.
(w)
Ownership
. Originator will establish and maintain, irrevocably in Buyer, (A) legal
and equitable title to the Receivables originated by Originator and the Collections and (B) all of
Originators right, title and interest in the Related Security, Collections and Proceeds associated
with the Receivables originated by Originator, in each case, free and clear of any Adverse Claims
other than Adverse Claims in favor of Buyer (and its assigns) (
including
,
without limitation
, the
filing of all financing statements or other similar instruments or documents necessary under the
UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyers interest in such
Receivables, Related Security, Collections and Proceeds and such other action to perfect, protect
or more fully evidence the interest of Buyer as Buyer (or its assigns) may reasonably request).
(x)
Collections
. Originator will cause (1) all proceeds from all Lock-Boxes to be
directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and
Collection Account to be subject at all times to a Collection Account Agreement that is in full
force and effect. In the event any payments relating to Receivables are remitted directly to
Originator or any Affiliate of Originator, Originator will remit (or will cause all such payments
to be remitted) directly to a Collection Bank and deposited into a Collection Account within two
(2) Business Days following receipt thereof and, at all times prior to such remittance, Originator
will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive
benefit of Buyer and its assigns. Originator will transfer exclusive ownership, dominion and
control of each Lock-Box and Collection Account to Buyer and, will not grant the right to take
dominion and control of any Lock-Box or Collection Account at a future time or upon the occurrence
of a future event to any Person, except to Buyer (or its assigns) as contemplated by this Agreement
and the Purchase Agreement.
Section 4.2
Negative Covenants of Originator
. Until the date on which this Agreement
terminates in accordance with its terms, Originator hereby covenants that:
(a)
Statement for and Treatment of Sales
. Originator shall not prepare any financial
statements for financial accounting or reporting purposes which shall account for the transactions
contemplated herein in any manner other than as a sale of the Receivables to the Buyer.
14
(b)
No Rescissions or Modifications
. Originator shall not rescind or cancel any
Receivable or related Contract or modify any terms or provisions thereof, or grant any Dilution to
an Obligor except in accordance with the Credit and Collection Policy, unless such Receivable has
been deemed collected pursuant to the Purchase Agreement or repurchased by Originator.
(c)
No Change in Name, Identity or Corporate Structure
. Originator shall not change
its name, identity or corporate structure (within the meaning of Section 9-507(c) of the UCC of any
applicable jurisdiction) in any manner which would make any financing statement or continuation
statement filed in connection with this Agreement or the transactions contemplated hereby seriously
misleading within the meaning of Section 9-507(c) of the UCC of any applicable jurisdiction or
other applicable Laws unless it shall have (i) given the Buyer at least 45 days prior written
notice thereof and (ii) delivered to the Buyer all financing statements, instruments and other
documents requested by the Buyer in connection with such change.
(d)
No Liens
. Originator shall not cause any of the Receivables or related Contracts,
or any inventory or goods the sale of which may give rise to a Receivable, or any Collection
Account or any right to receive any payments received therein or deposited thereto, to be sold,
pledged, assigned or transferred or to be subject to a Lien, other than the sale and assignment of
the Receivables to the Buyer and the Liens created in connection with the transactions contemplated
by this Agreement.
(e)
Liens on Inventory
. Originator shall not cause or permit any Lien to be placed
upon inventory or goods the sale of which may give rise to a Receivable unless (x) (i) any related
security agreement, financing statements and any other related documents specifically exclude from
such Lien the proceeds of the sale of such inventory or goods and (ii) the Buyer or any assignee or
transferee thereof has reviewed such security agreement, financing statements and related documents
or (y) the entity for whose benefit such Lien is granted or arises releases or has released the
Lien at or prior to the time an invoice is sent for payment upon the sale of such inventory or
goods.
(f)
Consolidations, Mergers and Sales of Assets
. Originator shall not (i) consolidate
or merge with or into any other Person, or (ii) sell, lease or otherwise transfer all or
substantially all of its assets to any other Person; provided that Originator may merge or
consolidate with another Person if Originator is the corporation surviving such merger.
(g)
Change in Payment Instructions to Obligors
. Originator shall not make any change
in its instructions to Obligors regarding payments to be made with respect to the Receivables
(other than changes with respect to the mailing addresses for remittances) unless the Buyer and the
Administrator shall have received, at least ten (10) days before the proposed effective date
therefor, written notice of such change and the Administrator shall have consented thereto;
provided, however,
that Originator may make changes in instructions to Obligors regarding payments
if such new instructions require such Obligor to make payments to another existing Collection
Account. Originator will not add or terminate any bank as a Collection Bank, unless Buyer (or its
assigns) shall have received, at least ten (10) days before the proposed effective date therefor,
(i) written notice of such addition or termination and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement with
respect to the new Collection Account or Lock-Box.
(h)
ERISA Matters
. Originator shall not permit any event or condition which is
described in Section 5.1(h) to occur or exist with respect to any Pension Plan.
(i)
Modifications to Credit and Collection Policy
. Originator will not make any
material change to the Credit and Collection Policy without prior written consent of the
Administrator and each Purchaser Agent (and the Originator shall provide notice of any such change
(unless de minimis) at least five (5) Business Days prior to the effective date of such change).
15
(j)
No Adverse Selection
. To the extent that Originator has retained Receivables that
would be Eligible Receivables but which have not been transferred to Buyer hereunder, Originator
will not select those Receivables to be transferred hereunder in any manner that materially
adversely affects Buyer.
ARTICLE 5
TERMINATION EVENTS
Section 5.1
Termination Events
. The occurrence of any one or more of the following
events shall constitute a Termination Event:
(a) Originator shall fail to make any payment or deposit required hereunder when due and such
failure goes unremedied for two (2) Business Days after the date when such amount became due.
(b) Originator shall fail to perform or observe any term, covenant or agreement hereunder
(other than as referred to in clause (a) of this
Section 5.1
) or any other Transaction
Document to which it is a party and such failure shall continue for ten (10) consecutive Business
Days after either (i) any Responsible Officer of Originator becomes aware thereof or (ii) notice
thereof to Originator by the Administrator, any Purchaser Agent or any Purchaser.
(c) Any representation, warranty, certification or statement made by Originator in this
Agreement, any other Transaction Document or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when made or deemed made and
which continues to be false or misleading in any material respect for a period of ten (10) Business
Days after either (i) any Responsible Officer of Originator becomes aware thereof or (ii) notice
thereof to Originator by the Administrator, any Purchaser Agent or any Purchaser;
provided that
the
materiality threshold in the preceding clause shall not be applicable with respect to any
representation or warranty which itself contains a materiality threshold and
provided further,
that
any misrepresentation or certification for which Buyer has actually received a Purchase Price
Credit shall not constitute a Termination Event hereunder.
(d) Failure of Originator to pay any Indebtedness when due in excess of $25,000,000 and such
failure shall continue beyond the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness; or the default by Originator in the performance of any
term, provision or condition contained in any agreement under which any such Indebtedness was
created or is governed (and such default shall continue for the applicable grace period, if any,
under the applicable agreement), the effect of which is to cause, or to permit the holder or
holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of Originator shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity
thereof.
(e) (i) An Event of Bankruptcy shall occur with respect to Originator.
(f) AmerisourceBergen shall cease to own and control, directly or indirectly, at least 100% of
Originator.
(g) One or more final judgments for the payment of money in an amount in excess of
$25,000,000, individually or in the aggregate, shall be entered against Originator on claims not
covered by insurance or as to which the insurance carrier has denied its responsibility, and such
judgment shall continue unsatisfied and in effect for fifteen (15) consecutive days without a stay
of execution.
(h) An ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability of Buyer, Originator or any ERISA
Affiliates under the Internal Revenue Code or Title IV of ERISA to such Pension Plan, such
Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000.
16
(i) An Amortization Event shall have occurred.
(j) Originator becomes unable for any reason to convey or reconvey Receivables in accordance
with the provisions of this Agreement.
(k) The Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the
Internal Revenue Code with regard to any of the Receivables, or any assets of Buyer, Originator or
any Affiliate and the lien shall not have been released within seven (7) days.
Section 5.2
Remedies
. Upon the occurrence and during the continuation of a Termination
Event, Buyer may take any of the following actions: (i) declare the Termination Date to have
occurred, whereupon the Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Originator;
provided, however,
that
upon the occurrence of a Termination Event described in
Section 5.1(e)
, or of an actual or
deemed entry of an order for relief with respect to Originator under the Federal Bankruptcy Code,
the Termination Date shall automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by Originator and (ii) to the fullest extent permitted by
applicable law, declare that the Default Fee shall accrue with respect to any amounts then due and
owing by Originator to Buyer. The aforementioned rights and remedies shall be without limitation
and shall be in addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at equity or otherwise,
all of which are hereby expressly preserved, including, without limitation, all rights and remedies
provided under the UCC, all of which rights shall be cumulative.
ARTICLE 6
INDEMNIFICATION
Section 6.1
Indemnities by Originator
. Without limiting any other rights that Buyer
may have hereunder or under applicable law, Originator hereby agrees to indemnify (and pay upon
demand to) Buyer and its assigns, officers, directors, agents and employees (each an
Indemnified
Party
) from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses
and for all other amounts payable, including reasonable attorneys fees (which attorneys may be
employees of Buyer or any such assign) and disbursements (all of the foregoing being collectively
referred to as
Indemnified Amounts
) awarded against or incurred by any of them arising out of or
as a result of this Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables originated by Originator,
excluding, however:
(a) Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction
holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the
part of the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in respect of Receivables
originated by Originator that are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(c) taxes imposed by the jurisdiction in which such Indemnified Partys principal executive
office is located, on or measured by the overall net income of such Indemnified Party to the extent
that the computation of such taxes is consistent with the characterization for income tax purposes
of the acquisition by the Purchasers of Receivable Interests under the Purchase Agreement as a loan
or loans by the Purchasers to Buyer secured by, among other things, the Receivables originated by
Originator, the Related Security and the Collections;
17
provided, however,
that nothing contained in this sentence shall limit the liability of Originator
or limit the recourse of Buyer to Originator for amounts otherwise specifically provided to be paid
by Originator under the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject in each case to clauses (a), (b) and (c) above, Originator shall
indemnify Buyer for Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by Originator (or any officers of Originator)
under or in connection with any Purchase Report, this Agreement, any other Transaction
Document or any other information or report delivered by Originator pursuant hereto or thereto
for which Buyer has not received a Purchase Price Credit that shall have been false or
incorrect when made or deemed made;
(ii) the failure by Originator, to comply with any applicable law, rule or regulation
with respect to any Receivable or Contract related thereto, or the nonconformity of any
Receivable or Contract included therein with any such applicable law, rule or regulation or
any failure of Originator to keep or perform any of its obligations, express or implied, with
respect to any Contract;
(iii) any failure of Originator to perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or other similar claim
arising out of or in connection with merchandise, insurance or services that are the subject
of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a
defense based on such Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with other funds;
(vii) any investigation, litigation or proceeding related to or arising from this
Agreement or any other Transaction Document, the transactions contemplated hereby,
Originators use of the proceeds of the Purchase from it hereunder, the ownership of the
Receivables originated by Originator or any other investigation, litigation or proceeding
relating to Originator in which any Indemnified Party becomes involved as a result of any of
the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in respect of any
Receivable as a result of such Obligor being immune from civil and commercial law and suit on
the grounds of sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in
Section 5.1(b)
;
(x) any failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal and
equitable title to, and ownership of, the Receivables originated by Originator and the
associated Collections, and all of Originators right, title and interest in the Related
Security associated with such Receivables, in each case, free and clear of any Adverse Claim;
(xi) the failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivable originated by Originator, the Related Security
and Collections with respect thereto, and the proceeds of any thereof, whether at the time of
the Purchase from Originator hereunder or at any subsequent time;
18
(xii) any action or omission by Originator which reduces or impairs the rights of Buyer
with respect to any Receivable or the value of any such Receivable;
(xiii) any attempt by any Person to void the Purchase from Originator hereunder under
statutory provisions or common law or equitable action; and
(xiv) the failure of any Receivable reflected as an Eligible Receivable on any Purchase
Report prepared by Originator to be an Eligible Receivable at the time acquired by Buyer.
Section 6.2
Other Costs and Expenses
. Originator shall pay to Buyer on demand all
reasonable costs and out-of-pocket expenses in connection with the preparation, execution, delivery
and administration of this Agreement, the transactions contemplated hereby and the other documents
to be delivered hereunder. Originator shall pay to Buyer on demand any and all reasonable costs and
expenses of Buyer, if any, including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in connection with
any restructuring or workout of this Agreement or such documents, or the administration of this
Agreement following a Termination Event.
ARTICLE 7
MISCELLANEOUS
Section 7.1
Waivers and Amendments
.
(a) No failure or delay on the part of Buyer (or its assigns) in exercising any power, right
or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein provided shall be
cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement
shall be effective only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified or waived except in
writing signed by Originator and Buyer and, to the extent required under the Purchase Agreement,
the Administrator, the Required Purchaser Agents and the Liquidity Banks or the Required Liquidity
Banks. Any material amendment, supplement, modification of waiver will required satisfaction of the
Rating Agency Condition.
Section 7.2
Notices
. All communications and notices provided for hereunder shall be in
writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or telecopy numbers set
forth on the signature pages hereof or at such other address or telecopy number as such Person may
hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice
or other communication shall be effective (a) if given by telecopy, upon the receipt thereof, (b)
if sent via U.S. certified or registered mail, five (5) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (c) if given by any
other means, when received at the address specified in this
Section 7.2
.
Section 7.3
Protection of Ownership Interests of Buyer
.
(a) Originator agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be necessary or desirable, or
that Buyer (or its assigns) may request, to perfect, protect or more fully evidence the interest of
Buyer hereunder and the Receivable Interests, or to enable Buyer (or its assigns) to exercise and
enforce their rights and remedies hereunder. At any time after the occurrence of a Termination
Event, Buyer (or its assigns) may, at Originators sole cost and expense, direct Originator to
notify the Obligors of Receivables of the ownership interests of Buyer under this Agreement and may
also direct that payments of all amounts due or that become due under any or all Receivables be
made directly to Buyer or its designee.
19
(b) If Originator fails to perform any of its obligations under
Section 13.3(a)
of the
Purchase Agreement and notice of such failure is given to Originator, Buyer (or its assigns) may
(but shall not be required to) perform, or cause performance of, such obligations, and Buyers (or
such assigns) costs and expenses incurred in connection therewith shall be payable by Originator
as provided in
Section 6.2
. Originator irrevocably authorizes Buyer (and its assigns) at
any time and from time to time in the sole discretion of Buyer (or its assigns), and appoints Buyer
(and its assigns) as its attorney(ies)-in-fact, to act on behalf of Originator (i) to execute on
behalf of Originator as debtor and to file financing statements necessary or desirable in Buyers
(or its assigns) sole discretion to perfect and to maintain the perfection and priority of the
interest of Buyer in the Receivables originated by Originator and the associated Related Security
and Collections and (ii) to file a carbon, photographic or other reproduction of this Agreement or
any financing statement with respect to the Receivables as a financing statement in such offices as
Buyer (or its assigns) in their sole discretion deem necessary or desirable to perfect and to
maintain the perfection and priority of Buyers interests in such Receivables. Buyer shall provide
Originator with copies of any such filings. This appointment is coupled with an interest and is
irrevocable. If Originator fails to perform any of its obligations hereunder: (A) Originator hereby
authorizes Buyer (or its assigns) to file financing statements and other filing or recording
documents with respect to the Receivables and Related Security (including any amendments thereto,
or continuation or termination statements thereof), without the signature or other authorization of
Originator, in such form and in such offices as Buyer (or any of its assigns) reasonably determines
appropriate to perfect or maintain the perfection of the ownership or security interests of Buyer
(or its assigns) hereunder, (B) Originator acknowledges and agrees that it is not authorized to,
and will not, file financing statements or other filing or recording documents with respect to the
Receivables or Related Security (including any amendments thereto, or continuation or termination
statements thereof), without the express prior written approval by the Administrator (as Buyers
assignee), consenting to the form and substance of such filing or recording document, and (C)
Originator approves, authorizes and ratifies any filings or recordings made by or on behalf of the
Administrator (as Buyers assign) in connection with the perfection of the ownership or security
interests in favor of Buyer or the Administrator (as Buyers assign).
Section 7.4
Confidentiality
.
(a) Originator and Buyer shall maintain and shall cause each of its employees and officers to
maintain the confidentiality of the Fee Letter and the other confidential or proprietary
information with respect to the Administrator and the Purchasers and their respective businesses
obtained by it or them in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that Originator and its officers and employees may
disclose such information to Originators external accountants, attorneys and other advisors and as
required by any applicable law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceeding (whether or not having the force or effect of
law).
(b) Originator hereby consents to the disclosure of any nonpublic information with respect to
it in connection with the transactions contemplated herein (i) to Buyer, the Administrator, the
Liquidity Banks, the Purchasers or the Purchaser Agents by each other, (ii) to any prospective or
actual assignee or participant of any of the Persons described in clause (i), and (iii) to any
rating agency, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to any Purchaser or any entity organized for the purpose of purchasing, or making loans
secured by, financial assets for which Wachovia acts as the administrative agent and to any
officers, directors, employees, outside accountants and attorneys of any of the foregoing,
provided
each such Person described in the foregoing clauses (ii) and (iii) is informed of the confidential
nature of such information. In addition, the Purchasers, the Purchaser Agents and the Administrator
may disclose any such nonpublic information pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or proceedings (whether or
not having the force or effect of law).
20
Section 7.5
Bankruptcy Petition
.
(a) Originator and Buyer each hereby covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding senior indebtedness of the Conduit
Purchasers, it will not institute against, or join any other Person in instituting against, any
Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or any state of the
United States.
(b) Originator covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding obligations of Buyer under the Purchase Agreement, it will
not institute against, or join any other Person in instituting against, Buyer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Section 7.6
Limitation of Liability
. Except with respect to any claim arising out of
the willful misconduct or gross negligence of Originator, Buyer, any Purchaser, the Administrator,
any Purchaser Agent or any Liquidity Bank, no claim may be made by any such Person (or its
Affiliates, directors, officers, employees, attorneys or agents) against any such other Person (or
its Affiliates, directors, officers, employees, attorneys or agents) for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated by this Agreement,
or any act, omission or event occurring in connection therewith; and each of the parties hereto, on
behalf of itself and its Affiliates, directors, officers, employees, attorneys, agents, successors
and assigns, hereby waives, releases, and agrees not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its favor.
Section 7.7
CHOICE OF LAW
. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
Section 7.8
CONSENT TO JURISDICTION
. ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL COURT SITTING IN THE SOUTHERN DISTRICT OF
NEW YORK OR ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS
AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT
MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER
(OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 7.9
WAIVER OF JURY TRIAL
. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY
DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
21
Section 7.10
Integration; Binding Effect; Survival of Terms
.
(a) This Agreement and each other Transaction Document contain the final and complete
integration of all prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with respect to the
subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the Originator, Buyer and
their respective successors and permitted assigns (including any trustee in bankruptcy). Originator
may not assign any of its rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and obligations hereunder and
interests herein to any other Person without the consent of Originator. Without limiting the
foregoing, Originator acknowledges that Buyer, pursuant to the Purchase Agreement, may assign to
the Administrator, for the benefit of the Purchasers, its rights, remedies, powers and privileges
hereunder and that the Administrator may further assign such rights, remedies, powers and
privileges to the extent permitted in the Purchase Agreement. Originator agrees that the
Administrator, as the assignee of Buyer, shall, subject to the terms of the Purchase Agreement,
have the right to enforce this Agreement and to exercise directly all of Buyers rights and
remedies under this Agreement (including, without limitation, the right to give or withhold any
consents or approvals of Buyer to be given or withheld hereunder) and Originator agrees to
cooperate fully with the Administrator in the exercise of such rights and remedies. This Agreement
shall create and constitute the continuing obligations of the parties hereto in accordance with its
terms and shall remain in full force and effect until terminated in accordance with its terms;
provided, however,
that the rights and remedies with respect to (i) any breach of any
representation and warranty made by Originator pursuant to
Article II
; (ii) the
indemnification and payment provisions of
Article VI
; and (iii)
Section 7.5
shall
be continuing and shall survive any termination of this Agreement.
Section 7.11
Counterparts; Severability; Section References
. This Agreement may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same Agreement. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise expressly
indicated, all references herein to
Article,
Section,
Schedule
or
Exhibit
shall mean
articles and sections of, and schedules and exhibits to, this Agreement.
22
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed and delivered
by their duly authorized officers as of the date hereof.
|
|
|
|
|
|
AMERISOURCEBERGEN DRUG CORPORATION
|
|
|
By:
|
/s/
J.F. Quinn
|
|
|
|
Name:
|
J.F. Quinn
|
|
|
|
Title:
|
Vice President & Corporate Treasurer
|
|
|
|
|
|
|
|
Address:
|
AmerisourceBergen Drug
Corporation
1300 Morris Drive
Chesterbrook, PA 19087
Attention: Jack Quinn
Telephone: (610) 727-7116
Facsimile: (610) 727-3639
|
|
|
|
AMERISOURCE RECEIVABLES FINANCIAL CORPORATION
|
|
|
By:
|
/s/
J.F. Quinn
|
|
|
|
Name:
|
J.F. Quinn
|
|
|
|
Title:
|
Vice President & Corporate Treasurer
|
|
|
|
|
|
|
|
Address:
|
Amerisource Receivables Financial
Corporation
P. O. Box 1735
Southeastern, PA 19399
Attention: Jack Quinn
Telephone: (610) 727-7453
Facsimile: (610) 727-3639
|
|
Receivables Sale Agreement
S-1
Exhibit I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined). As used in the Agreement and the
Exhibits and Schedules thereto, capitalized terms have the meanings set forth in this Exhibit I
(such meanings to be equally applicable to the singular and plural forms thereof).
If a capitalized
term is used in the Agreement, or any Exhibit or Schedule thereto, and is not otherwise defined
therein or in this Exhibit I, such term shall have the meaning assigned thereto in Exhibit I to the
Purchase Agreement (hereinafter defined).
Administrator
has the meaning set forth in the Preliminary Statements to the Agreement.
Agreement
means the Receivables Sale Agreement, dated as of July 10, 2003, between
Originator and Buyer, as the same may be amended, restated or otherwise modified.
AmerisourceBergen
shall mean AmerisourceBergen Corporation, a Delaware corporation.
Buyer
has the meaning set forth in the preamble to the Agreement.
Calculation Period
means each calendar month or portion thereof which elapses during the
term of the Agreement. The first Calculation Period shall commence on the date of the Purchases
hereunder and the final Calculation Period shall terminate on the Termination Date.
Credit and Collection Policy
means the Originator credit and collection policies and
practices relating to Contracts and Receivables existing on the date hereof and summarized in
Exhibit V
, as modified from time to time in accordance with the Agreement.
Default Fee
means a
per annum
rate of interest equal to the sum of (i) the Prime Rate,
plus
(ii) 2% per annum.
Discount Factor
means a percentage calculated to provide Buyer with a reasonable return on
its investment in the Receivables originated by Originator after taking account of (i) the time
value of money based upon the anticipated dates of collection of such Receivables and the cost to
Buyer of financing its investment in such Receivables during such period and (ii) the risk of
nonpayment by the Obligors. Originator and Buyer may agree from time to time to change the Discount
Factor based on changes in one or more of the items affecting the calculation thereof,
provided
that
any change to the Discount Factor shall take effect as of the commencement of a Calculation
Period, shall apply only prospectively and shall not affect the Purchase Price payment made prior
to the Calculation Period during which Originator and Buyer agree to make such change. As of the
date hereof, the Discount Factor is 0.2%.
Equity Interests
means, with respect to any Person, any and all shares, interests,
participations or other equivalents, including membership interests (however designated, whether
voting or non-voting), of capital of such Person, including, if such Person is a partnership,
partnership interests (whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of, or distributions of
assets of, such partnership, whether outstanding on the date hereof or issued after the date of
this Agreement.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and any rule or regulation issued thereunder.
I-1
ERISA Affiliate
means any trade or business (whether or not incorporated) under common
control with Originator within the meaning of Section 414(b) or (c) of the Internal Revenue Code
(and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to
Section 412 of the Internal Revenue Code).
ERISA Event
means a Reportable Event with respect to a Pension Plan; (b) a complete or
partial withdrawal from a Multiemployer Plan that would result in liability to the Originator or
any ERISA Affiliate, or the receipt or delivery by Originator or any ERISA Affiliate of any notice
with respect to any Multiemployer Plan concerning the imposition of liability as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA; (c) a determination that a Multiemployer Plan is, or is expected
to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (d) the filing
pursuant to Code Section 412 or ERISA Section 302 of an application for a waiver of the minimum
funding standard, or the grant of same, with respect to a Pension Plan; (e) the PBGC or a plan
administrator shall, or shall indicate its intention in writing to the Buyer, Originator or any
ERISA Affiliate to, terminate any Pension Plan or appoint a trustee to administer any Pension Plan;
(f) the Originator or any ERISA Affiliate incurs liability under Title IV of ERISA with respect to
the termination of any Pension Plan; or (g) the existence of an accumulated funding deficiency with
respect to any Pension Plan (as defined in Section 302(a) of ERISA and Section 412(a) of the
Internal Revenue Code), whether or not waived.
Indemnified Party
has the meaning set forth in
Section 6.1
.
Initial Contributed Receivables
has the meaning set forth in Section 1.1.
Initial Cutoff Date
has the meaning set forth in
Section 1.1
.
Law
shall mean any law (including common law), constitution, statute, treaty, regulation,
rule, ordinance, order, injunction, writ, decree or award of any Official Body.
Lien
, in respect of the property of any Person, shall mean any ownership interest of any
other Person, any mortgage, deed of trust, hypothecation, pledge, lien, security interest, filing
of any financing statement, charge or other encumbrance or security arrangement of any nature
whatsoever, including, without limitation, any conditional sale or title retention arrangement, and
any assignment, deposit arrangement, consignment or lease intended as, or having the effect of,
security.
Multiemployer Plan
means a multiemployer plan, within the meaning of Section 4001 (a) (3)
of ERISA, to which Originator or any ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has made, or been obligated to make,
contributions.
Net Worth
means as of the last Business Day of each Calculation Period preceding any date of
determination, the excess, if any, of (a) the aggregate Outstanding Balance of the Receivables at
such time,
over
(b) the sum of (i) the Aggregate Invested Amount outstanding at such time,
plus
(ii) the aggregate outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
Official Body
shall mean any government or political subdivision or any agency, authority,
bureau, central bank, commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.
Organizational Documents
means, for any Person, the documents for its formation and
organization, which, for example, (a) for a corporation are its corporate charter and bylaws, (b)
for a partnership are its certificate of partnership (if applicable) and partnership agreement, (c)
for a limited liability company are its certificate of formation or organization and its operating
agreement, regulations or the like and (d) for a trust is the trust agreement, declaration of
trust, indenture or bylaws under which it is created.
I-2
Original Balance
means, with respect to any Receivable coming into existence after the
Initial Cutoff Date, the Outstanding Balance of such Receivable on the date it was created.
Originator
has the meaning set forth in the preamble to the Agreement.
PBGC
means the Pension Benefit Guaranty Corporation, or any successor thereto.
Pension Plan
means a pension plan (as defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, subject to Title IV of ERISA which Originator or any ERISA Affiliate of
Originator sponsors or maintains, or to which Originator or any of its ERISA Affiliates makes, is
making, or is obligated to make contributions, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during the immediately
preceding five plan years.
Plan
means an employee benefit plan (as defined in Section 3(3) of ERISA) which Originator
or any of its ERISA Affiliates sponsors or maintains or to which Originator or any of its ERISA
Affiliates makes, is making, or is obligated to make contributions and includes any Pension Plan,
other than a Plan maintained outside the United States primarily for the benefit of Persons who are
not U.S. residents.
Purchase
means the purchase by Buyer from Originator pursuant to
Section 1.2(a)
of
the Agreement of the Receivables originated by Originator and the Related Security and Collections
related thereto, together with all related rights in connection therewith.
Purchase Agreement
has the meaning set forth in the Preliminary Statements to the Agreement.
Purchase Price
means, with respect to the Purchase from Originator, the aggregate price to
be paid by Buyer to Originator for such Purchase in accordance with
Section 1.3
of the
Agreement for the Receivables originated by Originator and the associated Collections and Related
Security being sold to Buyer, which price shall equal on any date (i) the product of (x) the
Outstanding Balance of such Receivables on such date,
multiplied by
(y) one minus the Discount
Factor in effect on such date, minus (ii) any Purchase Price Credits to be credited against the
Purchase Price otherwise payable in accordance with
Section 1.4
of the Agreement.
Purchase Price Credit
has the meaning set forth in
Section 1.4
of the Agreement.
Purchase Report
has the meaning set forth in
Section 1.2(b)
of the Agreement.
Purchased Assets
has the meaning set forth in
Section 2.1(c)
of the Agreement.
Purchaser
has the meaning set forth in the Preliminary Statements to the Agreement.
Receivable
means all indebtedness and other obligations owed to Originator (at the times it
arises, and before giving effect to any transfer or conveyance under the Agreement) or to Buyer
(after giving effect to the transfers under the Agreement) (including, without limitation, any
indebtedness, obligation or interest constituting an account, chattel paper, instrument or general
intangible) arising in connection with the sale of goods or the rendering of services by
Originator, and further includes, without limitation, the obligation to pay any Finance Charges
with respect thereto. Indebtedness and other rights and obligations arising from any one
transaction, including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any other transaction;
provided
,
further
, that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be a Receivable regardless or whether the account debtor or Originator
treats such indebtedness, rights or obligations as a separate payment obligation.
I-3
Related Security
means, with respect to any Receivable:
(i) all of Originators interest in the Related Equipment or other inventory and goods
(including returned or repossessed inventory or goods), if any, the sale, financing or lease
of which by Originator gave rise to such Receivable, and all insurance contracts with respect
thereto,
(ii) all other security interests or liens and property subject thereto from time to
time, if any, purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing statements and
security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements associated with such
Receivable,
(v) all Records related to such Receivable,
(vi) all of Originators right, title and interest in each Lock-Box and each Collection
Account, and
(vii) all proceeds of any of the foregoing.
Reportable Event
means any of the events set forth in Section 4043(c) of ERISA or the
regulations thereunder, other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
Required Capital Amount
means, as of any date of determination, an amount equal to the
greater of (a) 3% of the Purchase Limit under the Purchase Agreement, and (b) the product of (i)
2.0 times the product of the Default Ratio times the Default Horizon Ratio, each as determined from
the most recent Monthly Report received from the Servicer under the Purchase Agreement, and (ii)
the Outstanding Balance of all Receivables as of such date, as determined from the most recent
Monthly Report received from the Servicer under the Purchase Agreement.
Settlement Date
means the second Business Day after each Settlement Reporting Date.
Subordinated Loan
has the meaning set forth in
Section 1.3(a)
of the Agreement.
Subordinated Note
means a promissory note in substantially the form of
Exhibit VI
hereto as more fully described in
Section 1.3
of the Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
Termination Date
means the earliest to occur of (i) the Facility Termination Date (as
defined in the Purchase Agreement), (ii) the Business Day immediately prior to the occurrence of a
Termination Event set forth in
Section 5.1(b)
, (iii) the Business Day specified in a
written notice from Buyer to the Originator following the occurrence of any other Termination
Event, and (iv) the date which is 10 Business Days after Buyers receipt of written notice from
Originator that it wishes to terminate the facility evidenced by this Agreement.
I-4
Termination Event
has the meaning set forth in
Section 5.1
of the Agreement.
Transaction Documents
means, collectively, this Agreement, each Collection Account
Agreement, the Subordinated Note, and all other instruments, documents and agreements executed and
delivered in connection herewith by Originator or Buyer.
Unmatured Termination Event
means an event which, with the passage of time or the giving of
notice, or both, would constitute a Termination Event.
All accounting terms not specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
I-5
Exhibit II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
Exhibit II to Receivables Sale Agreement
Locations of Records, Federal Employer Identification Numbers, Other Names
Name of Originator:
AmerisourceBergen Drug Corporation
Subsidiaries and Divisions:
Subsidiaries of Originator:
AmeriSource Health Services Corporation
AmeriSource Heritage Corporation
AmeriSource Sales Corporation
AmeriSource Receivables Financial Corporation
Anderson Packaging, Inc.
ASD Specialty Healthcare, Inc.
Blue Hill, Inc.
Bridge Medical, Inc.
Committed Provider Services, LLC
General Drug Company
Health Services Capital Corporation
Home Medical Equipment Health Company
Inteplex, Inc.
Interfill, LLC
J.M. Blanco, Inc.
M.D.P. Properties, Inc.
Pharmacy Healthcare Solutions, Ltd.
Southwestern Drug Corporation
Telepharmacy Solutions, Inc.
Value Apothecaries, Inc.
Divisions of Originator:
The Diabetes Shoppe
Family Pharmacy
Good Neighbor Pharmacy
MedAssess
Rita Ann
Pharmabuy
Location of Books and Records:
|
|
|
|
|
Name of Location
|
|
Address/Location of Records
|
Chesterbrook
|
|
1300 Morris Drive, Suite 100, Chesterbrook, PA 19087
|
Orange
|
|
4000 Metropolitan Drive, Orange, CA 92868
|
|
|
|
|
|
Atlanta
|
|
1085 Satellite Blvd., Suwanee, GA 30024
|
Birmingham
|
|
172 Cahaba Valley Pkwy., Pelham, AL 35124
|
Boston
|
|
101 Norfolk Street, Mansfield, MA 02048
|
Chicago
|
|
980 Lombard Road, Lombard, IL 60148
|
Columbus
|
|
1200 E. 5
th
Avenue, Columbus, OH 43219
|
Corona
|
|
1851 California Avenue, Corona, CA 92881
|
Dallas
|
|
1229 Avenue R, Grand Prairie, TX 75050
|
Dallas
|
|
1841 Monetary Lane, Carrollton, TX 75006
|
Denver
|
|
501 W. 44th Avenue, Denver, CO 80216
|
Honolulu
|
|
238 Sand Island Access Rd. #M1, Honolulu, HI 96819
|
Houston
|
|
12727 W. Airport Blvd., Sugar Land, TX 77478
|
Johnson City
|
|
410 Princeton Road, Johnson City, TN 37601
|
Kansas City
|
|
1501 Southern Road, Kansas City, MO 64120
|
Louisville (Pharmabuy)
|
|
7841 National Turnpike, Louisville, KY 40214
|
Louisville
|
|
244 E. Woodlawn Ave., Louisville, KY 40214
|
Meridian
|
|
6300 St. Louis Street, Meridian, MS 39301
|
Minneapolis
|
|
6810 Shady Oak Rd., Eden Prairie, MN 55344
|
Mishawaka
|
|
1655 E. 12th Street, Mishawaka, IN 46544
|
Mobile
|
|
85 Sidney Phillips Drive, Mobile, AL 36607
|
Montgomery
|
|
2061 W. Fairview Ave., Montgomery, AL 36108
|
Nashville
|
|
12980 Old Hickory Rd., Antioch, TN 37013
|
Orlando
|
|
2100 Directors Row, Orlando, FL 32809-6234
|
Orlando
|
|
2702 Directors Row, Orlando, FL 32809
|
Paducah
|
|
322 North 3rd Street, Paducah, KY 42001
|
Phoenix
|
|
1825 S. 43rd Avenue, Phoenix, AZ 85009
|
Pinebrook
|
|
Rte. 80 @ Hook Mountain Rd., Pine Brook, NJ 07058
|
Raleigh
|
|
8605 Ebenezer Church Rd., Raleigh, NC 27613
|
Richmond
|
|
9900 J.E.B. Stuart Pkwy., Glen Allen, VA 23060
|
Rita Ann
|
|
8410 B Kelso Drive, Baltimore, MD 21221
|
Sacramento Admin Office
|
|
2520 Venture Oaks Way, Suite 140, Sacramento, CA 95833
|
Salt Lake City
|
|
1765 Fremont Drive, Salt Lake City, UT 84104
|
San Antonio
|
|
1949 Hormel Drive, San Antonio, TX 78219
|
San Jose
|
|
450 Charcot Avenue, San Jose, CA 95131
|
Seattle
|
|
19220 64th Avenue South, Kent, WA 98032
|
St. Joseph
|
|
3907 S. 48th Terrace, St. Joseph, MO 64503
|
St. Louis
|
|
8190 Lackland Road, St. Louis, MO 63114-4524
|
Tulsa
|
|
9401 E. 54th Street, Tulsa, OK 74145
|
Thorofare
|
|
100 Friars Lane, Thorofare, NJ 08086
|
Toledo
|
|
3145 Nebraska Avenue, Toledo, OH 43607
|
Valencia
|
|
24903 Avenue Kearny, Valencia, CA 91355
|
Williamston
|
|
One Industrial Park, Williamston, MI 48895
|
Legal, Trade and Assumed Names:
AmerisourceBergen
AmerisourceBergen Drug Corporation
AmeriSource Corporation
Bergen Brunswig Drug Company
C.D. Smith Healthcare, Inc.
Durr-Fillauer Medical, Inc.
HealthCare Purchasing Agency
Impact Distribution Company
Intelligent Drug Information
James Brudnick Company, Inc.
MedNet, MPC Corp.
Pharmabuy
Rita Ann
Mergers:
Effective on or about May 24, 2001, AmeriSource Medical Supply, Inc., a Tennessee corporation, merged into AmeriSource
Corporation.
Effective on or about August 30, 2001, MedNet, MPC Corp. merged into Bergen Brunswig Drug Company.
Effective as of October 1, 2002, Durr-Fillauer Medical, Inc., a Delaware corporation, merged into Bergen Brunswig Drug
Company, a California corporation; Bergen Brunswig Drug Company merged into AmeriSource Corporation (and was renamed
AmerisourceBergen Drug Corporation), and C.D. Smith Healthcare, Inc., a Missouri corporation; merged into
AmerisourceBergen Drug Corporation.
Corporate Information Regarding the Originator
Federal Tax Identification Number: 23-2353106
Delaware Corporate Organization Number: 2564484
II-1
Exhibit III
Lock-boxes; Collection Accounts; Collection Banks
(attached)
III-1
AMERISOURCEBERGEN CORPORATION
EXHIBIT A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
Division
|
|
Bank
|
|
Account #
|
|
|
Account Name
|
|
Type
|
|
|
Lockbox(es)
|
|
|
Status
|
Amerisource Receivables Financial Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Rita Ann- Baltimore, MD
|
|
Allfirst Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation Rita Ann
|
|
Depository
|
|
|
1596
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook, PA
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Birmingham, AL
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
403279
|
|
|
Open
|
ARFC
|
|
Columbus, OH
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
12581
|
|
|
Open
|
|
|
Toledo/Louisville
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Dallas, TX
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
8410046
|
|
|
Open
|
ARFC
|
|
Mishawaka, IN
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
12571
|
|
|
Open
|
ARFC
|
|
Orlando, FL
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
502978/403163
|
|
|
Open
|
ARFC
|
|
Johnson City, TN
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
502964
|
|
|
Open
|
ARFC
|
|
Minneapolis, MN
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
502620
|
|
|
Open
|
ARFC
|
|
Paducah, KY
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
503270
|
|
|
Open
|
ARFC
|
|
Columbus, OH
|
|
Bank One
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
0813
|
|
|
Open
|
|
|
Toledo, OH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
St. Joseph, MO
|
|
Commerce Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
802240
|
|
|
Open
|
ARFC
|
|
Mishawaka, IN
|
|
First Source Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
4181
|
|
|
TBC March 2003
|
ARFC
|
|
Thorofare, NJ
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
52598
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook, PA
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook, PA
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Thorofare, NJ
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
8500-41950
|
|
|
Open
|
ARFC
|
|
Springfield, MA
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
54873
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Hawaii
|
|
Bank of Hawaii
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
31000-5356
|
|
|
Open
|
ARFC
|
|
Chicago, IL
|
|
Bank One
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
21978, 100708,
|
|
|
Open
|
|
|
Corona, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
22016, 22103,
|
|
|
|
|
|
Denver, CO
|
|
|
|
|
|
|
|
|
|
|
|
|
100459, 100741,
|
|
|
|
|
|
Kansas City, MO
|
|
|
|
|
|
|
|
|
|
|
|
|
21983, 100801,
|
|
|
|
|
|
Phoenix, AZ
|
|
|
|
|
|
|
|
|
|
|
|
|
100491, 24900,
|
|
|
|
|
|
Sacramento, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
730034, 100806,
|
|
|
|
|
|
Salt Lake City, UT
|
|
|
|
|
|
|
|
|
|
|
|
|
27550
|
|
|
|
|
|
San Jose, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seattle, WA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
St. Louis, MO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tulsa, OK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valencia, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Williamston, MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Corp-Orange, CA
|
|
Chase Manhattan Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Corp-Orange, CA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Atlanta, GA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
530431, 642723,
|
|
|
Open
|
|
|
Boston, MA
|
|
|
|
|
|
|
|
|
|
|
|
|
676337, 676380,
|
|
|
|
|
|
Dallas, TX
|
|
|
|
|
|
|
|
|
|
|
|
|
530439, 530448,
|
|
|
|
|
|
Houston, TX
|
|
|
|
|
|
|
|
|
|
|
|
|
530456, 530463,
|
|
|
|
|
|
Meridian, MS
|
|
|
|
|
|
|
|
|
|
|
|
|
530477, 642755.
|
|
|
|
|
|
Mobile, AL
|
|
|
|
|
|
|
|
|
|
|
|
|
530494, 642800,
|
|
|
|
|
|
Montgomery, AL
|
|
|
|
|
|
|
|
|
|
|
|
|
676405
|
|
|
|
|
|
Nashville, TN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orlando, FL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pine Brook, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raleigh, NC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richmond, VA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Antonio, TX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Kansas City, KS
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
771732
|
|
|
Open
|
ARFC
|
|
Tulsa, OK
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
667604
|
|
|
Open
|
ARFC
|
|
Mansfield, MA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
643393
|
|
|
Open
|
ARFC
|
|
Raleigh, NC
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
643364
|
|
|
Open
|
ARFC
|
|
Richmond, VA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
643376
|
|
|
Open
|
ARFC
|
|
Corp-Orange, CA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
PharmaBuy
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
771530
|
|
|
Open
|
|
|
Louisville, KY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Corp-Orange, CA
|
|
Wells Fargo Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
77825
|
|
|
Open
|
Exhibit IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that certain Receivables Sale Agreement
dated as of July 10, 2003, among AmerisourceBergen Drug Corporation and Amerisource Receivables
Financial Corporation (the
Agreement
). Capitalized terms used and not otherwise defined herein
are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected
of
(
Originator
).
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under
my supervision, a detailed review of the transactions and conditions of Originator and its
Subsidiaries during the accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the
existence of any condition or event which constitutes a Termination Event or an Unmatured
Termination Event, as each such term is defined under the Agreement, during or at the end of the
accounting period covered by the attached financial statements or as of the date of this
Certificate
[
, except as set forth below
]
.
4.
[
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and the action which
Originator has taken, is taking, or proposes to take with respect to each such condition or event:
]
.
The foregoing certifications, together with the computations set forth in Schedule I hereto,
are made and delivered this
_____
day of
_____, 200_____.
IV-1
Exhibit V
Credit and Collection Policy
[attach copy]
V-1
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Credit and Collections Policy and Procedure Guidelines March 2003
1.0
|
|
APPLICABILITY
|
|
|
|
AmerisourceBergen Drug Company
|
|
2.0
|
|
PURPOSE
|
|
|
|
To formalize policies and procedures pertaining to the extension of
credit, quality control of trading assets (accounts and notes
receivable) and support of both internal and external customers.
|
|
3.0
|
|
OBJECTIVES
|
|
3.1
|
|
To provide for the development and retention of a broad and financially viable customer base.
|
|
3.2
|
|
To promote sales of product and services.
|
|
3.3
|
|
To maximize cash flow
|
|
3.4
|
|
To enhance profitability through reduction of Bad Debt Expense and optimization of the
investment in Accounts/Notes Receivable.
|
|
4.0
|
|
AUTHORITY
|
|
4.1
|
|
The Vice President, Finance and the Chief Financial Officer, with the concurrence of the Vice
President of Financial Services and Corporate Director of Credit shall have the responsibility
and authority for the establishment, revision and implementation of Corporate Credit &
Collections Policies & Procedures.
|
|
4.2
|
|
Approval Limits: The grid below identifies authority requirements for the approval and
administration of new accounts and increases to existing total accounts receivable exposure.
Total accounts receivable exposure is defined as the sum of trade receivables, including
future dated sales, and notes receivable.
|
V-2
Setting New Credit Limits or
Increasing Existing Credit Limits
|
|
|
|
|
|
|
Level of
|
|
Position
|
|
Authority
|
|
Corporate or Regional Directors of Credit
|
|
$
|
[*****]
|
|
Regional Vice President
|
|
|
[*****]
|
|
Vice President Financial Services
|
|
|
[*****]
|
|
VP Finance Drug Co.
|
|
|
[*****]
|
|
CFO and COO
|
|
|
>[*****]
|
|
5.0
|
|
TRADE ACCOUNT APPLICATION AND EVALUATION PROCEDURES
|
|
5.1
|
|
Documentation requirements
|
|
a.
|
|
Original Applications, Purchase Agreements, Guarantees and Loan Agreements are
to be retained by the Regional Director of Credit (RDC) or designee.
|
|
|
b.
|
|
Original note documents are to be retained where the note is being serviced.
|
5.1.1
|
|
All new account applications and requests to increase credit limits must include:
|
|
a.
|
|
Application, completed, signed and dated original ABC form, (see Exhibit A, ABC
Credit Application)
|
|
|
|
Must be signed by authorized signed
|
|
|
|
|
Chains with multiple locations under same legal entity may
attach a statement certified by authorized signer showing multiple delivery
addresses and attach to one Application
|
|
b.
|
|
Purchase Agreement or approved National Contract. (See Exhibit B, Sales
Agreement and Guaranty).
|
|
|
|
National contracts are approved by the Corporate Director of
Credit or above (see section 4.2)
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-3
|
c.
|
|
ID Verification of legal name
|
|
|
|
Corporations obtain Articles of Incorporation
|
|
|
|
|
Partnerships obtain copy of Partnership Agreement
|
|
|
|
|
Obtain copies of any fictitious name statements (doing business
as filings dba)
|
5.1.2
|
|
Purchase Accounts, Independent Pharmacies in addition to the above (see requirements
stated in 5.1 to 5.1.1), obtain:
|
|
a.
|
|
Continuing Guarantee of stockholders/partners
|
|
|
b.
|
|
Any other documentation deemed necessary by the Regional Director of Credit or
designee including but not limited to the three most recent current supplier statements
|
The following are guidelines for documenting the review of a customer, but are not required in the
customer files.
5.1.3
|
|
Start-up non-public companies
|
|
|
|
For purposes of this section, a business is no longer considered a
start-up after two consecutive years of positive cash flow with all
trade payments current.
|
|
a.
|
|
Cash flow projections prepared on a monthly basis covering the first operating
year. Must be signed and dated by borrowers.
|
|
|
b.
|
|
Cash verifications three most recent months bank/brokerage statements
verifying source of down payment and starting cash.
|
|
|
c.
|
|
Opening Balance Sheet.
|
|
|
d.
|
|
Other possible documents (At the discretion of the RDC or designee):
|
|
|
|
Resume
|
|
|
|
|
Board of Pharmacy Application copy
|
|
|
|
|
Loss payee endorsement hazard insurance
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-4
|
|
|
Assignment of life/disability insurance [*****]
|
|
|
|
|
Asset verifications
|
|
|
|
|
Landlord waiver
|
|
|
|
|
Own use certification (closed door)
|
5.2
|
|
Credit Request Processing Procedure Supplemental Information:
|
|
|
|
The RDC or designee shall supplement the information required above by
obtaining and reviewing the following:
|
|
a.
|
|
Credit Agency Reports D&B, Experlan Business and personal profiles (public
companies exempt from personal profiles)
|
|
|
b.
|
|
Trade References where possible and/or review of three most recent supplier
statements
|
|
|
c.
|
|
Verify the legal name, state of formation, business form and good standing of
the legal entity. This may include obtaining Good Standing Certificates, Statement by
Domestic Stock Company, Secretary of State verifications or other documents deemed
necessary by the RDC or designee.
|
|
|
d.
|
|
Where applicable, verifying major assets (real estate, business ownership)
|
|
|
e.
|
|
Other Any other credit information including bank references, UCC-1 lien
searches, business filings, judgments, other public record information, or other
information that in the judgment of the Credit Executive is applicable to the credit
evaluation process.
|
5.3
|
|
Responsibility for tracking new account applications
|
|
5.3.1
|
|
The RDC or designee will monitor the progress of new account applications to assure timely
processing and respond to inquiries regarding the status of the request. (For samples of
tracking tools, see Exhibit C, Credit Request Checklist and Exhibit D, Credit Request
Processing log.)
|
|
5.4
|
|
Trade Account Evaluation Guidelines
|
|
5.4.1
|
|
The RDC or designee will, if necessary, contact the applicant to obtain clarification of
information in addition to that required above and evaluate the application based on the
following criteria:
|
|
a.
|
|
Character Character of the borrower(s) as evidenced by their credit history
and previous experience.
|
|
|
b.
|
|
Capacity Does management have the experience and talents to successfully
manage this business plan? Tested management.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-5
|
c.
|
|
Cash flow Ability of the business to service the proposed debt.
|
|
|
d.
|
|
Collateral Adequacy of secondary support.
|
|
|
e.
|
|
Any other legal, financial or operational factor in the judgment of the Credit
Executive that affects the quality of the credit.
|
5.4.2
|
|
If review of the above disqualifies the applicant from open credit terms, it is recommended
that sales be secured using one of the following alternatives:
|
|
|
|
A standby Letter of Credit guarantees financial performance by
the initiating bank and are preferred to conventional L/Cs. Standby L/Cs have
a specific time period during which the issuing bank is obligated to pay in the
event of a customers default.
|
|
|
|
|
All fees (issuing, negotiating, confirming and wire) should be
paid by the purchaser (customer) or including in the cost of goods.
|
|
|
|
|
All letters of credit are to be irrevocable and provide for
partial draws.
|
|
|
|
|
All accounts supported by letters of credit should have a
switch on credit line no larger than the stated amount.
|
|
|
|
|
Purchasing accounts must be calendared to expire at a time
prior to L/C expiration so that if payment is not made, ABC has at least two
weeks remaining to submit a draft for payment on all balances. The last
purchase must be resolved at least two weeks prior to expiration of the L/C.
|
|
|
|
|
All L/Cs must be payable to the beneficiary (AmerisourceBergen)
in U.S. dollars.
|
|
|
|
|
All non-USA sales are to be via letters of credit.
|
|
|
|
|
The Treasury Department is to be advised of proposed letters of
credit to assure the issuing bank is of acceptable quality and reliability. No
letter of credit can be drawn on a Liberian Bank, for example, and the Treasury
Department is aware of any government or political restrictions.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-6
|
d.
|
|
Depository accounts
|
|
|
|
|
All accounts approved based on depository balances due to credit risk should be
supported by ABC standard Security Agreement. The Security Agreement, incorporated
into the Application for Credit and Purchase Agreement, provides ABC with
appropriate collateral rights to deposits.
|
5.5
|
|
Secondary Account to an Existing Customer:
|
|
5.5.1
|
|
In the event an existing customer requests a secondary account, it is not necessary to
request a completed new account application if a fully-approved application is in the customer
file. The customer is requested instead to submit a signed first page of the Application for
Credit (Exhibit A) that identifies the ownership of the secondary account. In addition, the
customer must submit a Payment Terms confirmation (Exhibit E, Additional Account Confirmation)
that asks for acknowledgement that the obligations of the secondary account are the
responsibility of the primary account owner. The signed copy of the Application for Credit
and the Payment Terms form are to be retained in the customers credit file.
|
|
5.6
|
|
PROMISSORY NOTE APPLICATION AND EVALUATION PROCEDURES
|
|
5.6.1
|
|
Applications for House Notes (see Exhibit F):
|
|
a.
|
|
All new money promissory note applications, regardless of dollar value or
purpose, are to be initiated by the Regional Directors of Credit. Approvals from the
VP DCM and the RVP are required prior to sending the request to the Corporate Director
of Credit for processing. Final review of the note application will be completed by
the Note Review Committee, consisting of V.P. of Financial Services, V.P. Finance, and
CFO. Any approved applications will then be processed for funding by the Corporate
Director of Credit, who will retain the original copies of the application and
supporting documentation. The Corporate Director of Credit will also provide
notification of approval/disapproval and copies of the documentation to the initiating
RDC for loan maintenance. Original promissory notes will be drafted, executed, and
filed centrally in the Legal Department.
|
|
|
b.
|
|
The recommended interest rate will be [*****]%. The term of the loan should
not exceed [*****] years.
|
|
|
c.
|
|
All notes are to have collateral that is valued at [*****] times the amount of
the Note. The Note Application should include a calculation of the collateral with the
following limitations:
|
|
|
|
|
[*****]
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-7
|
d.
|
|
Personal Guarantees are required, and must be validated with personal financial
statements of the owners (Exhibit G, Individual Financial Statement). The guarantees
must be signed as individuals, not as officers of the company.
|
|
|
e.
|
|
Mortgages on real estate are preferred collateral, and are valued through a
licensed appraisal service.
|
|
|
f.
|
|
Life insurance policies on the corporate officers, partners and/or individual
owners are also valid collateral with AmerisourceBergen as the assigned beneficiary.
The insurance carrier should notify ABC of delinquency or non-payment of premiums.
|
|
|
g.
|
|
UCC-1 filings are necessary to perfect our priority position, and value our
collateral. Attach copies of UCC-1s to the note application.
|
|
|
h.
|
|
Any additional documentation that the RDC or designee deems appropriate to
support the approval of the loan application.
|
|
|
i.
|
|
Applications for all Promissory Notes are to be approved by Regional Director
of Credit, and Regional Vice President. Forward to Corporate for review and approval
by VP of Finance and CFO.
|
5.6.2
|
|
Supplemental New Money Loan Criteria:
|
|
|
|
All new money loans should have an identifiable and dependable
primary and secondary source of repayment. If the secondary source
of payment is a life insurance policy, the policy should be assigned
to the Company. Simply being named as a beneficiary on the policy
is not full security. Conforming Loan Parameters should include the
following:
|
|
a.
|
|
[*****]
|
|
|
b.
|
|
Tangible net worth (aggregate business and guarantor(s)) should be at least
[*****]% of the requested loan amount.
|
|
|
c.
|
|
Acceptable collateral valuations should be supported by real estate appraisals
from a qualified appraiser and physical inventory reports.
|
|
|
d.
|
|
Sufficient liquidity ([*****]) to meet immediate requirements.
|
|
|
e.
|
|
Positive cash flow as evidence by two most recent, consecutive financial
statements (balance sheets and P&L).
|
|
|
f.
|
|
Positive working capital with positive trends.
|
|
|
g.
|
|
Financial statement trends which if continued for the term of the loan would
not endanger repayment.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-8
|
h.
|
|
No split borrowings with other suppliers.
|
|
|
i.
|
|
ABC collateral position senior to other suppliers.
|
|
|
j.
|
|
[*****]
|
|
|
k.
|
|
Letter of Credit should be reviewed by our Treasury Department or Bank to
verify the acceptability of the issuing bank. If the issuing bank is not of sufficient
reliability, the negotiating bank should confirm the L/C. Standby letters of credit
are preferred (see letters of credit section 5.4.2.a.).
|
5.6.3
|
|
[*****]
|
|
6.0
|
|
TRADE ACCOUNT TERMS OF SALE
|
|
6.1
|
|
Standard terms of sale are shown in Exhibit H1, Payment Terms.
|
|
6.2
|
|
Letter of Credit should be reviewed by our Treasury Department or Bank to verify the
acceptability of the issuing bank. If the issuing bank is not of sufficient reliability, the
negotiating bank should confirm the L/C. Standby letters of credit are preferred (see letters
of credit section 5.4.2).
|
|
6.3
|
|
Other terms of sale are to be approved in advance by the RDC or Designee and the Director of
Accounts Receivable after confirming systems capability.
|
|
6.4
|
|
All prepay deposits are to be recorded in the current or future due aging buckets.
|
|
6.5
|
|
A terms code letter should be sent to the customer confirming the terms of sale, payment
requirements, and late charge parameters. (See Exhibit H, Terms of Sale and Late Fee
Confirmation).
|
|
6.6
|
|
Customers which have been placed on COD terms may request open credit terms, the granting of
which is subject to review and approval of the RDC or Designee, per Credit & Collections
Policies & Procedures $10, Collection Procedures. If open terms are reinstated, a letter
confirming the change in terms should be sent to the customer. This acknowledgement letter
should be kept in the customers file. In addition, reinstatement of open terms must be
periodically reviewed to assure compliance.
|
|
7.0
|
|
CREDIT LIMITS
|
|
|
|
The RDC or Designee will have the authority to set credit limits according to 4.2.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-9
7.1
|
|
Trade account credit limits are to be based on:
|
|
a.
|
|
Anticipated normal purchases including dating. (Dating increase in credit
limit is only during the dating period. Once the dating period has expired, the credit
limit should be decreased to normal purchases.)
|
|
|
b.
|
|
Approved payment terms.
|
|
|
c.
|
|
Financial strength of the account, if financial statement information is
available to the RDC.
|
|
|
d.
|
|
Type of credit line (hard/soft) at the election of the Regional Director of
Credit or Designee.
|
7.2
|
|
The Regional Director of Credit or Designee can establish alternative maximum credit limits
not to exceed amounts based on the following criteria:
|
|
a.
|
|
[*****]
|
|
|
b.
|
|
[*****]
|
|
|
c.
|
|
The Regional Director of Credit or Designee is to review Regional aging
reports, delinquency reports and other accounts receivable tools that are available on
a periodic basis, at least monthly, and revise customer credit limits as necessary.
|
|
|
d.
|
|
If an account is less than 3 days beyond due date, resulting from delays in
receiving payment, the Regional Accounts Receivable Manager will have the authority to
exceed the credit limit on a temporary basis up to a maximum of [*****]% ([*****]
percent) of the established limit.
|
|
|
e.
|
|
The Regional Director of Credit or Designee will have the authority to exceed
the credit limit on a temporary basis up to a maximum of [*****]% ([*****] percent) of
the established limit, if reevaluation of the credit line occurs within 3 days of
exceeding the established limit. This authority is not limited to circumstances
resulting from delays in receiving payment.
|
|
7.3.1
|
|
The credit limit either determined by the procedure outlined in 7.1 or 7.2 will be made by
the Regional Director of Credit or Designee and reflect normal requirements including:
|
|
a.
|
|
Dependability of cash flow as a source of repayment for anticipated outstanding
balance, which includes orders that are dated but not yet due.
|
|
|
b.
|
|
Adequacy of collateral and our perfected position
|
|
|
c.
|
|
Trade payment history
|
|
|
d.
|
|
Strength of the guarantors
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-10
|
e.
|
|
Any other factor which in the judgment of the Regional Director of Credit or
Designee might be appropriate
|
|
|
If a basis for the establishment of a credit limit other than the normal requirements is to
be utilized, it will be so indicated in the customers credit file.
|
|
8.
|
|
DATING
|
|
|
|
Dating is to be used for inventory build-up only.
|
|
a.
|
|
Accounts on non-voluntary COD or other restrictive terms are not eligible for
Dating.
|
|
|
b.
|
|
Legal and Watch accounts are not eligible for Dating.
|
8.1
|
|
Manufacturer Promotion Participation in all manufacturers promotions require validation of
Dating Terms offered by the manufacturer and the Customer Credit Approval per Accounting and
Finance Policy. The decision process is, however, subject to the authorization grid defined
in 4.2.
|
|
8.2
|
|
Trade Show The RDC or Designee will determine which customers are eligible for Trade Show
Dating and the maximum amount of dating for each customer.
|
|
8.2.1
|
|
Other Dating
|
|
a.
|
|
A request for Dating (Exhibit I) is to be submitted to and approved by the
appropriate RDC or Designee prior to the offering of dating terms.
|
|
|
b.
|
|
The RDC or Designee has approval authority for dating for amounts per section
4.2 with consideration that the total exposure is within the established authority
limits.
|
|
|
c.
|
|
Approval limits for all original datings or extension of dating which term is
longer than six months requires the approval of the RDC or Designee.
|
|
|
d.
|
|
A Personal Guaranty and Security Agreement, as required in the Application for
Credit & Purchase Agreement, must be provided by customers seeking extended payment
terms.
|
|
a.
|
|
Total amount due in 90 days, or
|
|
|
b.
|
|
1/3rd payable monthly for three months, or
|
|
|
c.
|
|
1/6th monthly for six months
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-11
8.4
|
|
Customer Notification Trade Show and Other Dating
|
|
|
|
Declination, or change of dating status is to be communicated to the
customer by the RDC or Designee. Written documentation of the
communication with the customer is not required, however. A copy of
the approved Request for Dating is to be forwarded to the appropriate
Sales associate and Accounts Receivable Supervisor with a copy
retained in the customer credit file.
|
|
9.0
|
|
DROP SHIP ACCOUNTS
|
|
a.
|
|
The RDC or Designee is responsible for the communication of drop ship issues to
the customer service and procurement departments. The customer service department must
be educated to identify those customers that are restricted, and to decline the entry
of orders to those customers.
|
|
|
b.
|
|
Manufacturers are required to obtain credit approval prior to shipping goods to
an account. If credit approval is not obtained, the RDC or Designee has the
responsibility to decline the manufacturers invoice.
|
|
|
c.
|
|
Drop ships can only be initiated by the receiving customer via a P.O. This
P.O. should then be included as part of the drop ship documentation.
|
|
|
d.
|
|
Vendor agreements should include verbiage that drop ships require approval by
the credit department prior to shipment. This will provide AmerisourceBergen with
recourse should a shipment be sent to a customer not deemed creditworthy.
|
|
|
e.
|
|
Under no circumstances should the RDC or Designee or the customer service
department sign a drop ship authorization form that states a wholesaler agrees to pay
the distributor (or manufacturer) for purchases of the customer, or that the wholesaler
agrees to accept and pay all customer purchase orders or shipments. The distributor
(or manufacturer) must present the wholesaler with an invoice for goods shipped within
a reasonable time frame to allow AmerisourceBergen to collect from the customer.
Inordinate delays should be returned to the distributor (or manufacturer) if we are
unable to present a valid proof of delivery for the transaction.
|
10.0
|
|
COLLECTION PROCEDURES
|
|
10.1
|
|
Delinquency
|
|
a.
|
|
An account is considered delinquent when any portion of a balance due is not
paid within the invoiced terms. A short payment is a delinquent payment.
|
|
|
b.
|
|
Payments remitted with dishonored tender are considered delinquent.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-12
10.2
|
|
Notes on Collection Activities
|
|
a.
|
|
The RDC or Designee will maintain a record of all communications with all
accounts.
|
|
|
b.
|
|
The note is to include information on who was called, the date of the call, who
was contacted and any relevant information as to repayment or facts related to the
delinquency or business.
|
The following are recommended collections procedures; the RDC or Designee has the discretion to
deviate from these suggestions:
10.3
|
|
Plus payments
|
|
|
|
Provided the account has not indicated the intent to file bankruptcy, the collector may
negotiate a plus payment schedule with a duration not to exceed 3 months, if the balance is
below $50,000. Otherwise, the negotiation should be the responsibility of the RDC or
Designee.
|
|
a.
|
|
The agreement for a plus payment must be confirmed in writing with the account.
This agreement is to contain language indicating that the Plus is in consideration for
continued service. (See Exhibit J).
|
|
|
b.
|
|
Plus payments must be sufficient to repay all delinquent balances with lost
discounts and late charges in no longer than 6 months. Any exceptions must be
documents and approved by RVP.
|
|
|
c.
|
|
If dishonored checks are received, if invoices are not paid in full when due or
if required plus payment is missed, the account is to be placed on credit hold. See
Policy #12, Returned items (NSF Checks) for additional guidance on handling dishonored
checks.
|
|
|
d.
|
|
It is recommended that a file be maintained to include all accounts on plus
payment status, and an amortization schedule to eliminate the delinquency by account.
The RDC or Designee has responsibility for monitoring the progress and identifying
missed payments.
|
10.4
|
|
First delinquent payment
|
|
a.
|
|
Within one day of the first missed payment, the appropriate customer contact
person is to be called to arrange payment.
|
|
|
b.
|
|
Short payments are considered missed payments.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-13
10.5
|
|
Second delinquent payments
|
|
a.
|
|
All accounts will be placed on COD or credit hold. The choice between the two
is at the discretion of the RDC or Designee.
|
10.6
|
|
Severe Delinquencies
|
|
a.
|
|
All accounts delinquent three or more payments are the direct responsibility of
the Corporate Director, RDC or Designee, as appropriate.
|
|
|
b.
|
|
All customers who carry a delinquent balance that exceeds $[*****] greater than
60 days past due must have authorization from the Regional VP to continue service. The
authorization signature of the RVP is to be recorded on the Division bad debt reserve
analysis, and forwarded to Corporate for record keeping. See Item #16.1.f, Reports.
|
|
|
c.
|
|
[*****]
|
|
|
d.
|
|
Should the customer fail to comply with the terms of the work out agreement,
the account is to be referred to outside legal counsel or a collections agency
immediately after the 2nd payment default. The decision to place with an attorney or
collection agency is the responsibility of the RDC or Designee. Each situation is
unique, and the RDC or Designee has the discretion to determine what is appropriate.
If the decision is made to refer the matter to an attorney, it is
required
that the
Senior Litigation Counsel at the Corporate Legal Department is consulted to select the
firm to represent our company. [*****]
|
|
|
e.
|
|
Cases placed with a collection service or assigned to an attorney remain the
responsibility of the Corporate Director of Credit or RDC, as appropriate, until the
case is fully resolved.
|
|
|
f.
|
|
All accounts that threaten to file complaints or counter-suits against ABC must
be referred to ABC Legal Department.
|
|
a.
|
|
All accounts that have filed for bankruptcy protection are to be placed on
credit hold upon notification.
|
|
|
b.
|
|
The account is to be immediately referred to the RDC or Designee, and all
penalty accruals are to immediately terminate.
|
|
|
c.
|
|
Future shipments must be approved by the RDC or Designee and should be made
through a separate Debtor in Possession (DIP) account number to isolate pre-petition
sales from post-petition sales activity on prepayment or COD terms at the discretion of
the Regional Director of Credit or Designee. The accounts pre-petition invoice
summary, invoice copies, and Proofs of Delivery will provide substantiation of our
Proof of Claim (POC) with the Bankruptcy Court through
the ABC Legal Department. The POC is to be processed immediately upon receipt from
the Bankruptcy Court.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-14
|
d.
|
|
Collection efforts on the pre-filing balance must stop.
|
|
|
e.
|
|
A special statement as of the filing date of the bankruptcy should be requested
immediately and forwarded as soon as possible to the RDC or Designee. Generally, a
reclamation claim letter is prepared by the litigation paralegal at the
AmerisourceBergen Legal Department immediately upon receipt of the bankruptcy
notification. The original reclamation letter is faxed or sent overnight to the
customer to recover goods received within the ten days immediately preceding the
bankruptcy filing date. (See Exhibit K). Alternatively, if timing issues prohibit the
use of the ABC Legal Department for the letter preparation, the RDC may elect to
prepare the reclamation letter. Copies of all RDC-prepared reclamation letters must be
forwarded to the litigation paralegal at the ABC Legal Department on the date of the
letter distribution to the customer.
|
|
|
f.
|
|
The bad debt reserve is to be increased to [*****]% of the total A/R, unless
otherwise authorized by both the Regional Director of Credit and the Corporate Director
of Credit.
|
|
a.
|
|
Denied chargebacks are the responsibility of the customer.
|
|
|
b.
|
|
All contract pricing accounts must sign our Application for Credit and Purchase
Agreement (see Exhibit A & B) or National Contract that are to include language that
Penalties on contract accounts are subject to terms in their particular contracts.
I/we agree to promptly pay when invoiced all chargebacks for disallowed/ineligible
contract pricing, and to look solely to the relevant manufacturer(s) and/or buying
group(s) for redress.
|
|
|
c.
|
|
Denied chargebacks are to be paid within the cycle on which they are invoiced.
|
11.0
|
|
LATE FEES AND PRICE ADJUSTMENT
|
|
11.1
|
|
Late Fees:
|
|
|
|
For all accounts that have not paid within the agreed upon terms, a late fee, charged at a
rate of [*****]% per month, or the maximum percentage permitted by applicable State and
Federal laws, as well as purchase contract provisions, will be assessed.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-15
11.2
|
|
Price Adjustment:
|
|
|
|
To the extent permitted by applicable State and Federal laws, as well as purchase contract
provisions, all accounts that have not paid within the agreed upon terms will lose their
reduction in cost of goods, if any.
|
|
12.0
|
|
RETURNED PAYMENTS
|
|
|
|
This policy is applicable to NSF, UCF, stop payments on any form of tender.
|
|
12.1
|
|
The Treasury Department shall arrange with the depository banks to advice the RDC or Designee
within 24 hours of any dishonored payments. The RDC or Designee may authorize the re-deposit
of the returned item.
|
|
12.2
|
|
Immediately upon final notification of a non-payment or second return of a re-deposited
check, the RDC or Designee will place the account on credit hold, and request from the
customer a cashiers check or wire transfer of funds to replace the returned item. Deviations
are at the discretion of the RDC or Designee.
|
|
12.3
|
|
The RDC or Designee shall change the customers account a minimum of $[*****] for each time
an item is returned.
|
|
12.4
|
|
[*****]
|
|
12.5
|
|
The RDC or Designee should take every caution to assure the customer is not habitually
sending NSF payments before reinstalling open payment items. Copies of 3 consecutive bank
statements, which show no evidence of NSF charges, will provide adequate support for
reinstating open payment items.
|
|
13.0
|
|
CREDIT WATCH
|
|
13.1
|
|
Purpose
|
|
a.
|
|
Identify higher risk accounts
|
|
|
b.
|
|
Direct ownership to the appropriate associate
|
|
|
c.
|
|
Identify an appropriate bad debt reserve
|
|
|
d.
|
|
Restrict handling authority and options
|
13.2
|
|
Credit Watch Customer Characteristics
|
|
a.
|
|
Three or more delinquent payments in the past six months
|
|
|
b.
|
|
Three or more returned payments in the previous six months
|
|
|
c.
|
|
Operating losses with insufficient working capital
|
|
|
d.
|
|
Any other financial, operational or legal factor that in the opinion of the
Regional Director of Credit sufficiently impairs or might impair the customers
solvency or liquidity so as to create an unwarranted credit risk
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-16
13.3
|
|
Credit Watch Procedures
|
|
a.
|
|
The RDC or Designee will notify the appropriate Sales Directors of the change
of designation of each Credit Watch Account.
|
|
|
b.
|
|
The RDC or Designee is to review the status of Credit Watch accounts on a
monthly basis and change payment terms as justified with a written memo outlining the
reasons for any changes or removal from Credit Watch included in the customers credit
file.
|
|
|
c.
|
|
Watch accounts require RDC or Designee approval to change payment terms,
pricing, rebates, dating, special promotional offers, new programs or any other change
in which monetary exposure of ABC might increase.
|
|
|
d.
|
|
Once current, the account is to remain on the Watch list for an additional
three months to monitor continued performance.
|
|
|
e.
|
|
If a customer requested COD as payment terms, it is NOT necessary to place the
customer on Credit Watch.
|
14.1
|
|
Specific Allowance for Doubtful Accounts
|
|
|
|
A Specific Allowance for Doubtful Accounts must be created for 100% of the balance greater
than 60 days past due for intercompany accounts and accounts in bankruptcy. For all other
accounts, a Specific Allowance for Doubtful Accounts is to be created for each account,
which, in the judgments of the RDC or Designee, demonstrates higher than acceptable risk.
Characteristics of such accounts include, but are not limited to:
|
|
a.
|
|
Continuing delinquent payments
|
|
|
b.
|
|
Dishonored payments
|
|
|
c.
|
|
Filing of, or the stated intent to file for bankruptcy protection
|
|
|
d.
|
|
Debt balances which cannot be supported
|
|
|
e.
|
|
Suits, liens or judgments which could adversely affect the ongoing operations
|
|
|
f.
|
|
Any financial condition which could threaten the ongoing business
|
|
|
g.
|
|
Any other factor that in the judgments of the RDC or Designee might create a
loss
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-17
|
|
The amount of the specific reserve, for non-intercompany and bankruptcy accounts, is to be
based on the available information, as well as the judgment and experience of the RDC or
Designee. This reserve is an estimate of the probability the account will deteriorate and
the likely amount recoverable.
|
|
14.2
|
|
General Reserve
|
|
|
|
A General Allowance for Doubtful Accounts shall be maintained for all accounts, including
Intercompany accounts and notes receivable accounts, for which no specific allowance is
provided. [*****]
|
|
14.3
|
|
Monthly Division Allowances for Doubtful Accounts
|
|
|
|
The Regional Director of Credit or Designee shall submit to the VP of Financial Services, a
monthly analysis of the Allowance for Doubtful Accounts in the Corporate-provided format.
The submission shall occur at least one working day prior to the deadline for submission to
the Accounting Department.
|
|
14.4
|
|
The Allowances for Doubtful Accounts are to be reviewed at least monthly by the RDC or
Designee. The review is to be conducted to ensure that all un-collectable and/or potential
loss accounts are adequately reserved, and to ensure that there are sufficient reserves
related to other expenses.
|
|
15.0
|
|
BAD DEBT WRITE OFFS
|
|
15.1
|
|
Bankruptcies and Termination of Sales Agreements:
|
|
|
|
Balances of Accounts Receivable and Notes that are un-collectable due
to bankruptcy or termination of Sales Agreements are to be written
off as bad debt as determined by the RDC or Designee.
|
|
a.
|
|
Documentation: All requests for Bad Debt Write Offs and Receivables are to be
submitted by the RDC or Designee on Request for Write Off Form (Exhibit L) with the
following documentation attached as soon as an account is determined to be
un-collectable:
|
|
|
|
Photocopy of Accounts Receivable Statement indicating the
balance to be written off
|
|
|
|
|
Correspondence from attorney or collections agency indicating
that the account is to be closed
|
|
|
|
|
In the case of bankruptcy, include a copy of the final
distributions made
|
|
|
|
|
Any other data that would aid in the verification that the data
provided on the Request for Write-Off Form is valid
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-18
|
b.
|
|
Processing: All Bad Debt Write Off requests are to be properly authorized
before submitting to the VP of Financial Services for further processing. The
appropriate authorization levels are as follows:
|
Bad Debt Write Off Authorization Levels
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
Regional
|
|
Regional or Corporate Director of Credit and
Vice President Distribution Center Managers
|
|
|
[*****]
|
|
|
|
[*****]
|
|
Corporate Director of Credit
and
VP Financial Services
|
|
|
[*****]
|
|
|
|
[*****]
|
|
Regional Vice President and VP Financial
Services
|
|
|
[*****]
|
|
|
|
[*****]
|
|
VP Finance
|
|
|
[*****]
|
|
|
|
[*****]
|
|
CFO and COO
|
|
|
[*****]
|
|
|
|
[*****]
|
|
CEO
|
|
|
[*****]
|
|
|
|
[*****]
|
|
Executive Management Committee (any 4
signatures of the following: CFO, COO, CEO,
Pres. Drug Co., Pres. Pharmerica, Pres. ABSG)
|
|
|
[*****]
|
|
|
|
[*****]
|
|
Executive Committee of the Board of Directors
|
|
|
>[*****]
|
|
|
|
>[*****]
|
|
15.2
|
|
Service Charges:
|
|
|
|
Service charges, including those charged against accounts written off per 15.1, are to be
charged against the customer relations account, not bad debt expense.
|
|
15.3
|
|
Disputes:
|
|
|
|
Overdue balances resulting from customer disputes that are deemed to be uncollectible are to
be written off to bad debt expense only after all reasonable collections efforts have been
exhausted. If the customer is inactive or no longer purchasing from ABC, the account is to
be referred to a collections agency or to an attorney for further action.
|
|
a.
|
|
Delivery Documentation Uncollectable balances due to lack of proof of
delivery are to be charged to Returns and Allowances, not bad debt expense.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-19
|
b.
|
|
Other Irreconcilable Differences Overdue balances resulting from
irreconcilable differences can be written off only with concurrence of the RVP in the
interest of maintaining positive account relations.
|
16.0
|
|
REPORTS
|
|
|
|
The following table illustrates the minimum reports that are required to be reviewed or
prepared by Credit & Collections and Accounts Receivable personnel:
|
|
|
|
|
|
|
|
|
|
Report
|
|
Preparer
|
|
Reviewer
|
|
Due To
|
|
Frequency
|
Aged A/R Trial
Balance
|
|
System
|
|
RDC
|
|
N/A
|
|
Semi-monthly
|
|
|
|
|
|
|
|
|
|
Reserve Analysis
and Override
Summary
|
|
Divisional or
Regional Personnel,
as determined by
RDC
|
|
RDC
|
|
VP of Financial
Services
|
|
Monthly, on Day 4
of the Close
|
|
|
|
|
VP of Financial
Services
|
|
Accounting
|
|
Monthly, on Day 5
of the Close
|
|
|
|
|
|
|
|
|
|
Legal Update
|
|
Divisional or
Regional Personnel,
as determined by
RDC
|
|
RDC
|
|
VP of Financial
Services
|
|
Monthly
|
|
|
|
|
VP of Financial
Services
|
|
Executive Team
|
|
Quarterly, during
Month 2
|
|
|
|
|
|
|
|
|
|
Approaching Credit
Limit
|
|
System
|
|
RDC
|
|
N/A
|
|
When Available
|
|
|
|
|
|
|
|
|
|
Exceeding Credit
Limit
|
|
System
|
|
RDC
|
|
N/A
|
|
Daily
|
16.1
|
|
A monthly executive management report package will be prepared for review by the corporate
officers (CFO, VP of Financial Services, Sales, COO, and CEO). The package will include the
following report formats and topics:
|
|
a.
|
|
Accounts Receivable Aging by Distribution Center, summarized by Region
|
|
|
b.
|
|
Accounts Receivable Aging Trend by Region
|
|
|
c.
|
|
Top Customers by total sales volume year to date, with A/R aging summary for
each customer
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-20
|
d.
|
|
Division Held Noted Receivable, summarized by Region
|
|
|
e.
|
|
Corporate Held Notes Receivable
|
|
|
f.
|
|
Reserve Analysis, including Collection Plans for customers with delinquent
balances exceeding $[*****] beyond 60 days delinquent.
|
17.0
|
|
CREDIT REFERENCES
|
|
17.1
|
|
The company is often contacted to provide credit reference experience with existing customers
to potential suppliers.
|
|
17.2
|
|
Verbal references can be provided to suppliers who are within the National Association of
Credit Management (NACM) membership, or who have affiliation with other regional credit
information exchange groups common with AmerisourceBergen. Otherwise, the requests for credit
references must always be in writing.
|
|
17.3
|
|
The reference is to be factual, historical information. No opinions or statements of future
actions can be shared with the requestor.
|
|
17.4
|
|
Written information must be limited to the list provided:
|
|
|
|
Sold since
|
|
|
|
|
High Credit $ amount
|
|
|
|
|
Current total amount owed
|
|
|
|
|
Total amount now past due
|
|
|
|
|
Experience with NSF or returned payments
|
|
|
|
|
Payment patterns such as prompt, slow (# of days past due)
|
17.5
|
|
No written credit reference can include discussion relating to price of products or terms of
sale.
|
|
17.6
|
|
Only copies of written credit references are required to be maintained in the customers
credit files, although it is encouraged that verbal referencing also be noted.
|
|
18.0
|
|
INACTIVE ACCOUNTS
|
|
18.1
|
|
Run a query at each month end to determine which accounts have not purchased during the
month.
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-21
18.2
|
|
Review the list and eliminate any accounts that should not be placed on credit hold (example:
intercompany accounts).
|
|
18.3
|
|
Change the status of the remaining accounts to credit hold.
|
|
18.4
|
|
Review the customer file, pay history, etc. before allowing future purchases.
|
|
19.0
|
|
EXCEPTIONS
|
|
|
|
Any exceptions to these policies are to be approved in writing per the levels of authority
outlined in section 4.2
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
V-22
Exhibit VI
Form of Subordinated Note
SUBORDINATED NOTE
, 200____
1.
Note
. FOR VALUE RECEIVED, the undersigned, Amerisource Receivables Financial
Corporation, a Delaware corporation (
SPV
), hereby unconditionally promises to pay to the order of
[
ORIGINATOR NAME
]
, a(n)
***[
corporation
] [
limited liability company
]
[
partnership
]***
(
Originator
), in lawful money of the United States of America and in immediately
available funds, on or before the date following the Termination Date which is one year and one day
after the date on which (i) the Outstanding Balance of all Receivables sold by Originator under the
Sale Agreement
referred to below has been reduced to zero and (ii) Originator has paid to Buyer
all indemnities, adjustments and other amounts which may be owed thereunder in connection with the
Purchase thereunder (the
Collection Date
), the aggregate unpaid principal sum outstanding of all
Subordinated Loans
made from time to time by Originator to SPV pursuant to and in accordance with
the terms of that certain Receivables Sale Agreement dated as of July 10, 2003 among Originator and
certain of its affiliates, as sellers, and SPV, as buyer (as amended, restated, supplemented or
otherwise modified from time to time, the
Sale Agreement
). Reference to
Section 1.3
of
the Sale Agreement is hereby made for a statement of the terms and conditions under which the loans
evidenced hereby have been and will be made. All terms which are capitalized and used herein and
which are not otherwise specifically defined herein shall have the meanings ascribed to such terms
in the Sale Agreement.
2.
Interest
. SPV further promises to pay interest on the outstanding unpaid principal
amount hereof from the date hereof until payment in full hereof at a rate equal to the 1-month
LIBOR rate published in
The Wall Street Journal
on the first Business Day of each month (or portion
thereof) during the term of this Subordinated Note, computed for actual days elapsed on the basis
of a year consisting of 360 days and changing on the first business day of each month hereafter
(
LIBOR
);
provided, however,
that if SPV shall default in the payment of any principal hereof, SPV
promises to pay, on demand, interest at the rate equal to LIBOR plus 2.00%
per annum
on any such
unpaid amounts, from the date such payment is due to the date of actual payment. Interest shall be
payable on the first Business Day of each month in arrears;
provided, however,
that SPV may elect
on the date any interest payment is due hereunder to defer such payment and upon such election the
amount of interest due but unpaid on such date shall constitute principal under this Subordinated
Note. The outstanding principal of any loan made under this Subordinated Note shall be due and
payable on the Collection Date and may be repaid or prepaid at any time without premium or penalty.
3.
Principal Payments
. Originator is authorized and directed by SPV to enter on the
grid attached hereto, or, at its option, in its books and records, the date and amount of each loan
made by it which is evidenced by this Subordinated Note and the amount of each payment of principal
made by SPV, and absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered;
provided that
neither the failure of Originator to make any
such entry or any error therein shall expand, limit or affect the obligations of SPV hereunder.
VI-1
4.
Subordination
. Originator shall have the right to receive, and SPV shall make, any
and all payments and prepayments relating to the loans made under this Subordinated Note
provided
that
, after giving effect to any such payment or prepayment, the aggregate Outstanding Balance of
Receivables (as each such term is defined in the Purchase Agreement hereinafter referred to) owned
by SPV at such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the Purchase
Agreement) outstanding at such time under the Purchase Agreement, plus (b) the aggregate
outstanding principal balance of all loans made under this Subordinated Note. Originator hereby
agrees that at any time during which the conditions set forth in the proviso of the immediately
preceding sentence shall not be satisfied, Originator shall be subordinate in right of payment to
the prior payment of any indebtedness or obligation of SPV owing to the Administrator or any
Purchaser under that certain Receivables Purchase Agreement dated as of July 10, 2003 by and among
SPV, AmerisourceBergen Drug Corporation, as initial Servicer (the
Servicer
), various Purchaser
Groups from time to time party thereto, and Wachovia Bank, N.A., as the
Administrator
(as
amended, restated, supplemented or otherwise modified from time to time, the
Purchase Agreement
).
The subordination provisions contained herein are for the direct benefit of, and may be enforced
by, the Administrator and the Purchasers and/or any of their respective assignees (collectively,
the
Senior Claimants
) under the Purchase Agreement. Until the date on which the Aggregate
Invested Amount outstanding under the Purchase Agreement has been repaid in full and all other
obligations of SPV and/or the Servicer thereunder and under the
Fee Letter
referenced therein
(all such obligations, collectively, the
Senior Claim
) have been indefeasibly paid and satisfied
in full, Originator shall not institute against SPV any proceeding of the type described in
Section 5.1(b)
of the Sale Agreement unless and until the Collection Date has occurred.
Should any payment, distribution or security or proceeds thereof be received by Originator in
violation of this Section 4, Originator agrees that such payment shall be segregated, received and
held in trust for the benefit of, and deemed to be the property of, and shall be immediately paid
over and delivered to the Administrator for the benefit of the Senior Claimants.
5.
Bankruptcy; Insolvency
. Upon the occurrence of any proceeding of the type described
in
Section 5.1(b)
of the Sale Agreement involving SPV as debtor, then and in any such event
the Senior Claimants shall receive payment in full of all amounts due or to become due on or in
respect of the Aggregate Invested Amount and the Senior Claim (including
Yield
as defined and as
accruing under the Purchase Agreement after the commencement of any such proceeding, whether or not
any or all of such Yield is an allowable claim in any such proceeding) before Originator is
entitled to receive payment on account of this Subordinated Note, and to that end, any payment or
distribution of assets of SPV of any kind or character, whether in cash, securities or other
property, in any applicable insolvency proceeding, which would otherwise be payable to or
deliverable upon or with respect to any or all indebtedness under this Subordinated Note, is hereby
assigned to and shall be paid or delivered by the Person making such payment or delivery (whether a
trustee in bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly to the
Administrator for application to, or as collateral for the payment of, the Senior Claim until such
Senior Claim shall have been paid in full and satisfied.
6.
Amendments
. This Subordinated Note shall not be amended or modified except in
accordance with
Section 7.1
of the Sale Agreement. The terms of this Subordinated Note may
not be amended or otherwise modified without the prior written consent of the Administrator for the
benefit of the Purchasers.
VI-2
7.
GOVERNING LAW
. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT NEW YORK, NEW
YORK, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF NEW YORK. WHEREVER POSSIBLE EACH PROVISION
OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID
UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR
INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF
THIS SUBORDINATED NOTE.
8.
Waivers
. All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor. Originator additionally
expressly waives all notice of the acceptance by any Senior Claimant of the subordination and other
provisions of this Subordinated Note and expressly waives reliance by any Senior Claimant upon the
subordination and other provisions herein provided.
9.
Assignment
. This Subordinated Note may not be assigned, pledged or otherwise
transferred to any party other than Originator without the prior written consent of the
Administrator, and any such attempted transfer shall be void.
|
|
|
|
|
|
AMERISOURCE RECEIVABLES
FINANCIAL CORPORATION
|
|
|
By:
|
|
|
|
|
Title:
|
|
|
|
|
|
VI-3
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
|
|
|
|
|
|
|
|
|
|
|
AMOUNT OF
|
|
AMOUNT OF
|
|
UNPAID
|
|
|
|
|
SUBORDINATED
|
|
PRINCIPAL
|
|
PRINCIPAL
|
|
NOTATION MADE
|
DATE
|
|
LOAN
|
|
PAID
|
|
BALANCE
|
|
BY (INITIALS)
|
|
|
|
|
|
|
|
|
|
VI-4
Exhibit VII
[Form of] Purchase Report
For the Calculation Period beginning [date] and ending [date]
TO: BUYER AND THE ADMINISTRATOR (AS BUYERS ASSIGNEE)
|
|
|
|
|
|
|
|
|
Aggregate Receivables generated and sold during the period:
|
|
$
|
|
|
|
|
A
|
|
Less:
Purchase Price discount during the Period:
|
|
$
|
(
|
)
|
|
|
(B
|
)
|
Equals:
Gross Purchase Price payable during the period (A - B)
|
|
|
|
|
|
$
|
=C
|
|
Less:
Total Purchase Price Credits arising during the period:
|
|
$
|
(
|
)
|
|
|
(D
|
)
|
Equals:
Net Purchase Price payable during the period (C - D):
|
|
|
|
|
|
$
|
=E
|
|
Cash Purchase Price Paid to Originator during the period:
|
|
$
|
|
|
|
|
F
|
|
Subordinated Loans made during the period:
|
|
$
|
|
|
|
|
G
|
|
Less:
Repayments of Subordinated Loans received during the period:
|
|
$
|
(
|
)
|
|
|
(H
|
)
|
Equals:
Purchase Price paid in cash or Subordinated Loans during the
period (F + G - H):
|
|
|
|
|
|
$
|
=I
|
|
Aggregate Outstanding Balance of Receivables contributed during the period:
|
|
$
|
|
|
|
|
J
|
|
VII-1
Exhibit VIII
Pending or Threatened Actions, Suits, Investigations of Proceedings
None.
VIII-1
Schedule A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
1.
|
|
Executed copies of the Receivables Sale Agreement, duly executed by the parties thereto.
|
|
2.
|
|
Copy of the Credit and Collection Policy to attach to the Receivables Sale Agreement as an Exhibit.
|
|
3.
|
|
A certificate of Originators Secretary certifying:
|
(a) A copy of the Resolutions of the Board of Directors of Originator, authorizing
Originators execution, delivery and performance of the Receivables Sale Agreement and the
other documents to be delivered by it thereunder;
(b) A copy of the Organizational Documents of Originator (also certified, to the extent
that such documents are filed with any governmental authority, by the Secretary of State of
the jurisdiction of organization of Originator on or within thirty (30) days prior to
closing);
(c) Good Standing Certificates for Originator issued by the Secretary of State of its
state of incorporation and each jurisdiction where it has material operations; and
(d) The names and signatures of the officers authorized on its behalf to execute the
Receivables Sale Agreement and any other documents to be delivered by it thereunder.
4.
|
|
Pre-filing state and federal tax lien, judgment lien and UCC lien searches against Originator
from the following jurisdictions:
|
(a) California
(b) Delaware
(c) Massachusetts
(d) Missouri
(e) Nevada
(f) Pennsylvania
(g) Tennessee
5.
|
|
Time stamped receipt copies of proper financing statements, duly filed under the UCC on or
before the date of the initial Purchase (as defined in the Receivables Sale Agreement) in all
jurisdictions as may be necessary or, in the opinion of Buyer (or its assigns), desirable,
under the UCC of all appropriate jurisdictions or any comparable law in order to perfect the
ownership interests contemplated by the Receivables Sale Agreement.
|
A-1
6.
|
|
Time stamped receipt copies of proper UCC termination statements, if any, necessary to
release all security interests and other rights of any Person in the Receivables, Contracts or
Related Security previously granted by Originator.
|
|
7.
|
|
Executed Collection Account Agreements for each Lock-Box and Collection Account.
|
8.
|
|
A favorable opinion of legal counsel for Originator licensed to give opinions under New York
law reasonably acceptable to Buyer (and the Administrator, as Buyers assignee) as to the
following:
|
(a) Originator is a Delaware corporation duly organized, validly existing, and in good
standing under the laws of the state of Delaware.
(b) Originator has all requisite authority to conduct its business in each jurisdiction
where failure to be so qualified would have a material adverse effect on Originators
business.
(c) The execution and delivery by Originator of the Receivables Sale Agreement and each
other Transaction Document to which it is a party and its performance of its obligations
thereunder have been duly authorized by all necessary organizational action and proceedings on
the part of Originator and will not:
(i) require any action by or in respect of, or filing with, any governmental body, agency
or official (other than the filing of UCC financing statements);
(ii) contravene, or constitute a default under, any provision of applicable law or
regulation or of its articles or certificate of incorporation or bylaws or of any agreement,
judgment, injunction, order, decree or other instrument binding upon Originator; or
(iii) result in the creation or imposition of any Adverse Claim on assets of Originator
or any of its Subsidiaries (except as contemplated by the Receivables Sale Agreement).
(d) The Receivables Sale Agreement and each other Transaction Document to which it is a
party has been duly executed and delivered by Originator and constitutes the legally valid,
and binding obligation of Originator enforceable in accordance with its terms, except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
(e) In the event that the receivables Sale Agreement is held to create a transfer for
security purposes rather than a true sale or other outright assignment, the provisions of the
Receivables Sale Agreement are effective to create valid security interests in favor of Buyer
in all of Originators right, title and interest in and to the Receivables and Related
Security described therein which constitute accounts, chattel paper or general
intangibles (each as defined in the UCC) (collectively, the
Opinion Collateral
), as
security for the payment of a loan deemed to have been made by Buyer to Originator in an
amount equal to the Purchase Price (as defined therein) of the Receivables (as defined
therein) acquired from Originator, together with all other obligations of Originator
thereunder.
(f) Each of the UCC-1 Financing Statements naming Originator as debtor, Buyer, as secured
party, and Administrator, as assignee of secured party to be filed with the Secretary of State
of Delaware, is in appropriate form for filing therein. Upon filing of such UCC-1 Financing
Statements in such filing offices and payment of the required filing fees, the security
interest in favor of Buyer in the Opinion Collateral will be perfected and assigned of record
to the Administrator.
A-2
(g) Based solely on our review of the UCC Search Reports described in Paragraph 4 to this
Schedule A, and assuming (i) the filing of the Financing Statements and payment of the
required filing fees in accordance with paragraph (f) and (ii) the absence of any intervening
filings between the date and time of the Search Reports and the date and time of the filing of
the Financing Statements, the security interest of Buyer in the Opinion Collateral is prior to
any security interest granted in the Opinion Collateral by Originator, the priority of which
is determined solely by the filing of a financing statement in the appropriate filing offices.
(h) To the best of the opinion givers knowledge, there is no action, suit or other
proceeding against Originator or any Affiliate of Originator, which would materially adversely
affect the business or financial condition of Originator and its Affiliates taken as a whole
or which would materially adversely affect the ability of Originator to perform its
obligations under the Receivables Sale Agreement.
(i) Originator is not an investment company as such term is defined in the Investment
Company Act of 1940, as amended.
9.
|
|
A
true sale
opinion and
substantive consolidation
opinion of counsel for Originator with
respect to the transactions contemplated by the Receivables Sale Agreement.
|
10.
|
|
A Certificate of Originators Vice President and Corporate Treasurer certifying that, as of
the closing date, no Termination Event or Unmatured Termination Event exists and is
continuing.
|
11.
|
|
Executed copies of (i) all consents from and authorizations by any Persons and (ii) all
waivers and amendments to existing credit facilities, that are necessary in connection with
the Receivables Sale Agreement.
|
12.
|
|
Executed Subordinated Note by Buyer in favor of Originator.
|
13.
|
|
If applicable, a direction letter executed by Originator authorizing Buyer (and the
Administrator, as its assignee) and directing warehousemen to allow Buyer (and the
Administrator, as its assignee) to inspect and make copies from Originators books and records
maintained at off-site data processing or storage facilities.
|
A-3
PORTIONS
OF CERTAIN EXHIBITS TO THIS AGREEMENT HAVE BEEN OMITTED AND WILL BE
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A CONFIDENTIAL TREATMENT REQUEST
EXHIBIT 10.3
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JULY 10, 2003
AMONG
AMERISOURCE RECEIVABLES FINANCIAL CORPORATION, AS SELLER,
AMERISOURCEBERGEN DRUG CORPORATION, AS INITIAL SERVICER,
THE VARIOUS PURCHASERS GROUPS FROM TIME TO TIME PARTY HERETO
AND
WACHOVIA BANK, NATIONAL ASSOCIATION, AS ADMINISTRATOR
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page
|
|
ARTICLE I. PURCHASE ARRANGEMENTS
|
|
|
1
|
|
Section 1.1 Purchase Facility
|
|
|
1
|
|
Section 1.2 Incremental Purchases
|
|
|
2
|
|
Section 1.3 Decreases
|
|
|
2
|
|
Section 1.4 Deemed Collections; Purchase Limit
|
|
|
3
|
|
Section 1.5 Payment Requirements and Computations
|
|
|
4
|
|
Section 1.6 Extension of Termination Date
|
|
|
4
|
|
Section 1.7 Sharing of Payments, etc
|
|
|
5
|
|
ARTICLE II. PAYMENTS AND COLLECTIONS
|
|
|
5
|
|
Section 2.1 Payments of Recourse Obligations
|
|
|
5
|
|
Section 2.2 Collections Prior to the Final Facility Termination
Date; Repayment of Certain Demand Advances
|
|
|
5
|
|
Section 2.3 Repayment of Demand Advances on the Final Facility
Termination Date; Collections
|
|
|
6
|
|
Section 2.4 Payment Recission
|
|
|
7
|
|
Section 2.5 Clean Up Call
|
|
|
7
|
|
ARTICLE III. COMMERCIAL PAPER FUNDING
|
|
|
7
|
|
Section 3.1 CP Costs
|
|
|
7
|
|
Section 3.2 Calculation of CP Costs
|
|
|
8
|
|
Section 3.3 CP Costs Payments
|
|
|
8
|
|
Section 3.4 Default Rate
|
|
|
8
|
|
ARTICLE IV. BANK RATE FUNDINGS
|
|
|
8
|
|
Section 4.1 Bank Rate Fundings
|
|
|
8
|
|
Section 4.2 Yield Payments
|
|
|
8
|
|
Section 4.3 Bank Rate Funding Yield Rates
|
|
|
8
|
|
Section 4.4 Suspension of the LIBO Rate
|
|
|
9
|
|
Section 4.5 Default Rate
|
|
|
9
|
|
ARTICLE V. REPRESENTATIONS AND WARRANTIES
|
|
|
9
|
|
Section 5.1 Representations and Warranties of the Seller
|
|
|
9
|
|
Section 5.2 Representations and Warranties of the Seller With
Respect to Each Sale of Receivables
|
|
|
12
|
|
Section 5.3 Representations and Warranties of Servicer
|
|
|
13
|
|
ARTICLE VI. CONDITIONS OF PURCHASES
|
|
|
16
|
|
i
|
|
|
|
|
|
|
Page
|
|
Section 6.1 Conditions Precedent to Initial Incremental Purchase
|
|
|
16
|
|
Section 6.2 Conditions Precedent to All Purchases and Reinvestments
|
|
|
17
|
|
ARTICLE VII. COVENANTS
|
|
|
17
|
|
Section 7.1 Affirmative Covenants of the Seller
|
|
|
17
|
|
Section 7.2 Negative Covenants of the Seller
|
|
|
23
|
|
Section 7.3 Affirmative Covenants of the Servicer
|
|
|
25
|
|
Section 7.4 Negative Covenants of the Servicer
|
|
|
29
|
|
ARTICLE VIII. ADMINISTRATION AND COLLECTION
|
|
|
30
|
|
Section 8.1 Designation of Servicer
|
|
|
30
|
|
Section 8.2 Duties of Servicer
|
|
|
31
|
|
Section 8.3 Collection Notices
|
|
|
32
|
|
Section 8.4 Responsibilities of Seller
|
|
|
33
|
|
Section 8.5 Settlement Reports
|
|
|
33
|
|
Section 8.6 Servicing Fee
|
|
|
33
|
|
ARTICLE IX. AMORTIZATION EVENTS
|
|
|
34
|
|
Section 9.1 Amortization Events
|
|
|
34
|
|
Section 9.2 Remedies
|
|
|
37
|
|
ARTICLE X. INDEMNIFICATION
|
|
|
38
|
|
Section 10.1 Indemnities by the Seller Parties
|
|
|
38
|
|
Section 10.2 Increased Cost and Reduced Return
|
|
|
40
|
|
Section 10.3 Other Costs and Expenses
|
|
|
41
|
|
ARTICLE XI. THE AGENTS
|
|
|
41
|
|
Section 11.1 Appointment and Authorization
|
|
|
41
|
|
Section 11.2 Delegation of Duties
|
|
|
42
|
|
Section 11.3 Exculpatory Provisions
|
|
|
42
|
|
Section 11.4 Reliance by Agents
|
|
|
42
|
|
Section 11.5 Notice of Amortization Events
|
|
|
43
|
|
Section 11.6 Non-Reliance on Administrator, Purchaser Agents and Other Purchasers
|
|
|
44
|
|
Section 11.7 Administrators and Affiliates
|
|
|
44
|
|
Section 11.8 Indemnification
|
|
|
44
|
|
Section 11.9 Successor Administrator
|
|
|
45
|
|
ARTICLE XII. ASSIGNMENTS AND PARTICIPATIONS
|
|
|
45
|
|
Section 12.1 Successors and Assigns; Participations; Assignments
|
|
|
45
|
|
ii
|
|
|
|
|
|
|
Page
|
|
ARTICLE XIII. MISCELLANEOUS
|
|
|
47
|
|
Section 13.1 Waivers and Amendments
|
|
|
47
|
|
Section 13.2 Notices
|
|
|
47
|
|
Section 13.3 Protection of Administrators Security Interest
|
|
|
48
|
|
Section 13.4 Confidentiality
|
|
|
49
|
|
Section 13.5 Bankruptcy Petition
|
|
|
49
|
|
Section 13.6 Limitation of Liability
|
|
|
50
|
|
Section 13.7 CHOICE OF LAW
|
|
|
50
|
|
Section 13.8 CONSENT TO JURISDICTION
|
|
|
50
|
|
Section 13.9 WAIVER OF JURY TRIAL
|
|
|
50
|
|
Section 13.10 Integration; Binding Effect; Survival of Terms
|
|
|
51
|
|
Section 13.11 Counterparts; Severability; Section References
|
|
|
51
|
|
Section 13.12 Characterization
|
|
|
51
|
|
iii
Exhibits and Schedules
|
|
Exhibit I Definitions
|
|
Exhibit II Form of Purchase Notice
|
|
Exhibit III Places of Business of the Seller Parties; Locations of
Records; Federal Employer Identification Number(s)
|
|
Exhibit IV Names of Collection Banks; Collection Accounts
|
|
Exhibit V Form of Compliance Certificate
|
|
Exhibit VI Form of Collection Account Agreement
|
|
Exhibit VII Credit and Collection Policy
|
|
Exhibit VIII Form of Settlement Report
|
|
Exhibit IX Form of Assumption Agreement
|
|
Exhibit X Form of Transfer Supplement
|
|
Exhibit XI Form of Contract(s)
|
|
Exhibit XII Form of Performance Undertaking
|
|
Exhibit XIII List of Responsible Officers
|
|
Exhibit XIV Form of Interim Settlement Report
|
|
Exhibit XV Form of Reduction Notice
|
|
Exhibit XVI Form of Legend
|
|
Exhibit XVII Form of Collection Account Amendment and Assignment
|
|
Schedule A Closing Documents
|
|
iv
RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT,
dated as of July 10, 2003 is entered into by and among:
(a) Amerisource Receivables Financial Corporation, a Delaware corporation (
Seller
),
(b) AmerisourceBergen Drug Corporation, a Delaware corporation (
ABDC
), as initial
Servicer (the Servicer together with Seller, the Seller Parties and each, a
Seller Party
),
(c) the various Purchaser Groups from time to time party hereto, and
(d) Wachovia Bank, National Association, as administrator for each Purchaser Group
(together with its successors and assigns in such capacity, the
Administrator
).
Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Receivable Interests from time to time.
The Purchasers desire to purchase Receivable Interests from Seller from time to time.
Wachovia Bank, National Association has been requested and is willing to act as
Administrator on behalf of the Purchasers and their assigns in accordance with the terms
hereof.
ARTICLE I.
PURCHASE ARRANGEMENTS
Section 1.1
Purchase Facility
.
(a) Upon the terms and subject to the conditions of this Agreement (including, without
limitation, Article VI), from time to time prior to the applicable Facility Termination Date,
Seller may request that the Conduit Purchasers, or, if a Conduit Purchaser (in its sole discretion)
denies such request or is unable to fund (in which case it shall provide notice of such denial or
inability to the Seller, the Administrator and its Purchaser Agent), request that the Related
Committed Purchasers, purchase from Seller undivided ownership interests in the Receivables and the
associated Related Security and Collections (which interest shall be held by the Administrator on
behalf of the applicable Purchasers). Each Conduit Purchaser may (in its sole discretion), and each
Related Committed Purchaser severally hereby agrees to, make Incremental Purchases, on the terms
and subject to the conditions hereof before the applicable Facility Termination Date, ratably based
on the applicable Purchaser Groups Ratable Share of each Incremental Purchase requested pursuant
to Section 1.2 (and, in the case of each Related
Committed Purchaser, its Commitment Percentage of its Purchaser Groups Ratable Share of such
Purchase);
provided that
no Purchase shall be made by any Purchaser if, after giving effect
thereto, either (i) if such Purchaser is a Related Committed Purchaser, such Purchasers aggregate
Invested Amount would exceed its Available Commitment, (ii) the Group Invested Amount would exceed
the Group Commitment for such Purchasers Purchaser Group, or (iii) the aggregate of the Receivable
Interests would exceed 100%. It is the intent of the Conduit Purchasers to fund any Purchases
thereby through the issuance of Commercial Paper. If for any reason any Conduit Purchaser is
unable, or determines that it is undesirable, to issue Commercial Paper to fund or maintain its
investment in the Receivable Interests, or is unable for any reason to repay such Commercial Paper
upon the maturity thereof, such Conduit Purchaser may avail itself of a Bank Rate Funding to the
extent available. If any Purchaser funds or refinances its investment in a Receivable Interest
through any means other than the issuance of Commercial Paper, in lieu of paying CP Costs on the
Invested Amount pursuant to Article III hereof, Seller will pay Yield thereon at the Alternate Base
Rate or the LIBO Rate, selected in accordance with Article IV hereof. Nothing herein shall be
deemed to constitute a commitment of any Conduit Purchaser to issue Commercial Paper.
(b) Seller may, upon at least 30 days notice to the Administrator (which shall promptly
forward a copy to each Purchaser Agent), terminate in whole or reduce in part, the unused portion
of the Purchase Limit (but not below the amount which would cause the Group Investment of any
Purchaser Group to exceed its Group Commitment (after giving effect to such reduction) and, unless
terminated in whole, not below $100,000,000);
provided that
each partial reduction of the Purchase
Limit shall be in an amount equal to $10,000,000 (or a larger integral multiple of $1,000,000 if in
excess thereof). Such reduction shall, unless otherwise agreed to in writing by the Seller, the
Administrator and each Purchaser Agent be applied ratably to reduce the Group Commitment of each
Purchaser Group.
Section 1.2
Incremental Purchases
. Seller shall provide the Administrator and each
Purchaser Agent with at least one (1) Business Days prior written notice in a form set forth as
Exhibit II hereto of each Incremental Purchase (each, a
Purchase Notice
) by 12:00 noon (New York
time) on the Business Day prior to the Purchase Date. Each Purchase Notice shall be subject to
Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the
requested Purchase Price (which shall not be less than $500,000, or a larger integral multiple of
$100,000, with respect to each Purchaser Group) and the Purchase Date. Following receipt of a
Purchase Notice, the applicable Purchaser Agent will determine whether the related Conduit
Purchaser will fund the requested Incremental Purchase. If such Conduit Purchaser (in its sole
discretion) elects not to fund an Incremental Purchase, the Incremental Purchase shall be funded
ratably by its Related Committed Purchasers (in accordance with such Related Committed Purchasers
Available Commitments). On each Purchase Date, upon satisfaction of the applicable conditions
precedent set forth in Article VI, each applicable Purchaser shall deposit to the Facility Account,
in immediately available funds, no later than 2:00 p.m. (New York time), an amount equal to such
Purchasers portion (based on each Purchaser Groups Ratable Share and, if applicable, such
Purchasers Available Commitment) of the requested Purchase Price.
Section 1.3
Decreases
. Seller shall provide the Administrator and each Purchaser Agent
with prior written irrevocable notice in the form set forth as Exhibit XV hereto (a
Reduction
Notice
) of any proposed reduction of Aggregate Invested Amount at least two Business Days (or
three Business Days if the proposed reduction to be made to Purchasers in the
2
Market Street Funding Corporation Purchaser Group is $50,000,000 or more) prior to any such
proposed reduction. Such Reduction Notice shall designate (i) the date (the
Proposed Reduction
Date
) upon which any such reduction of Aggregate Invested Amount shall occur, and (ii) the amount
of Aggregate Invested Amount to be reduced (the
Aggregate Reduction
) which shall be applied to
all Receivable Interests (ratably, according to each Purchasers aggregate Invested Amount).
Section 1.4
Deemed Collections; Purchase Limit
.
(a) If on any day:
(i) the Outstanding Balance of any Receivable is reduced or cancelled as a result of any
credit issued for returned or repossessed goods, any shortages, any pricing adjustment, any
volume rebate or any other allowance, adjustment or deduction by Originator or any Affiliate
thereof, or as a result of any governmental or regulatory action, or
(ii) the Outstanding Balance of any Receivable is reduced or canceled as a result of a
setoff or disputed item in respect of any claim by the Obligor thereof (whether such claim
arises out of the same or a related or an unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is reduced on account of the obligation
of Originator or any Affiliate thereof to pay to the related Obligor any rebate or refund, or
(iv) the Outstanding Balance of any Receivable is less than the amount included in
calculating the Net Pool Balance for purposes of any Settlement Report (for any reason other
than receipt of Collections or such Receivable becoming a Defaulted Receivable), or
(v) any of the representations or warranties of Seller with respect to any Receivable set
forth in Article V were not true when made,
then, on such day, Seller shall be deemed to have received a Collection of such Receivable (A) in
the case of clauses (i)-(iv) above, in the amount of such reduction or cancellation or the
difference between the actual Outstanding Balance and the amount included in calculating such Net
Pool Balance, as applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and, not later than one (1) Business Day thereafter shall
pay to the Collection Account the amount of any such Collection deemed to have been received in the
same manner as actual cash collections are distributed under the terms of this Agreement.
(b) Seller shall ensure that the Aggregate Invested Amount at no time exceeds the Purchase
Limit. If at any time the Aggregate Invested Amount exceeds the Purchase Limit, Seller shall pay to
each Purchaser Agent for the benefit of the related Purchasers immediately an amount to be applied
to reduce the Aggregate Invested Amount (ratably, according to each Purchasers aggregate Invested
Amount), such that after giving effect to such payment the Aggregate Invested Amount is less than
or equal to the Purchase Limit.
3
(c) Seller shall also ensure that the aggregate of the Receivable Interests shall at no time
exceed 100%. If the aggregate of the Receivable Interests exceeds 100%, Seller shall pay to each
Purchaser Agent for the benefit of the related Purchasers on or before the next Business Day an
amount to be applied to reduce the Aggregate Invested Amount (ratably, according to each
Purchasers aggregate Invested Amount), such that after giving effect to such payment the aggregate
of the Receivable Interests equals or is less than 100%.
Section 1.5
Payment Requirements and Computations
. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or deposited in
accordance with the terms hereof no later than 2:00 p.m. (New York time) on the day when due in
immediately available funds, and if not received before 2:00 p.m. (New York time) shall be deemed
to be received on the next succeeding Business Day. If such amounts are payable to or for the
account of any Purchaser, such amounts shall be paid to the account from time to time specified by
the related Purchaser Agent to the Seller and the Servicer. All computations of CP Costs, Yield,
per annum fees calculated as part of any CP Costs, per annum fees hereunder and per annum fees
under the Fee Letters shall be made on the basis of a year of 360 days for the actual number of
days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
Section 1.6
Extension of Termination Date
. The Seller may advise the Administrator
(which shall promptly forward a copy to each Purchaser Agent) in writing of its desire to extend
the Scheduled Facility Termination Date for each Group Commitment (or portion thereof), provided
such request is made not more than 90 days (or such other number of days as to which the applicable
Purchaser Agent shall consent) prior to, and not less than 60 days prior to, the next Scheduled
Facility Termination Date. In the event that the Purchasers in such Purchaser Group are all
agreeable to such extension, the related Purchaser Agent shall so notify the Seller and the
Administrator in writing (it being understood that the Purchasers may accept or decline such a
request in their sole discretion and on such terms as they may elect) not less than 30 days prior
to such next Scheduled Facility Termination Date and the Seller, the Administrator, the Purchaser
Agents and the Purchasers shall enter into such documents as the Purchasers may deem necessary or
appropriate to reflect such extension, and all reasonable costs and expenses incurred by the
Purchasers, the Administrator and the Purchaser Agents in connection therewith (including
reasonable attorneys fees and expenses) shall be paid by the Seller. In the event any Purchaser in
a Purchaser Group declines the request for such extension, such Purchaser shall so notify the
related Purchaser Agent and the Purchaser Agent shall so notify the Seller and the Administrator of
such determination (it being understood that if any such Purchaser Group does not extend its Group
Commitment hereunder or assign its obligations to new Purchasers (willing to extend such Facility
Termination Date) in accordance with Section 12.1, then the Purchase Limit shall be reduced by an
amount equal to that portion of the Commitment of such Exiting Purchasers with respect to which the
Scheduled Facility Termination Date has occurred and the Commitment Percentages and Group
Commitments of the Purchasers within each Purchaser Group shall be appropriately adjusted);
provided that,
the failure of such Purchaser to notify the Purchaser Agent or of the Purchaser
Agent to notify the Seller or the Administrator of the determination to decline such extension
shall not affect the understanding and agreement that the applicable Purchasers shall be deemed to
have refused to grant the requested extension in the event such Purchaser Agent fails to
affirmatively notify the Seller, in writing, of their agreement to accept the requested extension.
4
Section 1.7
Sharing of Payments, etc
. If any Conduit Purchaser or any Related
Committed Purchaser (for purpose of this Section 1.7 only, a
Recipient
) shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on
account of any interest in the Receivable Interest owned by it in excess of its ratable share
thereof, such Recipient shall forthwith purchase from the Conduit Purchasers and/or the Related
Committed Purchasers entitled to a share of such amount participations in the percentage interests
owned by such Persons as shall be necessary to cause such
Recipient to share the excess payment ratably with each such other Person entitled thereto;
provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such Recipient, such purchase from each such other Person shall be rescinded and each such other
Person shall repay to the Recipient the purchase price paid by such Recipient for such
participation to the extent of such recovery, together with an amount equal to such other Persons
ratable share (according to the proportion of (a) the amount of such other Persons required
payment to (b) the total amount so recovered from the Recipient) of any interest or other amount
paid or payable by the Recipient in respect of the total amount so recovered.
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1
Payments of Recourse Obligations
. Seller hereby promises to pay the
following (collectively, the
Recourse Obligations
):
(a) all amounts due and owing under Section 1.3 or 1.4 on the dates specified therein;
(b) the fees set forth in the Fee Letters on the dates specified therein;
(c) all accrued and unpaid Yield on the Receivable Interests accruing Yield at the
Alternate Base Rate or the Default Rate on each Settlement Date applicable thereto;
(d) all accrued and unpaid Yield on the Receivable Interests accruing Yield at the LIBO
Rate on each Settlement Date applicable thereto;
(e) all accrued and unpaid CP Costs on the Receivable Interests funded with Commercial
Paper on each Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon demand.
Section 2.2
Collections Prior to the Final Facility Termination Date; Repayment of Certain
Demand Advances
.
(a) Prior to the Final Facility Termination Date, any Deemed Collections received by the
Servicer and the Purchasers Portion of any Collections received by the Servicer shall be set aside
and held in trust by the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or
for a Reinvestment as provided in this Section 2.2. If at any time any Collections are received by
the Servicer prior to the Final Facility Termination Date, Seller hereby requests and each
Purchaser (other than any Exiting Purchasers) hereby agrees to make, simultaneously with such
receipt, a reinvestment (each, a
Reinvestment
) with the Purchasers
5
Portion of the balance of each and every Collection received by the Servicer such that after giving
effect to such Reinvestment, the Invested Amount of the Receivable Interests of each Purchaser
(other than an Exiting Purchaser) immediately after such receipt and corresponding Reinvestment
shall be equal to the amount of such Invested Amounts immediately prior to such receipt.
(b) On each Settlement Date prior to the Final Facility Termination Date, the Servicer shall
remit to each Purchaser Agent for the benefit of its Purchaser Group (or, if applicable, to the
Administrator for its own benefit) the amounts set aside during the preceding Calculation Period
that have not been subject to a Reinvestment and (after deduction of its Servicing Fee) apply such
amounts (if not previously paid in accordance with Section 2.1) to the Aggregate Unpaids in the
order specified:
first,
ratably to the payment of all accrued and unpaid CP Costs, Yield and Broken
Funding Costs (if any) that are then due and owing,
second,
ratably to the payment of all accrued and unpaid fees under the Fee Letters (if
any) that are then due and owing,
third,
to the ratable reduction of the aggregate Invested Amount of each Exiting
Purchaser,
fourth,
if required under Section 1.3 or 1.4, to the ratable reduction of Aggregate
Invested Amount (less the amount, if any, distributed pursuant to clause third above),
fifth,
for the ratable payment of all other unpaid Recourse Obligations, if any, that are
then due and owing, and
sixth,
the balance, if any, to Seller or otherwise in accordance with Sellers
instructions.
(c) If the Collections are insufficient to pay the Servicing Fee and the amounts specified in
clauses first through fifth above on any Settlement Date, Seller shall make demand upon ABDC for
repayment of any outstanding Demand Advances in an aggregate amount equal to the lesser of (i) the
amount of such shortfall in Collections, and (ii) the aggregate outstanding principal balance of
the Demand Advances, together with all accrued and unpaid interest thereon, and ABDC hereby agrees
to pay such amount to the Collection Account for distribution on such Settlement Date in accordance
with the priorities above.
Section 2.3
Repayment of Demand Advances on the Final Facility Termination Date;
Collections
(a) On the Final Facility Termination Date, ABDC hereby agrees to repay the aggregate
outstanding principal balance of all Demand Advances, together with all accrued and unpaid interest
thereon, to the Collection Account, without demand or notice of any kind, all of which are hereby
expressly waived by ABDC.
(b) On the Final Facility Termination Date and on each day thereafter, the Servicer shall set
aside and hold in trust, for the Secured Parties, all Collections received on each
6
such day. On and after the Final Facility Termination Date, the Servicer shall, on each Settlement
Date and on each other Business Day specified by the Administrator (after deduction of any accrued
and unpaid Servicing Fee as of such date): (i) remit to each Purchaser Agent for the benefit of its
Purchaser Group (or, if applicable, to the Administrator for its own benefit) the amounts set aside
pursuant to the preceding two sentences, and (ii) apply such amounts to reduce the Aggregate
Unpaids as follows:
first,
to the reimbursement of the Administrators and each Purchaser Agents costs of
collection and enforcement of this Agreement,
second,
ratably to the payment of all accrued and unpaid CP Costs, Yield and Broken
Funding Costs,
third,
ratably to the payment of all accrued and unpaid fees under the Fee Letters,
fourth,
to the ratable reduction of Aggregate Invested Amount,
fifth,
for the ratable payment of all other Aggregate Unpaids, and
sixth,
after the Final Payout Date, to Seller.
Section 2.4
Payment Recission
. No payment of any of the Aggregate Unpaids shall be
considered paid or applied hereunder to the extent that, at any time, all or any portion of such
payment or application is rescinded by application of law or judicial authority, or must otherwise
be returned or refunded for any reason. Seller shall remain obligated for the amount of any payment
or application so rescinded, returned or refunded, and shall promptly pay to the applicable
Purchaser Agent (for application to the Person or Persons who suffered such recission, return or
refund) the full amount thereof, plus interest thereon at the Default Rate from the date of any
such recission, return or refunding.
Section 2.5
Clean Up Call
. In addition to Sellers rights pursuant to Section 1.3,
Seller shall have the right (after providing the Administrator and each Purchaser Agent with at
least two (2) Business Days prior notice), at any time following the reduction of the Aggregate
Invested Amount to a level that is less than 10.0% of the original Purchase Limit, to repurchase
all, but not less than all, of the then outstanding Receivable Interests plus any Broken Funding
Costs. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids
through the date of such repurchase, payable in immediately available funds in accordance with
Section 2.3(b). Such repurchase shall be without representation, warranty or recourse of any kind
by, on the part of, or against any Purchaser, any Purchaser Agent or the Administrator.
ARTICLE III.
COMMERCIAL PAPER FUNDING
Section 3.1
CP Costs
. Seller shall pay CP Costs with respect to the Invested Amount of
all Receivable Interests funded through the issuance of Commercial Paper. With respect to
Commercial Paper issued by EagleFunding Capital Corporation or Atlantic Asset Securitization Corp.,
Seller may from time to time request the duration of the next tranche of Commercial Paper. Notice
of such request shall be provided to the applicable Purchaser Agent by 2:00 p.m.
7
(New York time) on the Business day prior to the issuance of such Commercial Paper. The Purchaser
Agent shall use reasonable efforts to accommodate such request but shall have the right to select
the duration of the Commercial Paper whether or not the Seller has made a request.
Section 3.2
Calculation of CP Costs
. On each Business Day, each Purchaser (or the
applicable Purchaser Agent on its behalf) shall calculate the aggregate amount of CP Costs
applicable to its Receivable Interests accrued through the end of the preceding Business Day and
shall notify Seller of such aggregate amount; provided, however, if any Purchaser is unable or
unwilling to make such daily calculation, such Purchaser (or the applicable Purchaser Agent on its
behalf) shall only be required to notify the Seller on the first Business Day of each calendar week
with respect to the applicable CP Costs for each Business day in the preceding week.
Section 3.3
CP Costs Payments
. On each Settlement Date, Seller shall pay to the
applicable Purchaser Agent (for the benefit of the related Conduit Purchaser) an aggregate amount
equal to all accrued and unpaid CP Costs in respect of the portion of the Invested Amounts of all
Receivable Interests funded by such Conduit Purchaser with Commercial Paper for the Calculation
Period then most recently ended in accordance with Article II.
Section 3.4
Default Rate
. From and after the occurrence of an Amortization Event, all
Receivable Interests shall accrue Yield at the Default Rate.
ARTICLE IV.
BANK RATE FUNDINGS
Section 4.1
Bank Rate Fundings
. Prior to the occurrence of an Amortization Event, the
portion of outstanding Invested Amount of each Receivable Interest funded with Bank Rate Fundings
shall accrue Yield for each day during its Interest Period at either the LIBO Rate or the Alternate
Base Rate in accordance with the terms and conditions hereof. Until Seller gives the required
notice to the Administrator and the applicable Purchaser Agent of another Yield Rate in accordance
with Section 4.3, the initial Yield Rate for any Receivable Interest funded with a Bank Rate
Funding shall be the Alternate Base Rate (unless the Default Rate is then applicable). If any
undivided interest in a Receivable Interest initially funded with Commercial Paper is sold (or
otherwise participated) to the Liquidity Providers pursuant to a Liquidity Agreement, such
undivided interest in such Receivable Interest shall be deemed to have an Interest Period
commencing on the date of such sale.
Section 4.2
Yield Payments
. On the Settlement Date for each Receivable Interest that
is funded with a Bank Rate Funding, Seller shall pay to each applicable Purchaser Agent (for the
benefit of its Purchaser Group) an aggregate amount equal to the accrued and unpaid Yield thereon
for the entire Interest Period of each related Bank Rate Funding in accordance with Article II.
Section 4.3
Bank Rate Funding Yield Rates
. Seller may select the LIBO Rate (subject to
Section 4.4 below) or the Alternate Base Rate for each Bank Rate Funding. Seller shall by 12:00
noon (New York time): (i) at least three (3) Business Days prior to the commencement of any
Interest Period with respect to which the LIBO Rate is being requested as a new Yield Rate and (ii)
at least one (1) Business Day prior to the commencement of any Interest Period with
8
respect to which the Alternate Base Rate is being requested as a new Yield Rate, give the
applicable Purchaser Agent irrevocable notice of the new Yield Rate for the Bank Rate Funding
associated with such new Interest Period. Unless Seller gives sufficient notice to the applicable
Purchaser Agent of another Yield Rate (in accordance with the preceding sentence), the initial
Yield Rate for any Bank Rate Funding shall be the Alternate Base Rate (unless the Default Rate is
then applicable).
Section 4.4
Suspension of the LIBO Rate
. If any Related Committed Purchaser or
Liquidity Provider notifies the related Purchaser Agent that it has determined that funding its
ratable share of the Bank Rate Fundings at a LIBO Rate would violate any applicable law, rule,
regulation, or directive of any governmental or regulatory authority, whether or not having the
force of law, or that (i) deposits of a type and maturity appropriate to match fund its Bank Rate
Funding at such LIBO Rate are not available or (ii) such LIBO Rate does not accurately reflect the
cost of acquiring or maintaining a Bank Rate Funding at such LIBO Rate, then such Purchaser Agent
shall suspend the availability of such LIBO Rate and require Seller to select the Alternate Base
Rate for any Bank Rate Funding accruing Yield at such LIBO Rate.
Section 4.5
Default Rate
. From and after the occurrence of an Amortization Event, all
Bank Rate Fundings shall accrue Yield at the Default Rate.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1
Representations and Warranties of the Seller
. The Seller hereby represents
and warrants to the Administrator, each Purchaser Agent and each Purchaser, as to itself, as of the
date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that:
(a)
Organization and Qualification
. The Sellers only jurisdiction of organization is
correctly set forth in the preamble of this Agreement. The Seller is a corporation duly organized,
validly existing and in good standing under the Laws of its jurisdiction of incorporation. The
Seller is duly qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the ownership of its properties or the nature of its activities (including
transactions giving rise to Receivables), or both, requires it to be so qualified or, if not so
qualified, the failure to so qualify would not have a material adverse effect on its financial
condition or results of operations.
(b)
Authority
. The Seller has the legal power and authority to execute and deliver the
Transaction Documents, to make the sales provided for herein and to perform its obligations under
this Agreement and the other Transaction Documents.
(c)
Execution and Binding Effect
. Each of the Transaction Documents to which the
Seller is a party has been duly and validly executed and delivered by the Seller and (assuming the
due and valid execution and delivery thereof by the other parties thereto), constitutes a legal,
valid and binding obligation of the Seller enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar
Laws of general application relating to or affecting the
9
enforcement of creditors rights or by general principles of equity, and will vest absolutely and
unconditionally in the Administrator (for the benefit of the Secured Parties) a valid undivided
security interest in the Receivables purported to be assigned thereby, subject to no Liens
whatsoever. Upon the filing of the necessary financing statements under the UCC as in effect in the
jurisdiction whose Law governs the perfection of the Administrators (for the benefit of the
Secured Parties) ownership and security interests in the Receivables, such interests will be
perfected under Article 9 of such UCC, prior to and enforceable against all creditors of and
purchasers from the Seller and all other Persons whatsoever (other than the Administrator, for the
benefit of the Secured Parties, and their successors and assigns).
(d)
Authorizations and Filings
. No authorization, consent, approval, license,
exemption or other action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary or, in the opinion of the Seller, advisable
in connection with the execution and delivery by the Seller of each of the Transaction Documents to
which the Seller is a party, the consummation by the Seller of the transactions herein or therein
contemplated or the performance by the Seller of or the compliance by the Seller with the terms and
conditions hereof or thereof, to ensure the legality, validity or enforceability hereof or thereof,
or to ensure that the Administrator (for the benefit of the Secured Parties) will have an ownership
and security interest in and to the Receivables which is perfected and prior to all other Liens
(including competing ownership or security interests), other than the filing of financing
statements under the UCC in the jurisdiction of the Sellers Location and of the Originators
Location.
(e)
Location of Chief Executive Office, etc
. As of the date hereof: (i) the Sellers
chief executive office is located at the address for notices set forth on the signature page
hereof; (ii) the offices where the Seller keeps all of its Records are listed on Exhibit III
hereto; and (iii) since its incorporation, the Seller has operated only under the names identified
in Exhibit III hereto, and has not changed its name, merged or consolidated with any other
corporation or been the subject of any proceeding under Title 11, United States Code (Bankruptcy),
except as disclosed in Exhibit III hereto.
(f)
Perfection
. This Agreement is effective to create a valid security interest in
favor of the Administrator for the benefit of the Secured Parties in the Purchased Assets to secure
payment of the
Aggregate Unpaids, free and clear of any Lien except as created by the Transaction Documents.
There have been duly filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Administrators (on behalf of the Secured Parties) security interest in the Purchased Assets. Such
Sellers only jurisdiction of organization is Delaware.
(g)
Absence of Conflicts
. Neither the execution and delivery by the Seller of each of
the Transaction Documents to which the Seller is a party, nor the consummation by the Seller of the
transactions herein or therein contemplated, nor the performance by the Seller of or the compliance
by the Seller with the terms and conditions hereof or thereof, will (i) violate any Law or (ii)
conflict with or result in a breach of or a default under (A) the certificate of incorporation or
by-laws of the Seller or (B) any agreement or instrument, including, without limitation, any and
all indentures, debentures, loans or other agreements to which the Seller is a party or by which it
or any of its properties (now owned or hereafter acquired) may be subject or bound, which would
have a material adverse effect on the financial position or results of
10
operations of the Seller or result in rendering any indebtedness evidenced thereby due and payable
prior to its maturity or result in the creation or imposition of any Lien pursuant to the terms of
any such instrument or agreement upon any property (now owned or hereafter acquired) of the Seller.
The Seller has not entered into any agreement with any Obligor prohibiting, restricting or
conditioning the assignment of any portion of the Receivables.
(h)
No Amortization Event
. No event has occurred and is continuing and no condition
exists which constitutes an Amortization Event.
(i)
Accurate and Complete Disclosure
. No information furnished by the Seller to the
Administrator, any Purchaser Agent or any Purchaser pursuant to or in connection with this
Agreement or any transaction contemplated hereby is false or misleading in any material respect as
of the date as of which such information was furnished (including by omission of material
information necessary to make such information not misleading).
(j)
No Proceedings
. There are no proceedings or investigations pending, or to the
knowledge of the Seller, threatened, before any Official Body (A) asserting the invalidity of the
Transaction Documents, (B) seeking to prevent the consummation of any of the transactions
contemplated by the Transaction Documents, or (C) seeking any determination or ruling that might
materially and adversely affect (i) the performance by either the Seller or the Servicer of its
obligations under the Transaction Documents or (ii) the validity or enforceability of the
Transaction Documents, the Contracts or any material amount of the Receivables.
(k)
Bulk Sales Act
. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(l)
Litigation
. No injunction, decree or other decision has been issued or made by any
Official Body that prevents, and to the knowledge of the Seller, no threat by any Person has been
made to attempt to obtain any such decision that would have a material adverse effect on, the
conduct by the Seller of a significant portion of the Sellers business operations or any portion
of its business operations affecting the Receivables, and no litigation, investigation or
proceeding exists asserting the invalidity of the Transaction Documents, seeking to prevent the
consummation of any of the transactions contemplated by the Transaction Documents, or seeking any
determination or ruling that might materially and adversely affect (A) the performance by either
the Seller or the Servicer of its obligations under the Transaction Documents or (B) the validity
or enforceability of the Transaction Documents, the Contracts or any material amount of the
Receivables.
(m)
Margin Regulations
. The use of all funds acquired by the Seller under this
Agreement will not conflict with or contravene any of Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as the same may from time to time be amended, supplemented
or otherwise modified.
(n)
Taxes
. The Seller has timely filed all United States Federal income tax returns
and all other material tax returns which are required to be filed by it and has paid all taxes due
pursuant to such returns and paid or contested any assessment received by the Seller related to
such returns.
11
(o)
Books and Records
. The Seller has indicated on its books and records (including
any computer files), that the Receivable Interest in the Receivables sold by the Seller hereunder
is the property of Purchasers. The Seller maintains at, or shall cause the Servicer to maintain at,
one or more of their respective offices listed in Exhibit III hereto the complete Records for the
Receivables.
(p)
Creditor Approval
. The Seller has obtained from its creditors (i) all approvals
necessary to sell and assign the Receivables and (ii) releases of any security interests in the
Receivables.
(q)
Financial Condition
. The Seller is not insolvent or the subject of any Event of
Bankruptcy and the sale of Receivables on such day will not be made in contemplation of the
occurrence thereof.
(r)
Financial Information
. If and when produced in accordance with the terms of this
Agreement, the consolidated balance sheet of the Seller as at the most recent Fiscal Year end and
the related statements of income of the Seller for the Fiscal Year then ended, fairly present the
consolidated financial position of the Seller as at such date and the consolidated results of the
operations, all in accordance with GAAP.
(s)
Investment Company
. The Seller is not an investment company or a company
controlled by an investment company within the meaning of the Investment Company Act of 1940, as
amended. The Seller is not a holding company or a subsidiary holding company of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any
successor statute.
(t)
Payments to Applicable Originator
. With respect to each Receivable transferred to
Seller under the Receivables Sale Agreement, Seller has given reasonably equivalent value to the
applicable Originator in consideration therefor and such transfer was not made for or on account of
an antecedent debt. No transfer by any Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
§§ 101 et seq.), as amended.
Section 5.2
Representations and Warranties of the Seller With Respect to Each Sale of
Receivables
. By selling undivided ownership interests in Receivables to the Purchasers, either
by Incremental Purchase or Reinvestment, the Seller represents and warrants to the Administrator,
each Purchaser Agent and each Purchaser as of the date of such sale of an Incremental Purchase or
Reinvestment (in addition to its other representations and warranties contained herein or made
pursuant hereto) that:
(a)
Purchase Notice
. If such sale relates to an Incremental Purchase, all information
set forth on the related Purchase Notice is true and correct as of the date of such Incremental
Purchase.
(b)
Assignment
. This Agreement vests in the Administrator, for the benefit of the
Secured Parties, all the right, title and interest of the Seller in and to the Receivable Interest
in the Receivables, and the Related Security and Collections with respect thereto, and constitutes
a valid sale of or grant of a security interest in the Receivable Interest, enforceable against all
creditors of and purchasers from the Seller.
12
(c)
No Liens
. Each Receivable, together with the related Contract and all purchase
orders and other agreements related to such Receivable, is owned by the Seller free and clear of
any Lien, except as provided herein, and is not subject to any Dispute, except as provided herein.
When each of the Purchasers makes a purchase of a Receivable Interest in such Receivable, it shall
have acquired and shall continue to have maintained an undivided percentage ownership interest to
the extent of its percentage of the Receivable Interest in such Receivable and in the Related
Security and the Collections with respect thereto free and clear of any Lien, except as provided
herein. The Seller has not and will not prior to the time of the sale of any such interest to the
Purchasers have sold, pledged, assigned, transferred or subjected, and will not thereafter sell,
pledge, assign, transfer or subject, to a Lien any of the Receivables, the Related Security or the
Collections, other than the assignment of Receivable Interests therein to the Administrator, for
the benefit of the Secured Parties, in accordance with the terms of this Agreement.
(d)
Filings
. On or prior to each Purchase and each recomputation of the Receivable
Interest, all financing statements and other documents required to be recorded or filed in order to
perfect and protect the Receivable Interest against all creditors of and purchasers from the Seller
and all other Persons whatsoever will have been duly filed in each filing office necessary for such
purpose and all filing fees and taxes, if any, payable in connection with such filings shall have
been paid in full.
(e)
Credit and Collection Policy
. The Originators Credit and Collection Policy of the
applicable Originator has been complied with in all material respects in regard to each Receivable
and related Contract.
(f)
Collection Banks, Collection Accounts and Lock-Boxes
. The names and addresses of
all Collection Banks, together with the numbers of all Collection Accounts and Lock-Boxes at such
Collection Banks and the addresses of all related Collection Accounts and Lock-Boxes, are specified
in Exhibit IV (or such other Collection Banks, Collection Accounts and Lock Boxes that have been
changed or established in accordance with Section 7.2(g)).
(g)
Nature of Receivables
. Each Receivable is, or will be, an eligible asset within
the meaning of Rule 3a-7 promulgated under the Investment Company Act of 1940, as amended from time
to time.
(h)
Bona Fide Receivables
. Each Receivable is an obligation of an Obligor arising out
of a past, current or future sale or performance by the applicable Originator, in accordance with
the terms of the Contract giving rise to such Receivable. The Seller has no knowledge of any fact
that should have led it to expect at the time of the initial creation of an interest in any
Receivable hereunder that such Receivable would not be paid in full when due except with respect to
any Dilution. Each Receivable classified as an Eligible Receivable by the Seller in any document
or report delivered hereunder satisfies the requirements of eligibility contained in the definition
of Eligible Receivable.
Section 5.3
Representations and Warranties of Servicer
. The Servicer represents and
warrants to the Administrator, each Purchaser Agent and each Purchaser on and as of the date hereof
and as of the date of each Incremental Purchase and each Reinvestment after such date:
13
(a)
Organization and Qualification
. The Servicers only jurisdiction of organization
is in Delaware. The Servicer is a corporation duly organized, validly existing and in good standing
under the Laws of its jurisdiction of incorporation. The Servicer is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction in which the ownership of its
properties or the nature of its activities, or both, requires it to be so qualified or, if not so
qualified, the failure to so qualify would not have a material adverse effect on its financial
condition or results of operations.
(b)
Authority
. The Servicer has the legal power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and thereunder.
(c)
Execution and Binding Effect
. This Agreement has been duly and validly executed
and delivered by the Servicer and (assuming the due and valid execution and delivery thereof by the
other parties thereto), constitutes a legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other similar Laws of general application relating to or
affecting the enforcement of creditors rights or by general principles of equity, and will vest
absolutely and unconditionally in the Administrator (for the benefit of the Secured Parties) an
ownership or security interest in the Receivables purported to be assigned thereby, subject to no
Liens whatsoever. Upon the filing of the necessary financing statements under the UCC as in effect
in the jurisdiction whose Law governs the perfection of the Administrator (for the benefit of the
Secured Parties) ownership or security interests in the Receivables, such interests will be
perfected under Article 9 of such UCC, prior to and enforceable against all creditors of and
purchasers from the Seller and all other Persons whatsoever (other than for the Administrator, for
benefit of the Secured Parties, and their successors and assigns).
(d)
Authorizations and Filings
. No authorization, consent, approval, license,
exemption or other action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary or, in the opinion of the Servicer,
advisable in connection with the execution and delivery by the Servicer of this Agreement, the
consummation by the Servicer of the transactions herein or therein contemplated or the performance
by the Servicer of or the compliance by the Servicer with the terms and conditions hereof or
thereof, to ensure the legality, validity or enforceability hereof, or to ensure that the
Administrator (for the benefit of the Secured Parties) will have an ownership and security interest
in and to the Receivables which is perfected and prior to all other Liens (including competing
ownership or security interests), other than the filing of financing statements under the UCC in
the jurisdictions of each Originators Location and of the Sellers Location.
(e)
Absence of Conflicts
. Neither the execution and delivery by the Servicer of this
Agreement, nor the consummation by the Servicer of the transactions herein contemplated, nor the
performance by the Servicer of or the compliance by the Servicer with the terms and conditions
hereof, will (i) violate any Law or (ii) conflict with or result in a breach of or a default under
(A) the certificate of incorporation or by-laws of the Servicer or (B) any agreement or instrument,
including, without limitation, any and all indentures, debentures, loans or other agreements to
which the Servicer is a party or by which it or any of its properties (now owned or hereafter
acquired) may be subject or bound, which would have a material adverse effect on the financial
position or results of operations of the Servicer or result in rendering any debt in excess of
$10,000,000 evidenced thereby due and payable prior to its maturity or result in
14
the creation or imposition of any Lien pursuant to the terms of any such instrument or agreement
upon any property (now owned or hereafter acquired) of the Servicer. The Servicer has not entered
into any agreement with any Obligor prohibiting, restricting or conditioning the assignment of any
portion of the Receivables.
(f)
No Amortization Event
. No event has occurred and is continuing and no condition
exists which constitutes a Amortization Event.
(g)
Accurate and Complete Disclosure
. No information furnished by a Responsible
Officer of the Servicer to the Administrator, any Purchaser Agent or any Purchaser pursuant to or
in connection with this Agreement or any transaction contemplated hereby is false or misleading in
any material respect as of the date as of which such information was furnished (including by
omission of material information necessary to make such information not misleading).
(h)
No Proceedings
. There are no proceedings or investigations pending, or to the
knowledge of the Servicer, threatened, before any Official Body (A) asserting the invalidity of the
Transaction Documents, (B) seeking to prevent the consummation of any of the transactions
contemplated by the Transaction Documents, or (C) seeking any determination or ruling that might
materially and adversely affect (i) the performance by either the Seller or the Servicer of its
obligations under this Agreement or (ii) the validity or enforceability of the Transaction
Documents, the Contracts or any material amount of the Receivables.
(i)
No Change in Ability to Perform
. Since the date on which the Servicer accepted its
duties hereunder, there has been no material adverse change in the ability of the Servicer to
perform its obligations hereunder.
(j)
Credit and Collection Policy
. The Credit and Collection Policy has been complied
with in all material respects in regard to each Receivable and related Contract.
(k)
Financial Condition
. The consolidated balance sheet of the AmerisourceBergen and
its Consolidated Subsidiaries (which shall include the Servicer) as at the most recent Fiscal Year
end and the related statements of income and cash flows of AmerisourceBergen and its Consolidated
Subsidiaries for the fiscal year then ended, certified by Ernst & Young LLP, independent
accountants, or another nationally recognized firm of independent accountants, are available as a
matter of public record. The Servicer will cause AmerisourceBergen to provide on the date of such
public filing or the next succeeding Business Day a certificate to the Administrator (which shall
promptly forward a copy to each Purchaser Agent), that such balance sheet and statements of income
and cash flows fairly present the consolidated financial position of AmerisourceBergen and its
Consolidated Subsidiaries as at such date and the consolidated results of the operations of and
consolidated cash flows of AmerisourceBergen and its Consolidated Subsidiaries for the period ended
on such date, all in accordance with GAAP. The unaudited consolidated balance sheet of
AmerisourceBergen and its Consolidated Subsidiaries as at most recent fiscal quarter end and the
related unaudited statements of income and cash flows of AmerisourceBergen and its Consolidated
Subsidiaries for the periods then ended are available as a matter of public record. The Servicer
will cause AmerisourceBergen to provide on the date of such public filing or the next succeeding
Business Day a certificate to the Administrator (which shall promptly forward a copy to each
Purchaser
15
Agent), that such balance sheet and statements of income and cash flows fairly present the
consolidated financial position of AmerisourceBergen and its Consolidated Subsidiaries as at such
date and the consolidated results of the operations of and consolidated cash flows of
AmerisourceBergen and its Consolidated Subsidiaries for the periods ended on such date, all in
accordance with GAAP.
(l)
Litigation
. No injunction, decree or other decision has been issued or made by any
Official Body that prevents, and to the knowledge of the Servicer, no threat by any Person has been
made to attempt to obtain any such decision that would have a material adverse effect on, the
conduct by the Servicer of a significant portion of its business operations or any portion of its
business operations affecting the Receivables, and no litigation, investigation or proceeding
asserting the invalidity of this Agreement, seeking to prevent the consummation of the transactions
contemplated by this Agreement, or seeking any determination or ruling that might materially and
adversely affect (A) the performance of the Servicer of its obligations under this Agreement, or
(B) the validity or enforceability of this Agreement, the Contracts or any material amount of the
Receivables.
(m)
Insurance
. The Servicer currently maintains insurance with respect to its
properties and businesses and causes its Subsidiaries to maintain insurance with respect to their
properties and business against loss or damage of the kinds customarily insured against by
corporations engaged in the same or similar business and similarly situated, of such types and in
such amounts as are customarily carried under
similar circumstances by such other corporations including, without limitation, workers
compensation insurance.
(n)
ERISA
. No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is reasonably expected to
occur, could reasonably be expected to result in a material adverse effect on the business,
financial condition, operations or properties of Performance Guarantor and ERISA Affiliates taken
as a whole. The present value of all accumulated benefit obligations under each Pension Plan (based
on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Pension Plan, and the present value of
all accumulated benefit obligations of all underfunded Pension Plans (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Pension Plans.
ARTICLE VI.
CONDITIONS OF PURCHASES
Section 6.1
Conditions Precedent to Initial Incremental Purchase
. The initial
Incremental Purchase of a Receivable Interest under this Agreement is subject to the conditions
precedent that (a) the Administrator and each Purchaser Agent shall have received on or before the
date of such Purchase those documents listed on Schedule A and (b) the Administrator and each
Purchaser Agent shall have received all fees and expenses required to be paid on such date pursuant
to the terms of this Agreement and the Fee Letter.
16
Section 6.2
Conditions Precedent to All Purchases and Reinvestments
. Each Incremental
Purchase and each Reinvestment shall be subject to the further conditions precedent that (a) in the
case of each such Purchase: (i) the Servicer shall have delivered to the Administrator and each
Purchaser Agent on or prior to the date of such Purchase, in form and substance satisfactory to the
Administrator and each Purchaser Agent, all Settlement Reports as and when due under Section 8.5
and (ii) upon the Administrators or any Purchaser Agents request, the Servicer shall have
delivered to the Administrator and each Purchaser Agent at least one (1) Business Day prior to such
Purchase an interim settlement report in substantially the form of Exhibit XIV; (b) the
Administrator and each Purchaser Agent shall have received such other documents as it may
reasonably request and (c) on each Purchase Date, the following statements shall be true (and
acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be deemed a
representation and warranty by Seller that such statements are then true):
(i) the representations and warranties set forth in Article V are true and correct on and
as of the date of such Incremental Purchase or Reinvestment as though made on and as of such
Purchase Date;
(ii) no event has occurred and is continuing, or would result from such Incremental
Purchase or Reinvestment, that will constitute an Amortization Event, and no event has
occurred and is continuing, or would result from such Incremental Purchase or Reinvestment,
that would constitute an Unmatured Amortization Event; and
(iii) after giving effect to such Incremental Purchase or Reinvestment, the Aggregate
Invested Amount will not exceed the Purchase Limit and the aggregate Receivable Interests will
not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise directed by the
Administrator, occur automatically on each day that the Servicer shall receive any Collections
without the requirement that any further action be taken on the part of any Person and
notwithstanding the failure of Seller to satisfy any
of the foregoing conditions precedent in respect of such Reinvestment. The failure of Seller to
satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall give rise to
a right of the Administrator and each Purchaser Agent, which right may be exercised at any time on
demand of the Administrator or any Purchaser Agent, to rescind the related purchase and direct
Seller to pay to the Purchaser Agents, for the benefit of Purchasers (ratably, according to each
Purchasers aggregate Invested Amount), an amount equal to the Collections that shall have been
applied to the affected Reinvestment (but not in excess of the Aggregate Unpaids).
ARTICLE VII.
COVENANTS
Section 7.1
Affirmative Covenants of the Seller
. In addition to its other covenants
contained herein or made pursuant hereto, the Seller covenants with the Administrator, each
Purchaser Agent and each Purchaser as follows:
17
(a)
Notice of Amortization Event
. Promptly upon becoming aware of, but in any event no
later than the next Business Day, any Amortization Event or Unmatured Amortization Event, the
Seller shall give the Administrator (which shall promptly forward a copy to each Purchaser Agent)
notice thereof, together with a written statement of a Responsible Officer setting forth the
details thereof and any action with respect thereto taken or contemplated to be taken by the
Seller.
(b)
Notice of Material Adverse Change
. Promptly upon becoming aware thereof, the
Seller shall give the Administrator (which shall promptly forward a copy to each Purchaser Agent)
notice of any material adverse change in the business, operations or financial condition of the
Seller, which reasonably could affect adversely the collectibility of the Receivables.
(c)
Preservation of Corporate Existence
. The Seller shall preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation,
and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of the Administrator, any
Purchaser Agent or any Purchaser hereunder or (ii) the ability of the Seller to perform its
obligations under the Transaction Documents.
(d)
Compliance with Laws
. The Seller shall comply in all material respects with all
Laws applicable to the Seller, its business and properties, and all Receivables related to the
Receivable Interests.
(e)
Enforceability of Obligations
. The Seller shall take such actions as are
reasonable and within its power to ensure that, with respect to each Receivable, the obligation of
any related Obligor to pay the unpaid balance of such Receivable in accordance with the terms of
the related Contract remains legal, valid, binding and enforceable against such Obligor except as
otherwise permitted by Section 8.2(d).
(f)
Books and Records
. (i) The Seller shall, to the extent practicable, maintain and
implement administrative and operating procedures (including, without limitation, the ability to
recreate Records evidencing the Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, Records and other information, reasonably
necessary or advisable for the collection of all Receivables (including, without limitation,
Records adequate to permit the identification of all Related Security and Collections and
adjustments to each existing Receivable).
(ii) The Seller will (and will cause each Originator to): (A) on or prior to the date
hereof, mark its Aged Trial Balance with a legend in substantially the form set forth on
Exhibit XVI hereto and (B) upon the request of the Administrator or any Purchaser Agent
following the occurrence of an
Amortization Event: (x) mark each Contract with a legend describing the Administrators
security interest and (y) deliver to the Administrator all Contracts (including, without
limitation, all multiple originals of any such Contract constituting an instrument, a
certificated security or chattel paper) relating to the Receivables.
18
(g)
Fulfillment of Obligations
. The Seller shall do nothing to impair the rights,
title and interest of the Administrator, any Purchaser Agent or any Purchaser in and to the
Receivable Interests and shall pay when due any taxes, including without limitation any sales tax,
excise tax or other similar tax or charge, payable in connection with the Receivables and their
creation and satisfaction.
(h)
Obligor List
. The Seller shall at all times maintain (or cause the Servicer to
maintain) a current list (which may be stored on computer systems, magnetic tapes or disks) of all
Obligors under Contracts related to Receivables, including the name, address, telephone number and
account number of each such Obligor. The list shall be updated as provided in Section 8.5(b), and
the Seller shall deliver or cause to be delivered a copy of such list to the Administrator (which
shall promptly forward a copy to each Purchaser Agent) as soon as practicable following the
Administrators request (but not more frequently than once each calendar quarter unless an
Amortization Event or Unmatured Amortization Event has occurred and is continuing).
(i)
Litigation
. As soon as possible, and in any event within three (3) Business Days
of the Sellers knowledge thereof, the Seller shall give the Administrator (which shall promptly
forward a copy to each Purchaser Agent) notice of (i) any litigation, investigation or proceeding
against the Seller which may exist at any time which, in the reasonable judgment of the Seller,
could have a material adverse effect on the financial condition or results of operations of the
Seller, impair the ability of the Seller to perform its obligations under this Agreement, or
materially adversely affect the collectibility of the Receivables, and (ii) any material adverse
development in any such previously disclosed litigation.
(j)
Notice of Relocation
. The Seller shall give the Administrator (which shall
promptly forward a copy to each Purchaser Agent) 45 days prior written notice of any relocation of
its Location. The Seller will at all times maintain its Location within a jurisdiction in the
United States in which Article 9 of the UCC is in effect as of the date hereof or the date of any
such relocation.
(k)
Further Information
. The Seller shall furnish or cause to be furnished to the
Administrator and each Purchaser Agent such other information as promptly as practicable, and in
such form and detail, as the Administrator or any Purchaser Agent may reasonably request.
(l)
Fees, Taxes and Expenses
. The Seller shall pay all filing fees, stamp taxes and
other similar taxes and expenses, including the fees and expenses set forth in Section 10.3, if
any, which may be incurred on account of or arise out of this Agreement and the documents and
transactions entered into pursuant to this Agreement.
(m)
Compliance with Receivables Sale Agreement
. The Seller will enforce all material
obligations and undertakings on the part of each Originator to be observed and performed under the
Receivables Sale Agreement. Seller will take all actions to perfect and enforce its rights and
interests (and the rights and interests of the Administrator (for the benefit of the Secured
Parties), as Sellers assignee) under the Receivables Sale Agreement as the Administrator or any
Purchaser Agent may from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any indemnity, reimbursement or similar provision
contained in the Receivables Sale Agreement.
19
(n)
Audits
. At any time, upon reasonable notice to the Seller (but not more than twice
per calendar year unless an Amortization Event or Unmatured Amortization Event has occurred), the
Seller shall permit the Administrator, together with each Purchaser Agent that wants to
participate, or such Person as the Administrator or such Purchaser Agents may designate, during
business hours, to conduct audits or visit and inspect any of the properties of the Seller to
examine the Records, internal controls and procedures maintained by the Seller and take copies and
extracts therefrom, and to discuss the Sellers affairs with its officers, employees and
independent accountants. The Seller hereby authorizes such officers, employees and independent
accountants to discuss with the Administrator and each Purchaser Agent, or such Person they may
designate, the affairs of the Seller. The Seller shall reimburse the Administrator and each
Purchaser Agent for all reasonable fees, costs and out-of-pocket expenses incurred by or on behalf
of the Administrator and each Purchaser Agent in connection with up to two (2) such audits and
visits for each per calendar year promptly upon receipt of a written invoice therefor;
provided
that
, following the occurrence of an Amortization Event or an Unmatured Amortization Event, the
Seller shall reimburse the Administrator and each Purchaser Agent for all reasonable fees, costs
and out-of-pocket expenses incurred by or on behalf of the Administrator and each Purchaser Agent
in connection with the foregoing actions promptly upon receipt of written invoice therefor
regardless of the number of audits or visits in such year. Subject to the requirements of
applicable laws, the Administrator and each Purchaser Agent agrees to use commercially reasonable
precautions to keep confidential, in accordance with its respective customary procedures for
handling confidential information, any non-public information supplied to it by the Seller pursuant
to any such audit or visit which is identified by the Seller as being confidential at the time the
same is delivered to the Administrator and each Purchaser Agent.
(o)
Separate Corporate Existence
. The Seller shall:
(i) Maintain in full effect its existence, rights and franchises as a corporation under
the laws of the state of its incorporation and will obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement and each Transaction Document and
each other instrument or agreement necessary or appropriate to proper administration hereof
and permit and effectuate the transactions contemplated hereby.
(ii) Maintain its own deposit account or accounts, separate from those of any of its
Affiliates, with commercial banking institutions. The funds of the Seller will not be diverted
to any other Person or for other than the corporate use of the Seller and, except as may be
expressly permitted by this Agreement, the funds of the Seller shall not be commingled with
those of any of its Affiliates.
(iii) To the extent that the Seller contracts or does business with vendors or service
providers where the goods and services provided are partially for the benefit of any other
Person, the costs incurred in so doing shall be fairly allocated to or among the Seller and
such entities for whose benefit the goods and services are provided, and the
20
Seller and each such entity shall bear its fair share of such costs. All material transactions
between the Seller and any of its Affiliates shall be only on an arms-length basis.
(iv) Maintain a principal executive and administrative office through which its business
is conducted and a telephone number separate from those of its stockholders and Affiliates. At
all times have a Board of Directors consisting of three members, at least one member of which
is an Independent Director.
(v) Conduct its affairs strictly in accordance with its certificate of incorporation and
observe all necessary, appropriate and customary corporate formalities, including, but not
limited to, holding all regular and special stockholders and directors meetings appropriate
to authorize all corporate
action, keeping separate and accurate minutes of such meetings, passing all resolutions
or consents necessary to authorize actions taken or to be taken, and maintaining accurate and
separate books, records and accounts, including, but not limited to, intercompany transaction
accounts. Regular stockholders and directors meetings (or unanimous written consents in lieu
thereof) shall be held at least annually.
(vi) Ensure that decisions with respect to its business and daily operations shall be
independently made by the Seller (although the officer making any particular decision may also
be an employee, officer or director of an Affiliate of the Seller) and shall not be dictated
by an Affiliate of the Seller.
(vii) Act solely in its own corporate name and through its own authorized officers and
agents, and no Affiliate of the Seller shall be appointed to act as its agent, except as
expressly contemplated by this Agreement. The Seller shall at all times use its own
stationery.
(viii) Ensure that no Affiliate of the Seller shall advance funds to the Seller, other
than (i) capital contributions from ABDC, made to enable the Seller to pay the purchase price
of Receivables or (ii) as is otherwise provided herein or in any Transaction Document, and no
Affiliate of the Seller will otherwise supply funds to, or guaranty debts of, the Seller;
provided that
an Affiliate of the Seller may provide funds to the Seller in connection with
the capitalization of the Seller, including the provision of capital necessary to assure that
the Seller has substantial assets as described in Treasury Regulation Section
301.7701-2(d)(2).
(ix) Other than organizational expenses and as expressly provided herein, pay all
expenses, indebtedness and other obligations incurred by it.
(x) Not enter into any guaranty, or otherwise become liable, with respect to any
obligation of any of its Affiliates.
(xi) Ensure that any financial reports required of the Seller shall comply with generally
accepted accounting principles and shall be issued separately from, but may be consolidated
with, any reports prepared for any of its Affiliates.
21
(xii) Ensure that at all times it is adequately capitalized to engage in the transactions
contemplated in its certificate of incorporation, the Transaction Documents and this
Agreement.
(xiii) Take such action to ensure that: (A) the Seller is solvent, including, without
limitation, that it has not been rendered insolvent by the actions contemplated by the
Transaction Documents; (B) the Seller intends to and reasonably expects to survive as a
stand-alone entity, independent of financial assistance of any entity not contemplated by the
Transaction Documents; (C) the Seller shall at all times have its own telephone number
separate from that of ABDC; (D) neither the assets nor the creditworthiness of the Seller is
held out as being available for the payment of any liability of ABDC; (E) each of ABDC and the
Seller operates as a separate legal entity and not as a division or department thereof; (F)
the Seller does not engage in or expect to engage in business for which its remaining property
represents an unreasonably small capitalization; and (G) the Seller does not intend to incur
nor does it believe it will incur indebtedness that it will not be able to repay at its
maturity.
(p)
Information
. The Seller shall provide the Administrator (which shall promptly
forward a copy to each Purchaser Agent) with the following:
(i) as soon as practicable and in any event within 90 days following the close of each
fiscal quarter, excluding the last fiscal quarter, of each Fiscal Year of the Seller during
the term of this Agreement, an unaudited consolidated balance sheet of the Seller as of the
end of such quarter and unaudited consolidated statements of income of the Seller for such
quarter and for the Fiscal Year through such quarter, setting forth in comparative form the
corresponding figures for the corresponding quarter of the preceding Fiscal Year (provided
that such comparison will not be available until the report provided for the December, 2004
quarter), all in reasonable detail and certified by the chief financial officer of the Seller,
subject to adjustments of the type which would occur as a result of a year-end audit, as
having been prepared in accordance with GAAP; and
(ii) as soon as practicable and in any event within 120 days after the close of each
Fiscal Year of the Seller during the term of this Agreement, a consolidated balance sheet of
the Seller as at the close of such Fiscal Year and consolidated statements of income of the
Seller for such Fiscal Year, setting forth in comparative form the corresponding figures for
the preceding Fiscal Year (provided that such comparison will not be available until the
report provided for the September, 2004 Fiscal Year end), all in reasonable detail;
provided
that
following an Amortization Event or Unmatured Amortization Event, the Administrator or any
Purchaser Agent may require that such information be certified (with respect to the
consolidated financial statements) by independent certified public accountants of nationally
recognized standing selected by the Seller whose certificate or opinion accompanying such
financial statements shall not contain any qualification, exception or scope limitation not
satisfactory to the Administrator and each Purchaser Agent, and accompanied by any management
letter prepared by such accountants.
22
(iii)
Compliance Certificate
. Together with the financial statements required
pursuant to this Section 7.1(p), a compliance certificate in substantially the form of Exhibit
V signed by an Authorized Officer of the Seller and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
Section 7.2
Negative Covenants of the Seller
. Until the date on which the Aggregate
Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its
terms, the Seller hereby covenants, as to itself, that it will not:
(a)
No Rescissions or Modifications
. Rescind or cancel any Receivable or related
Contract or modify any terms or provisions thereof or grant any Dilution to an Obligor, except in
accordance with the applicable Originators Credit and Collection Policy or otherwise with the
prior written consent of the Administrator and the Required Purchaser Agents, unless such
Receivable has been deemed collected pursuant to Section 1.4(a) or repurchased pursuant to the
Receivables Sale Agreement.
(b)
No Liens
. Cause any of the Receivables or related Contracts, or any inventory or
goods the sale of which give rise to a Receivable, or any Lock-Box or Collection Account or any
right to receive any payments received therein or deposited thereto, to be sold, pledged, assigned
or transferred or to be subject to a Lien, other than the sale and assignment of the Receivable
Interest therein to the Administrator, for the benefit of the Secured Parties, and the Liens
created in connection with the transactions contemplated by this Agreement.
(c)
Consolidations, Mergers and Sales of Assets
. (i) Consolidate or merge with or into
any other Person or (ii) sell, lease or otherwise transfer all or substantially all of its assets
to any other Person.
(d)
No Changes
. Make any change in the character of its business, which change would
materially impair the collectibility of any Receivable, without prior written consent of the
Administrator and each Purchaser Agent, or change its name, identity or corporate structure in any
manner which would make any financing statement or continuation statement filed in connection with
this Agreement or the
transactions contemplated hereby seriously misleading within the meaning of Section 9-507(c)
of the UCC of any applicable jurisdiction or other applicable Laws unless it shall have given the
Administrator (which shall promptly forward a copy to each Purchaser Agent) at least 45 days prior
written notice thereof and unless prior thereto it shall have caused such financing statement or
continuation statement to be amended or a new financing statement to be filed such that such
financing statement or continuation statement would not be seriously misleading.
(e)
Capital Stock
. Issue any capital stock except to ABDC. The Seller shall not pay
any dividends to ABDC if such payment would be prohibited under the General Corporation Law of the
State of Delaware.
(f)
No Indebtedness
. Incur any Indebtedness other than as permitted under this
Agreement.
(g)
Change in Payment Instructions to Obligors
. Except as may be required by the
Administrator (which shall promptly forward a copy to each Purchaser Agent) pursuant to Section
8.2(b), the Seller will not add or terminate any bank as a Collection Bank, or make any
23
change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection
Account, unless (i) the Administrator (which shall promptly forward a copy to each Purchaser Agent)
shall have received, at least ten (10) days before the proposed effective date therefor, (A)
written notice of such addition, termination or change and (B) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement
(which is reasonably satisfactory to the Administrator) with respect to the new Collection Account
or Lock-Box, (ii) with respect to the termination of a Collection Bank or a Collection Account or
Lock-Box, the Administrator shall have consented thereto (which consent shall not be unreasonably
withheld and will be provided or withheld within 10 days of request) and (iii) with respect to any
changes in instructions to Obligors regarding payments, the Administrator shall have consented
thereto;
provided that
the Servicer may make changes in instructions to Obligors regarding payments
if such new instructions require such Obligor to make payments to another existing Lock-Box or
Collection Account.
(h)
Use of Proceeds
. Seller will not use the proceeds of the Purchases for any purpose
other than (i) paying for Receivables and Related Security under and in accordance with the
Receivables Sale Agreement, including without limitation, making payments on the Subordinated Notes
(as defined in the Receivables Sale Agreement) to the extent permitted thereunder and under the
Receivables Sale Agreement, (ii) making Demand Advances to ABDC at any time prior to the Final
Facility Termination Date while it is acting as Servicer and no Amortization Event or Unmatured
Amortization Event exists and is continuing, (iii) paying its ordinary and necessary operating
expenses when and as due, and (iv) making Restricted Junior Payments to the extent permitted under
this Agreement.
(i)
Termination Date Determination
. Seller will not designate the Termination Date (as
defined in the Receivables Sale Agreement), or send any written notice to any Originator in respect
thereof, without the prior written consent of the Administrator and each Purchaser Agent, except
with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(e) of the
Receivables Sale Agreement.
(j)
Restricted Junior Payments
. Seller will not make any Restricted Junior Payment if
after giving effect thereto, Sellers Net Worth (as defined in the Receivables Sale Agreement)
would be less than the Required Capital Amount (as defined in the Receivables Sale Agreement).
(k)
Seller Indebtedness
. Seller will not incur or permit to exist any Indebtedness or
liability on account of deposits except: (i) the Aggregate Unpaids, (ii) the Subordinated Loans,
and (iii) other current accounts payable arising in the ordinary course of business and not
overdue.
(l)
Prohibition on Additional Negative Pledges
. The Seller shall not enter into or
assume any agreement (other than this Agreement and the other Transaction Documents) prohibiting
the creation or assumption of any Lien upon the Purchased Assets except as contemplated by the
Transaction Documents, or otherwise prohibiting or restricting any transaction contemplated hereby
or by the other Transaction Documents, and the Seller shall not enter into or assume any agreement
creating any Lien upon the Subordinated Notes.
24
Section 7.3
Affirmative Covenants of the Servicer
. In addition to its other covenants
contained herein or made pursuant hereto, the Servicer covenants with the Administrator, each
Purchaser Agent and each Purchaser as follows:
(a)
Notice of Amortization Event
. Promptly upon becoming aware of any Amortization
Event or Unmatured Amortization Event, the Servicer shall give the Administrator (which shall
promptly forward a copy to each Purchaser Agent) notice thereof, together with a written statement
of a Responsible Officer setting forth the details thereof and any action with respect thereto
taken or contemplated to be taken by such Servicer.
(b)
Notice of Material Adverse Change
. Promptly upon any Responsible Officer of the
Servicer becoming aware thereof, the Servicer shall give the Administrator (which shall promptly
forward a copy to each Purchaser Agent) notice of any material adverse change in the business,
operations or financial condition of the Servicer which reasonably could affect adversely the
collectibility of the Receivables or the ability of the Servicer to perform its obligations under
this Agreement.
(c)
Preservation of Corporate Existence
. The Servicer shall preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation,
and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of the Administrator, any
Purchaser Agent or any Purchaser hereunder or (ii) the ability of such Servicer to perform its
obligations under this Agreement.
(d)
Compliance with Laws
. The Servicer shall comply in all material respects with all
Laws applicable to the Servicer, its business and properties, and all Receivables related to the
Receivable Interests.
(e)
Enforceability of Obligations
. The Servicer shall take such actions as are
reasonable and within its power to ensure that, with respect to an applicable Receivable, the
obligation of any related Obligor to pay the unpaid balance of such Receivable in accordance with
the terms of the related Contract remains legal, valid, binding and enforceable against such
Obligor except as otherwise permitted by Section 8.2(d).
(f)
Books and Records
. The Servicer shall, to the extent practicable, maintain and
implement administrative and operating procedures (including, without limitation, the ability to
recreate Records evidencing the Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, Records and other information reasonably
necessary or advisable for the collection of all applicable Receivables (including, without
limitation, Records adequate to permit the identification of all Related Security and Collections
and adjustments to each existing Receivable). Upon the request of the Administrator or any
Purchaser Agent, following the occurrence of an Amortization Event or an Unmatured Amortization
Event, the Servicer shall deliver to the Administrator all Contracts (including, without
limitation, all multiple originals of any such Contract constituting an instrument, a certificated
security or chattel paper) relating to the Receivables.
25
(g)
Fulfillment of Obligations
. The Servicer will duly observe and perform, or cause
to be observed or performed, all material obligations and undertakings on its part or on the part
of any subservicer to be observed and performed under or in connection with the Receivables, will
duly observe and perform all material provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables, will do nothing to impair the
rights, title and interest of the Administrator, any Purchaser Agent or any Purchaser in and to the
Receivable Interests and will pay when due any taxes, including without limitation any sales tax,
excise tax or other similar tax or charge, payable in connection with such Receivables and their
creation and satisfaction.
(h)
Obligor List
. The Servicer shall at all times maintain a current list (which may
be stored on magnetic tapes, computer systems or disks) of all Obligors under Contracts related to
the applicable Receivables, including the name, address, telephone number and account number of
each such Obligor. The list shall be updated as provided in Section 8.5(b) and, the Servicer shall
deliver or cause to be delivered a copy of such list to the Administrator (which shall promptly
forward a copy to each Purchaser Agent) as soon as practicable following the Administrators
request (but not more frequently than once each calendar quarter unless an Amortization Event or
Unmatured Amortization Event has occurred and is continuing).
(i)
Total Systems Failure
. The Servicer shall promptly notify the Administrator (which
shall promptly forward a copy to each Purchaser Agent) of any total systems failure and shall
advise the Administrator of the estimated time required to remedy such total systems failure and of
the estimated date on which a Settlement Report can be delivered. Until a total systems failure is
remedied, the Servicer (i) will furnish to the Administrator (which shall promptly forward a copy
to each Purchaser Agent) such periodic status reports and other information relating to such total
systems failure as the Administrator or any Purchaser Agent may reasonably request and (ii) will
promptly notify the Administrator (which shall promptly forward a copy to each Purchaser Agent) if
the Servicer believes that such total systems failure cannot be remedied by the estimated date,
which notice shall include a description of the circumstances which gave rise to such delay, the
action proposed to be taken in response thereto, and a revised estimate of the date on which the
information required for a Settlement Report can be delivered. The Servicer shall promptly notify
the Administrator (which shall promptly forward a copy to each Purchaser Agent) when a total
systems failure has been remedied.
(j)
Notice of Relocation
. The Servicer shall give the Administrator (which shall
promptly forward a copy to each Purchaser Agent) 45 days prior written notice of any relocation of
its Location. The Servicer will at all times maintain its Location within a jurisdiction in the
United States in which Article 9 of the UCC is in effect as of the date hereof or the date of any
such relocation.
(k)
Administrative and Operating Procedures
. The Servicer shall maintain and implement
administrative and operating procedures adequate to permit the identification of the applicable
Receivables and all collections and adjustments attributable thereto and shall comply in all
material respects with the Applicable Originators Credit and Collection Policy in regard to each
applicable Receivable and related Contract.
(l)
Modification of Systems
. The Servicer agrees, promptly after the replacement or
any material modification of any computer, automation or other operating
26
systems (in respect of hardware or software) used to perform its services as Servicer or to make
any calculations or reports hereunder, to give notice of any such replacement or modification to
the Administrator (which shall promptly forward a copy to each Purchaser Agent).
(m)
Litigation
. As soon as possible, and in any event within ten (10) Business Days of
the Servicers knowledge thereof, the Servicer shall give the Administrator (which shall promptly
forward a copy to each Purchaser Agent) notice of (i) any litigation, investigation or proceeding
against the Servicer which may exist at any time which, in the reasonable judgment of the Servicer
could materially impair the ability of the Servicer to perform its obligations under this Agreement
and (ii) any material adverse development in any such previously disclosed litigation.
(n)
ERISA Events
. Promptly upon becoming aware of the occurrence or likely occurrence
of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of Performance Guarantor and its ERISA Affiliates in
an aggregate amount exceeding $25,000,000. Performance Guarantor shall give the Seller a written
notice specifying the nature thereof, what action Performance Guarantor or any ERISA Affiliate has
taken and, when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto.
(o)
Separate Corporate Existence
. As long as ABDC is the Servicer hereunder, the
Servicer shall maintain its legal identity separate from the Seller and take such action to ensure
that: (A) the management of the Servicer does not anticipate any need for its having to extend
advances to the Seller except for those described in the Transaction Documents, if any; (B) the
Servicer does not conduct its business in the name of the Seller; (C) the Servicer has a telephone
number, stationery and business forms separate from those of the Seller; (D) the Servicer does not
provide for its expenses and liabilities from the funds of the Seller; (E) the Servicer is not
liable for the payment of any liability of the Seller; (F) neither the assets nor the
creditworthiness of the Servicer is held out as being available for the payment of any liability of
the Seller; (G) the Servicer maintains an arms-length relationship with the Seller; and (H) assets
are not transferred from the Servicer to the Seller without fair consideration or with the intent
to hinder, delay or defraud the creditors of either company.
(p)
Audits
. At any time, upon reasonable notice to the Servicer (but not more than
twice per calendar year unless an Amortization Event or Unmatured Amortization Event has occurred),
the Servicer shall permit the Administrator, together with each Purchaser Agent that wants to
participate, or such Person as they may designate, during business hours, to conduct audits or
visit and inspect any of the properties of the Servicer to examine the Records, internal controls
and procedures maintained by the Servicer and take copies and extracts therefrom, and to discuss
the Servicers affairs with its officers, employees and independent accountants. The Servicer
hereby authorizes such officers, employees and independent accountants to discuss with the
Administrator and each Purchaser Agent, or such Person as they may designate, the affairs of the
Servicer. The Seller shall reimburse the Administrator and each Purchaser Agent for all reasonable
fees, costs and out-of-pocket expenses incurred by or on behalf of the Administrator and each
Purchaser Agent in connection with up to two (2) such audits and visits for each per calendar year
promptly upon receipt of a written invoice therefor;
provided that
, following the occurrence of an
Amortization Event or an Unmatured Amortization Event, the Seller shall reimburse the Administrator
and each Purchaser Agent for all reasonable fees, costs and out of
27
pocket expenses incurred by or on behalf of the Administrator and each Purchaser Agent in
connection with the foregoing actions promptly upon receipt of written invoice therefor regardless
of the number of audits or visits in such year. Subject to the requirements of applicable laws, the
Administrator and each Purchaser Agent agrees to use commercially reasonable precautions to keep
confidential, in accordance with its respective customary procedures for handling confidential
information, any non-public information supplied to it by the Servicer pursuant to any such audit
or visit which is identified by the Servicer as being confidential at the time the same is
delivered to the Administrator and each Purchaser Agent.
(q)
S.E.C.
Filings
. Promptly upon the written request of the Administrator or
any Purchaser Agent, provide to the Administrator (which shall promptly forward a copy to each
Purchaser Agent) copies
of all registration statements and annual, quarterly, monthly or other regular reports which
Seller or Servicer files with the Securities and Exchange Commission.
(r)
Notices
. Servicer will notify the Administrator (which shall promptly forward a
copy to each Purchaser Agent) in writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being taken with respect
thereto:
(i)
Judgments and Proceedings
. (A) (1) The entry of any judgment or decree
against Performance Guarantor, the Servicer or any of their respective Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against Performance Guarantor,
the Servicer and their respective Subsidiaries exceeds $25,000,000 after deducting (a) the
amount with respect to which Performance Guarantor, the Servicer or any such Subsidiary, as
the case may be, is insured and with respect to which the insurer has assumed responsibility
in writing, and (b) the amount for which Performance Guarantor, the Servicer or any such
Subsidiary is otherwise indemnified if the terms of such indemnification are satisfactory to
the Administrator and the Required Purchaser Agents, and (2) the institution of any
litigation, arbitration proceeding or governmental proceeding against Performance Guarantor or
the Servicer; and (B) the entry of any judgment or decree or the institution of any
litigation, arbitration proceeding or governmental proceeding against Seller.
(ii)
Termination Date
. The occurrence of the
Termination Date
under and as
defined in the Receivables Sale Agreement.
(iii)
Defaults Under Other Agreements
. For the Servicer, the occurrence of a
default or an event of default in respect of a financing arrangement for an aggregate
principal amount exceeding $25,000,000. For the Seller, the occurrence of a default or an
event of default in respect of a financing arrangement for an aggregate principal amount
exceeding $11,625.
(iv)
Notices under Receivables Sale Agreement
. Copies of all notices to be
delivered under the Receivables Sale Agreement.
(s)
Rebate Reserves
. Servicer shall determine the Rebate Reserve in accordance with
the definition thereof and in a manner consistent with its practice in effect on the date hereof
and report the Rebate Reserve in each Settlement Report.
28
(t)
Accounting Certificate
. The Servicer shall deliver, or cause to be delivered, the
certificate described in
Section 5.3(k).
(u)
Financial Statements
. In the event that (i) the balance sheet and/or the
statements of income and cash flow (as described in Section 5.3(k)) of AmerisourceBergen and its
Consolidated Subsidiaries are no longer publicly available or (ii) the Credit Agreement has been
terminated, AmerisourceBergen shall, within 90 or 120 days of the end of the applicable quarter or
Fiscal Year, respectively, provide copies of such balance sheet and/or statements of income and
cash flow to the Administrator (which shall promptly forward a copy to each Purchaser Agent).
Section 7.4
Negative Covenants of the Servicer
. Until the date on which the Aggregate
Unpaids have been indefeasibly paid in full and the Agreement terminates in accordance with its
terms, the Servicer hereby covenants, as to itself, that it will not:
(a)
No Rescissions or Modifications
. Rescind or cancel any Receivable or related
Contract or modify any terms or provisions thereof or grant any Dilution to an Obligor, except in
accordance with the applicable Originators Credit and Collection Policy or otherwise with the
prior written consent of the
Administrator and the Required Purchaser Agents, unless such Receivable has been deemed
collected pursuant to Section 1.4(a) or repurchased pursuant to the Receivables Sale Agreement.
(b)
No Liens
. Cause any of the applicable Receivables or related Contracts, or any
inventory or goods the sale of which may give rise to a Receivable or any Collection Account or any
right to receive any payments received therein or deposited thereto, to be sold, pledged, assigned
or transferred or to be subject to a Lien, other than (i) the sale and assignment of the
Receivables Interest to the Administrator, for the benefit of Secured Parties, (ii) the Liens
created in connection with the transactions contemplated by this Agreement or (iii) Liens in
respect of a Receivable which has been deemed collected pursuant to Section 1.4(a) or repurchased
pursuant to the Receivables Sale Agreement, and for which payment has been received.
(c)
No Changes
. Make any material change in its Credit and Collection Policy, allow
any material change to be made in the Applicable Originators Credit and Collection Policy or
consent to any material change in the Applicable Originators Credit and Collection Policy without
prior written consent of the Administrator and each Purchaser Agent (and the Servicer shall provide
notice of any change (unless
de minimis
) in its or any Originators Credit and Collection Policy at
least five (5) Business Days prior to the effective date of such change), or change its name,
identity or corporate structure in any manner which would make any financing statement or
continuation statement filed in connection with this Agreement or the transactions contemplated
hereby seriously misleading within the meaning of Section 9.507(c) of the UCC of any applicable
jurisdiction or other applicable Laws unless it shall have given the Administrator (which shall
promptly forward a copy to each Purchaser Agent) at least 45 days prior written notice thereof and
unless prior thereto it shall have caused such financing statement or continuation statement to be
amended or a new financing statement to be filed such that such financing statement or continuation
statement would not be seriously misleading.
29
(d)
Consolidations, Mergers and Sales of Assets
. (i) Consolidate or merge with or into
any other Person or (ii) sell, lease or otherwise transfer all or substantially all of its assets
to any other Person;
provided that
the Servicer may merge with another Person if (A) the Servicer
is the corporation surviving such merger and (B) immediately after giving effect to such merger, no
Amortization Event or Unmatured Amortization Event shall have occurred and be continuing.
(e)
Change in Payment Instructions to Obligors
. Except as may be required by the
Administrator pursuant to Section 8.2(b), the Servicer will not add or terminate any bank as a
Collection Bank, or make any change in the instructions to Obligors regarding payments to be made
to any Lock-Box or Collection Account, unless (i) the Administrator (which shall promptly forward a
copy to each Purchaser Agent) shall have received, at least ten (10) days before the proposed
effective date therefor, (A) written notice of such addition, termination or change and (B) with
respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed
Collection Account Agreement (which is reasonably satisfactory to the Administrator) with respect
to the new Collection Account or Lock-Box, (ii) with respect to the termination of a Collection
Bank or a Collection Account or Lock-Box, the Administrator shall have consented thereto (which
consent shall not be unreasonably withheld and will be provided or withheld within 10 days of
request) and (iii) with respect to any changes in instructions to Obligors regarding payments, the
Administrator shall have consented thereto;
provided that
the Servicer may make changes in
instructions to Obligors regarding payments if such new instructions require such Obligor to make
payments to another existing Lock-Box or Collection Account.
(f)
Prohibition on Additional Negative Pledges
. The Servicer shall not enter into or
assume any agreement (other than this Agreement and the other Transaction Documents) prohibiting
the creation or assumption of any Lien upon the Purchased Assets or otherwise prohibiting or
restricting any transaction contemplated hereby or by the other Transaction Documents, and the
Servicer shall not enter into or assume any agreement creating any Lien upon the Subordinated
Notes.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1
Designation of Servicer
.
(a) The servicing, administration and collection of the Receivables shall be conducted by such
Person (the Servicer) so designated from time to time in accordance with this Section 8.1. ABDC
is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms of this Agreement. The Required Purchaser Agents may at any time following
the occurrence of an Amortization Event designate as Servicer any Person to succeed ABDC or any
successor Servicer;
provided that
the Rating Agency Condition is satisfied.
(b) ABDC may delegate, and ABDC hereby advises the Administrator, each Purchaser Agent and
each Purchaser that it has delegated, to the other Originators, as sub-servicers of the Servicer,
certain of its duties and responsibilities as Servicer hereunder in respect
30
of the Receivables originated by such other Originator. Without the prior written consent of the
Required Purchaser Agents (which consent shall not be unreasonably withheld), ABDC shall not be
permitted to delegate any of its duties or responsibilities as Servicer to any Person other than
(i) Seller, (ii) the other Originators, and (iii) with respect to certain Defaulted Receivables,
outside collection agencies in accordance with its customary practices. Neither Seller nor any
Originator shall be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by ABDC. If at any time the Required Purchaser
Agents shall designate as Servicer any Person other than ABDC, all duties and responsibilities
theretofore delegated by ABDC to Seller or the other Originators may, at the discretion of the
Required Purchaser Agents, be terminated forthwith on notice given by the Required Purchaser Agents
to ABDC and to Seller and the other Originators.
(c) Notwithstanding the foregoing subsection (b): (i) ABDC shall be and remain primarily
liable to the Administrator, each Purchaser Agent and each Purchaser for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and (ii) the
Administrator, each Purchaser Agent and each Purchaser shall be entitled to deal exclusively with
ABDC in matters relating to the discharge by the Servicer of its duties and responsibilities
hereunder. The Administrator, each Purchaser Agent and each Purchaser shall not be required to give
notice, demand or other communication to any Person other than ABDC in order for communication to
the Servicer and its sub-servicer or other delegate with respect thereto to be accomplished. ABDC,
at all times that it is the Servicer, shall be responsible for providing any sub-servicer or other
delegate of the Servicer with any notice given to the Servicer under this Agreement.
Section 8.2
Duties of Servicer
.
(a) The Servicer shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Receivable from time to time, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and in accordance with the Credit and
Collection Policy.
(b) The Servicer will instruct all Obligors to pay all Collections directly to a Lock-Box or
Collection Account. The Servicer shall (on or prior to September 30, 2003 with respect to each
Collection Account listed on Exhibit IV on the date hereof) effect a Collection Account Agreement
substantially in the form of Exhibit VI, or if an existing collection account agreement is in
place, an amendment and assignment in the form of Exhibit XVII (in each case, with such other
changes as the Administrator may otherwise consent), with each bank party to a Collection Account
at any time. In the case of any remittances received in any Lock-Box or Collection Account that
shall have been identified, to the
satisfaction of the Servicer, to not constitute Collections or other proceeds of the
Receivables or the Related Security, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the date the Administrator
delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the Administrator may
request that the Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary account specified by
the Administrator and, at all times thereafter, Seller and the Servicer shall not deposit or
otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new
depositary account any cash or payment item other than Collections.
31
(c) The Servicer shall administer the Collections in accordance with the procedures described
herein. The Servicer shall set aside and hold in trust for the account of Seller and each Purchaser
their respective shares of the Collections in accordance with Article II. The Servicer shall, upon
the request of the Administrator or any Purchaser Agent and after an Amortization Event or
Unmatured Amortization Event, segregate, in a manner acceptable to the Administrator and each
Purchaser Agent, all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior to the remittance
thereof in accordance with Article II. If the Servicer shall be required to segregate Collections
pursuant to the preceding sentence, the Servicer shall segregate and deposit with a bank designated
by the Administrator such allocable share of Collections of Receivables set aside for each
Purchaser on the first Business Day following receipt by the Servicer of such Collections, duly
endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection Policy, extend the maturity
of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicer determines to
be appropriate to maximize Collections thereof; provided that such extension or adjustment shall
not alter the status of such Receivable as a Delinquent Receivable or Defaulted Receivable or limit
the rights of the Administrator, any Purchaser Agent or any Purchaser under this Agreement.
Notwithstanding anything to the contrary contained herein, the Required Purchaser Agents shall have
the absolute and unlimited right to direct the Servicer to commence or settle any legal action with
respect to any Receivable or to foreclose upon or repossess any Related Security.
(e) The Servicer shall hold in trust for Seller and the Administrator, each Purchaser Agent
and each Purchaser all Records that (i) evidence or relate to the Receivables, the related
Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of the Administrator or any Purchaser
Agent, deliver or make available to the Administrator and each Purchaser Agent all such Records, at
a place selected by the Administrator. The Servicer shall, as soon as practicable following receipt
thereof turn over to Seller any cash collections or other cash proceeds received with respect to
Indebtedness not constituting Receivables. The Servicer shall, from time to time at the request of
the Administrator or any Purchaser Agent, furnish to the Administrator and each Purchaser Agent
(promptly after any such request) a calculation of the amounts set aside for each Purchaser
pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by it to Originator or
Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or
law and unless otherwise instructed by the Required Purchaser Agents, be applied as a Collection of
any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 8.3
Collection Notices
. The Administrator is authorized at any time after the
occurrence of an Amortization Event or an Unmatured Amortization Event to date and to deliver to
the Collection Banks the Collection Notices. Seller hereby transfers to the Administrator for the
benefit of the Secured Parties, effective when the Administrator delivers such notice, the
exclusive ownership and control of each Lock-Box and the Collection Accounts and, in connection
therewith, agrees to cause each Collection Bank to modify the name on each Lock-
32
Box and Collection Account as requested by the Administrator. In case any authorized signatory of
Seller whose signature appears on a Collection Account Agreement shall cease to have such authority
before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such
authority had remained in force. Seller hereby authorizes the Administrator, and agrees that the
Administrator shall be entitled (i) at any time after delivery of the Collection Notices, to
endorse Sellers name on checks and other instruments representing Collections, (ii) at any time
after the occurrence of an Amortization Event, to enforce the Receivables, the related Contracts
and the Related Security, and (iii) at any time after the occurrence of an Amortization Event, to
take such action as shall be reasonably necessary or desirable to cause all cash, checks and other
instruments constituting Collections of Receivables to come into the possession of the
Administrator rather than Seller.
Section 8.4
Responsibilities of Seller
. Anything herein to the contrary
notwithstanding, the exercise by the Administrator, on behalf of Secured Parties, of the
Administrators rights hereunder shall not release the Servicer, any Originator or Seller from any
of their duties or obligations with respect to any Receivables or under the related Contracts. The
Administrator, each Purchaser Agent and each Purchaser shall have no obligation or liability with
respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the
obligations of Seller or any Originator thereunder.
Section 8.5
Settlement Reports
.
(a) The Servicer shall prepare and forward to the Administrator (with an electronic copy to
each Purchaser Agent) (i) on each Settlement Reporting Date, a Settlement Report (certified by an
Authorized Officer of the Servicer) and an electronic file of the data contained therein and (ii)
at such times as the Administrator or any Purchaser Agent shall request, a listing by Obligor of
all Receivables together with an aging of such Receivables;
provided that
, if an Amortization Event
or an Unmatured Amortization Event shall exist and be continuing, the Administrator or any
Purchaser Agent may request that the Servicer deliver a Settlement Report more frequently than
monthly but not more frequently than weekly unless an Amortization Event or Unmatured Amortization
Event has occurred and is continuing.
(b) Upon the request of the Administrator or any Purchaser Agent (but not more frequently than
every quarter), the Servicer shall provide in writing to the Administrator (which shall promptly
forward a copy to each Purchaser Agent) the list of Obligors under Contracts related to the
Receivables including, for each Obligor added to the list, the name, address, telephone number and
account number of such Obligor and if there have been changes in the name, address, telephone
number or account number of any existing Obligor, the revisions shall be provided.
Section 8.6
Servicing Fee
. As compensation for the Servicers servicing activities on
their behalf, the Servicer shall be paid the Servicing Fee in arrears on each Settlement Date out
of Collections.
33
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1
Amortization Events
. The occurrence of any one or more of the following
events shall constitute an Amortization Event:
(a) the Seller or the Servicer shall fail to remit or fail to cause to be remitted to the
Administrator, any Purchaser Agent or any Purchaser on any day any Collections, including any
amounts to
be remitted to reduce the Invested Amount or any portion thereof, or interest or fees set
forth in any Fee Letter and required to be remitted to the Administrator, any Purchaser Agent or
any Purchaser on such day, and with respect to failure to remit interest or any such fees, such
failure shall continue for two Business Days after the date on which such interest or fees becomes
due; or
(b) the Seller or the Servicer shall fail to deposit, or pay or fail to cause to be deposited
or paid when due any other amount due hereunder or shall fail to deliver any Settlement Report and
such failure shall continue for two (2) Business Days after the date when such amount or Settlement
Report became due; or
(c) any representation, warranty, certification or statement made by the Seller or the
Servicer under this Agreement or in any agreement, certificate, report, appendix, schedule or
document furnished by the Seller or the Servicer to the Administrator, any Purchaser Agent or any
Purchaser pursuant to or in connection with this Agreement shall prove to have been false or
misleading in any respect material to this Agreement or the transactions contemplated hereby as of
the time made or deemed made (including by omission of material information necessary to make such
representation, warranty, certification or statement not misleading) and which continues to be
false or misleading in any material respect for a period of ten (10) Business Days after either (i)
any Responsible Officer of the Seller or the Servicer becomes aware thereof or (ii) notice thereof
to such Person by the Administrator, any Purchaser Agent or any Purchaser; or
(d) a Change in Control shall occur with respect to the Performance Guarantor; or
(e) except as otherwise provided in this Section 9.1, the Seller or the Servicer shall default
or fail in the performance or observance of any other covenant, agreement or duty applicable to it
contained herein and such default or failure shall continue for ten (10) Business Days after either
(i) any Responsible Officer of the Seller or the Servicer becomes aware thereof or (ii) notice
thereof to such Person by the Administrator, any Purchaser Agent or any Purchaser; or
(f) the Seller shall fail to pay any Indebtedness when due and such failure shall continue
beyond the applicable grace period, if any, specified in the agreement or instrument relating to
such Indebtedness; or AmerisourceBergen or any of its Consolidated Subsidiaries (other than the
Seller, if applicable) shall fail to pay any Indebtedness in excess of $25,000,000 of
AmerisourceBergen or any of its Consolidated Subsidiaries, as the case may be, or any interest or
premium on such Indebtedness, in either case, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
34
continue after the applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other default under any agreement or instrument relating to
any such Indebtedness or any other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument if the effect of such default or event is
to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or a final
court decision of $25,000,000 or more shall be rendered against AmerisourceBergen or any of its
Consolidated Subsidiaries and (i) such amount remains unpaid and (ii) AmerisourceBergen or the
relevant Consolidated Subsidiary does not, in good faith, contest such decision within the relevant
statutory period; or
(g) the average of the Default Ratios, computed for each of the immediately preceding three
months, shall exceed 0.50%; or the average of the Dilution Ratios, computed for each of the
immediately preceding three months, shall exceed 5.25%; or the average of the Delinquency Ratios,
computed for each of the immediately preceding three months, shall exceed 2.50%; or the Days Sales
Outstanding for any month shall exceed 30 days; or
(h) (i) a Collection Bank shall default or fail in the performance or observance of any
agreement or duty applicable to it in respect of any Collection Account, and (A) the Servicer has
not notified the Administrator (which shall promptly forward a copy to each Purchaser Agent),
within two (2) Business Days after becoming aware of such continuing default or failure, of the
action it intends to take to cure such default or failure or (B) if so requested by the
Administrator, any Purchaser Agent or any Purchaser, the Seller has not established, within fifteen
(15) Business Days of such default or failure, another Collection Account with a Collection Bank
agreed upon by the Seller and the Administrator, or (ii) the Seller or the Servicer shall default
or fail in the performance or observance of any covenant, agreement or duty set forth in Sections
8.2 or 8.3 hereof which is within the control of the Seller or the Servicer, as the case may be,
and such default or failure shall continue for two (2) Business Days after notice thereof; or
(i) there shall be pending any litigation, investigation or proceeding, or any material
adverse development in any such litigation shall have occurred, which the Seller or the Servicer is
required to disclose pursuant to Section 7.1(i) or Section 7.3(m), respectively, hereof, which in
the reasonable opinion of the Administrator, any Purchaser Agent or any Purchaser is likely to
materially adversely affect the financial position or results of operations of the Seller or the
Servicer or impair the ability of the Seller or the Servicer to perform its respective obligations
under this Agreement; or
(j) there shall have occurred any event which could have a material adverse effect on (i) the
ability of any Seller Party, any Originator or the Performance Guarantor to perform its obligations
under any Transaction Document, (ii) the legality, validity or enforceability of any Transaction
Document, (iii) the Administrators security interest in the Receivables generally or in any
significant portion of the Receivables or the proceeds thereof, or (iv) the collectibility of the
Receivables generally or of any material portion of the Receivables; or
(k) an Event of Bankruptcy shall occur with respect to the Seller, the Servicer, any
Originator or the Performance Guarantor; or
35
(l) the Aggregate Invested Amount shall exceed the Purchase Limit; or
(m) the Net Pool Balance shall at any time be less than an amount equal to the sum of (i) the
Aggregate Invested Amount plus (ii) the Required Reserve; or
(n) ABDC is replaced as Servicer pursuant to Section 8.1(a) or otherwise resigns as Servicer;
or
(o) AmerisourceBergen shall default or fail in the performance or observance of any of the
covenants set forth in Section 6.12, 6.13. 6.14 or 6.15 of the Credit Agreement as in effect on the
date hereof (without giving effect to any amendment, waiver, termination, supplement or other
modification thereof unless consented to by the Required Purchaser Agents); or
(p) a final court decision for $11,625 or more shall be rendered against the Seller; or
(q) ABDC shall cease to own 100% of the capital stock of the Seller or the Performance
Guarantor shall cease to own (directly or indirectly) 100% of the capital stock of each Originator;
or
(r) ABDC shall (i) consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer all or substantially all of its assets to any other Person unless ABDC is the
survivor of such transaction; or
(s) (i) the definition of Collateral and Guarantee Requirement (clause (b)(ii) thereof),
Excluded Subsidiary (clause (c) thereof), Loan Party, Proceeds, Securitization,
Securitization Entity, or Subsidiary Loan Party contained in the Credit Agreement is amended,
modified or waived without the prior written consent of the Administrator and the Required
Purchaser Agents; (ii) Section 6.01(a)(iv), 6.01(a)(v), 6.01(a)(viii), 6.02(f), 6.02(g), 6.04(d),
6.04(e), 6.04(f), 6.05(b), 6.05(c), 6.08(a)(ii), 6.08(b)(ii), 6.09(b), 6.09(c), 6.09(d), 6.10
(clause (i) of the first proviso thereto) or 6.11 (clause (b) of the first sentence hereof) of the
Credit Agreement is amended, modified or waived without the prior written consent of the
Administrator and the Required Purchaser Agents; (iii) Section 1 (clause (ii) of the proviso to
clause (a) thereof and the parenthetical phrases in clause (b)(ii) thereof) of the Pledge Agreement
is amended, modified or waived without the prior written consent of the Administrator and the
Required Purchaser Agents; (iv) the definition of Collateral (the proviso thereto), General
Intangibles (the first parenthetical thereof), Inventory, Investment Property, New York UCC,
Proceeds or Securities contained in the Security Agreement is amended, modified or waived
without the prior written consent of the Administrator and the Required Purchaser Agents; or (v)
any other provision of (including by the addition of a provision) the Credit Agreement, the
Security Agreement or the Pledge Agreement is amended, modified or waived without the prior written
consent of the Administrator and the Required Purchaser Agents in any way which could materially
and adversely impair the interests of the Administrator, any Purchaser Agent or any Purchaser in
the Receivables, Related Security or Collections or could result in the creation of a Lien thereon;
or
(t) the Performance Guarantor shall default or fail in the performance of any covenant or
agreement set forth in the Performance Guaranty; or
36
(u) the
Termination Date
under and as defined in the Receivables Sale Agreement shall occur
under the Receivables Sale Agreement or any Originator shall for any reason cease to transfer, or
cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables
to Seller under the Receivables Sale Agreement; or
(v) this Agreement shall terminate in whole or in part (except in accordance with its terms),
or shall cease to be effective or to be the legally valid, binding and enforceable obligation of
Seller, or any Obligor shall directly or indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability, or the Administrator (for the benefit of Secured
Parties) shall cease to have a valid and perfected first priority security interest in the
Purchased Assets; or
(w) the Performance Undertaking shall cease to be effective or to be the legally valid,
binding and enforceable obligation of Performance Guarantor, or Performance Guarantor shall
directly or indirectly contest in any manner such effectiveness, validity, binding nature or
enforceability of its obligations thereunder; or
(x) the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the
Internal Revenue Code with regard to any of the Purchased Assets or any assets of the Seller,
Performance Guarantor or any Affiliate and such lien shall not have been released within seven (7)
days, or the PBGC shall, or shall indicate its intention to, file notice of a lien pursuant to
Section 4068 of ERISA with regard to any of the Purchased Assets; or
(y) An ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability of Performance Guarantor or any of
its ERISA Affiliates under the Internal Revenue Code or Title IV of ERISA to such Pension Plan,
such Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000.
Section 9.2
Remedies
. Upon the occurrence and during the continuation of an
Amortization Event, the Administrator may, or upon the direction of any Purchaser Agent shall, take
any of the following
actions: (i) replace the Person then acting as Servicer (ii) declare the Facility Termination
Date for all Purchaser Groups to have occurred, whereupon Reinvestments shall immediately terminate
and the Final Facility Termination Date shall forthwith occur, all without demand, protest or
further notice of any kind, all of which are hereby expressly waived by each Seller Party; provided
that, upon the occurrence of an Event of Bankruptcy with respect to any Seller Party, the Facility
Termination Date for all Purchaser Groups shall automatically occur, without demand, protest or any
notice of any kind, all of which are hereby expressly waived by each Seller Party, (iii) deliver
the Collection Notices to the Collection Banks, (iv) exercise all rights and remedies of a secured
party upon default under the UCC and other applicable laws, and (v) notify Obligors of the
Administrators security interest in the Receivables and other Purchased Assets. The aforementioned
rights and remedies shall be without limitation, and shall be in addition to all other rights and
remedies of the Administrator, each Purchaser Agent and each Purchaser otherwise available under
any other provision of this Agreement, by operation of law, at equity or otherwise, all of which
are hereby expressly preserved, including, without limitation, all rights and remedies provided
under the UCC, all of which rights shall be cumulative.
37
ARTICLE X.
INDEMNIFICATION
Section 10.1
Indemnities by the Seller Parties
. Without limiting any other rights that
the Administrator, any Purchaser Agent, any Purchaser or any Funding Source may have hereunder or
under applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to) the
Administrator, each Purchaser Agent, each Purchaser, each Funding Source and each of the respective
assigns, officers, directors, Administrators and employees of the foregoing (each, an
Indemnified
Party
) from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses
and for all other amounts payable, including reasonable attorneys fees (which attorneys may be
employees of any Indemnified Party) and disbursements (all of the foregoing being collectively
referred to as
Indemnified Amounts
) awarded against or incurred by any of them arising out of or
as a result of this Agreement or the acquisition, either directly or indirectly, by any Indemnified
Party of an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify (and pay
upon demand to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any
of them arising out of the Servicers activities as Servicer hereunder;
excluding, however,
in all
of the foregoing instances under the preceding clauses (A) and (B):
(a) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same results from losses in respect of
Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(c) taxes imposed by the jurisdiction in which such Indemnified Partys principal
executive office is located, on or measured by the overall net income of such Indemnified
Party to the extent that the computation of such taxes is consistent with the characterization
for income tax purposes of the acquisition by any Purchaser of Receivables as a loan or loans
by any Purchaser to Seller secured by the Receivables, the Related Security, the Collection
Accounts and the Collections;
provided that
nothing contained in this sentence shall limit the liability of any Seller Party or
limit the recourse of any Indemnified Party to any Seller Party for amounts otherwise specifically
provided to be paid by such Seller Party under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, Seller shall indemnify the Indemnified Parties for
Indemnified Amounts
(including, without limitation, losses in respect of uncollectible receivables, regardless of
whether reimbursement therefor would constitute recourse to Seller or the Servicer) relating to or
resulting from:
(i) any representation or warranty made by any Seller Party or any Originator (or any
officers of any such Person) under or in connection with this Agreement, any other Transaction
Document or any other information or report delivered by any such Person pursuant hereto or
thereto, which shall have been false or incorrect when made or deemed made;
38
(ii) the failure by Seller, the Servicer or any Originator to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with any such applicable law,
rule or regulation or any failure of any Originator to keep or perform any of its obligations,
express or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer or any Originator to perform its duties,
covenants or other obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
(iv) any products liability, personal injury or damage suit, or other similar claim
arising out of or in connection with merchandise, insurance or services that are the subject
of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a
defense based on such Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with other funds;
(vii) any investigation, litigation or proceeding related to or arising from this
Agreement or any other Transaction Document, the transactions contemplated hereby, the use of
the proceeds of any Purchase, the Purchased Assets or any other investigation, litigation or
proceeding relating to Seller, the Servicer or any Originator in which any Indemnified Party
becomes involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in respect of any
Receivable as a result of such Obligor being immune from civil and commercial law and suit on
the grounds of sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event of the type described in Section 9.1(k);
(x) any failure of Seller to acquire and maintain legal and equitable title to, and
ownership of any of the Purchased Assets from the applicable Originator, free and clear of any
Lien (other than as created hereunder); or any failure of Seller to give reasonably equivalent
value to any Originator under the Receivables Sale Agreement in consideration of the transfer
by such Originator of any Receivable, or any attempt by any Person to void such transfer under
statutory provisions or common law or equitable action;
39
(xi) any failure to vest and maintain vested in the Administrator for the benefit of the
Secured Parties, or to transfer to the Administrator for the benefit of the Secured Parties, a
valid first priority perfected security interests in the Purchased Assets, free and clear of
any Lien (except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Purchased Assets, and the proceeds thereof, whether at the
time of any Purchase or at any subsequent time;
(xiii) any action or omission by any Seller Party which reduces or impairs the rights of
any Indemnified Party Portion with respect to any Purchased Assets or the value of any
Purchased Assets;
(xiv) any attempt by any Person to void any Purchase or the Administrators security
interest in the Purchased Assets under statutory provisions or common law or equitable action;
and
(xv) the failure of any Receivable included in the calculation of the Net Pool Balance as
an Eligible Receivable to be an Eligible Receivable at the time so included.
Section 10.2
Increased Cost and Reduced Return
. If after the date hereof, any
Regulatory Change shall occur: (i) that subjects any Funding Source to any charge or withholding on
or with respect to any Funding Agreement or a Funding Sources obligations under a Funding
Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments
to any Funding Source of any amounts payable under any Funding Agreement (except for changes in the
rate of tax on the overall net income of a Funding Source or taxes excluded by Section 10.1) or
(ii) that imposes, modifies or deems applicable any reserve, assessment, insurance charge, special
deposit or similar requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement or (iii) that
imposes any other condition the result of which is to increase the cost to a Funding Source of
performing its obligations under a Funding Agreement, or to reduce the rate of return on a Funding
Sources capital as a consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding Agreement or to
require any payment calculated by reference to the amount of interests or loans held or interest
received by it, then, upon demand by the applicable Purchaser Agent, Seller shall pay to such
Purchaser Agent, for the benefit of the relevant Funding Source, such amounts charged to such
Funding Source or such amounts to otherwise compensate such Funding Source for such increased cost
or such reduction (subject to any limitations specifically with respect to this Section 10.2 set
forth in the Fee Letters). For the avoidance of doubt, if the issuance of FASB Interpretation No.
46, or any other change in accounting standards or the issuance of any other pronouncement, release
or interpretation, causes or requires the consolidation of all or a portion of the assets and
liabilities of the Seller or any Conduit Purchaser with the assets and liabilities of the
Administrator, any Purchaser Agent or any other Funding Source, such event shall constitute a
circumstance on which such Funding Source may base a claim for reimbursement under this Section
10.2.
40
Section 10.3
Other Costs and Expenses
. Seller shall pay to the Administrator, each
Purchaser Agent and each Purchaser on demand all reasonable costs and out-of-pocket expenses in
connection with the preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered hereunder, including
without limitation, the cost of its auditors auditing the books, records and procedures of Seller,
reasonable fees and out-of-pocket expenses of independent legal counsel with respect thereto and
with respect to providing advice as to their respective rights and remedies under this Agreement
but excluding salaries and similar overhead costs of each Purchaser Group and the Administrator (it
being understood that, unless otherwise consented to by the Seller, the Administrator and each
Purchaser Group shall endeavor to utilize the same counsel to the extent
reasonably feasible). Seller shall pay to the Administrator, each Purchaser Agent and each
Purchaser on demand any and all costs and expenses thereof, if any, including reasonable counsel
fees and expenses in connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Amortization Event.
ARTICLE XI.
THE AGENTS
Section 11.1
Appointment and Authorization
.
(a) Each Purchaser and Purchaser Agent hereby irrevocably designates and appoints Wachovia
Bank, National Association, as the Administrator hereunder and authorizes the Administrator to
take such actions and to exercise such powers as are delegated to the Administrator hereby and to
exercise such other powers as are reasonably incidental thereto. The Administrator shall hold, in
its name, for the benefit of each Purchaser, ratably, the Receivable Interests. The Administrator
shall not have any duties other than those expressly set forth herein or any fiduciary relationship
with any Purchaser or Purchaser Agent, and no implied obligations or liabilities shall be read into
this Agreement, or otherwise exist, against the Administrator. The Administrator does not assume,
nor shall it be deemed to have assumed, any obligation to, or relationship of trust or agency with,
the Seller or Servicer. Notwithstanding any provision of this Agreement or any other Transaction
Document to the contrary, in no event shall the Administrator ever be required to take any action
which exposes the Administrator to personal liability or which is contrary to the provision of any
Transaction Document or applicable law.
(b) Each Purchaser hereby irrevocably designates and appoints the respective institution
identified as the Purchaser Agent for such Purchasers Purchaser Group on the signature pages
hereto or in the Assumption Agreement or Transfer Supplement pursuant to which such Purchaser
becomes a party hereto, and each authorizes such Purchaser Agent to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform such duties as are
expressly delegated to such Purchaser Agent by the terms of this Agreement, if any, together with
such other powers as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, no Purchaser Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any Purchaser or other
Purchaser Agent or the Administrator, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.
41
(c) Except as otherwise specifically provided in this Agreement, the provisions of this
Article XI are solely for the benefit of the Purchaser Agents, the Administrator and the
Purchasers, and none of the Seller or Servicer shall have any rights as a third-party beneficiary
or otherwise under any of the provisions of this Article XI, except that this Article XI shall not
affect any obligations which any Purchaser Agent, the Administrator or any Purchaser may have to
the Seller or the Servicer under the other provisions of this Agreement. Furthermore, no Purchaser
shall have any rights as a third-party beneficiary or otherwise under any of the provisions hereof
in respect of a Purchaser Agent which is not the Purchaser Agent for such Purchaser.
(d) In performing its functions and duties hereunder, the Administrator shall act solely as
the agent of the Purchasers and the Purchaser Agents and does not assume nor shall be deemed to
have assumed any obligation or relationship of trust or agency with or for the Seller or Servicer
or any of their successors and assigns. In performing its functions and duties hereunder, each
Purchaser Agent shall act solely as the agent of its respective Purchaser and does not assume nor
shall be deemed to have assumed
any obligation or relationship of trust or agency with or for the Seller, the Servicer, any
other Purchaser, any other Purchaser Agent or the Administrator, or any of their respective
successors and assigns.
Section 11.2
Delegation of Duties
. The Administrator may execute any of its duties
through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrator shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
Section 11.3
Exculpatory Provisions
. None of the Purchaser Agents, the Administrator
or any of their directors, officers, agents or employees shall be liable for any action taken or
omitted (i) with the consent or at the direction of the Required Purchaser Agents (or in the case
of any Purchaser Agent, the Purchasers within its Purchaser Group that have a majority of the
aggregate Commitment of such Purchaser Group) or (ii) in the absence of such Persons gross
negligence or willful misconduct. The Administrator shall not be responsible to any Purchaser,
Purchaser Agent or other Person for (i) any recitals, representations, warranties or other
statements made by the Seller, Servicer, or any of their Affiliates, (ii) the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Transaction Document, (iii) any
failure of the Seller, the Servicer, any Originator or any of their Affiliates to perform any
obligation hereunder or under the other Transaction Documents to which it is a party (or under any
Contract), or (iv) the satisfaction of any condition specified in any Transaction Document. The
Administrator shall not have any obligation to any Purchaser or Purchaser Agent to ascertain or
inquire about the observance or performance of any agreement contained in any Transaction Document
or to inspect the properties, books or records of the Seller, Servicer, Originator or any of their
Affiliates.
Section 11.4
Reliance by Agents
.
(a) Each Purchaser Agent and the Administrator shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or other writing or
42
conversation believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person and upon advice and statements of legal counsel (including counsel to the Seller),
independent accountants and other experts selected by the Administrator. Each Purchaser Agent and
the Administrator shall in all cases be fully justified in failing or refusing to take any action
under any Transaction Document unless it shall first receive such advice or concurrence of the
Required Purchaser Agents (or in the case of any Purchaser Agent, the Purchasers within its
Purchaser Group that have a majority of the aggregate Commitment of such Purchaser Group), and
assurance of its indemnification, as it deems appropriate.
(b) The Administrator shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Required Purchaser Agents or the
Purchaser Agents, and such request and any action taken or failure to act pursuant thereto shall be
binding upon all Purchasers, the Administrator and Purchaser Agents.
(c) The Purchasers within each Purchaser Group with a majority of the Commitment of such
Purchaser Group shall be entitled to request or direct the related Purchaser Agent to take action,
or refrain from taking action, under this Agreement on behalf of such Purchasers. Such Purchaser
Agent shall in all cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of such majority Purchasers, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of such Purchaser Agents
Purchasers.
(d) Unless otherwise advised in writing by a Purchaser Agent or by any Purchaser on whose
behalf such Purchaser Agent is purportedly acting, each party to this Agreement may assume that (i)
such Purchaser Agent is acting for the benefit of each of the Purchasers in respect of which such
Purchaser Agent is identified as being the Purchaser Agent in the definition of Purchaser Agent
hereto, as well as
for the benefit of each assignee or other transferee from any such Person, and (ii) each
action taken by such Purchaser Agent has been duly authorized and approved by all necessary action
on the part of the Purchasers on whose behalf it is purportedly acting. Each Purchaser Agent and
its Purchaser(s) shall agree amongst themselves as to the circumstances and procedures for removal,
resignation and replacement of such Purchaser Agent.
Section 11.5
Notice of Amortization Events
. Neither any Purchaser Agent nor the
Administrator shall be deemed to have knowledge or notice of the occurrence of any Amortization
Event or Unmatured Amortization Event unless such Purchaser Agent or Administrator has received
notice from any Purchaser, Purchaser Agent, the Servicer or the Seller stating that an Amortization
Event or Unmatured Amortization Event has occurred hereunder and describing such Amortization Event
or Unmatured Amortization Event. In the event that the Administrator receives such a notice, it
shall promptly give notice thereof to each Purchaser Agent whereupon each such Purchaser Agent
shall promptly give notice thereof to its Purchasers. In the event that a Purchaser Agent receives
such a notice (other than from the Administrator), it shall promptly give notice thereof to the
Administrator. The Administrator shall take such action concerning an Amortization Event or
Unmatured Amortization Event as may be directed by the Required Purchaser Agents (unless such
action otherwise requires the consent of all Purchaser Agents), but until the Administrator
receives such directions, the Administrator may (but shall not be obligated to) take such action,
or refrain from taking such action, as the Administrator deems advisable and in the best interests
of the Purchasers and Purchaser Agents.
43
Section 11.6
Non-Reliance on Administrator, Purchaser Agents and Other Purchasers
.
Each Purchaser expressly acknowledges that none of the Administrator, the Purchaser Agents nor any
of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Administrator, or any Purchaser
Agent hereafter taken, including any review of the affairs of the Seller, Servicer or any
Originator, shall be deemed to constitute any representation or warranty by the Administrator or
such Purchaser Agent, as applicable. Each Purchaser represents and warrants to the Administrator
and the Purchaser Agents that, independently and without reliance upon the Administrator, Purchaser
Agents or any other Purchaser and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and creditworthiness of
the Seller, Servicer or the Originators, and the Receivables and its own decision to enter into
this Agreement and to take, or omit, action under any Transaction Document. Except for items
specifically required to be delivered hereunder, the Administrator shall not have any duty or
responsibility to provide any Purchaser Agent with any information concerning the Seller, Servicer
or the Originators or any of their Affiliates that comes into the possession of the Administrator
or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
Section 11.7
Administrators and Affiliates
. Each of the Purchasers and the
Administrator and their Affiliates may extend credit to, accept deposits from and generally engage
in any kind of banking, trust, debt, entity or other business with the Seller, Servicer or any
Originator or any of their Affiliates. With respect to the acquisition of the Eligible Receivables
pursuant to this Agreement, each of the Purchaser Agents and the Administrator shall have the same
rights and powers under this Agreement as any Purchaser and may exercise the same as though it were
not such an agent, and the terms Purchaser and Purchasers shall include, to the extent
applicable, each of the Purchaser Agents and the Administrator in their individual capacities.
Section 11.8
Indemnification
. Each Related Committed Purchaser shall indemnify and
hold harmless the Administrator (but solely in its capacity as Administrator) and its officers,
directors, employees, representatives and agents (to the extent not reimbursed by the Seller, the
Servicer or any Originator and without limiting the obligation of the Seller, the Servicer, or any Originator to do so),
ratably (based on its Commitment) from and against any and all liabilities, obligations, losses,
damages, penalties, judgments, settlements, costs, expenses and disbursements of any kind
whatsoever (including in connection with any investigative or threatened proceeding, whether or not
the Administrator or such Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against the Administrator or such Person as a result of, or
related to, any of the transactions contemplated by the Transaction Documents or the execution,
delivery or performance of the Transaction Documents or any other document furnished in connection
therewith (but excluding any such liabilities, obligations, losses, damages, penalties, judgments,
settlements, costs, expenses or disbursements resulting solely from the gross negligence or willful
misconduct of the Administrator or such Person as finally determined by a court of competent
jurisdiction).
44
Section 11.9
Successor Administrator
. The Administrator may, upon at least five (5)
days notice to the Seller and each Purchaser and Purchaser Agent, resign as Administrator. Such
resignation shall not become effective until a successor agent is appointed by the Required
Purchasers and has accepted such appointment. Upon such acceptance of its appointment as
Administrator hereunder by a successor Administrator, such successor Administrator shall succeed to
and become vested with all the rights and duties of the retiring Administrator, and the retiring
Administrator shall be discharged from its duties and obligations under the Transaction Documents.
After any retiring Administrators resignation hereunder, the provisions of Article X and this
Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it
was the Administrator.
ARTICLE XII.
ASSIGNMENTS AND PARTICIPATIONS
Section 12.1
Successors and Assigns; Participations; Assignments
.
(a)
Successors and Assigns
. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Except as otherwise
provided herein, no Seller Party may assign or transfer any of its rights or delegate any of its
duties hereunder or under any Transaction Document without the prior consent of the Administrator
and the Purchaser Agents.
(b)
Participations
. Except as otherwise specifically provided herein, any Purchaser
may sell to one or more Persons (each a
Participant
) participating interests in the interests of
such Purchaser hereunder;
provided that,
no Purchaser shall grant any participation under which the
Participant shall have rights to approve any amendment to or waiver of this Agreement or any other
Transaction Document. Such Purchaser shall remain solely responsible for performing its obligations
hereunder, and the Seller, each Purchaser Agent and the Administrator shall continue to deal solely
and directly with such Purchaser in connection with such Purchasers rights and obligations
hereunder. A Purchaser shall not agree with a Participant to restrict such Purchasers right to
agree to any amendment hereto, except amendments that require the consent of all Purchasers.
(c)
Assignments by Certain Related Committed Purchasers
. Any Related Committed
Purchaser may assign to one or more Persons (each a
Purchasing Related Committed Purchaser
),
reasonably acceptable to the related Purchaser Agent, any portion of its Commitment pursuant to a
supplement hereto, substantially in the form of Exhibit X with any changes as have been approved by
the parties thereto (each, a
Transfer Supplement
), executed by each such Purchasing Related
Committed Purchaser, such selling Related Committed Purchaser, such related Purchaser Agent and the
Administrator and so long as no Amortization Event has occurred with the consent of Seller (which
consent shall not be unreasonably withheld). Any such assignment by Related Committed Purchaser
cannot be for an amount less than $10,000,000. Upon (i) the execution of the Transfer Supplement,
(ii) delivery of an executed copy thereof to the Seller, such related Purchaser Agent and the Administrator and (iii) payment by the
Purchasing Related Committed Purchaser to the selling Related Committed Purchaser of the agreed
purchase price, if any, such selling Related Committed Purchaser shall be released from its
obligations hereunder to the extent of such assignment and such Purchasing
45
Related Committed Purchaser shall for all purposes be a Related Committed Purchaser party hereto
and shall have all the rights and obligations of a Related Committed Purchaser hereunder to the
same extent as if it were an original party hereto. The amount of the Commitment of the selling
Related Committed Purchaser allocable to such Purchasing Related Committed Purchaser shall be equal
to the amount of the Commitment of the selling Related Committed Purchaser transferred regardless
of the purchase price, if any, paid therefor. The Transfer Supplement shall be an amendment hereof
only to the extent necessary to reflect the addition of such Purchasing Related Committed Purchaser
as a Related Committed Purchaser and any resulting adjustment of the selling Related Committed
Purchasers Commitment.
(d)
Assignments to Liquidity Providers and other Funding Source Providers
. Any Conduit
Purchaser may at any time grant to one or more of its Liquidity Providers or other Funding Source,
participating interests in its portion of the Receivable Interests. In the event of any such grant
by such Conduit Purchaser of a participating interest to a Liquidity Provider or other Funding
Source, such Conduit Purchaser shall remain responsible for the performance of its obligations
hereunder. The Seller agrees that each Liquidity Provider and Funding Source of any Conduit
Purchaser hereunder shall be entitled to the benefits of Section 1.7.
(e)
Other Assignment by Conduit Purchasers
. Each party hereto agrees and consents (i)
to any Conduit Purchasers assignment, participation, grant of security interests in or other
transfers of any portion of, or any of its beneficial interest in, the Purchased Interest (or
portion thereof), including without limitation to any collateral agent in connection with its
commercial paper program and (ii) to the complete assignment by any Conduit Purchaser of all of its
rights and obligations hereunder to any other Person with prior notice to the other parties hereto,
and upon such assignment such Conduit Purchaser shall be released from all obligations and duties,
if any, hereunder;
provided that,
such Conduit Purchaser may not, without the prior consent of its
Related Committed Purchasers, make any such transfer of its rights hereunder unless the assignee
(i) is principally engaged in the purchase of assets similar to the assets being purchased
hereunder, (ii) has as its Purchaser Agent the Purchaser Agent of the assigning Conduit Purchaser
and (iii) issues commercial paper with credit ratings substantially comparable to the ratings of
the assigning Conduit Purchaser. Any assigning Conduit Purchaser shall deliver to any assignee a
Transfer Supplement with any changes as have been approved by the parties thereto, duly executed by
such Conduit Purchaser, assigning any portion of its interest in the Receivable Interests to its
assignee. Such Conduit Purchaser shall promptly (i) notify each of the other parties hereto of such
assignment and (ii) take all further action that the assignee reasonably requests in order to
evidence the assignees right, title and interest in such interest in the Receivable Interests and
to enable the assignee to exercise or enforce any rights of such Conduit Purchaser hereunder. Upon
the assignment of any portion of its interest in the Receivable Interests, the assignee shall have
all of the rights hereunder with respect to such interest (except that the CP Costs therefor shall
thereafter accrue at the rate, determined with respect to the assigning Conduit Purchaser unless
the Seller, the related Purchaser Agent and the assignee shall have agreed upon a different CP
Costs).
(f)
Opinions of Counsel
. If required by the Administrator or the applicable Purchaser
Agent or to maintain the ratings of any Conduit Purchaser, each Transfer Supplement must be
accompanied by an opinion of counsel of the assignee as to such matters as the Administrator or
such Purchaser Agent may reasonably request.
46
ARTICLE XIII.
MISCELLANEOUS
Section 13.1
Waivers and Amendments
.
(a) No failure or delay on the part of the Administrator, any Purchaser Agent or any Purchaser
in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy preclude any other
further exercise thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by
law. Any waiver of this Agreement shall be effective only in the specific instance and for the
specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified or waived except in
writing in accordance with the provisions of this Section 13.1(b). Seller and the Administrator,
with the consent of the Required Purchaser Agents, may enter into written modifications or waivers
of any provisions of this Agreement; provided that, no such modification or waiver shall:
(i) without the consent of each Purchaser affected thereby, (A) extend the Facility
Termination Date for the related Purchaser Group or the date of any payment or deposit of
Collections by Seller or the Servicer, (B) reduce the rate or extend the time of payment of
Yield or any CP Costs (or any component of Yield or CP Costs), (C) reduce any fee payable to
such Purchaser, (D) change the Invested Amount of any Receivable Interest, (E) amend, modify
or waive any provision of the definition of Required Purchaser Agents, Section 9.1 or this
Section 13.1(b), (F) consent to or permit the assignment or transfer by Seller of any of its
rights and obligations under this Agreement, (G) change the definition of
Eligible
Receivable, Available Commitment, Loss Reserve, Dilution Reserve, Obligor
Concentration Limit, Yield Reserve, Purchase Limit, Commitment, Purchase Price,
Servicing Reserve, Servicing Fee Rate, Required Reserve or Required Reserve Factor
Floor
or (H) amend or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above in a manner that would
circumvent the intention of the restrictions set forth in such clauses; or
(ii) without the written consent of the Administrator and each Purchaser Agent, amend,
modify or waive any provision of this Agreement if the effect thereof is to affect the rights
(including, without limitation, fees and indemnities) or duties of such Administrator or
Purchaser Agent,
and any material amendment, waiver or other modification of this Agreement shall require
satisfaction of the Rating Agency Condition.
Section 13.2
Notices
. Except as provided in this Section 13.2, all communications and
notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other parties hereto at their
47
respective addresses or telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose of notice to each
of the other parties hereto. Each such notice or other communication shall be effective (i) if
given by telecopy, upon the receipt thereof, (ii) if sent via U.S. certified or registered mail,
three (3) Business Days after the time such communication is deposited in the mail with first class
postage prepaid or (iii) if given by any other means, when received at the address specified in
this Section 13.2. Seller hereby authorizes the Administrator and each Purchaser Agent to effect
Purchases and Interest Period and Yield Rate selections based on telephonic notices made by any
Person whom such Administrator or Purchaser Agent in good faith believes to be acting on behalf of
Seller. Seller agrees to deliver promptly to such Administrator or Purchaser Agent a
written confirmation of each telephonic notice signed by an authorized officer of Seller; provided
that, the absence of such confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by the Administrator or any Purchaser Agent, the records
of such Administrator or Purchaser Agent shall govern absent manifest error.
Section 13.3
Protection of Administrators Security Interest
.
(a) Seller agrees that from time to time, at its expense, it will promptly execute and deliver
all instruments and documents, and take all actions, that may be necessary or desirable, or that
the Administrator or any Purchaser Agent may request, to perfect, protect or more fully evidence
the Administrators security interest in the Purchased Assets, or to enable the Administrator, any
Purchaser Agent or any Purchaser to exercise and enforce their rights and remedies hereunder. At
any time after the occurrence of an Amortization Event the Administrator may, or the Administrator
may direct Seller or the Servicer to, notify the Obligors of Receivables, at Sellers expense, of
the ownership or security interests of the Administrator (for the benefit of the Secured Parties)
under this Agreement and may also direct that payments of all amounts due or that become due under
any or all Receivables be made directly to the Administrator or its designee. Seller or the
Servicer (as applicable) shall, at the Administrators request, withhold the identities of the
Administrator, each Purchaser Agent and each Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations under Section 13.3(a) and
notice of such failure is given to the Seller Party, the Administrator, any Purchaser Agent or any
Purchaser may (but shall not be required to) perform, or cause performance of, such obligations,
and the costs and expenses incurred in connection therewith shall be payable by Seller as provided
in Section 10.3. Each Seller Party irrevocably authorizes the Administrator at any time and from
time to time in the sole discretion of the Administrator, and appoints the Administrator as its
attorney-in-fact, to act on behalf of such Seller Party (i) to execute on behalf of Seller as
debtor and to file financing statements necessary or desirable in the Administrators sole
discretion to perfect and to maintain the perfection and priority of the interest of the
Administrator for the benefit of the Secured Parties in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as the Administrator in its sole discretion
deems necessary or desirable to perfect and to maintain the perfection and priority of the
Administrators security interest in the Purchased Assets, for the benefit of the Secured Parties.
The Administrator shall provide the Seller with copies of any such filings. This appointment is
coupled with an interest and is irrevocable. Each of the Seller Parties (A) hereby authorizes the
Administrator to file financing statements and other filing or recording documents with respect
48
to the Receivables and Related Security (including any amendments thereto, or continuation or
termination statements thereof), without the signature or other authorization of such Seller Party,
in such form and in such offices as the Administrator reasonably determines appropriate to perfect
or maintain the perfection of the security interest of the Administrator hereunder, (B)
acknowledges and agrees that it is not authorized to, and will not, file financing statements or
other filing or recording documents with respect to the Receivables or Related Security (including
any amendments thereto, or continuation or termination statements thereof), without the express
prior written approval by the Administrator, consenting to the form and substance of such filing or
recording document, and (C) approves, authorizes and ratifies any filings or recordings made by or
on behalf of the Administrator in connection with the perfection of the security interests in favor
of Seller or the Administrator.
Section 13.4
Confidentiality
.
(a) Each of the Seller Parties shall maintain and shall cause each of its employees and
officers to maintain the confidentiality of the Fee Letters and the other confidential or
proprietary information with respect to the Administrator, each Purchaser Agent and each Purchaser and their respective
businesses obtained by it or them in connection with the structuring, negotiating and execution of
the transactions contemplated herein, except that such Seller Party and its officers and employees
may disclose such information to such Seller Partys auditors and attorneys, employees, financial
advisors or rating agencies and as required by any applicable law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or proceeding (whether or
not having the force or effect of law).
(b) Anything herein to the contrary notwithstanding, each Seller Party hereby consents to the
disclosure of any nonpublic information with respect to it in connection with the transactions
contemplated herein (i) to the Administrator, any Purchaser Agent, any Purchaser or any other
Funding Source by each other, (ii) by any such Person to any prospective or actual assignee or
participant of any of them, (iii) by any such Person to any rating agency or Commercial Paper
dealer and (iv) to any officers, directors, employees, outside accountants, financial advisors, and
attorneys of any of the foregoing; provided that each such Person is informed of the confidential
nature of such information. In addition, any such Person may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the force or effect of
law).
(c) Notwithstanding anything herein to the contrary, to the extent not inconsistent with
applicable securities laws, each party hereto (and each of its employees, representatives or other
agents) may disclose to any and all Persons, without limitation of any kind, the tax treatment and
tax structure of the transaction (as defined in Section 1.6011-4 of the Treasury Regulations) and
all materials of any kind (including opinions or other tax analyses) to the extent relating to such
tax treatment and tax structure.
Section 13.5
Bankruptcy Petition
. Seller, the Servicer, the Administrator, each
Purchaser Agent and each Related Committed Purchaser hereby covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding senior indebtedness
of each Conduit Purchaser, it will not institute against, or join any other Person in instituting
against, each Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United States or any
state of the United States.
49
Section 13.6
Limitation of Liability
. No claim may be made by any Seller Party or any
other Person against the Administrator, any Purchaser Agent, any Purchaser or any other Funding
Source or their respective Affiliates, directors, officers, employees, attorneys or agent for any
special, indirect, consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions contemplated by this
Agreement, or any act, omission or event occurring in connection therewith; and each Seller Party
hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
Section 13.7
CHOICE OF LAW
. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW (EXCEPT IN THE CASE OF THE
OTHER TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND EXCEPT TO THE
EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTEREST OF SELLER OR THE OWNERSHIP OR SECURITY
INTEREST OF THE ADMINISTRATOR (FOR THE BENEFIT OF THE SECURED PARTIES) IN ANY OF THE COLLATERAL IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 13.8
CONSENT TO JURISDICTION
. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL COURT SITTING IN THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK STATE COURT SITTING
IN NEW YORK COUNTY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY
SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATOR, ANY PURCHASER AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE ADMINISTRATOR , ANY PURCHASER AGENT OR ANY
PURCHASER OR ANY AFFILIATE OF THE ADMINISTRATOR, ANY PURCHASER AGENT OR ANY PURCHASER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT
ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 13.9
WAIVER OF JURY TRIAL
. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
50
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY
PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 13.10
Integration; Binding Effect; Survival of Terms
.
(a) This Agreement and each other Transaction Document contain the final and complete
integration of all prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with respect to the
subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns (including any trustee in bankruptcy). This
Agreement shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms and shall remain in full force and effect until terminated in accordance
with its terms;
provided that
the rights and remedies with respect to (i) any breach of any
representation and warranty made by any Seller Party pursuant to Article V, (ii) the
indemnification and payment provisions of Article X, and Sections 13.4 and 13.5 shall be continuing
and shall survive any termination of this Agreement.
(c) Each of the Seller Parties, and the Administrator, the Purchaser Agents and the Purchasers
hereby acknowledges and agrees that the Funding Sources are hereby made express third party
beneficiaries of this Agreement and each of the other Transaction Documents as in effect from time
to time.
Section 13.11
Counterparts; Severability; Section References
. This Agreement may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same Agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of a signature page to this Agreement. Any provisions of this Agreement which
are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. Unless otherwise expressly indicated, all references herein to Article, Section,
Schedule or Exhibit shall mean articles and sections of, and schedules and exhibits to, this
Agreement.
Section 13.12
Characterization
.
(a) It is the intention of the parties hereto that each Purchase hereunder shall constitute
and be treated as an absolute and irrevocable sale, which Purchase shall provide the Administrator
(for the benefit of the Secured Parties) with the full benefits of ownership of the applicable
Receivable Interest. Except as specifically provided in this Agreement, each sale of a Receivable
Interest hereunder is made without recourse to Seller;
provided that
(i) Seller shall be liable to
the Administrator, the Purchaser Agents and the Purchasers for all representations,
51
warranties, covenants and indemnities made by Seller pursuant to the terms of this Agreement, and
(ii) such sale does not constitute and is not intended to result in an assumption by the
Administrator, any Purchaser Agent or any Purchaser or any assignee thereof of any obligation of
Seller or any Originator or any other person arising in connection with the Receivables, the
Related Security, or the related Contracts, or any other obligations of Seller or any Originator.
(b) In addition to any ownership interest which the Administrator or any Purchaser may from
time to time acquire pursuant hereto, Seller hereby grants to the Administrator for the benefit of
Secured Parties a valid and perfected security interest in all of Sellers right, title and
interest in, to and under all Receivables now existing or hereafter arising, the Collections, each
Lock-Box, each Collection Account, all Related Security, all other rights and payments relating to
such Receivables, and all proceeds of any thereof prior to all other liens on and security
interests therein to secure the prompt and complete payment of the Aggregate Unpaids. The
Administrator, on behalf of Secured Parties, shall have, in addition to the rights and remedies
that it may have under this Agreement, all other rights and remedies provided to a secured creditor
under the UCC and other applicable law, which rights and remedies shall be cumulative.
<
signature pages follow
>
52
IN WITNESS WHEREOF
,
the parties hereto have caused this Agreement to be executed and delivered
by their duly authorized officers or attorneys-in-fact as of the date hereof.
|
|
|
|
|
AMERISOURCE RECEIVABLES
FINANCIAL CORPORATION
|
|
|
|
|
|
|
|
By:
|
|
/s/ J.F. Quinn
|
|
|
|
|
Name: J.F. Quinn
Title: Vice President and Corporate Treasurer
|
|
|
|
|
|
Address:
|
|
Amerisource Receivables Financial Corporation
P. O. Box 1735
Southeastern, PA 19399
|
Attention:
|
|
Jack Quinn
|
Telephone:
|
|
(610) 727-7453
|
Facsimile:
|
|
(610) 727-3639
|
|
|
|
|
|
AMERISOURCEBERGEN DRUG CORPORATION,
as Servicer
|
|
|
|
|
|
|
|
By:
|
|
/s/ J.F. Quinn
|
|
|
|
|
Name: J.F. Quinn
Title: Vice President and Corporate Treasurer
|
|
|
|
|
|
Address:
|
|
AmerisourceBergen Drug Corporation
1300 Morris Drive
Chesterbrook, PA 19087
|
Attention:
|
|
Jack Quinn
|
Telephone:
|
|
(610) 727-7116
|
Facsimile:
|
|
(610) 727-3639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-1
BLUE RIDGE ASSET FUNDING CORPORATION,
as a Conduit Purchaser
|
|
|
|
|
BY:
|
|
WACHOVIA CAPITAL MARKETS, LLC,
|
|
|
ITS ATTORNEY-IN-FACT
|
|
|
|
|
|
|
|
By:
|
|
/s/ Douglas R. Wilson, Sr.
|
|
|
|
|
Name: Douglas R. Wilson, Sr.
Title: Vice President
|
|
|
|
|
|
Address:
|
|
Wachovia Capital Markets, LLC
301 South College Street
Charlotte, NC 28288
|
Attention:
|
|
Doug Wilson
|
Telephone:
|
|
(704) 374-2520
|
Facsimile:
|
|
(704) 383-9579
|
With a copy to:
Blue Ridge Asset Funding Corporation
c/o AMACAR Group, L.L.C.
6525 Morrison Boulevard,
Suite 318
Charlotte, NC 28211
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrator and as Purchaser Agent and
Related Committed Purchaser for
Blue Ridge Asset Funding Corporation
|
|
|
|
|
By:
|
|
/s/ Victoria A. Dudley
|
|
|
|
|
Name: Victoria A. Dudley
Title: Managing Director
|
|
|
|
|
|
Address:
|
|
Wachovia Bank, National Association
191 Peachtree Street, NE
22
nd
Floor
Mail Code GA8047
Atlanta, GA 30303
|
Attention:
|
|
Cecil Noble
|
Telephone:
|
|
(404) 332-4209
|
Facsimile:
|
|
(404) 332-5152
|
Commitment: $250,000,000
Scheduled Facility Termination Date: July 6, 2006 with respect to $250,000,000 of the Commitment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-2
EAGLEFUNDING CAPITAL CORPORATION,
as a Conduit Purchaser
|
|
|
|
|
By:
|
|
FLEET SECURITIES, INC., as attorney-in-fact
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jolin T. Hackett III
|
|
|
|
|
Name: Jolin T. Hackett III
Title: Managing Director
|
|
|
Fleet Securities, Inc.
100 Federal Street
Boston, Massachusetts 02110
Attention: John T. Hackett III
Telephone: (617) 434-4702
Telecopy: (617) 434-5719
FLEET NATIONAL BANK, as a Related Committed Purchaser
for EagleFunding Capital Corporation
|
|
|
|
|
By:
|
|
FLEET SECURITIES, INC.
|
|
|
|
|
|
|
|
By:
|
|
/s/ Thomas M. Callhoun
|
|
|
|
|
As agent for Fleet National Bank
Name: Thomas M. Callhoun
Title: Managing Director
|
|
|
Fleet Securities, Inc.
100 Federal Street
Boston, Massachusetts 02110
Attention: Peter M. Benham
Telephone: (617) 434-5241
Telecopy: (617) 434-5719
Commitment: $250,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-3
FLEET SECURITIES, INC., as Purchaser Agent for
EagleFunding Capital Corporation and its Related Committed Purchasers
|
|
|
|
|
By:
|
|
/s/ John T. Hackett III
|
|
|
|
|
Name: John T. Hackett III
Title: Managing Director
|
|
|
Fleet Securities, Inc.
100 Federal Street
Boston, Massachusetts 02110
Attention: John T. Hackett III
Telephone: (617) 434-4702
Telecopy: (617) 434-5719
Scheduled Facility Termination Date: July 6, 2006 with respect to $125,000,000 of the Commitment
and July 8, 2004 with respect to the remaining $125,000,000 of the Commitment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-4
LIBERTY STREET FUNDING CORP., as a Conduit Purchaser
|
|
|
|
|
By:
|
|
/s/ Andrew L. Stidd
|
|
|
|
|
Name: Andrew L. Stidd
Title: President
|
|
|
Address:
Liberty Street Funding Corp.
c/o Global Securitization Services, LLC
114 West 47
th
Street, Suite 1715
New York, New York 10036
Attention: Andrew L. Stidd
Telephone No.: (212) 302-5151
Facsimile No.: (212) 302-8767
THE BANK OF NOVA SCOTIA, as Administrator
and as Purchaser Agent and Related Committed Purchaser
for Liberty Street Funding Corp.
|
|
|
|
|
By:
|
|
/s/ Michael Eden
|
|
|
|
|
Name: Michael Eden
Title: Director
|
|
|
Address:
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Attention: Michael Eden
Telephone No.: (212) 225-5237
Facsimile No.: (212) 225-5274
Commitment: $250,000,000
Scheduled Facility Termination Date: July 6, 2006 with respect to $125,000,000 of the Commitment
and July 8, 2004 with respect to the remaining $125,000,000 of the Commitment.
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-5
ATLANTIC ASSET SECURITIZATION CORP.,
as a Conduit Purchaser
|
|
|
|
|
By:
|
|
CREDIT LYONNAIS, its attorney-in-fact
|
|
|
|
|
|
|
|
By:
|
|
/s/ Conrad Meyer
|
|
|
|
|
Name: Conrad Meyer
Title: Director
|
|
|
1301 Avenue of the Americas
New York, New York 10019-6022
Attn: Conrad A. Meyer
Telephone: (212) 261-7609
Telecopy: (212) 459-3258
CREDIT LYONNAIS, as Administrator
and as Purchaser Agent and Related Committed Purchaser
for Atlantic Asset Securitization Corp.
|
|
|
|
|
By:
|
|
/s/ Conrad Meyer
|
|
|
|
|
Name: Conrad Meyer
Title: Director
|
|
|
1301 Avenue of the Americas
New York, New York 10019-6022
Attn: Conrad A. Meyer
Telephone: (212) 261-7609
Telecopy: (212) 459-3258
Commitment: $200,000,000
Scheduled Facility Termination Date: July 8, 2004 with respect to $200,000,000 of the Commitment.
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-6
|
|
|
|
|
MARKET STREET FUNDING CORPORATION,
as a Conduit Purchaser
|
|
|
|
|
|
|
|
By:
|
|
/s/ Douglas K. Johnson
|
|
|
|
|
Name: Douglas K. Johnson
Title: President
|
|
|
c/o AMACAR Group, L.L.C.
6525 Morrison Boulevard,
Suite 318
Charlotte, NC 28211
United States of America
PNC BANK, NATIONAL ASSOCIATION, as Administrator
and as Purchaser Agent and Related Committed Purchaser
for Market Street Funding Corporation
|
|
|
|
|
By:
|
|
/s/ John T. Smathers
|
|
|
|
|
Name: John T. Smathers
Title: Vice President
|
|
|
One PNC Plaza, 26
th
Floor
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
Attention: John Smathers
Telephone: (412) 762-6440
Telecopy: (412) 762-9184
Commitment: $100,000,000
Scheduled Facility Termination Date: July 6, 2006 with respect to $50,000,000 of the Commitment and
July 8, 2004 with respect to the remaining $50,000,000 of the Commitment.
|
|
|
|
|
|
|
|
|
Receivables Purchase Agreement
|
S-7
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):
Adjusted Dilution Ratio
means, at any time, the rolling average of the Dilution Ratio for
the 12 Calculation Periods then most recently ended.
Administrator
has the meaning set forth in the preamble to this Agreement.
Affiliate
shall mean, with respect to a Person, any other Person, which directly or
indirectly controls, is controlled by or is under common control with, such Person. The term
control means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Aggregate Invested Amount
means, on any date of determination, the aggregate Invested Amount
of all Receivable Interests of all Purchasers outstanding on such date.
Aggregate Reduction
has the meaning specified in Section 1.3.
Aggregate Unpaids
means, at any time, an amount equal to the sum of (i) the Aggregate
Invested Amount, plus (ii) all Recourse Obligations (whether due or accrued) at such time.
Agreement
means this Receivables Purchase Agreement, as it may be amended or modified and in
effect from time to time.
Alternate Base Rate
means, for any day for any Purchaser (a) the rate per annum equal to the
higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent (0.50%) above the
Federal Funds Rate or (b) any other rate designated as the Alternate Base Rate for such Purchaser
in an Assumption Agreement or Transfer Supplement pursuant to which such Purchaser becomes a party
(as a Purchaser) to the Agreement, or any other written agreement among such Purchaser to the
Seller, the Servicer, the related Purchaser Agent and the Administrator from time to time. For
purposes of determining the Alternate Base Rate for any day, changes in the Prime Rate or the
Federal Funds Rate shall be effective on the date of each such change.
AmerisourceBergen
shall mean AmerisourceBergen Corporation, a Delaware corporation.
Amortization Date
means the earliest to occur of (i) the day on which any of the conditions
precedent set forth in Section 6.2 are not satisfied, (ii) the Business Day immediately prior to
the occurrence of an Event of Bankruptcy with respect to any Seller Party, (iii) the Business Day
specified in a written notice from the Administrator following the
I-1
occurrence of any other Amortization Event, and (iv) the date which is 30 days after the
Administrators receipt of written notice from Seller that it wishes to terminate the facility
evidenced by this Agreement.
Amortization Event
has the meaning specified in Article IX.
Applicable Originator
shall mean the Originator which generated a specific Receivable (or
Receivables).
Assumption Agreement
means an agreement substantially in the form set forth in Exhibit IX to
the Agreement.
Authorized Officer
means, with respect to any Person, its president, corporate controller,
treasurer or chief financial officer.
Available Commitment
means, with respect to each Related Committed Purchaser the excess, if
any, of such Related Committed Purchasers Commitment over the amount funded as of such date by
such Related Committed Purchaser with respect to outstanding principal of the Receivable Interests
under the Liquidity Agreement for the Conduit Purchaser in the related Purchaser Group.
Bank Rate Funding
means a purchase by any Liquidity Provider pursuant to its Liquidity
Commitment of all or any portion of, or any undivided interest in, a Receivable Interest or any
funding of a Receivable Interest hereunder by a Related Committed Purchaser other than through the issuance
of Commercial Paper.
Broken Funding Costs
means for any Receivable Interest which: (i) has its Invested Amount
reduced (I) if funded with Commercial Paper (a) with respect to the Blue Ridge Asset Funding
Corporation, Liberty Street Funding Corp. and Market Street Funding Corporation, without compliance
by Seller with the notice requirements hereunder or (b) with respect to EagleFunding Capital
Corporation or Atlantic Asset Securitization Corp., on any date other than a Settlement Date or
(II) if funded by reference to the LIBO Rate, on any date other than the Settlement Date or (ii)
does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice or
(iii) is assigned by any Conduit Purchaser to the Liquidity Providers under the related Liquidity
Agreement or terminated prior to the date on which it was originally scheduled to end; an amount
equal to the excess, if any, of (A) the CP Costs or Yield (as applicable) that would have accrued
during the remainder of the Interest Periods or the tranche periods for Commercial Paper determined
by the applicable Purchaser Agent to relate to such Receivable Interest (as applicable) subsequent
to the date of such reduction, assignment or termination (or in respect of clause (ii) above, the
date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the
Invested Amount of such Receivable Interest if such reduction, assignment or termination had not
occurred or such Reduction Notice had not been delivered, over (B) the sum of (x) to the extent all
or a portion of such Invested Amount is allocated to another Receivable Interest, the amount of CP
Costs or Yield actually accrued during the remainder of such period on such Invested Amount for the
new Receivable Interest, and (y) to the extent such Invested Amount is not allocated to another
Receivable Interest, the income, if any, actually received during the remainder of such period by
the holder of such Receivable Interest from investing the portion of such Invested Amount not so
I-2
allocated. In the event that the amount referred to in clause (B) exceeds the amount referred to in
clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the amount of such excess
(net of any amounts due to such Purchasers). All Broken Funding Costs shall be due and payable
hereunder upon written demand.
Business Day
means any day on which banks are not authorized or required to close in New
York, New York, Philadelphia, Pennsylvania or Atlanta, Georgia, and The Depository Trust Company of
New York is open for business, and, if the applicable Business Day relates to any computation or
payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
Calculation Period
means a calendar month.
Capitalized Lease
of a Person shall mean any lease of property by such Person as lessee
which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.
Change of Control
means the acquisition by any Person, or two or more Persons acting in
concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of
voting stock of the Performance Guarantor.
Collection Account
means each concentration account, depositary account, lock-box account or
similar account in which any Collections are collected or deposited and which is listed on Exhibit
IV.
Collection Account Agreement
means an agreement substantially in the form of Exhibit VI
among an Originator, Servicer, Seller, the Administrator and a Collection Bank.
Collection Bank
means, at any time, any of the banks holding one or more Collection
Accounts.
Collection Notice
means a notice, in substantially the form of Annex A to Exhibit VI, from
the Administrator to a Collection Bank.
Collections
means, with respect to any Receivable, all cash collections and other cash
proceeds in respect of such Receivable, including, without limitation, all Finance Charges or other
related amounts accruing in respect thereof and all cash proceeds of Related Security with respect
to such Receivable.
Commercial Paper
means promissory notes of a Conduit Purchaser issued by such Conduit
Purchaser in the commercial paper market.
Commitment
means, with respect to each Related Committed Purchaser, the aggregate maximum
amount which such Purchaser is obligated to pay hereunder on account of all Purchases, as set forth
below its signature to this Agreement or in the Assumption Agreement or other agreement pursuant to
which it became a Purchaser, as such amount may be modified in connection with any subsequent
assignment pursuant to Section 12.1 or in connection with a reduction in the Purchase Limit
pursuant to Section 1.1(b).
I-3
Commitment Percentage
means, for each Related Committed Purchaser in a Purchaser Group, such
Related Committed Purchasers Available Commitment divided by the total of all Available
Commitments of all Related Committed Purchasers in such Purchaser Group.
Conduit Purchasers
means each commercial paper conduit that is a party to the Agreement, as
a purchaser, or that becomes a party to the Agreement, as a Conduit Purchaser pursuant to an
Assumption Agreement or otherwise.
Consolidated Subsidiary
shall mean, at any date, for any Person, any Subsidiary or other
entity the accounts of which would be consolidated under GAAP with those of such Person in its
consolidated financial statements as of such date.
Contingent Obligation
of a Person means any agreement, undertaking or arrangement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any
other Person, or agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement, take-or-pay contract or
application for a letter of credit.
Contract
means, with respect to any Receivable, any and all instruments, agreements,
invoices or other writings pursuant to which such Receivable arises or which evidences such
Receivable.
CP Costs
means, for each day for any Conduit Purchaser (a) the weighted average cost (as
defined below) for such day related to the issuance of Commercial Paper by such Conduit Purchaser
that is allocated, in whole or in part by such Conduit Purchaser, to fund all or part of its
Purchases (and which may also be allocated in part to the funding of other assets of such Conduit
Purchaser) or (b) any other amount designated as the CP Costs for such Conduit Purchaser in an
Assumption Agreement or Transfer Supplement pursuant to which such Conduit Purchaser becomes a
party (as a Conduit Purchaser) to the Agreement, or any other written agreement among such Conduit
Purchaser, the Seller, the Servicer, the related Purchaser Agent and the Administrator from time to
time. As used in this definition, the weighted average cost shall consist of (A) the actual
interest rate (or discount) paid to purchasers of Commercial Paper issued by such Conduit Purchaser, together with the commissions of placement agents and
dealers in respect of such Commercial Paper, to the extent such commissions are allocated, in whole
or in part, to such Commercial Paper (B) the costs associated with the issuance of such Commercial
Paper, including without limitation, issuing and paying agent fees incurred with respect to such
Commercial Paper, (C) any incremental carrying costs incurred with respect to Commercial Paper
maturing on dates other than those on which corresponding funds are received by such Conduit
Purchaser under this Agreement and (D) interest on other borrowing or funding sources by such
Conduit Purchaser, including to fund small or odd dollar amounts that are not easily accommodated
in the commercial paper market and interest under any voluntary advance agreement. In addition to
the foregoing costs, if Seller shall request any Incremental Purchase during any period of time
determined by the applicable Purchaser Agent in its sole discretion to result in incrementally
higher CP Costs applicable to such Incremental Purchase, the Invested Amount associated with any
such Incremental Purchase shall, during such period,
I-4
be deemed to be funded by such Conduit Purchaser in a special pool (which may include capital
associated with other receivable purchase facilities) for purposes of determining such additional
CP Costs applicable only to such special pool and charged each day during such period to the
Seller.
Credit Agreement
shall mean the Credit Agreement dated as of August 29, 2001, among
AmerisourceBergen, the lenders named therein and The Chase Manhattan Bank (including its successors
and assigns), as Administrative Agent, as the same may from time to time be amended, supplemented
or otherwise modified.
Credit and Collection Policy
means, as applicable, each of the Servicers or the Applicable
Originators credit and collection policies and practices relating to Contracts and Receivables
existing on the date hereof and summarized in Exhibit VII hereto, as modified from time to time in
accordance with this Agreement.
Cut-Off Date
means the last day of a Calculation Period.
Days Sales Outstanding
means, as of any day, an amount equal to the product of (x) 91,
multiplied by (y) the amount obtained by dividing (i) the aggregate outstanding balance of
Receivables as of the most recent Cut-Off Date, by (ii) the aggregate amount of Receivables created
during the three (3) Calculation Periods including and immediately preceding such Cut-Off Date.
Deemed Collections
means Collections deemed received by Seller under Section 1.4(a).
Default Horizon Ratio
means, as of any Cut-Off Date, the ratio (expressed as a decimal)
computed by dividing (i) the aggregate amount of Receivables originated by the Originators during
the four Calculation Periods ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such
Cut-off Date.
Default Rate
means a rate per annum equal to the sum of (i) the Alternate Base Rate plus
(ii) 2.00%, changing when and as the Alternate Base Rate changes.
Default Ratio
means, as of any Cut-Off Date, the ratio (expressed as a percentage) computed
by dividing (x) the total amount of Receivables which became Defaulted Receivables during the
Calculation Period that includes such Cut-Off Date, by (y) the aggregate amount of receivables
originated by the Originators during the Calculation Period occurring five months prior to the
Calculation Period ending on such Cut-Off Date.
Defaulted Receivable
means a Receivable (without duplication): (i) as to which the Obligor
thereof has suffered an Event of Bankruptcy; (ii) which, consistent with the Credit and Collection
Policy, should be written off Sellers books as uncollectible; or (iii) as to which any payment, or
part thereof, remains unpaid for 121 days or more from the original due date for such payment (determined
without regard to any extension of the due date pursuant to Section 8.2(d)). The Outstanding
Balance of any Defaulted Receivable shall be determined without regard to any credit memos or
credit balances.
I-5
Delinquency Ratio
means, at any time, a percentage equal to (i) the aggregate Outstanding
Balance of all Receivables that were Delinquent Receivables at such time divided by (ii) the
aggregate Outstanding Balance of all Receivables at such time.
Delinquent Receivable
means a Receivable as to which any payment, or part thereof, remains
unpaid for 61-120 days from the original due date for such payment (determined without regard to
any extension of the due date pursuant to Section 8.2(d)). The Outstanding Balance of any
Delinquent Receivable shall be determined without regard to any credit memos or credit balances.
Demand Advance
means any advance made by Seller to ABDC at any time while it is acting as
the Servicer, which advance (a) is payable upon demand, (b) is not evidenced by an instrument,
chattel paper or a certificated security, (c) bears interest at a market rate determined by Seller
and the Servicer from time to time, (d) is not subordinated to any other Indebtedness or obligation
of the Servicer, and (e) may not be offset by ABDC against amounts due and owing from Seller to it
under its Subordinated Note;
provided that
no Demand Advance may be made after the Final Facility
Termination Date or on any date prior to the Final Facility Termination Date on which an
Amortization Event or an Unmatured Amortization Event exists and is continuing.
Dilution
means the amount of any reduction or cancellation of the Outstanding Balance of a
Receivable as described in Section 1.4(a).
Dilution Horizon Ratio
means, as of any Cut-off Date, a ratio (expressed as a decimal),
computed by dividing (i) the aggregate amount of receivables originated by the Originators during
the Calculation Period ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off
Date.
Dilution Ratio
means, as of any Cut-Off Date, a ratio (expressed as a percentage), computed
by dividing (i) the total amount of decreases in Outstanding Balances due to Dilutions during the
Calculation Period ending on such Cut-Off Date, by (ii) the aggregate sales generated by the
Originators during the Calculation Period prior to the Calculation Period ending on such Cut-Off
Date.
Dilution Reserve
means, for any Calculation Period, the product (expressed as a percentage)
of:
(a) the sum of (i) two (2) times the Adjusted Dilution Ratio as of the immediately
preceding Cut-Off Date,
plus
(ii) the Dilution Volatility Component as of the immediately
preceding Cut-Off Date,
times
(b) the Dilution Horizon Ratio as of the immediately preceding Cut-Off Date.
Dilution Volatility Component
means the product (expressed as a percentage) of (i) the
difference between (a) the highest three (3)-month rolling average Dilution Ratio over the past 12
Calculation Periods and (b) the Adjusted Dilution Ratio, and (ii) a fraction, the numerator of
which is equal to the amount calculated in (i)(a) of this definition and the denominator of which
is equal to the amount calculated in (i)(b) of this definition.
I-6
Dispute
shall mean any dispute, deduction, claim, offset, defense, counterclaim, set-off or
obligation of any kind, contingent or otherwise, relating to a Receivable, including, without
limitation, any dispute relating to goods or services already paid for.
Dollar
and
$
shall mean lawful currency of the United States of America.
Eligible Assignee
means a commercial bank having a combined capital and surplus of at least
$250,000,000 with a rating of its (or its parent holding companys) short-term securities equal to
or higher than (i) A-1 by S&P and (ii) P-1 by Moodys (or such other criteria as the applicable
Purchaser Agent shall specify to the Administrator and the Seller from time to time).
Eligible Receivable
means, at any time, a Receivable:
(a) which complies with all applicable Laws and other legal requirements, whether
Federal, state or local, including, without limitation, to the extent applicable, usury laws,
the Federal Consumer Credit Protection Act, the Fair Credit Billing Act, the Federal Truth in
Lending Act, and Regulation Z of the Board of Governors of the Federal Reserve System;
(b) which constitutes an account, chattel paper or a general intangible as defined
in the UCC as in effect in the State of New York and the jurisdiction whose Law governs the
perfection of the Administrators (for the benefit of the Secured Parties) ownership and
security interest therein, and is not evidenced by an instrument, as defined in the UCC as
so in effect;
(c) which was originated in connection with a sale of goods or the provision of services
by the Applicable Originator in the ordinary course of its business to an Obligor who was
approved by the Applicable Originator in accordance with its Credit and Collection Policy, and
which Obligor is not an Affiliate of the Seller or the Applicable Originator;
(d) which (i) arises from a Contract and has been billed, or in respect of which the
related Obligor is otherwise liable, in accordance with the terms of such Contract and (ii)
arises from a Contract that (A) does not require the Obligor under such Contract to consent to
the transfer, sale or assignment of the rights and duties of the Applicable Originator or the
Seller under such Contract and (B) does not contain any provision that restricts the ability
of the Administrator, any Purchaser Agent or any Purchaser to exercise its rights under this
Agreement (or the Receivables Sale Agreement), including, without limitation, the right to
review the Contract;
(e) which is genuine and constitutes a legal, valid, binding and irrevocable payment
obligation of the related Obligor, enforceable in accordance with its terms, and which is not
subject to any Disputes or other offsets, counterclaims, defenses or contra accounts;
(f) which provides for payment in Dollars and is to be paid in the United States by the
related Obligor;
I-7
(g) which directs payment thereof to be sent to a Lock-Box or the Collection Account;
(h) which has not been repurchased by any Originator pursuant to the repurchase
provisions of the Receivables Sale Agreement;
(i) which is not a Defaulted Receivable or Delinquent Receivable;
(j) which has a related Obligor who (i) is not more than 60 days past due on greater than
50% of the aggregate Outstanding Balance of such Receivable and other receivables generated by
the Applicable Originator and (ii) is not the subject of a current Event of Bankruptcy and has
not been the subject of an Event of Bankruptcy during the prior 24 months unless otherwise
agreed to in writing by the Administrator and the Required Purchaser Agents;
(k) which has a related Obligor that is a Person domiciled in the United States of
America;
(l) which was not originated in or subject to the Laws of a jurisdiction whose Laws would
make such Receivable, the related Contract or the sale of the Receivable Interests to the
Purchasers, or the pledge of the security interest to the Administrator (for the benefit of
the Secured Parties), hereunder unlawful, invalid or unenforceable and which is not subject to
any legal limitation on transfer;
(m) which is owned solely by the Seller free and clear of all Liens, except for the Lien
arising in connection with this Agreement;
(n) for which all goods, services, and other products and transactions in connection with
such Receivable have been finally performed or delivered to and accepted by the Obligor
without Dispute;
(o) which does not provide the Obligor with the right to obtain any cash advance
thereunder;
(p) which has not been selected in a manner materially adverse to any Purchaser;
(q) which by its terms requires payment in respect thereof to be made no later than 30
days after the date of the original invoice with respect thereto;
provided that
up to 5% of
the Receivables may have payment terms between 31 and 60 days and up to 5% of the Receivables
may have payment terms between 61 and 90 days;
(r) which is an eligible asset within the meaning of Rule 3a-7 promulgated under the
Investment Company Act of 1940, as amended from time to time;
(s) which is not of a type that has been disqualified by S&P or Moodys for any other
reason;
I-8
(t) which is not payable in installments (except for Receivables related to opening
orders);
(u) which is not evidenced by a promissory note;
(v) which has terms which have not been modified, impaired, waived, altered, extended or
renegotiated since the initial sale or provision of service to an Obligor in any way not
provided for in this Agreement; and
(w) which is not a Government Receivable.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and any rule or regulation issued thereunder.
ERISA Affiliate
means any trade or business (whether or not incorporated) under common
control with Performance Guarantor or ABDC within the meaning of Section 414(b) or (c) of the
Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of
provisions relating to Section 412 of the Internal Revenue Code).
ERISA Event
means a Reportable Event with respect to a Pension Plan; (b) a complete or
partial withdrawal from a Multiemployer Plan that would result in liability to Performance
Guarantor or any ERISA Affiliate, or the receipt or delivery by Performance Guarantor or any ERISA
Affiliate of any notice with respect to any Multiemployer Plan concerning the imposition of
liability as a result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA; (c) a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (d) the filing pursuant to Code Section 412 or ERISA Section 302 of an
application for a waiver of the minimum funding standard, or the grant of same, with respect to a
Pension Plan; (e) the PBGC or a plan administrator shall, or shall indicate its intention in
writing to the Seller, Performance Guarantor or any ERISA Affiliate to, terminate any Pension Plan
or appoint a trustee to administer any Pension Plan; (f) Performance Guarantor or any ERISA
Affiliate incurs liability under Title IV of ERISA with respect to the termination of any Pension
Plan; or (g) the existence of an accumulated funding deficiency with respect to any Pension Plan
(as defined in Section 302(a) of ERISA and Section 412(a) of the Internal Revenue Code), whether or
not waived.
Event of Bankruptcy
shall be deemed to have occurred with respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the application or consent of
such Person, in any court, seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like
for such Person or all or substantially all of its assets, or any similar action with respect
to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall continue undismissed, or
unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect
of such Person shall be entered in an involuntary case under the federal bankruptcy laws or
other similar laws now or hereafter in effect; or
I-9
(b) such Person shall commence a voluntary case or other proceeding under any applicable
bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now
or hereafter in effect, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee (other than a trustee under a deed of trust, indenture
or similar instrument), custodian, sequestrator (or other similar official) for, such Person
or for any substantial part of its property, or shall make any general assignment for the
benefit of creditors, or shall be adjudicated insolvent, or admit in writing its inability to
pay its debts generally as they become due, or, if a corporation or similar entity, its board
of directors shall vote to implement any of the foregoing.
Exiting Purchaser
means each Purchaser in a Purchaser Group for which the Facility
Termination Date has occurred, including, without limitation, because such Purchaser Group declined
to extend the Facility Termination Date in accordance with Section 1.6 (it being understood that if
an Exiting Purchaser has multiple Scheduled Facility Termination Dates for its Commitment, then
such Purchaser shall only be considered an Exiting Purchaser to the extent its Invested Amount
exceeds the portion of its Commitment with respect to which the Scheduled Facility Termination Date
has not yet occurred).
Facility Account
means Sellers account no. 323185460 at J.P. Morgan Chase Bank.
Facility Termination Date
means, for any Group Commitment (or portion thereof), the earliest
to occur of: (a) the Scheduled Facility Termination Date for such Group Commitment (or portion
thereof), (b) the Amortization Date and (c) the date the Purchase Limit reduces to zero pursuant to
Section 1.1(b) of the Agreement.
Federal Bankruptcy Code
means Title 11 of the United States Code entitled Bankruptcy, as
amended and any successor statute thereto.
Federal Funds Effective Rate
means, for any period for any Purchaser, a fluctuating interest
rate
per annum
for each day during such period equal to (i) the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S.
Government Securities; or (ii) if such rate is not so published for any day which is a Business
Day, the average of the quotations at approximately 11:30 a.m. (New York time) for such day on such
transactions received by the related Purchaser Agent from three federal funds brokers of recognized
standing selected by it.
Fee Letter
means each fee letter with respect to this Agreement among Seller, ABDC and the
applicable Purchaser Agent, as it may be amended, restated or otherwise modified and in effect from
time to time.
Final Facility Termination Date
means the latest Facility Termination Date to occur for all
the Purchaser Groups.
I-10
Final Payout Date
means the date on which all Aggregate Unpaids have been paid in full and
the Purchase Limit has been reduced to zero.
Finance Charges
means, with respect to a Contract, any finance, interest, late payment
charges or similar charges owing by an Obligor pursuant to such Contract.
Fiscal Year
shall mean each year ending September 30, which is the fiscal year of the Seller
and the Servicer for accounting purposes.
Funding Agreement
means (i) this Agreement, (ii) the Liquidity Agreement and (iii) any other
agreement or instrument executed by any Funding Source with or for the benefit of any Conduit
Purchaser.
Funding Source
means (i) the Administrator, any Purchaser Agent or any Liquidity Provider or
(ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to any Conduit Purchaser.
GAAP
means generally accepted accounting principles in effect in the United States of
America as of the date of this Agreement.
Government Receivables
shall mean, at the time, any Receivables for which the related
Obligor is the United States of America, any State or local government or any Federal or state
agency or instrumentality or political subdivision thereof.
Group Commitment
means with respect to any Purchaser Group the aggregate of the Commitments
of each Purchaser within such Purchaser Group.
Group Invested Amount
means with respect to any Purchaser Group, an amount equal to the
aggregate Invested Amount of all the Purchasers within such Purchaser Group.
Guarantee
shall mean, as applied to any Indebtedness, (i) a guarantee (other than by
endorsement for collection in the ordinary course of business), direct or indirect, in any manner,
of any part or all of such Indebtedness or (ii) an agreement, direct or indirect, contingent or otherwise,
providing assurance of the payment or performance (or payment of damages in the event of
non-performance) of any part or all of such Indebtedness, including, without limiting the
foregoing, the payment of amounts drawn down by letters of credit. The amount of any Guarantee
shall be deemed to be the maximum amount of the Indebtedness guaranteed for which the guarantor
could be held liable under such Guarantee.
Incremental Purchase
means a purchase of one or more Receivable Interests which increases
the total outstanding Aggregate Invested Amount hereunder.
Indebtedness
of any Person shall mean, without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are customarily made, (iii) all
obligations of such Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of business), (iv) all
I-11
obligations of such Person issued or assumed as the deferred purchase price of property or services
purchased by such Person (other than trade debt incurred in the ordinary course of business and due
within twelve months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (v) all obligations of such Person under take-or-pay or similar arrangements
or under commodities agreements, (vi) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien on, or payable out of the proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed,
provided that
for
purposes hereof the amount of such Indebtedness shall be limited to the greater of (A) the amount
of such Indebtedness as to which there is recourse to such Person and (B) the fair market value of
the property which is subject to the Lien, (vii) all Guarantees of such Person, (viii) the
principal portion of all obligations of such Person under Capitalized Leases, (ix) all obligations
of such Person in respect of interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest or exchange rate or commodity
price hedging agreements, (x) the maximum amount of all standby letters of credit issued or
bankers acceptances facilities created for the account of such Person and, without duplication,
all drafts drawn thereunder (to the extent unreimbursed), (xi) all preferred stock issued by such
Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due by a fixed date, (xii) the principal balance outstanding under any securitization
transaction and (xiii) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing product to which
such Person is a party, where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP. The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, but only to the extent to which there is recourse to such
Person for payment of such Indebtedness.
Indemnified Amounts
has the meaning specified in Section 10.1.
Indemnified Party
has the meaning specified in Section 10.1.
Independent Director
shall mean a member of the Board of Directors of Seller who is not at
such time, and has not been at any time during the preceding five (5) years: (A) a director,
officer, employee or affiliate of Performance Guarantor, any Originator or any of their respective
Subsidiaries or Affiliates (other than Seller), or (B) the beneficial owner (at the time of such
individuals appointment as an Independent Director or at any time thereafter while serving as an
Independent Director) of any of the outstanding common shares of Seller, any Originator, or any of
their respective Subsidiaries or Affiliates, having general voting rights.
Interest Period
means with respect to any Receivable Interest funded through a Bank Rate
Funding:
(a) the period commencing on the date of the initial funding of such Receivable Interest
through a Bank Rate Funding and including on, but excluding, the Business Day immediately preceding
the next following Settlement Date; and
I-12
(b) thereafter, each period commencing on, and including, the Business Day immediately
preceding a Settlement Date and ending on, but excluding, the Business Day immediately preceding
the next following Settlement Date.
Internal Revenue Code
shall mean the Internal Revenue Code of 1986, as amended from time to
time and any successor thereto, and the regulations promulgated and rulings issued thereunder.
Invested Amount
of any Receivable Interest means, at any time, (A) the Purchase Price of
such Receivable Interest paid by the Purchasers, minus (B) the sum of the aggregate amount of
Collections and other payments received by the applicable Purchaser Agent which in each case are
applied to reduce such Invested Amount in accordance with the terms and conditions of this
Agreement;
provided that
such Invested Amount shall be restored (in accordance with Section 2.5) in
the amount of any Collections or other payments so received and applied if at any time the
distribution of such Collections or payments are rescinded, returned or refunded for any reason.
Law
shall mean any law (including common law), constitution, statute, treaty, regulation,
rule, ordinance, order, injunction, writ, decree or award of any Official Body.
LIBO Rate
means, for any Interest Period for any Purchaser (a) (i) the rate per annum
determined on the basis of the offered rate for deposits in U.S. dollars of amounts equal or
comparable to the Invested Amount offered for a term comparable to such Interest Period, which
rates appear on a Bloomberg L.P. terminal, displayed under the address
US0001M
<
Index
>
Q
<
Go
>
effective as of 11:00 A.M., London time, two Business Days prior to the first day of
such Interest Period; provided that if no such offered rates appear on such page, the LIBO Rate for
such Interest Period will be the arithmetic average (rounded upwards, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than two major banks in New York, New York,
selected by the Administrator, at approximately 10:00 a.m.(New York time), two Business Days prior
to the first day of such Interest Period, for deposits in U.S. dollars offered by leading European
banks for a period comparable to such Interest Period in an amount comparable to the Invested
Amount, divided by one minus the maximum aggregate reserve requirement (including all basic,
supplemental, marginal or other reserves) which is imposed against the Administrator in respect of
Eurocurrency liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal), applicable to such Interest
Period plus (ii) the LIBOR Margin (set forth in the applicable Fee Letter) or (b) any other rate
designated as the LIBO Rate for such Purchaser in an Assumption Agreement or Transfer Supplement
pursuant to which such Purchaser becomes a party (as a Purchaser) to the Agreement, or any other
written agreement among such Purchaser to the Seller, the Servicer, the related Purchaser Agent and
the Administrator from time to time. The LIBO Rate shall be rounded, if necessary, to the next
higher 1/16 of 1%.
Lien
means, in respect of the property of any Person, any ownership interest of any other
Person, any mortgage, deed of trust, hypothecation, pledge, lien, security interest, filing of any
financing statement, charge or other encumbrance or security arrangement of any nature whatsoever,
including, without limitation, any conditional sale or title retention arrangement, and any
assignment, deposit arrangement, consignment or lease intended as, or having the effect of,
security.
I-13
Liquidity Agent
means each of the banks acting as agent for the various Liquidity Providers
under each Liquidity Agreement.
Liquidity Agreement
means any agreement entered into in connection with this Agreement
pursuant to which a Liquidity Provider agrees to make purchases or advances to, or purchase assets
from, any Conduit Purchaser in order to provide liquidity for such Conduit Purchasers Purchases.
Liquidity Commitment
means, as to each Liquidity Provider, its commitment under the
Liquidity Agreement (which generally will equal 102% of its Commitment hereunder).
Liquidity Provider
means each bank or other financial institution that provides liquidity
support to any Conduit Purchaser pursuant to the terms of a Liquidity Agreement.
Location
shall mean, with respect to the Seller, any Originator or the Servicer, the place
where the Seller, such Originator or the Servicer, as the case may be, is located (within the
meaning of Section 9-103(3)(d), or any analogous provision, of the UCC, in effect in the
jurisdiction whose Law governs the perfection of the Administrators (for the benefit of the
Secured Parties) interests in any Purchased Assets.
Lock-Box
means each locked postal box with respect to which a bank who has executed a
Collection Account Agreement has been granted exclusive access for the purpose of retrieving and
processing payments made on the Receivables and which is listed on Exhibit IV.
Loss Reserve
means, for any Calculation Period, the product (expressed as a percentage) of
(a) 2.0, times (b) the highest three-month rolling average Default Ratio during the 12 Calculation
Periods ending on the immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of
the immediately preceding Cut-Off Date.
Moodys
means Moodys Investors Service, Inc.
Multiemployer Plan
means a multiemployer plan, within the meaning of Section 4001 (a) (3)
of ERISA, to which Performance Guarantor or any ERISA Affiliate makes, is making, or is obligated
to make contributions or, during the preceding three calendar years, has made, or been obligated to
make, contributions.
Net Pool Balance
means, at any time, the aggregate Outstanding Balance of all Eligible
Receivables at such time reduced by (i) the aggregate amount by which the Outstanding Balance of
all Eligible Receivables of each Obligor and its Affiliates exceeds the Obligor Concentration Limit
for such Obligor and (ii) the Rebate Reserve.
Obligor
shall mean, for any Receivable, each and every Person who purchased goods or
services on credit under a Contract and who is obligated to make payments to an Originator or the
Seller as assignee thereof pursuant to such Contract.
Obligor Concentration Limit
means, at any time, in relation to the aggregate Outstanding
Balance of Receivables owed by any single Obligor and its Affiliates (if any), the applicable
concentration limit shall be determined as follows for Obligors who have short term unsecured debt
ratings currently assigned to them by S&P and Moodys (or in the absence thereof, the equivalent
long term unsecured senior debt ratings), the applicable concentration limit shall be determined
according to the following table:
I-14
|
|
|
|
|
|
|
|
|
Allowable % of
|
|
|
|
|
Eligible
|
S&P Rating
|
|
Moodys Rating
|
|
Receivables
|
A-1
|
|
P-1
|
|
11.00%
|
|
|
|
|
|
A-2
|
|
P-2
|
|
6.00%
|
|
|
|
|
|
A-3
|
|
P-3
|
|
3.00%
|
|
|
|
|
|
Below A-3 or not rated
by either S&P or
Moodys
|
|
Below P-3 or not rated
by either S&P or
Moodys
|
|
2.50%
|
; provided that,
(a) if any Obligor has a split rating, the applicable rating will be the lower of
the two, (b) if any Obligor is not rated by either S&P or Moodys, the applicable Obligor
Concentration Limit shall be the one set forth in the last line of the table above, and (c) subject
to satisfaction of the Rating Agency Condition and an increase in the percentage set forth in
clause (a)(i) of the definition of
Required Reserve,
upon Sellers request from time to time, the
Administrator and each Purchaser Agent may agree to a higher percentage of Eligible Receivables for
a particular Obligor and its Affiliates (each such higher percentage, a
Special Concentration
Limit
), it being understood that any Special Concentration Limit may be cancelled by the
Administrator or any Purchaser Agent upon not less than five (5) Business Days written notice to
the Seller. As of the date hereof, Longs Drug Stores Corporation and AdvancePCS, Inc. shall have a
Special Concentration Limit of 8.0% and 5.5%, respectively.
Official Body
shall mean any government or political subdivision or any agency, authority,
bureau, central bank, commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.
Originator
means each of ABDC and the other Persons, if any, party to the Receivables
Purchase Agreement from time to time as a seller.
Outstanding Balance
of any Receivable at any time means the then outstanding principal
balance thereof.
Participant
has the meaning set forth in Section 12.2.
PBGC
means the Pension Benefit Guaranty Corporation, or any successor thereto.
Pension Plan
means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV
of ERISA which Performance Guarantor or any ERISA Affiliate of Performance Guarantor sponsors or
maintains, or to which Performance Guarantor or any of its ERISA Affiliates makes, is making, or is
obligated to make contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five
plan years.
Performance Guarantor
means AmerisourceBergen.
I-15
Performance Undertaking
means that certain Performance Undertaking, dated as of July 10,
2003 by Performance Guarantor in favor of Seller, substantially in the form of Exhibit XII, as the
same may be amended, restated or otherwise modified from time to time.
Person
means an individual, partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
Plan
means an employee benefit plan (as defined in Section 3(3) of ERISA) which Performance
Guarantor or any of its ERISA Affiliates sponsors or maintains or to which Performance Guarantor or
any of its ERISA Affiliates makes, is making, or is obligated to make contributions and includes
any Pension Plan, other than a Plan maintained outside the United States primarily for the benefit
of Persons who are not U.S. residents.
Pledge Agreement
shall mean the Pledge Agreement dated as of August 29, 2001, among
AmerisourceBergen, each Subsidiary of AmerisourceBergen party thereto from time to time and The
Chase Manhattan Bank, as Collateral Agent, as the same may from time to time be amended,
supplemented or otherwise modified.
Prime Rate
means, for any day for any Purchaser, a rate per annum equal to the prime rate of
interest announced from time to time by the related Purchaser Agent (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate changes.
Proposed Reduction Date
has the meaning set forth in Section 1.3.
Purchase
means an Incremental Purchase or a Reinvestment.
Purchase Date
means each Business Day on which a Purchase is made hereunder.
Purchase Limit
means $1,050,000,000, as such amount may be reduced pursuant to Section
1.1(b) of the Agreement or otherwise in connection with any Exiting Purchaser. References to the
unused portion of the Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Aggregate Investment.
Purchase Notice
has the meaning set forth in Section 1.2.
Purchase Price
means, with respect to any Incremental Purchase of a Receivable Interest, the
amount paid to Seller for such Receivable Interest which shall not exceed the least of (i) the
amount requested by Seller in the applicable Purchase Notice, (ii) the unused portion of the
Purchase Limit on the applicable purchase date and (iii) the excess, if any, of the Net Pool
Balance less the Required Reserve on the applicable purchase date over the aggregate outstanding
amount of Aggregate Invested Amount determined as of the date of the most recent Settlement Report,
without taking into account such proposed Incremental Purchase.
Purchased Assets
means all of Sellers right, title and interest, whether now owned and
existing or hereafter arising in and to all of the Receivables, the Related Security, the
Collections and all proceeds of the foregoing.
I-16
Purchaser
means each Conduit Purchaser and/or each Related Committed Purchaser, as
applicable.
Purchaser Agent
means each Person acting as agent on behalf of a Purchaser Group and
designated as a Purchaser Agent for such Purchaser Group on the signature pages to the Agreement or
any other Person who becomes a party to this Agreement as a Purchaser Agent pursuant to an
Assumption Agreement or a Transfer Supplement.
Purchaser Group
means, for each Conduit Purchaser (or Purchaser Agent), such Conduit
Purchaser, its Related Committed Purchasers (if any) and its related Purchaser Agent (and, to the
extent applicable, its related Funding Sources and Indemnified Parties).
Purchasers Portion
means, on any date of determination, the sum of the percentages
represented by the Receivable Interests of the Purchasers (other than any Exiting Purchasers).
Ratable Share
means, for each Purchaser Group (other than those comprised of Exiting
Purchasers), such Purchaser Groups Group Commitments divided by the aggregate Group Commitments of
all Purchaser Groups (other than those comprised of Exiting Purchasers).
Rating Agency Condition
means that each Conduit Purchaser has received written notice from
the rating agencies then rating its Commercial Paper that an amendment, a change or a waiver will
not result in a withdrawal or downgrade of the then current ratings of such Commercial Paper;
provided that,
if the applicable Purchaser Agent notifies the Seller, the Servicer and the
Administrator that such Conduit Purchaser is not required to obtain such notice prior to the
effectiveness of such amendment, change or waiver, the Rating Agency Condition with respect to
such Conduit Purchaser shall mean the consent of such Purchaser Agent (which consent shall only be
withheld if such Purchaser Agent reasonably believes that such amendment, change or waiver would
result in a withdrawal or downgrade of the then current ratings of such Commercial Paper).
Rebate Reserve
means an amount equal to the accounting reserve for rebates on the
Receivables determined in the ordinary course of business in accordance with GAAP according to
policies consistently applied (and consistent with the Originators practices in effect on the date
hereof) and reported on the Settlement Report related to, or in anticipation of, rebates affecting
the Receivables.
Receivable
means all indebtedness and other obligations owed to Seller or any Originator (at
the time it arises, and before giving effect to any transfer or conveyance under the Receivables
Sale Agreement) or in which Seller or an Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest constituting an account,
chattel paper, instrument or general intangible, arising in connection with the sale of goods or
the rendering of services by an Originator, and further includes, without limitation, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation, indebtedness and other
rights and obligations represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and obligations
I-17
arising from any other transaction;
provided that
any indebtedness, rights or obligations referred
to in the immediately preceding sentence shall be a Receivable regardless of whether the account
debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.
Receivable Interest
means, at any time, an undivided percentage ownership interest (computed
as set forth below) associated with a designated amount of Invested Amount, selected pursuant to
the terms and conditions hereof in (i) each Receivable arising prior to the time of the most recent
computation or recomputation of such undivided interest, (ii) all Related Security with respect to
each such Receivable, and (iii) all Collections with respect to, and other proceeds of, each such
Receivable. Each such undivided percentage interest shall equal:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RR
|
|
|
|
|
|
|
|
|
IA x
(1 +
|
|
___
|
|
)
|
|
|
|
|
|
|
|
AIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NPB
|
where:
|
|
|
|
|
|
|
|
|
IA
|
|
=
|
|
the Invested Amount of such Receivable Interest.
|
|
|
AIA
|
|
=
|
|
the Aggregate Invested Amount.
|
|
|
NPB
|
|
=
|
|
the Net Pool Balance.
|
|
|
RR
|
|
=
|
|
the Required Reserve.
|
Such undivided percentage ownership interest shall be initially computed on its date of purchase.
Thereafter, until the Final Facility Termination Date, each Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day prior to the Final Facility
Termination Date. The variable percentage represented by any Receivable Interest as computed (or
deemed recomputed) as of the close of the business day immediately preceding the Final Facility
Termination Date shall remain constant at all times thereafter.
Receivables Sale Agreement
means that certain Receivables Sale Agreement, dated as of July
10, 2003, among each Originator and Seller, as the same may be amended, restated or otherwise
modified from time to time.
Records
means, with respect to any Receivable, all Contracts and other documents, books,
records and other information (including, without limitation, computer programs, tapes, disks,
punch cards, data processing software and related property and rights) relating to such Receivable,
any Related Security therefor and the related Obligor.
Recourse Obligations
has the meaning set forth in Section 2.1.
Reduction Notice
has the meaning set forth in Section 1.3.
Regulatory Change
means any change after the date of this Agreement in United States
(federal, state or municipal) or foreign laws, regulations (including Regulation D) or accounting
principles or the adoption or making after such date of any interpretations,
I-18
directives or requests applying to a class of banks (including the Liquidity Providers) of or under
any United States (federal, state or municipal) or foreign laws, regulations (whether or not having
the force of law) or accounting principles by any court, governmental or monetary authority, or
accounting board or authority (whether or not part of government) charged with the establishment,
interpretation or administration thereof. For the avoidance of doubt, any interpretation of
Accounting Research Bulletin No. 51 by the Financial Accounting Standards Board shall constitute a
Regulatory Change.
Reinvestment
has the meaning set forth in Section 2.2.
Related Committed Purchaser
means each Person listed as such (and its respective Commitment)
for each Conduit Purchaser as set forth on the signature pages of the Agreement or in any
Assumption Agreement or Transfer Supplement.
Related Security
means, with respect to any Receivable:
(i) all of Sellers interest in the inventory and goods (including returned or
repossessed inventory or goods), if any, the sale of which by an Originator gave rise to such
Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property subject thereto from time to
time, if any, purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing statements and
security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements associated with such
Receivable,
(v) all Records related to such Receivable,
(vi) all of Sellers right, title and interest in, to and under the Receivables Sale
Agreement in respect of such Receivable and all of Sellers right, title and interest in, to
and under the Performance Undertaking,
(vii) all of Sellers right, title and interest in and to the Demand Advances, and
(viii) all proceeds of any of the foregoing.
Reportable Event
means any of the events set forth in Section 4043(c) of ERISA or the
regulations thereunder, other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
I-19
Required Purchaser Agents
means, at any time, two or more Purchaser Agents representing
Purchasers whose Commitments aggregate more than 50% of the aggregate of the Commitments of all
Purchasers.
Required Reserve
means, on any day during a Calculation Period, the product of (a) the
greater of (i) the Required Reserve Factor Floor and (ii) the sum of the Loss Reserve, the Yield
Reserve, the Dilution Reserve and the Servicing Reserve, times (b) the Net Pool Balance as of the
Cut-Off Date immediately preceding such Calculation Period.
Required Reserve Factor Floor
means, for any Calculation Period, the sum (expressed as a
percentage) of (a) 18.5% plus (b) the product of the Adjusted Dilution Ratio and the Dilution
Horizon Ratio, in each case, as of the immediately preceding Cut-Off Date.
Responsible Officer
shall mean, with respect to the Seller, the Servicer, any Originator or
the Performance Guarantor, the chief executive officer, president, principal financial officer or
treasurer of such Person and any other Person identified on the List of Responsible Officers
attached as Exhibit XIII hereto (as such list may be amended and supplemented from time to time)
and agreed to by the Administrator.
Restricted Junior Payment
means (i) any dividend or other distribution, direct or indirect,
on account of any shares of any class of capital stock of Seller now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock or in any junior class of stock
of Seller, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of capital stock of Seller now or hereafter outstanding,
(iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other
charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined
in the Receivables Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of capital stock of Seller now or hereafter outstanding, and (v) any payment of
management fees by Seller (except for reasonable management fees to any Originator or its
Affiliates in reimbursement of actual management services performed).
S&P
means Standard and Poors Ratings Services, a division of The McGraw Hill Companies,
Inc.
Scheduled Facility Termination Date
means, for any Group Commitment (or portion thereof),
the Scheduled Facility Termination Date set forth therefor on the signature page hereof (or in
the applicable Assumption Agreement or Transfer Supplement), subject to any extension thereof
pursuant to Section 1.6 of the Agreement.
Secured Parties
means the Indemnified Parties.
Security Agreement
shall mean the Security Agreement dated as of August 29, 2001, among ABDC
Bergen, each Subsidiary of ABDC Bergen party thereto from time to time and The Chase Manhattan
Bank, as Collateral Agent, as the same may from time to time be amended, supplemented or otherwise
modified.
I-20
Seller
has the meaning set forth in the preamble to this Agreement.
Seller Parties
has the meaning set forth in the preamble to this Agreement.
Servicer
means at any time the Person (which may be the Administrator) then authorized
pursuant to Article VIII to service, administer and collect Receivables.
Servicing Fee
means, for each day in a Calculation Period:
(a) an amount equal to (i) the Servicing Fee Rate
times
(ii) the aggregate Outstanding
Balance of all Receivables at the close of business on the Cut-Off Date immediately preceding
such Calculation Period,
times
(iii) 1/360; or
(b) on and after the Servicers reasonable request made at any time when ABDC or one of
its Affiliates is no longer acting as Servicer hereunder, an alternative amount specified by
the successor Servicer not exceeding (i) 110% of such Servicers reasonable costs and expenses
of performing its obligations under this Agreement during the preceding Calculation Period,
divided by
(ii) the number of days in the current Calculation Period.
Servicing Fee Rate
means 1.0%
per annum
;
provided that
if ABDC or one of its Affiliates is
the Servicer, such rate shall mean 0.125%
per annum.
Servicing Reserve
means, for any Calculation Period, the product (expressed as a percentage)
of (a) the Servicing Fee Rate (determined assuming ABDC is not the Servicer), times (b) a fraction,
the numerator of which is the highest Days Sales Outstanding for the most recent 12 Calculation
Periods and the denominator of which is 360.
Settlement Date
means the 2
nd
Business Day after each Settlement Reporting Date.
Settlement Report
means a report, in substantially the form of Exhibit VIII hereto
(appropriately completed), together with the electronic backup data which is part of the
spreadsheet that creates such report, furnished by the Servicer to the Administrator and each
Purchaser Agent pursuant to Section 8.5.
Settlement Reporting Date
means the last day of each month immediately following the Cut-Off
Date (or if any such day is not a Business Day, the next succeeding Business Day thereafter) or
such other days of any month as Administrator or any Purchaser Agent may request in connection with
Section 8.5.
Subsidiary
of a Person means (i) any corporation more than 50% of the outstanding securities
having ordinary voting power of which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more
of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
I-21
Transaction Documents
means, collectively, this Agreement, each Purchase Notice, the
Receivables Sale Agreement, each Collection Account Agreement, the Performance Undertaking, the Fee
Letters, each Subordinated Note (as defined in the Receivables Sale Agreement) and all other
instruments, documents and agreements executed and delivered in connection herewith by any of the
Seller Parties.
Transfer Supplement
has the meaning set forth in Section 12.1(c).
UCC
means the Uniform Commercial Code as from time to time in effect in the specified
jurisdiction.
Unmatured Amortization Event
means an event which, with the passage of time or the giving of
notice, or both, would constitute an Amortization Event.
Wachovia
means Wachovia Bank, National Association in its individual capacity and its
successors.
Yield
means for each Interest Period relating to a Receivable Interest funded through a Bank
Rate Funding, an amount equal to the product of the applicable Yield Rate for such Receivable
Interest multiplied by the Invested Amount of such Receivable Interest for each day elapsed during
such Interest Period, annualized on a 360 day basis.
Yield Rate
means, with respect to each Receivable Interest funded through a Bank Rate
Funding, the LIBO Rate, the Alternate Base Rate or the Default Rate, as applicable.
Yield Reserve
means, for any Calculation Period, the product (expressed as a percentage) of
(i) 1.5
times
(ii) the Alternate Base Rate as of the immediately preceding Cut-Off Date
times
(iii) a fraction the numerator of which is the highest Days Sales Outstanding for the
most recent 12 Calculation Periods and the denominator of which is 360.
All accounting terms not specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
I-22
EXHIBIT II
Amerisource Receivables Financial Corporation
PURCHASE NOTICE
dated
_____
, 20
___
for Purchase on
_____
, 20
___
Wachovia Bank, National Association, as Administrator
191 Peachtree Street, N.E., GA-8047
Atlanta, Georgia 30303
Attention: Cecil Noble, Fax No. (404) 332-5152
[Address to each Purchaser Agent]
Ladies and Gentlemen:
Reference is made to the Receivables Purchase Agreement dated as of July 10, 2003 (as amended,
supplemented or otherwise modified from time to time, the
Agreement
) among Amerisource
Receivables Financial Corporation (the
Seller
), AmerisourceBergen Drug Corporation, as initial
Servicer, the various Purchaser Groups from time to time party thereto, and Wachovia Bank, National
Association, as Administrator. Capitalized terms defined in the Agreement are used herein with the
same meanings.
1. The
[
Servicer, on behalf of the
]
Seller hereby certifies, represents and warrants to the
Administrator, each Purchaser Agent and each Purchaser that on and as of the Purchase Date (as
hereinafter defined):
(a) all applicable conditions precedent set forth in Article VI of the Agreement have
been satisfied;
(b) each of its representations and warranties contained in Article V of the Agreement
will be true and correct, in all material respects, as if made on and as of the Purchase Date;
(c) no event will have occurred and is continuing, or would result from the requested
Purchase, that constitutes an Amortization Event or Unmatured Amortization Event;
(d) the applicable Facility Termination Date has not occurred; and
II-1
(e) after giving effect to the Purchase requested below, does not exceed the limits set
forth in Section 1.1(a) of the Agreement.
2. The [Servicer, on behalf of the] Seller hereby requests that the Purchasers make a Purchase
on
_____, 20___
(the
Purchase Date
) as follows:
(a) Purchase Price: $_____
(b) Ratable Share:
|
|
|
|
|
(i) Blue Ridge Asset Funding Corporations Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(ii) EagleFunding Capital Corporations Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(iii) Liberty Street Funding Corp.s Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(iv) Atlantic Asset Securitization Corp.s Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(v) Market Street Funding Corporations Purchaser Group:
|
|
$
|
|
|
(c) If the Purchase is funded with a Bank Rate Funding,
[
Servicer on behalf of the
]
Seller requests that the Invested Amount (which will initially accrue Yield at the Alternate
Base Rate) begin to accrued Yield at a LIBO Rate for an Interest Period of
months on the third Business Day after the Purchase Date).
3. Please disburse the proceeds of the Purchase as follows:
[Apply
$_____
to payment of Aggregate Unpaids due on the Purchase Date].
[Wire transfer $_____
to the Facility Account.]
IN WITNESS WHEREOF,
the Servicer, on behalf of the Seller has caused this Purchase Request to
be executed and delivered as of this
_____ day of
_____, _____.
|
|
|
|
|
|
[AmerisourceBergen Drug Corporation, as Servicer, on behalf of:]
Amerisource Receivables Financial Corporation, as Seller
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
II-2
EXHIBIT III
PLACES OF BUSINESS OF THE SELLER PARTIES; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
Name of Seller
:
Amerisource Receivables Financial Corporation
Location of Books and Records
:
|
|
|
Name of Location
|
|
Address/Location of Records
|
|
|
|
Chesterbrook
|
|
1300 Morris Drive, Suite 100, Chesterbrook, PA 19087
|
Orange
|
|
4000 Metropolitan Drive, Orange, CA 92868
|
|
|
|
Atlanta
|
|
1085 Satellite Blvd., Suwanee, GA 30024
|
Birmingham
|
|
172 Cahaba Valley Pkwy., Pelham, AL 35124
|
Boston
|
|
101 Norfolk Street, Mansfield, MA 02048
|
Chicago
|
|
980 Lombard Road, Lombard, IL 60148
|
Columbus
|
|
1200 E. 5
th
Avenue, Columbus, OH 43219
|
Corona
|
|
1851 California Avenue, Corona, CA 92881
|
Dallas
|
|
1229 Avenue R, Grand Prairie, TX 75050
|
Dallas
|
|
1841 Monetary Lane, Carrollton, TX 75006
|
Denver
|
|
501 W. 44th Avenue, Denver, CO 80216
|
Honolulu
|
|
238 Sand Island Access Rd. #M1, Honolulu, HI 96819
|
Houston
|
|
12727 W. Airport Blvd., Sugar Land, TX 77478
|
Johnson City
|
|
410 Princeton Road, Johnson City, TN 37601
|
Kansas City
|
|
1501 Southern Road, Kansas City, MO 64120
|
Louisville (Pharmabuy)
|
|
7841 National Turnpike, Louisville, KY 40214
|
Louisville
|
|
244 E. Woodlawn Ave., Louisville, KY 40214
|
Meridian
|
|
6300 St. Louis Street, Meridian, MS 39301
|
Minneapolis
|
|
6810 Shady Oak Rd., Eden Prairie, MN 55344
|
Mishawaka
|
|
1655 E. 12th Street, Mishawaka, IN 46544
|
Mobile
|
|
85 Sidney Phillips Drive, Mobile, AL 36607
|
Montgomery
|
|
2061 W. Fairview Ave., Montgomery, AL 36108
|
Nashville
|
|
12980 Old Hickory Rd., Antioch, TN 37013
|
Orlando
|
|
2100 Directors Row, Orlando, FL 32809-6234
|
Orlando
|
|
2702 Directors Row, Orlando, FL 32809
|
Paducah
|
|
322 North 3rd Street, Paducah, KY 42001
|
Phoenix
|
|
1825 S. 43rd Avenue, Phoenix, AZ 85009
|
Pinebrook
|
|
Rte. 80 @ Hook Mountain Rd., Pine Brook, NJ 07058
|
Raleigh
|
|
8605 Ebenezer Church Rd., Raleigh, NC 27613
|
Richmond
|
|
9900 J.E.B. Stuart Pkwy., Glen Allen, VA 23060
|
Rita Ann
|
|
8410 B Kelso Drive, Baltimore, MD 21221
|
Sacramento Admin Office
|
|
2520 Venture Oaks Way, Suite 140, Sacramento, CA 95833
|
Salt Lake City
|
|
1765 Fremont Drive, Salt Lake City, UT 84104
|
San Antonio
|
|
1949 Hormel Drive, San Antonio, TX 78219
|
San Jose
|
|
450 Charcot Avenue, San Jose, CA 95131
|
Seattle
|
|
19220 64th Avenue South, Kent, WA 98032
|
St. Joseph
|
|
3907 S. 48th Terrace, St. Joseph, MO 64503
|
St. Louis
|
|
8190 Lackland Road, St. Louis, MO 63114-4524
|
Tulsa
|
|
9401 E. 54th Street, Tulsa, OK 74145
|
Thorofare
|
|
100 Friars Lane, Thorofare, NJ 08086
|
Toledo
|
|
3145 Nebraska Avenue, Toledo, OH 43607
|
Valencia
|
|
24903 Avenue Kearny, Valencia, CA 91355
|
Williamston
|
|
One Industrial Park, Williamston, MI 48895
|
Legal, Trade and Assumed Names
:
AmeriSource Receivables Financial Corporation
Corporate Information Regarding the Seller
|
|
|
|
|
Federal Tax Identification Number: 23-2999097
|
|
|
|
|
Delaware Corporation Organization Number: 3031303
|
|
|
|
|
III-1
EXHIBIT IV
NAMES OF COLLECTION BANKS; LOCK-BOXES & COLLECTION ACCOUNTS
[SEE ATTACHED]
IV-1
AMERISOURCEBERGEN CORPORATION
EXHIBIT A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
Division
|
|
Bank
|
|
Account #
|
|
|
Account Name
|
|
Type
|
|
|
Lockbox(es)
|
|
|
Status
|
Amerisource Receivables Financial Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Rita Ann- Baltimore, MD
|
|
Allfirst Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation Rita Ann
|
|
Depository
|
|
|
1596
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook, PA
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Birmingham, AL
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
403279
|
|
|
Open
|
ARFC
|
|
Columbus, OH
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
12581
|
|
|
Open
|
|
|
Toledo/Louisville
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Dallas, TX
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
8410046
|
|
|
Open
|
ARFC
|
|
Mishawaka, IN
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
12571
|
|
|
Open
|
ARFC
|
|
Orlando, FL
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
502978/403163
|
|
|
Open
|
ARFC
|
|
Johnson City, TN
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
502964
|
|
|
Open
|
ARFC
|
|
Minneapolis, MN
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
502620
|
|
|
Open
|
ARFC
|
|
Paducah, KY
|
|
Bank of America
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
503270
|
|
|
Open
|
ARFC
|
|
Columbus, OH
|
|
Bank One
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
0813
|
|
|
Open
|
|
|
Toledo, OH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
St. Joseph, MO
|
|
Commerce Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
802240
|
|
|
Open
|
ARFC
|
|
Mishawaka, IN
|
|
First Source Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
4181
|
|
|
TBC March 2003
|
ARFC
|
|
Thorofare, NJ
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
52598
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook, PA
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook, PA
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Thorofare, NJ
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
8500-41950
|
|
|
Open
|
ARFC
|
|
Springfield, MA
|
|
First Union Natl Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
54873
|
|
|
Open
|
ARFC
|
|
Corp- Chesterbrook
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Hawaii
|
|
Bank of Hawaii
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
31000-5356
|
|
|
Open
|
ARFC
|
|
Chicago, IL
|
|
Bank One
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
21978, 100708,
|
|
|
Open
|
|
|
Corona, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
22016, 22103,
|
|
|
|
|
|
Denver, CO
|
|
|
|
|
|
|
|
|
|
|
|
|
100459, 100741,
|
|
|
|
|
|
Kansas City, MO
|
|
|
|
|
|
|
|
|
|
|
|
|
21983, 100801,
|
|
|
|
|
|
Phoenix, AZ
|
|
|
|
|
|
|
|
|
|
|
|
|
100491, 24900,
|
|
|
|
|
|
Sacramento, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
730034, 100806,
|
|
|
|
|
|
Salt Lake City, UT
|
|
|
|
|
|
|
|
|
|
|
|
|
27550
|
|
|
|
|
|
San Jose, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seattle, WA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
St. Louis, MO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tulsa, OK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valencia, CA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Williamston, MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Corp-Orange, CA
|
|
Chase Manhattan Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Corp-Orange, CA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Master
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
Atlanta, GA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
530431, 642723,
|
|
|
Open
|
|
|
Boston, MA
|
|
|
|
|
|
|
|
|
|
|
|
|
676337, 676380,
|
|
|
|
|
|
Dallas, TX
|
|
|
|
|
|
|
|
|
|
|
|
|
530439, 530448,
|
|
|
|
|
|
Houston, TX
|
|
|
|
|
|
|
|
|
|
|
|
|
530456, 530463,
|
|
|
|
|
|
Meridian, MS
|
|
|
|
|
|
|
|
|
|
|
|
|
530477, 642755.
|
|
|
|
|
|
Mobile, AL
|
|
|
|
|
|
|
|
|
|
|
|
|
530494, 642800,
|
|
|
|
|
|
Montgomery, AL
|
|
|
|
|
|
|
|
|
|
|
|
|
676405
|
|
|
|
|
|
Nashville, TN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orlando, FL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pine Brook, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raleigh, NC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richmond, VA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Antonio, TX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Kansas City, KS
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
771732
|
|
|
Open
|
ARFC
|
|
Tulsa, OK
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
667604
|
|
|
Open
|
ARFC
|
|
Mansfield, MA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
643393
|
|
|
Open
|
ARFC
|
|
Raleigh, NC
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
643364
|
|
|
Open
|
ARFC
|
|
Richmond, VA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
643376
|
|
|
Open
|
ARFC
|
|
Corp-Orange, CA
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
NA
|
|
|
Open
|
ARFC
|
|
PharmaBuy
|
|
PNC Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
771530
|
|
|
Open
|
|
|
Louisville, KY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARFC
|
|
Corp-Orange, CA
|
|
Wells Fargo Bank
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
|
|
Depository
|
|
|
77825
|
|
|
Open
|
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Wachovia Bank, National Association, as Administrator
This Compliance Certificate is furnished pursuant to that certain Receivables Purchase
Agreement dated as of July 10, 2003 among Amerisource Receivables Financial Corporation (the
Seller
), AmerisourceBergen Drug Corporation (the
Servicer
), the various Purchaser Groups from
time to time party thereto and Wachovia Bank, National Association, as Administrator (the
Agreement
).
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____ of Seller.
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under
my supervision, a detailed review of the transactions and conditions of Seller and its Subsidiaries
during the accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the
existence of any condition or event which constitutes an Amortization Event or Unmatured
Amortization Event, as each such term is defined under the Agreement, during or at the end of the
accounting period covered by the attached financial statements or as of the date of this
Certificate
[
, except as set forth in paragraph 5 below
]
.
4. Schedule I attached hereto sets forth financial data and computations evidencing the
compliance with Section 9.1(o) and certain covenants of the Agreement, all of which data and
computations are true, complete and correct.
[
5. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and the action which
Seller has taken, is taking, or proposes to take with respect to each such condition or event:
_____
]
The foregoing certifications, together with the computations set forth in Schedule I hereto and the
financial statements delivered with this Certificate in support hereof, are made and delivered as
of
_____, 20___.
V-1
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of
_____,
_____
with Section _____
of the Agreement. Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended: _____
Sch. I
EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
COLLECTION ACCOUNT AGREEMENT
_______, 2003
[
Collection Bank Name
]
[
Collection Bank Address
]
Attn:
_____
Fax No.
(_____) ____
Re:
[
Name of current Lock-Box owner]/Amerisource Receivables Financial Corporation
Ladies and Gentlemen:
Reference is hereby made to each of the
[
departmental
]
post office boxes listed on
Schedule 1
hereto (each, a
Lock-Box
) of which
[
Collection Bank Name
]
, a
_____
banking association (hereinafter
you
), has exclusive control for the purpose of receiving
mail and processing payments therefrom pursuant to the
[
Lock-Box Service Agreement
]
dated
_____, originally by and between Amerisource Bergen Drug Corporation (the
Company
) and you (the
Service Agreement
).
1. You hereby confirm your agreement to perform the services described therein. Among the
services you have agreed to perform therein, is to endorse all checks and other evidences of
payment received in each of the Lock-Boxes, and credit such payments to account no.
_____
(the
Lock-Box Account
).
2. The Company hereby informs you that it has transferred to its affiliate, Amerisource
Receivables Financial Corporation, a Delaware corporation (the
Seller
) all of the
Companys right, title and interest in and to the items from time to time received in the
Lock-Boxes and/or deposited in the Lock-Box Account, but that the Company has agreed to continue to
service the receivables giving rise to such items. Accordingly, the Company and Seller hereby
request that the name of the Lock-Box Account be changed to Amerisource Receivables Financial
Corporation. Seller hereby further advises you that it has pledged the receivables giving rise to
such items to Wachovia Bank, National Association, as Administrator for various parties (in such
capacity, the
Administrator
) and has granted a security interest to the Administrator in
all of Sellers right, title and interest in and to the Lock-Box Account and the funds therein.
3. Each of the Company and Seller hereby irrevocably instructs you, and you hereby agree, that
upon receiving notice from the Administrator in the form attached hereto as
Annex A
:
VI-1
(i) the name of the Lock-Box Account will be changed to
Wachovia Bank, National Association,
as Administrator
(or any designee of the Administrator), and the Administrator will have exclusive
ownership of and access to the Lock-Boxes and the Lock-Box Account, and none of the Company,
Seller, nor any of their respective affiliates will have any control of the Lock-Boxes or the
Lock-Box Account or any access thereto, (ii) you will either continue to send the funds from the
Lock-Boxes to the Lock-Box Account, or will redirect the funds as the Administrator may otherwise
request, (iii) you will transfer monies on deposit in the Lock-Box Account to the following
account:
|
|
|
|
|
|
|
Bank Name:
|
|
Wachovia Bank, National Association
|
|
|
Location:
|
|
Charlotte, North Carolina
|
|
|
ABA Routing No.:
|
|
ABA # 053000219
|
|
|
Credit Account No.:
|
|
For credit to Blue Ridge Asset Funding Account
#2000010384921
|
|
|
Account Name:
|
|
CP Liability Account
|
|
|
Reference:
|
|
Blue Ridge/Amerisource Receivables Financial
Corporation
|
|
|
Attention:
|
|
Sherry McInturf, tel. (704) 715-1125
|
or to such other account as the Administrator may specify, (iv) all services to be performed by you
under the Service Agreement will be performed on behalf of the Administrator, and (v) all
correspondence or other mail which you have agreed to send to the Company or Seller will be sent to
the Administrator at the following address:
|
|
|
|
|
Wachovia Bank, National Association, as Administrator
191 Peachtree Street
Mail Stop GA-8047
Atlanta, GA 30303
Attn: Cecil Noble,
Asset-Backed Finance
FAX: (404) 332- 5152
|
Moreover, upon such notice, the Administrator will have all rights and remedies given to the
Company (and Seller, as the Companys assignee) under the Service Agreement. The Company agrees,
however, to continue to pay all fees and other assessments due thereunder at any time.
4. In addition, as collateral security for Sellers obligations to the Administrator and
certain other persons in connection with the Receivables Purchase Agreement, Seller hereby grants
to the Administrator a present and continuing security interest in (a) the Lock-Box Account, (b)
all general intangibles and privileges in respect of the Lock-Box Account, and (c) all cash,
checks, money orders and other items of value of Seller now or hereafter paid, deposited, credited,
held (whether for collection, provisionally or otherwise) or otherwise, in your possession, under
your control, or in transit to you or any of your agents, bailees or custodians in respect of the
Lock-Box Account, and all proceeds of the foregoing (collectively,
Receipts
). You hereby
acknowledge and agree that (i) the Administrator has Control (as contemplated in §9-104 of the
applicable UCC) of the Lock-Box Account and you are required to comply with the instructions of the
Administrator directing disposition of the funds in the Lock-Box Account without further consent by
AmeriSource Corporation, the
VI-2
Servicer, Seller or any affiliate thereof and (ii) you shall at all times maintain the Lock-Box
Account as a Deposit Account (as defined in §9-102 of the applicable UCC). The Administrator
hereby appoints you as the Administrators bailee for the Lock-Box Account and all Receipts for the
purpose of perfecting the Administrators security interest in such collateral, and you hereby
accept such appointment and agree to be bound by the terms of this letter agreement. Seller hereby
agrees to such appointment and further agrees that you, on behalf of the Administrator, shall be entitled to exercise, as directed in accordance
with the terms of this letter agreement, any and all rights which the Administrator may have in
connection with the transactions referenced in the first paragraph of this letter agreement or
under applicable law with respect to the Lock-Box Account, all Receipts and all other collateral
described in this paragraph.
5. You hereby agree not to institute or join any other person or entity in instituting, any
suit pursuant to Title 11, United States Code, or any similar suit or proceeding under then
applicable state or federal law providing for the relief of debtors or the protection of creditors,
against Seller prior to the date which is one year and one day after payment of all obligations of
Seller to the Administrator (and the parties for which it is acting as agent) are paid in full.
This section shall survive any termination of this letter agreement.
6. You hereby acknowledge that monies deposited in the Lock-Box Account or any other account
established with you by the Administrator for the purpose of receiving funds from the Lock-Boxes
are subject to the liens of the Administrator, and will not be subject to deduction, set-off,
bankers lien or any other right you or any other party may have against the Company or Seller
except that you may debit the Lock-Box Account for any items deposited therein that are returned or
otherwise not collected and for all charges, fees, commissions and expenses incurred by you in
providing services hereunder, all in accordance with your customary practices for the charge back
of returned items and expenses.
7. You will be liable only for direct damages in the event you fail to exercise ordinary care.
You shall be deemed to have exercised ordinary care if your action or failure to act is in
conformity with general banking usages or is otherwise a commercially reasonable practice of the
banking industry. You shall not be liable for any special, indirect or consequential damages, even
if you have been advised of the possibility of these damages.
8. The parties acknowledge that you may assign or transfer your rights and obligations
hereunder solely to a wholly-owned subsidiary of
[
insert name of Collection Banks holding
company
]
.
9. Seller agrees to indemnify you for, and hold you harmless from, all claims, damages,
losses, liabilities and expenses, including legal fees and expenses, resulting from or with respect
to this letter agreement and the administration and maintenance of the Lock-Box Account and the
services provided hereunder, including, without limitation: (a) any action taken, or not taken, by
you in regard thereto in accordance with the terms of this letter agreement, (b) the breach of any
representation or warranty made by Seller pursuant to this letter agreement, (c) any item,
including, without limitation, any automated clearinghouse transaction, which is returned for any
reason, and (d) any failure of Seller to pay any invoice or charge to you for services in respect
to this letter agreement and the Lock-Box Account or any amount owing to you from Seller with
respect thereto or to the service provided hereunder.
VI-3
10. THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER WILL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
_____, WHICH STATE SHALL BE YOUR LOCATION FOR PURPOSES OF THE UNIFORM
COMMERCIAL CODE FROM AND AFTER JULY 1, 2002. This letter agreement may be executed in any number of
counterparts and all of such counterparts taken together will be deemed to constitute one and the
same instrument.
11. This letter agreement contains the entire agreement between the parties, and may not be
altered, modified, terminated or amended in any respect, nor may any right, power or privilege of
any party hereunder be waived or released or discharged, except upon execution by all parties
hereto of a written instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or is inconsistent with, any provision of the Service Agreement,
this letter agreement will exclusively govern and control. Each party agrees to take all actions reasonably requested by any other party to
carry out the purposes of this letter agreement or to preserve and protect the rights of each party
hereunder.
VI-4
Please indicate your agreement to the terms of this letter agreement by signing in the space
provided below. This letter agreement will become effective immediately upon execution of a
counterpart of this letter agreement by all parties hereto.
|
|
|
|
|
|
Very truly yours,
[NAME OF CURRENT LOCK-BOX OWNER]
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
AMERISOURCE RECEIVABLES FINANCIAL
CORPORATION
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
VI-5
|
|
|
|
|
Acknowledged and agreed to as of the
date first above written:
|
|
|
|
|
|
|
|
[COLLECTION BANK]
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
Title:
|
|
|
|
|
|
|
|
WACHOVIA BANK, NATIONAL
ASSOCIATION,
as Administrator
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
Title:
|
|
|
VI-6
ANNEX A
FORM OF NOTICE
[On letterhead of the Administrator]
[
Date
]
[Collection Bank Name]
[Collection Bank Address]
Attn:
_____
Fax No. (_____) _____
Re: [
Name of current Lock-Box owner]/Amerisource Receivables Financial Corporation
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to that certain letter
agreement dated
_____, 2003 (the
Letter Agreement
) among [Name of
current Lock-Box Owner], Amerisource Receivables Financial Corporation, you and us, to have the
name of, and to have exclusive ownership and control of, account no.
_____
identified in the Letter Agreement (the
Lock-Box Account
) maintained with you,
transferred to us. The Lock-Box Account will henceforth be a zero-balance account, and funds
deposited in the Lock-Box Account should be sent at the end of each day to the account specified in
Section 3(i) of the Letter Agreement, or as otherwise directed by the undersigned. You have further
agreed to perform all other services you are performing under the Service Agreement (as defined
in the Letter Agreement) on our behalf.
We appreciate your cooperation in this matter.
|
|
|
|
|
|
Very truly yours,
WACHOVIA BANK, NATIONAL
ASSOCIATION, as
Administrator
|
|
|
By:
|
|
|
|
|
Title:
|
|
Annex A
SCHEDULE 1
Lock-Box Post Office Address
Sch. 1
EXHIBIT VII
CREDIT AND COLLECTION POLICY
See Exhibit V to Receivables Sale Agreement
VII-1
EXHIBIT VIII
FORM OF SETTLEMENT REPORT
VIII-1
Amerisource Receivables Financial Corporation
for the Month Ended:
(Page 1)
($)
I. Portfolio Information
|
|
|
|
|
|
|
|
|
1. Beginning of Month Balance: (Total A/R Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Gross Sales (Domestic & Foreign):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Deduct
|
|
|
|
|
|
|
|
|
a. Total collections:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Dilution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Net Write Offs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d. Misc. Non-Dilutive Adj.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
|
|
|
|
|
|
|
|
a.
Calculated Ending A/R Balance[(1) + (2) - (3 a,b,c)+3d)]:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Reported Ending A/R Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Difference (if any)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Deduct
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Delinquent Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Defaulted Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Bankrupt Customers < 60 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d. Intercompany/affiliate Receivables < 60 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
e. Foreign Receivables < 60 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f. Total Government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
g. Contra Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
h. Cross Age Test 50% > 60 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i. Excess Receivables with terms 31-60 Days
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
j. Excess Receivables with terms 61-90 Days
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
k. Notes Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
l. Unapplied Cash (if not excluded from aging)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
m. Excess Futures (>3.5% of Total AR)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n. Other Ineligibles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
o. Total Ineligibles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. Eligible Receivables [(4 b) - (5.o)]:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Deduct Excess Concentration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Deduct Rebate Reserve
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. Net Pool Balance [(6) - (7)]:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
One Month
|
|
|
Two Months
|
|
|
Three Months
|
|
10.
|
|
Aging Schedule:
|
|
|
Month
|
|
|
%
|
|
|
Prior
|
|
|
Prior
|
|
|
Prior
|
|
a
|
|
Futures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c
|
|
1-30 Days Past Due
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d
|
|
31-60 Days Past Due
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
e
|
|
Gross Balance 61-90 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f
|
|
Gross Balance 91-120 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
g
|
|
Gross Balance 121-150 DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
h
|
|
Gross Balance 151 + DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i
|
|
Bergen Credit Balances 61 + DPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
For the Month Ended:
(Page 2)
($)
II. Calculations Reflecting Current Activity
|
|
|
|
|
|
|
|
|
11. CP Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12. Required Reserve %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13. Required Reserve [(8) x (11)]:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14. Funding Available
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15. Additional Availability or (Required Paydown)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
III. Compliance
|
|
|
|
|
|
|
|
|
|
18. Asset Interest [(10) + (12)/(8)] < 100%:
|
|
In Compliance
|
|
|
|
|
|
|
|
|
|
|
|
|
17. 3M Avg. Delinquency Ratio
|
|
In Compliance
|
|
|
|
|
|
|
|
|
|
|
|
|
18. 3M Avg. Default Ratio
|
|
In Compliance
|
|
|
|
|
|
|
|
|
|
|
|
|
19. 3M Avg. Dilution Ratio
|
|
In Compliance
|
|
|
|
|
|
|
|
|
|
|
|
|
20. 1M DSO Ratio
|
|
In Compliance
|
|
|
|
|
|
|
|
|
|
|
|
|
21. Facility Limit [(12)<= $1,050,000,000
|
|
In Compliance
|
|
|
|
|
|
|
|
|
|
|
|
|
Amerisource Receivables Financial Corporation
For the Month Ended:
(Page 3)
($)
IV. Excess Concentration: (Calculation)
Eligible Receivables
|
|
|
|
|
|
|
|
|
|
|
Allowable Percentage
|
|
|
Max. Allowable Balance
|
|
|
Credit Rating
|
|
|
5.50
|
%
|
|
$
|
0
|
|
|
Advance PCS
|
|
|
8.00
|
%
|
|
$
|
0
|
|
|
Longs
|
|
|
2.50
|
%
|
|
$
|
0
|
|
|
NR/NR
|
|
|
3.00
|
%
|
|
$
|
0
|
|
|
A3/P3
|
|
|
6.00
|
%
|
|
$
|
0
|
|
|
A2/P2
|
|
|
11.00
|
%
|
|
$
|
0
|
|
|
A1/P1
|
|
|
11.00
|
%
|
|
$
|
0
|
|
|
A1+/P1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Largest
|
|
|
Short-Term
|
|
|
Allowable
|
|
|
Total
|
|
|
Allowable
|
|
|
Excess
|
|
|
|
Obligors
|
|
|
Debt Rating
|
|
|
Percentage
|
|
|
Receivables
|
|
|
Receivables
|
|
|
Receivables
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting with respect to outstanding receivables as of
accordance with the Receivables Purchase Agreement dated
and that all
representations and warranties related to such Agreement are restated and reaffirmed.
EXHIBIT IX
FORM OF ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (this
Agreement
), dated as of [
_____, 20___], is among
AMERISOURCE RECEIVABLES FINANCIAL CORPORATION (the Seller), [
], as purchaser (the
[
] Conduit Purchaser), [
], as the related committed purchaser (the [
]
Related Committed Purchaser and together with the Conduit Purchaser, the [
] Purchasers),
and [
], as agent for the Purchasers (the [
] Funding Agent and together with the
Purchasers, the [
] Purchaser Group).
BACKGROUND
The Seller and various others are parties to a certain Receivables Purchase Agreement dated as
of July 10, 2003 (as amended, restated, supplemented or otherwise modified through the date hereof,
the Receivables Purchase Agreement). Capitalized terms used and not otherwise defined herein
have the respective meaning assigned to such terms in the Receivables Purchase Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. This letter constitutes an Assumption Agreement as defined in the Receivables
Purchase Agreement. The Seller desires [the [
] Purchasers] [the [
] Related Committed
Purchaser] to [become Purchasers under] [increase its existing Commitment under] the Receivables
Purchase Agreement and upon the terms and subject to the conditions set forth in the Receivables
Purchase Agreement, the [
] Purchasers agree to [become Purchasers thereunder] [increase its
Commitment in an amount equal to the amount set forth as the Commitment under the signature of
such [
] Related Committed Purchaser hereto].
Seller hereby represents and warrants to the [
] Purchasers as of the date hereof, as
follows:
(i) the representations and warranties of the Seller contained in
Section 5.1
of the
Receivables Purchase Agreement are correct on and as of such dates as though made on and as of such
dates and shall be deemed to have been made on such dates;
(ii) no Amortization Event or Unmatured Amortization Event has occurred and is continuing, or
would result from such transfer; and
(iii) the Facility Termination Date shall not have occurred.
SECTION 2. Upon execution and delivery of this Agreement by the Seller and each member of the
[
] Purchaser Group, satisfaction of the other conditions to assignment specified in the
Receivables Purchase Agreement and receipt by the Administrator of counterparts of this Agreement
(whether by facsimile or otherwise) executed by each of the parties hereto, [the [
]
Purchasers shall become a party to, and have the rights and obligations of Purchasers under, the
Receivables Purchase Agreement] [the [
] Related Committed Purchaser shall increase its
Commitment in the amount set forth as the Commitment under the signature of the [
] Related
Committed Purchaser, hereto].
[Insert Alternate Base Rate, CP Costs, LIBO Rate and Schedule Facility Termination Date as
appropriate.]
SECTION 3. Each party hereto hereby covenants and agrees that it will not institute against,
or join any other Person in instituting against, any Conduit Purchaser, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any
federal or state bankruptcy or similar law, for one year and one day after the latest maturing
Commercial Paper notes issued by such Conduit Purchaser is paid in full. The covenant contained in
this paragraph shall survive any termination of the Receivables Purchase Agreement.
SECTION 4. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
This Agreement may not be amended, supplemented or waived except pursuant to a writing signed by
the party to be charged. This Agreement may be executed in counterparts, and by the different
parties on different counterparts, each of which shall constitute an original, but all together
shall constitute one and the same agreement.
(continued on following page)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized
officers as of the date first above written.
|
|
|
|
|
|
[
], as a Conduit Purchaser
|
|
|
By:
|
|
|
|
|
Name Printed:
|
|
|
|
|
Title:
|
|
|
|
|
[Address]
[
], as a Related Committed Purchaser
|
|
|
By:
|
|
|
|
|
Name Printed:
|
|
|
|
|
Title:
|
|
|
|
|
[Address]
[Commitment]
[
], as Funding Agent for [
]
|
|
|
By:
|
|
|
|
|
Name Printed:
|
|
|
|
|
Title:
|
|
|
|
|
[Address]
|
|
|
|
|
|
|
AMERISOURCE RECEIVABLES
FINANCIAL CORPORATION, as Seller
|
|
|
By:
|
|
|
|
|
Name Printed:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
Consented and Agreed:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as administrator
|
|
|
By:
|
|
|
|
|
Name Printed:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name Printed:
|
|
|
|
|
Title:
|
|
|
|
|
|
Consented and Agreed:
[THE PURCHASERS]
|
|
|
Exhibit X
Form of Transfer Supplement
with respect to
Amerisource Receivables Financial Corporation
Receivables Purchase Agreement
Dated as of [________ __, 20____]
Section 1
.
|
|
|
|
|
Commitment assigned:
|
|
$
|
__________
|
|
Assignors remaining Commitment:
|
|
$
|
__________
|
|
Invested Amount allocable
to Commitment assigned:
|
|
$
|
__________
|
|
Assignors remaining Invested Amount:
|
|
$
|
__________
|
|
Discount (if any) allocable to Invested Amount
Assigned:
|
|
$
|
__________
|
|
Discount (if any) allocable to Assignors
Remaining Invested Amount:
|
|
$
|
__________
|
|
Section 2
.
|
|
|
|
|
Effective Date of this Transfer Supplement:
|
|
|
[________ __, 20, ____]
|
|
Upon execution and delivery of this Transfer Supplement by transferee and transferor and the
satisfaction of the other conditions to assignment specified in Section 12.1 of the Receivables
Purchase Agreement (as defined below), from and after the effective date specified above, the
transferee shall become a party to, and have the rights and obligations of a Related Committed
Purchaser under, the Receivables Purchase Agreement dated as of July [10], 2003 (as amended,
restated, supplemented or otherwise modified through the date hereof, the
Receivables Purchase
Agreement
), among Amerisource Receivables Financial Corporation, as Seller, AmerisourceBergen
Drug Corporation, as initial Servicer, Wachovia Bank, National Association, as Administrator, and
the various purchaser groups from time to time party thereto.
[Insert Alternate Base Rate, CP Costs, LIBO Rate and Scheduled Facility Termination Date as
appropriate.]
|
|
|
|
|
ASSIGNOR
|
|
[__________],
|
|
|
as a Related Committed Purchaser
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
ASSIGNEE:
|
|
[__________],
|
|
|
as a Related Committed Purchaser
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
[Address]
|
Accepted as of date first above
written:
[_____],
As Funding Agent for the
[_____] Purchaser Group
EXHIBIT XI
FORM OF CONTRACT(S)
[
See Attached
]
IX-1
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
PRIME VENDOR AGREEMENT
This Prime Vendor Agreement (Agreement) is made as of
(Effective Date) by
AmerisourceBergen Drug Corporation, a Delaware corporation (Distributor), and
, a
corporation (Customer).
A. Distributor is a national distributor of pharmaceutical and other products and services,
including prescription (Rx) and over-the-counter (OTC) pharmaceuticals, nutritional, health and
beauty care (HBC) and home health care (DME) products (collectively, Products);
B. Customer owns and operates one or more health system pharmacies (Facilities); and
C. The parties intend by this Agreement to set forth their obligations to each other for an
arrangement under which Distributor will provide Products and services to Customer (Program).
NOW THEREFORE, the parties agree as follows:
1. PRICING AND PAYMENT TERMS
Distributor will be the Primary Vendor of all requirements of Customers Facilities for
Products. Customer will pay, within terms, Product costs and Program fees pursuant to payment terms
in
Exhibit 1
(Pricing/Payment Terms). Primary Vendor means Customer purchases from
Distributor no less than
[*****]
% of all prescription pharmaceutical Products it purchases, as
verified quarterly, and meets minimum periodic purchase levels in Paragraph 3(A) of the
Pricing/Payment Terms. Orders for Products will be electronically transmitted (other than Schedule
II controlled substances) and will describe Products that Distributor will provide to Customer, the
quantity and designated delivery location. All payment plans (except pre-pay) must be by electronic
funds transfer (EFT).
2. GENERICS PROGRAM PARTICIPATION
Customer may elect to participate in Distributors preferred generic formulary program,
Preferred Rx Options (PRO Generics), pursuant to requirements as amended from time to time
by Distributor. If Customer elects to participate, Customer will order generic pharmaceutical
Products from Distributor. Customer authorizes Distributor as its sole agent to develop and
implement a generic pharmaceutical Product list for the Term. Customer will purchase from
Distributor each calendar quarter no less than the minimum Net Purchase volume of generic
pharmaceutical Products in Paragraph 3(A) of the Pricing/Payment Terms.
3. CUSTOMER LOCATIONS & DELIVERIES
Distributor will deliver Products to each Facility five days a week (Monday Friday), once a
day except holidays. Additionally, Customer will be entitled to one emergency delivery per calendar
quarter at no additional charge. Customer may be charged for each additional emergency order.
Customers current Facilities are located:
. Facility means each of
Customers health system pharmacies, together with any other facility Customer acquires, is
affiliated with or operates during the Term in the United States. Newly acquired facilities with
existing agreements with other distributors will become Facilities under this Agreement upon the
earlier of expiration of such existing agreement or the date Customer may terminate such agreement,
with or without cause, without breaching it or paying a material termination penalty; provided,
however, service to Facilities outside Distributors normal service area may be subject to a
delivery surcharge.
IX-2
4. RETURNED GOODS POLICY
Customer will only return goods to Distributor in accordance with Distributors standard
policy for returned goods (Returned Goods Policy), as amended from time to time by Distributor.
5. ADDITIONAL SERVICES & PROVISIONS.
Services are listed in
Exhibit 2
. Terms, conditions and other provisions are set
forth in
Exhibit 3
(Provisions). Distributor may, from time to time, develop policies
and procedures related to new or existing Services offered to customers, on an interim or as-needed
basis. If Distributor develops such policies or procedures or changes current ones, Distributor
will provide Customer with written notice at least thirty (30) days before such changes are
effective.
6. TERM OF AGREEMENT
Subject to Paragraph 5 of the Provisions, the Term will be from the Effective Date until
.
The Term will, thereafter, be extended on a month-to-month basis until either party gives at least
ninety (90) days prior written notice to the other of its intention to not extend this Agreement.
7. NOTICES
Subject to Paragraph 9.3 of the Provisions, notices to Customer will be sent to:
8. EXHIBITS
The following exhibits to this Agreement are incorporated by this reference.
|
1
|
|
Pricing/Payment Terms
|
|
|
2
|
|
Value-Added Services
|
|
|
3
|
|
Provisions
|
IN WITNESS WHEREOF, the parties have had a duly authorized officer, partner or principal
execute this Prime Vendor Agreement as of its Effective Date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUSTOMER:
|
|
|
|
DISTRIBUTOR:
|
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Drug Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IX-3
EXHIBIT 1 TO
PRIME VENDOR AGREEMENT
PRICING / PAYMENT TERMS
In addition to payment for Products, Customer will pay Distributor the following Program and other
fees for Distributors Product distribution and Services for Customer and its Facilities. Except
as otherwise provided, payments are due within ten (10) days from Distributors invoice date.
Pricing does not reflect any administrative or other fees to a group purchasing organization or
buying group (GPO). If Customer contracts with a GPO, Customer will pay any such fees to the
applicable GPO.
1. PROGRAM FEES
A.
Distribution Fee (Price of Goods).
Customer will pay the following Price of Goods
based, which includes Distributors fees for distributor, subject to the following adjustments for
Average Per-Facility Monthly Net Purchase volume and payment terms. For Products other than
SuperNet Products, Customers Price of Goods will be based upon Distributors Cost (as defined
below). Distributor will add to the billed amount any applicable sales, use, business and
occupation or similar tax. Price of Goods will begin at Tier No. 1 and may be adjusted quarterly
based upon Customers Average Per-Facility Monthly Net Purchase volume over the prior three (3)
months.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pricing Tiers
|
|
Price of Goods*
|
Average Per-Facility Monthly Net Purchase Volume
|
|
|
|
|
|
Weekly
|
No.
|
|
Branded Rx Pharmaceutical Products
|
|
Semi-Monthly
|
|
Weekly
|
|
Pre-Pay
|
1
|
|
|
|
|
|
to
|
|
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
2
|
|
$
|
0.01
|
|
|
to
|
|
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
3
|
|
$
|
0.01
|
|
|
to
|
|
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
4
|
|
$
|
0.01
|
|
|
to
|
|
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
5
|
|
$
|
0.01
|
|
|
to
|
|
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
6
|
|
$
|
0.01
|
|
|
&
|
|
Above
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
HBC/OTC Products
|
|
|
|
|
|
|
|
|
|
[*****]
|
|
[*****]
|
|
[*****]
|
PRO Generics, repackaged branded Rx, drop shipments, supplies
(bottles & vials), home healthcare (DME), private label, food,
nutritionals, gift items, school and office supplies, fragrance,
cosmetics, slow-moving items, bulk/case goods, etc.
|
|
SuperNet**
|
|
|
|
*
|
|
Cost means (i) the price on a manufacturer/suppliers current price list on the date Product is
shipped to Customer, or (ii) any applicable Customer/GPO contract price authorized by a supplier
and maintained in a Distributor bid file. Cost is subject to Distributors receiving from all
suppliers (x) a two percent (2%) or greater cash discount and 30 days or better terms; and (y)
Product delivered to Distributor FOB its facilities; Cost will be adjusted accordingly if discounts
and terms are less favorable or Distributor pays transportation and related costs to receive
Products. No other adjustments to Cost are made for cash discounts or purchase or performance
rebates.
|
|
**
|
|
SuperNet applies to Products sold at a special net cost quoted to Customer by Distributor.
SuperNet Products are not subject to Cost-plus prices or to additional discounts. SuperNet
Products include products deemed operationally difficult to manage (e.g., bulky and high-cube
products). SuperNet purchases qualify towards total monthly purchase volume.
|
B.
Additional Value-Added Services
. The additional value-added services in
Exhibit
2
will be provided to Customer by Distributor for $
[*****]
per month per Facility for
Facilities that meet minimum Net Purchase levels.
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IX-4
C.
Ordering Hardware/Software
. In addition to the foregoing value-added Services fee,
Customer will pay the per-month fees in
Exhibit 2
for ordering and reporting software and
hardware selected by Customer for each installation on system hardware at Customers Facilities and
other locations.
D.
Set-Up Fee.
A one-time set-up fee of will be paid to Distributor within five days
after execution of this Agreement.
E.
Security Deposit.
Within five days of execution, Customer will deposit with
Distributor the sum of $
[*****]
as a deposit for Customers performance of its obligations under
this Agreement. Upon request, Distributor will return such deposit within 30 days if Customer has
performed fully its obligations under this Agreement, including having no late payments, for a
period of 36 months prior to such request. Upon the expiration or termination of this Agreement,
Distributor may deduct from such deposit any unpaid amount, including payment for Products and
services. Distributor will return to Customer any balance remaining within 30 days of the
expiration or termination of this Agreement.
F.
Contract Administration
. In administering Customers GPO/supplier contracts,
Customer must (i) provide a copy of new contracts, (ii) comply with suppliers terms, (iii) use all
products for its own use (as defined in judicial and legislative interpretations), (iv) notify
Distributor at least 45 days before it changes suppliers, and (v) upon changing suppliers, assist
Distributor in disposing of any excess inventory acquired for Customer. When invoiced, Customer
will promptly reimburse Distributor for any unpaid chargebacks that are (x) denied by a GPO or
manufacturer/supplier; or (y) not paid within 45 days and, in either case, Customer will look
solely to such GPO or manufacturer/supplier for redress.
2. PAYMENT TERMS
Customer agrees to the following payment terms for Product purchases. (
Check only
one
box
below
):
All payments must be received by EFT for deposit to Distributors account by the due date.
Distributor may change available payment plans from time to time. Payment term changes may affect
Price of Goods. If Customer does not select an option or the option selected is not available,
Distributor will bill Customer on Semi-Monthly terms until otherwise notified by Customer. Subject
to credit approval, Customer may change payment terms upon thirty (30) days written notice prior
to the beginning of a calendar month. Price of Goods adjustments for payment terms changes are
subject to changes from time to time by Distributor to reflect Distributors cost of money and any
resulting credit risk.
3. MINIMUM ORDER VOLUME
A. Annual Purchases. Customers minimum annual Net Purchase (total purchases less returns,
credits, rebates, late payment fees and similar items) volume during Year 1 is . Year 1 is from the
Effective Date to . Subsequent contract Years are the following 12-month periods. Customers Net
Purchases during subsequent years are projected to increase at a rate of
[*****] %
per Year during
each Year of the Term. Customers aggregate Net Purchases over the life of this Agreement will be
no less than . Additionally, total PRO Generics Net Purchases from all Facilities will be at least
[*****] %
of total Rx purchases from all Facilities.
B. Small Order Charge. If Customer purchases less than $
[*****]
per month, a delivery charge
of $
[*****]
per delivery will be assessed for each order that is less than$
[*****]
Distributor
may adjust the per-delivery charge from time to time to reflect Distributors shipping and handling
costs.
C. Price of Goods Adjustments. Customer acknowledges that Price of Goods and Program fees
available under this Agreement are based upon Customers meeting such minimum annual, aggregate and
PRO Generics Net Purchases and, if Customer fails to do so, in addition to any other remedies,
Distributor may reasonably adjust Price of Goods and Program fees on 10 days notice to reflect
lower than expected volume of purchases.
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IX-5
EXHIBIT 2 TO
PRIME VENDOR AGREEMENT
ADDITIONAL VALUE-ADDED SERVICES
The following Services are offered to Customer by Distributor for monthly fees in Paragraph 1(B) of
Exhibit 1
(Pricing/Payment Terms).
|
|
|
Bar-Coded Shelf Labels
|
|
|
|
|
DEA Scheduled Rx Products Purchased Report
|
|
|
|
|
Monthly Usage and 80/20 Report
|
|
|
|
|
Price stickers Rx and OTC
|
Distributor reserves the right to discontinue any Services as it deems appropriate, in which case
Distributor will make a reasonable proportionate reduction in the monthly fee based upon the value
of the discontinued Services. In addition, from time to time Distributor may offer such new
Services, at such additional fees as it determines.
Ordering & Reporting Software and Hardware
|
|
InterLinx reporting software for $
[*****]
per month per installation. (Note: InterLinx is
subject to a separate software license agreement).
|
|
|
Internet ordering software (iBergen Catalog and Order Entry (COE),
iECHO
or similar
software, as appropriate) for $
[*****]
per month per installation.
|
|
|
AccuSource for $
[*****]
per month per installation (plus $
[*****]
per month for monthly
CD-ROM updates).
|
|
|
UltraPhase/Telxon handheld electronic order entry terminal (two per pharmacy) for no
additional charge per month per installation.
|
|
|
No hardware will be included for Customer at a cost of $
[*****]
per month per installation.
Any such hardware may be used solely with Distributors ordering and reporting software.
|
Distributor retains title to all ordering and reporting hardware and software and, pursuant to
Provisions Paragraph 5.2, Customer must return them upon termination of this Agreement.
Computer consulting and related services will be offered at Distributors then-current standard
charges for such services.
Recalls
Distributor will notify Customer of all recalls as instructed in the suppliers notification.
Drop Ship Service
Distributor provides drop ship service when Customers needs dictate this approach and the supplier
meets Distributors liability insurance and other requirements. Drop shipments may be subject to an
additional charge.
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IX-6
EXHIBIT 3 TO
PRIME VENDOR AGREEMENT
PROVISIONS
1. DUTIES OF ABDC
1.1
Orders
. Orders may be subject to minimum order size requirements. Other than
back-ordered Products, Distributor will make reasonable efforts to (i) deliver orders placed by
Distributors normal order cut-off time by the next delivery day; and (ii) ship out-of-stock
Products promptly after their receipt from the supplier.
1.2
Emergency Orders
. Distributor will use commercially reasonable efforts to meet a
requested delivery time for emergency orders, which may be subject to an additional charge. If
Distributor cannot do so, Customer may fill emergency orders outside the Program on such occasions
using another provider notwithstanding minimum purchase commitments in this Agreement.
1.3
Records, Audits
. Distributor will maintain records of transactions for one year during
the Term or after. Customers employees may audit such records only pursuant to Distributors
audit policies, as modified from time to time. Such audits may be conducted no more than once in
any 12-month period, only during reasonable business hours and upon reasonable notice and may only
cover 12 months prior to the request. All costs will be borne by Customer, including costs to
produce records. If an audit shows net overcharges or undercharges and Distributor agrees with
such findings, Distributor will credit or charge Customer within 30 days of receipt of written
notice of the net overcharge (or, if later, within 30 days of receiving an applicable suppliers
credit) or undercharge.
2. DUTIES OF CUSTOMER
2.1
Primary Vendor Orders
. For Products required by Facilities, Customer will submit an
electronic order for all required Products for Facilities. If allowed, non-electronic orders may by
subject to additional charges.
2.2
Disclosure
. Customer will comply with all laws, including reporting or reflecting
discounts, rebates and other price reductions pursuant to 42 U.S.C. §1320a-7b(b)(3)(A) on cost
reports or claims submitted to federal or state healthcare programs, retaining invoices and related
pricing documentation and making them available on request to healthcare program representatives.
2.3
Notice of Changes
. Customer will promptly notify Distributor of changes in ownership,
name, business form (e.g., sole proprietorship, partnership or corporation) or any intent to sell,
close, move or modify its operations.
2.4
No Set-Off
. Customers obligation to pay for Products will be absolute, unconditional
and not subject to reduction, set-off, counterclaim or delay.
2.5
Billing Statements
. Billing disputes must be brought promptly to attention of
Distributors accounts receivable department within 12 months after receipt of the first statement
containing the amount in dispute or, otherwise, Customer will be deemed to accept the accuracy of
such statements and to waive its right to dispute the amount.
2.6
Late Payment
. All payments must be received in Distributors account during normal
business hours on the date due. Drivers and other Distributor employees cannot accept cash. Price
of Goods reflects a prompt payment discount. If payment is not received by the due date,
Distributor will invoice Customer such unearned discount at [*****] effective as of the due date.
Thereafter, if payment is delinquent, Distributor may withhold any payments to Customer and will
assess a per-day late payment fee of the lower of [*****]% ([*****]) or the maximum rate permitted
by law on the outstanding balance until paid, beginning on the first (1
st
) business day
after such due date. Additionally, Distributor may adjust future Price of Goods to reflect
Customers payment history. Such rights are in addition to Distributors other remedies and will
not relieve Customer of its obligation to make prompt payment in accordance with this Agreement.
2.7
Title And Risk Of Loss
. All goods are F.O.B. Customers location, with freight prepaid.
Title and risk of loss passes upon delivery to Customer.
2.8
Extension Of Credit
. Payment terms are an extension of credit based upon an evaluation
of Customers financial condition upon commencement of this Agreement as reflected in written
information from Customer. Customer will abide by Distributors standard credit terms as amended
from time to time by Distributor. Customer will promptly notify Distributor in writing of any Claim
that, with an unfavorable result, would have a material adverse effect on Customers financial
condition or operation. Upon request, Customer will furnish Distributor complete annual and
quarterly financial statements and other evidence of its financial condition necessary to
establish, in Distributors opinion, Customers ability to perform its obligations. If Distributor
reasonably believes Customers ability to make payments is impaired or its financial condition has
materially deteriorated, Distributor may from time to time amend Customers payment terms and
require posting of adequate security or such other documents as Distributor may require. Pending
their receipt, Distributor may withhold delivery of goods and providing Services; place Customer on
a C.O.D. basis if Distributor has not received payment when due after giving notice by 10:00 a.m.
and giving Customer until 2:00 p.m. the same day for Distributor to receive payment; and/or require
Customer to pay part or all of any past due amount as a condition to continued service.
3. NO WARRANTIES
Customer acknowledges that Distributor is not the manufacturer of any Products and DISTRIBUTOR
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY, NON-INFRINGEMENT
AND FITNESS FOR A PARTICULAR PURPOSE, FOR PRODUCTS AND SERVICES. No oral or written information
provided by Distributor, its employees or other representatives will create any such warranty. In
no event will Distributor be liable for any special, incidental or consequential damages in
connection with Products, hardware, Software, including ordering software, or Services.
4. CONFIDENTIALITY
Each party and its employees or representatives (Receiving Party) will protect all proprietary
and confidential information (Confidential Information) disclosed by the other (Disclosing
Party) and not use or disclose it except in connection with the Program or as otherwise agreed.
Confidential Information does not include information (i) available on a non-confidential basis,
(ii) known or able to be formulated by Receiving Party, or (iii) required to be disclosed by law.
Pricing and payment terms are confidential. Customer will remove
Exhibit 1
(or request
confidential treatment) if it discloses this Agreement for any reason, including in a Securities
and Exchange Commission filing.
5. TERMINATION OF AGREEMENT
5.1
Default
. In addition to other available remedies, either party may immediately
terminate this Agreement for cause upon written notice to the other party upon the other partys:
(a) (i) filing an application for or consenting to appointment of a trustee, receiver or custodian
of its assets; (ii) having an order for relief entered in Bankruptcy Code proceedings; (iii)
making a general assignment for the benefit of creditors; (iv) having a trustee, receiver or
custodian of its assets appointed unless proceedings and the person appointed are dismissed within
30 days; (v) insolvency within the meaning of Uniform Commercial Code Section 1-201 or failing
generally to pay its debts as they become due within the meaning of Bankruptcy Section 303(h)(1),
as amended; or (vi) certification in writing of its inability to pay its debts as they become due
(and either party may periodically require the other to certify its ability to pay its debts as
they become due) (collectively, Bankruptcy);
(b) Failure to pay any amount due and such failure continues five days after written notice; or
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IX-7
(c) Failure to perform any other material obligation and such failure continues for 30 days after
it receives notice of such breach from the non-breaching party; provided, however, if the other
party has commenced to cure such breach within such 30 days, but such cure is not completed within
such 30 days, it will have a reasonable time to complete its cure if it diligently pursues the
cure until completion; and further provided that if such breach occurs more than three times
during any 12-month period, the non-breaching party may terminate this Agreement upon 30 days
written notice. For cause does not include Customers receiving a more favorable offer from a
competitor.
5.2
Survival Upon Termination
. Within five days of expiration or earlier termination of
this Agreement for any reason, Customer will (i) pay Distributor any amount owed and (ii) return
to Distributor all hardware, Software and other equipment, including ordering devices and totes,
or pay to Distributor the replacement cost of such items that are not returned. Obligations in
Provisions Paragraphs 4, 5.2, 6 and 9 and any provision the context of which shows the parties
intended it to survive will remain in effect after the Term.
6. INDEMNIFICATION
Each party (Indemnifying Party) will indemnify and defend the other, its employees and
representatives (Indemnified Party) against all claims and damages (including expenses and
attorneys fees) (Claim) to the extent arising out of performance of Indemnifying Partys
obligations under this Agreement. Failure to give prompt written notice of a Claim will not
relieve Indemnifying Party of liability except to the extent caused by such failure. Indemnifying
Party will defend a Claim with counsel reasonably satisfactory to Indemnified Party and
Indemnified Party will cooperate fully in such defense.
7. CUSTOMERS INSURANCE
Customer will maintain sufficient insurance to cover all unpaid inventory in its possession.
Customer will maintain professional liability insurance with limits of no less than $2,000,000 per
incident and $10,000,000 aggregate. Distributor will be named on such policies as an additional
insured. Distributor may reasonably increase such required limits from time to time.
8. SOFTWARE LICENSE
8.1
License
. Distributor grants Customer a non-exclusive, nontransferable and revocable
license to use software and related documentation Distributor provides for use in the Program
(Software). Customer may not make, or allow others to make, copies except one backup copy.
Customer must include all proprietary notices in permitted copies. Customer may not modify
Software or
create derivative works and may not translate, reverse engineer, disassemble or decompile
Software.
8.2
Limited Warranty
. Distributor warrants that, for 90 days from the Effective Date, (i)
Software will perform substantially in accordance with its documentation if operated as directed
and (ii) hardware provided by Distributor and diskettes, CD-ROMs or other media on which Software
is provided will be free from defects under normal use. DISTRIBUTOR DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE, FOR HARDWARE AND SOFTWARE. No oral or written information provided by
Distributor, its employees or other representatives will create any warranty.
8.3
Remedy
. Distributors liability and Customers exclusive remedy for breach of
warranties in Paragraph 8.2 will be, at Distributors option, to (i) repair or replace Software or
hardware so it performs substantially in accordance with its documentation; (ii) advise Customer
how to achieve substantially the same functionality using different procedures, or (iii) replace
defective media returned within 90 days of the Effective Date. Such replacement will not extend
such 90-day period.
9. MISCELLANEOUS
9.1
Force Majeure
. If Distributors performance is prevented or delayed by labor disputes,
fire, terrorism, acts of God, or any other cause beyond its control, including unavailability of
Products, transportation, materials or fuel, delays by suppliers, loss of facilities, voluntary
foregoing a right in order to comply with or accommodate government orders or requests, compliance
with any law, or any other cause beyond its control (Force Majeure), Distributor may reduce or
eliminate Products without liability or obligation during the Force Majeure period. In addition,
if Force Majeure affects Distributors cost of operations, Distributor may, at its discretion, add
to the cost of Products its increased fuel costs, including taxes, and other costs associated with
Product transportation so long as Force Majeure affects its costs.
9.2
Security Interest
. Customer hereby grants to Distributor a security interest which may
be a purchase money security interest in Products that Customer has not paid for and in Customers
or any third partys proceeds from Products until all amounts are paid. Distributor may do such
things as are necessary to achieve the purposes of this Paragraph.
9.3
Notices
. Notices must be in writing and sent certified mail, prepaid, return receipt
requested, or sent by facsimile as follows. Parties may change this information by written
notice.
Customer:
To the address in Agreement Section 7.
Distributor:
AmerisourceBergen Drug Corporation
1300 Morris Drive, Suite 100
Chesterbrook, Pennsylvania 19087-5594
Attn: Vice President, Health Systems
Fax: (610) 727-3601
With a copy to:
AmerisourceBergen Drug Corporation
1300 Morris Drive, Suite 100
Chesterbrook, Pennsylvania 19087-5594
Attn: General Counsel
Fax: (610) 727-3612
9.4
Assignment.
Customer may only assign its rights or delegate its duties under this
Agreement upon written consent of Distributor. Customer hereby consents to Distributors
assigning part or all of its obligations to any affiliate and to assigning or granting a security
interest in this Agreement in connection with any financing or securitization by Distributor or
any affiliate.
9.5
Miscellaneous
. The successful party in any legal action, including in a Bankruptcy
proceeding, may recover all costs, including reasonable attorneys fees. Internal Pennsylvania law
will govern this Agreement. Any waiver or delay in enforcing this Agreement will not deprive a
party of the right to act at another time or due to another breach. All provisions are severable.
This Agreement supersedes prior oral or written representations by the parties that relate to its
subject matter. Captions are intended for convenience of reference only. The parties may not
modify this Agreement other than by a subsequent writing signed by each party. This Agreement will
be interpreted as if written jointly by the parties. The parties are independent contractors. Time
is of the essence in the performance of all obligations.
[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IX-8
EXHIBIT XII
FORM OF PERFORMANCE UNDERTAKING
THIS PERFORMANCE UNDERTAKING
(this
Undertaking
), dated as of July 10, 2003, is executed by
AmerisourceBergen Corporation, a Delaware corporation (the
Performance Guarantor
), in favor of
Amerisource Receivables Financial Corporation, a Delaware corporation (together with its successors
and assigns,
Recipient
).
RECITALS
1. AmerisourceBergen Drug Corporation (the
Originator
) and Recipient have entered into a
Receivables Sale Agreement, dated as of July 10, 2003 (as amended, restated or otherwise modified
from time to time, the
Sale Agreement
), pursuant to which Originator, subject to the terms and
conditions contained therein, is selling and/or contributing its right, title and interest in its
accounts receivable to Recipient.
2. Performance Guarantor owns one hundred percent (100%) of the capital stock of the
Originator and Recipient, and Originator, and accordingly, Performance Guarantor, is expected to
receive substantial direct and indirect benefits from its sale or contribution of receivables to
Recipient pursuant to the Sale Agreement (which benefits are hereby acknowledged).
3. As an inducement for Recipient to acquire Originators accounts receivable pursuant to the
Sale Agreement, Performance Guarantor has agreed to guaranty the due and punctual performance by
Originator of its obligations under the Sale Agreement, as well as the Servicing Related
Obligations (as hereinafter defined).
4. Performance Guarantor wishes to guaranty the due and punctual performance by Originator of
its obligations to Recipient under or in respect of the Sale Agreement and the Servicing Related
Obligations (as hereinafter defined), as provided herein.
AGREEMENT
NOW, THEREFORE,
Performance Guarantor hereby agrees as follows:
Section 1.
Definitions
. Capitalized terms used herein and not defined herein shall
have the respective meanings assigned thereto in the Sale Agreement or the Receivables Purchase
Agreement (as hereinafter defined). In addition:
Guaranteed Obligations
means, collectively: (a) all covenants, agreements, terms, conditions
and indemnities to be performed and observed by Originator under and pursuant to the Sale Agreement
and each other document executed and delivered by Originator pursuant to the Sale Agreement,
including, without limitation, the due and punctual payment of all sums which are or may become due
and owing by Originator under the Sale Agreement, whether for fees, expenses (including counsel
fees), indemnified amounts or otherwise, whether upon any termination or for any other reason and
(b) all obligations of Originator (i) as Servicer under the Receivables Purchase Agreement, dated
as of July 10, 2003 by and among Recipient, as Seller, AmerisourceBergen Drug Corporation, as
Servicer, the various Purchaser Groups from time to time party thereto, and Wachovia Bank, National
Association, as Administrator (as amended, restated or otherwise modified, the
Receivables
Purchase Agreement
and, together
XII-1
with the Sale Agreement, the
Agreements
) or (ii) which arise pursuant to Sections 8.2, 8.3 or
13.3(a) of the Receivables Purchase Agreement as a result of its termination as Servicer (all such
obligations under this clause (b), collectively, the
Servicing Related Obligations
).
Section 2.
Guaranty of Performance of Guaranteed Obligations
. Performance Guarantor
hereby guarantees to Recipient, the full and punctual payment and performance by Originator of its
Guaranteed Obligations. This Undertaking is an absolute, unconditional and continuing guaranty of
the full and punctual performance of all Guaranteed Obligations of Originator under the Agreements
and each other document executed and delivered by Originator pursuant to the Agreements and is in
no way conditioned upon any requirement that Recipient first attempt to collect any amounts owing
by Originator to Recipient, the Administrator, any Purchaser Agent or any Purchaser from any other
Person or resort to any collateral security, any balance of any deposit account or credit on the
books of Recipient, the Administrator, any Purchaser Agent or any Purchaser in favor of Originator
or any other Person or other means of obtaining payment. Should Originator default in the payment
or performance of any of its Guaranteed Obligations, Recipient (or its assigns) may cause the
immediate performance by Performance Guarantor of the Guaranteed Obligations and cause any payment
Guaranteed Obligations to become forthwith due and payable to Recipient (or its assigns), without
demand or notice of any nature (other than as expressly provided herein), all of which are hereby
expressly waived by Performance Guarantor. Notwithstanding the foregoing, this Undertaking is not a
guarantee of the collection of any of the Receivables and Performance Guarantor shall not be
responsible for any Guaranteed Obligations to the extent the failure to perform such Guaranteed
Obligations by Originator results from Receivables being uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
provided that
nothing
herein shall relieve Originator from performing in full its Guaranteed Obligations under the
Agreements or Performance Guarantor of its undertaking hereunder with respect to the full
performance of such duties.
Section 3.
Performance Guarantors Further Agreements to Pay
. Performance Guarantor
further agrees, as the principal obligor and not as a guarantor only, to pay to Recipient (and its
assigns), forthwith upon demand in funds immediately available to Recipient, all reasonable costs
and expenses (including court costs and reasonable legal expenses) incurred or expended by
Recipient in connection with the Guaranteed Obligations, this Undertaking and the enforcement
thereof, together with interest on amounts recoverable under this Undertaking from the time when
such amounts become due until payment, at a rate of interest (computed for the actual number of
days elapsed based on a 360 day year) equal to the Prime Rate of Wachovia plus 2%
per annum
, such
rate of interest changing when and as such Prime Rate changes.
Section 4.
Waivers by Performance Guarantor
. Performance Guarantor waives notice of
acceptance of this Undertaking, notice of any action taken or omitted by Recipient (or its assigns)
in reliance on this Undertaking, and any requirement that Recipient (or its assigns) be diligent
or prompt in making demands under this Undertaking, giving notice of any Amortization Event, other
default or omission by Originator or asserting any other rights of Recipient under this
Undertaking. Performance Guarantor warrants that it has adequate means to obtain from Originator,
on a continuing basis, information concerning the financial condition of Originator, and that it is
not relying on Recipient to provide such information, now or in the future. Performance Guarantor
also irrevocably waives all defenses (i) that at any time may be available in respect of the
Guaranteed Obligations by virtue of any statute of limitations, valuation, stay,
XII-2
moratorium law or other similar law now or hereafter in effect or (ii) that arise under the law of
suretyship, including impairment of collateral. Recipient (and its assigns) shall be at liberty,
without giving notice to or obtaining the assent of Performance Guarantor and without relieving
Performance Guarantor of any liability under this Undertaking, to deal with Originator and with
each other party who now is or after the date hereof becomes liable in any manner for any of the
Guaranteed Obligations, in such manner as Recipient in its sole discretion deems fit, and to this
end Performance Guarantor agrees that the validity and enforceability of this Undertaking,
including without limitation, the provisions of Section 7 hereof, shall not be impaired or affected
by any of the following: (a) any extension, modification or renewal of, or indulgence with respect
to, or substitutions for, the Guaranteed Obligations or any part thereof or any agreement relating
thereto at any time; (b) any failure or omission to enforce any right, power or remedy with respect
to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or any
collateral securing the Guaranteed Obligations or any part thereof; (c) any waiver of any right,
power or remedy or of any Termination Event (as defined in the Receivables Sale Agreement),
Amortization Event, or default with respect to the Guaranteed Obligations or any part thereof or
any agreement relating thereto; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any other obligation of any person
or entity with respect to the Guaranteed Obligations or any part thereof; (e) the enforceability or
validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to the Guaranteed Obligations or any
part thereof; (f) the application of payments received from any source to the payment of any
payment obligations of Originator or any part thereof or amounts which are not covered by this
Undertaking even though Recipient (or its assigns) might lawfully have elected to apply such
payments to any part or all of the payment obligations of Originator or to amounts which are not
covered by this Undertaking; (g) the existence of any claim, setoff or other rights which
Performance Guarantor may have at any time against Originator in connection herewith or any
unrelated transaction; (h) any assignment or transfer of the Guaranteed Obligations or any part
thereof; or (i) any failure on the part of Originator to perform or comply with any term of the
Agreements or any other document executed in connection therewith or delivered thereunder, all
whether or not Performance Guarantor shall have had notice or knowledge of any act or omission
referred to in the foregoing clauses (a) through (i) of this Section 4.
Section 5.
Unenforceability of Guaranteed Obligations Against Originator
.
Notwithstanding (a) any change of ownership of Originator or the insolvency, bankruptcy or any
other change in the legal status of Originator; (b) the change in or the imposition of any law,
decree, regulation or other governmental act which does or might impair, delay or in any way affect
the validity, enforceability or the payment when due of the Guaranteed Obligations; (c) the failure
of Originator or Performance Guarantor to maintain in full force, validity or effect or to obtain
or renew when required all governmental and other approvals, licenses or consents required in
connection with the Guaranteed Obligations or this Undertaking, or to take any other action
required in connection with the performance of all obligations pursuant to the Guaranteed
Obligations or this Undertaking; or (d) if any of the moneys included in the Guaranteed Obligations
have become irrecoverable from Originator for any other reason other than final payment in full of
the payment obligations in accordance with their terms, this Undertaking shall nevertheless be
binding on Performance Guarantor. This Undertaking shall be in addition to any other guaranty or
other security for the Guaranteed Obligations, and it shall not be rendered unenforceable by the
invalidity of any such other guaranty or security. In the event that
XII-3
acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the
insolvency, bankruptcy or reorganization of Originator or for any other reason with respect to
Originator, all such amounts then due and owing with respect to the Guaranteed Obligations under
the terms of the Agreements, or any other agreement evidencing, securing or otherwise executed in
connection with the Guaranteed Obligations, shall be immediately due and payable by Performance
Guarantor.
Section 6.
Representations, Warranties and Covenants
. Performance Guarantor hereby
represents and warrants to, and covenants with, Recipient that:
(a)
Existence and Standing
. Performance Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of its state of incorporation. Performance
Guarantor is duly qualified to do business and is in good standing as a foreign corporation, and
has and holds all corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its business is conducted
except where the failure to so qualify or so hold could not reasonably be expected to have a
material adverse effect on its financial conditions or results of operations.
(b)
Authorization, Execution and Delivery; Binding Effect
. The execution and delivery
by Performance Guarantor of this Undertaking, and the performance of its obligations hereunder, are
within its corporate powers and authority and have been duly authorized by all necessary corporate
action on its part. This Undertaking has been duly executed and delivered by Performance Guarantor.
This Undertaking constitutes the legal, valid and binding obligation of Performance Guarantor
enforceable against Performance Guarantor in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(c)
No Conflict; Government Consent
. The execution and delivery by Performance
Guarantor of this Undertaking, and the performance of its obligations hereunder, do not contravene
or violate (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or
regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to
which it is a party or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its property, and do not result
in the creation or imposition of any Lien on assets of Performance Guarantor or its Subsidiaries
(except as created hereunder) except, in any case, where such contravention or violation could not
reasonably be expected to have a material adverse effect on its financial conditions or results of
operations or result in rendering any indebtedness evidenced thereby due and payable prior to its
maturity or result in the creation or imposition of any Lien pursuant to the terms of any such
instrument or agreement upon any property (now owned or hereafter acquired).
(d)
Financial Statements
. The consolidated financial statements of Performance
Guarantor and its consolidated Subsidiaries dated as of December 31, 2002 and March 31, 2003
heretofore delivered to Recipient have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present in all material respects the
consolidated financial condition and results of operations of Performance Guarantor
XII-4
and its consolidated Subsidiaries as of such dates and for the periods ended on such dates. Since
the later of (i) March 31, 2003 and (ii) the last time this representation was made or deemed made,
no event has occurred which would or could reasonably be expected to have a material adverse effect
on its financial conditions or results of operations.
(e)
Taxes
. Performance Guarantor has filed all United States federal tax returns and
all other tax returns which are required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by Performance Guarantor or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which adequate reserves
have been provided. The United States income tax returns of Performance Guarantor have been audited
by the Internal Revenue Service through the fiscal year ended December 31, 2002. No federal or
state tax liens have been filed and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of Performance Guarantor in respect of any taxes or
other governmental charges are adequate.
(f)
Litigation and Contingent Obligations
. Except as disclosed in the filings made by
Performance Guarantor with the Securities and Exchange Commission, there are no actions, suits or
proceedings pending or, to the best of Performance Guarantors knowledge threatened against or
affecting Performance Guarantor or any of its properties, in or before any court, arbitrator or
other body, that could reasonably be expected to have a material adverse effect on (i) the
business, properties, condition (financial or otherwise) or results of operations of Performance
Guarantor and its Subsidiaries taken as a whole, (ii) the ability of Performance Guarantor to
perform its obligations under this Undertaking, or (iii) the validity or enforceability of any of
this Undertaking or the rights or remedies of Recipient hereunder. Performance Guarantor does not
have any material Contingent Obligations not provided for or disclosed in the financial statements
referred to in Section 6(d).
(g)
Financial Covenants
. Performance Guarantor shall comply at all time with the
covenants set forth in Sections 6.12, 6.13. 6.14 and 6.15 of the Credit Agreement as in effect on
the date hereof (without giving effect to any amendment, waiver, termination, supplement or other
modification thereof unless consented to by the Administrator and the Required Purchaser Agents).
Section 7.
Subrogation; Subordination
. Notwithstanding anything to the contrary
contained herein, until the Guaranteed Obligations are paid in full Performance Guarantor: (a) will
not enforce or otherwise exercise any right of subrogation to any of the rights of Recipient, the
Administrator, any Purchaser Agent or any Purchaser against Originator, (b) hereby waives all
rights of subrogation (whether contractual, under Section 509 of the United States Bankruptcy Code,
at law or in equity or otherwise) to the claims of Recipient, the Administrator, each Purchaser
Agent and each Purchaser against Originator and all contractual, statutory or legal or equitable
rights of contribution, reimbursement, indemnification and similar rights and claims (as that
term is defined in the Federal Bankruptcy Code) which Performance Guarantor might now have or
hereafter acquire against Originator that arise from the existence or performance of Performance
Guarantors obligations hereunder, (c) will not claim any setoff, recoupment or counterclaim
against Originator in respect of any liability of Performance Guarantor to Originator and (d)
waives any benefit of and any right to participate in any collateral security which may be held by
Recipient, the Administrator, any Purchaser Agent or any Purchaser. The payment of any amounts due
with respect to any indebtedness of Originator now or hereafter
XII-5
owed to Performance Guarantor is hereby subordinated to the prior payment in full of all of the
Guaranteed Obligations. Performance Guarantor agrees that, after the occurrence of any default in
the payment or performance of any of the Guaranteed Obligations, Performance Guarantor will not
demand, sue for or otherwise attempt to collect any such indebtedness of Originator to Performance
Guarantor until all of the Guaranteed Obligations shall have been paid and performed in full. If,
notwithstanding the foregoing sentence, Performance Guarantor shall collect, enforce or receive any
amounts in respect of such indebtedness while any obligations are still unperformed or outstanding,
such amounts shall be collected, enforced and received by Performance Guarantor as trustee for
Recipient (and its assigns) and be paid over to Recipient (or its assigns) on account of the
Guaranteed Obligations without affecting in any manner the liability of Performance Guarantor under
the other provisions of this Undertaking. The provisions of this Section 7 shall be supplemental to
and not in derogation of any rights and remedies of Recipient under any separate subordination
agreement which Recipient may at any time and from time to time enter into with Performance
Guarantor.
Section 8.
Termination of Performance Undertaking
. Performance Guarantors obligations
hereunder shall continue in full force and effect until all Aggregate Unpaids are finally paid and
satisfied in full and the Receivables Purchase Agreement is terminated;
provided that
this
Undertaking shall continue to be effective or shall be reinstated, as the case may be, if at any
time payment or other satisfaction of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the bankruptcy, insolvency, or reorganization of Originator
or otherwise, as though such payment had not been made or other satisfaction occurred, whether or
not Recipient (or its assigns) is in possession of this Undertaking. No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any insolvency or other similar law,
or any law or order of any government or agency thereof purporting to reduce, amend or otherwise
affect the Guaranteed Obligations shall impair, affect, be a defense to or claim against the
obligations of Performance Guarantor under this Undertaking.
Section 9.
Effect of Bankruptcy
. This Performance Undertaking shall survive the
insolvency of Originator and the commencement of any case or proceeding by or against Originator
under the Federal Bankruptcy Code or other federal, state or other applicable bankruptcy,
insolvency or reorganization statutes. No automatic stay under the Federal Bankruptcy Code with
respect to Originator or other federal, state or other applicable bankruptcy, insolvency or
reorganization statutes to which Originator is subject shall postpone the obligations of
Performance Guarantor under this Undertaking.
Section 10.
Setoff
. Regardless of the other means of obtaining payment of any of the
Guaranteed Obligations, Recipient (and its assigns) is hereby authorized at any time and from time
to time, without notice to Performance Guarantor (any such notice being expressly waived by
Performance Guarantor) and to the fullest extent permitted by law, to set off and apply any
deposits and other sums against the obligations of Performance Guarantor under this Undertaking,
whether or not Recipient (or any such assign) shall have made any demand under this Undertaking and
although such obligations may be contingent or unmatured.
Section 11.
Taxes
. All payments to be made by Performance Guarantor hereunder shall be
made free and clear of any deduction or withholding. If Performance Guarantor is required by law to
make any deduction or withholding on account of tax or
XII-6
otherwise from any such payment, the sum due from it in respect of such payment shall be increased
to the extent necessary to ensure that, after the making of such deduction or withholding,
Recipient receive a net sum equal to the sum which it would have received had no deduction or
withholding been made.
Section 12.
Further Assurances
. Performance Guarantor agrees that it will from time to
time, at the request of Recipient (or its assigns), provide information relating to the business
and affairs of Performance Guarantor as Recipient may reasonably request. Performance Guarantor
also agrees to do all such things and execute all such documents as Recipient (or its assigns) may
reasonably consider necessary or desirable to give full effect to this Undertaking and to perfect
and preserve the rights and powers of Recipient hereunder.
Section 13.
Successors and Assigns
. This Performance Undertaking shall be binding upon
Performance Guarantor, its successors and permitted assigns, and shall inure to the benefit of and
be enforceable by Recipient and its successors and assigns. Performance Guarantor may not assign or
transfer any of its obligations hereunder without the prior written consent of each of Recipient,
the Administrator and each Purchaser Agent. Without limiting the generality of the foregoing
sentence, Recipient may assign or otherwise transfer the Agreements, any other documents executed
in connection therewith or delivered thereunder or any other agreement or note held by them
evidencing, securing or otherwise executed in connection with the Guaranteed Obligations, or sell
participations in any interest therein, to any other entity or other Person, and such other entity
or other Person shall thereupon become vested, to the extent set forth in the agreement evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the beneficiaries herein.
Section 14.
Amendments and Waivers
. No amendment or waiver of any provision of this
Undertaking nor consent to any departure by Performance Guarantor therefrom shall be effective
unless the same shall be in writing and signed by Recipient, the Administrator, each Purchaser
Agent and Performance Guarantor. No failure on the part of Recipient to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof or the exercise of
any other right.
Section 15.
Notices
. All notices and other communications provided for hereunder shall
be made in writing and shall be addressed as follows: if to Performance Guarantor, at the address
set forth beneath its signature hereto, and if to Recipient, at the addresses set forth beneath its
signature hereto, or at such other addresses as each of Performance Guarantor or any Recipient may
designate in writing to the other. Each such notice or other communication shall be effective (1)
if given by telecopy, upon the receipt thereof, (2) if given by mail, three (3) Business Days after
the time such communication is deposited in the mail with first class postage prepaid or (3) if
given by any other means, when received at the address specified in this Section 15.
Section 16.
GOVERNING LAW
. THIS UNDERTAKING SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
XII-7
Section 17.
CONSENT TO JURISDICTION
. EACH OF PERFORMANCE GUARANTOR AND RECIPIENT
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH
OR DELIVERED THEREUNDER AND EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
Section 18.
Bankruptcy Petition
. Performance Guarantor hereby covenants and agrees
that, prior to the date that is one year and one day after the payment in full of all outstanding
senior Indebtedness of Conduit Purchaser, it will not institute against, or join any other Person
in instituting against, Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other similar proceeding under the laws of the United States or any
state of the United States.
Section 19.
Miscellaneous
. This Undertaking constitutes the entire agreement of
Performance Guarantor with respect to the matters set forth herein. The rights and remedies herein
provided are cumulative and not exclusive of any remedies provided by law or any other agreement,
and this Undertaking shall be in addition to any other guaranty of or collateral security for any
of the Guaranteed Obligations. The provisions of this Undertaking are severable, and in any action
or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the obligations of
Performance Guarantor hereunder would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of Performance Guarantors liability under this Undertaking,
then, notwithstanding any other provision of this Undertaking to the contrary, the amount of such
liability shall, without any further action by Performance Guarantor or Recipient, be automatically limited and reduced to the highest amount that is
valid and enforceable as determined in such action or proceeding. Any provisions of this
Undertaking which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Unless otherwise specified, references herein to
Section
shall mean a reference to sections of
this Undertaking.
IN WITNESS WHEREOF,
Performance Guarantor has caused this Undertaking to be executed and
delivered as of the date first above written.
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
|
|
|
|
|
|
|
|
|
|
|
XII-8
Exhibit XIII
Responsible Officers
|
|
|
AmerisourceBergen
Drug Corporation
|
|
R. David Yost, Chief Executive Officer
Kurt J. Hilzinger, President & Chief Operating Officer
Michael D. DiCandilo, Senior Vice President & Chief Financial Officer
Terrance P. Haas, Senior Vice President, Operations
William D. Sprague, Senior Vice President, General Counsel & Secretary
Tim G. Guttman, Vice President & Corporate Controller
J.F. Quinn, Vice President & Corporate Treasurer
Vicki L. Bausinger, Assistant Secretary
Daniel T. Hirst, Assistant Secretary
|
|
|
|
AmeriSource
Receivables
Financial
Corporation
|
|
R. David Yost, President
Michael D. DiCandilo, Senior Vice President & Chief Financial Officer
William D. Sprague, Senior Vice President, General Counsel & Secretary
Tim G. Guttman, Vice President & Corporate Controller
J.F. Quinn, Vice President & Corporate Treasurer
Julie Frantz, Assistant Treasurer
James T. Rizol, Assistant Treasurer
Vicki L. Bausinger, Assistant Secretary
Daniel T. Hirst, Assistant Secretary
|
Exhibit XIV
Form of Interim Settlement Report
Amerisource Receivables Financial Corporation
For the Period Ended:
1/00/00
I. Portfolio Information
|
|
|
|
|
|
|
|
|
1. Reported Ending Weekly A/R Balance
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
2. Deduct: Ineligibles Receivables
|
|
From most recent monthly report
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
3. Eligible Receivables [(1 - 2)]:
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
4. Deduct: Excess Concentrations
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
5. Net Pool Balance [(3) - (4)]:
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
6. Required Reserve %
|
|
From most recent monthly report
|
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
7. Required Reserve $ [(5) x (6)]:
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
8. Borrowing Availability [(5) - (7)]
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
9. CP Outstanding:
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
10. Asset Interest [(9 + 7) / (5)] < 100%:
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
11. Additional Availability or (Required Paydown)
|
|
|
|
|
|
$
|
0
|
|
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting with respect to outstanding receivables as of
accordance with the Receivables Purchase Agreement dated
and that all
representations and warranties related to such Agreement are restated and reaffirmed.
EXHIBIT XV
FORM OF REDUCTION NOTICE
___________, _____
Wachovia Bank, National Association, as Administrator
191 Peachtree Street, N.E., GA-8047
Atlanta, Georgia 30303
Attention: Cecil Noble, Fax No. (404) 332-5152
[Address to each Purchaser Agent]
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated as of July 10, 2003 (as
amended, supplemented or otherwise modified, the
Receivables Purchase Agreement
), among
Amerisource Receivables Financial Corporation, as Seller, AmerisourceBergen Drug Corporation, as
Servicer, the various purchaser groups from time to time party thereto, and Wachovia Bank, National
Association, as Administrator. Capitalized terms used in this Reduction Notice and not otherwise
defined herein shall have the meanings assigned thereto in the Receivables Purchase Agreement.
This letter constitutes a Reduction Notice pursuant to
Section 1.3
of the Receivables
Purchase Agreement. The Seller desires to reduce the Aggregate Invested Amount on
_____,
_____
1
by the application of cash to pay Aggregate
Invested Amount and Yield to accrue (until such cash can be used to pay commercial paper notes) with respect to such Aggregate Invested Amount, together with all
costs related to such reduction of Aggregate Invested Amount, as follows:
(a) Reduction Amount:
$_____
(b) Ratable Share:
|
|
|
|
|
(i) Blue Ridge Asset Funding Corporations Purchaser Group:
|
|
$
|
|
|
|
|
|
1
|
|
Notice must be given at least two Business Days prior to the
requested reduction date (or three Business Days if the
reduction to be made to Purchasers in the Market Street
Funding Corporation Purchaser Group is $50,000,000 or more).
|
XV-1
|
|
|
|
|
(ii) EagleFunding Capital Corporations
Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(iii) Liberty Street Funding Corp.s
Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(iv) Atlantic Asset Securitization Corp.s
Purchaser Group:
|
|
$
|
|
|
|
|
|
|
|
(v) Market Street Funding Corporations
Purchaser Group:
|
|
$
|
|
|
XV-2
IN WITNESS WHEREOF, the undersigned has caused this Reduction Notice to be executed by its
duly authorized officer as of the date first above written.
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCE RECEIVABLES FINANCIAL CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
XV-3
EXHIBIT XVI
Form of Legend
THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD PURSUANT TO A RECEIVABLES SALE AGREEMENT,
DATED AS OF JULY 10, 2003, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR
OTHERWISE MODIFIED, BETWEEN AMERISOURCEBERGEN DRUG CORPORATION, AS ORIGINATOR, AND AMERISOURCE
RECEIVABLES FINANCIAL CORPORATION, AS BUYER; AND UNDIVIDED, FRACTIONAL OWNERSHIP INTERESTS IN THE
RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO VARIOUS PURCHASERS PURSUANT TO A RECEIVABLES
PURCHASE AGREEMENT, DATED AS OF JULY 10, 2003, AS THE SAME MAY FROM TIME TO TIME BE AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED, AMONG AMERISOURCE RECEIVABLES FINANCIAL CORPORATION,
AS SELLER, AMERISOURCEBERGEN DRUG CORPORATION, AS INITIAL SERVICER, THE VARIOUS PURCHASER GROUPS
FROM TIME TO TIME PARTY THERETO, AND WACHOVIA BANK, NATIONAL ASSOCIATION, AS ADMINISTRATOR.
EXHIBIT XVII
Form of Collection Account Amendment and Assignment
July 10, 2003
[Name of Lockbox Bank]
[Address]
Attention:
Re:
Amendment and Assignment of Lockbox Letter Agreements
Ladies and Gentlemen:
Reference is hereby made to those certain Lockbox Letter Agreements dated [_____] (the
Agreements
) for lockbox numbers [_____] (the
Lockboxes
) and the
corresponding demand deposit account numbers [_____] (the
Lockbox Accounts
), among
[_____], as Lockbox bank ([
Name of Lockbox Bank
]), AmeriSource Receivables Financial
Corporation (
ARFC
) and Morgan Guaranty Trust Company of New York (now known as JPMorgan
Chase Bank) (
Morgan
) under the Receivables Purchase Agreement, dated as of May 14, 1999,
among ARFC, as seller, AmerisourceBergen Drug Corporation (f/k/a AmeriSource Corporation)
(
ABDC
), as servicer, AmeriSource Health Corporation (now known as AmerisourceBergen
Services Corporation), as guarantor, Delaware Funding Corporation, as buyer, and Morgan, as
administrative agent (the
Morgan Transaction
). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Agreements.
1.
Assignment of Agreement
.
In connection with the transactions contemplated by the Receivables Sale Agreement, dated as
of July 10, 2003, between AmerisourceBergen Drug Corporation, as originator (in such capacity, the
Originator
), and ARFC (the
Receivables Sale Agreement
), and the Receivables
Purchase Agreement, dated as of July 10, 2003, among ABDC, as servicer (in such capacity, the
Servicer
), the various purchaser groups from time to time party thereto and Wachovia
Bank, National Association, as administrator (the
Administrator
) (the
Receivables
Purchase Agreement
and together with the Receivables Sale Agreement, the
Wachovia
Transaction
), Morgan hereby transfers and assigns to the Administrator all of its right, title
and interest in, to and under the Agreements, the Lockboxes and the Lockbox Accounts.
From and after the date hereof, (i) the Administrator shall have all the rights, and be
subject to all of the obligations of Morgan with respect to the Agreements, the Lockboxes and the
Lockbox Accounts, and (ii) all references in the Agreements to the Administrative Agent,
AmeriSource Corporation, the
Servicer and the Receivables Purchase Agreement shall refer to the Administrator, ABDC, the
Servicer and the Receivables Purchase Agreement (each as defined herein), respectively.
2.
Amendments to Agreement
.
(a) Each of the Agreements is hereby amended and restated by adding the following language
after the fourth paragraph thereto:
In addition, as collateral security for ARFCs obligations to the Administrator and
certain other persons in connection with the Receivables Purchase Agreement, ARFC hereby
grants to the Administrator a present and continuing security interest in (a) the Lockboxes
and the Lockbox Accounts, (b) all general intangibles and privileges in respect of the
Lockboxes or the Lockbox Accounts, and (c) all cash, checks, money orders and other items of
value of ARFC now or hereafter paid, deposited, credited, held (whether for collection,
provisionally or otherwise) or otherwise, in the possession or under the control of, or in
transit to [Name of Lockbox Bank] or any agent, bailee or custodian thereof in respect of
the Lockboxes or the Lockbox Accounts, and all proceeds of the foregoing (collectively,
Receipts
). [Name of Lockbox Bank] acknowledges and agrees that (i) the Administrator has
Control (as contemplated in §9-104 of the applicable UCC) of the Lockbox Accounts and
[Name of Lockbox Bank] is required to comply with the instructions of the Administrator
directing disposition of the funds in the Lockbox Accounts without further consent by
AmeriSource Corporation, the Servicer, ARFC or any affiliate thereof and (ii) [Name of
Lockbox Bank] shall at all times maintain the Lockbox Accounts as Deposit Accounts (as
defined in §9-102 of the applicable UCC). The Administrator hereby appoints [Name of
Lockbox Bank] as the Administrators bailee for the Lockboxes, Lockbox Accounts and all
Receipts for the purpose of perfecting the Administrators security interest in such
collateral, and [Name of Lockbox Bank] hereby accepts such appointment and agrees to be
bound by the terms of this letter agreement. ARFC hereby agrees to such appointment and
further agrees that [Name of Lockbox Bank], on behalf of the Administrator, shall be
entitled to exercise, as directed in accordance with the terms of this letter agreement, any
and all rights which the Administrator may have in connection with the transactions
referenced in the first paragraph of this letter agreement or under applicable law with
respect to the Lockboxes, Lockbox Accounts, all Receipts and all other collateral described
in this paragraph.
[Name of Lockbox Bank] hereby agrees not to institute or join any other person or
entity in instituting, any suit pursuant to Title 11, United States Code, or any similar
suit or proceeding under then applicable state or federal law providing for the relief of
debtors or the protection of creditors, against ARFC prior to the date which is one year and
one day after payment of all obligations of ARFC to the Administrator (and the parties for
which it is acting as agent) are paid in full. This section shall survive any termination
of this letter agreement.
2
(b) The eleventh paragraph each of the Agreement is hereby amended and restated by deleting
such paragraph and replacing it with the following:
[Name of Lockbox Bank] may terminate this letter agreement upon 60 days prior written
notice to ARFC, the Servicer and the Administrator. Neither ARFC nor the Servicer may
terminate this letter agreement, except with the written consent of the Administrator and
upon 10 days prior written notice to [Name of Lockbox Bank] and the Administrator.
AmeriSource Corporation may not terminate this letter agreement. Incoming mail addressed to
the Lockboxes or Lockbox Accounts (including, without limitation, any direct funds transfer
to the Lockbox Accounts) received after any such termination shall be forwarded in
accordance with the Administrators instructions (or if the Administrator has not delivered
the Administrators Notice, the Servicers instructions).
[Name of Lockbox Bank] shall not assign or transfer its rights or obligations hereunder
(other than to the Administrator) without the prior written consent (which consent shall not
be unreasonably withheld) of the Administrator and ARFC. AmeriSource Corporation (except to
the extent of its limited capacity as Servicer) shall not assign or transfer its rights and
obligations hereunder without the consent of [Name of Lockbox Bank] and the consent of the
Administrator. Neither ARFC nor the Servicer shall assign or transfer its rights or
obligations hereunder without the consent of the Administrator. The Administrator may at
any time assign its rights and obligations hereunder upon notice to the other parties
hereto. Subject to the preceding sentences, this Agreement shall be binding upon each of
the parties hereto and their respective successors and assigns, and shall inure to the
benefit of, and be enforceable by, the Administrator, each of the parties hereto and their
respective successors and assigns.
(c) The sentence comprising the fifteenth paragraph of each of the Agreements (before taking
into account this Amendment and Assignment) is hereby replaced with the following language:
This letter agreement and the rights and obligations of the parties hereunder will be
governed by and construed and interpreted in accordance with the internal laws of the State
of Virginia. ARFC, the Administrator and [Name of Lockbox Bank] agree that [_____] is
[Name of Lockbox Bank]s jurisdiction for purposes of §9-304 of the applicable UCC.
[Signatures begin on the following page]
3
This Amendment and Assignment and the rights and obligations of the parties hereunder will be
governed by and construed and interpreted in accordance with the laws of the State of New York.
This Assignment may be executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and the same
agreement. Delivery of an executed counterpart of the signature pages of this Assignment by
telecopier shall be equally effective as delivery of a manually executed counterpart.
|
|
|
|
|
|
|
|
|
Very truly yours,
|
|
|
|
|
|
|
|
|
|
|
|
JP MORGAN CHASE BANK (F/K/A MORGAN
GUARANTY TRUST COMPANY OF NEW YORK)
|
|
|
|
|
|
|
|
|
|
|
|
BY:
|
|
|
|
|
|
|
NAME:
|
|
|
|
|
|
|
TITLE:
|
|
|
|
|
|
|
|
|
|
|
|
|
WACHOVIA BANK, NATIONAL
ASSOCIATION, AS ADMINISTRATOR
|
|
|
|
|
|
|
|
|
|
|
|
BY:
|
|
|
|
|
|
|
NAME:
|
|
|
|
|
|
|
TITLE:
|
|
|
|
S-1
|
|
|
|
|
ACKNOWLEDGED AND AGREED:
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN DRUG
CORPORATION (F/K/A AMERISOURCE CORPORATION)
|
|
|
|
|
|
|
|
BY:
|
|
|
NAME:
|
|
|
TITLE:
|
|
|
|
|
|
|
AMERISOURCE RECEIVABLES
FINANCIAL CORPORATION
|
|
|
|
|
|
|
|
BY:
|
|
|
NAME:
|
|
|
TITLE:
|
|
|
|
|
|
|
[NAME OF LOCKBOX BANK]
|
|
|
|
|
|
|
|
BY:
|
|
|
NAME:
|
|
|
TITLE:
|
|
S-2
SCHEDULE A
DOCUMENTS TO BE DELIVERED
ON OR PRIOR TO THE INITIAL PURCHASE
1. Executed copies of the Receivables Purchase Agreement, duly executed by the parties
thereto.
2. Copy of the Resolutions of the Board of Directors of each Seller Party and Performance
Guarantor certified by its Secretary authorizing such Persons execution, delivery and performance
of this Agreement and the other documents to be delivered by it hereunder.
3. Articles or Certificate of Incorporation of each Seller Party and Performance Guarantor
certified by the Secretary of State of its jurisdiction of incorporation on or within thirty (30)
days prior to the initial Purchase.
4. Good Standing Certificate for each Seller Party and Performance Guarantor issued by the
Secretaries of State of its state of incorporation and each jurisdiction where it has material
operations, each of which is listed below:
a. Seller: Delaware
b. Servicer: Delaware
c. Performance Guarantor: Delaware
5. A certificate of the Secretary of each Seller Party and Performance Guarantor certifying
(i) the names and signatures of the officers authorized on its behalf to execute this Agreement and
any other documents to be delivered by it hereunder and (ii) a copy of such Persons By-Laws.
6. Pre-filing state and federal tax lien, judgment lien and UCC lien searches against each
Seller Party from the following jurisdictions:
a. Seller: Pennsylvania, Delaware
b. Servicer: Pennsylvania, Delaware, California, Missouri, Tennessee, Massachusetts, Nevada
7. Time stamped receipt copies of proper financing statements, duly filed under the UCC on or
before the date of the initial Purchase in all jurisdictions as may be necessary or, in the opinion
of the Administrator or any Purchaser Agent, desirable, under the UCC of all appropriate
jurisdictions or any comparable law in order to perfect the ownership interests contemplated by
this Agreement.
8. Time stamped receipt copies of proper UCC termination statements, if any, necessary to
release all security interests and other rights of any Person in the Receivables, Contracts or
Related Security previously granted by Seller.
Sch. A-1
9. Executed copies of Collection Account Agreements for each Lock-Box and Collection Account.
10. A favorable opinion of legal counsel for the Seller Parties and Performance Guarantor
reasonably acceptable to the Administrator and each Purchaser Agent which addresses the following
matters and such other matters as the Administrator and each Purchaser Agent may reasonably
request:
(a) Each of the Seller Parties and Performance Guarantor is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Delaware.
(b) Each of the Seller Parties and Performance Guarantor has all requisite authority to
conduct its business in each jurisdiction where failure to be so qualified would have a Material
Adverse Effect on such entitys business.
(c) The execution and delivery by each of the Seller Parties and Performance Guarantor of the
Transaction Document to which it is a party and its performance of its obligations thereunder have
been duly authorized by all necessary organizational action and proceedings on the part of such
entity and will not:
(i) require any action by or in respect of, or filing with, any governmental body, agency
or official (other than the filing of UCC financing statements);
(ii) contravene, or constitute a default under, any provision of applicable law or
regulation or of its articles or certificate of incorporation or bylaws or of any agreement,
judgment, injunction, order, decree or other instrument binding upon such entity; or
(iii) result in the creation or imposition of any Lien on assets of such entity or any of
its Subsidiaries (except as contemplated by the Transaction Documents).
(d) Each of the Transaction Documents to which each of the Seller Parties and Performance
Guarantor is a party has been duly executed and delivered by such entity and constitutes the
legally valid, and binding obligation of such entity enforceable in accordance with its terms,
except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
(e) The provisions of the Receivables Purchase Agreement are effective to create valid
security interests in favor of the Administrator, for the benefit of the Secured Parties, in all of
Sellers right, title and interest in and to the Receivables and Related Security described therein
which constitute accounts, chattel paper or general intangibles (each as defined in the UCC)
(collectively, the
Opinion Collateral
), as security for the payment of the Aggregate Unpaids.
(f) Each of the UCC-1 Financing Statements naming Seller as debtor, and Administrator, as
secured party, to be filed with the Secretary of State of Delaware, is in appropriate form for
filing therein. Upon filing of such UCC-1 Financing Statements in such filing offices and payment
of the required filing fees, the security interest in favor of the Administrator, for the benefit
of the Secured Parties, in the Opinion Collateral will be perfected.
Sch. A-2
(g) Based solely on our review of the UCC Search Reports described in Paragraph 4 to this
Schedule A, and assuming (i) the filing of the Financing Statements and payment of the required
filing fees in accordance with paragraph (f) and (ii) the absence of any intervening filings
between the date and time of the Search Reports and the date and time of the filing of the
Financing Statements, the security interest of the Administrator in the Opinion Collateral is prior
to any security interest granted in the Opinion Collateral by Seller, the priority of which is
determined solely by the filing of a financing statement in the applicable filing office.
(h) Neither of the Seller Parties is a holding company or a subsidiary holding company of
a holding company within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or an investment company within the meaning of the Investment Company Act of 1940, as
amended.
11. A Compliance Certificate.
12. The Fee Letter.
13. A Settlement Report as of
_____, 2003.
14. Executed copies of (i) all consents from and authorizations by any Persons and (ii) all
waivers and amendments to existing credit facilities, that are necessary in connection with this
Agreement.
15. If applicable, a direction letter executed by each of the Seller Parties authorizing the
Administrator and each Purchaser Agent, and directing warehousemen to allow the Administrator and
each Purchaser Agent to inspect and make copies from such Seller Partys books and records
maintained at off-site data processing or storage facilities.
16. The Liquidity Agreement, duly executed by each of the parties thereto.
17. If applicable, for each Purchaser that is not incorporated under the laws of the United
States of America, or a state thereof, two duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, as applicable, certifying in either case that such Purchaser is
entitled to receive payments under the Agreement without deduction or withholding of any United
States federal income taxes.
Sch. A-3
Exhibit 10.4
EXECUTION VERSION
CREDIT AGREEMENT
dated as of November 14, 2006,
among
AMERISOURCEBERGEN CORPORATION
The Borrowing Subsidiaries Party Hereto
The Lenders Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
J. P. MORGAN EUROPE LIMITED,
as London Agent
and
THE BANK OF NOVA SCOTIA,
as Canadian Agent
J.P. MORGAN SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC,
as Co-Lead Arrangers and Joint Bookrunners
BANK OF AMERICA, N.A.,
as Syndication Agent
and
THE BANK OF NOVA SCOTIA,
WACHOVIA BANK, NATIONAL ASSOCIATION
and
LEHMAN BROTHERS COMMERCIAL BANK,
as Documentation Agents
TABLE OF CONTENTS
|
|
|
|
|
ARTICLE I
|
|
|
|
|
|
Definitions
|
|
|
|
|
|
SECTION 1.01. Defined Terms
|
|
|
2
|
|
SECTION 1.02. Classification of Loans and Borrowings
|
|
|
29
|
|
SECTION 1.03. Terms Generally
|
|
|
29
|
|
SECTION 1.04. Accounting Terms; GAAP; Pro Forma Computations
|
|
|
30
|
|
SECTION 1.05. Currency Translation
|
|
|
30
|
|
|
|
|
|
|
ARTICLE II
|
|
|
|
|
|
The Credits
|
|
|
|
|
|
SECTION 2.01. Commitments
|
|
|
31
|
|
SECTION 2.02. Loans and Borrowings
|
|
|
32
|
|
SECTION 2.03. Requests for Borrowings
|
|
|
33
|
|
SECTION 2.04. Swingline Loans
|
|
|
34
|
|
SECTION 2.05. Letters of Credit
|
|
|
35
|
|
SECTION 2.06. Canadian Bankers Acceptances
|
|
|
40
|
|
SECTION 2.07. Funding of Borrowings and B/A Drawings
|
|
|
43
|
|
SECTION 2.08. Interest Elections
|
|
|
44
|
|
SECTION 2.09. Termination, Reduction and Increase of Commitments
|
|
|
46
|
|
SECTION 2.10. Repayment of Loans and B/As; Evidence of Debt
|
|
|
48
|
|
SECTION 2.11. Prepayment of Loans
|
|
|
49
|
|
SECTION 2.12. Fees
|
|
|
49
|
|
SECTION 2.13. Interest
|
|
|
51
|
|
SECTION 2.14. Alternate Rate of Interest
|
|
|
52
|
|
SECTION 2.15. Increased Costs
|
|
|
52
|
|
SECTION 2.16. Break Funding Payments
|
|
|
53
|
|
SECTION 2.17. Taxes
|
|
|
54
|
|
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
|
|
|
56
|
|
SECTION 2.19. Mitigation Obligations; Replacement of Lenders
|
|
|
57
|
|
SECTION 2.20. Foreign Subsidiary Costs
|
|
|
58
|
|
SECTION 2.21. Designation of Borrowing Subsidiaries
|
|
|
58
|
|
|
|
|
|
|
ARTICLE III
|
|
|
|
|
|
Representations and Warranties
|
|
|
|
|
|
SECTION 3.01. Organization; Powers
|
|
|
59
|
|
SECTION 3.02. Authorization; Enforceability
|
|
|
59
|
|
SECTION 3.03. Governmental Approvals; No Conflicts
|
|
|
60
|
|
SECTION 3.04. Financial Condition; No Material Adverse Change
|
|
|
60
|
|
SECTION 3.05. Properties
|
|
|
60
|
|
SECTION 3.06. Litigation and Environmental Matters
|
|
|
60
|
|
i
|
|
|
|
|
SECTION 3.07. Compliance with Laws and Agreements
|
|
|
61
|
|
SECTION 3.08. Investment Company Status
|
|
|
61
|
|
SECTION 3.09. Taxes
|
|
|
61
|
|
SECTION 3.10. ERISA
|
|
|
61
|
|
SECTION 3.11. Disclosure
|
|
|
61
|
|
SECTION 3.12. Subsidiaries
|
|
|
62
|
|
SECTION 3.13. Insurance
|
|
|
62
|
|
SECTION 3.14. Labor Matters
|
|
|
62
|
|
SECTION 3.15. Senior Indebtedness
|
|
|
62
|
|
|
|
|
|
|
ARTICLE IV
|
|
|
|
|
|
Conditions
|
|
|
|
|
|
SECTION 4.01. Effective Date
|
|
|
62
|
|
SECTION 4.02. Each Credit Event
|
|
|
63
|
|
SECTION 4.03. Initial Credit Event for each Additional Borrowing Subsidiary
|
|
|
64
|
|
|
|
|
|
|
ARTICLE V
|
|
|
|
|
|
Affirmative Covenants
|
|
|
|
|
|
SECTION 5.01. Financial Statements and Other Information
|
|
|
65
|
|
SECTION 5.02. Notices of Material Events
|
|
|
66
|
|
SECTION 5.03. Existence; Conduct of Business
|
|
|
66
|
|
SECTION 5.04. Payment of Obligations
|
|
|
66
|
|
SECTION 5.05. Maintenance of Properties; Insurance
|
|
|
67
|
|
SECTION 5.06. Books and Records; Inspection and Audit Rights
|
|
|
67
|
|
SECTION 5.07. Compliance with Laws
|
|
|
67
|
|
SECTION 5.08. Use of Proceeds and Letters of Credit
|
|
|
67
|
|
SECTION 5.09. Additional Subsidiaries
|
|
|
67
|
|
SECTION 5.10. Senior Debt Status
|
|
|
67
|
|
|
|
|
|
|
ARTICLE VI
|
|
|
|
|
|
Negative Covenants
|
|
|
|
|
|
SECTION 6.01. Indebtedness
|
|
|
68
|
|
SECTION 6.02. Liens
|
|
|
68
|
|
SECTION 6.03. Fundamental Changes
|
|
|
69
|
|
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
|
|
|
70
|
|
SECTION 6.05. Asset Sales
|
|
|
70
|
|
SECTION 6.06. Hedging Agreements
|
|
|
71
|
|
SECTION 6.07. Restricted Payments; Certain Payments of Indebtedness
|
|
|
71
|
|
SECTION 6.08. Transactions with Affiliates
|
|
|
71
|
|
SECTION 6.09. Restrictive Agreements
|
|
|
72
|
|
SECTION 6.10. Material Documents
|
|
|
72
|
|
SECTION 6.11. Fixed Charge Coverage Ratio
|
|
|
72
|
|
SECTION 6.12. Leverage Ratio
|
|
|
72
|
|
ii
|
|
|
|
|
SECTION 6.13. Fiscal Quarters
|
|
|
73
|
|
|
|
|
|
|
ARTICLE VII
|
|
|
|
|
|
Events of Default
|
|
|
|
|
|
ARTICLE VIII
|
|
|
|
|
|
The Agents
|
|
|
|
|
|
ARTICLE IX
|
|
|
|
|
|
Collection Allocation Mechanism
|
ARTICLE X
|
|
|
|
|
|
Guarantee
|
|
|
|
|
|
ARTICLE XI
|
|
|
|
|
|
Miscellaneous
|
|
|
|
|
|
SECTION 11.01. Notices
|
|
|
79
|
|
SECTION 11.02. Waivers; Amendments
|
|
|
80
|
|
SECTION 11.03. Expenses; Indemnity; Damage Waiver
|
|
|
81
|
|
SECTION 11.04. Successors and Assigns
|
|
|
82
|
|
SECTION 11.05. Survival
|
|
|
85
|
|
SECTION 11.06. Counterparts; Integration; Effectiveness
|
|
|
86
|
|
SECTION 11.07. Severability
|
|
|
86
|
|
SECTION 11.08. Right of Setoff
|
|
|
86
|
|
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process
|
|
|
86
|
|
SECTION 11.10. WAIVER OF JURY TRIAL
|
|
|
87
|
|
SECTION 11.11. Headings
|
|
|
87
|
|
SECTION 11.12. Confidentiality
|
|
|
87
|
|
SECTION 11.13. Interest Rate Limitation
|
|
|
88
|
|
SECTION 11.14. Releases of Guarantors
|
|
|
88
|
|
SECTION 11.15. U.S.A. PATRIOT Act
|
|
|
89
|
|
SECTION 11.16. Termination of Guarantee Agreement
|
|
|
89
|
|
SECTION 11.17. Non-Public Information
|
|
|
89
|
|
SECTION 11.18. No Fiduciary Duty
|
|
|
89
|
|
SECTION 11.19. Conversion of Currencies
|
|
|
90
|
|
SECTION 11.20. Waiver of Notice Period in connection with Termination of
the Existing US Credit Agreement
|
|
|
90
|
|
iii
Schedules
|
|
|
|
|
Schedule 1.01 Applicable Funding Account
|
|
|
|
|
Schedule 2.01 Commitments
|
|
|
|
|
Schedule 2.05 Existing Letters of Credit
|
|
|
|
|
Schedule 3.12 Subsidiaries
|
|
|
|
|
Schedule 3.13 Insurance
|
|
|
|
|
Schedule 6.02 Existing Liens
|
|
|
|
|
Schedule 6.09 Existing Restrictions
|
|
|
|
|
Exhibits
|
|
|
|
|
Exhibit A Form of Assignment and Assumption
|
|
|
|
|
Exhibit B-1 Form of Borrower Joinder Agreement
|
|
|
|
|
Exhibit B-2 Form of Borrower Termination Agreement
|
|
|
|
|
Exhibit C Form of Borrowing Request
|
|
|
|
|
Exhibit D Form of Guarantee Agreement
|
|
|
|
|
Exhibit E Mandatory Costs Rate
|
|
|
|
|
Exhibit F-1 Form of Opinion of Dechert LLP, Counsel for the Company
|
|
|
|
|
Exhibit F-2 Form of Opinion of John G. Chou, Deputy General Counsel of the Company
|
|
|
|
|
Exhibit F-3 Form of Opinion of McMillan Binch Mendelsohn LLP
|
|
|
|
|
Exhibit F-4 Form of Opinion of Dechert LLP, Counsel for the UK Borrowing Subsidiary
|
|
|
|
|
iv
CREDIT AGREEMENT dated as of November 14, 2006 (this
Agreement)
, among
AMERISOURCEBERGEN CORPORATION (the
Company
); the Borrowing Subsidiaries from time to
time party hereto; the LENDERS from time to time party hereto; JPMORGAN CHASE BANK,
N.A., as Administrative Agent; J.P. MORGAN EUROPE LIMITED, as London Agent; and THE BANK
OF NOVA SCOTIA, as Canadian Agent.
The Borrowers (such term and each other capitalized term used and not otherwise defined herein
having the meaning assigned to it in Article I) have requested the Lenders to extend, and the
Lenders are willing, on the terms and subject to the conditions set forth herein, to extend, credit
in the form of:
(a) Global Tranche Commitments under which (i) the Global Tranche Borrowers may obtain
Revolving Loans in US Dollars, Sterling, Euro, Designated Currencies and, in the case of Global
Tranche Borrowers that are Canadian Subsidiaries, Canadian Dollars, (ii) the Company and other
Global Tranche Borrowers that are US Subsidiaries or Canadian Subsidiaries may obtain Swingline
Loans in US Dollars, (iii) Global Tranche Borrowers that are Canadian Subsidiaries may obtain
Swingline Loans in Canadian Dollars, (iv) the Global Tranche Borrowers may obtain Letters of Credit
in US Dollars, Sterling, Euro, Designated Currencies and, in the case of Global Tranche Borrowers
that are Canadian Subsidiaries, Canadian Dollars and (v) Global Tranche Borrowers that are Canadian
Subsidiaries may issue and sell Global Tranche B/As.
(b) US/UK Tranche Commitments under which the US/UK Tranche Borrowers may obtain Revolving
Loans in US Dollars, Sterling, Euro and Designated Currencies.
(c) US/Canadian Tranche Commitments under which (i) the US/Canadian Tranche Borrowers may
obtain Revolving Loans in US Dollars and Designated Currencies, (ii) US/Canadian Tranche Borrowers
that are Canadian Subsidiaries may obtain Revolving Loans denominated in Canadian Dollars,
(iii) US/Canadian Tranche Borrowers that are Canadian Subsidiaries may issue and sell US/Canadian
Tranche B/As, (iv) the Company and other US/Canadian Tranche Borrowers that are US Subsidiaries or
Canadian Subsidiaries may obtain Swingline Loans in US Dollars and (v) US/Canadian Tranche
Borrowers that are Canadian Subsidiaries may obtain Swingline Loans in Canadian Dollars.
(d) US Tranche Commitments under which the US Tranche Borrowers may obtain Revolving Loans in
US Dollars.
The proceeds of Loans made, and B/As accepted and purchased, under the Global Tranche and
Loans made under the US Tranche will be used (a) on the Effective Date, to repay the loans and
other amounts outstanding or payable under the Existing US Credit Agreement and (b) on and after
the Effective Date, for general corporate purposes of the Company and the Subsidiaries. The
proceeds of the Loans made under the US/UK Tranche will be used (a) on the Effective Date, to repay
the loans and other amounts outstanding or payable under the Existing UK Credit Agreement and
(b) on and after the Effective Date, for general corporate purposes of the Company and the
Subsidiaries. The proceeds of the Loans made, and B/As accepted and purchased, under the
US/Canadian Tranche will be used (a) on the Effective Date, to repay the loans and other amounts
outstanding or payable under the Existing Canadian Credit Agreement and (b) on and after the
Effective Date, for general corporate purposes of the Company and the Subsidiaries. Letters of
Credit and Swingline Loans will be used by the Company and the Subsidiaries for general corporate
purposes.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01.
Defined Terms
. As used in this Agreement, the following terms have the
meanings specified below:
ABR
, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.
Accession Agreement
has the meaning set forth in Section 2.09(d).
Adjusted EURIBO Rate
means, with respect to any EURIBOR Borrowing for any Interest Period,
an interest rate per annum equal to the sum of (a) the EURIBO Rate for such Interest Period and
(b) the Mandatory Costs Rate.
Adjusted LIBO Rate
means (a) with respect to any LIBOR Borrowing denominated in US Dollars
for any Interest Period, an interest rate per annum equal to the product of (i) the LIBO Rate for
US Dollars for such Interest Period multiplied by (ii) the Statutory Reserve Rate and (b) with
respect to any LIBOR Borrowing denominated in Sterling or any Designated Currency for any Interest
Period, an interest rate per annum equal to the sum of (x) the LIBO Rate for such currency and such
Interest Period
plus
(y) the Mandatory Costs Rate.
Administrative Agent
means JPMorgan Chase Bank, N.A., in its capacity as administrative
agent for the Lenders hereunder, or any successor appointed in accordance with Article VIII.
Administrative Questionnaire
means an Administrative Questionnaire in a form supplied by the
Administrative Agent.
Affiliate
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.
Agents
means the Administrative Agent, the London Agent and the Canadian Agent.
Alternate Base Rate
means, for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus
1
/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective from and including the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate, as the case may be.
Alternative Currency
means any currency other than US Dollars, Sterling, Euros or Canadian
Dollars.
Applicable Agent
means (a) with respect to a Loan or Borrowing denominated in US Dollars
(other than any such Loan or Borrowing of a Canadian Borrowing Subsidiary) or any Letter of Credit,
and with respect to any payment hereunder that does not relate to a particular Loan,
2
Borrowing, B/A or Letter of Credit, the Administrative Agent, (b) with respect to a Loan or
Borrowing of a Canadian Borrowing Subsidiary denominated in US Dollars, a Loan or Borrowing
denominated in Canadian Dollars or a B/A, the Canadian Agent and (c) with respect to a Loan or
Borrowing denominated in a currency other than US Dollars or Canadian Dollars, the London Agent.
Applicable Funding Account
means, as to each Borrower, the applicable account with the
Applicable Agent (or one of its Affiliates) specified on
Schedule 1.01
hereto or set forth
in such Borrowers Borrower Joinder Agreement entered pursuant to Section 2.21, or any other
account with the Applicable Agent (or one of its Affiliates) that shall be specified in a written
notice signed by a Financial Officer and delivered to and approved by such Applicable Agent.
Applicable Rate
means, for any day, the applicable rate per annum set forth below under the
caption Facility Fee Rate or LIBOR/EURIBOR Spread and B/A Stamping Fee, as the case may be,
based upon the ratings established by S&P, Moodys and Fitch for the Index Debt as of the most
recent determination date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBOR/EURIBOR
|
|
|
|
|
|
|
|
|
|
Spread and B/A
|
|
|
|
Ratings
|
|
Facility Fee Rate
|
|
|
Stamping Fee
|
|
Category
|
|
(S&P/Moodys/Fitch)
|
|
(basis points per annum)
|
|
|
(basis points per annum)
|
|
Category 1
|
|
A/A2/A or higher
|
|
|
6.0
|
|
|
|
19.0
|
|
Category 2
|
|
A-/A3/A-
|
|
|
7.0
|
|
|
|
23.0
|
|
Category 3
|
|
BBB+/Baa1/BBB+
|
|
|
8.0
|
|
|
|
32.0
|
|
Category 4
|
|
BBB/Baa2/BBB
|
|
|
10.0
|
|
|
|
40.0
|
|
Category 5
|
|
BBB-/Baa3/BBB-
|
|
|
12.5
|
|
|
|
50.0
|
|
Category 6
|
|
BB+/Ba1/BB+ or lower
|
|
|
15.0
|
|
|
|
60.0
|
|
For purposes of the foregoing, (i) if any of Moodys, S&P or Fitch shall not have in effect a
rating for the Index Debt (other than by reason of the circumstances referred to in the last
sentence of this definition), then such rating agency shall be deemed to have established a rating
in Category 6; (ii) if the ratings established or deemed to have been established by Moodys, S&P
and Fitch for the Index Debt shall fall within different Categories, the Applicable Rate shall be
based on the Category in which two of such ratings shall fall or, if there shall be no such
Category, on the Category in which the second highest of the three ratings shall fall; and (iii) if
the rating established or deemed to have been established by Moodys, S&P or Fitch for the Index
Debt shall be changed (other than as a result of a change in the rating system of Moodys, S&P or
Fitch), such change shall be effective as of the date on which it is first announced by the
applicable rating agency. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Moodys, S&P or Fitch shall change,
or if any such rating agency shall cease to be in the business of rating corporate debt
obligations, the Company and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the ratings of the other rating agencies (or, if the circumstances referred to in this
sentence shall affect all such rating agencies, the ratings most recently in effect prior to such
changes or cessations).
3
Applicable Swingline Lender
means (a) with respect to any Swingline Loan denominated in US
Dollars (other than any such Swingline Loan to a Canadian Borrowing Subsidiary), JPMorgan Chase
Bank, N.A. and (b) with respect to any Swingline Loan to a Canadian Borrowing Subsidiary, The Bank
of Nova Scotia.
Approved Fund
has the meaning assigned to such term in Section 11.04.
Arrangers
means J.P. Morgan Securities Inc. and Banc of America Securities LLC.
Assignment and Assumption
means an assignment and assumption entered into by a Lender and an
assignee (with the consent of any party whose consent is required by Section 11.04), and accepted
by the Administrative Agent, in the form of
Exhibit A
or any other form approved by the
Administrative Agent.
Authorized Non-Canadian Bank
has the meaning assigned to the term Authorized Foreign Bank
in subsection 248(1) of the ITA and, by reference therein, the meaning assigned to the term
Authorized Foreign Bank in section 2 of the Bank Act (Canada), as amended, and any successor
thereto.
Availability Period
means the period from and including the Effective Date to but excluding
the earlier of the Maturity Date and the date of termination of the Commitments.
B/A
means a bill of exchange, including a depository bill issued in accordance with the
Depository Bills and Notes Act (Canada), denominated in Canadian Dollars, drawn by a Canadian
Borrowing Subsidiary and accepted by a Lender in accordance with the terms of this Agreement.
B/A Drawing
means Global Tranche B/As or US/Canadian Tranche B/As accepted and purchased
(and any B/A Equivalent Loans made in lieu of such acceptance and purchase) on the same date and as
to which a single Contract Period is in effect.
B/A Equivalent Loan
has the meaning assigned to such term in Section 2.06(k).
Board
means the Board of Governors of the Federal Reserve System of the United States of
America.
Borrower
means any Global Tranche Borrower, US/UK Tranche Borrower, US/Canadian Tranche
Borrower or US Tranche Borrower.
Borrower Joinder Agreement
means a Borrower Joinder Agreement substantially in the form of
Exhibit B-1
.
Borrower Termination Agreement
means a Borrower Termination Agreement, substantially in the
form of
Exhibit B-2
.
Borrowing
means (a) Loans of the same Class and Type made, converted or continued on the
same date and, in the case of LIBOR Loans, as to which a single Interest Period is in effect or
(b) a Swingline Loan.
Borrowing Minimum
means (a) in the case of a Borrowing denominated in US Dollars,
US$5,000,000, (b) in the case of a Borrowing denominated in Sterling, £3,000,000, (c) in
4
the case of a Borrowing denominated in Euros, 3,000,000, (d) in the case of a Borrowing
denominated in Canadian Dollars, Cdn.$5,000,000 and (e) in the case of a Borrowing denominated in
any Alternative Currency, the smallest amount of such Alternative Currency that is an integral
multiple of 1,000,000 units of such currency and that has a US Dollar Equivalent in excess of
US$5,000,000.
Borrowing Multiple
means (a) in the case of a Borrowing denominated in US Dollars,
US$100,000, (b) in the case of a Borrowing denominated in Sterling, £50,000, (c) in the case of a
Borrowing denominated in Euros, 50,000, (d) in the case of a Borrowing denominated in Canadian
Dollars, Cdn.$100,000 and (e) in the case of a Borrowing denominated in any Alternative Currency,
100,000 units of such currency.
Borrowing Request
means a request by a Borrower for a Revolving Borrowing in accordance with
Section 2.03.
Borrowing Subsidiary
means (a) Brecon Holdings Limited, a company organized under the laws
of England and Wales, (b) AmerisourceBergen Canada Corporation, a corporation organized under the
laws of Canada and (c) any other Subsidiary that has become a Borrowing Subsidiary as provided in
Section 2.21 and has not ceased to be a Borrowing Subsidiary as provided in such Section.
Business Day
means any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to remain closed;
provided
, that (a) when
used in connection with a LIBOR Loan in any currency, the term
Business Day
shall also exclude
any day on which banks are not open for dealings in deposits in such currency in the London
interbank market, (b) when used in connection with a EURIBOR Loan, the term
Business Day
shall
also exclude any day on which the TARGET payment system is not open for the settlement of payments
in Euros, (c) when used in connection with a Canadian Prime Rate Loan (including any Swingline Loan
denominated in Canadian Dollars) or a B/A, the term
Business Day
shall also exclude any day on
which banks are not open for
business in Toronto and (d) when used in connection with a Loan to any Borrower organized in a
jurisdiction other than the United States of America, the United Kingdom or Canada, the term
Business Day
shall also exclude any day on which commercial banks in the jurisdiction of
organization of such Borrower are authorized or required by law to remain closed.
CAM
means the mechanism for the allocation and exchange of interests in the Tranches and the
collections thereunder established under Article IX.
CAM Exchange
means the exchange of the Lenders interests provided for in Article IX.
CAM Exchange Date
means the date on which any event referred to in clause (h) or (i) of
Article VII shall occur with respect to the Company.
CAM Percentage
means, as to each Lender, a fraction, expressed as a decimal, of which
(a) the numerator shall be the sum of the US Dollar Equivalents (determined on the basis of
Exchange Rates prevailing on the CAM Exchange Date) of the Designated Obligations owed to such
Lender (whether or not at the time due and payable) immediately prior to the CAM Exchange and
(b) the denominator shall be the sum of the US Dollar Equivalents (as so determined) of the
Designated Obligations owed to all the Lenders (whether or not at the time due and payable)
immediately prior to the CAM Exchange. For purposes of determining the CAM Percentages, the amount
payable in respect of any B/A shall be deemed to be the face amount
5
thereof, reduced by the unaccreted portion of the discount at which such B/A shall have been
purchased (taking into account the applicable Discount Rates and acceptance fees), as determined by
the Administrative Agent in accordance with accepted financial practice.
Canadian Agent
means The Bank of Nova Scotia, in its capacity as Canadian agent for the
Lenders hereunder, or any successor appointed in accordance with Article VIII.
Canadian Borrowing Subsidiary
means any Borrowing Subsidiary that is a Canadian Subsidiary.
Canadian Banking Business
has the meaning assigned to such term in subsection 248(1) of the
ITA.
Canadian Banking Business Asset
means an amount receivable the interest on which is, or
would be, an amount paid or credited to an Authorized Non-Canadian Bank in respect of its Canadian
Banking Business.
Canadian Dollars
or
Cdn.$
means the lawful money of Canada.
Canadian Prime Rate
means, for any day, the rate of interest per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greater of (a) the interest rate per annum
publicly announced from time to time by the Canadian Agent as its reference rate in effect on such
day at its principal office in Toronto for determining interest rates applicable to commercial
loans denominated in Canadian Dollars and made by it in Canada (each change in such reference rate
being effective from and including the date such change is publicly announced as being effective)
and (b) the interest rate per annum equal to the sum of (i) the CDOR Rate on such day (or, if such
rate is not so reported on the Reuters Screen CDOR Page, the average of the rate quotes for
bankers acceptances denominated in Canadian Dollars with a one month term received by the Canadian
Agent at approximately 10:00 a.m., Toronto time, on such day (or, if such day is not a Business
Day, on the next preceding Business Day) from the Schedule I Reference Lenders) and (ii) 0.50% per
annum.
Canadian Subsidiary
means any Subsidiary that is incorporated or otherwise organized under
the laws of Canada or any political subdivision thereof.
Capital Lease Obligations
of any Person means the obligations of such Person to pay rent or
other amounts under any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be classified and accounted
for as capital leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance with GAAP.
CDOR Rate
means, on any date, an interest rate per annum equal to the stated average
discount rate applicable to bankers acceptances denominated in Canadian Dollars with a term of one
month (for purposes of the definition of
Canadian Prime Rate
) or with a term equal to the
Contract Period of the relevant B/As (for purposes of the definition of
Discount Rate
) appearing
on the Reuters Screen CDOR Page (or on any successor or substitute page of such Screen, or any
successor to or substitute for such Screen, providing rate quotations comparable to those currently
provided on such page of such Screen, as determined by the Canadian Agent from time to time) at
approximately 10:00 a.m., Toronto time, on such date (or, if such date is not a Business Day, on
the next preceding Business Day).
6
Change in Control
means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), of Equity Interests representing more than 30% of either the aggregate ordinary
voting power or the aggregate equity value represented by the issued and outstanding Equity
Interests of the Company; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Company by Persons who were not (i) directors of the Company on the
date of this Agreement, (ii) nominated by the board of directors of the Company or (iii) appointed
by directors referred to in the preceding clauses (i) and (ii); or (c) the occurrence of a Change
of Control (or other similar event or condition however denominated) under any Material
Indebtedness.
Change in Law
means (a) the adoption of any law, rule or regulation after the Closing Date,
(b) any change in any law, rule or regulation or in the interpretation or application thereof by
any Governmental Authority after the Closing Date or (c) compliance by any Lender or Issuing Bank
(or, for purposes of Section 2.15(b), by any lending office of such Lender or Issuing Bank or by
such Lenders or Issuing Banks holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or issued after the
Closing Date.
Claims
has the meaning set forth in Section 2.18(c).
Class
, when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, are Global Tranche Revolving Loans, US/UK Tranche Revolving
Loans, US/Canadian Tranche Revolving Loans, US Tranche Revolving Loans, Global Tranche Swingline
Loans or US/Canadian Tranche Swingline Loans, and (b) any Commitment, refers to whether such
Commitment is a Global Tranche Commitment, a US/UK Tranche Commitment, a US/Canadian Tranche
Commitment or a US Tranche Commitment.
Closing Date
means the date of this Agreement.
Code
means the Internal Revenue Code of 1986, as amended from time to time.
Commitments
means the Global Tranche Commitments, the US/UK Tranche Commitments, the
US/Canadian Tranche Commitments and the US Tranche Commitments, as the case may be. The aggregate
amount of the Commitments as of the Closing Date is US$750,000,000.
Commitment Increase
has the meaning set forth in Section 2.09(e).
Consolidated Cash Interest Expense
means, for any period, the sum, without duplication, of
(i) the cash interest expense of the Company and the Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, excluding premiums, transaction expenses, discounts and
other amounts
required to be amortized and (ii) all discount, interest, fees, premiums and other charges in
respect of all Securitizations for such period.
Consolidated EBITDA
means, for any period, Consolidated Net Income for such period plus
(a) without duplication and to the extent deducted in determining such Consolidated Net Income, the
sum, without duplication, of (i) consolidated interest expense for such period, (ii) consolidated
income tax expense for such period, (iii) all amounts attributable to depreciation and amortization
for such period, (iv) any special one-time or extraordinary charges
7
or extraordinary losses for such period, in each case to the extent not involving cash payments by
the Company or any Subsidiary in such period or any future period, and (vi) any LIFO adjustment (if
negative) or charge for such period and
minus
(b) without duplication and to the extent
included in determining such Consolidated Net Income, any extraordinary non-cash gains for such
period and any LIFO adjustment (if positive) or credit, all determined on a consolidated basis in
accordance with GAAP. In the event that the Company or any Subsidiary shall have completed an
acquisition or disposition of any material Person, division or business unit since the beginning of
the relevant period, Consolidated EBITDA shall be determined for such period on a
pro
forma
basis as if such acquisition or disposition, and any related incurrence or repayment
of Indebtedness, had occurred at the beginning of such period.
Consolidated EBITDAR
means, for any period, Consolidated EBITDA for such period plus rental
payments by the Company and the Subsidiaries for such period (other than under capital leases),
determined on a consolidated basis in accordance with GAAP.
Consolidated Net Income
means, for any period, the net income or loss of the Company and the
Subsidiaries for such period determined on a consolidated basis in accordance with GAAP;
provided
that there shall be excluded (a) the income or loss of any Person (other than the Company) that is
not a Subsidiary, except to the extent of the amount of dividends or other distributions actually
paid to the Company or any of the Subsidiaries during such period, and (b) the income or loss of
any Person accrued prior to the date it becomes a Subsidiary or is merged into, amalgamated with or
consolidated with the Company or any Subsidiary or the date that such Persons assets are acquired
by the Company or any Subsidiary.
Consolidated Tangible Assets
means the book value of the total consolidated assets of the
Company and the Subsidiaries less the book value of all intangible assets, including goodwill,
trademarks, non-compete agreements, customer relationships, patents, unamortized deferred financing
fees, and other rights or nonphysical resources that are presumed to represent an advantage to the
Company in the marketplace, in each case determined on a consolidated basis in accordance with
GAAP.
Contract Period
means, with respect to any B/A, the period commencing on the date such B/A
is issued, accepted and purchased and ending on the date that is seven, 14, 30, 60, 90 or 180 days
thereafter, as the applicable Canadian Borrowing Subsidiary may elect or, to the extent agreed to
by each Lender of the applicable Tranche, such other number of days (not in excess of 180) as shall
be requested by the applicable Canadian Borrowing Subsidiary;
provided
that if such Contract Period
would end on a day other than a Business Day, such Contract Period shall be extended to the next
succeeding Business Day.
Control
means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise.
Controlling
and
Controlled
have meanings correlative thereto.
Default
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of time or both would, unless cured or waived, become an Event of Default.
Designated Currency
means, in relation to any Tranche, any currency (a) that is freely
transferable and convertible into US Dollars in the London market, (b) for which LIBO Rates can be
determined by
reference to the Telerate screen as provided in the definition of
LIBO Rate
and (c) that has
been designated by the Administrative Agent as a Designated Currency
8
under such Tranche at the request of the Company and with the consent of each Lender with a
Commitment or a Revolving Credit Exposure under such Tranche. If the applicable Lenders and the
Administrative Agent shall so elect, the designation of a currency as a Designated Currency in
relation to any Tranche may be limited to one or more of the Borrowers entitled to borrow under
such Tranche.
Designated Obligations
shall mean all obligations of the Borrowers with respect to
(a) principal of and interest on the Revolving Loans, (b) participations in Swingline Loans funded
by the Global Tranche Lenders or the US/Canadian Tranche Lenders, (c) amounts payable to the
Lenders in respect of B/As, (d) unreimbursed L/C Disbursements and interest thereon and (c) all
facility fees and Letter of Credit participation fees.
Designated Subsidiary
means each Subsidiary that is not an Excluded Subsidiary.
Discount Proceeds
means, with respect to any B/A, an amount (rounded upward, if necessary,
to the nearest Cdn.$.01) calculated by multiplying (a) the face amount of such B/A by (b) the
quotient obtained by dividing (i) one by (ii) the sum of (A) one and (B) the product of (x) the
Discount Rate (expressed as a decimal) applicable to such B/A and (y) a fraction of which the
numerator is the Contract Period applicable to such B/A and the denominator is 365, with such
quotient being rounded upward or downward to the fifth decimal place and .000005 being rounded
upward.
Discount Rate
means, with respect to a B/A being accepted and purchased on any day, (a) for
a Lender which is a Schedule I Lender, (i) the CDOR Rate applicable to such B/A or (ii) if the
discount rate for a particular Contract Period is not quoted on the Reuters Screen CDOR Page, the
arithmetic average (as determined by the Canadian Agent) of the percentage discount rates
(expressed as a decimal and rounded upward, if necessary, to the nearest 1/100 of 1%) quoted to the
Canadian Agent by the Schedule I Reference Lenders as the percentage discount rate at which each
such bank would, in accordance with its normal practices, at approximately 10:00 a.m., Toronto
time, on such day, be prepared to purchase bankers acceptances accepted by such bank having a face
amount and term comparable to the face amount and Contract Period of such B/A and (b) for a lender
which is a Non-Schedule I Lender, the lesser of (i) the CDOR Rate applicable to such B/A referred
to in clause (a) above as if such Non-Schedule I Lender were a Schedule I Lender
plus
0.10% per annum and (ii) the arithmetic average (as determined by the Canadian Agent) of the
percentage discount rates (expressed as a decimal and rounded upward, if necessary, to the nearest
1/100 of 1%) quoted to the Canadian Agent by the Non-Schedule I Reference Lenders as the percentage
discount rate at which each such bank would, in accordance with its normal practices, at
approximately 10:00 a.m., Toronto time, on such day, be prepared to purchase bankers acceptances
accepted by such bank having a face amount and term comparable to the face amount and Contract
Period of such B/A.
Domestic Subsidiary
means any Subsidiary other than a Foreign Subsidiary.
Effective Date
means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 11.02).
Environmental Laws
means all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.
9
Environmental Liability
means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Company or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
Equity Interests
means shares of capital stock, partnership interests, membership interests
in a limited liability company, beneficial interests in a trust or other equity ownership interests
in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time to
time.
ERISA Affiliate
means any trade or business (whether or not incorporated) that, together
with the Company, is treated as a single employer under Section 414(b) or (c) of the Code or,
solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
ERISA Event
means (a) any reportable event, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an accumulated funding
deficiency (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning
the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
EURIBO Rate
means, with respect to any EURIBOR Borrowing for any Interest Period, (a) the
applicable Screen Rate or (b) if no Screen Rate is available for such Interest Period, the
arithmetic mean of the rates quoted by the Reference Banks to leading banks in the Banking
Federation of the European Union for the offering of deposits in Euros and for a period comparable
to such Interest Period, in each case as of the Specified Time on the Quotation Day.
EURIBOR
, when used in reference to any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the
Adjusted EURIBO Rate.
Euro
or
means the single currency of the European Union as constituted by the Treaty
on European Union and as referred to in the EMU Legislation.
10
Event of Default
has the meaning assigned to such term in Article VII.
Exchange Rate
means on any day, for purposes of determining the US Dollar Equivalent of any
other currency, the rate at which such other currency may be exchanged into US Dollars at the time
of determination on such day as set forth on the Reuters WRLD Page for such currency. In the event
that such
rate does not appear on any Reuters WRLD Page, the Exchange Rate shall be determined by
reference to such other publicly available service for displaying exchange rates as may be agreed
upon by the Applicable Agent and the Company, or, in the absence of such an agreement, such
Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the
Applicable Agent in the market where its foreign currency exchange operations in respect of such
currency are then being conducted, at or about such time as the Applicable Agent shall elect after
determining that such rates shall be the basis for determining the Exchange Rate, on such date for
the purchase of US Dollars for delivery two Business Days later;
provided
that if at the time of
any such determination, for any reason, no such spot rate is being quoted, the Applicable Agent may
use any reasonable method it deems appropriate to determine such rate, and such determination shall
be conclusive absent manifest error.
Excluded Subsidiary
means (a) Foreign Subsidiaries, (b) Securitization Entities,
(c) Subsidiaries that are less than 100% owned by the Company to the extent such Subsidiaries are
prohibited by shareholders agreements, joint venture agreements or other similar organizational
documents from guaranteeing the Obligations, (d) Subsidiaries that have assets (including Equity
Interests in other Subsidiaries) of less than $10,000,000 for any such Subsidiary (
provided
that
all such Subsidiaries assets shall not be in excess of $100,000,000 in the aggregate) and (e) JM
Blanco, Inc.
Excluded Taxes
means (a) with respect to any Lender, (i) income or franchise taxes imposed
on (or measured by) its net income by the United States of America or by the jurisdiction under the
laws of which such Lender is organized, in which its principal office is located or in which its
applicable lending office is located (or taxes on capital, in the case of any Lender located in
Canada), (ii) any branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a)(i) above and (iii) any withholding tax
that is attributable to the failure of such Lender to comply with Section 2.17(e), (b) with respect
to any Global Tranche Lender (other than a Lender that becomes a Global Tranche Lender through an
assignment under Section 2.19(b) or by operation of the CAM), any withholding tax that is imposed
on amounts payable by a Global Tranche Borrower organized in the United States of America, the
United Kingdom or Canada by any taxation authority of such Borrowers jurisdiction of organization
(including country) on amounts payable from locations within such jurisdiction to such Lenders
Global Tranche Lending Office designated for Global Tranche Borrowers organized in such
jurisdiction, to the extent such tax is in effect and applicable (assuming the taking by such
Borrower and such Lender of all actions required in order for available exemptions from such tax to
be effective) at the time such Lender becomes a party to this Agreement (or designates a new Global
Tranche Lending Office for Global Tranche Borrowers organized in such jurisdiction), except to the
extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts with respect to such withholding tax
pursuant to Section 2.17, (c) with respect to any US/UK Tranche Lender (other than a Lender that
becomes a US/UK Tranche Lender through an assignment under Section 2.19(b) or by operation of the
CAM), any withholding tax that is imposed on amounts payable by a US/UK Tranche Borrower organized
in the United States of America or the United Kingdom by any taxation authority of such Borrowers
jurisdiction of organization (including country) on amounts payable from locations within such
jurisdiction to such Lenders US/UK Tranche Lending Office designated for US/UK Tranche Borrowers
11
organized in such jurisdiction, to the extent such tax is in effect and applicable (assuming the
taking by such Borrower and such Lender of all actions required in order for available exemptions
from such tax to be effective) at the time such Lender becomes a party to this Agreement (or
designates a new US/UK Tranche Lending Office for US/UK Tranche Borrowers organized in such
jurisdiction), except to the extent that such Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive additional amounts with
respect to such withholding tax pursuant to Section 2.17, (d) with respect to any US/Canadian
Tranche Lender (other than a Lender that becomes a US/Canadian Tranche Lender through an assignment
under Section 2.19(b) or by operation of the CAM), any withholding tax that is imposed on amounts
payable by a US/Canadian Tranche Borrower organized in the United States of America or Canada by
any taxation authority of such Borrowers jurisdiction of organization (including country) on
amounts payable from locations within such jurisdiction to such
Lenders US/Canadian Tranche Lending Office designated for US/Canadian Tranche Borrowers organized
in such jurisdiction, to the extent such tax is in effect and applicable (assuming the taking by
such Borrower and such Lender of all actions required in order for available exemptions from such
tax to be effective) at the time such Lender becomes a party to this Agreement (or designates a new
US/Canadian Tranche Lending Office for US/Canadian Tranche Borrowers organized in such
jurisdiction), except to the extent that such Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive additional amounts with
respect to such withholding tax pursuant to Section 2.17 and (e) with respect to any US Tranche
Lender (other than a Lender that becomes a US Tranche Lender through an assignment under
Section 2.19 or by operation of the CAM), any withholding tax that is imposed on amounts payable by
a US Tranche Borrower organized in the United States of America by such Borrowers jurisdiction of
organization on amounts payable from locations within such jurisdiction to such Lenders US Tranche
Lending Office designated for US Tranche Borrowers organized in such jurisdiction, to the extent
such tax is in effect and applicable (assuming the taking by such Borrower and such Lender of all
actions required in order for available exemptions from such tax to be effective) at the time such
Lender becomes a party to this Agreement (or designates a new US Tranche Lending Office for US
Tranche Borrowers organized in such jurisdiction), except to the extent that such Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts with respect to such withholding tax pursuant to Section 2.17.
Existing Canadian Credit Agreement
means the Credit Agreement dated as of October 3, 2005,
as amended, among the Company, AmerisourceBergen Canada Corporation, the lenders from time to time
party thereto and the Bank of Nova Scotia, as administrative agent.
Existing US Credit Agreement
means the Credit Agreement dated as of December 2, 2004, as
amended, among the Company, the lenders from time to time party thereto and JPMorgan Chase Bank,
N.A., as administrative agent.
Existing UK Credit Agreement
means the Facility Agreement dated as of March 1, 2006, as
amended, among the Company, Brecon Holdings Limited and Barclays Bank PLC.
Existing Letters of Credit
means each letter of credit previously issued for the account of
the Company pursuant to the Existing US Credit Agreement that (a) is outstanding on the Effective
Date and (b) listed on
Schedule 2.05
.
Federal Funds Effective Rate
means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
12
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
Financed Amount
means, at any time, with respect to any Securitization, (a) if such
Securitization involves any transfer of interests in accounts receivable or inventory (i) to a
trust, partnership, corporation or other entity (other than a Subsidiary) or (ii) in the case of a
Securitization of accounts receivable, directly to one or more investors or other purchasers (other
than any Subsidiary), the aggregate amount of the interests in accounts receivable so transferred,
net of collections applied to such interests and net of any such interests that have been written
off as uncollectible, or the aggregate book value of the interests in inventory transferred
pursuant to such Securitization and not sold or otherwise disposed of by the purchaser or
purchasers, or (b) if such Securitization involves a transaction in which a Subsidiary incurs
Indebtedness secured by Liens on accounts receivable, the aggregate outstanding principal amount of
the Indebtedness secured by Liens on accounts receivable incurred pursuant to such Securitization.
Financial Officer
means (a) with respect to the Company, the chief financial officer,
principal accounting officer, treasurer, controller, assistant treasurer or director of treasury of
the Company and (b) with respect to any Borrowing Subsidiary, the chief financial officer,
principal accounting officer, treasurer, controller, assistant treasurer or director of treasury of
the Company or such Borrowing Subsidiary.
Fitch
means Fitch, Inc.
Foreign Subsidiary
means any Subsidiary that is organized under the laws of a jurisdiction
other than the United States of America, any State thereof or the District of Columbia.
GAAP
means generally accepted accounting principles in the United States of America.
Global Tranche
has the meaning set forth in the definition of Tranche.
Global Tranche B/As
means a B/As accepted and purchased pursuant to the Global Tranche
Commitments.
Global Tranche Borrower
means (a) the Company, (b) any US Borrowing Subsidiary, (c) any UK
Borrowing Subsidiary, (d) any Canadian Borrowing Subsidiary and (e) any Borrowing Subsidiary that
is not a US Borrowing Subsidiary, a UK Borrowing Subsidiary or a Canadian Borrowing Subsidiary and
that has been designated by the Administrative Agent as a Global Tranche Borrower at the request of
the Company and with the consent of each Global Tranche Lender.
Global Tranche Commitment
means, with respect to each Global Tranche Lender, the commitment
of such Global Tranche Lender to make Global Tranche Revolving Loans pursuant to Section 2.01(a),
to accept and purchase Global Tranche B/As pursuant to Section 2.06 and to acquire participations
in Global Tranche Swingline Loans and Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Global Tranche Lenders Global Tranche Revolving
Credit Exposure hereunder, as such commitment may be reduced or increased from time to time
pursuant to Section 2.09 or assignments by or to such
13
Global Tranche Lender pursuant to Section 11.04. The initial amount of each Global Tranche Lenders
Global Tranche Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption
pursuant to which such Global Tranche Lender shall have assumed its Global Tranche Commitment, as
the case may be. The aggregate amount of Global Tranche Commitments on the Closing Date is
US$260,000,000.
Global Tranche Lender
means a Lender with a Global Tranche Commitment or a Global Tranche
Revolving Credit Exposure.
Global Tranche Lending Office
means, with respect to any Global Tranche Lender, the
office(s) of such Lender (or any Affiliate of such Lender) specified as its Global Tranche Lending
Office(s) on Schedule 2.01 or, as to any Person that becomes a Global Tranche Lender after the
Closing Date, in the Assignment and Assumption executed by such Person, or such other office(s) of
such Lender (or an Affiliate of such Lender) as such Lender may hereafter designate from time to
time as its Global Tranche Lending Office(s) by notice to the Company and the Administrative
Agent. A Global Tranche Lender may designate different Global Tranche Lending Offices for Loans to
Global Tranche Borrowers in different jurisdictions.
Global Tranche Percentage
means, with respect to any Global Tranche Lender at any time, the
percentage of the aggregate Global Tranche Commitments represented by such Global Tranche Lenders
Global Tranche Commitment at such time;
provided
that if the Global Tranche Commitments have
expired or been terminated, the Global Tranche Percentages shall be determined on the basis of the
Global Tranche Commitments most recently in effect, giving effect to any assignments.
Global Tranche Revolving Credit Exposure
means, with respect to any Global Tranche Lender at
any time, the aggregate amount of (a) the sum of the US Dollar Equivalents of such Global Tranche
Lenders outstanding Global Tranche Revolving Loans, (b) the sum of the US Dollar Equivalents at
such time of the face amounts of the Global Tranche B/As accepted by such Global Tranche Lender and
outstanding at such time, (c) such Global Tranche Lenders LC Exposure and (d) such Global Tranche
Lenders Global Tranche Swingline Exposure.
Global Tranche Revolving Loans
means Loans made by the Global Tranche Lenders pursuant to
Section 2.01(a). Each Global Tranche Revolving Loan denominated in US Dollars shall be a LIBOR Loan
or, solely in the case of a Global Tranche Revolving Loan denominated in US Dollars and made to the
Company, a US Borrowing Subsidiary or a Canadian Borrowing Subsidiary, an ABR Loan. Each Global
Tranche Revolving Loan denominated in Sterling or a Designated Currency (other than Euros) shall be
a LIBOR Loan. Each Global Tranche Revolving Loan denominated in Euros shall be a EURIBOR Loan. Each
Global Tranche Revolving Loan denominated in Canadian Dollars shall be a Canadian Prime Rate Loan.
Global Tranche Swingline Exposure
means, at any time, the sum of the US Dollar Equivalents
of the outstanding Global Tranche Swingline Loans at such time. The Global Tranche Swingline
Exposure of any Global Tranche Lender at any time shall be its Global Tranche Percentage of the
total Global Tranche Swingline Exposure at such time.
Global Tranche Swingline Loan
means a Loan made pursuant to Section 2.04 and designated in
the notice delivered by the applicable Borrower pursuant to paragraph (b) of such Section as a
Global Tranche Swingline Loan.
Governmental Authority
means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any
14
agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
Guarantee
of or by any Person (the
guarantor
) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the
primary obligor
) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness;
provided
, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of business.
Guarantee Agreement
means the Guarantee Agreement among the Designated Subsidiaries and the
Administrative Agent, substantially in the form of
Exhibit D
.
Guarantee Agreement Termination Date
means any date on which the Guarantee Agreement shall
be terminated as provided in Section 11.16.
Guarantee Requirement
means, at any time, the requirement that the Administrative Agent
shall have received from each Designated Subsidiary either (i) a counterpart of the Guarantee
Agreement, duly executed and delivered on behalf of such Designated Subsidiary or (ii) in the case
of any Person that becomes a Designated Subsidiary after the Effective Date, a supplement to the
Guarantee Agreement in a form reasonably acceptable to the Borrower and the Administrative Agent,
duly executed and delivered on
behalf of such Designated Subsidiary;
provided
that a Designated Subsidiary shall not be
required to become a Guarantor under the Guarantee Agreement if the Company shall have advised the
Administrative Agent that it would be a violation of applicable law for such Designated Subsidiary
to take such action or if, in the judgment of the Administrative Agent, in consultation with the
Company, the expense, tax or regulatory consequences or difficulty of taking such action would not,
in light of the benefits to accrue to the Lenders, justify taking such action.
Guarantor
means each Subsidiary required to enter into the Guarantee Agreement as a
guarantor.
Hazardous Materials
means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
Hedging Agreement
means any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement or any credit default swap agreement.
Increase Effective Date
has the meaning set forth in Section 2.09(e).
15
Increasing Lender
has the meaning set forth in Section 2.09(d).
Indebtedness
of any Person means, without duplication, (a) all obligations of such Person
for borrowed money or with respect to deposits (other than customer deposits in respect of accounts
receivable maintained in the ordinary course of business consistent with past practices) or
advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person upon which interest charges are customarily
paid (excluding trade accounts payable and obligations to pay salary or benefits under deferred
compensation, executive compensation or other benefit programs), (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers acceptances and (k) all obligations
of such Person incurred under or in connection with a Securitization. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a result of such
Persons ownership interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Indemnified Taxes
means Taxes other than Excluded Taxes.
Indemnitee
has the meaning set forth in Section 11.03(b).
Index Debt
means the Companys senior, unsecured, non-credit-enhanced long-term Indebtedness
for borrowed money.
Information Memorandum
means the Confidential Information Memorandum dated October 2006
relating to the Company and the Transactions.
Initial Borrowings
has the meaning set forth in Section 2.09(e).
Interest Election Request
means a request by a Borrower to convert or continue a Revolving
Borrowing or B/A Drawing in accordance with Section 2.08.
Interest Payment Date
means (a) with respect to any ABR Loan or Canadian Prime Rate Loan
(other than a Swingline Loan), the first day of each January, April, July and October, (b) with
respect to any LIBOR Loan or EURIBOR Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a LIBOR Borrowing or a EURIBOR Borrowing
with an Interest Period of more than three months duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months duration after the first day of such
Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to
be repaid.
Interest Period
means, with respect to any LIBOR Borrowing or EURIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months (or, with consent of
16
each Lender under the applicable Tranche, nine or 12 months) thereafter, as the applicable Borrower
may elect;
provided
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
Issuing Bank
means (a) JPMorgan Chase Bank, N.A., (b) The Bank of Nova Scotia and (c) each
other Lender that shall have become an Issuing Bank hereunder as provided in Section 2.05(j) (other
than any Person that shall have ceased to be an Issuing Bank as provided in Section 2.05(k)), each
in its capacity as an issuer of Letters of Credit hereunder. Each Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank, in which case the term
Issuing Bank
shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
Issuing Bank Agreement
shall have the meaning assigned to such term in Section 2.05(j).
ITA
means the Income Tax Act (Canada), as amended, and any successor thereto, and any
regulations promulgated thereunder.
LC Commitment
shall mean, as to each Issuing Bank, the commitment of such Issuing Bank to
issue Letters of Credit pursuant to Section 2.05. The initial amount of each Issuing Banks LC
Commitment is set forth on
Schedule 2.05
or in such Issuing Banks Issuing Bank Agreement.
LC Disbursement
means a payment made by an Issuing Bank pursuant to a Letter of Credit.
LC Exposure
means, at any time, (a) the sum of the US Dollar Equivalents of the undrawn
amounts of all outstanding Letters of Credit at such time
plus
(b) the sum of the US Dollar
Equivalents of the amounts of all LC Disbursements that have not yet been reimbursed by or on
behalf of the applicable Borrowers at such time. The LC Exposure of any Global Tranche Lender at
any time shall be its Global Tranche Percentage of the aggregate LC Exposure at such time.
Lenders
means the Persons listed on
Schedule 2.01
and any other Person that shall
have become a Lender pursuant to an Assignment and Assumption or Section 2.09(d), other than any
such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the
context otherwise requires, the term
Lenders
includes each Swingline Lender.
Letter of Credit
means any letter of credit issued pursuant to this Agreement. For the
avoidance of doubt, nothing herein shall prohibit any Lender from issuing letters of credit for the
account of the Company and the Subsidiaries in addition to those issued under this Agreement.
Leverage Ratio
means, on any date, the ratio of (a) Total Indebtedness as of such date to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the
17
Company ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the
last day of the fiscal quarter of the Company most recently ended prior to such date);
provided
that for purposes of determining the Leverage Ratio at any time, the outstanding amount of the
Revolving Loans and B/As and all other revolving Indebtedness, and the Financed Amount of all
Securitizations, included in Total Indebtedness shall be deemed to equal the average of (i) the
outstanding amounts of the Revolving Loans and B/As and other revolving Indebtedness, and (ii) the
Financed Amount of all Securitizations, in each case on the last day of each of the four most
recently ended fiscal quarters, net of Permitted Investments not to exceed $50,000,000 on the last
day of each such quarter.
LIBO Rate
means, with respect to any LIBOR Borrowing denominated in any currency for any
Interest Period, (a) the applicable Screen Rate or (b) if no Screen Rate is available for such
currency or for such Interest Period, the arithmetic mean of the rates quoted by the Reference
Banks to leading banks in the London interbank market for the offering of deposits in such currency
and for a period comparable to such Interest Period, in each case as of the Specified Time on the
Quotation Day.
LIBOR
, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.
Lien
means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest
of a vendor or a lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
Loan Documents
means this Agreement, each promissory note issued hereunder, the Guarantee
Agreement and any other guarantee agreement entered into pursuant to Section 6.01(a).
Loan Parties
means, at any time, the Company, each other Borrower and each Subsidiary that
at such time is, or is required to be, a party to the Guarantee Agreement or any other guarantee
agreement entered into pursuant to Section 6.01(a).
Loans
means the loans made by the Lenders to the Borrowers pursuant to this Agreement.
Local Time
means (a) with respect to a Loan or Borrowing denominated in US Dollars (other
than any such Loan to or Borrowing of a Canadian Borrowing Subsidiary) or any Letter of Credit,
New York City time, (b) with respect to a Loan or Borrowing denominated in Sterling, Euros or an
Alternative Currency, London time and (c) with respect to a Loan or Borrowing denominated in
Canadian Dollars, any B/A or any Loan or Borrowing denominated in US Dollars of a Canadian
Borrowing Subsidiary, Toronto time.
London Agent
means J. P. Morgan Europe Limited, in its capacity as London agent for the
Lenders hereunder, or any successor appointed in accordance with Article VIII.
Mandatory Costs Rate
has the meaning set forth in
Exhibit E
.
18
Material Adverse Effect
means a material adverse effect on (a) the business, results of
operations or financial condition of the Company and the Subsidiaries taken as a whole, (b) the
ability of any Loan Party (other than any Subsidiaries that are not Significant Subsidiaries) to
perform any of its obligations under any Loan Document or (c) the rights of or benefits available
to the Lenders under any Loan Document.
Material Indebtedness
means Indebtedness (other than the Loans, B/As and Letters of Credit),
or obligations in respect of one or more Hedging Agreements, of any one or more of the Company and
the Subsidiaries in an aggregate principal amount exceeding US$25,000,000. For purposes of
determining Material Indebtedness, the principal amount of the obligations of the Company or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Company or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.
Maturity Date
means November 14, 2011.
Moodys
means Moodys Investors Service, Inc.
Multiemployer Plan
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
New Bonds
means the Companys (a) 5
5
/8% Senior Notes due 2012 in an aggregate
principal amount of $400,000,000 and (b) 5
7
/8% Senior Notes due 2015 in an aggregate
principal amount of $500,000,000.
Non-Canadian Issuing Bank
means any Issuing Bank that is a non-resident of Canada for
purposes of Part I of the ITA.
Non-Canadian Lender
means any Lender that is a non-resident of Canada for purposes of Part
I of the ITA.
Non-Schedule I Lender
means any Lender named on Schedule II or Schedule III to the Bank Act
(Canada).
Non-Schedule I Reference Lender
means JPMorgan Chase Bank, N.A., Toronto Branch and The Bank
of Nova Scotia.
Obligations
means (a) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, (b) all
reimbursement obligations of any Borrower in respect of B/As accepted hereunder, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise,
(c) each payment required to be made by any Borrower under this Agreement in respect of any Letter
of Credit, when and as due, including payments in respect of reimbursement of reasonable
disbursements, interest thereon and obligations to provide cash collateral, (c) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties under this Agreement and the other Loan
Documents and (d) the due and punctual payment and performance of all obligations of the Company
and the Subsidiaries under any Hedging Agreement and cash
19
management arrangement or agreement (i) existing on the date hereof and with a Person that is a
Lender on the date hereof (or an Affiliate of such a Lender) or (ii) with a Person that shall have
been a Lender at the time such Hedging Agreement or cash management arrangement or agreement was
entered into (or an Affiliate of such a Lender).
Other Taxes
means any and all present or future stamp or documentary Taxes or any other
excise or property Taxes, charges or similar levies arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
Participant
has the meaning set forth in Section 11.04.
PBGC
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.
Permitted Encumbrances
means:
(a) Liens imposed by law for Taxes that are not yet due or are being contested in compliance
with Section 5.04;
(b) carriers, warehousemens, mechanics, materialmens, repairmens and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in compliance with workers
compensation, unemployment insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the Company or any Subsidiary;
provided
that the term
Permitted Encumbrances
shall not include any Lien securing Indebtedness.
Permitted Investments
means:
(a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United States of America), in each
case maturing within 24 months from the date of acquisition thereof;
(b) Indebtedness maturing within 24 months issued by and constituting direct obligations of
any of the following agencies or any other like governmental or government-sponsored
20
agency, as follows: Federal Farm Credit Bank; Federal Intermediate Credit Bank; Federal Financings
Bank; Federal Home Loan Bank System; Federal Home Loan Mortgage Corporation; Federal National
Mortgage Association; Tennessee Valley Authority; Student Loan Marketing Association; Export-Import
Bank of the United States; Farmers Home Administration; Small Business Administration;
Inter-American Development Bank; International Bank for Reconstruction and Development; Federal
Land Banks; and Government National Mortgage Association;
(c) direct and general obligations of any state of the United States of America or any
municipality or political subdivision of such state, including auction rate securities
(
Auctions
), variable demand notes (
VRDNs
) and non rated pre-funded debt, or obligations of any
corporation, maturing (or, in the case of Auctions and VRDNs, having their next reset date) within
24 months if such obligations, except pre-refunded debt, are rated at least (i) in the case of Auctions or VRDNs, A2 by Moodys or A by
S&P or (ii) in all other cases, VMIG-1 by Moodys or A by S&P;
(d) obligations (including asset-backed obligations) maturing within 24 months of any
corporation, partnership, trust or other entity which are rated at least P1 by Moodys or A1 by S&P
(short term rating) or A2 by Moodys or A by S&P (long term rating);
(e) investments in commercial paper maturing within 270 days from the date of acquisition
thereof and rated, at such date of acquisition, at least P1 by Moodys or A1 by S&P, and
investments in master notes that are rated (or that have been issued by an issuer that is rated
with respect to a class of short-term debt obligations, or any security within that class, that is
comparable in priority and security with said master note) at least P1 by Moodys or A1 by S&P;
(f) investments in certificates of deposit, bankers acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
(g) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial institution satisfying
the criteria described in clause (c) above (or subsidiaries or Affiliates of such financial
institutions); and
(h) money market funds.
Person
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.
Pharmerica Spin-Off
means the transactions provided for in the Master Transaction Agreement
dated October 25, 2006, by and among the Company, PharMerica, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company (
PharMerica
), Kindred Healthcare, Inc., a Delaware
corporation, Kindred Healthcare Operating, Inc., a Delaware corporation, Kindred Pharmacy Services,
Inc., a Delaware corporation, Safari Holding Corporation, a Delaware corporation (
Newco
), Hippo
Merger Corporation, a Delaware corporation and wholly owned subsidiary of Newco (
Hippo Merger
Sub
), and Rhino Merger Corporation, a Delaware corporation and wholly owned subsidiary of Newco,
including (a) the transfer by Pharmacy Corporation of America, a California corporation and
indirect wholly owned subsidiary of the Company, of the capital stock of each of PMSI, Inc., a
Florida corporation and
21
Tmesys, Inc., a Florida corporation, to the Company or another Subsidiary of the Company, (b) the
borrowing by PharMerica of approximately $150,000,000 from certain financial institutions (the
PharMerica Borrowing
), (c) the distribution of the proceeds of the PharMerica Borrowing by way of
dividend, inter-company payment or return of capital to the Company, (d) the distribution of all
the capital stock of PharMerica to the stockholders of the Company by way of dividend, (e) the
merger of PharMerica with Hippo Merger Sub and (f) the provision of certain transitional services
between Newco and the Company and certain of the Companys Subsidiaries.
Plan
means any employee pension benefit plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Company or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Prime Rate
means (a) in the case of a Borrowing in US Dollars by the Company or a US
Borrowing Subsidiary, the rate of interest per annum publicly announced from time to time by
JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City, and
(b) in the case of any Borrowing in US Dollars by a Canadian Borrowing Subsidiary, the rate of
interest per annum publicly
announced from time to time by The Bank of Nova Scotia as its prime rate in effect at its
principal office in Toronto for loans made in Canada and denominated in US Dollars. Each change in
the Prime Rate shall be effective from and including the date such change is publicly announced as
being effective.
Proceeds
has the meaning specified in Section 9-102 of the Uniform Commercial Code of the
State of New York.
Quotation Day
means (a) with respect to any currency (other than Sterling) for any Interest
Period, two Business Days prior to the first day of such Interest Period and (b) with respect to
Sterling for any Interest Period, the first day of such Interest Period, in each case unless market
practice differs in the Relevant Interbank Market for any currency, in which case the Quotation Day
for such currency shall be determined by the Applicable Agent in accordance with market practice in
the Relevant Interbank Market (and if quotations would normally be given by leading banks in the
Relevant Interbank Market on more than one day, the Quotation Day shall be the last of those days).
Ratings Agency
means S&P, Moodys or Fitch.
Reference Banks
means with respect to the LIBO Rate or the EURIBO Rate, the principal London
offices of J.P. Morgan Europe Limited, The Bank of Nova Scotia and Bank of America, N.A. or such
other banks as may be appointed by the Administrative Agent in consultation with the Company.
Register
has the meaning set forth in Section 11.04.
Related Fund
means, with respect to any Lender that is a fund or trust that makes, buys or
invests in commercial loans, any other fund or trust that makes, buys or invests in commercial
loans and is managed by the same investment advisor as such Lender.
Related Parties
means, with respect to any specified Person, such Persons Affiliates and
the respective directors, officers, employees, agents and advisors of such Person and such Persons
Affiliates.
22
Relevant Interbank Market
means (a) with respect to any currency (other than Euros), the
London interbank market and (b) with respect to Euros, the European interbank market.
Required Lenders
means, at any time, Lenders having Revolving Credit Exposures and unused
Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and
unused Commitments at such time.
Restricted Payment
means any dividend or other distribution (whether in cash, securities or
other property) with respect to any Equity Interests in the Company or any Subsidiary, or any
payment (whether in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Equity Interests in the Company or any Subsidiary or any option, warrant or
other right to acquire any such Equity Interests in the Company or any Subsidiary;
provided
that no
such dividend, distribution or payment shall constitute a
Restricted Payment
to the extent made
solely with common stock of the Company.
Revolving Credit Exposure
means a Global Tranche Revolving Credit Exposure, a US/UK Tranche
Revolving Credit Exposure, a US/Canadian Tranche Revolving Credit Exposure or a US Tranche
Revolving Credit Exposure.
Revolving Loan
means any Global Tranche Revolving Loan, US/UK Tranche Revolving Loan,
US/Canadian Tranche Revolving Loan or US Tranche Revolving Loan, as applicable.
S&P
means Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.
Schedule I Lender
means any Lender named on Schedule I to the Bank Act (Canada).
Schedule I Reference Lenders
means The Bank of Nova Scotia and any other Schedule I Lender
agreed upon by the Company and the Canadian Agent from time to time.
Screen Rate
means (a) in respect of the LIBO Rate for any currency for any Interest Period,
the British Bankers Association Interest Settlement Rate for such currency and such Interest Period
as set forth on the applicable page of the Telerate Service (and if such page is replaced or such
service ceases to be available, another page or service displaying the appropriate rate designated
by the Applicable Agent) and (b) in respect of the EURIBO Rate for any Interest Period, the
percentage per annum determined by the Banking Federation of the European Union for such Interest
Period as set forth on the applicable page of the Telerate Service (and if such page is replaced or
such service ceases to be available, another page or service displaying the appropriate rate
designated by the Applicable Agent).
Securitization
means any transfer or pledge of accounts receivable, inventory and/or
Proceeds thereof or interests therein (a) to a special purpose trust, partnership or corporation or
other special purpose entity (which may but need not be a Subsidiary), which transfer or pledge is
funded by such entity in whole or in part by (i) the issuance to one or more lenders or investors
of indebtedness or other securities that are to receive payments principally from the cash flow
derived from such accounts receivable, inventory and/or Proceeds thereof or interests therein or
(ii) the transfer or pledge of such accounts, inventory and/or Proceeds thereof (or interests
therein) to
23
one or more investors or other purchasers, or (b) in the case of accounts receivable, directly to
one or more investors or other purchasers.
Securitization Entity
means AmeriSource Receivables Financial Corporation, a Delaware
corporation, and any other wholly owned limited purpose Subsidiary that purchases accounts
receivable or inventory of the Company or any Subsidiary pursuant to a Securitization.
Significant Subsidiary
means each Subsidiary other than any Subsidiary or Subsidiaries that
individually or in the aggregate did not account for more than 1% of the assets or revenues of the
Company and the Subsidiaries on a consolidated basis at the end of or for the most recent four
fiscal quarter period for which financial statements have been delivered under Section 5.01(a) or
(b).
Specified Time
means (a) with respect to the LIBO Rate, 11:00 a.m., London time and (b) with
respect to the EURIBO Rate, 11:00 a.m., Frankfurt time.
Statutory Reserve Rate
means a fraction (expressed as a decimal), the numerator of which is
the number one and the denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency
funding (currently referred to as Eurocurrency Liabilities in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D. LIBOR Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available from time to time
to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in any reserve
percentage.
Sterling
or
£
means the lawful currency of the United Kingdom.
Subsequent Borrowings
has the meaning set forth in Section 2.09(e).
subsidiary
means, with respect to any Person (the
parent
) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parents consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity (a) of which
securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting power or, in
the case of a partnership, more than 50% of the general partnership interests are, as of such date,
owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Subsidiary
means any subsidiary of the Company.
Swingline Exposure
means, at any time, the sum of the Global Tranche Swingline Exposure and
the US/Canadian Tranche Swingline Exposure at such time.
Swingline Lender
means each of JPMorgan Chase Bank, N.A. and The Bank of Nova Scotia in its
capacity as a lender of Swingline Loans pursuant to Section 2.04.
24
Swingline Loan
means a Global Tranche Swingline Loan or a Canadian Tranche Swingline Loan.
Synthetic Lease
means a lease of property or assets designed to permit the lessees (i) to
claim depreciation on such property or assets under US tax law and (ii) to treat such lease as an
operating lease or not to reflect the leased property or assets on the lessees balance sheet under
GAAP.
Synthetic Lease Obligations
shall mean, with respect to any Synthetic Lease, at any time, an
amount equal to the higher of (x) the aggregate termination value or purchase price or similar
payments in the nature of principal payable thereunder and (y) the then aggregate outstanding
principal amount of the notes or other instruments issued by, and the amount of the equity
investment, if any, in the lessor under such Synthetic Lease.
2003 Securitization
means the receivables Securitization as contemplated by the Receivables
Purchase Agreement dated as of July 10, 2003, among Amerisource Receivables Financial Corporation,
as seller, AmerisourceBergen Drug Corporation, as initial servicer, various purchaser groups from
time to time and Wachovia Bank National Association, as administrator.
Taxes
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
Total Indebtedness
means, as of any date, the sum, without duplication of (a) the aggregate
principal amount of Indebtedness of the Company and the Subsidiaries outstanding as of such date,
in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated
basis in accordance with GAAP, (b) the aggregate amount of the Financed Amounts of all
Securitizations of the Company and the Subsidiaries, and (c) the aggregate principal amount of
Indebtedness of the Company and the Subsidiaries outstanding as of such date that is not required
to be reflected on a balance sheet in accordance with GAAP, determined on a consolidated basis.
Tranche
means a category of Commitments and extensions of credit thereunder. For purposes
hereof, each of the following shall comprise a separate Tranche: (a) the Global Tranche
Commitments, the Global Tranche Revolving Loans, the Global Tranche B/As, the Letters of Credit and
the Global Tranche Swingline Loans (the
Global Tranche
), (b) the US/UK Tranche Commitments and
the US/UK Tranche Revolving Loans (the
US/UK Tranche
), (c) the US/Canadian Tranche Commitments,
the US/Canadian Tranche Revolving Loans, the US/Canadian Tranche B/As and the US/Canadian Tranche
Swingline Loans (the
US/Canadian Tranche
) and (d) the US Tranche Commitments and the US Tranche
Revolving Loans (the
US Tranche
).
Tranche Percentage
means a Global Tranche Percentage, a US/UK Tranche Percentage, a
US/Canadian Tranche Percentage or a US Tranche Percentage, as the case may be.
Transactions
means the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is to be a party, the making of Loans, the acceptance and purchase of B/As,
the use
of the proceeds thereof, the issuance of the Letters of Credit, the creation of the Guarantees
provided for herein and in the other Loan Documents and the other transactions contemplated hereby.
Type
, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by
25
reference to the Adjusted LIBO Rate, the Adjusted EURIBO Rate, the Alternate Base Rate or the
Canadian Prime Rate.
UK Borrowing Subsidiary
means any Borrowing Subsidiary that is a UK Subsidiary.
UK Subsidiary
means any Subsidiary that is incorporated or otherwise organized under the
laws of the United Kingdom or any political subdivision thereof.
US Borrowing Subsidiary
means any Borrowing Subsidiary that is a US Subsidiary.
US/Canadian Tranche
has the meaning set forth in the definition of Tranche.
US/Canadian Tranche B/As
means a B/As accepted and purchased pursuant to the US/Canadian
Tranche Commitments.
US/Canadian Tranche Borrower
means (a) the Company, (b) any US Borrowing Subsidiary and
(c) any Canadian Borrowing Subsidiary.
US/Canadian Tranche Commitment
means, with respect to each US/Canadian Tranche Lender, the
commitment of such US/Canadian Tranche Lender to make US/Canadian Tranche Revolving Loans pursuant
to Section 2.01(c) and to accept and purchase US/Canadian Tranche B/As pursuant to Section 2.06,
expressed as an amount representing the maximum aggregate amount of such US/Canadian Tranche
Lenders US/Canadian Tranche Revolving Credit Exposure hereunder, as such commitment may be reduced
or increased from time to time pursuant to Section 2.09 or assignments by or to such US/Canadian
Tranche Lender pursuant to Section 11.04. The initial amount of each US/Canadian Tranche Lenders
US/Canadian Tranche Commitment is set forth on
Schedule 2.01
, or in the Assignment and
Assumption pursuant to which such US/Canadian Tranche Lender shall have assumed its US/Canadian
Tranche Commitment, as the case may be. The aggregate amount of US/Canadian Tranche Commitments on
the Closing Date is US$200,000,000.
US/Canadian Tranche Lender
means a Lender with a US/Canadian Tranche Commitment or a
US/Canadian Tranche Revolving Credit Exposure.
US/Canadian Tranche Lending Office
means, with respect to any US/Canadian Tranche Lender,
the office(s) of such Lender (or any Affiliate of such Lender) specified as its US/Canadian
Tranche Lending Office(s) on Schedule 2.01 or, as to any Person that becomes a US/Canadian Tranche
Lender after the Closing Date, in the Assignment and Assumption executed by such Person, or such
other office(s) of such Lender (or an Affiliate of such Lender) as such Lender may hereafter
designate from time to time as its US/Canadian Tranche Lending Office(s) by notice to the Company
and the Administrative Agent. A US/Canadian Tranche Lender may designate different US/Canadian
Tranche Lending Offices for Loans to US/Canadian Tranche Borrowers in different jurisdictions.
US/Canadian Tranche Percentage
means, with respect to any US/Canadian Tranche Lender at any
time, the percentage of the aggregate US/Canadian Tranche Commitments represented by such
US/Canadian Tranche Lenders US/Canadian Tranche Commitment at such time;
provided
that if the
US/Canadian Tranche Commitments have expired or been terminated, the US/Canadian Tranche
Percentages shall be determined on the basis of the US/Canadian Tranche Commitments most recently
in effect, giving effect to any assignments.
26
US/Canadian Tranche Revolving Credit Exposure
means, with respect to any US/Canadian Tranche
Lender at any time, the aggregate amount of (a) the sum of the US Dollar Equivalents of such
US/Canadian Tranche Lenders outstanding US/Canadian Tranche Revolving Loans, (b) the sum of the US
Dollar Equivalents at such time of the face amounts of the US/Canadian Tranche B/As accepted by
such US/Canadian Tranche Lender and outstanding at such time and (c) such US/Canadian Tranche
Lenders US/Canadian Tranche Swingline Exposure.
US/Canadian Tranche Revolving Loans
means Loans made by the US/Canadian Tranche Lenders
pursuant to Section 2.01(c). Each US/Canadian Tranche Revolving Loan denominated in US Dollars
shall be a LIBOR Loan or an ABR Loan. Each US/Canadian Tranche Revolving Loan denominated in
Canadian Dollars shall be a Canadian Prime Rate Loan. Each US/Canadian Tranche Revolving Loan
denominated in a Designated Currency shall be a LIBOR Loan (or, in the case of a US/Canadian
Tranche Revolving Loan denominated in Euros, if the Euro shall be designated as an Designated
Currency for the US/Canadian Tranche, a EURIBOR Loan).
US/Canadian Tranche Swingline Exposure
means, at any time, the sum of the US Dollar
Equivalents of the outstanding US/Canadian Tranche Swingline Loans at such time. The US/Canadian
Tranche Swingline Exposure of any US/Canadian Tranche Lender at any time shall be its US/Canadian
Tranche Percentage of the total US/Canadian Tranche Swingline Exposure at such time.
US/Canadian Tranche Swingline Loan
means a Loan made pursuant to Section 2.04 and designated
in the notice delivered by the applicable Borrower pursuant to paragraph (b) of such Section as a
US/Canadian Tranche Swingline Loan.
US Dollar Equivalent
means, on any date of determination, (a) with respect to any amount in
US Dollars, such amount and (b) with respect to any amount in any currency other than US Dollars,
the equivalent in US Dollars of such amount, determined by the Administrative Agent pursuant to
Section 1.05 using the Exchange Rate with respect to such currency at the time in effect under the
provisions of such Section.
US Dollars
or
US$
means the lawful currency of the United States of America.
US/UK Tranche
has the meaning set forth in the definition of Tranche.
US/UK Tranche Borrower
means (a) the Company, (b) any US Borrowing Subsidiary, (c) any UK
Borrowing Subsidiary and (d) any Borrowing Subsidiary that is not a US Borrowing Subsidiary or a UK
Borrowing Subsidiary that has been designated by the Administrative Agent as a US/UK Tranche
Borrower at the request of the Company and with the consent of each US/UK Tranche Lender.
US/UK Tranche Commitment
means, with respect to each US/UK Tranche Lender, the commitment of
such US/UK Tranche Lender to make US/UK Tranche Revolving Loans pursuant to Section 2.01(b),
expressed as an amount representing the maximum aggregate amount of such US/UK Tranche Lenders
US/UK Tranche Revolving Credit Exposure hereunder, as such commitment may be reduced or increased
from time to time pursuant to Section 2.09 or assignments by or to such US/UK Tranche Lender
pursuant to Section 11.04. The initial amount of each US/UK Tranche Lenders US/UK Tranche
Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
such US/UK Tranche Lender shall have
27
assumed its US/UK Tranche Commitment, as the case may be. The aggregate amount of US/UK Tranche
Commitments on the Closing Date is US$70,000,000.
US/UK Tranche Lender
means a Lender with a US/UK Tranche Commitment or a US/UK Tranche
Revolving Credit Exposure.
US/UK Tranche Lending Office
means, with respect to any US/UK Tranche Lender, the office(s)
of such Lender (or any Affiliate of such Lender) specified as its US/UK Tranche Lending Office(s)
on Schedule 2.01 or, as to any Person that becomes a US/UK Tranche Lender after the Closing Date,
in the Assignment and Assumption executed by such Person, or such other office(s) of such Lender
(or an Affiliate of such Lender) as such Lender may hereafter designate from time to time as its
US/UK Tranche Lending Office(s) by notice to the Company and the Administrative Agent. A US/UK
Tranche Lender may designate different US/UK Tranche Lending Offices for Loans to US/UK Tranche
Borrowers in different jurisdictions.
US/UK Tranche Percentage
means, with respect to any US/UK Tranche Lender at any time, the
percentage of the aggregate US/UK Tranche Commitments represented by such US/UK Tranche Lenders
US/UK Tranche Commitment at such time;
provided
, that if the US/UK Tranche Commitments have expired
or been terminated, the US/UK Tranche Percentages shall be determined on the basis of the US/UK
Tranche Commitments most recently in effect, giving effect to any assignments.
US/UK Tranche Revolving Credit Exposure
means, with respect to any US/UK Tranche Lender at
any time, the sum of the US Dollar Equivalents of such US/UK Tranche Lenders outstanding US/UK
Tranche Revolving Loans.
US/UK Tranche Revolving Loans
means Loans made by the US/UK Tranche Lenders pursuant to
Section 2.01(b). Each US/UK Tranche Revolving Loan denominated in US Dollars shall be a LIBOR Loan
or, solely in the case of a US/UK Tranche Revolving Loan denominated in US Dollars and made to the
Company or a US Borrowing Subsidiary, an ABR Loan. Each US/UK Tranche Revolving Loan denominated in
Sterling or a Designated Currency shall be a LIBOR Loan. Each US/UK Tranche Revolving Loan
denominated in Euros shall be a EURIBOR Loan.
US Subsidiary
means any Subsidiary that is organized under the laws of the United States of
America, any State thereof or the District of Columbia.
US Tranche
has the meaning set forth in the definition of Tranche.
US Tranche Borrower
means (a) the Company and (b) any US Borrowing Subsidiary.
US Tranche Commitment
means, with respect to each US Tranche Lender, the commitment of such
US Tranche Lender to make US Tranche Revolving Loans pursuant to Section 2.01(d), expressed as an
amount representing the maximum aggregate amount of such US Tranche Lenders US Tranche Revolving
Credit Exposure hereunder, as such commitment may be reduced or increased from time to time
pursuant to Section 2.09 or assignments by or to such US Tranche Lender pursuant to Section 11.04.
The initial amount of each US Tranche Lenders US Tranche Commitment is set forth on
Schedule
2.01
, or in the Assignment and Assumption pursuant to which such US Tranche Lender shall have
assumed its US Tranche Commitment, as the case may be. The aggregate amount of US Tranche
Commitments on the Closing Date is US$220,000,000.
28
US Tranche Lender
means a Lender with a US Tranche Commitment or a US Tranche Revolving
Credit Exposure.
US Tranche Lending Office
means, with respect to any US Tranche Lender, the office(s) of
such Lender (or any Affiliate of such Lender) specified as its US Tranche Lending Office(s) on
Schedule 2.01 or, as to any Person that becomes a US Tranche Lender after the Closing Date, in the
Assignment and Assumption executed by such Person, or such other office(s) of such Lender (or an
Affiliate of such Lender) as such Lender may hereafter designate from time to time as its US
Tranche Lending Office(s) by notice to the Company and the Administrative Agent.
US Tranche Percentage
means, with respect to any US Tranche Lender at any time, the
percentage of the aggregate US Tranche Commitments represented by such US Tranche Lenders US
Tranche
Commitment at such time;
provided
that if the US Tranche Commitments have expired or been
terminated, the US Tranche Percentages shall be determined on the basis of the US Tranche
Commitments most recently in effect, giving effect to any assignments.
US Tranche Revolving Credit Exposure
means, with respect to any US Tranche Lender at any
time, the aggregate principal amount of such US Tranche Lenders outstanding US Tranche Revolving
Loans.
US Tranche Revolving Loans
means Loans made by the US Tranche Lenders pursuant to
Section 2.01(d). Each US Tranche Revolving Loan shall be a LIBOR Loan or an ABR Loan.
wholly owned
means, as to any Subsidiary, that all the Equity Interests in such Subsidiary
(other than directors qualifying shares) are owned, directly or indirectly, by the Company.
Withdrawal Liability
means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E
of Title IV of ERISA.
SECTION 1.02.
Classification of Loans and Borrowings
. For purposes of this Agreement,
Loans may be classified and referred to by Class (
e.g.
, a Global Tranche Revolving Loan)
or by Type (
e.g.
, a LIBOR Revolving Loan) or by Class and Type (
e.g.
, a Global
Tranche LIBOR Revolving Loan). Borrowings also may be classified and referred to by Class
(
e.g.
, a Global Tranche Revolving Borrowing) or by Type (
e.g.
, a LIBOR Revolving
Borrowing) or by Class and Type (
e.g.
, a Global Tranche LIBOR Revolving Borrowing).
SECTION 1.03.
Terms Generally
. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words include,
includes and including shall be deemed to be followed by the phrase without limitation. The
word will shall be construed to have the same meaning and effect as the word shall. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any definition of or reference to
any statute, regulation or other law herein shall be construed (i) as referring to such statute,
regulation or other law as from time to time amended, supplemented or otherwise modified (including
by succession of comparable successor statutes, regulations or other
29
laws) and (ii) to include all official rulings and interpretations thereunder having the force of
law or with which affected Persons customarily comply, (c) any reference herein to any Person shall
be construed to include such Persons successors and assigns, (d) the words herein, hereof and
hereunder, and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (e) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (f) the words asset and property shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04.
Accounting Terms; GAAP; Pro Forma Computations
. (a) Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided
that, if the Company notifies the
Administrative Agent that the Company requests an amendment to any provision hereof to eliminate
the effect of any change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the Company that the
Required Lenders request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
(b) All
pro
forma
computations required to be made hereunder giving effect to
any acquisition, investment, sale, disposition, merger, amalgamation or similar event shall reflect
on a
pro forma
basis such event as if it occurred on the first day of the relevant period
and, to the extent applicable, the historical earnings and cash flows associated with the assets
acquired or disposed of for such relevant period and any related incurrence or reduction of
Indebtedness for such relevant period, but shall not take into account any projected synergies or
similar benefits expected to be realized as a result of such event other than cost savings
permitted to be included under Regulation S-X.
SECTION 1.05.
Currency Translation
. The Administrative Agent shall determine the US
Dollar Equivalent of any Borrowing denominated in a currency other than US Dollars, other than a
Canadian Prime Rate Borrowing, as of the date of the commencement of the initial Interest Period
therefor and as of the date of the commencement of each subsequent Interest Period therefor, in
each case using the Exchange Rate for such currency in relation to US Dollars in effect on the date
that is three Business Days prior to the date on which the applicable Interest Period shall
commence, and each such amount shall, except as provided in the last two sentences of this Section,
be the US Dollar Equivalent of such Borrowing until the next required calculation thereof pursuant
to this sentence. The Administrative Agent shall determine the US Dollar Equivalent of any Letter
of Credit denominated in a currency other than US Dollars as of the date such Letter of Credit is
issued, amended to increase its face amount, extended or renewed and as of the last Business Day of
each subsequent calendar quarter, in each case using the Exchange Rate for such currency in
relation to US Dollars in effect on the date that is three Business Days prior to the date on which
such Letter of Credit is issued, amended to increase its face amount, extended or renewed and as of
the last Business Day of such subsequent calendar quarter, as the case may be, and each such amount
shall, except as provided in the last two sentences of this Section, be the US Dollar Equivalent of
such Letter of Credit until the next required calculation thereof pursuant to this sentence. The
Administrative Agent shall determine the US Dollar Equivalent of any Canadian Prime Rate Borrowing
or B/A denominated in a currency other than US Dollars as of the date on which such Borrowing is
made or such B/A is accepted and
30
purchased and as of the last Business Day of each subsequent calendar quarter, in each case using
the Exchange Rate for such currency in relation to US Dollars in effect on the last Business Day of
the calendar quarter preceding the date of such Borrowing or acceptance and purchase (or, if such
Borrowing or acceptance and purchase occurs on the last Business Day of a calendar quarter, on such
Business Day) and as of the last Business Day of such subsequent calendar quarter, as the case may
be, and each such amount shall, except as provided in the last two sentences of this Section, be
the US Dollar Equivalent of such Borrowing or B/A until the next required calculation thereof
pursuant to this sentence. The Administrative Agent shall notify the Company and the Lenders of
each calculation of the US Dollar Equivalent of each Borrowing, B/A or Letter of Credit.
Notwithstanding the foregoing, for purposes of any determination of the CAM Percentages, any
determination under Article V, Article VI (other than Sections 6.11 and 6.12) or Article VII or any
determination under any other provision of this Agreement expressly requiring the use of a current
exchange rate, all amounts incurred, outstanding or proposed to be incurred or outstanding in
currencies other than US Dollars shall be translated into US Dollars at currency exchange rates in
effect on the date of such determination. For purposes of Section 6.11 and 6.12, amounts in
currencies other than US Dollars shall be translated into US Dollars at the currency exchange rates
used in preparing the Companys annual and quarterly financial statements.
ARTICLE II
The Credits
SECTION 2.01.
Commitments
. (a)
Global Tranche Commitments
. Subject to the
terms and conditions set forth herein, each Global Tranche Lender agrees (i) to make Global Tranche
Revolving Loans denominated in US Dollars, Sterling, Euro or Designated Currencies to the Global
Tranche Borrowers, (ii) to make Global Tranche Revolving Loans denominated in Canadian Dollars to
the Global Tranche Borrowers that are Canadian Subsidiaries and (iii) to accept and purchase drafts
drawn by Global
Tranche Borrowers that are Canadian Subsidiaries in Canadian Dollars as B/As, in each case
from time to time during the Availability Period in an aggregate principal or face amount at any
time outstanding that will not result in (A) the aggregate Global Tranche Revolving Credit
Exposures exceeding the aggregate Global Tranche Commitments or (B) the Global Tranche Revolving
Credit Exposure of any Lender exceeding its Global Tranche Commitment. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Global Tranche Borrowers may borrow,
prepay and reborrow Global Tranche Revolving Loans and sell and pay drafts drawn as B/As.
(b)
US/UK Tranche Commitments
. Subject to the terms and conditions set forth herein,
each US/UK Tranche Lender agrees to make US/UK Tranche Revolving Loans denominated in US Dollars,
Sterling, Euro or Designated Currencies to the US/UK Tranche Borrowers from time to time during the
Availability Period in an aggregate principal amount at any time outstanding that will not result
in (i) the aggregate US/UK Tranche Revolving Credit Exposures exceeding the aggregate US/UK Tranche
Commitments or (ii) the US/UK Tranche Revolving Credit Exposure of any Lender exceeding its US/UK
Tranche Commitment. Within the foregoing limits and subject to the terms and conditions set forth
herein, the US/UK Tranche Borrowers may borrow, prepay and reborrow US/UK Tranche Revolving Loans.
(c)
US/Canadian Tranche Commitments
. Subject to the terms and conditions set forth
herein, each US/Canadian Tranche Lender agrees (i) to make US/Canadian Tranche Revolving Loans
denominated in US Dollars or Designated Currencies to the US/Canadian Tranche Borrowers, (ii) to
make US/Canadian Tranche Revolving Loans denominated in Canadian Dollars to the US/Canadian Tranche
Borrowers that are Canadian Subsidiaries and (iii) to accept
31
and purchase drafts drawn by US/Canadian Tranche Borrowers that are Canadian Subsidiaries in
Canadian Dollars as B/As, in each case from time to time during the Availability Period in an
aggregate principal or face amount at any time outstanding that will not result in (A) the
aggregate US/Canadian Tranche Revolving Credit Exposures exceeding the aggregate US/Canadian
Tranche Commitments or (B) the US/Canadian Tranche Revolving Credit Exposure of any Lender
exceeding its US/Canadian Tranche Commitment. Within the foregoing limits and subject to the terms
and conditions set forth herein, the US/Canadian Tranche Borrowers may borrow, prepay and reborrow
US/Canadian Tranche Revolving Loans and sell and pay drafts drawn as B/As.
(d)
US Tranche Commitments
. Subject to the terms and conditions set forth herein, each
US Tranche Lender agrees to make US Tranche Revolving Loans denominated in US Dollars to the US
Tranche Borrowers from time to time during the Availability Period in an aggregate principal amount
at any time outstanding that will not result in (A) the aggregate US Tranche Revolving Credit
Exposures exceeding the aggregate US Tranche Commitments or (B) the US Tranche Revolving Credit
Exposure of any Lender exceeding its US Tranche Commitment. Within the foregoing limits and subject
to the terms and conditions set forth herein, the US Tranche Borrowers may borrow, prepay and
reborrow US Tranche Revolving Loans.
SECTION 2.02.
Loans and Borrowings
. (a) Each Global Tranche Revolving Loan shall be
made as part of a Global Tranche Revolving Borrowing consisting of Global Tranche Revolving Loans
of the same Type and currency made by the Global Tranche Lenders ratably in accordance with their
respective Global Tranche Commitments. Each US/UK Tranche Revolving Loan shall be made as part of a
US/UK Tranche Revolving Borrowing consisting of US/UK Tranche Revolving Loans of the same Type and
currency made by the US/UK Tranche Lenders ratably in accordance with their respective US/UK
Tranche Commitments. Each US/Canadian Tranche Revolving Loan shall be made as part of a US/Canadian
Tranche Revolving Borrowing consisting of US/Canadian Tranche Revolving Loans of the same Type and
currency made by the US/Canadian Tranche Lenders ratably in accordance with their respective
US/Canadian Tranche Commitments. Each US Tranche Revolving Loan shall be made as part of a US
Tranche Revolving Borrowing consisting of US Tranche Revolving Loans of the same Type made by the
US Tranche Lenders ratably in accordance with their respective US Tranche Commitments. The failure
of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder;
provided
that the Commitments of the Lenders are several and no Lender shall be responsible for any
other Lenders failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving Borrowing denominated in US Dollars shall be
comprised entirely of (A) LIBOR Loans or (B) solely in the case of any such Borrowing by the
Company, a US Borrowing Subsidiary or a Canadian Borrowing Subsidiary, ABR Loans, (ii) each
Revolving Borrowing denominated in Sterling or any Alternative Currency shall be comprised entirely
of LIBOR Loans, (iii) each Revolving Borrowing denominated in Euros shall be comprised entirely of
EURIBOR Loans and (iv) each Revolving Borrowing denominated in Canadian Dollars shall be comprised
entirely of Canadian Prime Rate Loans. Each Swingline Loan denominated in US Dollars shall be an
ABR Loan and each Swingline Loan denominated in Canadian Dollars shall be a Canadian Prime Rate
Loan. Each Lender at its option may make any Loan, accept and purchase any B/A or issue any Letter
of Credit by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan,
accept and purchase such B/A or issue such Letter of Credit;
provided
that any exercise of such
option shall not affect the obligation of the applicable Borrower to repay such Loan in accordance
with the terms of this Agreement.
32
(c) At the commencement of each Interest Period for any LIBOR Revolving Borrowing or EURIBOR
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of
the Borrowing Multiple and not less than the Borrowing Minimum. At the time that each ABR Revolving
Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of
US$100,000 and not less than US$1,000,000;
provided
that an ABR Revolving Borrowing under any
Tranche may be in an aggregate amount that is equal to the entire unused balance of the Commitments
under such Tranche or, in the case of a Global Tranche Borrowing, that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e). At the time that each
Canadian Prime Rate Revolving Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of Cdn.$100,000 and not less than Cdn.$1,000,000. Each Swingline Loan
denominated in US Dollars shall be in an amount that is an integral multiple of US$100,000 and not
less than US$500,000. Each Swingline Loan denominated in Canadian Dollars shall be in an amount
that is an integral multiple of Cdn.$100,000 and not less than Cdn.$500,000. Borrowings of more
than one Type may be outstanding at the same time;
provided
that there shall not at any time be
more than a total of 15 LIBOR Revolving Borrowings and EURIBOR Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.
SECTION 2.03.
Requests for Borrowings
. To request a Borrowing, the applicable Borrower
shall notify the Applicable Agent by telephone confirmed promptly by hand delivery or telecopy to
such Applicable Agent (with a copy to the Administrative Agent if such Applicable Agent shall be
the Canadian Agent) of a written Borrowing Request in the form of
Exhibit C
or any other
form approved by the Administrative Agent and signed by a Financial Officer of the Company) (a) in
the case of a LIBOR Borrowing denominated in US Dollars, not later than 12:00 noon, Local Time,
three Business Days before the date of the proposed Borrowing, (b) in the case of a LIBOR Borrowing
denominated in Sterling or an Alternative Currency or a EURIBOR Borrowing, not later than
12:00 noon, Local Time, three Business Days before the date of the proposed Borrowing, (c) in the
case of an ABR Borrowing, not later than 12:00 noon, Local Time, the date of the proposed Borrowing
and (d) in the case of a Canadian Prime Rate Borrowing, not later than 12:00 noon, Local Time, the
date of the proposed Borrowing. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the Borrower requesting such Borrowing;
(ii) the Tranche under which such Borrowing is to be made;
(iii) the currency and the principal amount of such Borrowing;
(iv) the date of such Borrowing, which shall be a Business Day;
(v) the Type of such Borrowing;
(vi) in the case of a LIBOR Borrowing or a EURIBOR Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition of the term
Interest Period;
(vii) the Applicable Funding Account; and
33
(viii) in the case of a Borrowing by a Borrowing Subsidiary that is not a US Borrowing
Subsidiary, a UK Borrowing Subsidiary or a Canadian Borrowing Subsidiary, the jurisdiction
from which payments of the principal and interest on such Borrowing will be made.
Any Borrowing Request that shall fail to specify any of the information required by the preceding
provisions of this paragraph may be rejected by the Applicable Agent if such failure is not
corrected promptly after the Applicable Agent shall give written or telephonic notice thereof to
the applicable Borrower, and, if so rejected, will be of no force or effect. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Applicable Agent shall advise
each Lender that will make a Loan as part of the requested Borrowing of the details thereof and of
the amount of such Lenders Loan to be made as part of the requested Borrowing.
SECTION 2.04.
Swingline Loans.
(a) Subject to the terms and conditions set forth
herein, the Applicable Swingline Lender agrees to make Global Tranche Swingline Loans and
US/Canadian Tranche Swingline Loans to the Company, any US Borrowing Subsidiary or any Canadian
Borrowing Subsidiary denominated in US Dollars or, in the case of Swingline Loans to Canadian
Borrowing Subsidiaries, Canadian Dollars from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i) the sum of the US
Dollar Equivalents of the principal amounts of the outstanding Swingline Loans exceeding
US$150,000,000, (ii) the aggregate principal amount of the Swingline Loans denominated in Canadian
Dollars exceeding Cdn.$100,000,000, (iii) the aggregate Global Tranche Revolving Credit Exposures
exceeding the aggregate Global Tranche Commitments, (iv) the Global Tranche Revolving Credit
Exposure of any Lender exceeding its Global Tranche Commitment, (v) the aggregate US/Canadian
Tranche Revolving Credit Exposures exceeding the aggregate US/Canadian Tranche Commitments or
(vi) the US/Canadian Tranche Revolving Credit Exposure of any Lender exceeding its US/Canadian
Tranche Commitment;
provided
that no Swingline Lender shall be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Company, the US Borrowing Subsidiaries and the Canadian Borrowing
Subsidiaries may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the applicable Borrower shall notify the Applicable Agent
(with a copy to the Administrative Agent if the Applicable Agent shall be the Canadian Agent) and
the Applicable Swingline Lender of such request by telephone (confirmed by telecopy signed by a
Financial Officer on behalf of the applicable Borrower), not later than 2:00 p.m., Local Time, on
the day of such proposed Swingline Loan. Each such notice shall be irrevocable and shall specify
the requested date (which shall be a Business Day) and amount of the requested Swingline Loan and
whether such Swingline Loan is to be a Global Tranche Swingline Loan or a US/Canadian Tranche
Swingline Loan. The Applicable Swingline Lender shall make each Swingline Loan available to the
applicable Borrower by means of a credit to the Applicable Funding Account (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m., Local Time, on the requested date
of such Swingline Loan.
(c) Either Swingline Lender may by written notice given to the Administrative Agent not later
than 10:00 a.m., New York City time, on any Business Day (i) require the Global Tranche Lenders to
acquire participations on such Business Day in all or a portion of the Global Tranche Swingline
Loans of such Swingline Lender outstanding or (ii) require the US/Canadian Tranche Lenders to
acquire participations on such Business Day in all or a portion of the US/Canadian Tranche
Swingline Loans of such Swingline Lender outstanding. Such notice shall
34
specify the aggregate amount of Swingline Loans in which the Global Tranche Lenders or US/Canadian
Tranche Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Global Tranche Lender or US/Canadian Tranche Lender, as the case
may be, specifying in such notice such Lenders Global Tranche Percentage or US/Canadian Tranche
Percentage, as applicable, of such Swingline Loan or Loans. Each Global Tranche Lender and
US/Canadian Tranche Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of such Applicable Swingline
Lender, such Lenders Global Tranche Percentage or US/Canadian Tranche Percentage, as applicable,
of such Swingline Loan or Loans. Each Global Tranche Lender and US/Canadian Tranche Lender
acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant
to this paragraph is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction or termination of
the Global Tranche Commitments or US/Canadian Tranche Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each Global Tranche
Lender and US/Canadian Tranche Lender shall comply with its obligations under this paragraph by
wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply,
mutatis
mutandis
, to the payment obligations of the Global Tranche Lenders and US/Canadian Tranche
Lenders), and the Administrative Agent shall promptly pay to the Applicable Swingline Lender the
amounts so received by it from the Global Tranche Lenders or US/Canadian Tranche Lenders, as the
case may be. The Administrative Agent shall notify the Company of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the Applicable Agent and not to the applicable Swingline Lender.
Any amounts received by either Swingline Lender from or on behalf of the applicable Borrower in
respect of a Swingline Loan after receipt by the such Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Applicable Agent; any such amounts
received by the Applicable Agent shall be promptly remitted by the Applicable Agent to the Global
Tranche Lenders or US/Canadian Tranche Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear;
provided
that any such
payment so remitted shall be repaid to the Swingline Lender or to the Applicable Agent, as the case
may be, if and to the extent such payment is required to be refunded to a Loan Party for any
reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not
relieve any Borrower of any default in the payment thereof.
SECTION 2.05.
Letters of Credit
. (a)
General
. Subject to the terms and
conditions set forth herein, any Global Tranche Borrower may request any Issuing Bank to issue
Letters of Credit (or to amend, renew or extend outstanding Letters of Credit) denominated in US
Dollars, Sterling, Euro, any Designated Currency available under the Global Tranche or, in the case
of a Global Tranche Borrower that is a Canadian Subsidiary, Canadian Dollars, for its own account,
in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, at any
time and from time to time during the Availability Period;
provided
that (i) unless JPMorgan Chase
Bank, N.A. and the Company shall otherwise agree, JPMorgan Chase Bank, N.A. will not issue Letters
of Credit denominated in Canadian Dollars, (ii) unless The Bank of Nova Scotia and the Company
shall otherwise agree, The Bank of Nova Scotia will not issue Letters of Credit denominated in
currencies other than Canadian Dollars and (iii) any other Issuing Bank will not be required to
issue Letters of Credit denominated in any currency not set forth in such Issuing Banks Issuing
Bank Agreement. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit application or other
agreement submitted by a Borrower to, or entered into by a Borrower with, an Issuing Bank relating
to any Letter of Credit, the terms and conditions of this Agreement shall
35
control. From and after the Effective Date, each Existing Letter of Credit shall be deemed to be a
Letter of Credit for all purposes hereof and shall be deemed to have been issued hereunder on the
Effective Date.
(b)
Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions
. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), a Borrower shall deliver (or transmit by electronic communication, if arrangements for
doing so have been approved by the applicable Issuing Bank) to an Issuing Bank and the
Administrative Agent, reasonably in advance of the requested date of issuance, amendment, renewal
or extension, a notice requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal
or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount and currency of such Letter of
Credit, the name and address of the beneficiary thereof and such other information as shall be
necessary to enable the applicable Issuing Bank to prepare, amend, renew or extend such Letter of
Credit. If requested by the applicable Issuing Bank, the Borrower also shall submit a letter of
credit application on such Issuing Banks standard form in connection with any request for a Letter
of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Company shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment, renewal or extension
(i) the LC Exposure shall not exceed US$150,000,000, (ii) the amount of the LC Exposure
attributable to Letters of Credit issued by the applicable Issuing Bank will not exceed the LC
Commitment of such Issuing Bank, (iii) the aggregate Global Tranche Revolving Credit Exposures
shall not exceed the aggregate Global Tranche Commitments and (iv) the Global Tranche Revolving
Credit Exposure of each Lender will not exceed the Global Tranche Commitment of such Lender. If the
Required Lenders notify the Issuing Banks that a Default exists and instruct the Issuing Banks to
suspend the issuance, amendment, renewal or extension of Letters of Credit, no Issuing Bank shall
issue, amend, renew or extend any Letter of Credit without the consent of the Required Lenders
until such notice is withdrawn by the Required Lenders (and each Lender that shall have delivered
such a notice agrees promptly to withdraw it at such time as it determines that no Default exists).
(c)
Expiration Date
. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date. A Letter of
Credit may provide for automatic renewals for additional periods of up to one year subject to a
right on the part of the applicable Issuing Bank to prevent any such renewal from occurring by
giving notice to the beneficiary during a specified period in advance of any such renewal, and the
failure of such Issuing Bank to give such notice by the end of such period shall for all purposes
hereof be deemed an extension of such Letter of Credit;
provided
that in no event shall any Letter
of Credit, as extended from time to time, expire after the date that is five Business Days prior to
the Maturity Date.
(d)
Participations
. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the part of the
applicable Issuing Bank or the Lenders, the applicable Issuing Bank hereby grants to each Global
Tranche Lender, and each Global Tranche Lender hereby acquires from such Issuing Bank, a
participation in such Letter of Credit equal to such Lenders Global Tranche Percentage from time
to time of the aggregate amount available to be drawn under such Letter of Credit. In consideration
and in furtherance of the foregoing, each Global Tranche Lender hereby absolutely
36
and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing
Bank, such Lenders Global Tranche Percentage of each LC Disbursement made by such Issuing Bank and
not reimbursed by the applicable Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the applicable Borrower for any
reason. Each Global Tranche Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Global Tranche Commitments,
and that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e)
Reimbursement
. If an Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the applicable Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement, in the currency of such LC
Disbursement, not later than 2:00 p.m., New York City time, on the Business Day immediately
following the day that the Borrower receives notice of such LC Disbursement;
provided
that, in the
case of an LC Disbursement in US Dollars or Canadian Dollars the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment
be financed with an ABR Borrowing or a Canadian Prime Rate Borrowing, as applicable, in an
equivalent amount and, to the extent so financed, the Borrowers obligation to make such payment
shall be discharged and replaced by the resulting ABR Borrowing or Canadian Prime Rate Borrowing.
If such Borrower fails to make such payment when due, the Administrative Agent shall notify each
Global Tranche Lender of the applicable LC Disbursement, the amount and currency of the payment
then due from such Borrower in respect thereof and such Lenders Global Tranche Percentage thereof.
Promptly following receipt of such notice, each Global Tranche Lender shall pay to the
Administrative Agent its Global Tranche Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.07 with respect to Loans made by such Global Tranche
Lender (and Section 2.07 shall apply,
mutatis
mutandis
, to the payment obligations
of the Global Tranche Lenders), and the Administrative Agent shall promptly pay to such Issuing
Bank the amounts so received by it from the Global Tranche Lenders. Promptly following receipt by
the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to such Issuing Bank or, to the extent that
Global Tranche Lenders have made payments pursuant to this paragraph to reimburse such Issuing
Bank, then to such Global Tranche Lenders and such Issuing Bank, as their interests may appear. Any
payment made by a Global Tranche Lender pursuant to this paragraph to reimburse such Issuing Bank
for any LC Disbursement (other than the funding of ABR Loans or Canadian Prime Rate Loans as
contemplated above) shall not constitute a Loan and shall not relieve the applicable Borrower of
its obligation to reimburse such LC Disbursement.
(f)
Obligations Absolute
. Each Borrowers obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the
applicable Issuing Bank under a Letter of Credit against presentation of a draft or other document
that does not strictly comply with the terms of such Letter of Credit or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or provide a right of
setoff
37
against, the applicable Borrowers obligations hereunder. None of the Administrative Agent, the
Lenders, any Issuing Bank or any of their Related Parties shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the control of such
Issuing Bank;
provided
that nothing in this Section shall be construed to excuse an Issuing Bank
from liability to the applicable Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by each Borrower to the extent
permitted by applicable law) suffered by such Borrower that are caused by such Issuing Banks
failure to exercise care when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the
absence of gross negligence or wilful misconduct on the part of an Issuing Bank (as finally
determined by a non-appealable judgment of
a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in
each such determination. In furtherance of the foregoing and without limiting the generality
thereof, the parties agree that, with respect to documents presented which appear on their face to
be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.
(g)
Disbursement Procedures
. The applicable Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for payment under a Letter
of Credit. Such Issuing Bank shall promptly notify the Administrative Agent and the applicable
Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing
Bank has made or will make an LC Disbursement thereunder;
provided
that any failure to give or
delay in giving such notice shall not relieve the applicable Borrower of its obligation to
reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h)
Interim Interest
. If an Issuing Bank shall make any LC Disbursement, then, unless
the applicable Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that such Borrower
reimburses such LC Disbursement at (i) in the case of any LC Disbursement denominated in US
Dollars, the rate per annum then applicable to ABR Revolving Loans denominated in US Dollars and
made to the Company, (ii) in the case of any LC Disbursement denominated in Canadian Dollars, the
rate per annum then applicable to Canadian Prime Rate Revolving Loans and (iii) in the case of an
LC Disbursement denominated in any other currency, a rate per annum determined by the applicable
Issuing Bank (which determination will be conclusive absent manifest error) to represent its cost
of funds
plus
the Applicable Rate used to determine interest applicable to LIBOR or EURIBOR
Revolving Loans;
provided
that, if such Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(e) shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that
interest accrued on and after the date of payment by any Global Tranche Lender pursuant to
paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account of such
Global Tranche Lender to the extent of such payment.
38
(i)
Cash Collateralization.
If any Event of Default shall occur and be continuing, on
the Business Day that the Company receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Global Tranche Lenders with LC
Exposures representing more than 50% of the aggregate amount of LC Exposure) demanding the deposit
of cash collateral pursuant to this paragraph, each applicable Borrower shall deposit (
Cash
Collateralize
) in respect of each outstanding Letter of Credit issued for such Borrowers
account, in an account with the Applicable Agent, in the name of the Applicable Agent and for the
benefit of the Global Tranche Lenders and the applicable Issuing Bank, an amount in cash and in the
currency of such Letter of Credit equal to the portion of the LC Exposure attributable to such
Letter of Credit as of such date plus any accrued and unpaid interest thereon;
provided
that the
obligation to Cash Collateralize shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Company or any Borrower described in clause (h) or (i) of
Article VII. Each such deposit shall be held by the Applicable Agent as collateral for the payment
and performance of the obligations of the Borrowers under this Agreement. The Applicable Agent
shall have exclusive dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits, which investments shall
be made at the option and sole discretion of the Applicable Agent (which will use reasonable
efforts to obtain a return at market rates on any such investments) and at the Borrowers risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such account. Monies in such account shall be applied by the Applicable Agent
to reimburse the applicable Issuing Banks for LC Disbursements for which they have not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction of
the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of Global Tranche Lenders
with LC Exposures representing more than 50% of the aggregate amount of LC Exposure), be applied to
satisfy other obligations of the Borrowers under the Loan Documents. If the Borrowers are required
to provide cash collateral hereunder as a result of the occurrence of an Event of Default, such
cash collateral (to the extent not applied as aforesaid) shall be returned to the Borrowers within
three Business Days after all Events of Default have been cured or waived.
(j)
Designation of Additional Issuing Banks.
From time to time, the Company may by
notice to the Administrative Agent and the Global Tranche Lenders designate as additional Issuing
Banks one or more Lenders that agree to serve in such capacity as provided below. The acceptance by
a Lender of any appointment as an Issuing Bank hereunder shall be evidenced by an agreement (an
Issuing Bank Agreement
), which shall be in a form satisfactory to the Company and the
Administrative Agent, shall set forth the LC Commitment of such Lender and shall be executed by
such Lender, the Company and the Administrative Agent and, from and after the effective date of
such agreement, (i) such Lender shall have all the rights and obligations of an Issuing Bank under
this Agreement and the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term Issuing Bank shall be deemed to include such Lender in its capacity as an
Issuing Bank. The Issuing Bank Agreement of any Issuing Bank may limit the currencies in which and
the Borrowers for the accounts of which such Issuing Bank will issue Letters of Credit, and any
such limitations will, as to such Issuing Bank, be deemed to be incorporated in this Agreement.
(k)
Replacement of an Issuing Bank
. An Issuing Bank may be replaced at any time by
written agreement among the Company, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the Company shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank
39
pursuant to Section 2.12(b). From and after the effective date of any such replacement, the
successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and references herein to the
term Issuing Bank shall be deemed to refer to such successor or to any previous Issuing Bank, as
the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing
Bank shall remain a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
(l)
Issuing Bank Reports
. Unless otherwise agreed by the Administrative Agent, each
Issuing Bank shall report in writing to the Administrative Agent (which shall promptly provide
notice to the Global Tranche Lenders of the contents thereof) (i) on or prior to each Business Day
on which such Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of such
issuance, amendment, renewal or extension, and the currencies and face amounts of the Letters of
Credit issued, amended, renewed or extended by it and outstanding after giving effect to such
issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed), it
being understood that such Issuing Bank shall not effect any issuance, renewal, extension or
amendment resulting in an increase in the aggregate amount of the Letters of Credit issued by it
without first obtaining written confirmation from the Administrative Agent that such increase is
then permitted under this Agreement, (ii) on each Business Day on which such Issuing Bank makes any
LC Disbursement, the date, currency and amount of such LC Disbursement, (iii) on any Business Day
on which the applicable Borrower fails to reimburse an LC Disbursement required to be reimbursed to
such Issuing Bank on such day, the date of such failure and the currency and amount of such LC
Disbursement and (iv) on any other Business Day, such other information as the Administrative Agent
shall reasonably request as to the Letters of Credit issued by such Issuing Bank.
SECTION 2.06.
Canadian Bankers Acceptances
. (a) Each acceptance and purchase of
Global Tranche B/As or US/Canadian Tranche B/As of a single Contract Period pursuant to
Section 2.01(a) or (c) and this Section shall be made ratably by the Lenders in accordance with the
amounts of their Global Tranche Commitments or US/Canadian Tranche Commitments, respectively. The
failure of any Lender to accept any B/A required to be accepted by it shall not relieve any other
Lender of its obligations hereunder;
provided
that the Commitments are several and no Lender shall
be responsible for any other Lenders failure to accept B/As as required. Each Lender at its option
may accept and purchase any B/A by causing any Canadian lending office or Affiliate of such Lender
to accept and purchase such B/A.
(b) The Global Tranche B/As or US/Canadian Tranche B/As of a single Contract Period accepted
and purchased on any date shall be in an aggregate amount that is an integral multiple of
Cdn.$1,000,000 and not less than Cdn.$5,000,000. If any Lenders ratable share of the Global
Tranche B/As or US/Canadian Tranche B/As of any Contract Period to be accepted on any date would
not be an integral multiple of Cdn.$100,000, the face amount of the B/As accepted by such Lender
may be increased or reduced to the nearest integral multiple of Cdn.$100,000 by the Canadian Agent
in its sole discretion. Global Tranche B/As or US/Canadian Tranche B/As of more than one Contract
Period may be outstanding at the same time;
provided
that there shall not at any time be more than
a total of ten B/A Drawings outstanding at any time.
(c) To request an acceptance and purchase of Global Tranche B/As or US/Canadian Tranche B/As,
a Canadian Borrowing Subsidiary shall notify the Canadian Agent of such request by telephone or by
telecopy not later than 12:00 noon., Local Time, two Business Days before the date of such
acceptance and purchase. Each such request shall be irrevocable and,
40
if telephonic, shall be confirmed promptly by hand delivery or telecopy to the Canadian Agent of a
written request in a form approved by the Canadian Agent and signed by such Canadian Borrowing
Subsidiary. Each such telephonic and written request shall specify the following information:
(i) the aggregate face amount of the B/As to be accepted and purchased;
(ii) whether such B/As are to be Global Tranche B/As or US/Canadian Tranche B/As;
(iii) the date of such acceptance and purchase, which shall be a Business Day;
(iv) the Contract Period to be applicable thereto, which shall be a period contemplated
by the definition of the term Contract Period (and which shall in no event end after the
Maturity Date); and
(v) the location and number of the Canadian Borrowing Subsidiarys account to which the
proceeds of such B/As are to be disbursed.
Any request for an acceptance and purchase of B/As that shall fail to specify any of the
information required by the preceding provisions of this paragraph may be rejected by the Canadian
Agent if such failure is not corrected promptly after the Canadian Agent shall give written or
telephonic notice thereof to the applicable Borrower and, if so rejected, will be of no force or
effect. Promptly following receipt of a request in accordance with this paragraph, the Canadian
Agent shall advise each Global Tranche Lender or US/Canadian Tranche Lender, as the case may be, of
the details thereof and of the amount of B/As to be accepted and purchased by such Lender.
(d) Each Canadian Borrowing Subsidiary hereby appoints each Global Tranche Lender and
US/Canadian Tranche Lender as its attorney to sign and endorse on its behalf, manually or by
facsimile or mechanical signature, as and when deemed necessary by such Lender, blank forms of
B/As, each Global Tranche Lender and US/Canadian Tranche Lender hereby agreeing that it will not
sign or endorse B/As in excess of those required in connection with B/A Drawings that have been
requested by the Canadian Borrowing Subsidiaries hereunder. It shall be the responsibility of each
Global Tranche Lender and US/Canadian Tranche Lender to maintain an adequate supply of blank forms
of B/As for acceptance under this Agreement. Each Canadian Borrowing Subsidiary recognizes and
agrees that all B/As signed and/or endorsed on its behalf by any Global Tranche Lender or
US/Canadian Tranche Lender in accordance with
such Canadian Borrowing Subsidiarys written request shall bind such Canadian Borrowing
Subsidiary as fully and effectually as if manually signed and duly issued by authorized officers of
such Canadian Borrowing Subsidiary. Each Global Tranche Lender and US/Canadian Tranche Lender is
hereby authorized to issue such B/As endorsed in blank in such face amounts as may be determined by
such Lender;
provided
that the aggregate face amount thereof is equal to the aggregate face amount
of B/As required to be accepted by such Lender in accordance with such Canadian Borrowing
Subsidiarys written request. No Global Tranche Lender or US/Canadian Tranche Lender shall be
liable for any damage, loss or claim arising by reason of any loss or improper use of any such
instrument unless such loss or improper use results from the bad faith, gross negligence or willful
misconduct of such Lender. Each Global Tranche Lender and
41
US/Canadian Tranche Lender shall maintain a record with respect to B/As (i) received by it from the
Canadian Agent in blank hereunder, (ii) voided by it for any reason, (iii) accepted and purchased
by it hereunder and (iv) canceled at their respective maturities. Each Global Tranche Lender and
US/Canadian Tranche Lender further agrees to retain such records in the manner and for the periods
provided in applicable provincial or federal statutes and regulations of Canada and to provide such
records to each Canadian Borrowing Subsidiary upon its request and at its expense. Upon request by
any Canadian Borrowing Subsidiary, a Lender shall cancel all forms of B/A that have been pre-signed
or pre-endorsed on behalf of such Canadian Borrowing Subsidiary and that are held by such Lender
and are not required to be issued pursuant to this Agreement.
(e) Drafts of each Canadian Borrowing Subsidiary to be accepted as B/As hereunder shall be
signed as set forth in paragraph (d) above. Notwithstanding that any Person whose signature appears
on any B/A may no longer be an authorized signatory for any of the Lenders or such Canadian
Borrowing Subsidiary at the date of issuance of such B/A, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained in force at the time of
such issuance and any such B/A so signed and properly completed shall be binding on such Canadian
Borrowing Subsidiary.
(f) Upon acceptance of a B/A by a Global Tranche Lender or US/Canadian Tranche Lender, such
Lender shall purchase such B/A from the applicable Canadian Borrowing Subsidiary at the Discount
Rate for such Lender applicable to such B/A accepted by it and provide to the Canadian Agent the
Discount Proceeds for the account of such Canadian Borrowing Subsidiary as provided in
Section 2.07. The acceptance fee payable by the applicable Canadian Borrowing Subsidiary to a
Lender under Section 2.12 in respect of each B/A accepted by such Lender shall be set off against
the Discount Proceeds payable by such Lender under this paragraph. Notwithstanding the foregoing,
in the case of any B/A Drawing resulting from the conversion or continuation of a B/A Drawing or
Revolving Borrowing pursuant to Section 2.08, the net amount that would otherwise be payable to
such Borrower by each Lender pursuant to this paragraph will be applied as provided in
Section 2.08(f).
(g) Each Global Tranche Lender and US/Canadian Tranche Lender may at any time and from time to
time hold, sell, rediscount or otherwise dispose of any or all B/As accepted and purchased by it
(it being understood that no such sale, rediscount or disposition shall constitute an assignment or
participation of any Commitment hereunder).
(h) Each B/A accepted and purchased hereunder shall mature at the end of the Contract Period
applicable thereto.
(i) Subject to applicable law, each Canadian Borrowing Subsidiary waives presentment for
payment and any other defense to payment of any amounts due to a Global Tranche Lender or
US/Canadian Tranche Lender in respect of a B/A accepted and purchased by it pursuant to this
Agreement that might exist solely by reason of such B/A being held, at the maturity thereof, by
such Lender in its own right, and each Canadian Borrowing Subsidiary agrees not to claim any days
of grace if such Lender as holder sues such Canadian Borrowing Subsidiary on the B/A for payment of
the amounts payable by such Canadian Borrowing Subsidiary thereunder. On the last day of the
Contract Period of a B/A, or such earlier date as may be required pursuant to the provisions of
this Agreement, the applicable Canadian Borrowing
Subsidiary shall pay the Lender that has accepted and purchased such B/A the full face amount
of such B/A, and after such payment such Canadian Borrowing Subsidiary shall have no further
liability in respect of such B/A and such Lender shall be entitled to all benefits of, and be
responsible for all payments due to third parties under, such B/A.
(j) At the option of each Canadian Borrowing Subsidiary and any Lender, B/As under this
Agreement to be accepted by that Lender may be issued in the form of depository bills for deposit
with The Canadian Depository for Securities Limited pursuant to the Depository Bills
42
and Notes Act (Canada). All depository bills so issued shall be governed by the provisions of this
Section.
(k) If a Global Tranche Lender or US/Canadian Tranche Lender is not a chartered bank under the
Bank Act (Canada) or if a Global Tranche Lender or US/Canadian Tranche Lender notifies the Canadian
Agent in writing that it is otherwise unable to accept B/As, such Lender will, instead of accepting
and purchasing any B/As, make a Loan (a
B/A Equivalent Loan
) to the applicable Canadian Borrowing
Subsidiary in the amount and for the same term as each draft which such Lender would otherwise have
been required to accept and purchase hereunder. Each such Lender will provide to the Canadian Agent
the Discount Proceeds of such B/A Equivalent Loan for the account of the applicable Canadian
Borrowing Subsidiary in the same manner as such Lender would have provided the Discount Proceeds in
respect of the draft which such Lender would otherwise have been required to accept and purchase
hereunder. Each such B/A Equivalent Loan will bear interest at the same rate that would result if
such Lender had accepted (and been paid an acceptance fee) and purchased (on a discounted basis) a
B/A for the relevant Contract Period (it being the intention of the parties that each such B/A
Equivalent Loan shall have the same economic consequences for the Lenders and the applicable
Canadian Borrowing Subsidiary as the B/A that such B/A Equivalent Loan replaces). All such interest
shall be paid in advance on the date such B/A Equivalent Loan is made, and will be deducted from
the principal amount of such B/A Equivalent Loan in the same manner in which the Discount Proceeds
of a B/A would be deducted from the face amount of the B/A. Subject to the repayment requirements
of this Agreement, on the last day of the relevant Contract Period for such B/A Equivalent Loan,
the applicable Canadian Borrowing Subsidiary shall be entitled to convert each such B/A Equivalent
Loan into another type of Loan, or to roll over each such B/A Equivalent Loan into another B/A
Equivalent Loan, all in accordance with the applicable provisions of this Agreement.
(l) Notwithstanding any provision hereof but subject to Section 2.11(b), the Borrowers may not
prepay any B/A Drawing other than on the last day of its Contract Period.
(m) For greater certainty, all provisions of this Agreement that are applicable to B/As shall
also be applicable,
mutatis
mutandis
, to B/A Equivalent Loans.
SECTION 2.07.
Funding of Borrowings and B/A Drawings
. (a) Each Lender shall make each
Loan to be made by it hereunder and disburse the Discount Proceeds (net of applicable acceptance
fees) of each B/A to be accepted and purchased by it hereunder on the proposed date thereof by wire
transfer of immediately available funds in the applicable currency by 2:00 p.m., Local Time, to the
account of the Applicable Agent most recently designated by such Applicable Agent for such purpose
by notice to the Lenders;
provided
that Swingline Loans shall be made as provided in Section 2.04.
The Applicable Agent will make such Loan proceeds or Discount Proceeds available to the applicable
Borrower by promptly crediting the amounts so received, in like funds, to the Applicable Funding
Account of such Borrower;
provided
that ABR Revolving Loans or Swingline Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the applicable Issuing Bank.
(b) Unless the Applicable Agent shall have received notice from a Lender prior to the proposed
date of any Borrowing or acceptance and purchase of B/As that such Lender will not make available
to the Applicable Agent such Lenders share of such Borrowing or the applicable Discount Proceeds
(net of applicable acceptance fees), the Applicable Agent may assume that such Lender has made such
share
available on such date in accordance with paragraph (a) of this Section and may, in reliance
upon such assumption, make available to the applicable Borrower a
43
corresponding amount. In such event, if a Lender has not in fact made its share of the applicable
Borrowing or the applicable Discount Proceeds (net of applicable acceptance fees) available to the
Applicable Agent, then the applicable Lender and such Borrower severally agree to pay to the
Applicable Agent forthwith on demand such corresponding amount with interest thereon, for each day
from and including the date such amount is made available to such Borrower to but excluding the
date of payment to the Applicable Agent, at (i) in the case of such Lender, the rate reasonably
determined by the Applicable Agent to be the cost to it of funding such amount or (ii) in the case
of such Borrower, the interest rate applicable to the subject Loan or the applicable Discount Rate
and pro-rated acceptance fee, as the case may be.
SECTION 2.08.
Interest Elections
. (a) Each Revolving Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a LIBOR Borrowing or a
EURIBOR Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Each B/A Drawing shall have a Contract Period as specified in the applicable request therefor.
Thereafter, the applicable Borrower may elect to convert such Borrowing or B/A Drawing to a
Borrowing of a different Type or, in the case of a Borrowing in Canadian Dollars, a B/A Drawing, or
to continue such Borrowing or B/A Drawing and, in the case of a LIBOR Borrowing or a EURIBOR
Borrowing, may elect Interest Periods therefor, all as provided in this Section and on terms
consistent with the other provisions of this Agreement, it being understood that no B/A Drawing may
be converted or continued other than at the end of the Contract Period applicable thereto. A
Borrower may elect different options with respect to different portions of an affected Borrowing or
B/A Drawing, in which case each such portion shall be allocated ratably among the Lenders holding
the Loans comprising such Borrowing or accepting the B/As comprising such B/A Drawing, as the case
may be, and the Loans or B/As resulting from an election made with respect to any such portion
shall be considered a separate Borrowing or B/A Drawing. This Section shall not apply to Swingline
Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, a Borrower shall notify the Applicable Agent
of such election by telephone (i) in the case of an election that would result in a Borrowing, by
the time and date that a Borrowing Request would be required under Section 2.03 if such Borrower
were requesting a Revolving Borrowing of the Type resulting from such election to be made on the
effective date of such election, and (ii) in the case of an election that would result in a B/A
Drawing or the continuation of a B/A Drawing, by the time and date that a request would be required
under Section 2.06 if such Borrower were requesting an acceptance and purchase of B/As to be made
on the effective date of such election. Each such Interest Election Request shall be irrevocable
and shall be confirmed promptly by delivery to the Applicable Agent (with a copy to the
Administrative Agent if such Applicable Agent shall be the Canadian Agent) of a written Interest
Election Request in a form approved by the Administrative Agent and signed by a Financial Officer
on behalf of the applicable Borrower. Notwithstanding any other provision of this Section, a
Borrower shall not be permitted to (i) change the currency of any Borrowing or B/A Drawing,
(ii) elect an Interest Period for LIBOR Loans or EURIBOR Loans that does not comply with
Section 2.02(d) or any Contract Period for a B/A Drawing that does not comply with Section 2.06 or
(iii) convert any Borrowing or B/A Drawing to a Borrowing or B/A Drawing not available to such
Borrower under the Class of Commitments pursuant to which such Borrowing or B/A Drawing was made.
(c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:
44
(i) the Borrowing or B/A Drawing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing or B/A Drawing (in which case the
information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing
or B/A Drawing);
(ii) the effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;
(iii) in the case of an election resulting in a Borrowing, the Type of the resulting
Borrowing; and
(iv) in the case of an election resulting in a Borrowing, if the resulting Borrowing is
to be a LIBOR Borrowing or a EURIBOR Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a period contemplated by the definition
of the term Interest Period, and in the case of an election resulting in a B/A Drawing, the
Contract Period to be applicable thereto, which shall be a period contemplated by the
definition of the term Contract Period.
If any such Interest Election Request requests a LIBOR or EURIBOR Borrowing or a B/A Drawing but
does not specify an Interest Period or Contract Period, then the Borrower shall be deemed to have
selected an Interest Period of one months duration or a Contract Period of 30 days duration.
(d) Promptly following receipt of an Interest Election Request, the Applicable Agent shall
advise each affected Lender of the details thereof and of such Lenders portion of each resulting
Borrowing or B/A Drawing.
(e) If the applicable Borrower fails to deliver a timely Interest Election Request with
respect to a LIBOR Borrowing, EURIBOR Borrowing or B/A Drawing prior to the end of the Interest
Period or Contract Period applicable thereto, then, unless such Borrowing or B/A Drawing is repaid
as provided herein, at the end of such Interest Period or Contract Period, (i) in the case of a
LIBOR Borrowing made to the Company, a US Borrowing Subsidiary or a Canadian Borrowing Subsidiary
and denominated in US Dollars, such Borrowing shall be converted to an ABR Borrowing, (ii) in the
case of a Borrowing or B/A Drawing denominated in Canadian Dollars, such Borrowing or B/A Drawing
shall be converted to a Canadian Prime Rate Borrowing, and (iii) in the case of any other LIBOR
Borrowing or a EURIBOR Borrowing such Borrowing shall become due and payable on the last day of
such Interest Period.
(f) Upon the conversion of any Borrowing (or portion thereof), or the continuation of any B/A
Drawing (or portion thereof), to or as a B/A Drawing, the net amount that would otherwise be
payable to a Borrower by each Lender pursuant to Section 2.06(f) in respect of such new B/A Drawing
shall be applied against the principal of such Borrowing (in the case of a conversion) or the
reimbursement obligation owed to such Lender under Section 2.06(i) in respect of the B/As accepted
by such Lender as part of such maturing B/A Drawing (in the case of a continuation), and such
Borrower shall pay to such Lender an amount equal to the difference between the principal amount of
such Loan or the aggregate face amount of such maturing B/As, as the case may be, and such net
amount.
(g) Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
45
Borrowing denominated in US Dollars to the Company, a US Subsidiary or a Canadian Subsidiary may be
converted to or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR Borrowing
denominated in US Dollars to the Company, a US Subsidiary or a Canadian Subsidiary shall be
converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09.
Termination, Reduction and Increase of Commitments
. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
(b) The Company may at any time terminate, or from time to time reduce, the Commitments of any
Tranche;
provided
that (i) each reduction of the Commitments of any Tranche shall be in an amount
that is
an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum, in
each case for Borrowings denominated in US Dollars and (ii) the Company shall not terminate or
reduce the Commitments of any Tranche if, after giving effect to such termination or reduction and
to any concurrent payment or prepayment of Loans, B/As or LC Disbursements, the aggregate amount of
Revolving Credit Exposures under such Tranche would exceed the aggregate amount of Commitments of
such Tranche.
(c) The Company shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under any Tranche under paragraph (b) of this Section at least two Business Days
prior to the effective date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any such notice, the Administrative Agent
shall advise the other Agents and the applicable Lenders of the contents thereof. Each notice
delivered by the Company pursuant to this Section shall be irrevocable;
provided
that a notice of
termination of the Commitments under any Tranche may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be revoked or extended by
the Company (by notice to the Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied or the effectiveness of such other credit facilities is delayed.
Any termination or reduction of the Commitments under any Tranche shall be permanent. Each
reduction of the Commitments under any Tranche shall be made ratably among the applicable Lenders
in accordance with their Commitments under such Tranche.
(d) The Company may at any time and from time to time, by written notice to the Administrative
Agent (which shall promptly deliver a copy to each of the other Agents and the applicable Lenders)
executed by the Company and one or more financial institutions (any such financial institution
referred to in this Section being called an
Increasing Lender
), which may include any Lender,
cause Global Tranche Commitments, US/UK Tranche Commitments, US/Canadian Tranche Commitments or US
Tranche Commitments to be increased or extended by the Increasing Lenders (or cause the Commitments
of the Increasing Lenders to be increased, as the case may be) in an amount for each Increasing
Lender (which shall not be less than $5,000,000) set forth in such notice;
provided
, that (i) the
new Commitments and increases in existing Commitments pursuant to this paragraph shall not be
greater than US$250,000,000 in the aggregate during the term of this Agreement and shall not be
less than US$25,000,000 (or any portion of such US$250,000,000 aggregate amount remaining unused)
for any such increase, (ii) each Increasing Lender, if not already a Lender hereunder, shall be
subject to the approval of the Administrative Agent (which approval shall not be unreasonably
withheld) and (iii) each Increasing Lender, if not already a Lender hereunder, shall become a party
to this Agreement by completing and delivering to the Administrative Agent a duly executed
accession agreement in a form satisfactory to the Administrative Agent and the Borrower (an
Accession Agreement
). New Commitments and increases in Commitments shall become effective on the
date specified in the applicable notices delivered pursuant to this paragraph. Upon the
effectiveness of any Accession
46
Agreement to which any Increasing Lender is a party, (i) such Increasing Lender shall thereafter be
deemed to be a party to this Agreement and shall be entitled to all rights, benefits and privileges
accorded a Lender hereunder and subject to all obligations of a Lender hereunder and
(ii)
Schedule 2.01
shall be deemed to have been amended to reflect the Commitment or
Commitments of such Increasing Lender as provided in such Accession Agreement. Notwithstanding the
foregoing, no increase in the Commitments (or in the Commitment of any Lender) pursuant to this
paragraph shall become effective unless (i) the Administrative Agent shall have received documents
consistent with those delivered under Section 4.01(b) and (c), giving effect to such increase and
(ii) on the effective date of such increase, the conditions set forth in Section 4.02(a) and
(b) shall be satisfied (with all references in such paragraphs to a Borrowing being deemed to be
references to such increase) and the Administrative Agent shall have received a certificate to that
effect dated such date and executed by a Financial Officer of the Company.
(e) On the effective date (the
Increase Effective Date
) of any increase in the Commitments
of any Tranche pursuant to paragraph (d) above (a
Commitment Increase
), (i) the aggregate
principal amount of the Revolving Borrowings of such Tranche outstanding (the
Initial Borrowings
)
immediately prior to the Commitment Increase on the Increase Effective Date shall be deemed to be
paid, (ii) each Increasing
Lender that shall have had a Commitment under such Tranche prior to the Commitment Increase
shall pay to the Administrative Agent in same day funds (in the applicable currencies), an amount
equal to the difference between (A) the product of (1) such Lenders applicable Tranche Percentage
(calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of each
Subsequent Borrowing (as hereinafter defined) and (B) the product of (1) such Lenders applicable
Tranche Percentage (calculated without giving effect to the Commitment Increase) multiplied by
(2) the amount of each Initial Borrowing, (iii) each Increasing Lender that shall not have had a
Commitment under such Tranche prior to the Commitment Increase shall pay to Administrative Agent in
same day funds (in the applicable currencies) an amount equal to the product of (1) such Increasing
Lenders applicable Tranche Percentage (calculated after giving effect to the Commitment Increase)
multiplied by (2) the amount of each Subsequent Borrowing, (iv) after the Administrative Agent
receives the funds specified in clauses (ii) and (iii) above, the Administrative Agent shall pay to
each Lender (in the applicable currencies) the portion of such funds that is equal to the
difference between (A) the product of (1) such Lenders applicable Tranche Percentage (calculated
without giving effect to the Commitment Increase) multiplied by (2) the amount of each Initial
Borrowing, and (B) the product of (1) such Lenders applicable Tranche Percentage (calculated after
giving effect to the Commitment Increase) multiplied by (2) the amount of each Subsequent
Borrowing, (v) after the effectiveness of the Commitment Increase, the applicable Borrower shall be
deemed to have made new Borrowings (the
Subsequent Borrowings
) in amounts (in the currencies of
the Initial Borrowings) equal to the amounts of the Initial Borrowings and of the Types and for the
Interest Periods specified in a Borrowing Request delivered to the Administrative Agent in
accordance with Section 2.03, (vi) each Lender shall be deemed to hold its applicable Tranche
Percentage of each Subsequent Borrowing (calculated after giving effect to the Commitment Increase)
and (vii) the Borrower shall pay each Lender any and all accrued but unpaid interest on its Loans
comprising the Initial Borrowings. The deemed payments made pursuant to clause (i) above shall be
subject to compensation by the applicable Borrower pursuant to the provisions of Section 2.16 if
the Increase Effective Date occurs other than on the last day of the Interest Period relating
thereto. On the Increase Effective Date of any increase in the Global Tranche Commitments or the
US/Canadian Tranche Commitments pursuant to paragraph (d) above, the applicable Borrowers and
Lenders shall take such actions (including making and receiving payments), if any, as the
Administrative Agent shall specify in order that the extensions of credit represented by any
outstanding Global Tranche B/As or US/Canadian Tranche B/As may be held by the Global Tranche
Lenders or the US/Canadian Tranche Lenders ratably in proportion to their Global
47
Tranche Commitments or US/Canadian Tranche Commitments;
provided
, that if the Administrative Agent
does not specify any such actions, such outstanding B/As will continue outstanding for the duration
of the applicable Contract Periods and the applicable Borrowers reimbursement obligations under
Section 2.06(i) will continue to be owed to the Lenders that accepted and purchased such B/As.
SECTION 2.10.
Repayment of Loans and B/As; Evidence of Debt
. (a) Each Borrower hereby
unconditionally promises to pay (i) to the Applicable Agent for the account of each Lender the then
unpaid principal amount of each Revolving Loan of such Borrower on the Maturity Date and the face
amount of each B/A, if any, accepted by such Lender as provided in Section 2.06 and (ii) to the
Applicable Swingline Lender the then unpaid principal amount of each Swingline Loan (A) if
denominated in US Dollars on the earlier of the Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is at least three
Business Days after such Swingline Loan is made and (B) if denominated in Cdn$ on the Maturity
Date;
provided
that on each date that a Revolving Borrowing denominated in US Dollars or Canadian
Dollars (including any ABR Borrowing) is made to a Borrower that shall have borrowed Swingline
Loans, such Borrower shall repay all its outstanding Swingline Loans denominated in such currency.
Each Borrower will pay the principal amount of each Loan or B/A made to or drawn by such Borrower
and the accrued interest on such Loan in the currency of such Loan or B/A.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of each Borrower to such Lender resulting from each Loan made or B/A
accepted and purchased by such Lender, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made and B/A accepted and purchased hereunder, the Class and Type of each such Loan
and, in the case of any LIBOR or EURIBOR Loan, the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from each Borrower
to each Lender hereunder and (iii) the amount of any sum received by any Agent hereunder for the
account of the Lenders or any of them and each Lenders share thereof. The London Agent and the
Canadian Agent shall furnish to the Administrative Agent, promptly after the making of any Loan or
Borrowing or the acceptance and purchase of any B/As with respect to which it is the Applicable
Agent or the receipt of any payment of principal or interest with respect to any such Loan or
Borrowing or any such B/As, information with respect thereto that will enable the Administrative
Agent to maintain the accounts referred to in the preceding sentence.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be
prima facie
evidence of the existence and amounts of the obligations recorded
therein;
provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of any Borrower to
repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it to any Borrower be evidenced by
a promissory note. In such event, the applicable Borrower shall prepare, execute and deliver to
such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form reasonably acceptable to the Administrative Agent.
Thereafter, the Revolving Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 11.04) be
48
represented by one or more promissory notes in such form payable to the payee named therein (or, if
such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11.
Prepayment of Loans
. (a) Any Borrower shall have the right at any time
and from time to time to prepay any Borrowing of such Borrower in whole or in part, subject to
prior notice in accordance with paragraph (d) of this Section.
(b) If the aggregate Revolving Credit Exposures under any Tranche shall exceed the aggregate
Commitments under such Tranche, then (i) on the last day of any Interest Period for any LIBOR
Borrowing or EURIBOR Borrowing, and the last day of any Contract Period for any B/A Drawing, under
such Tranche and (ii) on each other date on which any ABR Revolving Borrowing, Canadian Prime Rate
Borrowing or Swingline Loan shall be outstanding under such Tranche, the applicable Borrowers shall
prepay Loans under such Tranche in an aggregate amount equal to the lesser of (A) the amount
necessary to eliminate such excess (after giving effect to any other prepayment of Loans or payment
of B/As on such day) and (B) the amount of the applicable Revolving Borrowings, B/A Drawings or
Swingline Loans referred to in clause (i) or (ii), as applicable. If the aggregate amount of the
Revolving Credit Exposures under any Tranche on the last day of any month (or on any other date
specified by Lenders representing more than 50% of the Commitments under such Tranche) shall exceed
105% of the aggregate Commitments under such Tranche, then the applicable Borrowers shall, not
later than the next Business Day, prepay one or more Borrowings under such Tranche in an aggregate
principal amount sufficient to eliminate such excess.
(c) Prior to any optional or mandatory prepayment of Borrowings hereunder, the applicable
Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in
the notice of such prepayment pursuant to paragraph (d) of this Section.
(d) The applicable Borrower shall notify the Applicable Agent (and, in the case of prepayment
of a Swingline Loan, the Applicable Swingline Lender) by a telecopy notice signed by a Financial
Officer on behalf of the applicable Borrower of any prepayment of a Borrowing hereunder (i) in the
case of a LIBOR Borrowing denominated in US Dollars, not later than 12:00 noon, Local Time,
three Business Days before
the date of such prepayment (or, in the case of a prepayment under paragraph (b) above, as
soon thereafter as practicable), (ii) in the case of a LIBOR Borrowing denominated in Sterling or
an Alternative Currency or a EURIBOR Borrowing, not later than 12:00 noon, Local Time, three
Business days before the date of such prepayment (or, in the case of a prepayment under paragraph
(b) above, as soon thereafter as practicable), (iii) in the case of an ABR Borrowing, not later
than 12:00 noon, Local Time, the date of such prepayment and (d) in the case of a Canadian Prime
Rate Borrowing, not later than 12:00 noon, Local Time, the date of such prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the principal amount of each
Borrowing or portion thereof to be prepaid;
provided
that, if a notice of optional prepayment is
given in connection with a conditional notice of termination of the Commitments as contemplated by
Section 2.09(c), then such notice of prepayment may be revoked or extended if such notice of
termination is revoked or extended in accordance with Section 2.09(c). Promptly following receipt
of any such notice, the Applicable Agent shall advise the applicable Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in
the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment
of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.
SECTION 2.12.
Fees
. (a) The Company agrees to pay to the Administrative Agent, in US
Dollars, for the account of each Lender, a facility fee, which shall accrue at the
49
Applicable Rate on the daily amount of each Commitment of such Lender, whether used or unused,
during the period from and including the Closing Date to but excluding the date on which such
Commitment terminates;
provided
, that if any Lender continues to have any Revolving Credit Exposure
under any Tranche after its Commitment of such Tranche terminates, then such facility fee shall
continue to accrue on the daily amount of such Lenders Revolving Credit Exposure under such
Tranche from and including the date on which such Commitment terminates to but excluding the date
on which such Lender ceases to have any Revolving Credit Exposure under such Tranche. Accrued
facility fees shall be payable in arrears on the first day of January, April, July and October of
each year, commencing on the first such date to occur after the date hereof, and, with respect to
the Commitments of any Tranche, on the date on which the Commitments of such Tranche shall
terminate;
provided
that any facility fees accruing on the Revolving Credit Exposure under any
Tranche after the date on which the Commitments of such Tranche terminate shall be payable on
demand. All facility fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day).
(b) The Company agrees to pay (i) to the Administrative Agent for the account of each Global
Tranche Lender a participation fee with respect to its participations in Letters of Credit, which
shall accrue at the Applicable Rate used to determine the interest rate applicable to Global
Tranche LIBOR Revolving Loans, on the daily amount of such Lenders LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Effective Date to but excluding the later of the date on which such Lenders Global Tranche
Commitment terminates and the date on which such Lender ceases to have any LC Exposure and (ii) to
each Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the portion
of the daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) attributable to Letters of Credit issued by such Issuing Bank during the period
from and including the Effective Date to but excluding the later of the date of termination of the
Global Tranche Commitments and the date on which there ceases to be any LC Exposure, as well as
each Issuing Banks standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees
accrued or becoming payable in respect of Letters of Credit issued through and including the last
day of March, June, September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the Effective Date;
provided
that all such fees shall be payable on the date on which the Global Tranche Commitments
terminate and any such fees accruing after the date on which the Global Tranche Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Banks pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) Each Canadian Borrowing Subsidiary agrees to pay to the Canadian Agent, for the account of
each Global Tranche Lender and US/Canadian Tranche Lender, on each date on which Global Tranche
B/As or US/Canadian Tranche B/As, respectively, drawn by such Canadian Borrowing Subsidiary are
accepted and purchased hereunder, in Canadian Dollars, an acceptance fee computed by multiplying
the aggregate face amount of the B/As accepted by such Lender on such date by the product of
(i) the Applicable Rate (being the applicable B/A Stamping Fee set forth in the definition of
such term) on such date and (ii) a fraction, the numerator of which is the number of days in the
Contract Period applicable to such B/As and the denominator of which is 365.
50
(d) The Company agrees to pay to the Agents, for their own account, fees payable in the
amounts and at the times separately agreed upon between the Company and the Agents.
(e) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent, to the Issuing Banks (in the case of fees payable to them) or to the
Canadian Agent (in the case of fees referred to in paragraph (c) of this Section) for distribution
(i) in the case of facility fees, to the Lenders, (ii) in the case of the participation fees, to
the Global Tranche Lenders and (iii) in the case of acceptance fees, to the Global Tranche Lenders
or the US/Canadian Tranche Lenders, as the case may be. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13.
Interest
. (a) The Loans comprising each ABR Borrowing (including each
Swingline Loan denominated in US Dollars) shall bear interest at the Alternate Base Rate.
(b) The Revolving Loans comprising each LIBOR Revolving Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus
the Applicable
Rate.
(c) The Revolving Loans comprising each EURIBOR Revolving Borrowing shall bear interest at the
Adjusted EURIBO Rate for the Interest Period in effect for such Borrowing
plus
the
Applicable Rate.
(d) The Loans comprising each Canadian Prime Rate Borrowing (including each Swingline Loan
denominated in Canadian Dollars) shall bear interest at the Canadian Prime Rate.
(e) Notwithstanding the foregoing, if any principal of or interest on any Loan, B/A or LC
Disbursement, any fee or other amount payable by any Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, B/A or LC Disbursement, 2%
plus
the interest rate or discount rate
otherwise applicable to such Loan, B/A or LC Disbursement as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans
made to the Company as provided in paragraph (a) of this Section.
(f) Accrued interest on each Loan under any Tranche shall be payable in arrears on each
Interest Payment Date for such Loan and upon the termination of the Commitments of such Tranche;
provided
that (i) interest accrued pursuant to paragraph (e) of this Section shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an
ABR Revolving Loan or a Canadian Prime Rate Revolving Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (iii) in the event of any conversion of any LIBOR Revolving Loan
or EURIBOR Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion. All interest shall
be payable in the currency in which the applicable Loan is denominated.
(g) All interest hereunder shall be computed on the basis of a year of 360 days, except that
(i) interest on Borrowings denominated in Sterling, (ii) interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate and
(iii) interest on Canadian Prime Rate Borrowings and acceptance fees shall each be computed on the
basis of a year of 365 days (or, in the case of ABR Borrowings, 366 days in a leap year), and in
51
each case shall be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Adjusted LIBO Rate, Adjusted EURIBO Rate, Alternate Base
Rate or Canadian Prime Rate shall be determined by the Applicable Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.14.
Alternate Rate of Interest
. If prior to the commencement of any Interest
Period for a LIBOR Borrowing or a EURIBOR Borrowing:
(a) the Applicable Agent determines (which determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or
the Adjusted EURIBO Rate, as the case may be, for such Interest Period; or
(b) the Applicable Agent is advised by a majority in interest of the Lenders that would make
Loans as part of such Borrowing that the Adjusted LIBO Rate or Adjusted EURIBO Rate, as the case
may be, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining the Loans included in such Borrowing for such Interest Period;
then the Applicable Agent shall give notice thereof to the applicable Borrower and the applicable
Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Applicable
Agent notifies the applicable Borrower and the applicable Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion
of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, an affected LIBOR
Borrowing or a EURIBOR Borrowing, as the case may be, shall be ineffective, (ii) any affected LIBOR
Borrowing or EURIBOR Borrowing that is requested to be continued shall (A) if denominated in US
Dollars, be continued as an ABR Borrowing, or (B) otherwise, be repaid on the last day of the then
current Interest Period applicable thereto and (iii) any Borrowing Request for an affected LIBOR
Borrowing or a EURIBOR Borrowing shall (A) if denominated in US Dollars, be deemed a request for an
ABR Borrowing, or (B) otherwise, be ineffective.
SECTION 2.15.
Increased Costs
. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by, any Lender
(except any such reserve requirement reflected in the Adjusted LIBO Rate or the Adjusted EURIBO
Rate) or any Issuing Bank; or
(ii) impose on any Lender, any Issuing Bank or the London, European or Canadian interbank
market any other condition affecting this Agreement or LIBOR Loans or EURIBOR Loans made by or
any acceptance and purchase of B/As by such Lender or any Letter of Credit or participations
therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan or EURIBOR Loan or accepting and purchasing any B/As (or of maintaining
its obligation to make any such Loan or to accept and purchase any such B/As) or to increase the
cost to such Lender or Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such Lender or Issuing Bank
hereunder (whether of principal, interest or otherwise), then the applicable Borrower will pay to
such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
52
(b) If any Lender or Issuing Bank determines in good faith that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return on such Lenders
or Issuing Banks capital or on the capital of such Lenders or Issuing Banks holding company, if
any, as a consequence of this Agreement or the Loans made or B/As accepted and purchased by, or
participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lenders or Issuing
Banks holding company could have achieved but for such Change in Law (taking into consideration
such Lenders or Issuing Banks policies and the policies of such Lenders or Issuing Banks
holding company with respect to capital adequacy), then from time to time the applicable Borrower
will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or Issuing Bank or such Lenders or Issuing Banks holding company for
any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth the amount or amounts necessary to
compensate such Lender or Issuing Bank or its holding company, as the case may be, and the manner
in which such amount or amounts have been calculated, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Company and shall be conclusive absent manifest error. The
Company shall pay or cause the applicable Borrower to pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant
to this Section shall not constitute a waiver of such Lenders or Issuing Banks right to demand
such compensation;
provided
that the applicable Borrower shall not be required to compensate a
Lender or Issuing Bank pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or Issuing Bank, as the case may be, notifies the
Company of the Change in Law giving rise to such increased costs or reductions and of such Lenders
or Issuing Banks intention to claim compensation therefor;
provided further
that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect thereof.
(e) The foregoing provisions of this Section shall not apply to Taxes, which shall be governed
solely by Section 2.17.
SECTION 2.16.
Break Funding Payments
. In the event of (a) the payment of any principal
of any LIBOR Loan or any EURIBOR Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of any LIBOR Loan or any
EURIBOR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure
to borrow, convert, continue or prepay any LIBOR Loan or any EURIBOR Loan or to make any B/A
Drawing on the date specified in any notice delivered pursuant hereto (regardless of whether any
such notice may be revoked or extended under Section 2.11(d) and is revoked or extended in
accordance therewith) or (d) the assignment of any LIBOR Loan or any EURIBOR Loan or the right to
receive payment in respect of a B/A other than on the last day of the Interest Period or Contract
Period applicable thereto as a result of a request by the applicable Borrower pursuant to
Section 2.19 or the CAM Exchange, then, in any such event, the applicable Borrower shall compensate
each Lender for the loss, cost and expense (but not for any lost profit) attributable to such
event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) (A) with respect to a LIBOR Loan or EURIBOR Loan, the
amount of interest which would have accrued on the principal amount of such Loan had such event not
occurred, at the Adjusted LIBO Rate or the Adjusted
53
EURIBO Rate, as the case may be, that would have been applicable to such Loan, for the period from
the date of such event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan) or (B) with respect to a B/A, (x) in the case of an event described in clause
(c) above, the face amount of such B/A minus the Discount Proceeds of such B/A and (y) in the case
of an event described in clause (d) above, the face amount of such B/A minus amounts received as a
result of such assignment over (ii) the amount of interest that would accrue on such principal
amount or the Discount Proceeds applicable to such B/A for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for deposits in the
applicable currency of a comparable amount and period from other banks in the London, European or
Canadian interbank market. A certificate of any Lender setting forth in reasonable detail any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Company and shall be conclusive absent manifest error. The applicable Borrower
shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt
thereof. Any payments by the applicable Borrowers in respect of B/As under this section shall be
made without duplication of any payment made by any Canadian Borrowing Subsidiary under
Section 2.06(i).
SECTION 2.17.
Taxes
. (a) Any and all payments by or on account of any obligation of a
Loan Party hereunder or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes;
provided
that if any Loan Party shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) each Agent, Lender and Issuing
Bank (as the case may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Loan Party shall make such deductions and (iii) such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.
(c) Each Loan Party shall indemnify each Agent, Lender and Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by such
Agent, Lender or Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of such Loan Party hereunder or under any other Loan Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate setting forth the amount of such
payment or liability delivered to the Company by an Agent, Lender or Issuing Bank, or by the
Administrative Agent on behalf of a Lender or Issuing Bank, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Loan
Party to a Governmental Authority, such Loan Party shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
54
(e) Any Lender that is entitled to an exemption from or reduction of withholding tax under the
law of the jurisdiction in which a Borrower to which such Lender may be required to make Loans
hereunder is resident or located, or any treaty to which such jurisdiction is a party, with respect
to payments under this Agreement shall deliver to the Company (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Company as will permit
such payments to be made without withholding or at a reduced rate;
provided
that such Lender has
received written notice from the Company advising it of the availability of such exemption or
reduction and containing all applicable documentation. Each Lender shall promptly notify the
Company at any time it determines that it is no longer in a position to provide any such previously
delivered documentation to the Company.
(f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by a
Borrower or with respect to which a Borrower has paid additional amounts pursuant to this Section,
it shall pay over such refund to such Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by such Borrower under this Section with respect to the Indemnified
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund);
provided
, that such Borrower, upon
the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such
Lender is required to repay such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent or any Lender to make available its tax returns (or
any other information relating to its taxes which it deems confidential) to any Borrower or other
Person.
(g) With respect to amounts advanced to, or otherwise made available to, a Canadian Subsidiary
by a Global Tranche Lender or a US/Canadian Tranche Lender, any Non-Canadian Lender or Non-Canadian
Issuing Bank: (i) either (I)(A) shall designate, for the purpose and throughout the term of such
Loan, an office of such Person in Canada as its applicable lending office; (B) severally represent
and warrant that, as of the date such Person becomes a party to this Agreement, it is an Authorized
Non-Canadian Bank; (C) covenant and agree that all material times other than by reason of a change
in treaty, law, rule or regulation occurring after the date of this Agreement (1) such Person will
continue to be an Authorized Non-Canadian Bank, (2) such Loan will be a Canadian Banking Business
Asset and (3) such Person will record such Canadian Banking Business Asset and any income thereon
in all financing statements for its Canadian Banking Business that are filed (or are required to be
filed) with the Superintendent of Financial Institutions, and will include in its income for a
taxation year from the Canadian Banking Business any income in respect of that Canadian Banking
Business Asset or (II) if such Person becomes a Non-Canadian Lender or Non-Canadian Issuing Bank
pursuant to an assignment under Section 11.04, shall represent to the Borrower, at any time prior
to the occurrence and continuation of an Event of Default under clause (a), (b), (h), (i) or (j) of
Article VII, that it is entitled to receive payments of interest hereunder without imposition of
Canadian withholding tax or subject to Canadian withholding tax at no greater rate than applied to
the transferor; and (ii) shall, upon request, provide the Borrower and the Administrative Agent
with such documentation as may be reasonably necessary to establish the Lenders entitlement to an
exemption from Canadian withholding tax on payments hereunder (but only so long as such Person is
or remains lawfully entitled to do so). Each affected Non-Canadian Lender or Non-Canadian Issuing
Bank shall
55
promptly notify the Borrower in writing upon becoming aware at any time that it is not in
compliance with the provisions of this paragraph (g).
SECTION 2.18.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
. (a) Each
Borrower shall make each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest, fees or reimbursement of LC Disbursements or otherwise)
prior to the time expressly required hereunder or under such other Loan Document for such payment
or, if no such time is expressly required, prior to 1:00 p.m., Local Time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Applicable Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All such payments shall
be made to the Applicable Agent for the account of the applicable Lenders to such account as the
Applicable Agent shall from time to time specify in one or more notices delivered to the Company,
except that payments to be made directly to an Issuing Bank or Swingline Lender as expressly
provided herein shall be made directly to such parties and payments pursuant to Sections 2.15,
2.16, 2.17, 2.20 and 11.03 shall be made directly to the Persons entitled thereto. The Applicable
Agent shall distribute any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under any Loan Document
shall be due on a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder of principal or interest
in respect of any Loan, B/A or LC Disbursement shall, except as otherwise expressly provided
herein, be made in the currency of such Loan, B/A or LC Disbursement; all other payments hereunder
and under each other Loan Document shall be made in US Dollars. Any payment required to be made by
any Agent hereunder shall be deemed to have been made by the time required if such Agent shall, at
or before such time, have taken the necessary steps to make such payment in accordance with the
regulations or operating procedures of the clearing or settlement system used by such Agent to make
such payment.
(b) If at any time insufficient funds are received by the Agents from any Borrower (or from
the Company as guarantor of the Obligations of such Borrower pursuant to Article X) and available
to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due
from such Borrower hereunder, such funds shall be applied (i)
first
, towards payment of
interest and fees then due from such Borrower hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties, and
(ii)
second
, towards payment of principal of the Loans and B/As and unreimbursed LC
Disbursements then due from such Borrower hereunder, ratably among the parties entitled thereto in
accordance with the amounts of such principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of its Loans, B/As, participations in LC Disbursements or Swingline Loans
or accrued interest on any of the foregoing (collectively
Claims
) under any Tranche resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of its Claims under
such Tranche than the proportion received by any other Lender with Claims under such Tranche, then
the Lender receiving such greater proportion shall purchase (for cash at face value) participations
in the Claims of the other Lenders under such Tranche to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders with Claims under such Tranche ratably in
accordance with the aggregate amounts of their respective Claims under such Tranche;
provided
that
(i) if any such participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the
56
provisions of this paragraph shall not be construed to apply to any payment made by any Borrower
pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any of its Claims to
any assignee or participant, other than to the Company or any Subsidiary or Affiliate thereof (as
to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the Company and each
Borrower rights of set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Company or such Borrower in the amount of such participation.
(d) Unless an Agent shall have received notice from a Borrower prior to the date on which any
payment is due to such Agent for the account of any Lenders or Issuing Bank hereunder that the such
Borrower will not make such payment, such Agent may assume that such Borrower has made such payment
on such date in accordance herewith and may, in reliance upon such assumption, distribute to the
applicable Lenders or Issuing Bank, as the case may be, the amount due. In such event, if such
Borrower has not in fact made such payment, then each applicable Lender or Issuing Bank, as the
case may be, severally agrees to repay to such Agent forthwith on demand the amount so distributed
to such Lender or Issuing Bank with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to such Agent, at a rate
determined by such Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(c), 2.05(d) or (e), 2.07(b), 2.18(d) or 11.03(c) then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), and each other Agent, at the
direction of the Administrative Agent, shall, apply any amounts thereafter received by it for the
account of such Lender to satisfy such Lenders obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19.
Mitigation Obligations; Replacement of Lenders
. (a) If any Lender
requests compensation under Section 2.15 or 2.20, or if any Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its affected Loans or other extensions of credit hereunder or
to assign its affected rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15, 2.17 or 2.20, as the case may be, in the future
and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under Section 2.15 or 2.20, (ii) any Loan Party is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.17 or (iii) any Lender defaults in its obligation to fund
Revolving Loans or to accept and purchase B/As hereunder, then the Company may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign
and delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 11.04), all its interests, rights and obligations under the Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such
assignment);
provided
that (x) such Borrower shall have received the prior written
57
consent of the Administrative Agent (and, if a Global Tranche Commitment is being assigned, the
Issuing Bank), which consent, in each case, shall not unreasonably be withheld, (y) such Lender
shall have received payment of an amount equal to the outstanding principal of its Loans and B/As
and funded participations in LC Disbursements and Swingline Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal, funded participations and accrued interest and fees) or such Borrower
(in the case of all other amounts) and (z) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or 2.20 or payments required to be made pursuant to
Section 2.17, such assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require
such assignment and delegation cease to apply.
SECTION 2.20.
Foreign Subsidiary Costs
. (a) If the cost to any Lender of making or
maintaining any Loan to, or accepting and purchasing any B/A of, or participating in any Letter of
Credit or Swingline Loan issued for the account of or made to, any Borrower is increased (or the
amount of any sum received or receivable by any Lender (or its applicable lending office) is
reduced) by an amount deemed in good faith by such Lender to be material, by reason of the fact
that such Borrower is incorporated in, or conducts business in, a jurisdiction outside the United
States of America, the United Kingdom or Canada, such Borrower shall indemnify such Lender for such
increased cost or reduction within 15 days after demand by such Lender (with a copy to the
Administrative Agent). A certificate of such Lender claiming compensation under this paragraph and
setting forth the additional amount or amounts to be paid to it hereunder (and the basis for the
calculation of such amount or amounts) shall be conclusive in the absence of manifest error.
(b) Each Lender will promptly notify the Company and the Administrative Agent of any event of
which it has knowledge that will entitle such Lender to additional interest or payments pursuant to
paragraph (a) above, but in any event within 45 days after such Lender obtains actual knowledge
thereof;
provided
that (i) if any Lender fails to give such notice within 45 days after it obtains
actual knowledge of such an event, such Lender shall, with respect to compensation payable pursuant
to this Section in respect of any costs resulting from such event, only be entitled to payment
under this Section for costs incurred from and after the date 45 days prior to the date that such
Lender does give such notice and (ii) each Lender will designate a different applicable lending
office, if, in the judgment of such Lender, such designation will avoid the need for, or reduce the
amount of, such compensation and will not be otherwise disadvantageous to such Lender.
(c) Notwithstanding the foregoing, no Lender shall be entitled to compensation under this
Section to the extent the increased costs for which such Lender is claiming compensation have been
or are being incurred at the time such Lender becomes a party to this Agreement, except to the
extent that such Lenders assignor was entitled immediately prior to the assignment to such Lender
to receive compensation with respect to such increased costs pursuant to this Section.
(d) The foregoing provisions of this Section shall not apply to Taxes, which shall be governed
solely by Section 2.17.
SECTION 2.21.
Designation of Borrowing Subsidiaries
. The Company may at any time and
from time to time designate (a) any US Subsidiary, UK Subsidiary or Canadian Subsidiary, or, with
the prior written consent of each Global Tranche Lender, any other
58
Subsidiary, as a Global Tranche Borrowing Subsidiary, (b) any US Subsidiary or UK Subsidiary, or,
with the prior written consent of each US/UK Tranche Lender, any other Subsidiary, as a US/UK
Tranche Borrowing Subsidiary, (c) any US Subsidiary or Canadian Subsidiary as a US/Canadian Tranche
Borrowing Subsidiary or (d) any US Subsidiary as a US Tranche Borrowing Subsidiary, in each case by
delivery to the Administrative Agent of a Borrower Joinder Agreement executed by such Subsidiary
and by the Company, and upon such delivery such Subsidiary shall for all purposes of this Agreement
be a Global Tranche Borrowing Subsidiary, a US/UK Tranche Borrowing Subsidiary, a US/Canadian
Tranche Borrowing Subsidiary or a US Tranche Borrowing Subsidiary, as the case may be, and a party
to this Agreement. Any Borrowing Subsidiary shall continue to be a Global Tranche Borrowing
Subsidiary, a US/UK Tranche Borrowing Subsidiary, a US/Canadian Tranche Borrowing Subsidiary or a
US Tranche Borrowing Subsidiary, as the case may be, until the Company shall have executed and
delivered to the Administrative Agent a Borrower Termination Agreement with respect to such
Subsidiary, whereupon such Subsidiary shall cease to be a Borrowing Subsidiary hereunder.
Notwithstanding the preceding sentence, (a) no Borrower Joinder Agreement shall become effective as
to any Subsidiary if it shall be unlawful for such Subsidiary to become a Borrower hereunder or for
any Lender participating in a Tranche under which such Subsidiary may borrow to make Loans or
otherwise extend credit to such Subsidiary as provided herein and (b) no Borrower Termination
Agreement will become effective as to any Borrowing Subsidiary until all Loans made to and B/As
drawn by such Borrowing Subsidiary shall have been repaid, all Letters of Credit issued for the
account of such Borrowing Subsidiary have been drawn in full or have expired and all amounts
payable by such Borrowing Subsidiary in respect of LC Disbursements, interest and/or fees (and, to
the extent notified by the Administrative Agent or any Lender, any other amounts payable under the
Credit Agreement by such Borrowing Subsidiary) shall have been paid in full;
provided
that such
Borrower Termination Agreement shall be effective to terminate the right of such Borrowing
Subsidiary to request or receive further extensions of credit under this Agreement. As soon as
practicable upon receipt of a Borrower Joinder Agreement, the Administrative Agent shall send a
copy thereof to each Global Tranche Lender, US/UK Tranche Lender, US/Canadian Tranche Lender or US
Tranche Lender, as the case may be.
ARTICLE III
Representations and Warranties
The Company represents and warrants, and each Borrower represents and warrants as to itself
and its subsidiaries, to the Lenders that:
SECTION 3.01.
Organization; Powers
. Each Loan Party is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, is qualified to do business, and is in good standing, in every
jurisdiction where such qualification is required.
SECTION 3.02.
Authorization; Enforceability
. The Transactions to be entered into by
each Loan Party are within such Loan Partys corporate, partnership or other applicable powers and
have been duly authorized by all necessary corporate, partnership or other applicable and, if
required, stockholder or other equityholder action. This Agreement has been duly executed and
delivered by each Borrower and constitutes, and each other Loan Document to which any Loan Party is
to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and
binding obligation of such Borrower or Loan Party (as the case may be),
59
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03.
Governmental Approvals; No Conflicts
. (a) The Transactions (i) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, (ii) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of any Loan Party or any order of any Governmental
Authority, (iii) will not violate or result in a default under any indenture, material agreement or
other material instrument binding upon any Loan Party or its assets, or give rise to a right
thereunder to require any payment to be made by any Loan Party and (iv) will not result in the
creation or imposition of any Lien on any asset of any Loan Party (other than Liens created
hereunder).
(b) Neither the Company nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of purchasing or carrying
margin stock (as defined in Regulation U of the Board). No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that would entail a violation of such
Regulation U.
SECTION 3.04.
Financial Condition; No Material Adverse Change
. (a) The Company has
heretofore furnished to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended September 30, 2005,
audited and reported on by Ernst & Young LLP, independent public accountants and (ii) as of and for
the fiscal quarters and the portions of the fiscal year ended December 31, 2005, March 31, 2006,
and June 30, 2006, certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of operations and cash flows
of the Company and its consolidated subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the
case of the statements referred to in clause (ii) above.
(b) Since September 30, 2005, there has been no material adverse change in the business,
assets, operations, prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
SECTION 3.05.
Properties
. (a) The Company and each of the Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material to its business,
except for minor defects in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Company and the Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by the Company and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06.
Litigation and Environmental Matters
. (a) There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority (including the United States Food
and Drug Administration and the corresponding Governmental Authorities in Canada and the United
Kingdom) pending against or, to the knowledge of the Company, threatened against or affecting the
Company or any of the Subsidiaries (i) as to which there is a reasonable likelihood of an adverse
determination and that, if adversely determined, could reasonably be
60
expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that
involve any of the Loan Documents or the Transactions.
(b) Except with respect to any matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the Company nor any of the
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental Liability.
SECTION 3.07.
Compliance with Laws and Agreements
. Each of the Company and the
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to comply, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08.
Investment Company Status
. Neither the Company nor any of the
Subsidiaries is an investment company as defined in, or subject to regulation under, the
Investment Company Act of 1940.
SECTION 3.09.
Taxes
. Each of the Company and the Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being
contested in good faith by appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10.
ERISA
. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present
value of all accumulated benefit obligations under each Plan (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.11.
Disclosure
. The Company has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which the Company or any of the Subsidiaries is
subject, and all other matters known to any of them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum
nor any of the other reports, financial statements, certificates or other information furnished by
or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished), taken as a whole, contains any
material misstatement of fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
provided
that, with respect to projected financial
61
information, the Company represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
SECTION 3.12.
Subsidiaries.
Schedule 3.12
sets forth the name of, and the
ownership interest of the Company in, each Subsidiary and identifies each Subsidiary that is a
Designated Subsidiary, in each case as of the Effective Date.
SECTION 3.13.
Insurance.
Schedule 3.13
sets forth a description of all
insurance maintained by or on behalf of the Company and the Subsidiaries as of the Effective Date.
As of the Effective Date, all premiums in respect of such insurance have been paid to the extent
due. The Company believes that the insurance maintained by or on behalf of the Company and the
Subsidiaries is adequate.
SECTION 3.14.
Labor Matters.
As of the Effective Date, there are no strikes, lockouts
or slowdowns against the Company or any Subsidiary pending or, to the knowledge of the Company,
threatened. The hours worked by and payments made to employees of the Company and the Subsidiaries
have not been in violation in any material respect of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All payments due from
the Company or any Subsidiary, or for which any claim may be made against the Company or any
Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have
been paid or accrued as a liability on the books of the Company or such Subsidiary. The
consummation of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement to which the
Company or any Subsidiary is bound.
SECTION 3.15.
Senior Indebtedness.
The Obligations constitute, and have been
designated as, Senior Indebtedness, Designated Senior Debt, Designated Guarantor Senior Debt
or any equivalent term, however defined, under and as defined in each document or instrument
governing subordinated Indebtedness of the Company or any Subsidiary.
ARTICLE IV
Conditions
SECTION 4.01.
Effective Date.
The obligations of the Lenders to make Loans and accept
and purchase B/As and of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied (or waived in
accordance with Section 11.02):
(a) The Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written
evidence reasonably satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written opinion (addressed to
the Administrative Agent and the Lenders and dated the Effective Date) of (i) Dechert LLP,
counsel for the Borrowers, substantially in the form of
Exhibit F-1
, (ii) John G. Chou,
Deputy General Counsel of the Company, in substantially the form of
Exhibit F-2
,
(iii) McMillan Binch Mendelsohn LLP, counsel for the Canadian
62
Borrowing Subsidiaries on the date hereof, in substantially the form of
Exhibit F-3
,
and (iv) Dechert LLP, counsel for the UK Borrowing Subsidiaries on the date hereof, in
substantially the form of
Exhibit F-4
and, in each case, covering such other matters
relating to the Loan Parties, the Loan Documents or the Transactions as the Administrative
Agent or the Required Lenders shall reasonably request. The Company hereby requests such
counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the Transactions and any
other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all
in form and substance satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the Company, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02 and in
paragraph (f) of this Section.
(e) The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Loan Party hereunder or under any other Loan Document.
(f) The Guarantee Requirement shall be satisfied.
(g) The commitments under the Existing US Credit Agreement, the Existing UK Credit
Agreement and the Existing Canadian Credit Agreement shall have been terminated, the loans and
other amounts outstanding or accrued thereunder, whether or not at the time due and payable,
shall have been paid in full, all letters of credit outstanding thereunder shall have expired
or been terminated or shall be Existing Letters of Credit, and all Liens securing such loans
and other amounts shall have been released.
(h) The Agents and Lenders shall have received all documentation and other information
requested by them for purposes of ensuring compliance with applicable know your customer and
anti-money laundering rules and regulations, including the U.S.A. Patriot Act, the Criminal
Code (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada)
and the Anti-terrorism Act (Canada), not fewer than five Business Days prior to the Closing
Date.
The Administrative Agent shall notify the Company and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and accept and purchase B/As and of the Issuing Banks to issue Letters of
Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied
(or waived pursuant to Section 11.02) at or prior to 5:00 p.m., New York City time, on November 30,
2006 (and, in the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02.
Each Credit Event
. The obligation of each Lender to make a Loan on the
occasion of any Borrowing or to accept and purchase B/As on the occasion of any B/A Drawing, and of
each Issuing Bank to issue, amend, renew or extend any Letter of Credit, is
63
subject to receipt of the request therefor in accordance herewith and to the satisfaction of the
following conditions:
(a) The representations and warranties of each Loan Party set forth in the Loan Documents
shall be true and correct in all material respects on and as of the date of such Borrowing or
B/A Drawing or the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable.
(b) At the time of and immediately after giving effect to such Borrowing or B/A Drawing or
the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.
Each Borrowing or B/A Drawing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the Company on the date
thereof as to the matters specified in paragraphs (a) and (b) of this Section.
SECTION 4.03.
Initial Credit Event for each Additional Borrowing Subsidiary.
The
obligations of the Lenders to make Loans to and accept and purchase B/As issued by, and the
obligations of the Issuing Banks to issue Letters of Credit for the account of any Borrowing
Subsidiary that becomes a Borrowing Subsidiary after the Closing Date in accordance with
Section 2.21 are subject to the satisfaction of the following conditions:
(a) The Administrative Agent (or its counsel) shall have received such Borrowers Borrower
Joinder Agreement duly executed by all parties thereto.
(b) The Administrative Agent shall have received such documents (including such legal
opinions) as the Administrative Agent or its counsel may reasonably request relating to the
formation, existence and good standing of such Borrower, the authorization and legality of the
Transactions insofar as they relate to such Borrower and any other legal matters relating to
such Borrower, its Borrower Joinder Agreement or such Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.
(c) The Agents and Lenders shall have received, at least five Business Days prior to the
making of such Loans, acceptance and purchase of such B/As or issuance of such Letters of
Credit, all documentation and other information relating to such Borrower requested by them for
purposes of ensuring compliance with applicable know your customer and anti-money laundering
rules and regulations, including the U.S.A. Patriot Act.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and each B/A and all fees payable hereunder have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements have been reimbursed, the Company
covenants and agrees, and each Borrower covenants and agrees, as to itself and its subsidiaries,
with the Lenders that:
64
SECTION 5.01.
Financial Statements and Other Information
. The Company will furnish to
the Administrative Agent, which will make available by means of electronic posting to each Lender:
(a) as soon as available, and in any event within 95 days after the end of each fiscal year of
the Company, its audited consolidated balance sheet and related statements of operations,
stockholders equity and cash flows as of the end of and for such year, in each case setting forth
in comparative form the figures for the previous fiscal year, all reported on by independent public
accountants of recognized national standing (without a going concern or like qualification or
exception and without any qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all material respects the financial
condition and results of operations of the Company and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) as soon as available, and in any event within 50 days after the end of each of the first
three fiscal quarters of each fiscal year of the Company, its unaudited consolidated balance sheet
and related statements of operations, stockholders equity and cash flows as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, in each case setting forth in
comparative form the figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer of
the Company as presenting fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of the Company (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.11 (unless the Company shall no longer be required to
comply with such Section by reason of the last sentence thereof) and 6.12 and (iii) stating whether
any change in GAAP or in the application thereof has occurred since the date of the Companys
audited financial statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying such certificate;
(d) promptly after the same become publicly available, the Company will provide to each Lender
copies of all periodic and other reports, proxy statements and other materials filed by the Company
or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any national securities
exchange, or distributed by the Company to its shareholders generally, as the case may be;
(e) promptly following a request therefor, any documentation or other information that a
Lender reasonably requests in order to comply with its ongoing obligations under applicable know
your customer and anti-money laundering rules and regulations, including the USA Patriot Act; and
(f) promptly following any request therefor, such other information regarding the operations,
business affairs, assets and financial condition of the Company or any Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably request, it being understood that the Company
65
may require any Lender receiving such information to confirm in writing its confidentiality
obligations under Section 11.12.
Information required to be delivered pursuant to this Section shall be deemed to have been
delivered on the date on which the Company provides notice to the Administrative Agent that such
information has been posted on the Companys website on the Internet at
http://www.amerisourcebergen.com
or at the appropriate Borrower designated website at
http://www.sec.gov
or
http://intralinks.com
;
provided
that the Company shall
deliver paper copies of the information referred to in this Section after the date delivery is
required thereunder to any Lender that requests such delivery within five Business Days after such
request.
SECTION 5.02.
Notices of Material Events
. The Company will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Company or any Affiliate thereof
that is reasonably likely to be adversely determined and, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events
that have occurred, could reasonably be expected to result in liability of the Company and the
Subsidiaries in an aggregate amount exceeding $25,000,000;
(d) the amendment, modification or waiver of any provision of any agreement or instrument
relating to any Securitization in effect on the date hereof or to the 2003 Securitization to
(i) add any termination event or other similar event, however denominated, or to make any
existing such event more onerous to the Company, any Subsidiary or any Securitization Entity,
(ii) advance the stated date on which such Securitization terminates, (iii) reduce the Financed
Amount of such Securitization or (iv) materially reduce the advance rate of such
Securitization; and
(e) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Company setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03.
Existence; Conduct of Business
. The Company will, and will cause each of
its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the conduct of its
business;
provided
that the foregoing shall not prohibit (a) any merger, amalgamation,
consolidation, liquidation or dissolution permitted under Section 6.03 or (b) the Pharmerica
Spin-Off.
SECTION 5.04.
Payment of Obligations
. The Company will, and will cause each of the
Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the
same shall become delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Company or the applicable
66
Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05.
Maintenance of Properties; Insurance
. The Company will, and will cause
each of the Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted and (b) maintain,
with financially sound and reputable insurance companies insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations;
provided
that the foregoing shall not prohibit the
Pharmerica Spin-Off.
SECTION 5.06.
Books and Records; Inspection and Audit Rights
. The Company will, and
will cause each of the Subsidiaries to, keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to its business and
activities. The Company will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit and inspect its
properties, to examine and make extracts from its books and records and to discuss its affairs,
finances and condition with its officers and independent accountants, all at such reasonable times
and as often as reasonably requested, subject to such reasonable notice requirements and other
procedures as shall from time to time be agreed upon by the Company and the Administrative Agent.
SECTION 5.07.
Compliance with Laws
. The Company will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08.
Use of Proceeds and Letters of Credit
. The proceeds of the Loans will be
used only for the purposes set forth in the preamble of this Agreement. No part of the proceeds of
any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of
any of the Regulations of the Board, including Regulations U and X. Letters of Credit will be
issued only for general corporate purposes.
SECTION 5.09.
Additional Subsidiaries
. If any additional Subsidiary is formed or
acquired after the Effective Date, the Company will, within 45 days after such Subsidiary is formed
or acquired, notify the Administrative Agent and the Lenders thereof and cause the Guarantee
Requirement to be satisfied with respect to such Subsidiary (if it is not an Excluded Subsidiary).
Subject to Section 11.16, the Company will cause the Guarantee Requirement to remain satisfied at
all times.
SECTION 5.10.
Senior Debt Status
. In the event that the Company or any Designated
Subsidiary shall at any time issue or have outstanding any Indebtedness that by its terms is
subordinated to any other Indebtedness of the Company or such Subsidiary, the Company shall take or
cause such Subsidiary to take all such actions as shall be necessary to cause the Obligations to
constitute senior indebtedness (however denominated) in respect of such subordinated Indebtedness
and to enable the Lenders to have and exercise any payment blockage or other remedies available or
potentially available to holders of senior indebtedness under the terms of such subordinated
Indebtedness. Without limiting the foregoing, the Obligations are hereby designated as senior
indebtedness and, if relevant, as designated senior indebtedness in respect of all such
subordinated Indebtedness and are further given all such other designations as
67
shall be required under the terms of any such subordinated Indebtedness in order that the Lenders
may have and exercise any payment blockage or other remedies available or potentially available to
holders of senior indebtedness under the terms of such subordinated indebtedness.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each
Loan and each B/A and all fees payable hereunder have been paid in full and all Letters of Credit
have expired or terminated and all LC Disbursements have been reimbursed, the Company covenants and
agrees, and each Borrower covenants and agrees, as to itself and its subsidiaries, with the Lenders
that:
SECTION 6.01.
Indebtedness.
(a) The Company will not permit any Subsidiary to be
liable for the New Bonds or any other Material Indebtedness (other than (x) Indebtedness referred
to in clauses (i), (ii) and (iii) of paragraph (b) below, (y) Guarantees by Foreign Subsidiaries of
Material Indebtedness of other Foreign Subsidiaries and (z) Material Indebtedness of Foreign
Subsidiaries and which Indebtedness is not Guaranteed by any Domestic Subsidiary), whether as a
primary obligor or under any Guarantee, unless such Subsidiary (i) shall be a party to and a
Guarantor under the Guarantee Agreement or (ii) if the Guarantee Agreement shall have been
terminated as provided in Section 11.16, shall have executed and delivered a Guarantee of the
Obligations satisfactory in form and substance to the Administrative Agent. The Company will not
permit any such Material Indebtedness to contain any provision requiring, contingently or
otherwise, that any Subsidiary guarantee any obligations thereunder (other than any provision
requiring Guarantees by Foreign Subsidiaries of Material Indebtedness of other Foreign
Subsidiaries) unless this Agreement shall have been amended to incorporate such provision,
mutatis
mutandis
, into the appropriate Article herein.
(b) The Company will not, and will not permit any Subsidiary to, create, incur, assume or
permit to exist any Indebtedness under any Securitization, or any Indebtedness of an Excluded
Subsidiary, other than:
(i) Indebtedness under the 2003 Securitization or any other receivables Securitization;
(ii) Indebtedness of Excluded Subsidiaries (other than any Securitization Entity) in an
aggregate principal amount not exceeding $400,000,000 at any time outstanding;
(iii) Indebtedness incurred by Pharmerica and its subsidiaries in connection with the
Pharmerica Spin-Off.
SECTION 6.02.
Liens.
The Company will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any Subsidiary existing on the
date hereof and set forth in
Schedule 6.02
;
provided
that (i) such Lien shall
68
not apply to any other property or asset of the Company or any Subsidiary and (ii) such Lien
shall secure only those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding principal amount
thereof;
(c) any Lien existing on any property or asset prior to the acquisition thereof by the
Company or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary;
provided
that (i) such Lien is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any
other property or assets of the Company or any Subsidiary and (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved by the Company or
any Subsidiary;
provided
that (i) such Liens secure only Indebtedness incurred to finance the
acquisition, construction or improvement of any fixed or capital assets, including any Capital
Lease Obligations or other Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity date or decreased
weighted average life thereof, (ii) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100%
of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other property or assets of the Company or any
Subsidiary;
(e) Liens on accounts receivable and the Proceeds thereof existing or deemed to exist in
connection with any Securitization permitted pursuant to Section 6.01;
(f) other Liens securing obligations not greater than US$50,000,000 in the aggregate; and
(g) Liens securing Indebtedness incurred by Pharmerica or its subsidiaries in connection
with the Pharmerica Spin-Off.
SECTION 6.03.
Fundamental Changes
. (a) The Company will not, and will not permit any
Subsidiary to, merge into, amalgamate with or consolidate with any other Person, or permit any
other Person to merge into, amalgamate with or consolidate with it, or liquidate or dissolve,
except that if at the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing, (i) any Subsidiary may merge into the Company in a transaction in
which the Company is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary
in a transaction in which the surviving entity is a Subsidiary (and (A) if any party to such merger
is a Designated Subsidiary, the surviving entity is a Designated Subsidiary and (B) if any party to
such merger is a Borrower, the surviving entity is a Borrower), (iii) any acquisition permitted
under Section 6.04 may be accomplished by a merger of one or more Subsidiaries in a transaction in
which the surviving entity is a Subsidiary (and (A) if any party to such merger is a Designated
Subsidiary, the surviving entity is a Designated Subsidiary and (B) if any party to such merger is
a Borrower, the surviving entity is a Borrower), (iv) any Subsidiary (other than a
69
Designated Subsidiary or a Borrower) may liquidate or dissolve if the Company determines in good
faith that such liquidation or dissolution is in the best interests of the Company and is not
materially disadvantageous to the Lenders and (v) the Company and the Subsidiaries may complete the
Pharmerica Spin-Off;
provided
that any such merger or amalgamation involving a Person that is not a
wholly owned Subsidiary immediately prior to such merger or amalgamation shall not be permitted
unless also permitted by Section 6.04.
(b) The Company will not, and will not permit any of the Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by the Company and the
Subsidiaries on the Closing Date and businesses reasonably related thereto or to the healthcare
industry or such other business as shall have been approved by the Required Lenders.
SECTION 6.04.
Investments, Loans, Advances, Guarantees and Acquisitions
. The Company
will not, and will not permit any of the Subsidiaries to, purchase or acquire (including pursuant
to any merger or amalgamation with any Person that was not a wholly owned Subsidiary prior to such
merger or amalgamation) any Equity Interests in or evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing) of, make any loans
or advances to, Guarantee any obligations of, or make any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any
assets of any other Person constituting a business unit, if (a) a Default shall have occurred and
be continuing or would occur as a result of any such transaction and any related incurrence of
Indebtedness or (b) the Company shall not be in compliance with Sections 6.11 (unless the Company
shall no longer be required to comply with such Section by reason of the last sentence thereof) and
6.12 (determined on a
pro forma
basis as if such transaction and any related incurrence of
Indebtedness had occurred on the first day of the most recent period of four fiscal quarters for
which financial statements shall have been delivered pursuant to Section 5.01(a) or (b)). The
foregoing provisions of this Section shall not prohibit (a) investments, loans, advances,
guarantees or acquisitions made pursuant to or in connection with the 2003 Securitization or any
other Securitization of accounts receivable or (b) the Pharmerica Spin-Off.
SECTION 6.05.
Asset Sales
. The Company will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any Equity
Interest owned by it, nor will the Company permit any of its Subsidiaries to issue any additional
Equity Interest in such Subsidiary, except:
(a) sales of inventory, obsolete or surplus equipment and Permitted Investments in the
ordinary course of business;
(b) sales, transfers and dispositions to the Company or a Subsidiary;
provided
that any
such sales, transfers or dispositions involving a Subsidiary that is not a Designated
Subsidiary shall be made in compliance with Section 6.08;
(c) sales of accounts receivable and the Proceeds thereof under any Securitization;
(d) the sale, transfer or other disposition of Pharmerica and its subsidiaries, or their
assets, in the Pharmerica Spin-Off; and
(e) sales, transfers and other dispositions of assets that are not permitted by any other
clause of this Section (including pursuant to sale and leaseback transactions);
provided
that
the aggregate fair market value of all assets sold, transferred or otherwise
70
disposed of in reliance upon this clause (d) shall not exceed, at any time, 20% of the
Consolidated Tangible Assets of the Company and the Subsidiaries, as reflected on a
consolidated balance sheet of the Company as of the last day of the most recent fiscal quarter
for which financial statements shall have been delivered pursuant to Section 5.01(a) and (b);
provided
that, in the event the Pharmerica Spin-Off is consummated and only for purposes of the
preceding calculation, the Consolidated Tangible Assets of the Company and the Subsidiaries as
of the last day of the fiscal quarter immediately preceding the Pharmerica Spin-Off shall be
calculated on a
pro forma
basis for the consummation of the Pharmerica Spin-Off as if it had
occurred on the last day of such fiscal quarter immediately preceding the quarter in which the
Pharmerica Spin-Off is consummated.
SECTION 6.06.
Hedging Agreements
. The Company will not, and will not permit any of the
Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in
the ordinary course of business to hedge or mitigate risks to which the Company or any Subsidiary
is exposed in the conduct of its business or the management of its liabilities and not for any
speculative purpose.
SECTION 6.07.
Restricted Payments; Certain Payments of Indebtedness
. (a) The Company
will not, and will not permit any of the Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment if a Default shall have occurred and be continuing
or would occur as a result of making such Restricted Payment and any related incurrence of
Indebtedness;
provided
that (i) Subsidiaries may declare and pay dividends ratably with respect to
their Equity Interests and (ii) the Company may pay any cash dividend declared by it not more than
60 days prior to such payment if the payment of such dividend on the date on which it was declared
would have been permitted under this paragraph and (iii) the Company and the Subsidiaries may
complete the Pharmerica Spin-Off.
(b) The Company will not, and will not permit any of the Subsidiaries to, make or agree to pay
or make, directly or indirectly, any payment or other distribution (whether in cash, securities or
other property) of or in respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Indebtedness, if a Default shall have occurred and be continuing or would occur
as a result of making such payment and any related incurrence of Indebtedness;
provided
that the
Company or any Subsidiary may pay Indebtedness created under the Loan Documents and make regularly
scheduled interest payments and scheduled or mandatory principal payments as and when due in
respect of any Indebtedness.
SECTION 6.08.
Transactions with Affiliates
. The Company will not, and will not permit
any of the Subsidiaries to, sell, lease or otherwise transfer any material amount of property or
assets to, or purchase, lease or otherwise acquire any material amount of property or assets from,
or otherwise engage in any other material transactions with, any Affiliate of the Company or such
Subsidiary, except (a) transactions that are at prices and on terms and conditions not less
favorable to the Company or such Subsidiary than could be obtained on an arms-length basis from
unrelated third parties, (b) transactions between or among the Company and the Designated
Subsidiaries not involving any other Affiliate, (c) transactions between the Company or any
Subsidiary and any Securitization Entity pursuant to any Securitization, (d) any Restricted Payment
permitted by Section 6.07 and (e) the Pharmerica Spin-Off.
71
SECTION 6.09.
Restrictive Agreements
. The Company will not, and will not permit any of
the Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the
Company or any Domestic Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets (including, without limitation, negative pledges, but other than negative
pledges that do not prohibit, restrict or impose any condition upon Liens securing this Agreement
or the Obligations) or (b) the ability of any Domestic Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or to Guarantee Indebtedness of the Company or any other
Subsidiary;
provided
that (i) the foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document or by any agreement, document or instrument relating to any
Securitization or any indenture, agreement or instrument evidencing or governing Indebtedness, in
each case, as in effect on the date hereof or as modified in accordance herewith, or relating to
the 2003 Securitization as modified in accordance herewith, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on
Schedule 6.09
(but
shall apply to any amendment or modification expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale,
provided
such restrictions
and conditions apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed
by any agreement relating to secured Indebtedness permitted by this Agreement if such Indebtedness
is incurred in accordance with Section 6.01 and such restrictions or conditions apply only to the
property or assets financed with such Indebtedness, (v) clause (a) of the foregoing shall not apply
to customary provisions in leases and other contracts restricting the assignment thereof, (vi) the
Company may enter into agreements limiting Guarantees by Subsidiaries,
provided
that any such
agreements do not limit or impair the Guarantees issued or required to be issued in connection with
this Agreement and (viii) the foregoing shall not apply to restrictions and conditions contained in
agreements governing Indebtedness incurred by Pharmerica and its subsidiaries in connection with
the Pharmerica Spin-Off.
SECTION 6.10.
Material Documents
. The Company will not, nor will it permit any
Subsidiary to, amend, modify or waive in any manner that could reasonably be expected to adversely
affect the Lenders any of its rights under (i) any indenture, material agreement or material
instrument evidencing or governing Indebtedness or (ii) its certificate of incorporation, by-laws
or other organizational documents;
provided
that the foregoing shall not restrict the amendment,
modification or waiver of any Indebtedness of Pharmerica or its subsidiaries in connection with the
Pharmerica Spin-Off.
SECTION 6.11.
Fixed Charge Coverage Ratio
. The Company will not permit the ratio of
(a) Consolidated EBITDAR to (b) the sum, without duplication, of (i) Consolidated Cash Interest
Expense, (ii) cash dividends on Equity Interests in the Company and (iii) rental payments of the
Company and the Subsidiaries (other than under capital leases), determined on a consolidated basis
in accordance with GAAP, in each case for any period of four consecutive fiscal quarters ending on
any date that is the last day of a fiscal quarter, to be less than 3.00 to 1.00 on the last day of
such period. Notwithstanding the foregoing, the Company shall not be required to comply with the
covenant contained in this Section after any date on which the Index Debt shall have been rated at
least BBB- by S&P, at least Baa3 by Moodys and at least BBB- by Fitch.
SECTION 6.12.
Leverage Ratio
. The Company will not permit the Leverage Ratio as of the
last day of any fiscal quarter to exceed 3.00 to 1.00.
72
SECTION 6.13.
Fiscal Quarters
. The Company will not change, and will not permit any
Subsidiary to change, the fiscal quarter ends of the Company or any Subsidiary to any date other
than March 31, June 30, September 30 or December 31.
ARTICLE VII
Events of Default
If any of the following events (
Events of Default
) shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or any B/A or any
reimbursement obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or
otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement
or any other Loan Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Company or
any Subsidiary in or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any material respect when
made or deemed made;
(d) the Company or any Borrower shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02, 5.03 (with respect to the existence of any Borrower),
5.06, 5.08 or 5.09 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this
Article), and such failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent to the Company (which notice will be given at the request
of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the
same shall become due and payable prior to the expiration of any grace period applicable to
such payment;
(g) any event or condition occurs that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity, or there shall occur any default, event of default,
event of termination or other event that results in, or entitles any person other than the
Company or a Subsidiary to cause, the acceleration of any Indebtedness, or the termination of
the purchase of accounts receivable or inventory, under any Securitization;
provided
that this
clause (g) shall not apply to secured
73
Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of any Borrower or any other
Significant Subsidiary or its debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for any Borrower or any other Significant Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(i) any Borrower or any other Significant Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Borrower or any other Significant Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
(j) any Borrower or any other Significant Subsidiary shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in excess of
US$25,000,000 which is not paid or fully covered by insurance shall be rendered against any
Borrower, any other Significant Subsidiary, any Designated Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Borrower or any other Significant Subsidiary
or any Designated Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrowers, the Significant Subsidiaries and the Designated
Subsidiaries in an aggregate amount exceeding US$25,000,000;
(m) except as provided in Section 11.14 or 11.16, any Guarantee under any Loan Document or
any other guarantee agreement entered into pursuant to Section 6.01(a) shall cease to be, or
shall be asserted by any Loan Party not to be, a valid, binding and enforceable obligation of
the Company or the applicable Designated Subsidiary;
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to any Borrower or any Significant
Subsidiary described in clause (h) or (i) of this Article), and at any time thereafter during the
74
continuance of such event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Company, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately and (ii) declare the Loans and all payment obligations of the Borrowers in respect of
B/As then outstanding to be due and payable in whole (or in part, in which case any principal not
so declared to be due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans and all payment obligations of the Borrowers in respect of B/As so
declared to be due and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Borrowers; and in case of any event with respect to any Borrower or any Significant Subsidiary
described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and
the principal of the Loans and all payment obligations of the Borrowers in respect of B/As then
outstanding, together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.
ARTICLE VIII
The Agents
Each of the Lenders and Issuing Banks hereby irrevocably appoints the Agents as its agents and
authorizes the Agents to take such actions on its behalf and to exercise such powers as are
delegated to the Agents by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
Any Person serving as an Agent hereunder shall have the same rights and powers in its capacity
as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind
of business with the Company or any Subsidiary or other Affiliate thereof as if it were not an
Agent hereunder.
The Agents shall not have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) the Agents shall not be
subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and
is continuing, (b) the Agents shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan
Documents that the Agents are required to exercise in writing as directed by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02) and (c) except as expressly set forth in the Loan Documents, the Agents
shall not have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Company or any of the Subsidiaries that is communicated to or obtained
by them or any of their Affiliates in any capacity. The Agents shall not be liable for any action
taken or not taken by them with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the circumstances as provided
in Section 11.02) or in the absence of their own gross negligence or wilful misconduct. Each Agent
shall be deemed not to have knowledge of any Default unless and until written notice thereof is
given to such Agent by the Company or a Lender, and the Agents shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the
75
contents of any certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the proper Person. Each Agent also
may rely upon any statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon. Each Agent may consult with
legal counsel (who may be counsel for any Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by it. Each Agent and any such sub-agent may perform any and
all its duties and exercise its rights and powers through its respective Related Parties. The
exculpatory provisions of the preceding paragraphs and the provisions of Section 11.03 shall apply
to any such sub-agent and to the Related Parties of each Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the credit facilities
provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as provided in this paragraph,
each Agent may resign at any time by notifying the other Agents, the Lenders, the Issuing Banks and
the Company. Upon any such resignation, the Required Lenders (in the case of a resignation by the
Administrative Agent) or the Administrative Agent (in the case of a resignation by any other Agent)
shall have the right, in consultation with the Company, to appoint a successor. If no successor
Agent shall have been so appointed and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Banks, appoint a successor Agent which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank, that is reasonably acceptable to the Company.
Upon the acceptance of its appointment as Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. The
fees payable by the Company to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Company and such successor. After an Agents
resignation hereunder, the provisions of this Article and Section 11.03 shall continue in effect
for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was acting as Agent.
Each Lender acknowledges that it has, independently and without reliance upon any Agent or any
other Lender and based on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or thereunder.
76
The parties agree that none of the Co-Lead Arrangers and Joint Bookrunners, the Syndication
Agent or the Documentation Agents named on the cover page of this Agreement shall, in such
capacities, have any powers, duties or responsibilities under this Agreement or any other Loan
Document.
ARTICLE IX
Collection Allocation Mechanism
On the CAM Exchange Date, (a) the Commitments shall automatically and without further act be
terminated as provided in Article VII and (b) the Lenders shall automatically and without further
act be deemed to have made reciprocal purchases of interests in the Designated Obligations such
that, in lieu of the interests of each Lender in the particular Designated Obligations that it
shall own as of such date and immediately prior to the CAM Exchange, such Lender shall own an
interest equal to such Lenders CAM Percentage in each Designated Obligation. It is understood and
agreed that Lenders holding interests in B/As immediately prior to the CAM Exchange shall discharge
their obligations with respect to the payment of such B/As at the maturity thereof in exchange for
the interests acquired by such Lenders in funded Loans in the CAM Exchange. Each Lender, each
person acquiring a participation from any Lender as contemplated by Section 11.04 and each Borrower
hereby consents and agrees to the CAM Exchange. Each Borrower and each Lender agrees from time to
time to execute and deliver to the Agents all such promissory notes and other instruments and
documents as the Administrative Agent shall reasonably request to evidence and confirm the
respective interests and obligations of the Lenders after giving effect to the CAM Exchange, and
each Lender agrees to surrender any promissory notes originally received by it hereunder to the
Administrative Agent against delivery of any promissory notes so executed and delivered;
provided
that the failure of any Borrower to execute or deliver or of any Lender to accept any such
promissory note, instrument or document shall not affect the validity or effectiveness of the CAM
Exchange.
As a result of the CAM Exchange, on and after the CAM Exchange Date, each payment received by
an Agent pursuant to any Loan Document in respect of the Designated Obligations shall be
distributed to the Lenders
pro rata
in accordance with their respective CAM Percentages (to
be redetermined as of each such date of payment or distribution to the extent required by the next
paragraph).
In the event that, after the CAM Exchange, the aggregate amount of the Designated Obligations
shall change as a result of the making of an LC Disbursement by an Issuing Bank that is not
reimbursed by the applicable Borrower, then (a) each Global Tranche Lender shall, in accordance
with Section 2.05(d), promptly purchase from the applicable Issuing Bank a participation in such LC
Disbursement in the amount of such Lenders Global Tranche Percentage of such LC Disbursement
(without giving effect to the CAM Exchange), (b) the Administrative Agent shall redetermine the CAM
Percentages after giving effect to such LC Disbursement and the purchase of participations therein
by the applicable Lenders, and the Lenders shall automatically and without further act be deemed to
have made reciprocal purchases of interests in the Designated Obligations such that each Lender
shall own an interest equal to such Lenders CAM Percentage in each of the Designated Obligations
and (c) in the event distributions shall have been made in accordance with the preceding paragraph,
the Lenders shall make such payments to one another as shall be necessary in order that the amounts
received by them shall be equal to the amounts they would have received had each LC Disbursement
been outstanding immediately prior to the CAM Exchange. Each such redetermination shall be binding
on each of the Lenders and their successors and assigns and shall be conclusive absent manifest
error.
77
ARTICLE X
Guarantee
In order to induce the Lenders to extend credit to the other Borrowers hereunder, the Company
hereby irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety,
the payment when and as due of the Obligations of such other Borrowers. The Company further agrees
that the due and punctual payment of such Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound upon its guarantee
hereunder notwithstanding any such extension or renewal of any such Obligation.
The Company waives presentment to, demand of payment from and protest to any Borrower of any
of the Obligations, and also waives notice of acceptance of its obligations and notice of protest
for nonpayment. The obligations of the Company hereunder shall not be affected by (a) the failure
of any Agent or Lender to assert any claim or demand or to enforce any right or remedy against any
Loan Party under the provisions of this Agreement, any other Loan Document or otherwise, (b) any
extension or renewal of any of the Obligations, (c) any rescission, waiver, amendment or
modification of, or release from, any of the terms or provisions of this Agreement, or any other
Loan Document or agreement, (d) any default, failure or delay, wilful or otherwise, in the
performance of any of the Obligations, (e) any decree or order, or any law or regulation of any
jurisdiction or event affecting any term of an Obligation or (f) any other act, omission or delay
to do any other act which may or might in any manner or to any extent vary the risk of the Company
or otherwise operate as a discharge of a guarantor as a matter of law or equity or which would
impair or eliminate any right of the Company to subrogation or any other circumstance that might
constitute a defense of the Company or any other Borrower.
The Company further agrees that its agreement hereunder constitutes a guarantee of payment
when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or
collection of any of the Obligations or operated as a discharge thereof) and not merely of
collection, and waives any right to require that any resort be had by any Agent or Lender to any
balance of any deposit account or credit on the books of any Agent or Lender in favor of any
Borrower or any other Person.
The obligations of the Company hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in full of all the
Obligations), and shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the
Obligations, any impossibility in the performance of any of the Obligations or otherwise (other
than for the indefeasible payment in full of all the Obligations).
The Company further agrees that its obligations hereunder shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Agent or Lender upon the bankruptcy or
reorganization of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other right any Agent or Lender
may have at law or in equity against the Company by virtue hereof, upon the failure of any other
Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Company hereby promises to and will,
upon receipt of written demand by any Agent or Lender, forthwith pay, or cause to be
78
paid, to the Applicable Agent or Lender in cash an amount equal to the unpaid principal amount of
such Obligations then due, together with accrued and unpaid interest thereon. The Company further
agrees that if payment in respect of any Obligation shall be due in a currency other than US
Dollars and/or at a place of payment other than New York and if, by reason of any Change in Law,
disruption of currency or foreign exchange markets, war or civil disturbance or other event,
payment of such Obligation in such currency or at such place of payment shall be impossible or, in
the reasonable judgment of any Agent or Lender, not consistent with the protection of its rights or
interests, then, at the election of the Administrative Agent, the Company shall make payment of
such Obligation in US Dollars (based upon the applicable Exchange Rate in effect on the date of
payment) and/or in New York, and shall indemnify each Agent and Lender against any losses or
reasonable out-of-pocket expenses that it shall sustain as a result of such alternative payment.
Upon payment by the Company of any sums as provided above, all rights of the Company against
any Borrower arising as a result thereof by way of right of subrogation or otherwise shall in all
respects be subordinated and junior in right of payment to the prior indefeasible payment in full
of all the Obligations owed by such Borrower to the Agents, the Issuing Bank and the Lenders.
ARTICLE XI
Miscellaneous
SECTION 11.01.
Notices.
(a) Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:
(i) if to the Company, to it at 1300 Morris Drive, Suite 100, Chesterbrook, PA 19087,
Attention of J.F. Quinn (Telecopy (610) 727-3639), with a copy to the Company, Attention of
General Counsel;
(ii) if to any Borrower (other than the Company), to it in care of the Company as provided
in clause (i) above;
(iii) if to the Administrative Agent, JPMorgan Chase Bank, N.A., in its capacity as a
Swingline Lender or JPMorgan Chase Bank, N.A., in its capacity as Issuing Bank, to JPMorgan
Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, Floor 10, Houston, TX 77002,
Attention of Claudia Correa, with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue,
New York, New York 10017, Attention of Dawn Lee Lum (Telecopy No. (212) 270-3279);
(iv) if to the London Agent, to J. P. Morgan Europe Limited, 125 London Wall, London EC2Y
5AJ, Attention of Agency Department (Telecopy No. 44-207-777-2360), with a copy to the
Administrative Agent as provided under clause (iii) above;
(v) if to the Canadian Agent, in its capacity as a Swingline Lender, to The Bank of Nova
Scotia, Wholesale Banking Operations, Loans Administration and Agency Services, 720 King Street
West, 3rd Floor, Toronto, Ontario, Canada, M5V 2T3, Attention of Andrew Yiu, with a copy to the
Administrative Agent as provided under clause (iii) above; and
79
(vi) if to any other Issuing Bank or Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Agents;
provided
that the
foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the
Applicable Agent and the applicable Lender. Any Agent or Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it;
provided
that approval of such procedures may be limited to particular
notices or communications.
(c) Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.
SECTION 11.02.
Waivers; Amendments
. (a) No failure or delay by any Agent, any Issuing
Bank or any Lender in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of the Agents, the Issuing Banks and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the foregoing, the making of a
Loan, acceptance and purchase of a B/A or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether any Agent, any Lender or any Issuing Bank may have
had notice or knowledge of such Default at the time.
(b) None of this Agreement, any Loan Document or any provision hereof or thereof may be
waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or
agreements in writing entered into by the Company and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders;
provided
that no such agreement shall (i) increase any
Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan, payment obligation in respect of a B/A or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the maturity of any Loan or B/A, or the required date of
reimbursement of any LC Disbursement, or any date for the payment of any interest or fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled
date of expiration of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.18(b) or (c) in a manner that would alter the
pro
rata
sharing of payments required thereby, without the written consent of each Lender, (v) change any of
the provisions of this Section or the percentage set forth in the definition of Required Lenders
or any other provision of any Loan Document specifying the number or percentage of Lenders (or
Lenders of any Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of each Lender (or each
Lender of such Class, as the case may be), (vi) release the Company from its
80
Guarantee under Article X, or release any Subsidiary from its Guarantee under the Guarantee
Agreement or any other guarantee agreement entered into pursuant to Section 6.01(a) (except as
expressly provided in this Agreement or the Guarantee Agreement), or limit the liability of the
Company or any Subsidiary in respect of any such Guarantee, without the written consent of each
Lender or (vii) change any provision of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments or prepayments due to Lenders with Commitments or
Obligations of any Class differently than those with Commitments or Obligations of any other Class,
without the written consent of Lenders holding a majority in interest of the Commitments and
outstanding Loans and B/As of the adversely affected Class;
provided further
that (i) no such
agreement shall amend, modify or otherwise affect the rights or duties of any Agent, Issuing Bank
or Swingline Lender without the prior written consent of such Agent, Issuing Bank or Swingline
Lender, as the case may be and (ii) any waiver, amendment or modification of this Agreement that by
its terms affects the rights or duties under this Agreement of one or more Tranches (but not of one
or more other Tranches) may be effected by an agreement or agreements in writing entered into by
the Company and requisite percentage in interest of the affected Lenders under the applicable
Tranches. Notwithstanding the foregoing, any provision of this Agreement may be amended by an
agreement in writing entered into by the Company, the Required Lenders and the Administrative Agent
(and, if their rights or obligations are affected thereby, the other Agents, the Issuing Banks and
the Swingline Lenders) if (i) by the terms of such agreement the Commitments of each Lender not
consenting to the amendment provided for therein shall terminate upon the effectiveness of such
amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan made and B/A
accepted by it and all other amounts owing to it or accrued for its account under this Agreement.
SECTION 11.03.
Expenses; Indemnity; Damage Waiver
. (a) The Company shall pay (i) all
reasonable out-of-pocket expenses incurred by the Agents, the Arrangers and their Affiliates,
including the reasonable fees, charges and disbursements of outside counsel for the Agents, the
Arrangers and their Affiliates, in connection with the structuring, arrangement and syndication of
the credit facilities provided for herein, the preparation and administration of the Loan Documents
or any amendments, modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Banks in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by any Agent, Arranger, Issuing Bank or Lender, including the fees,
charges and disbursements of any outside counsel for such Agent, Arranger, Issuing Bank or Lender,
in connection with the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the Loans made, the B/As
accepted and purchased or the Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect of such Loans, B/As
or Letters of Credit.
(b) The Company shall indemnify each Agent, Arranger, Issuing Bank and Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
Indemnitee
)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties,
liabilities and related expenses, including the reasonable fees, charges and disbursements of any
outside counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the structuring, arrangement and syndication of the
credit facilities provided for herein, (ii) the execution or delivery of any Loan Document or any
other agreement or instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of
81
the Transactions or any other transactions contemplated hereby, (iii) any Loan, B/A or Letter of
Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iv) any Environmental
Liability related in any way to the Company or any of the Subsidiaries or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether initiated by any
Indemnitee or a third party or whether any Indemnitee is a party thereto;
provided
that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, penalties, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from (i) the gross negligence or
wilful misconduct of such Indemnitee or (ii) the breach by such Indemnitee of its obligations under
the Loan Documents.
(c) To the extent that the Company fails to pay any amount required to be paid by it to any
Agent or Issuing Bank or Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to such Agent, Issuing Bank or Swingline Lender, as the case may be, such
Lenders
pro
rata
share (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount;
provided
that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against such Agent, Issuing Bank or Swingline Lender in its capacity as
such. For purposes hereof, a Lenders
pro
rata
share shall be determined based
upon its share of the sum of the aggregate Revolving Credit Exposures and unused Commitments at the
time.
(d) To the extent permitted by applicable law, the Borrowers shall not assert, and hereby
waive, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan, B/A or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after written demand
therefor.
SECTION 11.04.
Successors and Assigns
. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of
Credit), except that the Borrowers may not assign or otherwise transfer any of their rights or
obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by any Borrower without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby (including any Affiliate
of any Issuing Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments under any Tranche and the Loans and other amounts at
the time owing to it under any Tranche) with the prior written consent (such consent not to be
unreasonably withheld) of:
82
(A) the Company;
provided
that no consent of the Company shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default
has occurred and is continuing, any other assignee;
(B) the Administrative Agent; and
(C) each Issuing Bank.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of any Commitment of the assigning Lender, the amount
of each Commitment of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than US$5,000,000 unless each of the Company and the
Administrative Agent otherwise consent;
provided
that no such consent of the Company shall be
required if an Event of Default has occurred and is continuing;
(B) each partial assignment of a Commitment and extensions of credit under a Tranche shall
be made as an assignment of a proportionate part of all the assigning Lenders rights and
obligations under such Tranche;
(C) the parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire in which the assignee designates one or more credit contacts to
whom all syndicate-level information (which may contain material non-public information about
the Borrower and its Related Parties or their securities) will be made available and who may
receive such information in accordance with the assignees compliance procedures and applicable
laws, including Federal, State and foreign securities laws.
For purposes of this Section, the term Approved Fund has the following meaning:
Approved Fund
means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary
course of its business and that is administered or managed by a Lender, an Affiliate of a Lender or
an entity or an Affiliate of an entity that administers or manages a Lender.
(c) Subject to acceptance and recording thereof pursuant to paragraph (e) of this Section,
from and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lenders rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue
83
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 11.03). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply with this paragraph
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (f) of this Section.
(d) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall
maintain at one of its offices in The City of New York a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amounts owing to, each Lender pursuant to the terms hereof from
time to time (the
Register
). The entries in the Register shall be conclusive, and the Borrowers,
the Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by any Borrower, Issuing Bank and Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignees completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment required by paragraph (b)
of this Section, the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph. Following
the effectiveness of any assignment, the Administrative Agent shall, if so requested, cause
promissory notes reflecting such assignment to be issued to the Assignee and, if applicable, to the
Assignor, upon cancellation of any existing promissory notes originally issued to the Assignor.
(f) Any Lender may, without the consent of the Company, the Administrative Agent, the Issuing
Banks or any other Lender, sell participations to one or more banks or other entities (a
Participant
) in all or a portion of such Lenders rights and/or obligations under this Agreement
(including all or a portion of its Commitments and its Loans and other extensions of credit
hereunder);
provided
that (i) such Lenders obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, the Agents, the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in connection with such
Lenders rights and obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of
the Loan Documents;
provided
that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 11.02(b) that affects such Participant. Subject to
paragraph (g) of this Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a
Lender,
provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(g) A Participant shall not be entitled to receive any greater payment under Section 2.15 or
2.17 than the applicable Lender would have been entitled to receive with respect to
84
the participation sold to such Participant, unless the sale of the participation to such
Participant is made with the Companys prior written consent. A Participant shall not be entitled
to the benefits of Section 2.17 unless the Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.17(e) as though it were a Lender.
(h) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest;
provided
that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
(i) Notwithstanding anything to the contrary contained herein, any Lender (a
Granting Bank
)
may grant to a special purpose funding vehicle (an
SPC
) of such Granting Bank, identified as such
in writing from time to time by the Granting Bank to the Administrative Agent and the Company, the
option to provide to any Borrower all or any part of any Loan that such Granting Bank would
otherwise be obligated to make to such Borrower pursuant to Section 2.01,
provided
that (i) nothing
herein shall constitute a commitment to make any Loan by any SPC, (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Bank
shall be obligated to make such Loan pursuant to the terms hereof, (iii) all amounts payable by any
Borrower to any SPC hereunder in respect of any Loan and the applicability of the cost protection
provisions contained in Section 2.15, 2.16 and 2.17 shall be determined as if the Granting Bank had
made such Loan and (iv) any notices given by the Agents, the Borrowers and the other Lenders with
respect to any Loan provided by an SPC may be given to the Granting Bank and the Granting Bank
shall have the authority to act on behalf of the SPC with respect to such Loans and/or notices. The
making of Loans and other extensions of credit by an SPC hereunder shall be deemed to utilize the
Commitments of the Granting Bank to the same extent, and as if, such Loans and other extensions of
credit were made by the Granting Bank. Each party hereto hereby agrees that no SPC shall be liable
for any payment under this Agreement for which a Lender would otherwise be liable, for so long as,
and to the extent, the related Granting Bank makes such payment. In furtherance of the foregoing,
each party hereto hereby agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior indebtedness of any SPC, it will not institute against,
or join any other person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the
United States or any State thereof. In addition, notwithstanding anything to the contrary contained
in this Section, any SPC may assign all or a portion of its interests in any Loans and other
extensions of credit to its Granting Bank or to any financial institutions providing liquidity
and/or credit facilities to or for the account of such SPC to fund the Loans and other extensions
of credit made by such SPC or to support the securities (if any) issued by such SPC to fund such
Loans and other extensions of credit.
SECTION 11.05.
Survival
. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, the acceptance and purchase of any B/As
and the issuance of any Letters of Credit, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that any Agent, Issuing Bank or Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
85
the time any credit is extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 11.03
and Article VIII shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans and B/As, the expiration or
termination of the Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.
SECTION 11.06.
Counterparts; Integration; Effectiveness
. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter agreements with respect
to fees payable to the Agents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Agents and when the Administrative
Agent shall have received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or other electronic imaging means shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 11.07.
Severability
. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 11.08.
Right of Setoff
. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of any Borrower against
any of and all the obligations of such Borrower now or hereafter existing under this Agreement or
any other Loan Document held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies (including other rights
of setoff) which such Lender may have.
SECTION 11.09.
Governing Law; Jurisdiction; Consent to Service of Process
. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by
86
law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that any Agent, Issuing Bank or Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document against any Borrower
or its properties in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 11.01. Nothing in the Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.
SECTION 11.10.
WAIVER OF JURY TRIAL
. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 11.11.
Headings
. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 11.12.
Confidentiality
. Each Agent, Issuing Bank and Lender agrees to maintain
the confidentiality of the Information (as defined below), and will not use such confidential
Information for any purpose or in any manner except in connection with this Agreement, except that
Information may be disclosed (a) to its and its Affiliates directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the extent requested by
any governmental, supervisory or regulatory authority (it being understood that it will to the
extent reasonably practicable provide the Company with an opportunity to request confidential
treatment from such authority), (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as those of this
87
Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to the Company or any
Subsidiary and its obligations, (g) with the written consent of the Company or (h) to the extent
such Information (i) becomes publicly available other than as a result of a breach of this Section
or any other confidentiality agreement to which it is party with the Company or any Subsidiary or
(ii) becomes available to such Agent, Issuing Bank or Lender on a nonconfidential basis from a
source other than the Company. For the purposes of this Section,
Information
means all
confidential information received from the Company relating to the Company or its businesses, other
than any such information that is available to any Agent, Issuing Bank or Lender on a
nonconfidential basis prior to disclosure by the Company. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.
Each Lender acknowledges that Information furnished to it pursuant to this Agreement may
include material non-public information concerning the Borrower and its Related Parties or its or
their securities, and confirms that it has developed compliance procedures regarding the use of
material non-public information and that it will handle such material non-public information in
accordance with the procedures and applicable law, including Federal, State and foreign securities
laws.
All Information, including requests for waivers and amendments, furnished by the Borrower or
the Administrative Agent pursuant to, or in the course of administering, this Agreement will be
syndicate-level information, which may contain material non-public information about the Borrower
and the Subsidiaries and its and their Related Parties or securities. Accordingly, each Lender
represents to the Borrower and the Administrative Agent that it has identified in its
Administrative Questionnaire a credit contact who may receive information that may contain material
non-public information in accordance with its compliance procedures and applicable law, including
Federal, State and foreign securities laws.
SECTION 11.13.
Interest Rate Limitation
. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any extension of credit hereunder,
together with all fees, charges and other amounts which are treated as interest on such extension
of credit under applicable law (collectively the
Charges
), shall exceed the maximum lawful rate
(the
Maximum Rate
) which may be contracted for, charged, taken, received or reserved by the
Lender that made such extension of credit in accordance with applicable law, the rate of interest
payable in respect of such extension of credit hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such extension of credit but were not payable as
a result of the operation of this Section shall be cumulated and the interest and Charges payable
to such Lender in respect of other extensions of credit or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 11.14.
Releases of Guarantors
. (a) Notwithstanding any contrary provision
herein or in any other Loan Document, if the Company shall request the release under the Guarantee
Agreement of any Guarantor that shall have been sold in or disposed of (or will, simultaneously
with such release, be sold or disposed of) to a Person or Persons (other than the Company and the
Subsidiaries) pursuant to the Pharmerica Spin-Off or any other transaction
88
permitted hereby and shall deliver to the Administrative Agent a certificate to the effect that
such sale complied or will comply with the terms of this Agreement, the Administrative Agent, if
satisfied in its reasonable judgment that the applicable certificate is correct, shall, without the
consent of any Lender, execute and deliver all such releases and other instruments, and take all
such further actions, as shall be necessary to effect the release of such Guarantor.
(b) Without limiting the provisions of Section 11.03, the Company shall reimburse the
Administrative Agent and the Lenders for all costs and expenses, including attorneys fees and
disbursements, incurred by any of them in connection with any action contemplated by this Section.
SECTION 11.15.
U.S.A. PATRIOT Act
. Each Lender hereby notifies the Borrowers that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the
Act
), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the names and addresses of the Borrowers and
other information that will allow such Lender to identify the Borrowers in accordance with the Act.
SECTION 11.16.
Termination of Guarantee Agreement
. Notwithstanding any other provision
of this Agreement, if at any time (a) no Subsidiary shall be liable for the New Bonds or any other
Material Indebtedness (other than Indebtedness referred to in the first parenthetical in
Section 6.01(a) or in clauses (i), (ii) or (iii) of Section 6.01(b)), whether as a primary obligor
or as a Guarantor and (b) the Company shall have delivered to the Administrative Agent a
certificate confirming that the condition set forth in the preceding clause (a) shall be satisfied
simultaneously with the termination of the Guarantee Agreement, the Guarantee Agreement shall
automatically terminate without any further action or consent by any party hereto or to the
Guarantee Agreement.
SECTION 11.17.
Non-Public Information
. (a) Each Lender acknowledges that all
information furnished to it pursuant to this Agreement by the Company or on its behalf and relating
to the Company, the Subsidiaries or their businesses may include material non-public information
concerning the Company and the Subsidiaries or their securities, and confirms that it has developed
compliance procedures regarding the use of material non-public information and that it will handle
such material non-public information in accordance with the procedures and applicable law,
including Federal, state and foreign securities laws.
(b) All such information, including requests for waivers and amendments, furnished by the
Company or the Administrative Agent pursuant to, or in the course of administering, this Agreement
will be syndicate-level information, which may contain material non-public information about the
Company and the Subsidiaries and their securities. Accordingly, each Lender represents to the
Company and the Administrative Agent that it has identified in its Administrative Questionnaire a
credit contact who may receive information that may contain material non-public information in
accordance with its compliance procedures and applicable law, including Federal, state and foreign
securities laws.
SECTION 11.18.
No Fiduciary Duty
. The Company agrees that in connection with all
aspects of the Transactions and any communications in connection therewith, the Company and its
Affiliates, on the one hand, and the Agents, the Arrangers, the Issuing Banks, the Lenders and
their Affiliates, on the other hand, will have a business relationship that does not create, by
implication or otherwise, any fiduciary duty on the part of the Agents, the Arrangers, the Issuing
Banks, the Lenders or their Affiliates, and no such duty will be deemed to have arisen in
connection with any such Transactions or communications.
89
SECTION 11.19.
Conversion of Currencies
. (a) If, for the purpose of obtaining judgment
in any court, it is necessary to convert a sum owing hereunder in one currency into another
currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other currency on the
Business Day immediately preceding the day on which final judgment is given.
(b) The obligations of each party hereto in respect of any sum due to any other party hereto
or any holder of the obligations owing hereunder (the
Applicable Creditor
) shall, notwithstanding
any judgment in a currency (the
Judgment Currency
) other than the currency in which such sum is
stated to be due hereunder (the
Agreement Currency
), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in
the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in
the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount
of the Agreement Currency so purchased is less than the sum originally due to the Applicable
Creditor in the Agreement Currency, the Company agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The
obligations of each party hereto contained in this Section shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.
SECTION 11.20.
Waiver of Notice Period in connection with Termination of the Existing US
Credit Agreement
. Each Lender that is a party to the Existing US Credit Agreement hereby waives
the prior notice required for the termination of the commitments under the Existing US Credit
Agreement.
90
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION,
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ J.F. Quinn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
J.F. Quinn
|
|
|
|
|
|
|
Title:
|
|
Vice President & Corporate Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CANADA CORPORATION,
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ J.F. Quinn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
J.F. Quinn
|
|
|
|
|
|
|
Title:
|
|
Vice President & Corporate Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRECON HOLDINGS LIMITED,
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ J.F. Quinn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
J.F. Quinn
|
|
|
|
|
|
|
Title:
|
|
Vice President & Corporate Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMORGAN CHASE BANK, N.A.,
individually and as Administrative
Agent, Issuing Bank and Swingline Lender,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Dawn Lee Lum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Dawn Lee Lum
|
|
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. P. MORGAN EUROPE LIMITED,
individually and as London Agent,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Stephen Clarke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Stephen Clarke
|
|
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BANK OF NOVA SCOTIA,
individually and as Canadian Agent,
Swingline Lender and Issuing Bank,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ John Hun
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
John Hun
|
|
|
|
|
|
|
Title:
|
|
Director
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
JPMorgan Chase Bank, N.A., Toronto Branch
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Christine Chan
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Christine Chan
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Bank of America, N.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Richard C. Harlison
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Richard C. Harlison
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Bank of America, N.A., Canada Branch
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Nelson Lam
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Nelson Lam
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Lillian Kim
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Lillian Kim
|
|
|
|
|
Title:
|
|
Authorized Signatory
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Citibank, N.A.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Juan Carlos Lorenzo
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Juan Carlos Lorenzo
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Citibank, N.A., Canadian branch
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Niyousha Zarinpour
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Niyousha Zarinpour
|
|
|
|
|
Title:
|
|
Authorized Signer
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Citibank, N.A., London branch
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Mark Chabrel
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Mark Chabrel
|
|
|
|
|
Title:
|
|
Director
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Credit Suisse, Cayman Islands Branch
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Brian T. Caldwell
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Brian T. Caldwell
|
|
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
|
|
|
|
For any Lender requiring a second signature line:
|
|
|
|
|
|
|
|
by
|
|
/s/ Karim Blasetti
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Karim Blasetti
|
|
|
|
|
Title:
|
|
Associate
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Credit Suisse, Toronto Branch
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Alain Daoust
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Alain Daoust
|
|
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
|
|
|
|
For any Lender requiring a second signature line:
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Steve W. Fuh
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Steve W. Fuh
|
|
|
|
|
Title:
|
|
Vice-President
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
Deutsche Bank AG, New York Branch
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Frederick Laird
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Frederick Laird
|
|
|
|
|
Title:
|
|
Managing Director
|
|
|
|
|
|
|
|
|
|
For any Lender requiring a second signature line:
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Vincent Wong
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Vincent Wong
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Fifth Third Bank
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Michael R. Zaksheske
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Michael R. Zaksheske
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
LaSalle Bank National Association
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Nick Lotz
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Nick Lotz
|
|
|
|
|
Title:
|
|
Assistant Vice President
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
LaSalle Commercial Lending
|
|
|
A division of ABN Amro Bank N.V.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ L. Geoffrey Morphy
|
|
|
|
|
|
|
|
|
|
Name:
|
|
L. Geoffrey Morphy
|
|
|
|
|
Title:
|
|
First Vice President
|
|
|
|
|
|
|
|
|
|
For any Lender requiring a second signature line:
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ J. Wright
|
|
|
|
|
|
|
|
|
|
Name:
|
|
J. Wright
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Bank of Nova Scotia
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Anastasia Kotsidis
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Anastasia Kotsidis
|
|
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
|
|
|
|
For any Lender requiring a second signature line:
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Gitesh Goyal
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Gitesh Goyal
|
|
|
|
|
Title:
|
|
Associate Director
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
The Bank of Nova Scotia
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ V. Gibson
|
|
|
|
|
|
|
|
|
|
Name:
|
|
V. Gibson
|
|
|
|
|
Title:
|
|
Assistant Agent
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Sumitomo Mitsui Banking Corporation
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Shigeru Tsuru
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Shigeru Tsuru
|
|
|
|
|
Title:
|
|
Joint General Manager
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Sumitomo Mitsui Banking Corporation of Canada
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Elwood Langley
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Elwood Langley
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
Sumitomo Mitsui Finance Dublin Limited
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Timothy ODonovan
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Timothy ODonovan
|
|
|
|
|
Title:
|
|
Managing Director
|
|
|
|
|
|
|
|
|
|
For any Lender requiring a second signature line:
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Ciaran Bolger
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Ciaran Bolger
|
|
|
|
|
Title:
|
|
Manager Benefits Promotion
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Barclays Bank PLC
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Nicholas Bell
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Nicholas Bell
|
|
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Lehman Commercial Paper Inc.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Janine M. Shugan
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Janine M. Shugan
|
|
|
|
|
Title:
|
|
Authorized Signatory
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
The Bank of New York
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Robert J. Joyce
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Robert J. Joyce
|
|
|
|
|
Title:
|
|
Managing Director and Division Head
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Mizuho Corporate Bank, Ltd.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Raymond Ventura
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Raymond Ventura
|
|
|
|
|
Title:
|
|
Deputy General Manager
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Wells Fargo Bank, N.A.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Don Schwartz
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Don Schwartz
|
|
|
|
|
Title:
|
|
Senior Vice President
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
William Street Commitment Corporation
|
|
|
(Recourse only to assets of William Street Commitment Corporation)
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Mark Walton
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Mark Walton
|
|
|
|
|
Title:
|
|
Assistant Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
PNC Bank, National Association
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Denise D. Killen
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Denise D. Killen
|
|
|
|
|
Title:
|
|
Senior Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
KeyBank National Association
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ J.T. Taylor
|
|
|
|
|
|
|
|
|
|
Name:
|
|
J.T. Taylor
|
|
|
|
|
Title:
|
|
Senior Vice President
|
|
|
Lender Signature Page to
the AmerisourceBergen Corporation
Credit Agreement
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
U.S. Bank, N.A.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Patrick H. McGraw, Jr.
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Patrick H. McGraw, Jr.
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Union Bank of California, N.A.
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Michael Tschida
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Michael Tschida
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Wachovia Bank, National Association
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Kirk Tesch
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Kirk Tesch
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Name of Institution:
|
|
|
|
|
|
|
|
|
|
Wachovia Capital Finance Corporation (Canada)
|
|
|
|
|
|
|
|
|
|
by
|
|
/s/ Enza Agosta
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Enza Agosta
|
|
|
|
|
Title:
|
|
Vice President
|
|
|
Schedule 1.01
Applicable Funding Account
|
|
|
BANK NAME:
|
|
J.P. Morgan Chase
|
BANK ADDRESS:
|
|
New York, NY
|
BANK ABA #
|
|
021000021
|
ACCOUNT NAME:
|
|
AmerisourceBergen Corporation
|
ACCOUNT
NUMBER:
|
|
XXXXXXXXX
|
REFERENCE:
|
|
Attention: Treasury
|
|
|
|
BANK NAME:
|
|
Royal Bank of Canada
|
BANK ADDRESS:
|
|
65 Princess Street
|
|
|
Kingston, Ontario
|
|
|
Canada K7L 1A6
|
TRANSIT
#:
|
|
02382
|
ACCOUNT NAME:
|
|
AmerisourceBergen Canada Corporation
|
ACCOUNT NUMBER:
|
|
XXX-XXXX
|
DESTINATION
#:
|
|
003
|
SWIFT #:
|
|
ROYCCAT2
|
|
|
|
BANK NAME:
|
|
The Toronto Dominion Bank
|
BANK ADDRESS:
|
|
7085 Woodbine Avenue
|
|
|
Markham, Ontario
|
|
|
Canada L3R 1A3
|
TRANSIT #:
|
|
12772
|
ACCOUNT NAME:
|
|
Rep-Pharm Inc.
|
ACCOUNT NUMBER:
|
|
XXX-XXXXXXX
|
DESTINATION
#:
|
|
004
|
SWIFT
#
:
|
|
TDOMCATTTOR
|
|
|
|
BANK NAME:
|
|
Barclays Bank PLC
|
BANK ADDRESS:
|
|
Hereford
|
|
|
HR1 2XX
|
SORT CODE
|
|
20-39-64
|
ACCOUNT NAME:
|
|
Brecon Holdings Limited
|
ACCOUNT NUMBER:
|
|
XXXXXXXX
|
Schedule 2.01
Commitments
Global Tranche
|
|
|
|
|
Lender
|
|
Commitment
|
|
JPMorgan Chase Bank, N.A.
|
|
$
|
42,500,000
|
|
Bank of America, N.A.
|
|
$
|
42,500,000
|
|
Wachovia Bank, National Association
|
|
$
|
40,000,000
|
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
|
|
$
|
25,000,000
|
|
Citibank, N.A.
|
|
$
|
20,000,000
|
|
Credit Suisse, Cayman Islands Branch
|
|
$
|
20,000,000
|
|
Deutsche Bank AG New York Branch
|
|
$
|
20,000,000
|
|
Fifth Third Bank
|
|
$
|
15,000,000
|
|
LaSalle Bank National Association
|
|
$
|
15,000,000
|
|
The Bank of Nova Scotia
|
|
$
|
15,000,000
|
|
Sumitomo Mitsui Banking Corporation
|
|
$
|
5,000,000
|
|
|
|
|
|
Total
|
|
$
|
260,000,000
|
|
|
|
|
|
US/UK Tranche
|
|
|
|
|
Lender
|
|
Commitment
|
|
Barclays Bank PLC
|
|
$
|
35,000,000
|
|
Lehman Brothers Commercial Bank
|
|
$
|
20,000,000
|
|
The Bank of New York
|
|
$
|
15,000,000
|
|
|
|
|
|
Total
|
|
$
|
70,000,000
|
|
|
|
|
|
US/Canadian Tranche
|
|
|
|
|
Lender
|
|
Commitment
|
|
J.P. Morgan Chase Bank, N.A.
|
|
$
|
25,000,000
|
|
Bank of America, N.A.
|
|
$
|
25,000,000
|
|
The Bank of Nova Scotia
|
|
$
|
40,000,000
|
|
Citibank, N.A.
|
|
$
|
15,000,000
|
|
Credit Suisse, Cayman Islands Branch
|
|
$
|
15,000,000
|
|
Deutsche Bank AG New York Branch
|
|
$
|
15,000,000
|
|
Mizuho Corporate Bank, Ltd.
|
|
$
|
15,000,000
|
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
|
|
$
|
15,000,000
|
|
Wachovia Bank, National Association
|
|
$
|
15,000,000
|
|
Sumitomo Mitsui Banking Corporation
|
|
$
|
10,000,000
|
|
Union Bank of California, N.A.
|
|
$
|
10,000,000
|
|
|
|
|
|
Total
|
|
$
|
200,000,000
|
|
|
|
|
|
US Tranche
|
|
|
|
|
Lender
|
|
Commitment
|
|
Wells Fargo Bank, N.A.
|
|
$
|
50,000,000
|
|
Lehman Brothers Commercial Bank
|
|
$
|
35,000,000
|
|
PNC Bank, National Association
|
|
$
|
35,000,000
|
|
William Street Commitment Corporation
|
|
$
|
35,000,000
|
|
Mizuho Corporate Bank, Ltd.
|
|
$
|
20,000,000
|
|
KeyBank National Association
|
|
$
|
15,000,000
|
|
US Bank, N.A.
|
|
$
|
15,000,000
|
|
The Bank of Tokyo Mitsubishi UFJ, Ltd.
|
|
$
|
10,000,000
|
|
Union Bank of California, N.A.
|
|
$
|
5,000,000
|
|
|
|
|
|
Total
|
|
$
|
220,000,000
|
|
|
|
|
|
2
Schedule 2.05
Existing Letters of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiry
|
|
|
|
L/C
Number
|
|
Beneficiary
|
|
Date
|
|
Outstanding
|
|
|
|
Letter of Credit-Hartford
|
|
03/22/07
|
|
$
|
6,500,000
|
|
|
|
Letter of Credit-Hartford
|
|
03/22/07
|
|
$
|
6,500,000
|
|
|
|
Letter of Credit-Travelers
|
|
05/05/07
|
|
$
|
500,000
|
|
|
|
Letter of Credit-Liberty Mutual
|
|
05/05/07
|
|
$
|
536,000
|
|
|
|
Letter of Credit-Royal Indemnity
|
|
09/24/06
|
|
$
|
1,000,000
|
|
|
|
Letter of Credit-Royal Bank of Canada
|
|
03/31/07
|
|
$
|
1,049,203
|
|
|
|
Letter of Credit-St. Paul Fire and Marine
|
|
05/01/07
|
|
$
|
400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Letter of Credit-Columbia Casualty Co.
|
|
05/01/07
|
|
$
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,735,203
|
|
|
|
|
|
|
|
|
|
Schedule 3.12
Subsidiaries
ABSG Cap, Inc.*
Ambulatory Pharmaceutical Services, Inc.
AmerisourceBergen Canada Corporation*
AmerisourceBergen Drug Corporation
AmerisourceBergen Holding Corporation
AmerisourceBergen Services Corporation
AmerisourceBergen Specialty Group Canada Acquisition Corporation*
AmerisourceBergen Specialty Group Canada Corporation*
AmeriSource Health Services Corporation
AmeriSource Heritage Corporation
AmeriSource Receivables Financial Corporation*
Anderson Packaging, Inc.
APS Enterprises Holding Company
ASD Specialty Healthcare, Inc.
AutoMed Technologies, Inc.
AutoMed Technologies (Canada) Inc.*
Brecon Holdings Limited*
Brecon Pharmaceuticals Holdings Limited*
Brecon Pharmaceuticals Limited*
Brownstone Pharmacy, Inc.
Capstone Med, Inc.
Capstone Pharmacy of Delaware, Inc.
Century Advertising, Inc.*
Chapin Drug Company*
CliniCare Concepts, Inc.
Compuscript, Inc.
Computran Systems, Inc.
Dunnington Rx Services of Massachusetts, Inc.
Dunnington Rx Services of Rhode Island, Inc.
Express Pharmacy Services, Inc.
Family Center Pharmacy, Inc.
Goot Nursing Home Pharmacy, Inc.
Health Services Capital Corporation
I.G.G. of America, Inc.
IHS Acquisition XXX, Inc.
Imedex, Inc.
Insta-Care Pharmacy Services Corporation
Integrated Commercialization Solutions, Inc.
International Physician Networks, L.L.C.
J.M. Blanco, Inc.*
Leading Educational Research Network, LLC
Managed Care Network, Inc.
Medical Initiatives, Inc.
Network for Medical Communication & Research Analytics, LLC
New Jersey Medical Corporation*
NMCR Holdings, Inc.
Pharm Plus Acquisition, Inc.
Pharmacy Corporation of America
Pharmacy Corporation of America-Massachusetts, Inc.
Pharmacy Healthcare Solutions, Ltd.
Pharmacy Review Services, Inc.
PharMerica, Inc.
PharMerica Drug Systems, Inc.
PharMerica Technology Solutions, LLC
PMSI, Inc.
PMSI MSA Services, Inc.
Premier Pharmacy, Inc.
Reimbursement Education Network, LLC
Rombros Drug Center, Inc.
Solana Beach, Inc.
Southwest Pharmacies, Inc.
Specialty Pharmacy, Inc.
Specialty Pharmacy of California, Inc.
Taylor & Manno Asset Recovery, Inc.
Telepharmacy Solutions, Inc.
The Lash Group, Inc.
Tmesys(TM), Inc.
US Bioservices Corporation
Value Apothecaries, Inc.
All the subsidiaries listed above are owned directly or indirectly 100% by the Borrower.
|
|
|
*
|
|
Not a Designated Subsidiary
|
Schedule of Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Liability
|
|
St. Paul Fire &
Marine Ins. Co.
|
|
TEO6100918
|
|
5/1/06 07
|
|
$997,873
|
|
$5MM General Total Limit
|
|
$3.5MM Basket Aggregate (GL, Prod, Auto, E&O)
|
|
Occurrence
|
|
Marsh
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Products/Comp. Ops.
|
|
$1MM SIR Each Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Personal Injury
|
|
$1MM Ded Each Person
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Advertising Injury
|
|
$1MM Ded Each Person
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Each Event
|
|
$1MM Ded Each Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1MM Premises Damages
|
|
$1MM Ded Each Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$10K Medical Expenses
|
|
$10,000 Ded Each Person
|
|
|
|
|
|
|
|
Employee Benefits Liability
|
|
St. Paul Fire &
|
|
TEO6100918
|
|
5/1/06 07
|
|
Included
|
|
$3MM Total
|
|
$1,000 Ded Each Wrongful Act
|
|
Claims Made
|
|
Marsh
|
|
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
$1MM Each Wrongful Act
|
|
|
|
|
|
|
|
|
|
Errors & Omissions
|
|
St. Paul Fire &
|
|
TEO6100918
|
|
5/1/06 07
|
|
$276,902
|
|
$2MM General Total
|
|
$250,000 Ded Each Error
|
|
Claims Made
|
|
Marsh
|
|
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
$1MM Each Error
|
|
|
|
|
|
|
|
|
|
Automobile (AOS)
|
|
St. Paul Fire &
|
|
TEO6100918
|
|
5/1/06 07
|
|
$191,043
|
|
$1MM Combined Single Limit
|
|
$100,000 Ded Each Accident
|
|
Occurrence
|
|
Marsh
|
|
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
$500K Garagekeepers
|
|
$1,000 Ded Comp & Coll.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,000 Ded GK Comp & Coll.
|
|
|
|
|
|
|
|
Automobile (VA)
|
|
St. Paul Fire &
|
|
TEO6101590
|
|
5/1/06 07
|
|
Included
|
|
$1MM Combined Singled Limit
|
|
$100,000 Ded Each Accident
|
|
Occurrence
|
|
Marsh
|
|
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
|
|
$1,000 Ded Comp & Coll.
|
|
|
|
|
|
|
|
Automobile (MA)
|
|
St. Paul Fire & Marine Ins. Co.
|
|
MA06100016
|
|
5/1/06 07
|
|
Included
|
|
$1MM Combined Single Limit
|
|
$100,000 Ded Each Accident
$1,000 Ded Comb & Coll.
|
|
Occurrence
|
|
Marsh
|
|
|
|
International General Liability
|
|
St. Paul Fire &
|
|
TEO6101122
|
|
5/1/06 07
|
|
$5,368
|
|
$5MM Total Limit
|
|
NIL
|
|
Occurrence
|
|
Marsh
|
|
Products coverage is
|
|
|
Marine Ins.
|
|
|
|
|
|
|
|
Excluded Products/Comp. Ops.
|
|
|
|
|
|
|
|
provided under
|
|
|
Co. Company
|
|
|
|
|
|
|
|
$4MM Personal Injury
|
|
|
|
|
|
|
|
Domestic GL
|
|
|
|
|
|
|
|
|
|
|
$4MM Advertising Injury
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Each Occurrence
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1MM Premises Damage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$10K Medical Expense
|
|
|
|
|
|
|
|
|
|
International Auto Liability
|
|
St. Paul Fire &
|
|
TEO6101122
|
|
5/1/06 07
|
|
$5,000
|
|
$1MM Total Limit
|
|
NIL
|
|
Occurrence
|
|
Marsh
|
|
DIC and Excess to
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
locally required coverage
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Workers Compensation
|
|
St. Paul Fire &
|
|
TEO6101122
|
|
5/1/06 07
|
|
$14,217
|
|
$5MM Total Limit
|
|
NIL
|
|
Occurrence
|
|
Marsh
|
|
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
$1MM Total Limit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1MM Total Limit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$250K Transit Expenses
|
|
|
|
|
|
|
|
Each Employee
|
|
|
|
|
|
|
|
|
$1,490,403
|
|
$500K Transit Expenses
|
|
|
|
|
|
|
|
Total Limit
|
|
Canadian Liability (GL/EL)
|
|
St. Paul Fire &
|
|
UXCPC0070535
|
|
5/1/06 07
|
|
$8,131
|
|
$5MM General Total Limit
|
|
$1,000,000 Deductible
|
|
Occurrence
|
|
Marsh
|
|
Limits, Deductibles and
|
|
|
Marine of Canada
|
|
|
|
|
|
|
|
Incld in Limit Limited Pollution
|
|
|
|
|
|
|
|
Premiums in US Dollars
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Personal Injury
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not Covered Products/Comp. Ops.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Advertising Injury
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4MM Each Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1MM Tenant Legal Liab
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$10K Medical Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1MM Employers Liab
|
|
|
|
|
|
|
|
|
|
Canadian Auto Liability
|
|
St. Paul Fire &
|
|
UXCPC0070535
|
|
5/1/06 07
|
|
$20,599
|
|
$1MM Total Limit
|
|
$500 Ded Comp/Coll.
|
|
Occurrence
|
|
Marsh
|
|
Limits, Deductibles and
|
|
|
Marine of Canada
|
|
|
|
|
|
|
|
|
|
$1,500 Ded on 2003 Infinity
|
|
|
|
|
|
Premiums in Canadian Dollars
|
|
Umbrella Liability
|
|
St. Paul Fire &
|
|
TEO6100918
|
|
5/1/06 07
|
|
$276,950
|
|
$5MM General Aggregate
|
|
$10,000 Deductible
|
|
Occurrence
|
|
Marsh
|
|
AL, EL, Foreign AL & EL
|
|
|
Marine Ins. Co.
|
|
|
|
|
|
|
|
|
|
|
|
Claims Made
|
|
|
|
E&O and EBL
|
|
Medical Professional Liability
|
|
Arch Specialty Insurance Co.
|
|
UFL001489500
|
|
5/1/06 07
|
|
$455,624
|
|
$10MM Aggregate
|
|
$1,000,000 SIR Each Claim
|
|
Claims Made
|
|
Marsh
|
|
|
|
|
|
|
|
|
|
|
|
|
$10MM Each Claim
|
|
|
|
|
|
|
|
|
|
Excess Medical Professional Liability
|
|
Steadfast Insurance Co.
|
|
HPC9137557 00
|
|
5/1/06 07
|
|
$737,701
|
|
$25MM xs $11MM Med Prof Total Limit
|
|
|
|
Claims Made
|
|
Marsh
|
|
|
|
Excess Tech E&O (1st Excess)
|
|
National Union (AIG)
|
|
6269980
|
|
5/1/06 07
|
|
$252,450
|
|
$15MM xs $6MM total Limit
|
|
|
|
Claims Made
|
|
Marsh
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess Tech E&O (2nd Excess)
|
|
ACE American Insurance Co. (ACE)
|
|
XEOG216841070-01
|
|
5/1/06 07
|
|
$109,390
|
|
$10MM xs $21MM Total Limit
|
|
Claims Made
|
|
Marsh
|
|
|
|
Excess Tech E&O (3rd Excess)
|
|
General Security Ind. Co. of AZ (Scor)
|
|
QF016706-1
|
|
5/1/06 07
|
|
$153,287
|
|
$20MM xs $31MM Total Limit
|
|
Claims Made
|
|
Marsh UK
|
|
|
|
Excess Liability (1st Excess)
|
|
American Guarantee (Zurich)
|
|
AEC9279783-05
|
|
5/1/06 07
|
|
$1,118,070
|
|
$25MM xs $5MM GL/AL/EL Total Limit
|
|
Occurrence
|
|
Marsh
|
|
Excludes E&O and Med Mal
|
|
Excess Liability (2nd Excess)
|
|
SR International (Swiss Re)
|
|
MH353203
|
|
5/1/06 07
|
|
$460,161
|
|
$20MM xs $30MM GL/AL/EL Total Limit
|
|
Occurrence
|
|
Marsh Zurich
|
|
Excludes E&O
|
|
|
|
|
|
|
|
|
|
|
$20MM xs $36MM Med Prof Total Limit
|
|
Claims Made
|
|
|
|
|
|
Excess Liability
|
|
American World
|
|
C000391/005
|
|
5/1/06 07
|
|
$564,000
|
|
$25MM xs $50MM GL/AL/EL Total Limit
|
|
Occurrence
|
|
Marsh Bermuda
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3rd Excess)
|
|
Assurance
|
|
|
|
|
|
|
|
$25MM xs $51MM E&O Total Limit
|
|
Claims Made
|
|
Marsh Bermuda
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company (AWAC)
|
|
|
|
|
|
|
|
$25MM xs $56MM Med Prof Total Limit
|
|
Claims Made
|
|
Marsh Bermuda
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess Liability (4th Excess)
|
|
Arch Insurance Company
|
|
TBD
|
|
5/1/06 07
|
|
$427,000
|
|
$25MM xs $75MM GL/AL/EL Total Limit
|
|
Occurrence
|
|
|
|
(Excludes Tech
|
|
|
|
|
|
|
|
|
|
|
$20MM xs $81MM Med Prof Total Limit
|
|
Claims Made
|
|
|
|
E&O)
|
|
Excess Liability (5th Excess)
|
|
Starr Excess International
|
|
307865
|
|
5/1/06 07
|
|
$900,000
|
|
$150MM xs $100MM Total Limit
|
|
Occurrence
|
|
Marsh Bermuda
|
|
Excludes Tech
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&O and Med Mal
|
|
Excess Liability (6th Excess)
|
|
XL Europe Ltd.
|
|
B0509DL469206-1
|
|
5/1/06 07
|
|
$225,000
|
|
$50MM xs $250MM Total Limit
|
|
Occurrence
|
|
Marsh UK
|
|
Excludes Tech E&O and Med Mal
|
Punitive Damages
|
|
TBD
|
|
|
|
|
|
|
|
|
|
|
|
Bermuda Marsh
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employed Lawyers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employed Lawyers
|
|
Executive Risk
|
|
8171-8653
|
|
8/29/05 06
|
|
$50,667
|
|
$3MM Per Claim/Aggregate
|
|
$0 (A)
|
|
Marsh
|
|
|
|
|
|
|
|
|
|
|
$200K Defense Sub-limit
|
|
$50,000 (B)
|
|
|
|
Fiduciary Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiduciary Liability
|
|
National Union Fire Ins Co of PA
|
|
493-64-72
|
|
8/29/05 06
|
|
$100,000
|
|
$15MM Total Limit
|
|
|
|
Marsh
|
|
Excess Fiduciary Liability
|
|
Continental Casualty
|
|
DOX169838900
|
|
8/29/05 06
|
|
$25,000
|
|
$5MM xs $15MM Total Limit
|
|
|
|
Marsh
|
|
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real and Personal (Excess)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BI/Extra Expense
|
|
FM Global
|
|
LR503 (USA)
|
|
7/15/06 07
|
|
$2,746,214
|
|
$6,000,000,000 Total Limit
|
|
|
|
ABC
|
|
|
|
|
LR503 (CN)
|
|
7/15/06 07
|
|
$45,181 CN
|
|
|
|
|
|
|
|
|
|
|
UK 060928
|
|
7/15/06 07
|
|
13,848 GB
|
|
$27,459,000 Primary Limit
|
|
$100,000 per occurrence
|
Occurrence
|
|
|
|
|
|
|
|
|
|
|
|
US Policy in excess
|
|
$200,000 inventory
|
|
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 MUL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000,000 Extra Expense/Expediting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 Data/Serv Intrup.
|
|
2 Day or $100,000 Min.
|
|
|
|
|
|
|
|
|
|
|
|
|
$20,000,000 Dependent TE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$250,000,000 EQ Non Rated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000,000 Zone A & B
|
|
1% of TIV
|
|
|
|
|
|
|
|
|
|
|
|
|
$20,000,000 EQ CA., HI, PR
|
|
5% of TIV at location
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000,000 Flood
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$15,000,000 Flood MS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$40,000,000 Sacramento
|
|
|
|
|
|
Inventory
|
|
Lloyds of London
|
|
QPC000545000
|
|
7/15/06 07
|
|
$1,896,077
|
|
$35,000,000 Primary Limit ex TRIA
|
|
$100/200,000 per occurrence
|
Occurrence
|
Lloyd and Partners
|
|
Excess Inventory
|
|
Lloyds of London
|
|
|
|
7/15/06 07
|
|
$1,014,750
|
|
$65M X $35M Inc. TRIA
|
|
|
Occurrence
|
Lloyd and Partners
|
|
Excess Inventory
|
|
Lloyds of London
|
|
|
|
7/15/06 07
|
|
$310,250
|
|
$50M X $100M Inc TRIA
|
|
|
Occurrence
|
Lloyd and Partners
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess Inventory
|
|
Lloyds of London
|
|
|
|
7/15/06 07
|
|
$327,250
|
|
$50M X $150M Inc. TRIA
|
|
|
|
Occurrence
|
|
Lloyd and Partners
|
|
Stand Alone Terrorism
|
|
Lloyds of London
|
|
|
|
7/15/06 07
|
|
$176,809.80
|
|
$35,000,000 Primary Terr.
|
|
|
|
Occurrence
|
|
Lloyd and Partners
|
|
DIC EQ/Flood/Excess
|
|
United F&C
|
|
UIM 466568
|
|
7/15/06 07
|
|
$60,250 $5Mp/o $10M xFM
|
|
EQ/Flood CA. HI. PR.
|
|
5% TIV
|
|
Occurrence
|
|
HRH
|
|
|
Greenwich
|
|
WRG702027
|
|
|
|
$18,000 $1.5M p/o $10M xFM
|
|
|
|
|
|
|
|
|
|
|
Arch
|
|
ESP0016986-00
|
|
|
|
$24,762 $2M p/o $10M x FM
|
|
|
|
|
|
|
|
|
|
|
Essex
|
|
TBD
|
|
|
|
$18,572 $1.5M p/o $10M xFM
|
|
|
|
|
|
|
|
|
|
DIC EQ/Flood/Excess
|
|
Continental Casualty
|
|
RMP2083562262
|
|
7/15/06 07
|
|
$50,000 $5M x$10Mx FM
|
|
EQ/Flood CA. HI. PR.
|
|
5% TIV
|
|
Occurrence
|
|
HRH
|
|
DIC EQ/Flood/Excess
|
|
Lloyds of London
|
|
NSM26253
|
|
7/15/06 07
|
|
$39,001 $5Mx$15Mx FM
|
|
EQ/Flood CA. HI. PR.
|
|
5% TIV
|
|
Occurrence
|
|
HRH
|
|
DIC EQ/Flood/Excess
|
|
Axis Surplus
|
|
AXS100210
|
|
7/15/06 07
|
|
$31,210 $5mx$20MxFM
|
|
EQ/CA. HI. PR.
|
|
5% TIV
|
|
Occurrence
|
|
HRH
|
|
DIC EQ/Flood Excess
|
|
Westchester
|
|
I20636245 004
|
|
7/15/06 07
|
|
$77,381.25 $5Mx$25MxFM
|
|
EQ/Flood CA. HI. PR.
|
|
5% TIV
|
|
Occurrence
|
|
HRH
|
|
DIC/Flood Excess
|
|
RSUI
|
|
TBD
|
|
7/15/06 07
|
|
$20,000 $5x$25MXFM
|
|
Flood
|
|
5% TIV
|
|
Occurrence
|
|
HRH
|
|
Directors and Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors and Officers
|
|
AIG
|
|
|
|
8/29/06 07
|
|
$900,000
|
|
$15,000,000 Directors & Officers
|
|
5M Corporate Reimbursement
|
|
Claims Made
|
|
Graham
|
|
|
|
|
|
|
|
|
|
|
|
|
$5M Security Claims
|
|
|
|
|
|
Excess D&O
|
|
Zurich
|
|
|
|
8/29/06 07
|
|
$720,000
|
|
$15Mx$15M Excess D&O
|
|
|
|
Claims Made
|
|
Graham
|
|
Excess D&O
|
|
Platte River
|
|
|
|
8/29/06 07
|
|
$400,000
|
|
$10Mx30M Excess D&O
|
|
|
|
Claims Made
|
|
Graham
|
|
Excess D&O
|
|
RSUI
|
|
|
|
8/29/06 07
|
|
$315,000
|
|
$10Mx$40M Excess D&O
|
|
|
|
Claims Made
|
|
Graham
|
|
Excess D&O
|
|
SR
|
|
|
|
8/29/06 07
|
|
$419,225
|
|
$15Mx$50M Excess D&O
|
|
|
|
Claims Made
|
|
Graham
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess D&O
|
|
Avis RE
|
|
|
|
8/29/06 07
|
|
$247,100
|
|
$10Mx$65M Excess D&O
|
|
|
|
Claims Made
|
|
Graham
|
|
|
|
Excess D&O
|
|
Starr EX
|
|
|
|
8/29/06 07
|
|
$537,675
|
|
$25Mx$75M Excess D&O
|
|
|
|
Claims Made
|
|
Graham
|
|
|
|
Side A DIC
|
|
XL
|
|
|
|
8/29/06 07
|
|
$150,000
|
|
$10,000,000 DIC Side A
|
|
|
|
Claims Made
|
|
Graham
|
|
|
|
Employment Practices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment Practices
|
|
AIG
|
|
|
|
8/29/06 07
|
|
$340,000
|
|
$15,000,000
|
|
|
|
Claims Made
|
|
Graham
|
|
|
|
Excess EPLI
|
|
Chubb
|
|
|
|
8/29/06 07
|
|
$147,220
|
|
$10Mx$15M
|
|
|
|
Claims Made
|
|
Graham
|
|
|
|
Credit/Insolvency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit/Insolvency
|
|
AIG
|
|
|
|
7/1/05 10/1/06
|
|
$1,266,660
|
|
$65,000,000 Total Aggregate/Annual
|
|
$10,000,000 Annual DCL Buyers
|
|
Claims Made
|
|
Aon
|
|
Important Warranties exist for this Cover: policy review necessary for Buyer level endorsements
|
|
|
|
|
|
|
|
|
|
|
$25,000,000 DCL Buyers
Various Endorsed Buyer Limits
|
|
$1,000,000 NQ Loss Amount
|
|
|
|
Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
95% Named Buyers
|
|
Varies per Buyer Endorsement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85% DCL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K&R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kidnapp Ransom
|
|
AIG
|
|
647-9377
|
|
5/31/06 07
|
|
$14,134
|
|
$25,000,000 Covered Loss A-E
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$500,000 Covered Loss F
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,500,000 Death/Dismemberment
|
|
|
|
|
|
|
|
|
|
Crime
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crime
|
|
AIG
|
|
494-62-33
|
|
11/1/05 06
|
|
$161,045
|
|
$15,000,000 $15,000,000 Total Agg.
|
|
$1,000,000
|
|
Claims Made
|
|
Aon
|
|
|
|
Excess Crime
|
|
Zurich
|
|
FID 9004604 03
|
|
11/1/05 06
|
|
$65,000
|
|
$10Mx$15M
|
|
|
|
Claims Made
|
|
Aon
|
|
|
|
Excess Crime
|
|
Quanta
|
|
CCR400035305
|
|
11/1/05 06
|
|
$35,000
|
|
$10Mx$25M
|
|
|
|
Claims Made
|
|
Aon
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GL/Products/Auto/Med-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ma/Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workers Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workers Compensation
Paid Loss Retro
|
|
Hartford
|
|
39 WBR C73200
|
|
5/1/06 07
|
|
$10,125 Statutory
|
|
$10,000,000 Each Accident
|
|
$500,000 per Accident Loss Limit
|
|
|
|
Aon
|
|
WI
|
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 Policy Limit by Disease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 Each Employee
|
|
|
|
Occurrence
|
|
|
|
|
|
Workers Compensation Deductible Program
|
|
Hartford
|
|
39 WN C73201
|
|
5/1/06 07
|
|
$1,076,143
|
|
Statutory
|
|
|
|
|
|
Aon
|
|
AL, AR, AZ, CO, CT, DC, DE, FL, GA, HI,
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 Each Accident
|
|
$500,000 per Accident Loss
|
|
Occurrence
|
|
|
|
IA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS,
|
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 Policy Limit by Disease
|
|
|
|
|
|
|
|
MT, NC, ND, NE, NH, NJ, NM, NV, NY, OK,
|
|
|
|
|
|
|
|
|
|
|
|
$10,000,000 Each Employee
|
|
|
|
|
|
|
|
OR, PA, RI, SC, SD, TN, UT, VA, WV, WY
|
|
Workers Compensation
SIR Program
|
|
Hartford
|
|
39 XWE C73202 (CA)
|
|
5/1/06 07
|
|
$248,097 Statutory
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 XWE C73204 (OH/WA)
|
|
|
|
|
|
$10,000,000 Each Accident
$10,000,000 Policy Limit by Disease
|
|
$500,000 per Accident Loss
|
|
Occurrence
|
|
Aon
|
|
CA: OH/WA
|
|
Workers Compensation
|
|
Brick Sleet
|
|
WC10004369-01
|
|
7/1/06 07
|
|
$640
|
|
|
|
|
|
|
|
ABC
|
|
|
|
Aviation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation
|
|
Net Jets Program
|
|
SIHL1-609E
|
|
|
|
2873.25 See Schedule
|
|
See Schedule
|
|
See Schedule
|
|
Occurrence
|
|
NetJets
|
|
|
|
Underground Storage Tank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UST Liability
|
|
Zurich
|
|
USC533500502
|
|
7/1/06 07
|
|
3963 $1M/$2M
|
|
Each Aggregate
|
|
$10,000 Each claim
|
|
Claims Made
|
|
Aon
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Department
|
|
Confidental
|
|
11/9/2006
|
7
Schedule 6.04
Existing Liens
1.
|
|
PERSONAL PROPERTY SECURITY ACT
(ONTARIO) REGISTRATIONS
|
AmerisourceBergen Canada Corporation
Corporation AmerisourceBergen Canada
AmerisourceBergen Canada Corporation Corporation AmerisourceBergen Canada
The certified PPSA enquiry responses each with a file currency of November 5, 2006, which we
obtained with respect to the above-noted entities, disclosed no registrations made under the
Corporation Securities Registration Act
(the
CSRA
) and no financing statements or financing
change statements filed under the PPSA, which appear to affect the above-noted entities.
Rep-Pharm Inc.
The certified PPSA enquiry response with a file currency of November 5, 2006, which we
obtained with respect to Rep-Pharm Inc., disclosed no registrations made under the CSRA and the
following financing statements filed under the PPSA, which appear to affect Rep-Pharm (Note: For
ease of reference, we have listed the registrations in reverse chronological order, being the order
in which they appear on the certificate. This is not indicative of
the order of priority.):
|
|
|
|
|
|
|
|
|
Secured
|
|
Collateral
|
|
General Collateral
|
|
Reference File No. &
|
|
|
Party(ies)
|
|
Classification
|
|
Description
|
|
Registration Number(s)
|
|
Comments
|
Ford Credit Canada
Leasing Company
|
|
Equipment, Other,
Motor Vehicles
2005 Ford Escape
V.I.N.
1FMYU03175KA64247
|
|
|
|
612161559 - 20050121
1453 1530
5988 (3 years)
|
|
|
|
|
|
|
|
|
|
|
|
Ford Credit Canada
Leasing Company
|
|
Equipment, Other,
Motor Vehicles
2005 Ford Focus
V.I.N.
3FAFP37N25R126494
|
|
|
|
610199928 - 20041029
1453 1530 6040 (3 years)
|
|
|
|
|
|
|
|
|
|
|
|
Xerox Canada Ltd
|
|
Equipment, Other
|
|
|
|
878440797
- 20011130 1432 1715 8651 (5 years)
|
|
|
Trent Drugs (Wholesale) Ltd.
The certified PPSA enquiry response with a file currency of November 6, 2006, which we
obtained with respect to Trent Drugs (Wholesale) Ltd., disclosed no registrations made
under the CSRA and the following financing statements filed under the PPSA, which appear to
affect Trent Drugs (Wholesale) Ltd. (Note: For ease of reference, we have listed the
registrations in reverse chronological order, being the order in which they appear on the
certificate. This is not indicative of the order of priority.):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reference File No. &
|
|
|
Secured
|
|
Collateral
|
|
General Collateral
|
|
Registration
|
|
|
Party(ies)
|
|
Classification
|
|
Description
|
|
Number(s)
|
|
Comments
|
De Lage Landen
Financial Services
Canada Inc.
|
|
Equipment, Other
|
|
|
|
611604909 - 20041223 1503 7029
1264 (5 years)
|
|
Debtor name is
listed as Trent
Drugs
(Wholesale) Ltd
|
|
|
|
|
|
|
|
|
|
Nissan Canada
Finance Inc.
|
|
Consumer Goods,
Equipment, Motor
Vehicles
|
|
|
|
896136435 - 20030708 1452
1530 0780 (4 years)
|
|
Debtor name is
listed as Trent
Drugs
(Wholesale) Ltd
|
|
|
|
|
|
|
|
|
|
|
|
Amount Secured:
|
|
|
|
|
|
|
|
|
$80,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of Maturity:
|
|
|
|
|
|
|
|
|
July 4, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 Infiniti
|
|
|
|
|
|
|
|
|
FX45
|
|
|
|
|
|
|
|
|
V.I.N.
|
|
|
|
|
|
|
|
|
JNRBS08WX3X403085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Onset Capital
Corporation
|
|
Equipment, Other
No Fixed Maturity Date
|
|
Folder-inserter(s),
reading base(s)
together with all
attachments
accessories
accessions
replacements
substitutions
additions and
improvements
thereto and all
proceeds in any
form derived
directly or
indirectly from any
sale and or
dealings with the
collateral and a
right to an
insurance payment
or other payment
that indemnifies or
compensates for
loss or damage to
the collateral or
proceeds of the
collateral
|
|
894096072
- 20030507 1220 8022 4053
(6 years)
|
|
Debtor name is
listed as Trent
Drugs
(Wholesale)
Ltd
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reference File No. &
|
|
|
Secured
|
|
Collateral
|
|
General Collateral
|
|
Registration
|
|
|
Party(ies)
|
|
Classification
|
|
Description
|
|
Number(s)
|
|
Comments
|
National Leasing
Group Inc. L#
2209773
|
|
Equipment
|
|
All
photocopiers/printers/faxes
of every nature or kind
described in lease number
2209773 dated May 2,
2003 between the secured
party, as lessor and the
debtor as lessee, as
amended from time to
time, together with all
attachments, accessories
and substitutions.
|
|
893992536 -
20030505 1127 6005
5147 (5 years)
|
|
|
2.
|
|
PERSONAL PROPERTY SECURITY ACT
(ALBERTA) REGISTRATIONS
|
AmerisourceBergen Canada Corporation
Corporation AmerisourceBergen Canada
AmerisourceBergen Canada Corporation Corporation AmerisourceBergen Canada
Rep-Pharm Inc.
The certified PPSA enquiry responses each with a file currency of November 6, 2006, which we obtained with respect to the above-noted entities, disclosed no financing statements or financing change statements filed under the PPSA, which appear to affect the above-noted entities.
Trent
Drugs (Wholesale) Ltd
.
The certified PPSA enquiry response with a file currency of November 7, 2006, which we obtained with respect to Trent Drugs (Wholesale) Ltd., disclosed no financing statements or financing change statements filed under the PPSA, which appear to affect Trent Drugs (Wholesale) Ltd.
3.
|
|
PERSONAL PROPERTY SECURITY ACT
(BRITISH COLUMBIA) REGISTRATIONS
|
AmerisourceBergen Canada Corporation
Corporation AmerisourceBergen Canada
AmerisourceBergen Canada Corporation Corporation AmerisourceBergen Canada
Rep-Pharm Inc.
The certified PPSA enquiry responses each with a file currency of November 6, 2006, which we obtained with respect to the above-noted entities, disclosed no financing statements or financing change statements filed under the PPSA, which appear to affect the above-noted entities.
Trent Drugs (Wholesale) Ltd.
The certified PPSA enquiry response with a file currency of November 7, 2006, which we
obtained with respect to Trent Drugs (Wholesale) Ltd., disclosed no financing statements
or financing change statements filed under the PPSA, which appear to affect Trent Drugs
(Wholesale) Ltd.
4.
|
|
PERSONAL PROPERTY SECURITY ACT
(NEWFOUNDLAND) REGISTRATIONS
|
AmerisourceBergen Canada Corporation
Corporation AmerisourceBergen Canada
AmerisourceBergen Canada Corporation Corporation AmerisourceBergen Canada
Rep-Pharm Inc.
The certified PPSA enquiry responses each with a file currency of November 7, 2006,
which we obtained with respect to the above-noted entities, disclosed no financing
statements or financing change statements filed under the PPSA, which appear to affect the
above-noted entities.
Trent Drugs (Wholesale) Ltd.
The certified PPSA enquiry response with a file currency of November 7, 2006, which we
obtained with respect to Trent Drugs (Wholesale) Ltd., disclosed the following financing
statements and financing change statements filed under the PPSA, which appear to affect
Trent Drugs (Wholesale) Ltd.:
|
|
|
|
|
|
|
|
|
|
|
Registration
|
|
|
|
|
|
|
Number(s),
|
|
|
Secured
|
|
Collateral
|
|
Registration Date and
|
|
|
Party(ies)
|
|
Classification/General Collateral Description
|
|
Expiry Date
|
|
Comments
|
GMAC Leaseco
Corporation
|
|
And all proceeds therefrom
2004 Buick Century VIN
2G4WS52J441197445
|
|
3177378 (amended by
3180168 and 3726613)
February 5, 2004
February 5, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registration
|
|
|
|
|
|
|
Number(s),
|
|
|
Secured
|
|
Collateral
|
|
Registration Date and
|
|
|
Party(ies)
|
|
Classification/General Collateral Description
|
|
Expiry Date
|
|
Comments
|
De Lage
Landen
Financial
Services
Canada Inc.
|
|
All goods supplied by the Secured Party
pursuant to a Lease between the Debtor and
the Secured Party, together with all parts and
accessories thereto and accession thereto and
all replacements or substitutions for such
goods and proceeds thereof (proceeds as
defined in the Personal Property Security Act
(NL)) and any insurance proceeds resulting
there from.
|
|
4016344
March 21, 2005
March 21, 2010
|
|
|
5.
|
|
PERSONAL PROPERTY SECURITY ACT
(NOVA SCOTIA) REGISTRATIONS
|
AmerisourceBergen Canada Corporation
Corporation AmerisourceBergen Canada
AmerisourceBergen Canada Corporation Corporation AmerisourceBergen Canada
Rep-Pharm Inc.
Trent Drugs (Wholesale) Ltd.
The certified PPSA enquiry responses each with a file currency of November 7, 2006,
which we obtained with respect to the above-noted entities, disclosed no financing
statements or financing change statements filed under the PPSA, which appear to affect the
above-noted entities.
Schedule 6.09
Existing Restrictions
The transaction provided for in, and the restrictions contained in, the Master Transaction
Agreement dated October 25, 2006, by and among the Company, PharMerica, Inc., a Delaware corporation
and wholly-owned subsidiary of the Company (
PharMerica
), Kindred Healthcare, Inc., a Delaware
corporation, Kindred Healthcare Operating, Inc., a Delaware corporation, Kindred Pharmacy Services,
Inc., a Delaware corporation, Safari Holding Corporation, a Delaware corporation (
Newco
), Hippo
Merger Corporation, a Delaware corporation and wholly owned subsidiary of Newco (
Hippo Merger
Sub
), and Rhino Merger Corporation, a Delaware corporation and wholly owned subsidiary of Newco,
including (a) the transfer by Pharmacy Corporation of America, a California corporation and
indirect wholly owned subsidiary of the Company, of the capital stock of each of PMSI, Inc., a
Florida corporation and Tmesys, Inc., a Florida corporation, to the Company or another Subsidiary
of the Company, (b) the borrowing by PharMerica of approximately $ 150,000,000 from certain
financial institutions (the
PharMerica Borrowing
), (c) the distribution of the proceeds of the
PharMerica Borrowing by way of dividend, inter-company payment or return of capital to the Company,
(d) the distribution of all the capital stock of PharMerica to the stockholders of the Company by
way of dividend, (e) the merger of PharMerica with Hippo Merger Sub and (f) the provision of
certain transitional services between Newco and the Company and certain of the Companys
Subsidiaries.
EXHIBIT A
Form of Assignment and Assumption
This Assignment and Assumption (this
Assignment and Assumption
) is dated as of the
Effective Date set forth below and is entered into by and between [NAME OF ASSIGNOR] (the
Assignor
) and [NAME OF ASSIGNEE] (the
Assignee
). Capitalized terms used herein
but not otherwise defined herein shall have the meanings assigned to such terms in the Credit
Agreement identified below (as amended, the
Credit Agreement
), receipt of a copy of which
is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and made
a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (a) all of the Assignors
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any letters of credit,
guarantees, and swingline loans included in such facilities) and (b) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under
or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity related to the rights and obligations sold and assigned pursuant
to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (i) and
(b) above being referred to herein collectively as the
Assigned Interest
). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
|
|
|
1. Assignor:
|
|
|
|
|
|
2. Assignee:
|
|
|
|
|
[and is an Affiliate/Approved Fund of [
identify Lender
]
1
]
|
|
|
|
3. Company:
|
|
AmerisourceBergen Corporation
|
|
|
|
4. Borrowers:
|
|
The Company, the US Borrowing Subsidiaries, the UK Borrowing
Subsidiaries, the Canadian Borrowing Subsidiaries and any Borrowing
Subsidiary that is not a US Borrowing Subsidiary, a UK Borrowing
Subsidiary or a Canadian Borrowing Subsidiary and that has been
designated by the Administrative Agent as a Borrowing Subsidiary at
the request of the Company and with the consent of each Lender
under the applicable Tranche
|
|
|
|
5. Administrative Agent:
|
|
JPMorgan Chase Bank, N.A., as administrative agent for the Lenders
|
Form of Assignment and Assumption
A-1
|
|
|
6. Credit Agreement:
|
|
The US$750,000,000 Credit Agreement dated as
of November [
], 2006, among
AmerisourceBergen Corporation, the Borrowing
Subsidiaries from time to time party thereto,
the Lenders from time to time party thereto,
JPMorgan Chase Bank, N.A., as administrative
agent for the Lenders, J. P. Morgan Europe
Limited, as London agent for the Lenders and
The Bank of Nova Scotia, as Canadian agent for
the Lenders
|
|
|
|
7. Assigned Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Assigned of
|
|
|
|
Aggregate Amount of
|
|
|
Amount of
|
|
|
Aggregate Amount of
|
|
|
|
Commitments/Loans of
|
|
|
Commitments/Loans
|
|
|
Commitments/Loans
|
|
|
|
all Lenders
|
|
|
Assigned
|
|
|
of all Lenders
2
|
|
Global Tranche
|
|
$
|
260,000,000
|
|
|
$
|
|
|
|
|
|
%
|
US/UK Tranche
|
|
$
|
70,000,000
|
|
|
$
|
|
|
|
|
|
%
|
US/Canadian Tranche
|
|
$
|
200,000,000
|
|
|
$
|
|
|
|
|
|
%
|
US Tranche
|
|
$
|
220,000,000
|
|
|
$
|
|
|
|
|
|
%
|
Effective Date:
, 200
[TO BE INSERTED BY THE ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire
in which the Assignee designates one or more credit contacts to whom all syndicate-level
information (which may contain material non-public information about the Company, the other Loan
Parties and their Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignees compliance procedures and applicable
laws, including Federal, state and foreign securities laws.
|
|
|
2
|
|
Set forth, to at least nine decimals.
|
Form of Assignment and Assumption
A-2
The terms set forth in this Assignment and Assumption are hereby agreed to:
|
|
|
|
|
|
[NAME OF ASSIGNOR], as Assignor,
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
[NAME OF ASSIGNEE], as Assignee,
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
[Consented to and]
3
Accepted:
|
|
|
|
|
JPMORGAN CHASE BANK, N.A., as
Administrative Agent,
|
|
|
|
|
|
|
|
by
|
|
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
[Consented to:]
4
|
|
|
|
|
|
|
|
[NAME OF ISSUING BANK], as an
Issuing Bank,
|
|
|
|
|
|
|
|
by
|
|
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
3
|
|
To be added only if the consent of the Administrative Agent is required under Section 11.04(b) of the Credit Agreement.
|
|
4
|
|
To be added only if the consent of each Issuing Bank is required by Section 9.04(b) of the Credit Agreement.
|
Form of Assignment and Assumption
A-3
[Consented to:]
5
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION,
|
|
|
|
|
|
|
|
by
|
|
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
5
|
|
To be added only if the consent of the Company is required by Section 9.04(b) of the Credit Agreement.
|
Form of Assignment and Assumption
A-4
ANNEX 1
to Form of Assignment and Assumption
US$750,000,000 AmerisourceBergen Corporation Credit Agreement
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1.
Representations and Warranties
.
1.1
Assignor
. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.
1.2.
Assignee
. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received and/or had the opportunity to review a
copy of the Credit Agreement to the extent it has in its sole discretion deemed necessary, together
with copies of the most recent financial statements delivered pursuant to Section 5.01(a) or
5.01(b) thereof, as applicable, and such other documents and information as it has in its sole
discretion deemed appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made
such analysis and decision independently and without reliance on the Administrative Agent, the
London Agent, the Canadian Agent or any Lender[, and (v) if it is a Foreign Lender, attached to
this Assignment and Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee and (b) agrees that it
will (i) independently and without reliance on the Administrative Agent, the London Agent or the
Canadian Agent, the Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under the Loan Documents and (ii) perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.]
6
2.
Payments
. From and after the Effective Date, the Applicable Agent shall make all
payments in respect of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective Date.
|
|
|
6
|
|
Subject to CS&M tax review.
|
Form of Assignment and Assumption
A-5
3.
General Provisions
. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This Assignment
and Assumption may be executed in any number of counterparts, each of which shall constitute an
original and all of which when taken together shall constitute one agreement. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by telecopy or other
electronic transmission shall be as effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed
in accordance with, the laws of the State of New York.
Form of Assignment and Assumption
A-6
EXHIBIT B-1
Form of Borrower Joinder Agreement
BORROWER JOINDER AGREEMENT dated as of [
] (this
Agreement
), among
AMERISOURCEBERGEN CORPORATION, a Delaware corporation (the
Company
), [NAME OF NEW
BORROWING SUBSIDIARY], a [JURISDICTION] [ORGANIZATIONAL FORM] (the
New Borrower
)
and JPMORGAN CHASE BANK, N.A., as administrative agent (the
Administrative Agent
)
for the Lenders.
Reference is made to the Credit Agreement dated as of November [
], 2006 (as amended,
supplemented or otherwise modified time to time, the
Credit Agreement
), among the
Company, the Borrowing Subsidiaries from time to time party thereto, the Lenders from time to time
party thereto, the Administrative Agent, J. P. Morgan Europe Limited, as London agent for the
Lenders and The Bank of Nova Scotia, as Canadian agent for the Lenders. Each capitalized term used
but not defined herein shall have the meaning assigned to it in the Credit Agreement.
Under the Credit Agreement, the Lenders and the Issuing Banks have agreed, upon the terms and
subject to the conditions set forth therein, to make Loans to, accept and purchase B/As issued by,
and issue Letters of Credit for the account of, the Borrowers, and the Company and the New Borrower
desire that the New Borrower becomes a Borrower and a [Global Tranche Borrower][ US/UK Tranche
Borrower][ US/Canadian Tranche Borrower][ US Tranche Borrower] under the Credit Agreement.
Each of the Company and the New Borrower represent and warrant that the representations and
warranties of the Company in the Credit Agreement relating to the New Borrower and this Agreement
are true and correct in all material respects on and as of the date hereof. The Company agrees that
the guarantee of the Company contained in the Credit Agreement, and the guarantee of each
Designated Subsidiary contained in the Guaranty Agreement, will apply to the Obligations of the New
Borrower.
Upon execution and delivery of this Agreement (and of any other documents reasonably requested
by the Administrative Agent) by each of the Company, the New Borrower and the Administrative Agent
and the satisfaction of the other conditions set forth in Section 4.03 of the Credit Agreement, the
New Borrower shall become a party to the Credit Agreement and a Borrower and a [Global Tranche
Borrower][US/UK Tranche Borrower] [US/Canadian Tranche Borrower] [US Tranche Borrower] for
all purposes thereof;
provided
that this Agreement shall not become effective if it shall be
unlawful for the New Borrower to become a Borrower thereunder or for any Lender participating in
a Tranche under which the New Borrower may borrow to make Loans or otherwise extend credit to the
New Borrower as provided therein.
Form of Borrower Joinder Agreement
B-1-1
The New Borrower hereby agrees to be bound by all provisions of the Credit Agreement. The
Applicable Funding Account for the New Borrower shall be:
|
|
|
|
|
|
|
|
|
Bank
|
|
Swift
|
|
Acct #
|
|
ABA
|
|
IBAN/ Routing Code
|
|
|
|
|
|
|
|
|
|
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
Form of Borrower Joinder Agreement
B-1-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION,
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
[NAME OF NEW BORROWER],
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
JPMORGAN CHASE BANK, N.A., as
Administrative Agent,
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
Form of Borrower Joinder Agreement
B-1-3
EXHIBIT B-2
Form of Borrower Termination Agreement
JPMorgan Chase Bank, N.A.,
as
administrative agent under the Credit Agreement referred to below,
c/o Loan and Agency Services Group
1111 Fannin, 10th Floor
Houston, TX 77002
Attention: Claudia Correa (Telecopy No. [
])
JPMorgan Chase Bank, N.A.,
as administrative agent under the Credit Agreement referred to below,
270 Park Avenue, NY 10017
Attention: Dawn Lee Lum (Telecopy No. (212) 270-3279)
[DATE]
Re:
Borrower Termination Agreement
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of November [
], 2006 (as amended,
supplemented or otherwise modified time to time, the
Credit Agreement
), among the
AmerisourceBergen Corporation (the
Company
), the Borrowing Subsidiaries from time to time
party thereto, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders, J. P. Morgan Europe Limited, as London agent for the Lenders
and The Bank of Nova Scotia, as Canadian agent for the Lenders. Each capitalized term used but not
defined herein shall have the meaning assigned to it in the Credit Agreement.
The Company hereby terminates the status of [NAME OF TERMINATED BORROWING SUBSIDIARY] (the
Terminated Borrower
) as a Borrower and a [Global Tranche Borrower][ US/UK Tranche
Borrower][ US/Canadian Tranche Borrower][ US Tranche Borrower] under the Credit Agreement.
[The Company represents and warrants that all Loans made to and B/As drawn by the Terminated
Borrower have been repaid, all Letters of Credit issued for the account of the Terminated Borrower
have been drawn in full or have expired and all amounts payable by the Terminated Borrower in
respect of LC Disbursements, interest and/or fees (and, to the extent notified by the
Administrative Agent or any Lender, any other amounts payable under the Credit Agreement by the
Terminated Borrower have been paid in full on or prior to the date hereof.][The Company and the
Terminated Borrower acknowledge that the Terminated Borrower shall continue to be a Borrower until
such time as all Loans made to and B/As drawn by the Terminated Borrower have been repaid, all
Letters of Credit issued for the account of the Terminated Borrower have been drawn in full or have
expired and all amounts payable by the Terminated Borrower in respect of LC Disbursements, interest
and/or fees (and, to the extent notified by the Administrative Agent or any Lender, any other
amounts payable under the Credit Agreement by the Terminated Borrower) have been paid in full;
provided
that the Terminated Borrower shall not have the right to request or receive further
extensions of credit under the Credit Agreement.]
From of Borrower Termination Agreement
B-2-1
THIS INSTRUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
|
|
|
|
|
|
Very truly yours,
AMERISOURCEBERGEN CORPORATION,
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
From of Borrower Termination Agreement
B-2-2
EXHIBIT C
Form of Borrowing Request
JPMorgan Chase Bank, N.A.,
as
administrative agent under the Credit Agreement referred to below,
c/o Loan and Agency Services Group
1111 Fannin, 10th Floor
Houston, TX 77002
Attention: Claudia Correa (Telecopy No. [
])
J.P. Morgan Europe Limited,
as
London agent under the Credit Agreement referred to below,
25 London Wall, London EC2Y 5AJ
Attention: Agency Department (Telecopy No. 44-207-777-2360)
The Bank of Nova Scotia,
as
Canadian agent under the Credit Agreement referred to below,
[ADDRESS]
[ADDRESS]
Attention: [
] (Telecopy No. [
])
JPMorgan Chase Bank, N.A.,
as
administrative agent under the Credit Agreement referred to below,
270 Park Avenue, NY 10017
Attention: Dawn Lee Lum (Telecopy No. (212) 270-3279)
[DATE]
Re: Borrowing Request
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of November [
], 2006 (as amended,
supplemented or otherwise modified time to time, the
Credit Agreement
), among the
AmerisourceBergen Corporation (the
Company
), the Borrowing Subsidiaries from time to time
party thereto, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders, J. P. Morgan Europe Limited, as London agent for the Lenders
and The Bank of Nova Scotia, as Canadian agent for the Lenders. Each capitalized term used but not
defined herein shall have the meaning assigned to it in the Credit Agreement.
[NAME OF BORROWER] hereby gives you notice pursuant to Section 2.03 of the Credit Agreement
that it requests a Borrowing under the Credit Agreement, and in that connection sets forth below
the terms on which such Borrowing is requested to be made:
(a) such Borrowing shall be a [Global Tranche Revolving Borrowing][US/UK Tranche Revolving
Borrowing][US/Canadian Tranche Revolving Borrowing][US Tranche Revolving Borrowing];
From of Borrowing Request
C-1
(b) such Borrowing shall be denominated in [CURRENCY] and shall be in an aggregate principal
amount equal to US$[
]
7
;
(c) the date of such Borrowing shall be [
]
8
;
(d) such Borrowing shall be [an ABR Borrowing][a LIBOR Borrowing][a EURIBOR Borrowing][a
Canadian Prime Rate Borrowing];
(e)
[if such Borrowing is a LIBOR Borrowing or EURIBOR Borrowing,]
the initial Interest Period
for such Borrowing shall have a [one][two][three][six]
9
months duration;
(f) the Applicable Funding Account for such Borrowing shall be [
]; and
(g)
[if such Borrowing Subsidiary is organized in a jurisdiction other than the United States,
the United Kingdom or Canada,]
payments of the principal and interest on such Borrowing will be
made from [JURISDICTION].
[Each of the][The] Company [and the [BORROWER]] hereby represents and warrants to the
Administrative Agent and the Lenders that, on the date of this Borrowing Request and on the date of
the related Borrowing, the conditions to lending specified in paragraphs (a) and (b) of
Section 4.02 of the Credit Agreement have been satisfied.
|
|
|
|
|
|
Very truly yours,
AMERISOURCEBERGEN CORPORATION,
|
|
|
by
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
7
|
|
The aggregate principal amount of any LIBOR or EURIBOR
Borrowing must be an integral multiple of the Borrowing
Multiple and not less than the Borrowing Minimum. The
aggregate principal amount of any ABR Borrowing must be an
integral multiple of $100,000 and not less than $1,000,000.
The aggregate principal amount of any Canadian Prime Rate
Borrowing must be an integral multiple of Cdn.$ 100,000 and
not less than $1,000,000.
|
|
8
|
|
The date of any Borrowing must be a Business Day and (a) in
the case of a LIBOR Borrowing denominated in US Dollars,
three Business Days after the date of this Borrowing Request
if this request is submitted by 12:00 noon, Local Time, and
the next Business Day thereafter if this request is submitted
after 12:00 noon, Local Time, (b) in the case of a LIBOR
Borrowing denominated in Sterling or an Alternative Currency
or a EURIBOR Borrowing, three Business Days after the date of
this Borrowing Request if this request is submitted by 12:00
noon, Local Time, and the next Business Day thereafter if
this request is submitted after 12:00 noon, Local Time,
(c) in the case of an ABR Borrowing, the date of this
Borrowing Request if this request is submitted by 12:00 noon,
Local Time, and the next Business Day thereafter if this
request is submitted after 12:00 noon, Local Time and (d) in
the case of a Canadian Prime Rate Borrowing, the date of this
Borrowing Request if this request is submitted by 12:00 noon,
Local Time, and the next Business Day thereafter if this
request is submitted after 12:00 noon, Local Time.
|
|
9
|
|
With the consent of each Lender with Commitments under the
Tranche under which such Borrowing is to be made, the
Interest Period may other than those set forth in this
clause.
|
From of Borrowing Request
C-2
EXHIBIT D
Form of Guarantee Agreement
Form of
Guarantee Agreement
(see attached)
D-1
GUARANTEE AGREEMENT, dated as of [ ] (this Agreement),
between the subsidiary of the Company listed on Schedule I
hereto (the Guarantor) and JPMORGAN CHASE BANK, N.A., as
administrative agent (the Administrative Agent) for the
Lenders.
Reference is made to the Credit Agreement, dated as of November [ ], 2006 (as amended,
supplemented or otherwise modified from time to time, the
Credit Agreement
), among
AmerisourceBergen Corporation, the Borrowing Subsidiaries from time to time party thereto, the
Lenders from time to time party thereto, the Administrative Agent, J.P. Morgan Europe Limited, as
London agent for the Lenders and The Bank of Nova Scotia, as Canadian agent for the Lenders. Each
capitalized term used but not defined herein shall have the meaning assigned to it in the Credit
Agreement. The Lenders have agreed to extend credit to the Borrowers subject to the terms and
conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit
are conditioned upon, among other things, the execution and delivery of this Agreement. Each
Guarantor will derive substantial benefits from the extension of credit to the Borrowers pursuant
to the Credit Agreement and is willing to execute and deliver this Agreement in order to induce the
Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
SECTION 1.
Guarantee
. Each Guarantor irrevocably and unconditionally guarantees, as a
primary obligor and not merely as a surety, the due and punctual payment and performance of the
Obligations. Each Guarantor agrees that the Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound upon its Guarantee
hereunder notwithstanding any such extension or renewal of any Obligation. Each Guarantor waives
presentment to, demand of payment from and protest to the Borrowers, any other Loan Party or any
Guarantor of any of the Obligations, and also waives notice of acceptance of its Guarantee and
notice of protest for nonpayment.
SECTION 2.
No Limitations
. Except for termination of any Guarantors obligations
hereunder as expressly provided in Section 8 of this Agreement and Sections 11.14 and 11.16 of the
Credit Agreement, the obligations of such Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration, or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of each of the
Guarantors hereunder shall not be affected by (a) the failure of the Administrative Agent or any
other Lender to assert any claim or demand or to enforce or exercise any right or remedy under the
provisions of the Credit Agreement, this Agreement, any other Loan Document or otherwise, (b) any
extension or renewal of any of the Obligations, (c) any rescission, waiver, amendment or
modification of, or release from any of the terms or provisions of, the Credit Agreement, this
Agreement or any other Loan Document, (d) any default, failure or delay, willful or otherwise, in
the performance of the Obligations or (e) any other act, omission or delay to do any other act
which may or might in any manner or to any extent vary the risk of such Guarantor or otherwise
operate as a discharge of such Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Obligations) or which would impair or eliminate any right of
such Guarantor to subrogation. Each Guarantor expressly authorizes the Administrative Agent and
the Lenders to release or substitute any one or more other guarantors or obligors upon or in
respect of the Obligations, all without affecting the obligations of such Guarantor hereunder.
D-2
SECTION 3.
Guarantee of Payment
. Each Guarantor further agrees that its guarantee
hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar
proceeding shall have stayed the accrual or collection of any of the Obligations or operated as a
discharge thereof) and not merely of collection, and waives any right to require that any resort be
had by the Administrative Agent or any other Lender to any balance of any deposit account or credit
on the books of the Administrative Agent or any other Lender in favor of the Borrowers, any other
Loan Party, any other Guarantor or any other Person.
SECTION 4.
Defenses Waived
. To the fullest extent permitted by applicable law, each
Guarantor waives any defense based on or arising out of any defense of the Borrowers, any other
Loan Party or any other Guarantor or the unenforceability of the Obligations or any part hereof
from any cause, or the cessation from any cause of the liability of the Borrowers, any other Loan
Party or any other Guarantor, other than the indefeasible payment in full in cash of all the
Obligations. The Administrative Agent and the other Lenders may, at their election, compromise or
adjust any part of the Obligations, make any other accommodation with the Borrowers, any other Loan
Party or any Guarantor or exercise any other right or remedy available to them against the
Borrowers or any other Loan Party, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent all the Obligations have been fully and indefeasibly paid
in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense
arising out of any such election even though such election operates, pursuant to applicable law, to
impair or extinguish any right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Borrowers, any other Loan Party or any other Guarantor, as the case may be,
or any security.
SECTION 5.
Agreement to Pay; Subordination
. In furtherance of the foregoing and not in
limitation of any other right that any Agent or any other Lenders may have at law or in equity
against any Guarantor by virtue hereof, upon the failure of the Borrowers any other Loan Party or
any Guarantor to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will,
upon receipt of written demand by the Applicable Agent, forthwith pay, or cause to be paid, to the
Applicable Agent for distribution to the applicable Lenders in cash the amount of such unpaid
Obligation. Upon payment by any Guarantor of any sums to the Applicable Agent as provided above,
all rights of such Guarantor against the Borrowers, any other Loan Party or any other Guarantor
arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity
or otherwise shall in all respects be subordinated and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, any Indebtedness of the
Borrowers, any other Loan Party or any Guarantor now or hereafter held by any Guarantor is hereby
subordinated in right of payment to the prior indefeasible payment in full in cash of all the
Obligations. If any amount shall erroneously be paid to any Guarantor on account of (a) such
subrogation, contribution, reimbursement, indemnity or similar right or (b) any such Indebtedness
of the Borrowers, any other Loan Party or any Guarantor, such amount shall be held in trust for the
benefit of the Lenders and shall forthwith be paid to the Applicable Agent to be credited against
the payment of the Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement or any other Loan Document.
SECTION 6.
Information
. Each Guarantor assumes all responsibility for being and
keeping itself informed of each Borrowers, each other Loan Partys and each Guarantors financial
condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs
hereunder and agrees that none of the Administrative Agent or the other Lenders will have any duty
to advise such Guarantor of information known to it or any of them regarding such circumstances or
risks.
SECTION 7.
Taxes
. Each Guarantor agrees that the provisions of Section 2.17 of the
Credit Agreement shall apply equally to such Guarantor with respect to payments made by it
hereunder.
D-3
SECTION 8.
Termination
.
(a) Each of the Guarantees made hereunder shall (i) subject to clause (ii) below, terminate
when all the Obligations have been indefeasibly paid in full in cash and the Lenders have no
further commitment to lend under the Credit Agreement and (ii) continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Administrative Agent or any other Lender upon the
bankruptcy or reorganization of any Borrower, any other Loan Party or any Guarantor, or otherwise.
(b) The Administrative Agent shall release any Guarantor that ceases to be a Subsidiary as a
result of transactions permitted under the Credit Agreement from its obligations hereunder on the
terms and subject to the conditions and limitations set forth in Section 11.14 of the Credit
Agreement.
SECTION 9.
Effectiveness; Binding Agreement; Assignments
. This Agreement shall become
effective when a counterpart hereof executed on behalf of each Guarantor shall have been delivered
to the Administrative Agent, and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon the parties hereto and their respective
successors and assigns, and shall inure to the benefit of each Guarantor, the Administrative Agent,
the other Lenders and their respective successors and assigns, except that none of the Guarantors
shall have the right to assign or otherwise transfer any of its rights or obligations hereunder or
any interest herein, and any such attempted assignment or transfer shall be null and void.
Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed
to include the successors and assigns of such party permitted hereby.
SECTION 10.
Waivers; Amendment
.
(a) No failure or delay of the Administrative Agent or any other Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such
a right or power, preclude any other or further exercise thereof or the exercise of any other right
or power. The rights and remedies of the Administrative Agent and the other Lenders hereunder or
under the Credit Agreement or any other Loan Document are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Guarantor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No notice or demand
on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand
in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and each
Guarantor, subject to any consent required in accordance with Section 11.02 of the Credit
Agreement.
SECTION 11.
GOVERNING LAW
. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 12.
Notices
. All communications and notices hereunder shall be in writing and
given as provided in Section 11.01 of the Credit Agreement. All communications and notices
hereunder to the Guarantors shall be given to it at 1300 Morris Drive, Suite 100, Chesterbrook, PA
19087, Attention of J.F. Quinn (Telecopy (610) 727-3639), with a copy to the Company, Attention of
General Counsel.
D-4
SECTION 13.
Survival of Agreement; Severability
.
(a) All covenants, agreements, representations and warranties made by the Guarantors herein
and in the certificates or other instruments prepared or delivered in connection with or pursuant
to this Agreement shall be considered to have been relied upon by the Administrative Agent and the
other Lenders and shall survive the execution and delivery of this Agreement and the making of the
Loans, the acceptance and purchase of any B/As and the issuance of any Letters of Credit,
regardless of any investigation made by any of them or on their behalf and notwithstanding that the
Administrative Agent or any other Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended under the Credit Agreement,
and shall continue in full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid and as long as the Commitments have not expired or been terminated.
(b) In the event any one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby (it
being understood that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 14.
Counterparts
. This Agreement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall constitute a single
contract, and shall become effective as provided in Section 9. Delivery of an executed signature
page to this Agreement by facsimile or other electronic transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 15.
Rules of Interpretation
. The rules of interpretation specified in Sections
1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable to this Agreement.
SECTION 16.
Jurisdiction; Consent to Service of Process
.
(a) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court of the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that the Administrative Agent or any other Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any Guarantor or its
properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (a) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fully extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
D-5
(c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 12. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 17.
WAIVER OF JURY TRIAL
. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 18.
Right of Setoff
. If an Event of Default shall have occurred and be
continuing, the Administrative Agent, each other Lender and each of their Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held and other Indebtedness at any time owing by such Person to or for the credit or the
account of any Guarantor against any or all the obligations of such Guarantor now or hereafter
existing under this Agreement held by such Person, irrespective of whether or not such Person shall
have made any demand under this Agreement and although such obligations may be unmatured. The
rights of the Administrative Agent, each other Lender and each of their Affiliates under this
Section are in addition to other rights and remedies (including other rights of setoff) which such
Person may have.
SECTION 19.
No Fiduciary Relationship
. Each Guarantor, on behalf of itself and its
Affiliates, agrees that in connection with all aspects of the transactions contemplated hereby and
any communications in connection therewith, such Guarantor and its Affiliates, on the one hand, and
the Administrative Agent, the other Lenders and their Affiliates, on the other hand, will have a
business relationship that does not create, by implication or otherwise, any fiduciary duty on the
part of the Administrative Agent, the other Lenders or their Affiliates, and no such duty will be
deemed to have arisen in connection with any such transactions or communications.
[the rest of this page left intentionally blank]
D-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized Officers as of the day and year first above written.
|
|
|
|
|
|
[NAME OF GUARANTORS]
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
D-7
Schedule I
to Form of Guarantee Agreement
Guarantors
EXHIBIT E
Mandatory Costs Rate
1.
|
|
The Mandatory Costs Rate is an addition to the interest rate to
compensate Lenders for the cost of compliance with (a) the
requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all
or any of its functions) or (b) the requirements of the European
Central Bank.
|
2.
|
|
On the first day of each Interest Period (or as soon as possible
thereafter) the London Agent shall calculate a rate (the Additional
Costs Rate), expressed as a percentage, for each Lender, in
accordance with the paragraphs set out below. The Mandatory Costs Rate
will be calculated by the London Agent as a weighted average of the
Lenders Additional Costs Rates (weighted in proportion to the
percentage participation of each Lender in the applicable Borrowing)
and will be expressed as a percentage rate per annum.
|
3.
|
|
The Additional Costs Rate for any Lender lending from a Lending Office
located in a Participating Member State will be the percentage
notified by that Lender to the London Agent. This percentage will be
certified by that Lender in its notice to the London Agent to be its
reasonable determination of the cost (expressed as a percentage of
that Lenders participation in all Loans made from such Lending
Office) of complying with the minimum reserve requirements of the
European Central Bank in respect of Loans made from such Lending
Office.
|
4.
|
|
The Additional Costs Rate for any Lender lending from a Lending Office
in the United Kingdom will be calculated by the London Agent as
follows:
|
(a) with respect to any Loan denominated in Sterling:
|
|
|
|
|
percent per annum
|
100-
(A+C)
|
|
|
(b) with respect to any Loan denominated in any currency (other than Sterling):
Where:
A
means the percentage of Eligible Liabilities (assuming these to be in excess of any
stated minimum) which that Lender is from time to time required to maintain as an interest free
cash ratio deposit with the Bank of England to comply with cash ratio requirements.
B
means the percentage rate of interest (excluding the Applicable Rate and the Mandatory
Costs Rate and, if the Loan was not paid when due, the additional rate of interest specified in
Section 2.13(e)) payable for the applicable Interest Period on the Loan.
C
means the percentage (if any) of Eligible Liabilities which that Lender is required
from time to time to maintain as interest bearing Special Deposits with the Bank of England.
D
means the percentage rate per annum payable by the Bank of England to the London Agent
on interest bearing Special Deposits.
Mandatory Costs Rate
E-1
E
is designed to compensate Lenders for amounts payable under the Fees Rules and is
calculated by the London Agent as being the average of the most recent rates of charge supplied by
the Reference Banks to the London Agent pursuant to paragraph 7 below and expressed in Sterling per
£1,000,000.
5.
|
|
For the purposes of this Schedule:
|
|
(a)
|
|
Eligible Liabilities and Special Deposits have the meanings given
to them from time to time under or pursuant to the Bank of England Act
1998 or (as may be appropriate) by the Bank of England.
|
|
(b)
|
|
Fees Rules means the rules on periodic fees contained in the
Financial Services Authority Supervision Manual or such other law or
regulation as may be in force from time to time in respect of the
payment of fees for the acceptance of deposits.
|
|
(c)
|
|
Fee Tariffs means the fee tariffs specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee or
zero rated fee required pursuant to the Fees Rules but taking into
account any applicable discount rate).
|
|
(d)
|
|
Participating Member State means any member state of the European
Communities that adopts or has adopted the Euro as its lawful currency
in accordance with legislation of the European Community relating to
Economic and Monetary Union.
|
|
(e)
|
|
Tariff Base has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
6.
|
|
In application of the above formulae, A, B, C and D will be included
in the formulae as percentages (i.e. 5% will be included in the
formula as 5 and not as 0.05). A negative result obtained by
subtracting D from B shall be taken as zero. The resulting figures
shall be rounded to four decimal places.
|
7.
|
|
If requested by the London Agent, each Reference Bank shall, as soon
as practicable after publication by the Financial Services Authority,
supply to the London Agent, the rate of charge payable by that
Reference Bank to the Financial Services Authority pursuant to the
Fees Rules in respect of the relevant financial year of the Financial
Services Authority (calculated for this purpose by that Reference Bank
as being the average of the Fee Tariffs applicable to that Reference
Bank for that financial year) and expressed in Sterling per £1,000,000
of the Tariff Base of that Reference Bank.
|
8.
|
|
Each Lender shall supply any information required by the London Agent
for the purpose of calculating its Additional Costs Rate. In
particular, but without limitation, each Lender shall supply the
following information on or prior to the date on which it becomes a
Lender:
|
|
(a)
|
|
the jurisdiction of its applicable Lending Office; and
|
|
(b)
|
|
any other information that the London Agent may reasonably require for such purpose.
|
Each Lender shall promptly notify the London Agent of any change to the information provided by it
pursuant to this paragraph.
Mandatory Costs Rate
E-2
9.
|
|
The percentages of each Lender for the purpose of A and C above and
the rates of charge of each Reference Bank for the purpose of E above
shall be determined by the London Agent based upon the information
supplied to it pursuant to paragraphs 7 and 8 above and on the
assumption that, unless a Lender notifies the London Agent to the
contrary, each Lenders obligations in relation to cash ratio deposits
and Special Deposits are the same as those of a typical bank from its
jurisdiction of incorporation with a Lending Office in the same
jurisdiction as its applicable Lending Office.
|
10.
|
|
The London Agent shall have no liability to any person if such
determination results in an Additional Costs Rate which over or under
compensates any Lender and shall be entitled to assume that the
information provided by any Lender or Reference Bank pursuant to
paragraphs 3, 7 and 8 above is true and correct in all respects.
|
11.
|
|
The London Agent shall distribute the additional amounts received as a
result of the Mandatory Costs Rate to the Lenders on the basis of the
Additional Costs Rate for each Lender based on the information
provided by each Lender and each Reference Bank pursuant to paragraphs
3, 7 and 8 above.
|
12.
|
|
Any determination by the London Agent pursuant to this Schedule in
relation to a formula, the Mandatory Costs Rate, an Additional Costs
Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding.
|
13.
|
|
The London Agent may from time to time, after consultation with the
Borrower and the Lenders, determine and notify to all parties any
amendments which are required to be made to this Schedule in order to
comply with any change in law, regulation or any requirements from
time to time imposed by the Bank of England, the Financial Services
Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive
and binding.
|
Mandatory Costs Rate
E-3
EXHIBIT F-1
Form of Opinion of Dechert LLP, Counsel for the Company
From of Opinion of Dechert LLP, Counsel for the Company
[Blank
in original]
F-1-1
EXHIBIT F-2
Form of Opinion of John G. Chou, Deputy General Counsel of the Company
From of Opinion of John G. Chou, Deputy General Counsel for the Company
[Blank
in original]
F-2-1
EXHIBIT F-3
Form of Opinion of McMillan Binch Mendelsohn LLP
Form of Opinion of McMillan Binch Mendelsohn LLP
[Blank
in original]
F-3-1
EXHIBIT F-4
Form of Opinion of Dechert LLP, Counsel for the UK Borrowing Subsidiaries
Form of Opinion of Dechert LLP, Counsel for the UK Borrowing Subsidiaries
[Blank
in original]
F-4-1