Document:

Exhibit 4.2

 

EXECUTION VERSION

 

DIPLOMAT PHARMACY, INC.

 

FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
GENERAL
    	
1
    
	
 
    	
1.1
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
RESTRICTIONS ON TRANSFER; REGISTRATION
    	
4
    
	
 
    	
2.1
    	
RESTRICTIONS ON TRANSFER
    	
4
    
	
 
    	
2.2
    	
DEMAND REGISTRATION
    	
6
    
	
 
    	
2.3
    	
PIGGYBACK REGISTRATIONS
    	
8
    
	
 
    	
2.4
    	
FORM S-3 REGISTRATION
    	
9
    
	
 
    	
2.5
    	
EXPENSES OF REGISTRATION
    	
11
    
	
 
    	
2.6
    	
OBLIGATIONS OF THE COMPANY
    	
11
    
	
 
    	
2.7
    	
TERMINATION OF REGISTRATION   RIGHTS
    	
14
    
	
 
    	
2.8
    	
FURNISHING INFORMATION
    	
14
    
	
 
    	
2.9
    	
INDEMNIFICATION
    	
14
    
	
 
    	
2.10
    	
ASSIGNMENT OF REGISTRATION   RIGHTS
    	
16
    
	
 
    	
2.11
    	
AMENDMENT OF REGISTRATION   RIGHTS
    	
17
    
	
 
    	
2.12
    	
LIMITATION ON SUBSEQUENT   REGISTRATION RIGHTS
    	
17
    
	
 
    	
2.13
    	
“MARKET STAND-OFF” AGREEMENT
    	
17
    
	
 
    	
2.14
    	
AGREEMENT TO FURNISH   INFORMATION
    	
17
    
	
 
    	
2.15
    	
RULE 144 REPORTING
    	
18
    
	
 
    	
2.16
    	
CHANGES IN COMMON STOCK OR   PREFERRED STOCK
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
COVENANTS OF THE COMPANY
    	
18
    
	
 
    	
3.1
    	
BASIC FINANCIAL INFORMATION AND   REPORTING
    	
18
    
	
 
    	
3.2
    	
INSPECTION RIGHTS
    	
20
    
	
 
    	
3.3
    	
CONFIDENTIALITY OF RECORDS
    	
20
    
	
 
    	
3.4
    	
MEETINGS OF DIRECTORS
    	
21
    
	
 
    	
3.5
    	
EXPENSES OF DIRECTORS; REMOTE   PARTICIPATION BY DIRECTORS AND OBSERVERS
    	
21
    
	
 
    	
3.6
    	
PUBLICITY
    	
21
    
	
 
    	
3.7
    	
ASSIGNMENT OF RIGHT OF FIRST   REFUSAL
    	
21
    
	
 
    	
3.8
    	
RESTRICTIVE AGREEMENTS   PROHIBITED
    	
22
    
	
 
    	
3.9
    	
TERMINATION OF COVENANTS
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
PARTICIPATION RIGHTS
    	
22
    
	
 
    	
4.1
    	
SUBSEQUENT OFFERINGS
    	
22
    
	
 
    	
4.2
    	
EXERCISE OF RIGHTS
    	
22
    
	
 
    	
4.3
    	
ISSUANCE OF EQUITY SECURITIES   TO OTHER PERSONS
    	
22
    
	
 
    	
4.4
    	
TERMINATION AND WAIVER OF   PARTICIPATION RIGHTS
    	
23
    
	
 
    	
4.5
    	
AMENDMENT AND WAVIER
    	
23
    
	
 
    	
4.6
    	
TRANSFER AND ALLOCATION OF   PARTICIPATION RIGHTS
    	
23
    
	
 
    	
4.7
    	
EXCLUDED SECURITIES
    	
23
    
	
 
    	
 
    	
 
    
	
5.
    	
MISCELLANEOUS
    	
24
    

 

i

 

	
 
    	
5.1
    	
GOVERNING LAW; CONSENT TO   JURISDICTION
    	
24
    
	
 
    	
5.2
    	
SUCCESSORS AND ASSIGNS
    	
24
    
	
 
    	
5.3
    	
ENTIRE AGREEMENT
    	
25
    
	
 
    	
5.4
    	
SEVERABILITY
    	
25
    
	
 
    	
5.5
    	
AMENDMENT AND WAIVER
    	
25
    
	
 
    	
5.6
    	
DELAYS OR OMISSIONS
    	
26
    
	
 
    	
5.7
    	
NOTICES
    	
26
    
	
 
    	
5.8
    	
ATTORNEYS’ FEES
    	
26
    
	
 
    	
5.9
    	
TITLES AND SUBTITLES
    	
26
    
	
 
    	
5.10
    	
AGGREGATION OF STOCK
    	
26
    
	
 
    	
5.11
    	
COUNTERPARTS
    	
27
    
	
 
    	
5.12
    	
SPECIFIC PERFORMANCE
    	
27
    

 

ii

 

DIPLOMAT PHARMACY, INC.

 

FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is entered into as of March 31, 2014 by and among DIPLOMAT PHARMACY, INC., a Michigan corporation (the “Company”), the holders of the Company’s Series A Preferred Stock listed in Exhibit A to this Agreement (collectively, the “Existing Investors” and each, without distinction among them, an “Existing Investor”), the purchasers of the Company’s Series A Preferred Stock listed in Exhibit B to this Agreement (collectively, the “New Investors” and each, without distinction among them, a “New Investor” and, together with the Existing Investors, the “Investors”) and each of the stockholders listed on Exhibit C hereto, each of which is referred to in this Agreement as a “Key Holder.”

 

RECITALS

 

The Company, the Key Holders and the Existing Investors are parties to an Investors’ Rights Agreement dated as of January 23, 2014 (the “Prior Agreement”).

 

The New Investors are holders of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Preferred Stock”), pursuant to that certain Series A Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”).

 

The obligations in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement.

 

The Key Holders are parties to this Agreement solely for purposes of Sections 1, 2 (other than Sections 2.2, 2.4, 2.11 and 2.12) and 5.

 

In connection with the consummation of the sale and purchase of the Preferred Stock, the Company, the Key Holders and the Existing Investors desire to amend and restate the Prior Agreement in its entirety as set forth herein and, with the New Investors, enter into this Agreement in order to grant registration, information rights and other rights to the Investors as set forth below.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree hereto as follows:

 

1.                                      GENERAL.

 

1.1                               DEFINITIONS.

 

Capitalized terms not otherwise defined in this Agreement, shall have the following meanings:

 

(a)                                 “Affiliate” means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by, or is under common control with

 

 

such specified Person, including without limitation any partner, officer, director, manager or employee of such Person, and, with respect to a T. Rowe Price Investor, other funds and accounts managed by T. Rowe Price, and with respect to a Janus Investor, other funds and accounts managed by Janus.

 

(b)                                 “Board” means the Board of Directors of the Company.

 

(c)                                  “Change in Control” means a sale of all or substantially all of the assets of the Company, or a merger, acquisition or sale of voting control of the Company in which the stockholders of the Company immediately prior to such transaction do not own a majority of the outstanding equity interests of the surviving entity or the Company, as the case may be, immediately following such transaction.

 

(d)                                 “Charter” means the Company’s Second Amended and Restated Articles of Incorporation in the form contemplated by the Purchase Agreement, as it may be amended and restated from time to time as permitted thereby.

 

(e)                                  “Common Stock” means the Company’s common stock, par value $1.00 per share.

 

(f)                                   “Equity Securities” means (i) any Common Stock, Preferred Stock or other security of the Company, (ii) any security convertible, with or without consideration, into any Common Stock, Preferred Stock or other security (including any option to purchase such a convertible security), (iii) any security carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or other security, or (iv) any such warrant or right.

 

(g)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(h)                                 “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor or similar registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(i)                                    “Holder” means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.10 hereof.

 

(j)                                    “Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

 

(k)                                 “Janus” means Janus Capital Management LLC.

 

(l)                                    “Janus Investor” means those Investors that are advisory clients of Janus.

 

(m)                             “Key Holder Registrable Securities” means, solely with respect to the piggy back registration rights provided in Section 2.3 below, (a) the outstanding shares of Common Stock held by the Key Holders, and (b) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is

 

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issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities.

 

(n)                                 “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

(o)                                 “Proprietary Rights” means patents, trademarks, trade names, know-how, rights in trade dress and packaging, and shop rights, copyrights, inventions, trade secrets, service marks and all other intellectual property rights, in each case whether registered or not and in each case wherever such rights exist throughout the world, and including the right to recover for any past infringement.

 

(p)                                 “Qualified Public Offering” means a firmly underwritten public offering of the Common Stock pursuant to a registration statement filed with the Securities and Exchange Commission, and declared effective under the Securities Act of 1933, as amended, and not subsequently withdrawn, in which the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least Thirty-Five Million Dollars ($35,000,000).

 

(q)                                 “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

(r)                                  “Registrable Securities” means (a) Common Stock, (b) Common Stock issued or issuable upon conversion of Preferred Stock, (c) Common Stock issued or issuable upon conversion of Preferred Stock that is issued or issuable upon exercise of any Warrant, (d) Common Stock issued or issuable upon exercise of any Warrant, (e) any Shares issued (or issuable upon the conversion or exercise of any Warrant, right or other security which is issued) as a dividend or other distribution with respect to, or in exchange for or in replacement of, the securities described in the foregoing clauses (a), (b), (c) or (d), in the case of any of (a) through (e) above, now owned or hereafter acquired by the Investors and/or their permitted assigns and (f) the Key Holder Registrable Securities, provided, however, that Key Holder Registrable Securities shall not be deemed Registrable Securities and the Key Holders shall not be deemed “Holders” for the purposes of Sections 2.2, 2.4, 2.11 and 2.12 and Sections 3 and 4.  Notwithstanding the foregoing, Registrable Securities shall not include any securities sold by a person to the public either pursuant to a registration statement or Rule 144 or sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned.

 

(s)                                   “Registrable Securities then outstanding” means the shares of the Company’s Common Stock that are Registrable Securities that are either: (a) then issued and outstanding or (b) issuable upon the exercise or conversion of exercisable or convertible securities including, without limitation, Preferred Stock.

 

(t)                                    “Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements not to exceed thirty-five thousand dollars ($35,000) of a single special counsel for the selling Holders, blue sky fees and expenses and the

 

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expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

 

(u)                                 “Requisite Holders” shall mean the holders of two thirds of the Registrable Securities then outstanding held by the Investors.

 

(v)                                 “Rule 144” means Rule 144, as promulgated under the Securities Act, or any similar or analogous rule promulgated under the Securities Act.

 

(w)                               “SEC” or “Commission” means the Securities and Exchange Commission.

 

(x)                                 “Securities Act” shall mean the Securities Act of 1933, as amended.

 

(y)                                 “Selling Expenses” shall mean all stock transfer taxes, underwriting discounts and selling commissions applicable to the sale of Registrable Securities.

 

(z)                                  “Shares” shall mean the Preferred Stock and the Common Stock held by the Investors and their permitted assigns.

 

(aa)                          “Special Registration Statement” shall mean (i) a registration statement relating to any employee benefit plan, (ii) with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act, including any registration statements related to the resale of securities issued in such a transaction, or (iii) a registration related to stock issued upon conversion of debt securities.

 

(bb)                          “Subsidiary” shall mean, with respect to any entity, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are owned directly or indirectly by such entity or any Subsidiary of such entity or by such entity and one or more Subsidiaries of such entity.

 

(cc)                            “T. Rowe Price” shall mean T. Rowe Price Associates, Inc. and any successor or affiliated investment advisor to the T. Rowe Price Investors.

 

(dd)                          “T. Rowe Price Investors” shall mean those Investors that are advisory clients of T. Rowe Price.

 

2.                                      RESTRICTIONS ON TRANSFER; REGISTRATION.

 

2.1                               RESTRICTIONS ON TRANSFER.

 

(a)                                 Each party hereto agrees not to make any disposition of all or any portion of the Shares or Registrable Securities unless and until:

 

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(i)                                    There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(ii)                                (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B) such party shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (C) if reasonably requested by the Company, such party shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company (it being understood that (i) internal securities counsel of T. Rowe Price shall be deemed acceptable for transfers by any T. Rowe Price Investors and (ii) internal securities counsel of Janus shall be deemed acceptable for transfers by any Janus Investors) that such disposition will not require registration of such shares under the Securities Act and applicable state and foreign securities law.  Notwithstanding the foregoing, no such opinion of counsel shall be required in connection with any transfer of shares of Registrable Securities made in compliance with Rule 144.  After its Initial Offering, the Company will not require the transferee to be bound by the terms of this Agreement.

 

Notwithstanding the provisions of clauses (i) and (ii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by a party hereto that is (A) a partnership transferring to its partners or former partners in accordance with partnership interests, (B) a corporation transferring to a wholly-owned subsidiary or a parent corporation that owns all of the capital stock of such corporation, (C) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company, (D) an individual transferring to such individual’s family member or trust for the benefit of such individual, (E) transfers pursuant to a merger or reorganization of a U.S. registered mutual fund, (F) transfers by any T. Rowe Price Investor to any Affiliate or any other entity managed by a registered investment advisor, or (G) transfers by any Janus Investor to any Affiliate or any other entity managed by a registered investment advisor; provided, however, that in each case the transferee will be subject to the terms of this Agreement to the same extent as if he, she or it were an original party hereto.  Notwithstanding the provisions of clauses (i) and (ii) above or anything to the contrary in this Agreement, no party hereto shall make any disposition of all or any portion of the Shares or Registrable Securities to any competitor of the Company without prior written consent from the Company, such consent not to be unreasonably withheld, conditioned or delayed.

 

(b)                                 Each Investor shall be entitled to have a certificate, signed by, or in the name of the Company by the chairperson of the Board, vice-chairperson of the Board, president or a vice-president and which also may be signed by another officer of the Company, certifying the number of Shares or Registrable Securities owned by such Investor.  Each certificate representing Shares or Registrable Securities (unless otherwise permitted by the provisions of the Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW.  NEITHER THIS SECURITY NOR ANY

 

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PORTION HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE CORPORATION (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION).

 

THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTORS’ RIGHTS AGREEMENT BY AND BETWEEN THE STOCKHOLDER AND THE CORPORATION.  COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

 

(c)                                  The Company shall be obligated to reissue promptly unlegended certificates at the request of any holder thereof if such holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company (it being understood that internal securities counsel of T. Rowe Price or Janus, as applicable, shall be deemed acceptable) to the effect that the securities proposed to be disposed of may lawfully be so disposed of without registration, qualification or legend.

 

(d)                                 Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal.

 

(e)                                  The Company shall keep its securities held by the Holders certificated physical form at least through the expiration or early release of the lock-up period as set forth in Section 2.13 below.

 

2.2                               DEMAND REGISTRATION.

 

(a)                                 Subject to the conditions of this Section 2.2, if the Company shall receive a written request from the Holders of not less than fifty percent (50%) of the Registrable Securities then outstanding (the “Initiating Holders”), that the Company file a registration statement under the Securities Act covering the registration of all or a portion of the Registrable Securities held by such Initiating Holders, then the Company shall, within thirty (30) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.2, the Company shall use its commercially reasonable efforts to effect as soon as practicable the registration under the Securities Act of all Registrable Securities that the Holders request to be registered.

 

(b)                                 If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part

 

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of their request made pursuant to Section 2.2(a) or any request pursuant to Section 2.4 and the Company shall include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as applicable.  In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the managing underwriter or underwriters determine that the proposed number of securities to be underwritten would adversely affect the marketing of such securities, then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares that may be included in such underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all securities of the Company other than Registrable Securities are first entirely excluded from such underwriting and registration.  Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

 

(c)                                  The Company shall not be required to effect a registration pursuant to this Section 2.2:

 

(i)                                    prior to one hundred eighty (180) days following the effective date of the registration statement pertaining to the Initial Offering;

 

(ii)                                after the Company has effected two (2) registrations pursuant to this Section 2.2, and such registrations have been declared or ordered effective;

 

(iii)                            if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than Twenty-Five Million Dollars ($25,000,000);

 

(iv)                             during the period starting with the date of filing of, and ending on the date ninety (90) days following the effective date of, a non-Initial Offering registration statement, other than pursuant to a Special Registration Statement; provided, however, that the Company makes a reasonable good faith effort to effect such registration as soon thereafter as practicable;

 

(v)                                 if within thirty (30) days of receipt of a written request from the Initiating Holders pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to file a registration statement for a public offering, other than pursuant to a Special Registration Statement, within ninety (90) days of the time of request;

 

(vi)                             if the Company shall furnish to the Holders requesting a registration statement pursuant to this Section 2.2, a certificate signed by the Chairman of the

 

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Board stating that in the good faith judgment of the Board, it would be detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Initiating Holders; provided, however, that such right to delay a request shall be exercised by the Company not more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for the account of itself or any other stockholder during such one hundred twenty (120) day period;

 

(vii)                         if the Company and the Initiating Holders are unable to obtain the commitment of an underwriter to firmly underwrite the offer; or

 

(viii)                     if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below.

 

In addition to the foregoing, the Company shall not be obligated to effect, or to take any action to effect, any such registration statement pursuant to this Section 2.2 in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.

 

2.3                               PIGGYBACK REGISTRATIONS.

 

The Company shall notify all Holders of Registrable Securities in writing at least thirty (30) days prior to the filing of any registration statement under the Securities Act covering the sale of the Company’s securities to the public, whether for its own account or for the account of other security holders or both (but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder.  Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within twenty (20) days after such Holder receives the above-described notice from the Company, so notify the Company in writing, and the Company will use its commercially reasonable efforts to cause the Registrable Securities so requested by such Holder to be included in such registration statement.  Such notice shall state the intended method of disposition of the Registrable Securities by such Holder.  If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

(a)                                 Underwriting.  If the registration statement under which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities.  In such event, the right of any such Holder to be included in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their

 

8

 

Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of this Agreement, if the managing underwriter or underwriters determine in good faith that the proposed number of securities to be underwritten would adversely affect the marketing of such securities, then the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders (including the Key Holders) on a pro rata basis based on the total number of Registrable Securities held by such Holders; third, to any stockholder of the Company (other than a Holder) on a pro rata basis; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below twenty-five percent (25%) of the total amount of securities included in such registration without the written consent of the holders of a majority of the Registrable Securities then outstanding, including the majority such Registrable Securities held by the Investors, unless such offering is a Qualified Public Offering and such registration does not include shares of any other selling stockholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding clause.  In no event will shares of any other selling stockholder be included in such registration that would reduce the number of shares which may be included by the Holders without the written consent of Holders of not less than a majority in interest of the Registrable Securities proposed to be sold in the offering, including the majority in interest of such Registrable Securities held by the Investors, if any.  If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the managing underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement.  Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.  For any Holder which is a partnership or corporation, the partners, retired partners, members, retired members and stockholders of such Holder, or the estates and family members of any such partners, retired partners, members, retired members and stockholders and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.

 

(b)                                 Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration, and shall promptly notify any Holder that has elected to include shares in such registration of such termination or withdrawal.  The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.5 hereof.

 

2.4                               FORM S-3 REGISTRATION.

 

If at any time the Company shall receive from any Holder or Holders of Registrable Securities a written request or requests that the Company file a registration on Form S-3 or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will use its commercially reasonable efforts to:

 

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(a)                                 promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and

 

(b)                                 as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4 if any of the following apply:

 

(i)                                    if such request is made prior to one hundred eighty (180) days following the effective date of the registration statement pertaining to the Initial Offering; or

 

(ii)                                if Form S-3 is not available for such offering by the Holders; or

 

(iii)                            if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than Five Million Dollars ($5,000,000); or

 

(iv)                             if within thirty (30) days of receipt of a written request from any Holder or Holders pursuant to this Section 2.4, the Company gives notice to such Holder or Holders of the Company’s intention to make a public offering within one hundred twenty (120) days, other than pursuant to a Special Registration Statement; provided, that such Holders were permitted to register such shares as requested to be registered pursuant to Section 2.3 hereof ; or

 

(v)                                 if the Company shall furnish to the Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than one hundred twenty (120) days after receipt of the request of the Holder or Holders under this Section 2.4; provided, however, that such right to delay a request shall be exercised by the Company not more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for the account of itself or any other stockholder during such one hundred twenty (120) day period; or

 

(vi)                             if the Company has, within the twelve (12) month period preceding the date of such request, already effected two (2) registrations on Form S-3 for the Holders pursuant to this Section 2.4.

 

In addition to the foregoing, the Company shall not be obligated to effect, or to take any action to effect, any such registration statement pursuant to this Section 2.4 in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.

 

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(c)                                  Subject to the foregoing, the Company shall use its commercially reasonable efforts to file a registration statement on Form S-3 to register the Registrable Securities so requested to be registered as soon as practicable after receipt of the requests of the Holders.  Whenever the Company is required by this Section 2.4 to use its commercially reasonable efforts to effect the registration of Registrable Securities, each of the procedures and requirements of Section 2.2 shall apply to such registration.  Registrations effected pursuant to this Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 2.2.

 

2.5                               EXPENSES OF REGISTRATION.

 

Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 2.2, 2.3 or 2.4 hereof shall be borne by the Company.  All Selling Expenses incurred in connection with any registrations hereunder shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered.  The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been subsequently withdrawn by the Initiating Holders or the requesting Holder or Holders under Section 2.4, as the case may be, or because a sufficient number of Holders have withdrawn so that the minimum offering conditions set forth in Sections 2.2 and 2.4 are no longer satisfied, unless (a) the withdrawal is based upon material adverse information concerning the Company that is different from the information known or available (upon request from the Company or otherwise) to the Initiating Holders at the time of such request or (b) the Holders of at least a majority in interest of Registrable Securities then outstanding agree to forfeit their right to one requested registration pursuant to Section 2.2, in which event such right shall be forfeited by all Holders.  If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested.  If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above, then the Holders shall not forfeit their rights to a demand registration pursuant to Section 2.2.

 

2.6                               OBLIGATIONS OF THE COMPANY.

 

Whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible, use its commercially reasonable efforts to:

 

(a)                                 Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective, and keep such registration statement effective until the earlier of ninety (90) days after the effective date of such registration statement (to be measured from the expiration of any lock-up period related to such registration, if applicable) or until the Holder or Holders have completed the distribution or sale of such Registrable Securities; provided, however, that at any time, upon written notice to the participating Holders and for a period not to exceed sixty (60) days thereafter (the “Suspension Period”), the Company may delay the filing or effectiveness of any registration statement or suspend the use or effectiveness of any registration statement (and the Initiating Holders hereby agree not to offer or sell any Registrable

 

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Securities pursuant to such registration statement during the Suspension Period) if the Company reasonably believes that the Company may, in the absence of such delay or suspension hereunder, be required under state or federal securities laws to disclose (i) any corporate development the disclosure of which could reasonably be expected to have a material adverse effect upon the Company or its stockholders, (ii) a potentially significant transaction or event involving the Company, or (iii) any negotiations, discussions, or proposals directly relating thereto.  No more than two (2) such Suspension Periods shall occur in any twelve (12) month period.  In the event that the Company shall exercise its suspension rights hereunder, the applicable time period during which the registration statement is to remain effective shall be extended by a period of time equal to the duration of the Suspension Period.  The Company shall not register any securities for its own account or that of any other stockholder during the Suspension Period other than pursuant to a Special Registration Statement.  The Company may extend the Suspension Period for an additional consecutive sixty (60) days with the consent of the holders of at least a majority in interest of the Registrable Securities proposed to be sold by the Initiating Holders, which consent shall not be unreasonably withheld.  If so directed by the Company, the Initiating Holders shall use their reasonable efforts to deliver to the Company (at the Company’s expense) or destroy all copies, other than permanent file copies then in such Initiating Holders’ possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice.  The Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement other than a registration statement on Form S-3 that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.

 

(b)                                 Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above.

 

(c)                                  Furnish to each seller of Registrable Securities and to each underwriter such number of copies of the registration statement and the prospectus included therein, including each preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities covered by such registration statement.

 

(d)                                 Register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as the sellers of Registrable Securities, or in the case of an underwritten public offering, the managing underwriter, reasonably shall request; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions except to the extent the Company is already subject to service in such jurisdiction or is otherwise so required.

 

(e)                                  In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering.  Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

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(f)                                   Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use commercially reasonable efforts to amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g)                                 Furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.

 

(h)                                 Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; provided that in the case of a registration effected pursuant to Section 2.2 above, which registration constitutes the Initial Offering, the Registrable Securities shall be listed on a national securities exchange or the NASDAQ National Market System.

 

(i)                                    Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereto and a CUSIP number, if available, for all such Registrable Securities, in each case not later than the effective date of such registration

 

(j)                                    Make available to each Holder of Registrable Securities covered by such registration statement, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with such registration statement.

 

(k)                                 Advise each Holder of Registrable Securities covered by such registration statement, promptly after the Company shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use all reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued.

 

(l)                                    Cooperate with the Holders of Registrable Securities covered by such registration statement and the managing underwriters, if any, to facilitate the timely preparation

 

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and delivery of certificates representing such Registrable Securities to be sold, such certificates to be in such denominations and registered in such names as such Holders or the managing underwriters may request at least two business days prior to any sale of Registrable Securities.

 

2.7                               TERMINATION OF REGISTRATION RIGHTS.

 

All registration rights granted under this Section 2 shall terminate and be of no further force and effect upon the earlier of: (a) three (3) years after the date of the Initial Offering or (b) with respect to each Holder, when all Registrable Securities held by and issuable to such Holder (and its Affiliates) may be sold without any volume limitation under Rule 144 during any ninety (90) day period.

 

2.8                               FURNISHING INFORMATION.

 

(a)                                 No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

(b)                                 It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company in writing such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be reasonably necessary in order to assure compliance with Federal and applicable state securities laws.

 

2.9                               INDEMNIFICATION.

 

In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4:

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will reimburse, as incurred, each such Holder, partner, member, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided,

 

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however, that the indemnity agreement contained in this Section 2.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, member, officer, director, underwriter or controlling person of such Holder.

 

(b)                                 To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, severally and not jointly, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors, managers or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, manager, trustee, officer, controlling person, underwriter or other such Holder, or partner, director, manager, trustee, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any of the following statements, omissions or violations: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law (collectively, a “Holder Violation”), in each case, to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder to the Company expressly for use in connection with such registration; and each such Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any such director, manager, officer, controlling person, underwriter or other Holder, or partner, officer, director, manager or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Holder Violation; provided, however, that the indemnity agreement contained in this Section 2.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such Holder, which consent shall not be unreasonably withheld or delayed; provided further, that in no event shall any indemnity under this Section 2.9(b) exceed the net proceeds from the offering received by such Holder when combined with any amounts contributed under Section 2.9(d) by such Holder.

 

(c)                                  Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the

 

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indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.9, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.9.

 

(d)                                 If the indemnification provided for in this Section 2.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) or Holder Violations(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder, when combined with any amounts contributed under Section 2.9(b), exceed the net proceeds from the offering received by such Holder.

 

(e)                                  The obligations of the Company and the Holders under this Section 2.9 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement.  No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

(f)                                   Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

2.10                        ASSIGNMENT OF REGISTRATION RIGHTS.

 

The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities that is

 

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an Affiliate of such Holder or pursuant to a transfer otherwise permitted under Section 2.1(a) or (b); provided, however, (i) the transferor shall, at least ten (10) days prior to such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned, and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement.

 

2.11                        AMENDMENT OF REGISTRATION RIGHTS.

 

Any provision of this Section 2 may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Requisite Holders.  Any amendment or waiver effected in accordance with this Section 2.11 shall be binding upon each Holder and the Company.  By acceptance of any benefits under this Section 2, Holders of Registrable Securities hereby agree to be bound by the provisions hereunder.

 

2.12                        LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS.

 

After the date of this Agreement, the Company shall not, without the prior written consent of the Requisite Holders, enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder registration rights pari passu with, or senior to, those granted to the Holders hereunder, other than a right to a Special Registration Statement.

 

2.13                        “MARKET STAND-OFF” AGREEMENT.

 

Each Holder hereby agrees, if so requested by the Company and the representative of the underwriters of the Common Stock (or other securities) of the Company (the “Underwriter Representative”), that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during (i) the 180-day period following the effective date of the Initial Offering and (ii) with respect to any registration other than the Initial Offering pursuant to which the Holder is participating, the 90-day period following such registration; provided that all officers and directors of the Company and holders of at least one percent (1%) of the Company’s voting securities enter into similar agreements.  Any discretionary waiver or termination of the restrictions or any or all of such agreements by the Company or the underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such agreements.  Notwithstanding anything herein to the contrary, the provisions of this Section 2.13 shall not apply to any shares purchased in the Initial Offering or in the secondary market following the Initial Offering.

 

2.14                        AGREEMENT TO FURNISH INFORMATION.

 

Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriter that are consistent with such Holder’s and such Holder’s obligations under Section 2.13 or that are necessary to give further effect thereto.  In addition, if requested by the Company or the Underwriter Representative, each Holder shall provide, within ten (10) days of such request, such information as may be required

 

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by the Company or such Underwriter Representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act.  The obligations described in Section 2.13 and this Section 2.14 shall not apply to a Special Registration Statement.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of the period determined pursuant to Section 2.13.  Each Holder agrees that any transferee of any shares of Registrable Securities shall be bound by Section 2.13 and this Section 2.14.  The lead managing underwriters of the Company’s stock are intended third party beneficiaries of Section 2.13 and this Section 2.14 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

2.15                        RULE 144 REPORTING.

 

With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

 

(a)                                 Make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;

 

(b)                                 File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and

 

(c)                                  So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request:  a written statement by the Company as to its compliance with the reporting requirements of Rule 144, the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.

 

2.16                        CHANGES IN COMMON STOCK OR PREFERRED STOCK.

 

If, and as often as, there is any change in the Common Stock or the Preferred Stock by way of a stock split, stock dividend, combination, recapitalization, reclassification and the like, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Common Stock and the Preferred Stock as so changed.

 

3.                                      COVENANTS OF THE COMPANY.

 

3.1                               BASIC FINANCIAL INFORMATION AND REPORTING.

 

(a)                                 The Company shall, and shall cause each Subsidiary to, maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with

 

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generally accepted accounting principles consistently applied, and will set aside on its books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.  The Company shall, at all times, properly maintain consolidated records of its corporate affairs, including, without limitation, a corporate minute book containing a complete summary of all meetings of directors and stockholders since the time of incorporation.

 

(b)                                 As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred thirty-five (135) days thereafter, the Company shall furnish to T. Rowe Price, on behalf of the T. Rowe Price Investors, and to Janus, on behalf of the Janus Investors, a consolidated balance sheet of the Company and its Subsidiaries, as of the end of such fiscal year, and a consolidated statement of income, a consolidated statement of cash flows and a statement of stockholders’ equity of the Company and its Subsidiaries, for such year, all prepared in accordance with generally accepted accounting principles consistently applied and setting forth in each case, in comparative form, the figures for the previous fiscal year, all in reasonable detail.  Such financial statements shall be accompanied by a report and opinion thereon by independent certified public accountants selected by the Board.

 

(c)                                  The Company shall furnish to T. Rowe Price, on behalf of the T. Rowe Price Investors, and to Janus, on behalf of the Janus Investors, as soon as practicable after the end of each fiscal quarter, and in any event within sixty (60) days thereafter, a consolidated balance sheet of the Company and its Subsidiaries, as of the end of each such quarter, and a consolidated statement of income, a consolidated statement of cash flows and a statement of stockholders’ equity of the Company and its Subsidiaries for such quarter and for the current fiscal year to date, prepared in accordance with generally accepted accounting principles consistently applied and setting forth in each case, in comparative form, the corresponding figures for the corresponding period of the preceding fiscal year, all in reasonable detail, with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.  The delivery of such financial statements shall be accompanied by a current capitalization table of the Company.

 

(d)                                 The Company shall promptly and accurately respond, and shall use its best efforts to cause its transfer agent to promptly respond, to (i) requests for information made by T. Rowe Price on behalf of T. Rowe Investors relating to (a) accounting or securities law matters required in connection with its audit or (b) the actual holdings of the T. Rowe Price Investors, including in relation to the total outstanding shares and (ii) requests for information made by Janus on behalf of Janus Investors relating to (a) accounting or securities law matters required in connection with its audit or (b) the actual holdings of the Janus Investors, including in relation to the total outstanding shares; provided however, that in no event will the Company be obligated to provide any such information that could reasonably result in a violation of applicable law or conflict with the Company’s insider trading policy or a confidentiality obligation of the Company.  These rights shall expire at the point at which no T. Rowe Price Investor (with respect to the rights of T. Rowe Price) or Janus Investor (with respect to the rights of Janus) holds any Equity Securities of the Company that are restricted under the Securities Act.

 

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3.2                               INSPECTION RIGHTS.

 

Each Investor and its representatives (including, without limitation, its lawyers and accountants) that is not a former officer or employee of, or consultant to, the Company shall have the right to inspect the premises and the books and records of the Company at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this Section 3.2 with respect to a competitor of the Company or with respect to information which the Board determines in good faith is confidential and should not, therefore, be disclosed (it being understood that no T. Rowe Price Investor or Janus Investor shall be deemed a competitor of the Company). The Company shall make such books and records available for inspection by such Investor and such of its representatives as such Investor shall designate in writing to the Company upon giving notice of any such inspection.

 

3.3                               CONFIDENTIALITY OF RECORDS.

 

Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 3.3 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of or reference to the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor that is not a direct competitor of the Company, if such prospective purchaser agrees to be bound by the provisions of this Section 3.3; (iii) to any Affiliate, partner, member, stockholder, or wholly owned Subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; (iv) as may otherwise be required by law or regulation, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure or (v) with respect to T. Rowe Price Investors, as would otherwise be permitted pursuant to Section 5 of that certain Nondislosure Agreement by and between the Company and T. Rowe Price, dated as of July 17, 2013.  For the sake of clarity, nothing contained in this Section 3.3 shall in any way restrict or impair the obligations of T. Rowe Price to report the investment of its advisory clients (as Investors) or of Janus to report the investment of its advisory clients (as Investors) in the Company, in accordance with applicable laws and regulations, without any requirement of prior notice to the Company.  The Company acknowledges that the Investors are in the business of investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises that may have products or services that compete directly or indirectly with those of the Company.  Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise, regardless of whether such enterprise has products or services that compete with those of the Company.

 

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3.4                               MEETINGS OF DIRECTORS.

 

The Company will hold meetings of the Board not less than four (4) times a year on a quarterly basis.

 

3.5                               EXPENSES OF DIRECTORS; REMOTE PARTICIPATION BY DIRECTORS AND OBSERVERS.

 

The Company will promptly reimburse in full, each director of the Company who are not employees of the Company for all of his or her reasonable out-of-pocket expenses incurred in attending each meeting of the Board or any committee thereof.  The Company will make available to each director and board observer of the Company who is unable to attend such meetings in person, participation at such meetings by teleconference and/or the Internet.

 

3.6                               PUBLICITY.

 

The Company shall not use the name of any Investor, T. Rowe or Janus in any written manner, context or format (including reference on or links to websites, press releases, etc.) without the prior review and written approval of such Investor or, with respect to T. Rowe Price and the T. Rowe Price Investors, T. Rowe Price, or with respect to Janus and the Janus Investors, Janus.

 

3.7                               ASSIGNMENT OF RIGHT OF FIRST REFUSAL.

 

In the event the Company elects not to exercise any right of first refusal or right of first offer the Company may have on a proposed transfer of any of the Company’s outstanding capital (other than pursuant to the Co-Sale Agreement (as defined in the Purchase Agreement)), the Company shall, to the extent it may do so, assign such right of first refusal or right of first offer to (a) first, the Key Holders and their respective affiliates, family members and estate planning vehicles, and (b) second, the Investors.  In the event of such assignment, each Key Holder shall have a right to purchase its pro rata portion of the capital stock proposed to be transferred.  Each Key Holder’s pro rata portion shall be equal to the product obtained by multiplying (i) the aggregate number of shares proposed to be transferred by (ii) a fraction, the numerator of which is the number of outstanding shares of Common Stock held by such Key Holder as the case may be, at the time of the proposed transfer and the denominator of which is the number of outstanding shares of Common Stock owned by all Key Holders at the time of such proposed transfer.  If the Key Holders do not effect the purchase all of such capital stock within 30 days of notice from the Company, then each Investor shall have a right to purchase its pro rata portion of the capital stock proposed to be transferred and not so purchased (the “Remaining Shares”).  Each Investor’s pro rata portion shall be equal to the product obtained by multiplying (i) the aggregate number of Remaining Shares by (ii) a fraction, the numerator of which is the number of outstanding shares of Common Stock issued or issuable upon the conversion of the Preferred Stock held by such Investor at the time of the proposed transfer and the denominator of which is the number of outstanding shares of Common Stock issued or issuable upon the conversion of the Preferred Stock owned by all Investors at the time of such proposed transfer.  All restricted stock, stock options and other stock equivalents issued after the date of this Agreement to

 

21

 

employees, directors, consultants and other service providers shall be subject to a right of first refusal in favor of the Company.

 

3.8                               RESTRICTIVE AGREEMENTS PROHIBITED.

 

Neither the Company nor any of its Subsidiaries shall become a party to any agreement which by its terms creates a material restriction on the Company’s performance, or ability to perform, any of this Agreement.

 

3.9                               TERMINATION OF COVENANTS.

 

Excepting Sections 3.8 and this Section 3.9, all covenants of the Company and each Subsidiary, if and when such Subsidiary exists, contained in Section 3 of this Agreement shall expire and terminate as to each Investor or holder of Registrable Securities, as applicable, upon the earlier of (a) the closing of the Initial Offering, or (b) the occurrence of a Change in Control.

 

4.                                      PARTICIPATION RIGHTS.

 

4.1                               SUBSEQUENT OFFERINGS.

 

Each Investor shall have a right to purchase such Investor’s pro rata share of all Equity Securities that the Company may, from time to time, propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Section 4.7 hereof.  Each Investor’s pro rata share is equal to the ratio of (a) the number of shares of the Company’s outstanding Common Stock (treating all shares of convertible preferred stock to acquire convertible preferred stock on an as-converted to common stock basis and including all shares of Common Stock issuable upon the exercise of outstanding options) which such Investor holds of record immediately prior to the issuance of such Equity Securities to (b) the total number of shares of the Company’s outstanding Common Stock (treating all shares of convertible preferred stock on an as-converted to common stock basis and including all shares of Common Stock issuable upon the exercise of outstanding options) immediately prior to the issuance of such Equity Securities.

 

4.2                               EXERCISE OF RIGHTS.

 

If the Company proposes to issue any Equity Securities, it shall give each Investor written notice of its intention, describing the Equity Securities, the price and the terms and conditions upon which the Company proposes to issue the same.  Each Investor shall have ten (10) business days from the giving of such notice to agree to purchase its pro rata share of the Equity Securities for the price and upon the terms and conditions specified in the notice by giving written notice to the Company and stating therein the quantity of Equity Securities to be purchased.  Notwithstanding the foregoing, the Company shall not be required to offer or sell such Equity Securities to any Investor that would cause the Company to be in violation of applicable Federal or state securities laws by virtue of such offer or sale.

 

4.3                               ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS.

 

If not all of the Investors elect to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify in writing the Investors that have so elected (the

 

22

 

“Participating Investors”) and offer the Participating Investors the right to acquire such unsubscribed shares.  Each Participating Investor shall have ten (10) business days after receipt of such notice to notify the Company of such Participating Investor’s election to purchase all or a portion thereof of the unsubscribed shares.  If the Investors fail to exercise in full the participation rights set forth in Section 4.2 hereof and this Section 4.3, the Company shall have one hundred twenty (120) days thereafter to sell the Equity Securities in respect of which the Investors’ rights were not exercised, at a price and upon terms and conditions no more favorable to the purchasers thereof than specified in the Company’s original notice of the sale of such Equity Securities to the Investors pursuant to Section 4.2 hereof.  If the Company has not sold such Equity Securities within one hundred twenty days (120) days of such notice, the Company shall not thereafter issue or sell any Equity Securities, without first offering such securities to the Investors in the manner provided above.

 

4.4                               TERMINATION AND WAIVER OF PARTICIPATION RIGHTS.

 

The participation rights established by this Section 4 shall not apply to, and shall terminate upon the earlier of (i) the closing of a Qualified Public Offering, (ii) the closing of an Initial Offering which results in the Preferred Stock being converted into Common Stock, or (iii)  the occurrence of a Change in Control.

 

4.5                               AMENDMENT AND WAVIER.

 

The participation rights set forth in this Section 4 may be amended, or any provision waived with the written consent the Requisite Holders or as permitted by Section 5.5.

 

4.6                               TRANSFER AND ALLOCATION OF PARTICIPATION RIGHTS.

 

The participation rights set forth in this Section 4 are transferable to the same parties, and subject to the same limitations, as are set forth for registration rights in Section 2.10 hereof.  Notwithstanding anything to the contrary in this Section 4, (i) T. Rowe Price may, in its discretion, elect in writing to allocate the participation rights set forth in this Section 4 among the T. Rowe Price Investors as it may determine in its sole discretion, and the Company shall adhere to any such written election provided to the Company so long as T. Rowe Price otherwise complies with the provisions of this Section 4 and (ii) Janus may, in its discretion, elect in writing to allocate the participation rights set forth in this Section 4 among the Janus Investors as it may determine in its sole discretion, and the Company shall adhere to any such written election provided to the Company so long as Janus otherwise complies with the provisions of this Section 4.

 

4.7                               EXCLUDED SECURITIES.

 

The participation rights set forth in this Section 4 shall not apply to the following Equity Securities:

 

(a)                                 shares of Common Stock issued upon conversion of the Preferred Stock or as a dividend or distribution on the Preferred Stock;

 

23

 

(b)                                 shares of Common Stock and/or options or other purchase rights and the shares of Common Stock issued pursuant to such options or other purchase rights issuable or issued to employees, advisors, consultants, directors or advisory board members (other than Jeff Rowe and Phil Hagerman and their respective Affiliates) pursuant to one or more plans, agreements or similar arrangements approved by the Board and not to exceed in the aggregate such number of shares that would represent 20% of the fully-diluted capitalization of the Company as of the date of sale and issuance of the applicable Equity Securities and after giving effect to such issuance;

 

(c)                                  shares of Common Stock issued upon the exercise or conversion of warrants or convertible securities outstanding as of the date hereof; or

 

(d)                                 Equity Securities issued in connection with mergers, acquisitions, strategic transactions, joint ventures, equipment leasing, debt financings and commercial transactions approved by the Board.

 

5.                                      MISCELLANEOUS.

 

5.1                               GOVERNING LAW; CONSENT TO JURISDICTION.

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to its principles of conflicts of laws.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the state or federal courts of the State of Michigan for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  THE PARTIES TO THIS AGREEMENT HEREBY WAIVE THEIR RIGHT TO A TRIAL BY JURY WITH RESPECT TO DISPUTES ARISING UNDER THIS AGREEMENT AND CONSENT TO A BENCH TRIAL WITH THE APPROPRIATE JUDGE ACTING AS THE FINDER OF FACT.

 

5.2                               SUCCESSORS AND ASSIGNS.

 

Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.

 

24

 

5.3                               ENTIRE AGREEMENT.

 

This Agreement, the Exhibits hereto, the Purchase Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

 

5.4                               SEVERABILITY.

 

In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

5.5                               AMENDMENT AND WAIVER.

 

(a)                                 Except as otherwise expressly provided herein, this Agreement may be amended or modified only upon the written consent of the Company and the Requisite Holders.  Any such amendment or modification effected in accordance with this Section 5.5(a) shall be binding on all parties hereto, even if they do not execute such consent.

 

(b)                                 Subject to Section 5.5(c) below, any party hereto may waive compliance with any agreements, covenants or conditions for the benefit of such party contained herein.  Any agreement on the part of a party hereto to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

 

(c)                                  Except as otherwise expressly provided, the obligations of the Company and the rights of the Holders under this Agreement may be waived with respect to all parties to this Agreement (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the holders of at a majority in interest of the Registrable Securities.  Any such waiver effected in accordance with this Section 5.5(c) shall be binding on all parties hereto, even if they do not execute such consent.  Each Holder acknowledges that by the operation of this paragraph, the Requisite Holders will have the right and power to diminish or eliminate all rights of such Holder under this Agreement.

 

(d)                                 Notwithstanding Section 5.5(a) above, any amendment, modification or waiver which adversely affects the registration rights of the Key Holders under Section 2.3 in a different manner than the other Holders shall also require the written consent of the holders of at least a majority of the then-outstanding Registrable Securities held by the Key Holders.

 

(e)                                  For the purposes of determining the number of Holders or Investors entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company.

 

25

 

5.6                               DELAYS OR OMISSIONS.

 

It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any Holder, upon any breach, default or noncompliance of the Company under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit, consent, or approval of any kind or character on any Holder’s part of any breach, default or noncompliance under the Agreement or any waiver on such Holder’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not alternative.

 

5.7                               NOTICES.

 

All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the party to be notified at the address as set forth on the signature pages or Exhibit attached hereto or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.

 

5.8                               ATTORNEYS’ FEES.

 

In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

5.9                               TITLES AND SUBTITLES.

 

The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

5.10                        AGGREGATION OF STOCK.

 

All shares of Registrable Securities held or acquired by Affiliated entities or persons, or persons or entities under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

26

 

5.11                        COUNTERPARTS.

 

This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  This Agreement may be executed by facsimile, PDF or TIF signatures.

 

5.12                        SPECIFIC PERFORMANCE.

 

In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Holder shall be entitled to specific performance of the agreements and obligations of the Company hereunder and to such other injunction or other equitable relief as may be granted by a court of competent jurisdiction.

 

SIGNATURES ON THE FOLLOWING PAGES

 

27

 

The parties hereto have executed this FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
THE   COMPANY:
    	
 
    
	
 
    	
 
    
	
DIPLOMAT   PHARMACY, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Philip Hagerman
    	
 
    
	
 
    	
Philip Hagerman
    	
 
    
	
 
    	
Its:   Chief Executive Officer
    	
 
    
	
 
    	
 
    
	
ADDRESS:
    	
 
    
	
 
    	
 
    
	
c/o   Diplomat Pharmacy, Inc.
    	
 
    
	
4100   South Saginaw Street
    	
 
    
	
Flint,   MI 48507
    	
 
    
	
Fax:   (810) 282-0195
    	
 
    
	
Attention:    Chief Financial Officer
    	
 
    

 

DIPLOMAT PHARMACY, INC.

FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT SIGNATURE PAGE

 

 

	
EXISTING INVESTORS:
    
	
 
    
	
 
    
	
T. ROWE PRICE HEALTH SCIENCES   FUND, INC.
    
	
TD MUTUAL FUNDS — TD HEALTH   SCIENCES FUND
    
	
VALIC COMPANY I — HEALTH   SCIENCES FUND 
    
	
T. ROWE PRICE HEALTH SCIENCES   PORTFOLIO
    
	
JOHN HANCOCK VARIABLE INSURANCE   TRUST — HEALTH SCIENCES TRUST
    
	
JOHN HANCOCK FUNDS II — HEALTH   SCIENCES FUND
    
	
 
    	
 
    
	
By:   
    	
T.   ROWE PRICE ASSOCIATES, INC.,
    	
 
    
	
 
    	
Investment   Adviser
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Zlad Bakri
    	
 
    
	
 
    	
 
    
	
Name:  Zlad   Bakri, Vice President
    	
 
    
	
 
    	
 
    
	
Title:    Analyst
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
T.   ROWE PRICE NEW HORIZONS FUND, INC.
    	
 
    
	
T.   ROWE PRICE NEW HORIZONS TRUST
    	
 
    
	
T.   ROWE PRICE U.S. EQUITIES TRUST
    	
 
    
	
 
    	
 
    
	
By:   
    	
T.   ROWE PRICE ASSOCIATES, INC.,
    	
 
    
	
 
    	
Investment   Adviser
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Henry Ellenbogen
    	
 
    
	
 
    	
 
    
	
Name:  Henry   Ellenbogen
    	
 
    
	
 
    	
 
    
	
Title:  Vice   President
    	
 
    

 

DIPLOMAT PHARMACY, INC.

FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT SIGNATURE PAGE

 

 

	
NEW INVESTORS:
    
	
 
    	
 
    
	
JANUS GLOBAL LIFE SCIENCES FUND
    
	
JANUS CAPITAL FUNDS PLC JANUS   GLOBAL LIFE SCIENCES FUND
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Andrew Acker
    	
 
    
	
 
    	
 
    
	
Name:    Andrew Acker
    	
 
    
	
 
    	
 
    
	
Title:    Authorized Person
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
JANUS TRITON FUND
    
	
JANUS VENTURE FUND
    
	
JANUS CAPITAL FUNDS PLC JANUS   US VENTURE FUND
    
	
 
    	
 
    
	
By:
    	
/s/ Jonathan Coleman
    	
 
    
	
 
    	
 
    
	
Name:    Jonathan Coleman
    	
 
    
	
 
    	
 
    
	
Title:    Authorized Person
    	
 
    

 

DIPLOMAT PHARMACY, INC.

FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT SIGNATURE PAGE

 

 

	
KEY HOLDERS:*
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By 
    	
/s/ Jeffrey M. Rowe
    	
 
    	
 
    
	
 
    	
Jeffrey M. Rowe
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
PHILIP HAGERMAN REVOCABLE TRUST
    	
THE   2007 HAGERMAN FAMILY GST TRUST U/T/A 6/1/2007
    
	
DATED SEPTEMBER 6, 1991, AS   AMENDED
    
	
 
    	
 
    
	
 
    	
 
    
	
By 
    	
/s/ Philip R. Hagerman
    	
 
    	
By   
    	
/s/   Jocelyn Hagerman
    
	
 
    	
Philip R. Hagerman, its Trustee
    	
 
    	
 
    	
Jocelyn   Hagerman, its Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Kerry Hayes
    
	
 
    	
 
    	
Kerry   Hayes, its Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
THE JH GST TRUST U/T/A 5/1/2007
    	
THE   ROWE FAMILY TRUST
    
	
 
    	
 
    
	
 
    	
 
    
	
By 
    	
/s/ Philip R. Hagerman
    	
 
    	
By   
    	
/s/   Michele Ramo
    
	
 
    	
Philip R. Hagerman, its Trustee
    	
 
    	
 
    	
Michele   Ramo, its Trustee
    

 

* Signing solely for purposes of Sections 1, 2 (other than Sections 2.2, 2.4, 2.11 and 2.12) and 5.

 

DIPLOMAT PHARMACY, INC.

FIRST AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT SIGNATURE PAGE

 

 

EXHIBIT A

 

SCHEDULE OF EXISTING INVESTORS

 

	
Name
    	
 
    	
Address
    	
 
    	
# of Shares
   Preferred Stock
    
	
T.   Rowe Price Health Sciences Fund, Inc.
    	
 
    	
*
    	
 
    	
112
    
	
TD   Mutual Funds - TD Health Sciences Fund
    	
 
    	
*
    	
 
    	
6
    
	
VALIC   Company I - Health Sciences Fund
    	
 
    	
*
    	
 
    	
7
    
	
T.   Rowe Price Health Sciences Portfolio
    	
 
    	
*
    	
 
    	
5
    
	
John   Hancock Variable Insurance Trust - Health Sciences Trust
    	
 
    	
*
    	
 
    	
3
    
	
John   Hancock Funds II - Health Sciences Fund
    	
 
    	
*
    	
 
    	
7
    
	
T.   Rowe Price New Horizons Fund, Inc.
    	
 
    	
*
    	
 
    	
193
    
	
T.   Rowe Price New Horizons Trust
    	
 
    	
*
    	
 
    	
18
    
	
T.   Rowe Price U.S. Equities Trust 
    	
 
    	
*
    	
 
    	
0.32097
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL:
    	
 
    	
 
    	
 
    	
351.32097
    

 

* Address for Notices:

 

T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Andrew Baek, Vice President and Senior Legal Counsel

Phone:  410-345-2090

E-mail: andrew_baek@troweprice.com

 

A-1

 

EXHIBIT B

 

SCHEDULE OF NEW INVESTORS

 

	
Name
    	
 
    	
Address
    	
 
    	
# of Shares
   Preferred Stock
    
	
Janus   Global Life Sciences Fund
    	
 
    	
*
    	
 
    	
70.176
    
	
Janus   Triton Fund
    	
 
    	
*
    	
 
    	
201.1571
    
	
Janus   Venture Fund
    	
 
    	
*
    	
 
    	
81.0076
    
	
JANUS   CAPITAL FUNDS PLC JANUS GLOBAL LIFE SCIENCES FUND
    	
 
    	
*
    	
 
    	
16.105
    
	
JANUS   CAPITAL FUNDS PLC JANUS US VENTURE FUND
    	
 
    	
*
    	
 
    	
10.981
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL:
    	
 
    	
 
    	
 
    	
379.4267
    

 

* Address for Notices:

 

Janus Capital Management LLC

151 Detroit Street

Denver, CO 80206

Attn: Angela Morton

Phone:  303-336-4358

E-mail: Angela.morton@janus.com

 

A-1

 

EXHIBIT C

 

SCHEDULE OF KEY HOLDERS

 

	
Name
    	
 
    	
Address
    	
 
    	
# of Shares
   Class A
   Common
   Stock
    	
 
    	
# of Shares
   Class B
   Common
   Stock
    
	
Philip   Hagerman Revocable Trust Dated September 6, 1991, As Amended
    	
 
    	
*
    	
 
    	
195
    	
 
    	
1151.99501
    
	
The   2007 Hagerman Family GST Trust U/T/A 6/1/2007
    	
 
    	
*
    	
 
    	
0
    	
 
    	
544.24340
    
	
The   JH GST Trust U/T/A 5/1/2007
    	
 
    	
*
    	
 
    	
0
    	
 
    	
613.46037
    
	
The   Rowe Family Trust
    	
 
    	
*
    	
 
    	
0
    	
 
    	
65
    
	
Jeffrey   M. Rowe
    	
 
    	
*
    	
 
    	
0
    	
 
    	
293.13659
    

 

* Address for Notices:

 

c/o Diplomat Pharmacy, Inc.

4100 South Saginaw Street

Flint, MI 48507

Fax: (810) 282-0195

Attention:  Chief Financial Officer

 

A-1Exhibit 10.1

 

Execution Version

 

AMENDED AND RESTATED
 CREDIT AGREEMENT

 

Dated as of June 26, 2014

 

by and among

 

DIPLOMAT PHARMACY, INC.,
 as the Borrower,

 

THE OTHER PERSONS PARTY HERETO THAT ARE
 DESIGNATED AS CREDIT PARTIES,

 

GENERAL ELECTRIC CAPITAL CORPORATION,
 for itself, as Swingline Lender and as Agent for all Lenders,

 

and

 

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
 as Lenders

 

****************************************

 

GE CAPITAL MARKETS, INC., 
 as Sole Lead Arranger and Bookrunner

 

 

TABLE OF CONTENTS

 

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I.          THE CREDITS
    	
2
    
	
 
    	
 
    
	
 
    	
1.1
    	
Amounts   and Terms of Commitments
    	
2
    
	
 
    	
1.2
    	
Evidence   of Loans; Notes
    	
8
    
	
 
    	
1.3
    	
Interest
    	
8
    
	
 
    	
1.4
    	
Loan   Accounts
    	
9
    
	
 
    	
1.5
    	
Procedure   for Revolving Credit Borrowing
    	
10
    
	
 
    	
1.6
    	
Conversion   and Continuation Elections
    	
11
    
	
 
    	
1.7
    	
Optional   Prepayments
    	
12
    
	
 
    	
1.8
    	
Revolving   Loan Repayment
    	
12
    
	
 
    	
1.9
    	
Fees
    	
12
    
	
 
    	
1.10
    	
Payments   by the Borrower
    	
13
    
	
 
    	
1.11
    	
Payments   by the Lenders to Agent; Settlement
    	
15
    
	
 
    	
1.12
    	
[Reserved]
    	
18
    
	
 
    	
1.13
    	
Eligible   Accounts
    	
18
    
	
 
    	
1.14
    	
Eligible   Inventory
    	
21
    
	
 
    	
1.15
    	
Replacement   of Commitments
    	
23
    
	
 
    	
1.16
    	
Restatement   of Obligations
    	
23
    
	
 
    	
 
    
	
ARTICLE II.        CONDITIONS PRECEDENT
    	
24
    
	
 
    	
 
    
	
 
    	
2.1
    	
Conditions   of Initial Loans
    	
24
    
	
 
    	
2.2
    	
Conditions   to All Borrowings
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III.      REPRESENTATIONS AND WARRANTIES
    	
26
    
	
 
    	
 
    
	
 
    	
3.1
    	
Corporate   Existence and Power
    	
26
    
	
 
    	
3.2
    	
Corporate   Authorization; No Contravention
    	
26
    
	
 
    	
3.3
    	
Governmental   Authorization
    	
27
    
	
 
    	
3.4
    	
Binding   Effect
    	
27
    
	
 
    	
3.5
    	
Litigation
    	
27
    
	
 
    	
3.6
    	
No   Default
    	
28
    
	
 
    	
3.7
    	
ERISA   Compliance
    	
28
    
	
 
    	
3.8
    	
Use   of Proceeds; Margin Regulations
    	
28
    
	
 
    	
3.9
    	
Ownership   of Property; Liens
    	
28
    
	
 
    	
3.10
    	
Taxes
    	
29
    
	
 
    	
3.11
    	
Financial   Condition
    	
29
    
	
 
    	
3.12
    	
Environmental   Matters
    	
30
    
	
 
    	
3.13
    	
Regulated   Entities
    	
31
    
	
 
    	
3.14
    	
Solvency
    	
31
    
	
 
    	
3.15
    	
Labor   Relations
    	
31
    
	
 
    	
3.16
    	
Intellectual   Property
    	
31
    
	
 
    	
3.17
    	
Brokers’   Fees; Transaction Fees
    	
32
    
	
 
    	
3.18
    	
Insurance
    	
32
    
	
 
    	
3.19
    	
Ventures,   Subsidiaries and Affiliates; Outstanding Stock
    	
32
    
					

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.20
    	
Jurisdiction   of Organization; Chief Executive Office
    	
33
    
	
 
    	
3.21
    	
Locations   of Inventory, Equipment and Books and Records
    	
33
    
	
 
    	
3.22
    	
Deposit   Accounts and Other Accounts
    	
33
    
	
 
    	
3.23
    	
Government   Contracts
    	
33
    
	
 
    	
3.24
    	
Customer   and Trade Relations
    	
33
    
	
 
    	
3.25
    	
Bonding
    	
33
    
	
 
    	
3.26
    	
Subordinated   Indebtedness
    	
34
    
	
 
    	
3.27
    	
Full   Disclosure
    	
34
    
	
 
    	
3.28
    	
Foreign   Assets Control Regulations and Anti-Money Laundering
    	
34
    
	
 
    	
3.29
    	
Patriot   Act
    	
34
    
	
 
    	
3.30
    	
Certain   Other Representations and Warranties
    	
35
    
	
 
    	
3.31
    	
Regulatory   Matters
    	
35
    
	
 
    	
3.32
    	
Healthcare   Matters
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV.       AFFIRMATIVE COVENANTS
    	
41
    
	
 
    	
 
    
	
 
    	
4.1
    	
Financial   Statements
    	
41
    
	
 
    	
4.2
    	
Appraisals;   Certificates; Other Information
    	
42
    
	
 
    	
4.3
    	
Notices
    	
44
    
	
 
    	
4.4
    	
Preservation   of Corporate Existence, Etc.
    	
47
    
	
 
    	
4.5
    	
Maintenance   of Property
    	
48
    
	
 
    	
4.6
    	
Insurance
    	
48
    
	
 
    	
4.7
    	
Payment   of Obligations
    	
49
    
	
 
    	
4.8
    	
Compliance   with Laws
    	
50
    
	
 
    	
4.9
    	
Inspection   of Property and Books and Records
    	
50
    
	
 
    	
4.10
    	
Use   of Proceeds
    	
50
    
	
 
    	
4.11
    	
Cash   Management Systems
    	
51
    
	
 
    	
4.12
    	
Landlord   Agreements
    	
53
    
	
 
    	
4.13
    	
Further   Assurances
    	
53
    
	
 
    	
4.14
    	
Environmental   Matters
    	
55
    
	
 
    	
4.15
    	
Post-Closing   Obligations
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V.        NEGATIVE COVENANTS
    	
56
    
	
 
    	
 
    
	
 
    	
5.1
    	
Limitation   on Liens
    	
56
    
	
 
    	
5.2
    	
Disposition   of Assets
    	
58
    
	
 
    	
5.3
    	
Consolidations   and Mergers
    	
58
    
	
 
    	
5.4
    	
Acquisitions;   Loans and Investments
    	
59
    
	
 
    	
5.5
    	
Limitation   on Indebtedness
    	
60
    
	
 
    	
5.6
    	
Employee   Loans and Transactions with Affiliates
    	
60
    
	
 
    	
5.7
    	
Compensation
    	
61
    
	
 
    	
5.8
    	
Margin   Stock; Use of Proceeds
    	
61
    
	
 
    	
5.9
    	
Contingent   Obligations
    	
61
    
	
 
    	
5.10
    	
Compliance   with ERISA
    	
62
    
					

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.11
    	
Restricted   Payments
    	
62
    
	
 
    	
5.12
    	
Change   in Business
    	
64
    
	
 
    	
5.13
    	
Change   in Structure
    	
64
    
	
 
    	
5.14
    	
Changes   in Accounting, Name or Jurisdiction of Organization
    	
64
    
	
 
    	
5.15
    	
Amendments   to Related Agreements, Material Agreements and Subordinated Indebtedness
    	
64
    
	
 
    	
5.16
    	
No   Negative Pledges
    	
65
    
	
 
    	
5.17
    	
OFAC;   Patriot Act
    	
65
    
	
 
    	
5.18
    	
Sale-Leasebacks
    	
65
    
	
 
    	
5.19
    	
Hazardous   Materials
    	
65
    
	
 
    	
5.20
    	
Prepayments   of Other Indebtedness
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI.       FINANCIAL COVENANT
    	
66
    
	
 
    	
 
    
	
 
    	
6.1
    	
Fixed   Charge Coverage Ratio
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII.     EVENTS OF DEFAULT
    	
66
    
	
 
    	
 
    
	
 
    	
7.1
    	
Events   of Default
    	
66
    
	
 
    	
7.2
    	
Remedies
    	
69
    
	
 
    	
7.3
    	
Rights   Not Exclusive
    	
70
    
	
 
    	
7.4
    	
Cash   Collateral for Letters of Credit
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII.   THE AGENT
    	
70
    
	
 
    	
 
    
	
 
    	
8.1
    	
Appointment   and Duties
    	
70
    
	
 
    	
8.2
    	
Binding   Effect
    	
71
    
	
 
    	
8.3
    	
Use   of Discretion
    	
71
    
	
 
    	
8.4
    	
Delegation   of Rights and Duties
    	
72
    
	
 
    	
8.5
    	
Reliance   and Liability
    	
72
    
	
 
    	
8.6
    	
Agent   Individually
    	
74
    
	
 
    	
8.7
    	
Lender   Credit Decision
    	
74
    
	
 
    	
8.8
    	
Expenses;   Indemnities; Withholding
    	
75
    
	
 
    	
8.9
    	
Resignation   of Agent or L/C Issuer
    	
76
    
	
 
    	
8.10
    	
Release   of Collateral or Guarantors
    	
77
    
	
 
    	
8.11
    	
Additional   Secured Parties
    	
77
    
	
 
    	
8.12
    	
Information   Regarding Bank Products and Secured Rate Contracts
    	
78
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX.       MISCELLANEOUS
    	
78
    
	
 
    	
 
    
	
 
    	
9.1
    	
Amendments   and Waivers
    	
78
    
	
 
    	
9.2
    	
Notices
    	
80
    
	
 
    	
9.3
    	
Electronic   Transmissions
    	
81
    
	
 
    	
9.4
    	
No   Waiver; Cumulative Remedies
    	
82
    
	
 
    	
9.5
    	
Costs   and Expenses
    	
83
    
	
 
    	
9.6
    	
Indemnity
    	
83
    
					

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.7
    	
Marshaling;   Payments Set Aside
    	
84
    
	
 
    	
9.8
    	
Successors   and Assigns
    	
85
    
	
 
    	
9.9
    	
Assignments   and Participations; Binding Effect
    	
85
    
	
 
    	
9.10
    	
Non-Public   Information; Confidentiality
    	
87
    
	
 
    	
9.11
    	
Set-off;   Sharing of Payments
    	
89
    
	
 
    	
9.12
    	
Counterparts;   Facsimile Signature
    	
90
    
	
 
    	
9.13
    	
Severability
    	
90
    
	
 
    	
9.14
    	
Captions
    	
90
    
	
 
    	
9.15
    	
Independence   of Provisions
    	
91
    
	
 
    	
9.16
    	
Interpretation
    	
91
    
	
 
    	
9.17
    	
No   Third Parties Benefited
    	
91
    
	
 
    	
9.18
    	
Governing   Law and Jurisdiction
    	
91
    
	
 
    	
9.19
    	
Waiver   of Jury Trial
    	
92
    
	
 
    	
9.20
    	
Entire   Agreement; Release; Survival
    	
92
    
	
 
    	
9.21
    	
Patriot   Act
    	
93
    
	
 
    	
9.22
    	
Replacement   of Lender
    	
93
    
	
 
    	
9.23
    	
Joint   and Several
    	
94
    
	
 
    	
9.24
    	
Creditor-Debtor   Relationship
    	
94
    
	
 
    	
9.25
    	
Actions   in Concert
    	
94
    
	
 
    	
9.26
    	
Keepwell
    	
94
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X.        TAXES, YIELD PROTECTION AND ILLEGALITY
    	
95
    
	
 
    	
 
    
	
 
    	
10.1
    	
Taxes
    	
95
    
	
 
    	
10.2
    	
Illegality
    	
97
    
	
 
    	
10.3
    	
Increased   Costs and Reduction of Return
    	
97
    
	
 
    	
10.4
    	
Funding   Losses
    	
99
    
	
 
    	
10.5
    	
Inability   to Determine Rates
    	
99
    
	
 
    	
10.6
    	
Reserves   on LIBOR Rate Loans
    	
100
    
	
 
    	
10.7
    	
Certificates   of Lenders
    	
100
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XI.       DEFINITIONS
    	
100
    
	
 
    	
 
    
	
 
    	
11.1
    	
Defined   Terms
    	
100
    
	
 
    	
11.2
    	
Other   Interpretive Provisions
    	
129
    
	
 
    	
11.3
    	
Accounting   Terms and Principles
    	
130
    
	
 
    	
11.4
    	
Payments
    	
131
    
					

 

iv

 

	
SCHEDULES
    
	
 
    	
 
    
	
Schedule 1.1(b)
    	
Revolving Loan   Commitments
    
	
Schedule 3.5
    	
Litigation
    
	
Schedule 3.7
    	
ERISA
    
	
Schedule 3.9
    	
Ownership of   Property; Liens
    
	
Schedule 3.12
    	
Environmental
    
	
Schedule 3.15
    	
Labor Relations
    
	
Schedule 3.16
    	
Intellectual   Property
    
	
Schedule 3.18
    	
Insurance
    
	
Schedule 3.19
    	
Ventures,   Subsidiaries and Affiliates; Outstanding Stock
    
	
Schedule 3.20
    	
Jurisdiction of   Organization; Chief Executive Office
    
	
Schedule 3.21
    	
Locations of   Inventory, Equipment and Books and Records
    
	
Schedule 3.22
    	
Deposit Accounts   and Other Accounts
    
	
Schedule 3.23
    	
Government   Contracts
    
	
Schedule 3.25
    	
Bonding
    
	
Schedule 3.31
    	
Regulatory   Matters
    
	
Schedule 4.15
    	
Post-Closing   Obligations
    
	
Schedule 5.1
    	
Liens
    
	
Schedule 5.4
    	
Investments
    
	
Schedule 5.5
    	
Indebtedness
    
	
Schedule 5.6
    	
Transactions   with Affiliates
    
	
Schedule 5.9
    	
Contingent   Obligations
    
	
Schedule 11.1A
    	
Omitted
    
	
Schedule 11.1B
    	
Subordinated   Indebtedness
    
	
 
    	
 
    
	
EXHIBITS
    
	
 
    	
 
    
	
Exhibit 1.1(c) 
    	
Form of L/C   Request
    
	
Exhibit 1.1(d)
    	
Form of   Swing Loan Request
    
	
Exhibit 1.6
    	
Form of   Notice of Conversion/Continuation
    
	
Exhibit 2.1
    	
Closing   Checklist
    
	
Exhibit 4.2(b)
    	
Form of   Compliance Certificate
    
	
Exhibit 11.1(a)
    	
Form of   Assignment
    
	
Exhibit 11.1(b)
    	
Form of   Borrowing Base Certificate
    
	
Exhibit 11.1(c)
    	
Form of   Notice of Borrowing 
    
	
Exhibit 11.1(d)
    	
Form of   Revolving Note
    
	
Exhibit 11.1(e)
    	
Form of   Swingline Note
    

 

v

 

AMENDED AND RESTATED
 CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (including all exhibits and schedules hereto, as the same may be amended, modified and/or restated from time to time, this “Agreement”) is entered into as of June 26, 2014, by and among Diplomat Pharmacy, Inc., a Michigan corporation (the “Borrower”), the other Persons party hereto that are designated as a “Credit Party”, General Electric Capital Corporation, a Delaware corporation (in its individual capacity, “GE Capital”), in its capacity as Agent for the several financial institutions from time to time party to this Agreement (collectively, the “Lenders” and individually each a “Lender”) and for itself as Swingline Lender, and such Lenders.

 

W I T N E S S E T H:

 

WHEREAS, on July 20, 2012, the Borrower, the other Credit Parties party thereto, Agent and the lenders party thereto (the “Existing Lenders”), entered into that certain Credit Agreement, as amended by the First Amendment thereto dated as of August 21, 2012, but effective as of August 14, 2012, the Second Amendment thereto dated as of December 30, 2012, the Third Amendment thereto dated as of November 12, 2013, the Fourth Amendment thereto dated as of December 13, 2013, the Fifth Amendment thereto and Joinder dated as of December 16, 2013, the Sixth Amendment thereto dated as of January 23, 2014 and the Seventh Amendment thereto dated as of March 31, 2014 (collectively, the “Existing Credit Agreement”) and certain other “Loan Documents” under and as defined therein (collectively, the “Existing Loan Documents”), pursuant to which the Existing Lenders provided a $85,000,000 revolving credit facility to the Borrower and certain other financial accommodations to or for the benefit of Borrower and the other Credit Parties upon the terms and conditions contained therein.

 

WHEREAS, the Borrower has requested that the Existing Credit Agreement and certain other Existing Loan Documents be amended and restated in order to, among other things, provide for a $120,000,000 revolving credit facility on the terms and conditions set forth herein and make certain other amendments to the Existing Credit Agreement, and the Agent and Lenders are willing to do so in accordance with the terms and conditions set forth herein and in the other Loan Documents (as defined below).

 

WHEREAS, the Borrower has agreed that all of its Obligations under the Loan Documents will continue to be secured by a Lien in favor of Agent, for the benefit of Agent and the other Secured Parties, upon substantially all of its existing and after acquired Property.

 

WHEREAS, subject to the terms hereof, each Subsidiary of the Borrower has agreed that it will continue to guaranty all of the Obligations under the Loan Documents and that all of such Obligations will continue to be secured by a Lien in favor of the Agent, for the benefit of Agent and the other Secured Parties, upon substantially all of its Property;

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree, and the Existing Credit Agreement is hereby amended and restated in its entirety, as follows:

 

 

ARTICLE I.
 THE CREDITS

 

1.1                               Amounts and Terms of Commitments.

 

(a)                                 [Reserved]

 

(b)                                 The Revolving Credit.

 

(i)                                     Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Lender severally and not jointly agrees to make Loans to the Borrower (each such Loan, a “Revolving Loan”) from time to time on any Business Day during the period from the Closing Date through the Final Availability Date, in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender’s name in Schedule 1.1(b) under the heading “Revolving Loan Commitments” (such amount as the same may be reduced or increased from time to time in accordance with this Agreement, being referred to herein as such Lender’s “Revolving Loan Commitment”); provided, however, that, after giving effect to any Borrowing of Revolving Loans, the aggregate principal amount of all outstanding Revolving Loans shall not exceed the Maximum Revolving Loan Balance.  Subject to the other terms and conditions hereof, amounts borrowed under this Section 1.1(b) may be repaid and reborrowed from time to time.  The “Maximum Revolving Loan Balance” from time to time will be the lesser of:

 

(x)                                 the Borrowing Base (as calculated pursuant to the Borrowing Base Certificate and including applicable Reserves imposed by Agent in its Permitted Discretion) in effect from time to time, or

 

(y)                                 the Aggregate Revolving Loan Commitment then in effect;

 

less, in either case, the sum of (x) the aggregate amount of Letter of Credit Obligations plus (y) outstanding Swing Loans.

 

(ii)                                  If at any time the then outstanding principal balance of Revolving Loans exceeds the Maximum Revolving Loan Balance, then the Borrower shall immediately prepay outstanding Revolving Loans and then cash collateralize outstanding Letters of Credit in an amount sufficient to eliminate such excess in accordance herewith and in a manner satisfactory to the L/C Issuers.

 

(c)                                  Letters of Credit.

 

(i)                                     Conditions.  On the terms and subject to the conditions contained herein, the Borrower may request that one or more L/C Issuers Issue, in accordance with such L/C Issuers’ usual and customary business practices and for the account of the Borrower, Letters of Credit (denominated in Dollars) from time to time on any Business Day during the period from the Closing Date through the earlier of (x) the Final Availability Date and (y) seven (7) days prior to the date specified in clause (a) of the definition of Revolving Termination Date; provided, however, that no L/C Issuer shall Issue any Letter of Credit upon the occurrence of any of the following or, if after giving effect to such Issuance:

 

2

 

(A)                               (i) Availability would be less than zero or (ii) the Letter of Credit Obligations for all Letters of Credit would exceed $3,000,000 (the “L/C Sublimit”);

 

(B)                               the expiration date of such Letter of Credit (i) is not a Business Day, (ii) is more than one year after the date of Issuance thereof or (iii) is later than seven (7) days prior to the date specified in clause (a) of the definition of Revolving Termination Date; provided, however, that any Letter of Credit with a term not exceeding one year may provide for its renewal for additional periods not exceeding one year as long as (x) each of the Borrower and such L/C Issuer have the option to prevent such renewal before the expiration of such term or any such period and (y) neither such L/C Issuer nor the Borrower shall permit any such renewal to extend such expiration date beyond the date set forth in clause (iii) above; or

 

(C)                               (i) any fee due in connection with, and on or prior to, such Issuance has not been paid, (ii) such Letter of Credit is requested to be Issued in a form that is not acceptable to such L/C Issuer or (iii) such L/C Issuer shall not have received, each in form and substance reasonably acceptable to it and duly executed by the Borrower, the documents that such L/C Issuer generally uses in the Ordinary Course of Business for the Issuance of letters of credit of the type of such Letter of Credit (collectively, the “L/C Reimbursement Agreement”).

 

Furthermore, GE Capital as an L/C Issuer may elect only to Issue Letters of Credit in its own name and may only Issue Letters of Credit to the extent permitted by Requirements of Law, and such Letters of Credit may not be accepted by certain beneficiaries such as insurance companies.  For each Issuance, the applicable L/C Issuer may, but shall not be required to, determine that, or take notice whether, the conditions precedent set forth in Section 2.2 have been satisfied or waived in connection with the Issuance of any Letter of Credit; provided, however, that no Letter of Credit shall be Issued during the period starting on the first Business Day after the receipt by such L/C Issuer of notice from Agent or the Required Lenders that any condition precedent contained in Section 2.2 is not satisfied and ending on the date all such conditions are satisfied or duly waived.

 

Notwithstanding anything else to the contrary herein, if any Lender is a Non-Funding Lender or Impacted Lender, no L/C Issuer shall be obligated to Issue any Letter of Credit unless (w) the Non-Funding Lender or Impacted Lender has been replaced in accordance with Section 9.9 or Section 9.22, (x) the Letter of Credit Obligations of such Non-Funding Lender or Impacted Lender have been cash collateralized, or (y) the Revolving Loan Commitments of the other Lenders have been increased by an amount sufficient to satisfy Agent that all future Letter of Credit Obligations will be covered by all Lenders that are not Non-Funding Lenders or Impacted Lenders, or (z) the Letter of Credit Obligations of such Non-Funding Lender or Impacted Lender have been reallocated to other Lenders in a manner consistent with Section 1.11(e)(ii).

 

3

 

(ii)                                  Notice of Issuance.  The Borrower shall give the relevant L/C Issuer and Agent a notice of any requested Issuance of any Letter of Credit, which shall be effective only if received by such L/C Issuer and Agent not later than 2:00 p.m. (New York time) on the third Business Day prior to the date of such requested Issuance.  Such notice shall be made in a writing or Electronic Transmission substantially in the form of Exhibit 1.1(c) duly completed or in a writing in any other form acceptable to such L/C Issuer (an “L/C Request”).

 

(iii)                               Reporting Obligations of L/C Issuers.  Each L/C Issuer agrees to provide Agent, in form and substance satisfactory to Agent, each of the following on the following dates:  (A) (i) on or prior to any Issuance of any Letter of Credit by such L/C Issuer, (ii) immediately after any drawing under any such Letter of Credit or (iii) immediately after any payment (or failure to pay when due) by the Borrower of any related L/C Reimbursement Obligation, notice thereof, which shall contain a detailed description of such Issuance, drawing or payment, and Agent shall provide copies of such notices to each Lender reasonably promptly after receipt thereof; (B) upon the request of Agent (or any Lender through Agent), copies of any Letter of Credit Issued by such L/C Issuer and any related L/C Reimbursement Agreement and such other documents and information as may reasonably be requested by Agent; and (C) on the first Business Day of each calendar week, a schedule of the Letters of Credit Issued by such L/C Issuer, in form and substance reasonably satisfactory to Agent, setting forth the Letter of Credit Obligations for such Letters of Credit outstanding on the last Business Day of the previous calendar week.

 

(iv)                              Acquisition of Participations.  Upon any Issuance of a Letter of Credit in accordance with the terms of this Agreement resulting in any increase in the Letter of Credit Obligations, each Lender shall be deemed to have acquired, without recourse or warranty, an undivided interest and participation in such Letter of Credit and the related Letter of Credit Obligations in an amount equal to its Commitment Percentage of such Letter of Credit Obligations.

 

(v)                                 Reimbursement Obligations of the Borrower.  The Borrower agrees to pay to the L/C Issuer of any Letter of Credit, or to Agent for the benefit of such L/C Issuer, each L/C Reimbursement Obligation owing with respect to such Letter of Credit no later than the first Business Day after the Borrower receives notice from such L/C Issuer or from Agent that payment has been made under such Letter of Credit or that such L/C Reimbursement Obligation is otherwise due (the “L/C Reimbursement Date”) with interest thereon computed as set forth in clause (A) below.  In the event that any L/C Reimbursement Obligation is not repaid by the Borrower as provided in this Section 1.1(c)(v) (or any such payment by the Borrower is rescinded or set aside for any reason), such L/C Issuer shall promptly notify Agent of such failure (and, upon receipt of such notice, Agent shall notify each Lender) and, irrespective of whether such notice is given, such L/C Reimbursement Obligation shall be payable on demand by the Borrower with interest thereon computed (A) from the date on which such L/C Reimbursement Obligation arose to the L/C Reimbursement Date, at the interest rate applicable during such period to Revolving Loans that are Base Rate Loans and (B) thereafter until payment in full, at the interest rate applicable during such period to past due Revolving Loans that are Base Rate Loans.

 

4

 

(vi)                              Reimbursement Obligations of the Revolving Credit Lenders.

 

(1)                                 Upon receipt of the notice described in Section 1.1(c)(v) above from Agent, each Lender shall pay to Agent for the account of such L/C Issuer its Commitment Percentage of such Letter of Credit Obligations (as such amount may be increased pursuant to Section 1.11(e)(ii)).

 

(2)                                 By making any payments described in Section 1.1(c)(vi)(1) above (other than during the continuation of an Event of Default under Section 7.1(f) or 7.1(g)), such Lender shall be deemed to have made a Revolving Loan to the Borrower, which, upon receipt thereof by Agent for the benefit of such L/C Issuer, the Borrower shall be deemed to have used in whole to repay such L/C Reimbursement Obligation.  Any such payment that is not deemed a Revolving Loan shall be deemed a funding by such Lender of its participation in the applicable Letter of Credit and the Letter of Credit Obligation in respect of the related L/C Reimbursement Obligations.  Such participation shall not otherwise be required to be funded.  Following receipt by any L/C Issuer of any payment from any Lender pursuant to this Section 1.1(c)(vi) with respect to any portion of any L/C Reimbursement Obligation, such L/C Issuer shall promptly pay to Agent, for the benefit of such Lender, all amounts received by such L/C Issuer (or to the extent such amounts shall have been received by Agent for the benefit of such L/C Issuer, Agent shall promptly pay to such Lender all amounts received by Agent for the benefit of such L/C Issuer) with respect to such portion.

 

(vii)                           Obligations Absolute.  The obligations of the Borrower and the Lenders pursuant to Sections 1.1(c)(iv), (c)(v) and (c)(vi) above shall be absolute, unconditional and irrevocable and performed strictly in accordance with the terms of this Agreement irrespective of (A) (i) the invalidity or unenforceability of any term or provision in any Letter of Credit, any document transferring or purporting to transfer a Letter of Credit, any Loan Document (including the sufficiency of any such instrument), or any modification to any provision of any of the foregoing, (ii) any document presented under a Letter of Credit being forged, fraudulent, invalid, insufficient or inaccurate in any respect or failing to comply with the terms of such Letter of Credit or (iii) any loss or delay, including in the transmission of any document, (B) the existence of any setoff, claim, abatement, recoupment, defense or other right that any Person (including any Credit Party) may have against the beneficiary of any Letter of Credit or any other Person, whether in connection with any Loan Document or any other Contractual Obligation or transaction, or the existence of any other withholding, abatement or reduction, (C) in the case of the obligations of any Lender, (i) the failure of any condition precedent set forth in Section 2.2 to be satisfied (each of which conditions precedent the Lenders hereby irrevocably waive) or (ii) any adverse change in the condition (financial or otherwise) of any Credit Party and (D) any other act or omission to act or delay of any kind of Agent, any Lender or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 1.1(c)(vii), constitute a legal or equitable discharge of any obligation of the Borrower or any Lender hereunder.  No provision hereof shall be deemed to waive or limit the Borrower’s right to seek repayment of any payment of any L/C Reimbursement Obligations from the L/C Issuer under the terms of the applicable L/C Reimbursement Agreement or applicable law.  Nothing herein shall excuse L/C Issuer for liability to the extent such liability has resulted primarily from the gross negligence or willful misconduct of L/C Issuer under the terms of the applicable L/C Reimbursement Agreement as determined by a court of competent jurisdiction in a final non-appealable judgment or order.

 

5

 

(d)                                 Swing Loans.

 

(i)                                     Availability.  Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, the Swingline Lender may, in its sole discretion, make Loans (each a “Swing Loan”) available to the Borrower under the Revolving Loan Commitments from time to time on any Business Day during the period from the Closing Date through the Final Availability Date in an aggregate principal amount at any time outstanding not to exceed its Swingline Commitment; provided, however, that the Swingline Lender may not make any Swing Loan (x) to the extent that after giving effect to such Swing Loan, the aggregate principal amount of all Revolving Loans would exceed the Maximum Revolving Loan Balance and (y) during the period commencing on the first Business Day after it receives notice from Agent or the Required Lenders that one or more of the conditions precedent contained in Section 2.2 are not satisfied and ending when such conditions are satisfied or duly waived.  In connection with the making of any Swing Loan, the Swingline Lender may but shall not be required to determine that, or take notice whether, the conditions precedent set forth in Section 2.2 have been satisfied or waived.  Each Swing Loan shall be a Base Rate Loan and must be repaid as provided herein, but in any event must be repaid in full on the Revolving Termination Date.  Within the limits set forth in the first sentence of this Section 1.1(d)(i), amounts of Swing Loans repaid may be reborrowed under this Section 1.1(d)(i).

 

(ii)                                  Borrowing Procedures.  In order to request a Swing Loan, the Borrower shall give to Agent a notice to be received not later than 2:00 p.m. (New York time) on the day of the proposed Borrowing, which shall be made in a writing or in an Electronic Transmission substantially in the form of Exhibit 1.1(d) or in a writing in any other form acceptable to Agent duly completed (a “Swingline Request”).  In addition, if any Notice of Borrowing of Revolving Loans requests a Borrowing of Base Rate Loans, the Swingline Lender may, notwithstanding anything else to the contrary herein, make a Swing Loan to the Borrower in an aggregate amount not to exceed such proposed Borrowing, and the aggregate amount of the corresponding proposed Borrowing shall be reduced accordingly by the principal amount of such Swing Loan.  Agent shall promptly notify the Swingline Lender of the details of the requested Swing Loan.  Upon receipt of such notice and subject to the terms of this Agreement, the Swingline Lender may make a Swing Loan available to the Borrower by making the proceeds thereof available to Agent and, in turn, Agent shall make such proceeds available to the Borrower on the date set forth in the relevant Swingline Request or Notice of Borrowing.

 

(iii)                               Refinancing Swing Loans.

 

(1)                                 The Swingline Lender may at any time (and shall, no less frequently than once each week) forward a demand to Agent (which Agent shall, upon receipt, forward to each Lender) that each Lender pay to Agent, for the account of the Swingline Lender, such Lender’s Commitment Percentage of the outstanding Swing Loans (as such amount may be increased pursuant to Section 1.11(e)(ii)).

 

(2)                                 Each Lender shall pay the amount owing by it to Agent for the account of the Swingline Lender on the Business Day following receipt of the notice or demand therefor.  Payments received by Agent after 1:00 p.m. (New York time) may, in Agent’s 

 

6

 

discretion be deemed received on the next Business Day.  Upon receipt by Agent of such payment (other than during the continuation of any Event of Default under Section 7.1(f) or 7.1(g)), such Lender shall be deemed to have made a Revolving Loan to the Borrower, which, upon receipt of such payment by the Swingline Lender from Agent, the Borrower shall be deemed to have used in whole to refinance such Swing Loan.  In addition, regardless of whether any such demand is made, upon the occurrence of any Event of Default under Section 7.1(f) or 7.1(g), each Lender shall be deemed to have acquired, without recourse or warranty, an undivided interest and participation in each Swing Loan in an amount equal to such Lender’s Commitment Percentage of such Swing Loan.  If any payment made by any Lender as a result of any such demand is not deemed a Revolving Loan, such payment shall be deemed a funding by such Lender of such participation.  Such participation shall not be otherwise required to be funded.  Upon receipt by the Swingline Lender of any payment from any Lender pursuant to this clause (iii) with respect to any portion of any Swing Loan, the Swingline Lender shall promptly pay over to such Lender all payments of principal (to the extent received after such payment by such Lender) and interest (to the extent accrued with respect to periods after such payment) on account of such Swing Loan received by the Swingline Lender with respect to such portion.

 

(iv)                              Obligation to Fund Absolute.  Each Lender’s obligations pursuant to Section 1.1(d)(iii) above 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, including (A) the existence of any setoff, claim, abatement, recoupment, defense or other right that such Lender, any Affiliate thereof or any other Person may have against the Swingline Lender, Agent, any other Lender or L/C Issuer or any other Person, (B) the failure of any condition precedent set forth in Section 2.2 to be satisfied or the failure of the Borrower to deliver a Notice of Borrowing (each of which requirements the Lenders hereby irrevocably waive) and (C) any adverse change in the condition (financial or otherwise) of any Credit Party.

 

(e)                                  Incremental Increase.  Borrower may request that Lenders increase the size of the Revolving Loan Commitments or enter into one or more tranches of term loans (each, an “Incremental Term Loan” and together with any increase to the Revolving Loan Commitments, the “Incremental Facility”), in each case in minimum amounts of $10,000,000 and increments of $5,000,000 so long as, after giving effect thereto, the aggregate amount of such increases in the Revolving Loan Commitments and all such Incremental Term Loans does not exceed $25,000,000, and the Incremental Facility shall be on terms acceptable to Agent and Lenders, including the following:

 

(i)                                     on a pro forma basis for the initial borrowing under any such Incremental Facility and the application of the proceeds therefrom, no Default or Event of Default shall have occurred and be continuing;

 

(ii)                                  if the sum of the margin above LIBOR, fees, and discounts of the Incremental Facility, expressed as a percentage of such Incremental Facility, shall exceed the Applicable Margin then in effect for LIBOR Loans (in the case of an Incremental Term Loan, by more than 0.50%), then the Applicable Margin then in effect shall be automatically increased by such differential, effective upon the making of such Incremental Facility; and

 

7

 

(iii)                               any such Incremental Facility shall otherwise be on substantially the same terms and pursuant to the same documentation as the Revolving Loans (but allowing for amortization and prepayment provisions on terms acceptable to Agent and the Lenders); provided, that in the case of an Incremental Term Loan, Borrower shall deliver to Agent and the Lenders an amendment (an “Incremental Term Loan Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each other applicable Credit Party, each Lender and Agent, to the extent necessary or appropriate in the opinion of Agent to give effect to any Incremental Term Loans to be made pursuant to this Section 1.1(e)  in each case on terms consistent with this Section 1.1(e).

 

Any request under this Section 1.1(e) shall be submitted by the Borrower in writing, through Agent, to each existing Lender who shall have the right on a first refusal basis to provide, in accordance with such Lender’s pro rata share of all Loans outstanding, the full principal amount of such Incremental Facility.  Borrower may also specify any fees that it proposes to offer to all Lenders (the “Increasing Lenders”) that agree to provide the Incremental Facility.  No Lender shall have any obligation, express or implied, to offer to assume any portion of the Incremental Facility, and any decision whether or not to do so shall be made in such Lender’s sole discretion.  Only the consent of each Increasing Lender shall be required for an increase in the principal amount of such Lender’s Revolving Loan Commitment.  No Lender which declines to provide any portion of the Incremental Facility may be replaced with respect to its existing Revolving Loan Commitment as a result thereof without such Lender’s consent.

 

Each Lender shall as soon as reasonably practicable specify in writing to Borrower and Agent the principal amount by which it is willing to increase its Revolving Loan Commitment or provide an Incremental Term Loan (provided that if such Lender does not so respond within fifteen (15) Business Days, it shall be deemed to have declined to provide any part of the Incremental Facility) and identify in such writing any increase in the Applicable Margin related thereto; provided, however, that Borrower shall have the right to rescind its request for an Incremental Term Loan within five (5) Business Days after receipt of any Lender’s written notice which contains an increase in the Applicable Margin for such Incremental Term Loan.

 

1.2                               Evidence of Loans; Notes.

 

(a)                                 [Reserved]

 

(b)                                 The Revolving Loans made by each Lender shall be evidenced by this Agreement and, if requested by such Lender, a Revolving Note payable to such Lender in an amount equal to such Lender’s Revolving Loan Commitment.

 

(c)                                  Swing Loans made by the Swingline Lender shall be evidenced by this Agreement and, if requested by such Lender, a Swingline Note in an amount equal to the Swingline Commitment.

 

1.3                               Interest.

 

(a)                                 Subject to Sections 1.3(c) and 1.3(d), each Loan shall bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to 

 

8

 

LIBOR or the Base Rate, as the case may be, plus the Applicable Margin; provided Swing Loans may not be LIBOR Rate Loans.  Each determination of an interest rate by Agent shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error.  All computations of fees and interest payable under this Agreement shall be made on the basis of a 360-day year and actual days elapsed.  Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.

 

(b)                                 Interest on each Loan shall be paid in arrears on each Interest Payment Date.  Interest shall also be paid on the Revolving Termination Date.

 

(c)                                  At the election of Agent or the Required Lenders while any Event of Default exists (or automatically while any Event of Default under Section 7.1(a), 7.1(f) or 7.1(g) exists), the Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the Loans under the Loan Documents from and after the date of occurrence of such Event of Default, at a rate per annum which is determined by adding two percent (2.0%) per annum to the Applicable Margin then in effect for such Loans (plus the LIBOR or Base Rate, as the case may be).  All such interest shall be payable on demand of Agent or the Required Lenders.

 

(d)                                 Anything herein to the contrary notwithstanding, the obligations of the Borrower hereunder shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by the respective Lender would be contrary to the provisions of any law applicable to such Lender limiting the highest rate of interest which may be lawfully contracted for, charged or received by such Lender, and in such event the Borrower shall pay such Lender interest at the highest rate permitted by applicable law (“Maximum Lawful Rate”); provided, however, that if at any time thereafter the rate of interest payable hereunder is less than the Maximum Lawful Rate, the Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate until such time as the total interest received by Agent, on behalf of Lenders, is equal to the total interest that would have been received had the interest payable hereunder been (but for the operation of this paragraph) the interest rate payable since the Closing Date as otherwise provided in this Agreement.

 

1.4                               Loan Accounts.

 

(a)                                 Agent, on behalf of the Lenders, shall record on its books and records the amount of each Loan made, the interest rate applicable, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding.  Agent shall deliver to the Borrower on a monthly basis a loan statement setting forth such record for the immediately preceding calendar month.  Such record shall, absent manifest error, be conclusive evidence of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so, or any failure to deliver such loan statement shall not, however, limit or otherwise affect the obligation of the Borrower hereunder (and under any Note) to pay any amount owing with respect to the Loans or provide the basis for any claim against Agent.

 

9

 

(b)                                 Agent, acting as a non-fiduciary agent of the Borrower solely for tax purposes and solely with respect to the actions described in this Section 1.4(b), shall establish and maintain at its address referred to in Section 9.2 (or at such other address as Agent may notify the Borrower) (A) a record of ownership (the “Register”) in which Agent agrees to register by book entry the interests (including any rights to receive payment hereunder) of Agent, each Lender and each L/C Issuer in the Revolving Loans, Swing Loans, L/C Reimbursement Obligations, and Letter of Credit Obligations, each of their obligations under this Agreement to participate in each Loan, Letter of Credit, Letter of Credit Obligations, and L/C Reimbursement Obligations, and any assignment of any such interest, obligation or right and (B) accounts in the Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders and the L/C Issuers (and each change thereto pursuant to Sections 9.9 and 9.22), (2) the Commitments of each Lender, (3) the amount of each Loan and each funding of any participation described in clause (A) above, and for LIBOR Rate Loans, the Interest Period applicable thereto, (4) the amount of any principal or interest due and payable or paid, (5) the amount of the L/C Reimbursement Obligations due and payable or paid in respect of Letters of Credit and (6) any other payment received by Agent from the Borrower and its application to the Obligations.

 

(c)                                  Notwithstanding anything to the contrary contained in this Agreement, the Loans (including any Notes evidencing such Loans and, in the case of Revolving Loans, the corresponding obligations to participate in Letter of Credit Obligations and Swing Loans) and the L/C Reimbursement Obligations are registered obligations, the right, title and interest of the Lenders and the L/C Issuers and their assignees in and to such Loans or L/C Reimbursement Obligations, as the case may be, shall be transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective until recorded therein.  This Section 1.4 and Section 9.9 shall be construed so that the Loans and L/C Reimbursement Obligations are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

 

(d)                                 The Credit Parties, Agent, the Lenders and the L/C Issuers shall treat each Person whose name is recorded in the Register as a Lender or L/C Issuer, as applicable, for all purposes of this Agreement.  Information contained in the Register with respect to any Lender or any L/C Issuer shall be available for access by the Borrower, Agent, such Lender or such L/C Issuer during normal business hours and from time to time upon at least one Business Day’s prior notice.  No Lender or L/C Issuer shall, in such capacity, have access to or be otherwise permitted to review any information in the Register other than information with respect to such Lender or L/C Issuer unless otherwise agreed by Agent.

 

1.5                               Procedure for Revolving Credit Borrowing.

 

(a)                                 Each Borrowing of a Revolving Loan shall be made upon the Borrower’s irrevocable (subject to Section 10.5) written notice delivered to Agent substantially in the form of a Notice of Borrowing or in a writing in any other form acceptable to Agent, which notice must be received by Agent prior to 2:00 p.m. (New York time) (i) on the date which is three (3) Business Days prior to the requested Borrowing date in the case of each LIBOR Rate Loan, (ii) on the date which is three (3) Business Days prior to the requested Borrowing date of each Base Rate Loan in excess of $25,000,000, and (iii) on the date which is one (1) Business Day prior to 

 

10

 

the requested Borrowing date of each Base Rate Loan equal to or less than $25,000,000.  Such Notice of Borrowing shall specify:

 

(i)                                     the amount of the Borrowing (which shall be in an aggregate minimum principal amount of $250,000);

 

(ii)                                  the requested Borrowing date, which shall be a Business Day;

 

(iii)                               whether the Borrowing is to be comprised of LIBOR Rate Loans or Base Rate Loans; and

 

(iv)                              if the Borrowing is to be LIBOR Rate Loans, the Interest Period applicable to such Loans.

 

(b)                                 Upon receipt of a Notice of Borrowing, Agent will promptly notify each Lender of such Notice of Borrowing and of the amount of such Lender’s Commitment Percentage of the Borrowing.

 

(c)                                  Unless Agent is otherwise directed in writing by the Borrower, the proceeds of each requested Borrowing after the Closing Date will be made available to the Borrower by Agent by wire transfer of such amount to the Borrower pursuant to the wire transfer instructions specified on the signature page hereto.

 

1.6                               Conversion and Continuation Elections.

 

(a)                                 The Borrower shall have the option to (i) request that any Revolving Loan be made as a LIBOR Rate Loan, (ii) convert at any time all or any part of outstanding Loans (other than Swing Loans) from Base Rate Loans to LIBOR Rate Loans, (iii) convert any LIBOR Rate Loan to a Base Rate Loan, subject to Section 10.4 if such conversion is made prior to the expiration of the Interest Period applicable thereto, or (iv) continue all or any portion of any Loan as a LIBOR Rate Loan upon the expiration of the applicable Interest Period.  Any Loan or group of Loans having the same proposed Interest Period to be made or continued as, or converted into, a LIBOR Rate Loan must be in a minimum amount of $5,000,000.  Any such election must be made by Borrower by 2:00 p.m. (New York time) on the third Business Day prior to (1) the date of any proposed Revolving Loan which is to bear interest at LIBOR, (2) the end of each Interest Period with respect to any LIBOR Rate Loans to be continued as such, or (3) the date on which the Borrower wishes to convert any Base Rate Loan to a LIBOR Rate Loan for an Interest Period designated by Borrower in such election.  If no election is received with respect to a LIBOR Rate Loan by 2:00 p.m. (New York time) on the third Business Day prior to the end of the Interest Period with respect thereto, that LIBOR Rate Loan shall be converted to a Base Rate Loan at the end of its Interest Period.  The Borrower must make such election by notice to Agent in writing, including by Electronic Transmission.  In the case of any conversion or continuation, such election must be made pursuant to a written notice (a “Notice of Conversion/Continuation”) substantially in the form of Exhibit 1.6 or in a writing in any other form acceptable to Agent.  No Loan shall be made, converted into or continued as a LIBOR Rate Loan, if the conditions to Loans and Letters of Credit in Section 2.2 are not met at the time of such proposed conversion or continuation and Agent or Required Lenders have determined not to make or continue any Loan as a LIBOR Rate Loan as a result thereof.

 

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(b)           Upon receipt of a Notice of Conversion/Continuation, Agent will promptly notify each Lender thereof.  In addition, Agent will, with reasonable promptness, notify the Borrower and the Lenders of each determination of LIBOR; provided that any failure to do so shall not relieve the Borrower of any liability hereunder or provide the basis for any claim against Agent.  All conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans held by each Lender with respect to which the notice was given.

 

(c)           Notwithstanding any other provision contained in this Agreement, after giving effect to any Borrowing, or to any continuation or conversion of any Loans, there shall not be more than five (5) different Interest Periods in effect.

 

1.7          Optional Prepayments.

 

The Borrower may at any time prepay the Loans in whole or in part (without a corresponding reduction in the Aggregate Revolving Commitments), in each instance, without penalty or premium except as provided in Section 10.4.  The Borrower may at any time on at least 10 days’ prior written notice to Agent terminate the Aggregate Revolving Commitments in full (but not in part), and the Borrower shall repay to the Lenders in full the aggregate principal amount of the Revolving Loans and Swing Loans outstanding on such date, together with any amounts required pursuant to Section 10.4.

 

1.8          Revolving Loan Repayment.

 

The Borrower shall repay to the Lenders in full on the date specified in clause (a) of the definition of “Revolving Termination Date” the aggregate principal amount of the Revolving Loans and Swing Loans outstanding on the Revolving Termination Date.

 

1.9          Fees.

 

(a)           Fees.  The Borrower shall pay to Agent, for Agent’s own account, fees in the amounts and at the times set forth in a letter agreement between the Borrower and Agent dated April 27, 2012 (as amended from time to time, the “Fee Letter”).

 

(b)           Unused Commitment Fee.  The Borrower shall pay to Agent a fee (the “Unused Commitment Fee”) for the account of each Lender in an amount equal to:

 

(i)            the average daily balances of the Revolving Loan Commitment of such Lender during the preceding calendar month, less

 

(ii)           the sum of (x) the average daily balance of all Revolving Loans held by such Lender plus (y) the average daily amount of Letter of Credit Obligations held by such Lender, plus (z) in the case of the Swingline Lender, the average daily balance of all outstanding Swing Loans held by such Swingline Lender, in each case, during the preceding calendar month; provided, that in no event shall the amount computed pursuant to clauses (i) and (ii) with respect to the Swingline Lender be less than zero,

 

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(iii)          multiplied by the applicable percentage per annum listed below corresponding to the average unused daily balance of the Revolving Loan Commitment:

 

	
Average Unused Daily Balance
   (based upon a percentage of the
   Revolving Credit Facility)
    	
 
    	
Percentage Per Annum
    	
 
    
	
Greater than or equal to   66 2/3%
    	
 
    	
0.50
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Greater than or equal to   33 1/3% but less than 66 2/3%
    	
 
    	
0.375
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Less than 33 1/3%
    	
 
    	
0.25
    	
%
    

 

The total fee paid by the Borrower will be equal to the sum of all of the fees due to the Lenders, subject to Section 1.11(e)(vi).  Such fee shall be payable monthly in arrears on the first day of each calendar month following the date hereof. The Unused Commitment Fee provided in this Section 1.9(b) shall accrue at all times from and after the execution and delivery of this Agreement.  For purposes of this Section 1.9(b), the Revolving Loan Commitment of any Non-Funding Lender shall be deemed to be zero.

 

(c)           Letter of Credit Fee.  The Borrower agrees to pay to Agent for the ratable benefit of the Lenders, as compensation to such Lenders for Letter of Credit Obligations incurred hereunder, (i) without duplication of costs and expenses otherwise payable to Agent or Lenders hereunder or fees otherwise paid by the Borrower, all costs and expenses incurred by Agent or any Lender on account of such Letter of Credit Obligations, and (ii) for each calendar month during which any Letter of Credit Obligation shall remain outstanding, a fee (the “Letter of Credit Fee”) in an amount equal to the product of the average daily undrawn face amount of all Letters of Credit Issued, guaranteed or supported by risk participation agreements multiplied by a per annum rate equal to the Applicable Margin with respect to Revolving Loans which are LIBOR Rate Loans; provided, however, that at Agent’s or Required Lenders’ option, while an Event of Default exists (or automatically while an Event of Default under Section 7.1(a), 7.1(f) or 7.1(g) exists), such rate shall be increased by two percent (2.00%) per annum.  Such fee shall be paid to Agent for the benefit of the Lenders in arrears, on the first day of each calendar month and on the date on which all L/C Reimbursement Obligations have been discharged.  In addition, the Borrower shall pay to Agent, any L/C Issuer or any prospective L/C Issuer, as appropriate, on demand, such L/C Issuer’s or prospective L/C Issuer’s customary fees at then prevailing rates, without duplication of fees otherwise payable hereunder (including all per annum fees), charges and expenses of such L/C Issuer or prospective L/C Issuer in respect of the application for, and the Issuance, negotiation, acceptance, amendment, transfer and payment of, each Letter of Credit or otherwise payable pursuant to the application and related documentation under which such Letter of Credit is Issued.

 

1.10        Payments by the Borrower.

 

(a)           All payments (including prepayments) to be made by each Credit Party on account of principal, interest, fees and other amounts required hereunder shall be made without 

 

13

 

set off, recoupment, counterclaim or deduction of any kind, shall, except as otherwise expressly provided herein, be made to Agent (for the ratable account of the Persons entitled thereto) at the address for payment specified in the signature page hereof in relation to Agent (or such other address as Agent may from time to time specify in accordance with Section 9.2), including payments utilizing the ACH system, and shall be made in Dollars and by wire transfer or ACH transfer in immediately available funds (which shall be the exclusive means of payment hereunder), no later than 1:00 p.m. (New York time) on the date due.  Any payment which is received by Agent later than 1:00 p.m. (New York time) on any Business Day or at any time on a day that is not a Business Day shall be deemed to have been received on the immediately succeeding Business Day and any applicable interest or fee shall continue to accrue.  The Borrower and each other Credit Party hereby irrevocably waives the right to direct the application during the continuance of an Event of Default of any and all payments in respect of any Obligation and any proceeds of Collateral.  The Borrower hereby authorizes Agent and each Lender to make a Revolving Loan (which shall be a Base Rate Loan and which may be a Swing Loan) to pay interest, principal (including Swing Loans), L/C Reimbursement Obligations, agent fees, Unused Commitment Fees, Letter of Credit Fees and any other fees, costs or expenses payable by the Borrower or any of its Subsidiaries hereunder or under the other Loan Documents, in each instance, on the date due.

 

(b)           Subject to the provisions set forth in the definition of “Interest Period” herein, if any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.

 

(c)           During the continuance of an Event of Default, Agent may, and shall upon the direction of Required Lenders apply any and all payments received by Agent in respect of any Obligation in accordance with clauses first through sixth below.  Notwithstanding any provision herein to the contrary, all payments made by Credit Parties to Agent after any or all of the Obligations have been accelerated (so long as such acceleration has not been rescinded), including proceeds of Collateral, shall be applied as follows:

 

first, to payment of costs and expenses, including Attorney Costs, of Agent payable or reimbursable by the Credit Parties under the Loan Documents;

 

second, to payment of Attorney Costs of Lenders payable or reimbursable by the Borrower under this Agreement;

 

third, to payment of all accrued unpaid interest and principal on any Swing Loans and fees owed to any Swingline Lender;

 

fourth, to payment of all accrued unpaid interest on the Obligations and fees owed to Agent, Lenders and L/C Issuers;

 

fifth, to payment of principal of the Obligations including, without limitation, L/C Reimbursement Obligations then due and payable, any Obligations under any Secured Rate Contract, Obligations constituting Bank Products (other than Obligations under Bank Products which are commercial credit cards and stored value cards), and cash 

 

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collateralization of unmatured L/C Reimbursement Obligations to the extent not then due and payable);

 

sixth, to payment of any other amounts owing constituting Obligations (including Obligations under Bank Products which are commercial credit cards and stored value cards); and

 

seventh, any remainder shall be for the account of and paid to whoever may be lawfully entitled thereto.

 

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, (ii) each of the Lenders or other Persons entitled to payment shall receive an amount equal to its pro rata share of amounts available to be applied pursuant to clauses third, fourth and fifth above and (iii) no payments by a Guarantor and no proceeds of Collateral of a Guarantor shall be applied to Excluded Rate Contract Obligations of such Guarantor.

 

1.11        Payments by the Lenders to Agent; Settlement.

 

(a)           Agent may, on behalf of Lenders, disburse funds to the Borrower for Loans requested.  Each Lender shall reimburse Agent on demand for all funds disbursed on its behalf by Agent, or if Agent so requests, each Lender will remit to Agent its Commitment Percentage of any Loan before Agent disburses same to the Borrower.  If Agent elects to require that each Lender make funds available to Agent prior to disbursement by Agent to the Borrower, Agent shall advise each Lender by telephone or fax of the amount of such Lender’s Commitment Percentage of the Loan requested by the Borrower no later than the Business Day prior to the scheduled Borrowing date applicable thereto, and each such Lender shall pay Agent such Lender’s Commitment Percentage of such requested Loan, in same day funds, by wire transfer to Agent’s account, as set forth on Agent’s signature page hereto, no later than 1:00 p.m. (New York time) on such scheduled Borrowing date.  Nothing in this Section 1.11(a) or elsewhere in this Agreement or the other Loan Documents, including, without limitation, the remaining provisions of Section 1.11, shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that Agent, any Lender or the Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

(b)           At least once each calendar week or more frequently at Agent’s election (each, a “Settlement Date”), Agent shall advise each Lender by telephone or fax of the amount of such Lender’s Commitment Percentage of principal, interest and Fees paid for the benefit of Lenders with respect to each applicable Loan.  Agent shall pay to each Lender such Lender’s Commitment Percentage (except as otherwise provided in Section 1.1(c)(vi) and Section 1.11(e)) of principal, interest and fees paid by the Borrower since the previous Settlement Date for the benefit of such Lender on the Loans held by it.  Such payments shall be made by wire transfer to such Lender not later than 2:00 p.m. (New York time) on the next Business Day following each Settlement Date.

 

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(c)           Availability of Lender’s Commitment Percentage.  Agent may assume that each Lender will make its Commitment Percentage of each Revolving Loan available to Agent on each Borrowing date.  If such Commitment Percentage is not, in fact, paid to Agent by such Lender when due, Agent will be entitled to recover such amount on demand from such Lender without setoff, counterclaim or deduction of any kind.  If any Lender fails to pay the amount of its Commitment Percentage forthwith upon Agent’s demand, Agent shall promptly notify the Borrower and the Borrower shall promptly (and in any event within three Business Days of receipt of Agent’s notice) repay such amount to Agent.  Nothing in this Section 1.11(c) shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder.  Without limiting the provisions of Section 1.11(b), to the extent that Agent advances funds to the Borrower on behalf of any Lender and is not reimbursed therefor on the same Business Day as such advance is made, Agent shall be entitled to retain for its account all interest accrued on such advance from the date such advance was made until reimbursed by the applicable Lender.

 

(d)           Return of Payments.

 

(i)            If Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by Agent from the Borrower and such related payment is not received by Agent, then Agent will be entitled to recover such amount from such Lender on demand without setoff, counterclaim or deduction of any kind.

 

(ii)           If Agent determines at any time that any amount received by Agent under this Agreement or any other Loan Document must be returned to any Credit Party or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or any other Loan Document, Agent will not be required to distribute any portion thereof to any Lender.  In addition, each Lender will repay to Agent on demand any portion of such amount that Agent has distributed to such Lender, together with interest at such rate, if any, as Agent is required to pay to the Borrower or such other Person, without setoff, counterclaim or deduction of any kind, and Agent will be entitled to set-off against future distributions to such Lender any such amounts (with interest) that are not repaid on demand.

 

(e)           Non-Funding Lenders; Procedures.

 

(i)            Responsibility.  The failure of any Non-Funding Lender to make any Revolving Loan, Letter of Credit Obligation or any payment required by it, or to make any payment required by it under any Loan Document, or to fund any purchase of any participation to be made or funded by it (including, without limitation, with respect to any Swing Loan) on the date specified therefor shall not relieve any other Lender (each such other Lender, an “Other Lender”) of its obligations to make such loan, fund the purchase of any such participation, or make any other such payment required on such date, and neither Agent nor, other than as expressly set forth herein, any other Lender shall be responsible for the failure of any Non-Funding Lender to make a loan, fund the purchase of a participation or make any other payment required under any Loan Document.

 

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(ii)           Reallocation.  If any Lender is a Non-Funding Lender, all or a portion of such Non-Funding Lender’s Letter of Credit Obligations (unless such Lender is the L/C Issuer that Issued such Letter of Credit) and reimbursement obligations with respect to Swing Loans shall, at Agent’s election at any time or upon any L/C Issuer’s or Swingline Lender’s, as applicable, written request delivered to Agent (whether before or after the occurrence of any Default or Event of Default), be reallocated to and assumed by the Lenders that are not Non-Funding Lenders or Impacted Lenders pro rata in accordance with their Commitment Percentages of the Aggregate Revolving Loan Commitment (calculated as if the Non-Funding Lender’s Commitment Percentage was reduced to zero and each other Lender’s Commitment Percentage had been increased proportionately), provided that no Lender shall be reallocated any such amounts or be required to fund any amounts that would cause the sum of its outstanding Revolving Loans, outstanding Letter of Credit Obligations, amounts of its participations in Swing Loans and its pro rata share of unparticipated amounts in Swing Loans to exceed its Revolving Loan Commitment.

 

(iii)          Voting Rights.  Notwithstanding anything set forth herein to the contrary, including Section 9.1, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a “Lender” (or be, or have its Loans and Commitments, included in the determination of “Required Lenders” or “Lenders directly affected” pursuant to Section 9.1) for any voting or consent rights under or with respect to any Loan Document, provided that (A)  the Commitment of a Non-Funding Lender may not be increased, (B) the principal of a Non-Funding Lender’s Loans may not be reduced or forgiven, and (C) the interest rate applicable to Obligations owing to a Non-Funding Lender may not be reduced in such a manner that by its terms affects such Non-Funding Lender more adversely than other Lenders, in each case without the consent of such Non-Funding Lender.  Moreover, for the purposes of determining Required Lenders, the Loans, Letter of Credit Obligations, and Commitments held by Non-Funding Lenders shall be excluded from the total Loans and Commitments outstanding.

 

(iv)          Borrower Payments to a Non-Funding Lender.  Agent shall be authorized to use all payments received by Agent for the benefit of any Non-Funding Lender pursuant to this Agreement to pay in full the Aggregate Excess Funding Amount to the appropriate Secured Parties.  Following such payment in full of the Aggregate Excess Funding Amount, Agent shall be entitled to hold such funds as cash collateral in a non-interest bearing account up to an amount equal to such Non-Funding Lender’s unfunded Revolving Loan Commitment and to use such amount to pay such Non-Funding Lender’s funding obligations hereunder until the Obligations are paid in full in cash, all Letter of Credit Obligations have been discharged or cash collateralized and all Commitments have been terminated.  Upon any such unfunded obligations owing by a Non-Funding Lender becoming due and payable, Agent shall be authorized to use such cash collateral to make such payment on behalf of such Non-Funding Lender.  With respect to such Non-Funding Lender’s failure to fund Revolving Loans or purchase participations in Letters of Credit or Letter of Credit Obligations, any amounts applied by Agent to satisfy such funding shortfalls shall be deemed to constitute a Revolving Loan or amount of the participation required to be funded and, if necessary to effectuate the foregoing, the other Lenders shall be deemed to have sold, and such Non-Funding Lender shall be deemed to have purchased, Revolving Loans or Letter of Credit participation interests from the other Lenders until such time as the aggregate amount of the Revolving Loans and participations in 

 

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Letters of Credit and Letter of Credit Obligations are held by the Lenders in accordance with their Commitment Percentages of the Aggregate Revolving Loan Commitment.  Any amounts owing by a Non-Funding Lender to Agent which are not paid when due shall accrue interest at the interest rate applicable during such period to Revolving Loans that are Base Rate Loans.  In the event that Agent is holding cash collateral of a Non-Funding Lender that cures pursuant to Section 1.11(e)(v) or ceases to be a Non-Funding Lender pursuant to the definition of Non-Funding Lender, Agent shall return the unused portion of such cash collateral to such Lender. The “Aggregate Excess Funding Amount” of a Non-Funding Lender shall be the aggregate amount of (A) all unpaid obligations owing by such Lender to Agent, L/C Issuers, Swingline Lender, and other Lenders under the Loan Documents, including such Lender’s pro rata share of all Revolving Loans, Letter of Credit Obligations and Swing Loans, plus, without duplication, (B) all amounts of such Non-Funding Lender’s Letter of Credit Obligations and reimbursement obligations with respect to Swing Loans reallocated to other Lenders pursuant to Section 1.11(e)(ii)

 

(v)           Cure.  A Lender may cure its status as a Non-Funding Lender under clause (a) of the definition of Non-Funding Lender if such Lender (A) fully pays to Agent, on behalf of the applicable Secured Parties, the Aggregate Excess Funding Amount, plus all interest due thereon and (B) timely funds the next Revolving Loan required to be funded by such Lender or makes the next reimbursement required to be made by such Lender.  Any such cure shall not relieve any Lender from liability for breaching its contractual obligations hereunder.

 

(vi)          Fees.  A Lender that is a Non-Funding Lender pursuant to clause (a) of the definition of Non-Funding Lender shall not earn and shall not be entitled to receive, and the Borrower shall not be required to pay, such Lender’s portion of the Unused Commitment Fee during the time such Lender is a Non-Funding Lender pursuant to such clause (a).  In the event that any reallocation of Letter of Credit Obligations occurs pursuant to Section 1.11(e)(ii), during the period of time that such reallocation remains in effect, the Letter of Credit Fee payable with respect to such reallocated portion shall be payable to (A) all Lenders based on their pro rata share of such reallocation or (B) to the L/C Issuer for any remaining portion not reallocated to any other Lenders.

 

(f)            Procedures.  Agent is hereby authorized by each Credit Party and each other Secured Party to establish procedures (and to amend such procedures from time to time) to facilitate administration and servicing of the Loans and other matters incidental thereto.  Without limiting the generality of the foregoing, Agent is hereby authorized to establish procedures to make available or deliver, or to accept, notices, documents and similar items on, by posting to or submitting and/or completion on, E-Systems.

 

1.12        [Reserved]

 

1.13        Eligible Accounts.

 

All of the Accounts owned by each Credit Party and properly reflected as “Eligible Accounts” in the most recent Borrowing Base Certificate delivered by the Borrower to Agent shall be “Eligible Accounts” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies.  Agent shall have the right, in determining the 

 

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Borrowing Base, to establish, modify or eliminate Reserves against Eligible Accounts from time to time in its Permitted Discretion.  In addition, Agent reserves the right, at any time and from time to time after the Closing Date, to adjust any of the applicable criteria and to establish new criteria and to adjust advance rates with respect to Eligible Accounts, in its Permitted Discretion, subject to the approval of Required Lenders in the case of adjustments or new criteria or changes in advance rates which have the effect of making more credit available.  Agent, in its Permitted Discretion, may further adjust the Borrowing Base by applying percentages (known as “liquidity factors”) to Eligible Accounts by payor class based upon any Borrowing Base Parties’ actual recent collection history for each such payor class (e.g., Medicare, Medicaid, commercial insurance, etc.) in a manner consistent with Agent’s underwriting practices and procedures.  Eligible Accounts shall not include the following Accounts of a Credit Party:

 

(a)           Past Due Accounts. Accounts that are not paid within the earlier of sixty (60) days following its due date or ninety (90) days following its original invoice date;

 

(b)           Cross Aged Accounts. Accounts that are the obligations of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under Section 1.13;

 

(c)           Foreign Accounts. Accounts that are the obligations of an Account Debtor located in a foreign country other than Canada;

 

(d)           Government Accounts. Accounts that are the obligation of an Account Debtor that is the United States government or a political subdivision thereof, or any state, county or municipality or department, agency or instrumentality thereof (other than any Federal/State Healthcare Program Account Debtor to include, but not limited to, each of CMS, Medicare, Medicaid and TRICARE) unless Agent, in its sole discretion, has agreed to the contrary in writing, or the applicable Credit Party has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, or any applicable state, county or municipal law restricting the assignment thereof with respect to such obligation;

 

(e)           Contra Accounts. Accounts to the extent the Borrower or any Subsidiary thereof is liable for goods sold or services rendered by the applicable Account Debtor to the Borrower or any such Subsidiary but only to the extent of the potential offset;

 

(f)            Chargebacks/Partial Payments/Disputed. Any Account to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account;

 

(g)           Inter-Company/Affiliate Accounts. Accounts that arise from a sale to any Affiliate of any Credit Party;

 

(h)           Concentration Risk. Accounts (other than Accounts of any Federal/State Healthcare Program Account Debtor) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed twenty percent (20%) of all Eligible Accounts (including Accounts of any Federal/State Healthcare Program Account Debtor); provided, however, that only the portion of such Account which exceeds such twenty percent limitation shall be excluded hereunder;

 

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(i)            Credit Risk. Accounts that are otherwise determined to be unacceptable by Agent in its Permitted Discretion, upon the delivery of prior or contemporaneous notice (oral or written) of such determination to the Borrower;

 

(j)            Pre-Billing. Accounts with respect to which an invoice, reasonably acceptable to Agent in form and substance, has not been sent to the applicable Account Debtor, including adjudicated prescriptions that have not been filled;

 

(k)           Defaulted Accounts; Bankruptcy. Accounts where:

 

(i)            the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or

 

(ii)           a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;

 

(l)            Employee Accounts.  Accounts that arise from a sale to any director, officer, other employee, or to any entity that has any common officer or director with any Credit Party.

 

(m)          Private Pay Accounts.  Accounts which are payable solely by an individual beneficiary, recipient or subscriber individually and not directly to a Credit Party by a Federal/State Healthcare Program Account Debtor or commercial medical insurance carrier acceptable to Agent in its good faith credit judgment;

 

(n)           Progress Billing. Accounts (i) as to which a Credit Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process, or (ii) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to a Credit Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;

 

(o)           Bill and Hold. Accounts that arise with respect to goods that are delivered on a bill-and-hold basis;

 

(p)           C.O.D.. Accounts that arise with respect to goods that are delivered on a cash-on-delivery basis;

 

(q)           Credit Limit. Accounts to the extent such Account exceeds any credit limit established by Agent, in its Permitted Discretion but only to the extent of any amounts greater than 60 days past invoice date, following prior notice of such limit by Agent to the Borrower;

 

(r)            Non-Acceptable Alternative Currency. Accounts that are payable in any currency other than United States Dollars;

 

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(s)            Other Liens Against Receivables. Accounts that (i) are not owned by a Credit Party or (ii) are subject to any right, claim, Lien or other interest of any other Person, other than Liens in favor of Agent securing the Obligations;

 

(t)            Conditional Sale. Accounts that arise with respect to goods that are placed on consignment, guarantied sale or other terms by reason of which the payment by the Account Debtor is conditional;

 

(u)           Judgments, Notes or Chattel Paper. Accounts that are evidenced by a judgment, Instrument or Chattel Paper;

 

(v)           Not Bona Fide. Accounts that are not true and correct statements of bona fide indebtedness incurred in the amount of such Account for merchandise sold to or services rendered as a pharmaceutical distributor and accepted by the applicable Account Debtor;

 

(w)          Ordinary Course; Sales of Equipment or Bulk Sales.  Accounts that do not arise from the sale of goods or the performance of services by a Credit Party in the Ordinary Course of Business, including, without limitation, sales of Equipment, bulk sales and Accounts that arise from personal injury claims or from services performed or undertaken in violation of any Requirement of Law; or

 

(x)           Not Perfected. Accounts as to which Agent’s Lien thereon, on behalf of itself and the other Secured Parties, is not a first priority perfected Lien.

 

1.14        Eligible Inventory.

 

All of the Inventory owned by each Credit Party and properly reflected as “Eligible Inventory” in the most recent Borrowing Base Certificate delivered by the Borrower to Agent shall be “Eligible Inventory” for purposes of this Agreement, except any Inventory to which any of the exclusionary criteria set forth below or in the component definitions herein applies.  Agent shall have the right, in determining the Borrowing Base, to establish, modify, or eliminate Reserves against Eligible Inventory from time to time in its Permitted Discretion.  In addition, Agent reserves the right, at any time and from time to time after the Closing Date, to adjust any of the applicable criteria, to establish new criteria and to adjust advance rates with respect to Eligible Inventory in its Permitted Discretion, subject to the approval of Required Lenders in the case of adjustments, new criteria or changes in advance rates which have the effect of making more credit available.  Eligible Inventory shall not include the following Inventory of a Credit Party:

 

(a)           Excess/Obsolete. Inventory that is excess, obsolete, unsaleable, shopworn, or seconds;

 

(b)           Damaged. Inventory that is damaged or unfit for sale or with an expiration date within six (6) months;

 

(c)           Locations < $100,000. Inventory that is located at any site if the aggregate book value of Inventory at any such location is less than $100,000;

 

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(d)           Consignment. Inventory that is placed on consignment;

 

(e)           Off-Site. Inventory that (i) is not located on premises owned, leased or rented by a Credit Party and set forth in Schedule 3.21 or (ii) is stored at a leased location, unless Agent has given its prior consent thereto and unless (x) a reasonably satisfactory landlord waiver has been delivered to Agent, or (y) Reserves satisfactory to Agent have been established with respect thereto, (iii) is stored with a bailee or warehouseman unless (x) a reasonably satisfactory, acknowledged bailee letter has been received by Agent with respect thereto and (y) Reserves satisfactory to Agent have been established with respect thereto, or (iv) is located at an owned location subject to a mortgage in favor of a lender other than Agent, unless a reasonably satisfactory mortgagee waiver has been delivered to Agent;

 

(f)            In-Transit. Inventory that is in transit;

 

(g)           Customized. Inventory subject to any licensing, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party for the sale or disposition of that Inventory (which consent has not been obtained) or the payment of any monies to any third party upon such sale or other disposition (to the extent of such monies);

 

(h)           Packing/Shipping Materials. Inventory that consists of packing or shipping materials, or manufacturing supplies;

 

(i)            Tooling. Inventory that consists of tooling or replacement parts;

 

(j)            Display. Inventory that consists of display items;

 

(k)           Returns. Inventory that consists of goods which have been returned by the buyer;

 

(l)            Freight. Inventory that consists of any costs associated with “freight in” charges;

 

(m)          Hazardous Materials. Inventory that consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available;

 

(n)           Un-insured. Inventory that is not covered by casualty insurance reasonably acceptable to Agent;

 

(o)           Not Owned/Other Liens. Inventory that is not owned by a Credit Party or is subject to Liens other than Permitted Liens described in Sections 5.1(b), (c), (d) and (f) or rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure a Credit Party’s performance with respect to that Inventory, and including any Inventory constituting AmerisourceBergen Inventory Collateral or and any other Inventory subject to vendor financing);

 

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(p)           Unperfected.  Inventory that is not subject to a first priority Lien in favor of Agent on behalf of itself and the Secured Parties, except for Liens described in Section 5.1(d) (subject to Reserves);

 

(q)           Controlled Substances.  Inventory that constitutes a “controlled substance” under the Controlled Substances Act (21 U.S.C. 801 et seq.) or under any state controlled substances laws;

 

(r)            Negotiable Bill of Sale.  Inventory that is covered by a negotiable document of title, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except Liens in favor of Agent, on behalf of itself and the Secured Parties; or

 

(s)            Not Ordinary Course. Inventory (other than raw materials) that is not of a type held for sale in the Ordinary Course of Business of a Credit Party.

 

1.15        Replacement of Commitments.  On the Closing Date, each Existing Lender’s Commitment under the Existing Credit Agreement shall automatically be replaced and superseded by the Commitments set forth on Schedule 1.1(b), and Agent shall cancel each Revolving Note issued to such Existing Lender with respect to such Existing Lender’s Revolving Credit Commitment (as defined in the Existing Credit Agreement), upon Agent’s receipt or delivery, as the case may be, of the applicable amount set forth in clauses (a) or (b) below in immediately available funds received no later than 1:00 p.m. (New York time) on the Closing Date:

 

(a)           the amount, if any, by which (i) such Lender’s Commitment Percentage of Advances to be made on the Closing Date, exceeds (ii) its actual outstanding Loans under the Existing Credit Agreement as of the Closing Date; or

 

(b)           the amount, if any, by which (i) such Lender’s actual outstanding Loans under the Existing Credit Agreement as of the Closing Date, exceeds (ii) such Lender’s Commitment Percentage of the Loans to be made on the Closing Date.

 

1.16        Restatement of Obligations.  The Borrower, each other Credit Party, Agent and each Lender hereby acknowledge and agree that upon satisfaction or waiver in writing of all conditions precedent set forth in Section 2.1:

 

(a)           this Agreement shall amend, restate and supersede in its entirety the Existing Credit Agreement;

 

(b)           those other Loan Documents that amend and restate any of the Existing Loan Documents shall amend, restate and supersede such other Existing Loan Documents;

 

(c)           the Loan Documents (and the obligations and commitments thereunder) do not constitute an accord and satisfaction or a novation of the obligations and commitments of Credit Parties under the Existing Loan Agreement and the other Existing Loan Documents;

 

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(d)           all obligations and commitments outstanding under the Existing Loan Documents are amended, restated and superseded by the Loan Documents and will be governed by the terms of this Agreement and the other Loan Documents;

 

(e)           the Collateral will secure the Obligations under this Agreement and the other Loan Documents; and

 

(f)            amounts in respect of interest, fees, and other amounts payable to or for the account of Agent or any Lender shall be calculated in accordance with the provisions of (i) the Existing Credit Agreement with respect to any period (or portion thereof) ending prior to the Closing Date, and (ii) this Agreement with respect to any period (or portion thereof) commencing on or after the Closing Date.

 

Notwithstanding the foregoing or anything to the contrary herein, nothing herein shall be deemed to limit or terminate any of Agent’s or Lenders’ rights under the Existing Credit Agreement that expressly survive the termination of the Commitments and the payment in full of the Obligations.

 

ARTICLE II.
 CONDITIONS PRECEDENT

 

2.1          Conditions of Initial Loans.

 

The obligation of each Lender to make its initial Loans and of each L/C Issuer to Issue, or cause to be Issued, the initial Letters of Credit hereunder is subject to satisfaction of the following conditions in a manner satisfactory to Agent:

 

(a)           Loan Documents.  Agent shall have received on or before the Closing Date all of the agreements, documents, instruments and other items set forth on the closing checklist attached hereto as Exhibit 2.1 (except those items that are expressly permitted to be delivered after the Closing Date pursuant to Section 4.15), each in form and substance reasonably satisfactory to Agent;

 

(b)           Availability.  After giving effect to the Revolving Loan Commitment as provided herein, Availability is not less than $60,000,000 on the Closing Date;

 

(c)           Projections.  Agent shall have received (a) projections of the Credit Parties (and their Subsidiaries’) consolidated and consolidating financial performance for the current Fiscal Year and the next succeeding two (2) Fiscal Years on a year by year basis, and for the current Fiscal Year on a month by month basis (without regard to MedPro) and (b) projections of MedPro’s financial performance for the current Fiscal Year and the next Fiscal Year in form and substance satisfactory to the Agent;

 

(d)           MedPro Acquisition Documents.  The terms of the MedPro Acquisition Agreement, including all schedules and exhibits thereto, and all other MedPro Acquisition Documents, shall be reasonably satisfactory to the Agent and Lenders;

 

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(e)           Approvals.  Agent shall have received (i) satisfactory evidence that the Credit Parties have obtained all required consents and approvals of all Persons including all requisite Governmental Authorities, to the execution, delivery and performance of this Agreement and the other Loan Documents and the consummation of the Related Transactions or (ii) an officer’s certificate in form and substance reasonably satisfactory to Agent affirming that no such consents or approvals are required; and

 

(f)            Payment of Fees.  The Borrower shall have paid the fees required to be paid on the Closing Date in the respective amounts specified in Section 1.9 (including the fees specified in the Fee Letter), and shall have reimbursed Agent for all fees, costs and expenses of closing presented as of the Closing Date.

 

2.2          Conditions to All Borrowings.

 

Except as otherwise expressly provided herein, no Lender or L/C Issuer shall be obligated to fund any Loan or incur any Letter of Credit Obligation, if, as of the date thereof:

 

(a)           any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect in any material respect (without duplication of any materiality qualifier contained therein) as of such date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were untrue or incorrect in any material respect (without duplication of any materiality qualifier contained therein) as of such earlier date), and Agent or Required Lenders have determined not to make such Loan or incur such Letter of Credit Obligation as a result of the fact that such warranty or representation is untrue or incorrect;

 

(b)           (i)  any Default or Event of Default has occurred and is continuing or would reasonably be expected to result after giving effect to any Loan (or the incurrence of any Letter of Credit Obligation), and Agent or Required Lenders shall have determined not to make any Loan or incur any Letter of Credit Obligation as a result of that Default or Event of Default or (ii) any Event of Default has occurred and is continuing under Section 7.1(a) or under Section 7.1(c) as a result of a failure to comply with the covenant in Section 6.1; or

 

(c)           after giving effect to any Loan (or the incurrence of any Letter of Credit Obligations), the aggregate outstanding amount of the Revolving Loans would exceed the Maximum Revolving Loan Balance.

 

The request by the Borrower and acceptance by the Borrower of the proceeds of any Loan or the incurrence of any Letter of Credit Obligations shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by the Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by each Credit Party of the granting and continuance of Agent’s Liens, on behalf of itself and the Secured Parties, pursuant to the Collateral Documents.

 

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ARTICLE III.
 REPRESENTATIONS AND WARRANTIES

 

The Credit Parties, jointly and severally, represent and warrant to Agent and each Lender that the following are, and after giving effect to the Related Transactions will be, true, correct and complete (it being understood that in the case of MedPro, references to the Closing Date shall be deemed to be references to the MedPro Acquisition Closing Date after giving effect to the MedPro Acquisition):

 

3.1          Corporate Existence and Power.

 

Each Credit Party and each of their respective Subsidiaries:

 

(a)           is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable;

 

(b)           has the power and authority and all governmental licenses, authorizations, Permits, consents and approvals to own its assets, carry on its business and execute, deliver, and perform its obligations under, the Loan Documents and the Related Agreements to which it is a party;

 

(c)           is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification or license; and

 

(d)           is in compliance with all Requirements of Law;

 

except, in each case referred to in clause (c) or clause (d), to the extent that the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

3.2          Corporate Authorization; No Contravention.

 

The execution, delivery and performance by each of the Credit Parties of this Agreement, and by each Credit Party and each of their respective Subsidiaries of any other Loan Document and Related Agreement to which such Person is party, have been duly authorized by all necessary action, and do not and will not:

 

(i)            contravene the terms of any of that Person’s Organization Documents;

 

(ii)           conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject;

 

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(iii)          violate any Requirement of Law in any material respect; or

 

(iv)          affect any Credit Party’s or any Subsidiary of a Credit Party’s right to receive, or reduce the amount of, payments and reimbursements from Third Party Payors, or materially adversely affect any Health Care Permit.

 

3.3          Governmental Authorization.

 

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Credit Party or any Subsidiary of any Credit Party of this Agreement, any other Loan Document or Related Agreement except (a) for recordings and filings in connection with the Liens granted to Agent under the Collateral Documents, (b) those obtained or made on or prior to the Closing Date and (c) in the case of any Related Agreement, those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

3.4          Binding Effect.

 

This Agreement and each other Loan Document and Related Agreement to which any Credit Party or any Subsidiary of any Credit Party is a party constitute the legal, valid and binding obligations of each such Person which is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

3.5          Litigation.

 

Except as specifically disclosed in Schedule 3.5, there are no actions, suits, proceedings, claims or disputes pending, or to the best knowledge of each Credit Party, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against any Credit Party, any Subsidiary of any Credit Party or any of their respective Properties which:

 

(a)           purport to affect or pertain to this Agreement, any other Loan Document or Related Agreement, or any of the transactions contemplated hereby or thereby; or

 

(b)           would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, in excess of $500,000; or

 

(c)           seek an injunction or other equitable relief which would reasonably be expected to have a Material Adverse Effect.

 

No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.  As of the Closing Date, no Credit Party or any Subsidiary of any Credit Party is the subject of an audit or, to each Credit Party’s knowledge, any review or 

 

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investigation by any Governmental Authority (excluding the IRS and other taxing authorities) concerning the violation or possible violation of any Requirement of Law.

 

3.6          No Default.

 

No Default or Event of Default exists or would result from the incurring of any Obligations by any Credit Party or the grant or perfection of Agent’s Liens on the Collateral or the consummation of the Related Transactions.  No Credit Party and no Subsidiary of any Credit Party is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, would reasonably be expected to have a Material Adverse Effect.

 

3.7          ERISA Compliance.

 

Schedule 3.7 sets forth, as of the Closing Date, a complete and correct list of, and that separately identifies, (a) all Title IV Plans, (b) all Multiemployer Plans and (c) all material Benefit Plans.  Each Benefit Plan, and each trust thereunder, intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law so qualifies.  Except for those that would not reasonably be expected to result in Liabilities in excess of $500,000 in the aggregate, (x) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (y) there are no existing or pending (or to the knowledge of any Credit Party, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any Benefit Plan to which any Credit Party incurs or otherwise has or could have an obligation or any Liability and (z) no ERISA Event is reasonably expected to occur.  On the Closing Date, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding.

 

3.8          Use of Proceeds; Margin Regulations.

 

No Credit Party and no Subsidiary of any Credit Party is engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock.

 

3.9          Ownership of Property; Liens.

 

As of the Closing Date, the Real Estate listed in Schedule 3.9 constitutes all of the Real Estate of each Credit Party and each of their respective Subsidiaries.  Each of the Credit Parties and each of their respective Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all Real Estate, and good and valid title to all owned personal property and valid leasehold interests in all leased personal property, in each instance, necessary or used in the ordinary conduct of their respective businesses.  As of the Closing Date, none of the Real Estate of any Credit Party or any Subsidiary of any Credit Party is subject to any Liens other than Permitted Liens.  As of the Closing Date, Schedule 3.9 also describes any purchase options, rights of first refusal or other similar contractual rights pertaining to any Real Estate.  As of the Closing Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect.

 

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3.10        Taxes.

 

All federal, state, local and foreign income and franchise and other material tax returns, reports and statements (collectively, the “Tax Returns”) required to be filed by any Tax Affiliate have been filed with the appropriate Governmental Authorities, all such Tax Returns are true and correct in all material respects, and all taxes, assessments and other governmental charges and impositions reflected therein or otherwise due and payable have been paid prior to the date on which any Liability may be added thereto for non-payment thereof except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP.  As of the Closing Date, no Tax Return is under audit or examination by any Governmental Authority, and no notice of any audit or examination or any assertion of any claim for Taxes has been given or made by any Governmental Authority.  Proper and accurate amounts have been withheld by each Tax Affiliate from their respective employees for all periods in full and complete compliance with the tax, social security and unemployment withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental Authorities.  No Tax Affiliate has participated in a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b) or has been a member of an affiliated, combined or unitary group other than the group of which a Tax Affiliate is the common parent.

 

3.11        Financial Condition.

 

(a)           Each of (i) the audited consolidated balance sheet of the Borrower and its Subsidiaries dated December 31, 2013, and the related audited consolidated statements of income or operations, shareholders’ equity and cash flows for the Fiscal Year ended on that date and (ii) the unaudited interim consolidated balance sheet of the Borrower and its Subsidiaries dated March 31, 2014 and the related unaudited consolidated statements of income, shareholders’ equity and cash flows for the three (3) fiscal months then ended:

 

(x)           were prepared in accordance with GAAP consistently applied throughout the respective periods covered thereby, except as otherwise expressly noted therein, subject to, in the case of the unaudited interim financial statements, normal year-end adjustments and the lack of footnote disclosures; and

 

(y)           present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of the dates thereof and results of operations for the periods covered thereby.

 

(b)           [Reserved]

 

(c)           Since December 31, 2013, there has been no Material Adverse Effect.

 

(d)           The Credit Parties and their Subsidiaries have no Indebtedness other than Indebtedness permitted pursuant to Section 5.5 and have no Contingent Obligations other than Contingent Obligations permitted pursuant to Section 5.9.

 

(e)           All financial performance projections delivered to Agent, including the financial performance projections delivered on or prior to the Closing Date represent the 

 

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Borrower’s best good faith estimate of future financial performance and are based on assumptions believed by the Borrower to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by Agent and Lenders that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by such projections may differ from the projected results.

 

3.12        Environmental Matters.

 

(a)           Except as set forth in Schedule 3.12(a), and except where any failures to comply would not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries, (i) the operations of each Credit Party and each Subsidiary of each Credit Party are and have been in compliance with all applicable Environmental Laws, including obtaining, maintaining and complying with all Permits required by any applicable Environmental Law, (ii) no Credit Party and no Subsidiary of any Credit Party is party to, and no Credit Party and no Subsidiary of any Credit Party and no Real Estate currently (or to the knowledge of any Credit Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Person is subject to or the subject of, any Contractual Obligation or any pending (or, to the knowledge of any Credit Party, threatened) order, action, investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of potential liability or similar notice relating in any manner to any Environmental Laws, (iii) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities has attached to any Property of any Credit Party or any Subsidiary of any Credit Party and, to the knowledge of any Credit Party, no facts, circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such Property, (iv) no Credit Party and no Subsidiary of any Credit Party has caused or suffered to occur a Release of Hazardous Materials at, to or from any Real Estate, (v) all Real Estate currently (or to the knowledge of any Credit Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Credit Party and each Subsidiary of each Credit Party is free of contamination by any Hazardous Materials, and (vi) no Credit Party and no Subsidiary of any Credit Party (x) is or has been engaged in, or has permitted any current or former tenant to engage in, operations in violation of any Environmental Law or (y) knows of any facts, circumstances or conditions reasonably constituting notice of a violation of any Environmental Law, including receipt of any information request or notice of potential responsibility under the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et. seq.) or similar Environmental Laws.  Each Credit Party has made available to Agent copies of all existing environmental reports, reviews and audits and all documents pertaining to actual or potential Environmental Liabilities, in each case to the extent such reports, reviews, audits and documents are in their possession, custody, control or otherwise available to the Credit Parties.

 

(b)           (i) Borrower and each applicable Credit Party is and has been in compliance in all material respects with the Headquarters Due Care Plan and Section 20107a of Part 201, Environmental Remediation, of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended, and any associated regulations and guidance, and (ii) Borrower and each applicable Credit Party has taken all steps and actions reasonably necessary to obtain and maintain the liability protection afforded or provided to prospective and new operators of contaminated property under Part 201 of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended, and any associated regulations and guidance.

 

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3.13        Regulated Entities.

 

None of any Credit Party, any Person controlling any Credit Party, or any Subsidiary of any Credit Party, is (a) an “investment company” within the meaning of the Investment Company Act of 1940 or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Indebtedness, pledge its assets or perform its Obligations under the Loan Documents.

 

3.14        Solvency.

 

Both before and after giving effect to (a) the Loans made and Letters of Credit Issued on or prior to the date this representation and warranty is made or remade, (b) the disbursement of the proceeds of such Loans to or as directed by the Borrower, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with the foregoing, both the Credit Parties taken as a whole and the Borrower individually are Solvent.

 

3.15        Labor Relations.

 

There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Credit Party, threatened) against or involving any Credit Party or any Subsidiary of any Credit Party, except for those that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.  Except as set forth in Schedule 3.15, as of the Closing Date, (a) there is no collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee of any Credit Party or any Subsidiary of any Credit Party, (b) no petition for certification or election of any such representative is existing or pending with respect to any employee of any Credit Party or any Subsidiary of any Credit Party and (c) no such representative has sought certification or recognition with respect to any employee of any Credit Party or any Subsidiary of any Credit Party.

 

3.16        Intellectual Property.

 

Schedule 3.16 sets forth a true and complete list of the following Intellectual Property each Credit Party owns, licenses or otherwise has the right to use:  (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) material Intellectual Property and material Software, separately identifying that owned and licensed to such Credit Party and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by such Credit Party with respect thereto.  Each Credit Party and each Subsidiary of each Credit Party owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.  To the knowledge of each Credit Party, (a) the conduct and operations 

 

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of the businesses of each Credit Party and each Subsidiary of each Credit Party does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of any Credit Party or any Subsidiary of any Credit Party in, or relating to, any Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the transactions contemplated therein and would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.17        Brokers’ Fees; Transaction Fees.

 

Except for fees payable to Agent and Lenders, none of the Credit Parties or any of their respective Subsidiaries has any obligation to any Person in respect of any finder’s, broker’s or investment banker’s fee in connection with the transactions contemplated hereby.

 

3.18        Insurance.

 

Schedule 3.18 lists all insurance policies of any nature maintained, as of the Closing Date, for current occurrences by each Credit Party, including issuers, coverages and deductibles.  Each of the Credit Parties and each of their respective Subsidiaries and their respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses of the same size and character as the business of the Credit Parties and, to the extent relevant, owning similar Properties in localities where such Person operates.

 

3.19        Ventures, Subsidiaries and Affiliates; Outstanding Stock.

 

Except as set forth in Schedule 3.19, as of the Closing Date, no Credit Party and no Subsidiary of any Credit Party (a) has any Subsidiaries, or (b) is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person.  All issued and outstanding Stock and Stock Equivalents of each of the Credit Parties and each of their respective Subsidiaries are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than, with respect to the Stock and Stock Equivalents of the Borrower and Subsidiaries of the Borrower, those in favor of Agent, for the benefit of the Secured Parties.  All such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities.  All of the issued and outstanding Stock of each Credit Party and each Subsidiary of each Credit Party is owned by each of the Persons and in the amounts set forth in Schedule 3.19, which the Credit Parties shall update upon notice to Agent promptly following the incorporation, organization or formation of any Subsidiary, promptly following the completion of any Permitted Acquisition and promptly following any Janus Series A Preferred Proceeds Distribution.  Except as set forth in Schedule 3.19, there are no pre-emptive or other outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem any of its Stock or Stock Equivalents or any Stock or Stock Equivalents of its Subsidiaries.  Set forth in Schedule 3.19 is a true and complete organizational chart of the Borrower and all of its Subsidiaries, which the Credit Parties shall update upon notice to Agent 

 

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promptly following the incorporation, organization or formation of any Subsidiary and promptly following the completion of any Permitted Acquisition.

 

3.20        Jurisdiction of Organization; Chief Executive Office.

 

Schedule 3.20 lists each Credit Party’s jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Credit Party’s chief executive office or sole place of business, in each case as of the date hereof, and such Schedule 3.20 also lists all jurisdictions of organization and legal names of such Credit Party for the five years preceding the Closing Date.

 

3.21        Locations of Inventory, Equipment and Books and Records.

 

Each Credit Party’s inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral are kept at the locations listed in Schedule 3.21 (which Schedule 3.21 shall be promptly updated by the Credit Parties upon notice to Agent as permanent Collateral locations change).

 

3.22        Deposit Accounts and Other Accounts.

 

Schedule 3.22 lists all banks and other financial institutions at which any Credit Party maintains deposit or other accounts as of the Closing Date, and such Schedule correctly identifies the name, address and any other relevant contact information reasonably requested by Agent with respect to each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

 

3.23        Government Contracts.

 

Except as set forth in Schedule 3.23, as of the Closing Date, no Credit Party is a party to any material contract or agreement with any Governmental Authority and no Credit Party’s Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local law.

 

3.24        Customer and Trade Relations.

 

As of the Closing Date, there exists no actual or, to the knowledge of any Credit Party, threatened termination or cancellation of, or any material adverse modification or change in (a) the business relationship of any Credit Party with any customer or group of customers whose purchases during the preceding 12 calendar months caused them to be ranked among the ten largest customers of such Credit Party or (b) the business relationship of any Credit Party with any supplier essential to its operations.

 

3.25        Bonding.

 

Except as set forth in Schedule 3.25, as of the Closing Date, no Credit Party is a party to or bound by any surety bond agreement, indemnification agreement therefor or bonding requirement with respect to products or services sold by it.

 

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3.26        Subordinated Indebtedness.

 

As of the Closing Date, the Borrower has delivered to Agent a complete and correct copy of the Subordinated Indebtedness Documents (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith). All Obligations, including the L/C Reimbursement Obligations, constitute Indebtedness entitled to the benefits of the subordination provisions contained in the Subordination Agreements.

 

3.27        Full Disclosure.

 

None of the representations or warranties made by any Credit Party or any of their Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of any Credit Party or any of their Subsidiaries in connection with the Loan Documents (including the offering and disclosure materials, if any, delivered by or on behalf of any Credit Party to Agent or the Lenders prior to the Closing Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.

 

3.28        Foreign Assets Control Regulations and Anti-Money Laundering.

 

Each Credit Party and each Subsidiary of each Credit Party is and will remain in compliance in all material respects with all U.S. economic sanctions laws, Executive Orders and implementing regulations as promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it.  No Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a U.S. Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under U.S. law.

 

3.29        Patriot Act.

 

The Credit Parties, each of their Subsidiaries and each of their Affiliates are in compliance with (a) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and (c) other federal or state laws relating to “know your customer” and anti-money laundering rules and regulations.  No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or 

 

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employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

 

3.30        Certain Other Representations and Warranties.

 

As of the Closing Date and any other date on which representations and warranties are otherwise remade or deemed remade thereunder, each of the representations and warranties contained in the Subordinated Indebtedness Documents made by each Credit Party is true and correct. Each of the Credit Parties agrees that, by this reference, such representations and warranties contained in the Subordinated Indebtedness Documents by a Credit Party, without limiting any of the representations and warranties otherwise contained herein or in any other Loan Document, hereby are incorporated herein, mutatis mutandis, for the benefit of the Secured Parties.

 

3.31        Regulatory Matters.

 

(a)           Schedule 3.31 sets forth, as of the Closing Date, a complete and correct list of all Registrations held by each Credit Party and its Subsidiaries.  Such listed Registrations are the only Registrations that are required for the Credit Parties and their Subsidiaries to conduct their respective businesses as presently conducted or as proposed to be conducted.  Each Credit Party and its Subsidiaries has, and it and its Products are in conformance with, all Registrations required to conduct its respective businesses as now or currently proposed to be conducted except where the failure to have such Registrations would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.  To the knowledge of each Credit Party and its Subsidiaries, neither the FDA nor other Governmental Authority is considering limiting, suspending, or revoking such Registrations or changing the marketing classification or labeling or other significant parameter affecting the Products of the Credit Parties or any of their respective Subsidiaries.  To the knowledge of each Credit Party and its Subsidiaries, there is no false or misleading information or significant omission in any product application or other submission to the FDA or other Governmental Authority administering Public Health Laws.  The Credit Parties and their respective Subsidiaries have fulfilled and performed their obligations under each Registration, and, to the knowledge of each Credit Party and its Subsidiaries, no event has occurred or condition or state of facts exists which would constitute a breach or default, or would cause revocation or termination of any such Registration.  To the knowledge of each Credit Party and its Subsidiaries, no event has occurred or condition or state of facts exists which would present potential product liability related, in whole or in part, to Regulatory Matters.  To the knowledge of each Credit Party and its Subsidiaries, any third party that is a manufacturer or contractor for the Credit Parties or any of their respective Subsidiaries is in compliance with all Registrations required by the FDA or comparable Governmental Authority and all Public Health Laws insofar as they reasonably pertain to the Products of the Credit Parties and their respective Subsidiaries.

 

(b)           All Products designed, developed, investigated, manufactured, prepared, assembled, packaged, tested, labeled, distributed, sold or marketed by or on behalf of the Credit Parties or their respective Subsidiaries that are subject to Public Health Laws have been and are being designed, developed, investigated, manufactured, prepared, assembled, packaged, tested, 

 

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labeled, distributed, sold and marketed in compliance with the Public Health Laws or any other applicable Requirement of Law, including, without limitation, clinical and non-clinical evaluation, product approval or clearance, premarketing notification, good manufacturing practices, labeling, advertising and promotion, record-keeping, establishment registration and device listing, reporting of recalls and adverse event reporting; provided, however, as to Products manufactured, packaged, labeled and tested by third parties as to which a Credit Party is solely dispensing, the above representations as to good manufacturing practices and reporting of recalls and adverse events are to the knowledge of each Credit Party and its Subsidiaries.

 

(c)           No Credit Party nor its Subsidiaries is subject to any obligation arising under an administrative or regulatory action, proceeding, investigation or inspection by or on behalf of a Governmental Authority, warning letter, notice of violation letter, consent decree, request for information or other notice, response or commitment made to or with a Governmental Authority with respect to Regulatory Matters, and, to the knowledge of each Credit Party and its Subsidiaries, no such obligation has been threatened.  There is no, and there is no act, omission, event, or circumstance of which any Credit Party or any of its Subsidiaries has knowledge that would reasonably be expected to give rise to or lead to, any civil, criminal or administrative action, suit, demand, claim, complaint, hearing, investigation, demand letter, warning letter, proceeding or request for information pending against any Credit Party or its Subsidiaries, and, to each Credit Party’s and its Subsidiary’s knowledge, no Credit Party nor its Subsidiaries has any liability (whether actual or contingent) for failure to comply with any Public Health Laws.  There has not been any violation of any Public Health Laws by any Credit Party or its Subsidiaries in its product development efforts, submissions, record keeping and reports to the FDA or any other Governmental Authority that could reasonably be expected to require or lead to investigation, corrective action or enforcement, regulatory or administrative action that would reasonably be expected, in the aggregate, have a Material Adverse Effect.  To the knowledge of each Credit Party and each of their respective Subsidiaries, there are no civil or criminal proceedings relating to any Credit Party or any of its Subsidiaries or any officer, director or employee of any Credit Party or Subsidiary of any Credit Party that involve a matter within or related to the FDA’s or any other Governmental Authority’s jurisdiction.

 

(d)           As of the Closing Date, no Credit Party nor its Subsidiaries is undergoing any inspection related to Regulatory Matters, or any other Governmental Authority investigation.

 

(e)           During the period of three calendar years immediately preceding the Closing Date, no Credit Party nor any Subsidiary of any Credit Party has knowledge that it has, nor has it received notice that it has, introduced into commercial distribution any Products manufactured by or on behalf of any Credit Party or any Subsidiary of a Credit Party or distributed any products on behalf of another manufacturer that were upon their shipment by any Credit Party or any of its Subsidiaries adulterated or misbranded in violation of 21 U.S.C. § 331.  No Credit Party nor any Subsidiary of any Credit Party has received any notice of communication from any Governmental Authority alleging material noncompliance with any Requirement of Law.  No Product has been seized, withdrawn, recalled, detained, or subject to a suspension (other than in the ordinary course of business) of research, manufacturing, distribution, or commercialization activity, and there are no facts or circumstances reasonably likely to cause (i) the seizure, denial, withdrawal, recall, detention, public health notification, safety alert or suspension of manufacturing or other activity relating to any Product; (ii) a change 

 

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in the labeling of any Product suggesting a compliance issue or risk; or (iii) a termination, seizure or suspension of manufacturing, researching, distributing or marketing of any Product.  No proceedings in the United States or any other jurisdiction seeking the withdrawal, recall, revocation, suspension, import detention, or seizure of any Product are pending or threatened against any Credit Party or any of its Subsidiaries.

 

(f)            No Credit Party nor any Subsidiary of any Credit Party nor any of their respective officers, directors, employees, agents, or contractors (i) have been excluded or debarred from any federal healthcare program (including without limitation Medicare or Medicaid) or any other federal program or (ii) have received notice from the FDA or any other Governmental Authority with respect to debarment or disqualification of any Person that would reasonably be expected to have, in the aggregate, a Material Adverse Effect.   No Credit Party nor any Subsidiary of any Credit Party nor any of their respective officers, directors, employees, agents or contractors have been convicted of any crime or engaged in any conduct for which (x) debarment is mandated or permitted by 21 U.S.C. § 335a or (y) such Person could be excluded from participating in the federal health care programs under Section 1128 of the Social Security Act or any similar law.  No officer and to the knowledge of each Credit Party and its Subsidiaries, no employee or agent of any Credit Party or its Subsidiaries, has (A) made any untrue statement of material fact or fraudulent statement to the FDA or any other Governmental Authority; (B) failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority; or (C) committed an act, made a statement, or failed to make a statement that would reasonably be expected to provide the basis for the FDA or any other Governmental Authority to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991).

 

(g)           No Credit Party nor any Subsidiary of any Credit Party has granted rights to design, develop, manufacture, produce, assemble, distribute, license, prepare, package, label, market or sell its Products to any other Person nor is any Credit Party or any of its Subsidiaries bound by any agreement that affects any Credit Party’s exclusive right to design, develop, manufacture, produce, assemble, distribute, license, prepare, package, label, market or sell its Products.

 

(h)           Except as set forth on Schedule 3.31: (i) each Credit Party and its Subsidiaries and, to their knowledge, their respective contract manufacturers are, and have been for the past three calendar years, in compliance with, and each Product in current commercial distribution is designed, manufactured, processed, prepared, assembled, packaged, labeled, stored, installed, serviced and held in compliance with, the current Good Manufacturing Practice regulations set forth in 21 C.F.R. Parts 210 and 211, as applicable, (ii) each Credit Party and its Subsidiaries is in compliance with the written procedures, record-keeping and reporting requirements required by the FDA or any comparable Governmental Authority pertaining to the reporting of adverse events and recalls involving the Products, (iii) all Products are and have been labeled, promoted, and advertised in accordance with their Registration and approved labeling or within the scope of an exemption from obtaining such Registration, and (iv) each Credit Party and its Subsidiaries’ establishments are registered with the FDA, as applicable, and each Product is listed with the FDA under the applicable FDA registration and adverse event reporting regulations for pharmaceuticals.

 

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3.32        Healthcare Matters.

 

(a)           Compliance with Health Care Laws.  Each Credit Party and each of their respective Subsidiaries is, and at all times during the three calendar years immediately preceding the Closing Date has been, in material compliance with all Health Care Laws and requirements of Third Party Payor Programs applicable to it, its assets, business or operations.  No circumstance exists or event has occurred which could reasonably be expected to result in a material violation of any Health Care Law or any requirement of any Third Party Payor Program.

 

(b)           Health Care Permits.  Each Credit Party and each of their respective Subsidiaries holds, and at all times during the three calendar years immediately preceding the Closing Date has held, all Health Care Permits necessary for it to own, lease, sublease or operate its assets or to conduct its business or operations as presently conducted (including without limitation, to provide specialized pharmaceutical medication management programs and to participate in and obtain reimbursement under all Third Party Payor Programs in which such Persons’ participate).  All such Health Care Permits are, and at all times during the three calendar years immediately preceding the Closing Date have been, in full force and effect and there is and has been no default under, violation of, or other noncompliance with the terms and conditions of any such Health Care Permit.  Except as set forth on Schedule 3.31 as to required consents or approvals of Governmental Authorities under certain Health Care Permits of MedPro in connection with the MedPro Acquisition (where the failure to obtain such consents or approvals could not reasonably be expected to have, in the aggregate, a Material Adverse Effect), to the knowledge of each Credit Party and its Subsidiaries, no condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, has resulted or would reasonably be expected to result in the suspension, revocation, termination, restriction, limitation, modification or non-renewal of any Health Care Permit.  No Governmental Authority has taken, or to the knowledge of any Credit Party intends to take, action to suspend, revoke, terminate, place on probation, restrict, limit, modify or not renew any Health Care Permit of any Credit Party or any Subsidiary of any Credit Party.   As of the Closing Date, Schedule 3.31 sets forth an accurate, complete and current list of all material Health Care Permits.

 

(c)           Third Party Payor Authorizations.   Each Credit Party and each of their respective Subsidiaries holds, and at all times during the three calendar years immediately preceding the Closing Date has held, in full force and effect, all Third Party Payor Authorizations necessary to participate in and be reimbursed by all Third Party Payor Programs in which any Credit Party or any Subsidiary of any Credit Party participates.  There is no investigation, audit, claim review, or other action pending, or to the knowledge of any Credit Party, threatened, which could result in a suspension, revocation, termination, restriction, limitation, modification or non-renewal of any Third Party Payor Authorization or result in any Credit Party’s or any of their Subsidiaries’ exclusion from any Third Party Payor Program.

 

(d)           Licensed Personnel.  The Licensed Personnel have complied and currently are in compliance with all applicable Health Care Laws, and hold and, at all times that such Persons have been Licensed Personnel of any Credit Party or any Subsidiary of any Credit Party, have held, all professional licenses and other Health Care Permits and all Third Party Payor Authorizations required in the performance of such Licensed Personnel’s duties for such Credit Party or such Subsidiary, and, each such Health Care Permit and Third Party Payor 

 

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Authorization is in full force and effect and, to the knowledge of each Credit Party, no suspension, revocation, termination, impairment, modification or non-renewal of any such Permit or Third Party Payor Authorization is pending or threatened.

 

(e)           Accreditation.  Each Credit Party and each of their respective Subsidiaries has obtained and maintains accreditation in good standing and without limitation or impairment by all applicable accrediting organizations, to the extent prudent and customary in the industry in which it is engaged or required by law (including any foreign law or equivalent regulation), except where the failure to have or maintain such accreditation in good standing or imposition of limitation or impairment would not reasonably be expected to have, in the aggregate, a Material Adverse Effect.

 

(f)            Proceedings; Audits.  There are no pending (or, to the knowledge of any Credit Party, threatened) Proceedings against or affecting any Credit Party or any Subsidiary of any Credit Party or any Licensed Personnel relating to any actual or alleged non-compliance with any Health Care Law or requirement of any Third Party Payor Program.  To the knowledge of each Credit Party and its Subsidiaries, there are no facts, circumstances or conditions that would reasonably be expected to form the basis for any such Proceeding against or affecting any Credit Party or any Subsidiary of any Credit Party or any Licensed Personnel. There currently exist no restrictions, deficiencies, required plans of correction or other such remedial measures with respect to any Health Care Permit of any Credit Party or any Subsidiary of any Credit Party, or any of their participation in any Third Party Payor Program.  Without limiting the foregoing, no validation review, program integrity review, audit or other investigation related to any Credit Party or any Subsidiary of any Credit Party or their respective operations, or the consummation of the transactions contemplated in the Loan Documents or related to the Collateral (i) has been conducted by or on behalf of any Governmental Authority, or (ii) is scheduled, pending or, to the knowledge of any Credit Party, threatened.

 

(g)           Overpayments.  No Credit Party and no Subsidiary of any Credit Party (i) has retained an overpayment received from, or failed to refund any amount due to, any Third Party Payor in violation of any Health Care Law or contract; and (ii) except as set forth on Schedule 3.31, has received written notice of, or has knowledge of, any overpayment or refunds due to any Third Party Payor.

 

(h)           Material Statements.  No Credit Party and no Subsidiary of any Credit Party, nor any officer, affiliate, employee or agent of any Credit Party or any Subsidiary of any Credit Party, has made an untrue statement of a material fact or fraudulent statement to any Governmental Authority, failed to disclose a material fact that must be disclosed to any Governmental Authority, or committed an act, made a statement or failed to make a statement that, at the time such statement, disclosure or failure to disclose occurred, would reasonably be expected to constitute a violation of any Health Care Law.

 

(i)            Prohibited Transactions.  No Credit Party and no Subsidiary of any Credit Party, nor any officer, affiliate, employee or agent of any Credit Party or any Subsidiary of any Credit Party, directly or indirectly, has (i) offered or paid or solicited or received any remuneration, in cash or in kind, or made any financial arrangements, in violation of any Health Care Law; (ii) given or agreed to give, or is aware that there has been made or that there is any 

 

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agreement to make, any gift or gratuitous payment of any kind, nature or description (whether in money, property or services) in violation of any Health Care Law; (iii) made or agreed to make, or is aware that there has been made or that there is any agreement to make, any contribution, payment or gift of funds or property to, or for the private use of, any governmental official, employee or agent where either the contribution, payment or gift or the purpose of such contribution, payment or gift is or was illegal under the laws of any Governmental Authority having jurisdiction over such payment, contribution or gift; (iv) established or maintained any unrecorded fund or asset for any purpose or made any misleading, false or artificial entries on any of its books or records for any reason; or (v) made, or agreed to make, or is aware that there has been made or that there is any agreement to make, any payment to any person with the intention or understanding that any part of such payment would be in violation of any Health Care Law or used or was given for any purpose other than that described in the documents supporting such payment.  To the knowledge of each Credit Party, no person has filed or has threatened to file against any Credit Party or any of their Affiliates an action under any federal or state whistleblower statute, including without limitation, under the False Claims Act of 1863 (31 U.S.C. § 3729 et seq.).

 

(j)            Exclusion.  No Credit Party and no Subsidiary of any Credit Party, nor any owner, officer, director, partner, agent, managing employee or Person with a “direct or indirect ownership interest” (as that phrase is defined in 42 C.F.R. § 420.201) in any Credit Party or any Subsidiary of any Credit Party, nor any Licensed Personnel of any Credit Party or any Subsidiary of any Credit Party, has been (or, has been threatened to be) (i) excluded from any Third Party Payor Program pursuant to 42 U.S.C. § 1320a-7 and related regulations, (ii) “suspended” or “debarred” from selling products to the U.S. government or its agencies pursuant to the Federal Acquisition Regulation, relating to debarment and suspension applicable to federal government agencies generally (42 C.F.R. Subpart 9.4), or other applicable laws or regulations, (iii) debarred, disqualified, suspended or excluded from participation in any Third Party Payor Program or is listed on the General Services Administration list of excluded parties, nor is any such debarment, disqualification, suspension or exclusion threatened or pending, or (iv) made a party to any other action by any Governmental Authority that may prohibit it from selling products or providing services to any governmental or other purchaser pursuant to any federal, state or local laws or regulations.

 

(k)           Corporate Integrity Agreement.  No Credit Party and no Subsidiary of any Credit Party, nor any owner, officer, director, partner, agent, managing employee or Person with a “direct or indirect ownership interest” (as that phrase is defined in 42 C.F.R. §1001.1001) in any Credit Party or any Subsidiary of any Credit Party is a party to, or bound by, any order, individual integrity agreement, corporate integrity agreement, corporate compliance agreement, deferred prosecution agreement, or other formal or informal agreement with any Governmental Authority concerning compliance with Health Care Laws.

 

(l)            Reimbursement Coding.  To the extent any Credit Party or any Subsidiary of any Credit Party provides to its customers or any other Persons reimbursement coding or billing advice, all such advice is and, as applicable, has been, complete and accurate, and conforms and, as applicable, has conformed, to the applicable American Medical Association’s Current Procedural Terminology (CPT), the International Classification of Disease, Ninth 

 

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Revision, Clinical Modification (ICD 9 CM), and other applicable coding systems, and the advice can be relied upon to create accurate claims for reimbursement by Third Party Payors.

 

(m)          Recoupments.  On each Borrowing Base Certificate given to Agent, Borrower has disclosed to Agent the amount of any material recoupments or offsets or set-offs of any Third Party Payor being sought, requested or claimed of which any Credit Party is aware, or, to the knowledge of any Credit Party, have been threatened against any Credit Party or any Subsidiary of any Credit Party.

 

ARTICLE IV.
 AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) shall remain unpaid or unsatisfied:

 

4.1          Financial Statements.

 

Each Credit Party shall maintain, and shall cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit the preparation of financial statements in conformity with GAAP (provided that monthly financial statements shall not be required to have footnote disclosures and are subject to normal year-end adjustments).  The Borrower shall deliver to Agent and each Lender by Electronic Transmission and in detail reasonably satisfactory to Agent and the Required Lenders:

 

(a)           as soon as available, but not later than one hundred thirty five (135) days after the end of each Fiscal Year, a copy of the audited consolidated and consolidating balance sheets of the Borrower and each of its Subsidiaries as at the end of such year and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, and accompanied by the report of any nationally recognized independent certified public accounting firm reasonably acceptable to Agent which report shall (i) contain an unqualified opinion, stating that such consolidated financial statements present fairly in all material respects the financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years and (ii) not include any explanatory paragraph expressing substantial doubt as to going concern status; provided, however, that Agent acknowledges that, as of a Closing Date, BDO USA, LLP shall be an acceptable independent certified public accounting firm; and

 

(b)           as soon as available, but not later than thirty (30) days after the end of each fiscal month of each year, a copy of the unaudited consolidated and consolidating balance sheets of the Borrower and each of its Subsidiaries, and the related consolidated and consolidating statements of income and cash flows as of the end of such fiscal month and for the portion of the Fiscal Year then ended, all certified by an appropriate Responsible Officer of the Borrower as being complete and correct and fairly presenting, in all material respects, in 

 

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accordance with GAAP, the financial position and the results of operations of the Borrower and its Subsidiaries, subject to normal year-end adjustments and absence of footnote disclosures.

 

4.2          Appraisals; Certificates; Other Information.

 

The Borrower shall furnish to Agent and each Lender by Electronic Transmission:

 

(a)           together with each delivery of financial statements pursuant to Sections 4.1(a) and 4.1(b), (i) a management discussion and analysis report, in reasonable detail, signed by the chief financial officer of the Borrower, describing the operations and financial condition of the Credit Parties and their Subsidiaries for the fiscal month and the portion of the Fiscal Year then ended (or for the Fiscal Year then ended in the case of annual financial statements), provided that, unless otherwise required by Agent or if an Event of Default has occurred and is continuing, such management discussion and analysis reports need only be delivered together with the delivery of financial statements for the third fiscal month of each fiscal quarter, and (ii) solely as it relates to the consolidating and consolidated statements of income, a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the most recent projections for the current Fiscal Year delivered pursuant to Section 4.2(k) and discussing the reasons for any significant variations;

 

(b)           concurrently with the delivery of the financial statements referred to in Sections 4.1(a) and 4.1(b) above, a fully and properly completed Compliance Certificate in the form of Exhibit 4.2(b), certified on behalf of the Borrower by a Responsible Officer of the Borrower;

 

(c)           promptly after the same are sent, copies of all financial statements and reports which any Credit Party sends to its shareholders or other equity holders, as applicable, generally and promptly after the same are filed, copies of all financial statements and regular, periodic or special reports which such Person may make to, or file with, the Securities and Exchange Commission or any successor or similar Governmental Authority;

 

(d)           as soon as available and in any event within fifteen (15) days after the end of each calendar month, and at such other times as Agent may reasonably require, a Borrowing Base Certificate, certified on behalf of the Borrower by a Responsible Officer of the Borrower, setting forth the Borrowing Base of the Borrower as at the end of the most-recently ended fiscal month or as at such other date as Agent may reasonably require;

 

(e)           concurrently with the delivery of each Borrowing Base Certificate on or after the Eligible Inventory Inclusion Date, a summary of Inventory by location and type with a supporting perpetual inventory report, in each case accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;

 

(f)            concurrently with the delivery of the Borrowing Base Certificate, a monthly trial balance showing Accounts by payor class outstanding aged from invoice date as follows:  1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;

 

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(g)           concurrently with the delivery of the Borrowing Base Certificate, an aging of accounts payable accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;

 

(h)           on a monthly basis (together with a copy of all or any part of such delivery requested by any Lender in writing after the Closing Date), collateral reports, including all additions and reductions (cash and non-cash) with respect to Accounts of the Credit Parties by payor class in each case accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion each of which shall be prepared by the Borrower as of the last day of the immediately preceding fiscal month; provided that, if as of any date of determination the average daily principal balance of Revolving Loans for the immediately preceding fiscal month exceeds 80% of the total Borrowing Base at such time (without regard to the Aggregate Revolving Loan Commitment then in effect), Agent may request such collateral reports on a more frequent basis as of a date specified by Agent in any such request;

 

(i)            to Agent, at the time of delivery of each of the monthly financial statements delivered pursuant to Section 4.1(b);

 

(i)            a reconciliation of the most recent Borrowing Base Certificate, general ledger and month-end accounts receivable aging of the Borrower to the Borrower’s general ledger and monthly financial statements delivered pursuant to Section 4.1(b), in each case, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;

 

(ii)           on or after the Eligible Inventory Inclusion Date, a reconciliation of the perpetual Inventory by location to the Borrower’s most recent Borrowing Base Certificate, general ledger and monthly Financial Statements delivered pursuant to Section 4.1(b), in each case, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion; and

 

(iii)          a reconciliation of the accounts payable aging to the Borrower’s general ledger and monthly Financial Statements delivered pursuant to Section 4.1(b), in each case, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;

 

(iv)          a reconciliation of the outstanding Loans as set forth in the monthly loan account statement provided by Agent to the Borrower’s general ledger and monthly Financial Statements delivered pursuant to Section 4.1(b), in each case, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;

 

(j)            at the time of delivery of each of the monthly or annual financial statements delivered pursuant to Section 4.1, (i) a listing of government contracts of the Borrower subject to the Federal Assignment of Claims Act of 1940 or any similar state or municipal law; and (ii) a list of any applications for the registration of any Patent, Trademark or Copyright filed by any Credit Party with the United States Patent and Trademark Office, the 

 

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United States Copyright Office or any similar office or agency in each case entered into or filed in the prior fiscal month;

 

(k)           as soon as available and in any event no later than 45 days after the commencement of each Fiscal Year of the Borrower, projections of the Credit Parties (and their Subsidiaries’) consolidated and consolidating financial performance for such Fiscal Year and the next succeeding two (2) Fiscal Years on a year by year basis, and for such Fiscal Year on a month by month basis;

 

(l)            promptly upon receipt thereof, copies of any reports submitted by the Borrower’s certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Credit Party made by such accountants, including any comment letters submitted by such accountants to management of any Credit Party in connection with their services;

 

(m)          upon Agent’s request from time to time after the Eligible Inventory Inclusion Date, the Credit Parties shall permit and enable Agent to obtain appraisals in form and substance and from appraisers reasonably satisfactory to Agent stating the then Net Orderly Liquidation Value, or such other value as determined by Agent, of all or any portion of the Inventory of any Credit Party or any Subsidiary of any Credit Party; provided, that notwithstanding any provision herein to the contrary, the Credit Parties shall only be obligated to reimburse Agent for the expenses of such appraisals occurring once per year or more frequently so long as an Event of Default has occurred and is continuing; and

 

(n)           promptly, such additional business, financial, corporate affairs, perfection certificates and other information as Agent may from time to time reasonably request.

 

4.3          Notices.

 

The Borrower shall notify promptly Agent and each Lender of each of the following (and in no event later than three (3) Business Days after a Responsible Officer becomes aware thereof):

 

(a)           the occurrence or existence of any Default or Event of Default, or any event or circumstance that foreseeably will become a Default or Event of Default;

 

(b)           any breach or non performance of, or any default under, any Contractual Obligation of any Credit Party or any Subsidiary of any Credit Party, or any violation of, or non-compliance with, any Requirement of Law, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non-compliance and the steps, if any, such Person has taken, is taking or proposes to take in respect thereof;

 

(c)           any dispute, litigation, investigation, proceeding or suspension which may exist at any time between any Credit Party or any Subsidiary of any Credit Party and any Governmental Authority which would reasonably be expected to result, either individually or in the aggregate, in Liabilities in excess of $500,000;

 

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(d)           the commencement of, or any material development in, any litigation or proceeding affecting any Credit Party or its Subsidiaries or any Property or Product of any Credit Party or its Subsidiaries (i) in which the amount of damages claimed is $1,000,000 or more, individually or in the aggregate, (ii) if adversely determined, would reasonably be expected to have a Material Adverse Effect, (iii) in which the relief sought is an injunction or other stay of the performance of this Agreement, any other Loan Document or any Related Agreement, (iv) alleges potential or actual violations of any Public Health Law or (v) alleges potential or actual violations of any Health Care Law by any Credit Party or any Subsidiary of any Credit Party or any of its Licensed Personnel;

 

(e)           (i) the receipt by any Credit Party of any notice of violation of or potential liability or similar notice under Environmental Law, (ii)(A) unpermitted Releases, (B) the existence of any condition that could reasonably be expected to result in violations of or Liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or Liability under any Environmental Law which in the case of clauses (A), (B) and (C) above, in the aggregate for all such clauses, would reasonably be expected to result in Material Environmental Liabilities, (iii) the receipt by any Credit Party of notification that any Property of any Credit Party is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iv) any proposed acquisition or lease of Real Estate, if such acquisition or lease would have a reasonable likelihood of resulting in Material Environmental Liabilities;

 

(f)            (i) on or prior to any filing by any ERISA Affiliate of any notice of any reportable event under Section 4043 of ERISA, or intent to terminate any Title IV Plan, a copy of such notice (ii) promptly, and in any event within ten (10) days, after any officer of any ERISA Affiliate knows or has reason to know that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a notice describing such waiver request and any action that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto, and (iii) promptly, and in any event within ten (10) days after any officer of any ERISA Affiliate knows or has reason to know that an ERISA Event will or has occurred, a notice describing such ERISA Event, and any action that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notices received from or filed with the PBGC, IRS, Multiemployer Plan or other Benefit Plan pertaining thereto;

 

(g)           any Material Adverse Effect subsequent to the date of the most recent audited financial statements delivered to Agent and Lenders pursuant to this Agreement;

 

(h)           any material change in accounting policies or financial reporting practices by any Credit Party or any Subsidiary of any Credit Party;

 

(i)            any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor disruption against or involving any Credit Party or any Subsidiary of any Credit Party if the same would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

 

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(j)            the creation, establishment or acquisition of any Subsidiary or the issuance by or to any Credit Party of any Stock or Stock Equivalent (except for any such issuance by Borrower in connection with the conversion of Series A Preferred Stock into common stock);

 

(k)           (i) the creation, or filing with the IRS or any other Governmental Authority, of any Contractual Obligation or other document extending, or having the effect of extending, the period for assessment or collection of any income or franchise or other material taxes with respect to any Tax Affiliate and (ii) the creation of any Contractual Obligation of any Tax Affiliate, or the receipt of any request directed to any Tax Affiliate, to make any material adjustment under Section 481(a) of the Code, by reason of a change in accounting method or otherwise;

 

(l)            if the Accounts owing by any Account Debtor and its Affiliates (other than any Federal/State Healthcare Program Account Debtor) to the Borrower and its Subsidiaries exceed fifteen percent (15%) of all Accounts owing by all Account Debtors as of any date; provided, however, that Borrower’s Borrowing Base Certificate shall satisfy the notice requirement with respect to the information contained in this Section 4.3(l);

 

(m)          (i) any notice that the FDA or any other similar Governmental Authority is limiting, suspending or revoking any Registration, changing the market classification, distribution pathway or parameters, or labeling of the Products of the Credit Parties or their respective Subsidiaries, or considering any of the foregoing; (ii) any Credit Party or any of its Subsidiaries becoming subject to any administrative or regulatory action, inspection, Form FDA 483 observation, warning letter, notice of violation letter, or other notice, response or commitment made to or with the FDA or any comparable Governmental Authority, or any Product of any Credit Party or any of its Subsidiaries being seized, withdrawn, recalled, detained, or subject to a suspension of manufacturing, or the commencement of any proceedings in the United States or any other jurisdiction seeking the withdrawal, recall, suspension, import detention, or seizure of any Product are pending or threatened against the Credit Parties or their respective Subsidiaries; and (iii) any voluntary withdrawal or recall of any Product by any Credit Party or any of its Subsidiaries in an aggregate amount of $5,000,000 or which would, in the aggregate, have a Material Adverse Effect; and

 

(n)           (1) the voluntary disclosure by any Credit Party or any Subsidiary of any Credit Party to the Office of the Inspector General of the United States Department of Health and Human Services, any Third Party Payor Program (including to any intermediary, carrier or contractor of such Program), of an actual overpayment matter involving the submission of claims to a Third Party Payor in an amount greater than $500,000 or a potential overpayment matter involving the submission of claims to a Third Party Payor in an amount greater than $2,000,000; (2)  that any Credit Party or any Subsidiary of any Credit Party, an owner, officer, manager, employee or Person with a “direct or indirect ownership interest” (as that phrase is defined in 42 C.F.R. §420.201) in any Credit Party or any Subsidiary of any Credit Party:  (A) has had a civil monetary penalty assessed against him or her pursuant to 42 U.S.C. §1320a-7a or is the subject of a proceeding seeking to assess such penalty; (B) has been excluded from participation in a Federal Health Care Program (as that term is defined in 42 U.S.C. §1320a-7b) or is the subject of a proceeding seeking to assess such penalty; (C) has been convicted (as that term is defined in 42 C.F.R. §1001.2) of any of those offenses described in 42 U.S.C. §1320a-7b or 18 U.S.C. §§669, 

 

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1035, 1347, 1518 or is the subject of a proceeding seeking to assess such penalty; or (D) has been involved or named in a U.S. Attorney complaint made or any other action taken pursuant to the False Claims Act under 31 U.S.C. §§3729-3731 or in any qui tam action brought pursuant to 31 U.S.C. §3729 et seq.; (3) receipt by any Credit Party or any Subsidiary of any Credit Party of any notice or communication from an accrediting organization that such Person is in danger of losing its accreditation due to a failure to comply with a plan of correction; (4) any validation review, program integrity review or material reimbursement audits related to any Credit Party or any Subsidiary of any Credit Party in connection with any Third Party Payor Program; (5) any claim to recover any alleged overpayments with respect to any receivables, or any notice of any fees of any Credit Party or any Subsidiary of any Credit Party being contested or disputed, in each case, in excess of $500,000; (6) notice of any material reduction in the level of reimbursement expected to be received with respect to receivables; (7) any allegations of material licensure violations or fraudulent acts or omissions involving any Credit Party or any Subsidiary of any Credit Party, or, to the knowledge of any Credit Party, any Licensed Personnel; (8) the pending or threatened imposition of any material fine or penalty by any Governmental Authority under any Health Care Law against any Credit Party or any Subsidiary of any Credit Party, or, to the knowledge of any Credit Party, any Licensed Personnel; (9) any changes in any Health Care Law (including the adoption of a new Health Care Law) known to any Credit Party or any Subsidiary or any Credit Party that would reasonably be expected to have, in the aggregate, a Material Adverse Effect;  (10) notice of any Credit Party’s or any of their Subsidiaries’ fees in excess of $500,000 being contested or disputed; (11) any pending or threatened revocation, suspension, termination, probation, restriction, limitation, denial, or non-renewal with respect to any Health Care Permit or Third Party Payor Authorization except for any such non-renewal at the election of a Credit Party or a Subsidiary of a Credit Party as would not reasonably be expected to have, in the aggregate, a Material Adverse Effect; and (12) notice of the occurrence of any reportable event as defined in any corporate integrity agreement, corporate compliance agreement or deferred prosecution agreement pursuant to which any Credit Party or any Subsidiary of any Credit Party has to make a submission to any Governmental Authority or other Person under the terms of such agreement, if any.

 

Each notice pursuant to this Section 4.3 shall be in electronic form accompanied by a statement by a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein, and stating what action the Borrower or other Person proposes to take with respect thereto and at what time.  Each notice under Section 4.3(a) shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.

 

4.4          Preservation of Corporate Existence, Etc.

 

Each Credit Party shall, and shall cause each of its Subsidiaries to:

 

(a)           preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of incorporation, organization or formation, as applicable, except as permitted by Section 5.3;

 

(b)           preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business 

 

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except as permitted by Sections 5.2 and 5.3 and except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

 

(c)           use its commercially reasonable efforts, in the Ordinary Course of Business, to preserve its business organization and preserve the goodwill and business of the customers, suppliers and others having material business relations with it;

 

(d)           preserve or renew all of its registered trademarks, trade names and service marks, the non preservation of which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and

 

(e)           conduct its business and affairs without infringement of or interference with any Intellectual Property of any other Person in any material respect and shall comply in all material respects with the terms of its IP Licenses.

 

4.5          Maintenance of Property.

 

Each Credit Party shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its Property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted and shall make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

4.6          Insurance.

 

(a)           Each Credit Party shall, and shall cause each of its Subsidiaries to, (i) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the Property and businesses of the Credit Parties and such Subsidiaries (including policies of life, fire, theft, product liability, public liability, Flood Insurance, property damage, other casualty, employee fidelity, workers’ compensation, business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Borrower) of a nature and providing such coverage as is sufficient and as is customarily carried by businesses of the size and character of the business of the Credit Parties and (ii) cause all such insurance relating to any Property or business of any Credit Party to name Agent as additional insured or lenders loss payee, as agent for the Lenders, as appropriate.  All policies of insurance on real and personal property of the Credit Parties will contain an endorsement, in form and substance acceptable to Agent, showing loss payable to Agent (Form CP 1218 or equivalent and naming Agent as lenders loss payee as agent for the Lenders) and extra expense and business interruption endorsements.  Such endorsement, or an independent instrument furnished to Agent, will provide that the insurance companies will give Agent at least 30 days’ prior written notice before any such policy or policies of insurance shall be altered or canceled and that no act or default of the Credit Parties or any other Person shall affect the right of Agent to recover under such policy or policies of insurance in case of loss or damage.  Each Credit Party shall direct all present and future insurers under its “All Risk” policies of property insurance to pay all proceeds payable thereunder directly to Agent.  If any insurance proceeds are paid by check, draft or other instrument payable to any Credit Party and Agent jointly, Agent may endorse such Credit Party’s name thereon and 

 

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do such other things as Agent may deem advisable to reduce the same to cash.  Agent reserves the right at any time, upon review of each Credit Party’s risk profile, to require additional forms and limits of insurance.  Notwithstanding the requirement in clause (i) above, Federal Flood Insurance shall not be required for (x) Real Estate not located in a Special Flood Hazard Area, or (y) Real Estate located in a Special Flood Hazard Area in a community that does not participate in the National Flood Insurance Program.

 

(b)           Unless the Credit Parties provide Agent with evidence of the insurance coverage required by this Agreement (including, without limitation, Flood Insurance), Agent may, after ten (10) days’ prior notice to the Borrower (and an opportunity for the Credit Parties to cure during such period) or at any time if an Event of Default exists, purchase insurance (including, without limitation, Flood Insurance) at the Credit Parties’ expense to protect Agent’s and Lenders’ interests in the Credit Parties’ and their Subsidiaries’ properties.  This insurance may, but need not, protect the Credit Parties’ and their Subsidiaries’ interests.  The coverage that Agent purchases may not pay any claim that any Credit Party or any Subsidiary of any Credit Party makes or any claim that is made against such Credit Party or any Subsidiary in connection with said Property.  The Borrower may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that there has been obtained insurance as required by this Agreement.  If Agent purchases insurance, the Credit Parties will be responsible for the costs of that insurance, including interest and any other charges Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance shall be added to the Obligations.  The costs of the insurance may be more than the cost of insurance the Borrower may be able to obtain on its own.

 

(c)           The Credit Parties appoint Agent as their attorney-in-fact to settle or adjust all property damage claims under its casualty insurance policies; provided, that such power of attorney shall only be exercised so long as an Event of Default has occurred and is continuing or if the casualty claim exceeds $1,000,000.  Agent shall have no duty to exercise such power of attorney, but may do so at its discretion.

 

4.7          Payment of Obligations.

 

Each Credit Party shall, and shall cause each of its Subsidiaries to, pay, discharge and perform as the same shall become due and payable or required to be performed, all their respective obligations and liabilities, including:

 

(a)           all tax liabilities, assessments and governmental charges or levies upon it or its Property, unless (i) the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the filing or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person; and (ii) the aggregate Liabilities secured by such Lien do not exceed $250,000.

 

(b)           all lawful claims which, if unpaid, would by law become a Lien upon its Property unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the imposition or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person;

 

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(c)           all Indebtedness, as and when due and payable, but subject to any subordination provisions contained herein, in any other Loan Documents and/or in any instrument or agreement evidencing such Indebtedness;

 

(d)           the performance of all obligations under any Contractual Obligation to such Credit Party or any of its Subsidiaries is bound, or to which it or any of its Property is subject, including the Related Agreements, except where the failure to perform would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and

 

(e)           payments to the extent necessary to avoid the imposition of a Lien with respect to, or the involuntary termination of any underfunded Benefit Plan.

 

4.8          Compliance with Laws.

 

Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business, except where the failure to comply would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

4.9          Inspection of Property and Books and Records.

 

Each Credit Party shall maintain and shall cause each of its Subsidiaries to maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Person.  Each Credit Party shall, and shall cause each of its Subsidiaries to, with respect to each owned, leased, or controlled property, during normal business hours and upon reasonable advance notice (unless an Event of Default shall have occurred and be continuing, in which event no notice shall be required and Agent shall have access at any and all times during the continuance thereof):  (a) provide access to such property to Agent and any of its Related Persons, as frequently as Agent determines to be reasonably appropriate; and (b) permit Agent and any of its Related Persons to conduct field examinations, audit, inspect and make extracts and copies (or take originals if reasonably necessary) from all of such Credit Party’s books and records, and evaluate and make physical verifications of the Inventory and other Collateral in any manner and through any medium that Agent considers advisable, in each instance, at the Credit Parties’ expense; provided that, in addition to reimbursement of Agent for expenses of field examinations, audit and inspections prior to the Closing Date, a take-down field examination following the Closing Date and in connection with any Permitted Acquisition, the Credit Parties shall only be obligated to reimburse Agent for the expenses for two such field examinations, audits and inspections per year, or more frequently if either (i) an Event of Default has occurred and is continuing or (ii) the average daily Availability in any fiscal month reaches or falls below $20,000,000.  Any Lender may accompany Agent or its Related Persons in connection with any inspection at such Lender’s expense.

 

4.10        Use of Proceeds.

 

The Borrower shall use the proceeds of the Loans solely for working capital, capital expenditures and other general corporate purposes not in contravention of any Requirement of 

 

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Law and not in violation of this Agreement, including for Permitted Acquisitions and Restricted Payments to the extent permitted to be made under Section 5.11.

 

4.11        Cash Management Systems.

 

(a)           Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each of its deposit, securities, commodity or similar accounts maintained by such Person (other than any payroll account so long as such payroll account is a zero balance account, any withholding tax account, any fiduciary account, any Segregated Governmental Account and other exceptions explicitly set forth in clauses (b), (c) and (d) of this Section 4.11) as of or after the Closing Date.  For purposes of computing interest and fees any payments made to Agent through such accounts shall be deemed received on the Business Day following the Business Day on which immediately available funds are received by Agent prior to 1:00 p.m. (New York time) with respect to such payment, and any payment which is received by Agent through such accounts later than 1:00 p.m. (New York time) on any Business Day or at any time on a day that is not a Business Day shall be deemed to have been received on the second succeeding Business Day.  In addition, at Agent’s request, Credit Parties will enter into Control Agreements providing for springing cash dominion over disbursement accounts as of the Closing Date, except as set forth in the preceding sentence.  At any time the aggregate amount of outstanding Obligations exceeds $5,000,000 or a Default or Event of Default exists, the Credit Parties shall not maintain cash on deposit in disbursement accounts in excess of outstanding checks and wire transfers payable from such accounts and amounts necessary to meet minimum balance requirements.  The Credit Parties shall establish deposit accounts at Comerica Bank subject to Control Agreements providing for “full” cash dominion (collectively, the “Controlled Collateral Account”) and direct all Account Debtors to remit all payments directly to such Controlled Collateral Account (except that, in those of Governmental Payors making payments under Medicare or Medicaid, the Credit Parties shall establish, and direct such Governmental Payors to remit all payments to, a Segregated Governmental Account at Comerica Bank).  Notwithstanding the foregoing, the Credit Parties may instruct Account Debtors to make payment to an alternate address for electronic deposit capture (“EDC Payments”), which such EDC Payments shall be immediately deposited by the Credit Parties in the Controlled Collateral Account; provided that, in the event the aggregate amount of EDC Payments in any three calendar month period ending on or after the Closing Date exceeds 40% of the aggregate Account collections in such period, or at any time a Default or Event of Default has occurred and is continuing, the Credit Parties shall, promptly upon Agent’s request, establish lockboxes subject to Control Agreements at Comerica Bank and direct all such Account Debtors to make payment to such lockboxes or to the Controlled Collateral Account.

 

(b)           AHF shall be permitted to retain amounts in its existing deposit accounts at TD Bank sufficient to meet necessary minimum balance requirements as well as pay checks and wire transfers payable from such accounts and outstanding against such accounts.  In the event that such TD Bank account(s) contain, in the aggregate, $2,000,000 or more at any one time, then AHF shall transfer such excess amount to the deposit account(s) at Comerica Bank subject to a Control Agreement within three (3) Business Days thereafter.  AHF shall not make any disbursements out of such deposit accounts at TD Bank after December 31, 2014 (other than payment checks and wire transfers payable from such accounts and outstanding against such 

 

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accounts as of such date).  AHF shall close all accounts with TD Bank by March 31, 2015, except with respect to any such account which is subject to a Control Agreement by such date.

 

(c)           MedPro shall be permitted to retain amounts in its existing deposit accounts at First Citizens Bank sufficient to meet necessary minimum balance requirements as well as pay checks and wire transfers payable from such accounts and outstanding against such accounts.  In the event that such First Citizens Bank account(s) contain, in the aggregate, $4,000,000 or more at any one time, then MedPro shall transfer such excess amount to the deposit account(s) at Comerica Bank subject to a Control Agreement within three (3) Business Days thereafter.  MedPro shall not make any disbursements out of such deposit accounts at First Citizens Bank after the 270th day following the MedPro Acquisition Closing Date (other than payment checks and wire transfers payable from such accounts and outstanding against such accounts as of such date).  MedPro shall close all accounts with First Citizens Bank within 455 days of the MedPro Acquisition Closing Date, except with respect to any such account which is subject to a Control Agreement by such date.

 

(d)           Envoy shall be permitted to maintain a zero balance account at Comerica for receipt of collections and for disbursements in the ordinary course of its business so long as amounts in such account are transferred to an account(s) at Comerica Bank subject to a Control Agreement on the date of receipt (and Envoy shall at all times maintain standing instructions to transfer such amounts to such account(s)).

 

(e)           In addition, in order to segregate and to facilitate perfection of Agent’s security interest in funds received from Governmental Payors making payments under Medicare or Medicaid, if any, the Credit Parties agree that the Credit Parties shall (a) segregate collections made from Governmental Payors making payments under Medicare or Medicaid, from collections made from all other Account Debtors and customers of the applicable Credit Parties, including, without limitation, by (i) notifying all payors (other than Governmental Payors making payments under Medicare or Medicaid) then instructed to make payments to such Credit Parties’ deposit accounts to make payments to a deposit account subject to a Control Agreement, and (ii) notifying all Governmental Payors making payments under Medicare or Medicaid to make payments to a Segregated Governmental Account, and (b) enter into, and cause each applicable depository to enter into, a “sweep” agreement (a “Sweep Agreement”) with respect to each Segregated Governmental Account pursuant to which such depository will agree to sweep amounts deposited therein on daily basis to a deposit account of the Credit Parties subject to a Control Agreement in favor of Agent as and when funds clear and become available in accordance with such depository’s customary procedures, each with such financial institution and each in form and substance reasonably acceptable to Agent.  No Credit Party may change any sweep instruction set forth in such Sweep Agreement without the prior written consent of Agent.

 

(f)            To the extent any Person, whether a Governmental Payor or otherwise, remits payments to an incorrect deposit account or otherwise makes payments not in accordance with the provisions of this Section 4.11 or an applicable Credit Party’s payment direction, such Credit Party shall contact such Person and use its commercially reasonable efforts to redirect payment from such Person in accordance with the terms hereof. Agent agrees and confirms that Credit Parties will have sole dominion and “control” (within the meaning of Section 9-104 of the 

 

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UCC and the common law) over each Segregated Governmental Account and all funds therein and Agent disclaims any right of any nature whatsoever to control or otherwise direct or make any claim against the funds held in any Segregated Governmental Account from time to time.  In addition, promptly following the Closing Date and thereafter, to the extent any Person, whether a Governmental Payor or otherwise, remits payments that constitute EDC Payments, such Credit Party shall contact such Person and use its commercially reasonable efforts to direct payment from such Person to the Controlled Collateral Account or the Segregated Government Account.

 

4.12        Landlord Agreements.

 

Each Credit Party shall use commercially reasonable efforts to obtain a landlord agreement or bailee or mortgagee waivers, as applicable, from the lessor of each leased Property, bailee in possession of any Collateral or mortgagee of any owned Property with respect to each location where any Collateral is stored or located, in each case for locations where the Inventory at such location or in possession of said third party has an aggregate book value of $100,000 or more or where books and records of a Credit Party are located, which agreement shall be reasonably satisfactory in form and substance to Agent; provided, that, except as to locations at which books and records are located, each Credit Party shall not be required to use such commercially reasonable efforts until the Inventory Inclusion Date.

 

4.13        Further Assurances.

 

(a)           Each Credit Party shall ensure that all written information, exhibits and reports furnished to Agent or the Lenders do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to Agent and the Lenders and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgement or recordation thereof.

 

(b)           Promptly upon request by Agent, the Credit Parties shall (and, subject to the limitations hereinafter set forth, shall cause each of their Subsidiaries to) take such additional actions and execute such documents as Agent may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Loan Document, (ii) to subject to the Liens created by any of the Collateral Documents any of the Properties, rights or interests covered by any of the Collateral Documents, (iii) to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document.  Without limiting the generality of the foregoing and except as otherwise approved in writing by Required Lenders, the Credit Parties shall cause each of their Domestic Subsidiaries (other than Domestic Subsidiaries owned indirectly through a Foreign Subsidiary) and, to the extent no 956 Impact exists, Foreign Subsidiaries, and Domestic Subsidiaries owned indirectly through a Foreign Subsidiary, to guaranty the Obligations and to cause each such Subsidiary to grant to Agent, for the benefit of the Secured Parties, a security interest in, subject to the limitations hereinafter set forth, all of such Subsidiary’s Property to secure such guaranty.  Furthermore and except as otherwise approved in writing by Required 

 

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Lenders, each Credit Party shall, and shall cause each of its Domestic Subsidiaries (other than Domestic Subsidiaries owned indirectly through a Foreign Subsidiary) to, pledge all of the Stock and Stock Equivalents of each of its Domestic Subsidiaries (other than Domestic Subsidiaries owned indirectly through a Foreign Subsidiary) and First Tier Foreign Subsidiaries (provided that with respect to any First Tier Foreign Subsidiary, if a 956 Impact exists such pledge shall be limited to sixty-five percent (65%) of such Foreign Subsidiary’s outstanding voting Stock and Stock Equivalents and one hundred percent (100%) of such Foreign Subsidiary’s outstanding non-voting Stock and Stock Equivalents) and to the extent no 956 Impact exists, each of its Foreign Subsidiaries to pledge all of the Stock and Stock Equivalent of each of its Subsidiaries, in each instance, to Agent, for the benefit of the Secured Parties, to secure the Obligations.  In connection with each pledge of Stock and Stock Equivalents, the Credit Parties shall deliver, or cause to be delivered, to Agent, irrevocable proxies and stock powers and/or assignments, as applicable, duly executed in blank.  A “956 Impact” will be deemed to exist to the extent the issuance of a guaranty by, grant of a Lien by, or pledge of greater than two-thirds of the voting Stock and Stock Equivalents of, a Foreign Subsidiary, would result in material incremental income tax liability as a result of the application of Section 956 of the Code, taking into account actual anticipated repatriation of funds, foreign tax credits and other relevant factors.  Notwithstanding the foregoing, upon its formation and for so long as the Primrose Health Joint Venture is not a Wholly Owned Subsidiary of the Borrower, the Primrose Health Joint Venture shall not be required to guaranty the Obligations and shall not be required to grant to Agent, for the benefit of the Secured Parties, a security interest in its Property, but the Credit Parties shall be required to pledge all of the Stock and Stock Equivalents of the Primrose Health Joint Venture owned by any Credit Party (and the organizational documents of the Primrose Health Joint Venture shall expressly permit such pledge and the exercise of remedies by Agent in respect thereof on terms acceptable to Agent in its sole discretion).

 

(c)           In the event any Credit Party or any Domestic Subsidiary (other than Domestic Subsidiaries owned indirectly through a Foreign Subsidiary) or, to the extent no 956 Impact exists, any Foreign Subsidiary, or any Domestic Subsidiary owned indirectly through a Foreign Subsidiary, of any Credit Party acquires any Real Estate with a fair market value in excess of $1,000,000, simultaneously with such acquisition, such Person shall execute and/or deliver, or cause to be executed and/or delivered, to Agent, (w) within forty-five (45) days of receipt of notice from Agent that Real Estate is located in a Special Flood Hazard Area, Federal Flood Insurance as required by Section 4.6(a), (x) a fully executed Mortgage, in form and substance reasonably satisfactory to Agent together with an A.L.T.A. lender’s title insurance policy issued by a title insurer reasonably satisfactory to Agent, in form and substance and in an amount reasonably satisfactory to Agent insuring that the Mortgage is a valid and enforceable first priority Lien on the respective Property, free and clear of all defects, encumbrances and Liens other than Permitted Liens, (y) then current A.L.T.A. surveys, certified to Agent by a licensed surveyor sufficient to allow the issuer of the lender’s title insurance policy to issue such policy without a survey exception and (z) an environmental site assessment prepared by a qualified firm reasonably acceptable to Agent, in form and substance satisfactory to Agent.  In addition to the obligations set forth in Sections 4.6(a) and 4.13(b)(w), within forty-five days after written notice from Agent to Credit Parties that any Real Estate is located in a Special Flood Hazard Area, Credit Parties shall satisfy the Federal Flood Insurance requirements of Section 4.6(a).

 

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(d)           If the Borrower (or a direct or indirect holding company of the Borrower) has not consummated a Qualified IPO on or before December 31, 2015, then the Borrower shall cause the Permitted Holders to pledge on or before such date the Stock and Stock Equivalents of the Borrower owned legally or beneficially by the Permitted Holders to Agent, for the benefit of the Secured Parties, to secure the Obligations.  In addition, if in connection with a Qualified IPO (or otherwise), any parent company of the Borrower is organized, then the Borrower shall cause such parent company promptly to pledge the Stock and Stock Equivalents of the Borrower owned by such parent company to Agent, for the benefit of the Secured Parties, to secure the Obligations.  In connection with the foregoing pledged, the Permitted Holders or the parent company, as the case may be shall deliver, or cause to be delivered, to Agent, irrevocable proxies and stock powers and/or assignments, as applicable, duly executed in blank.

 

4.14        Environmental Matters.

 

(a)           Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with, and maintain its Real Estate, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance) or that is required by orders and directives of any Governmental Authority except where the failure to comply would not reasonably be expected to, individually or in the aggregate, result in a Material Environmental Liability.  Without limiting the foregoing, if an Event of Default is continuing or if Agent at any time has a reasonable basis to believe that there exist violations of Environmental Laws by any Credit Party or any Subsidiary of any Credit Party or that there exist any Environmental Liabilities, then each Credit Party shall, promptly upon receipt of request from Agent, cause the performance of, and allow Agent and its Related Persons access to such Real Estate for the purpose of conducting, such environmental audits and assessments, including subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each case as Agent may from time to time reasonably request.  Such audits, assessments and reports, to the extent not conducted by Agent or any of its Related Persons, shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable to Agent and shall be in form and substance reasonably acceptable to Agent.

 

(b)           Borrower and each applicable Credit Party will comply in all material respects with the Headquarters Due Care Plan and Section 20107a of Part 201 of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended, and any associated regulations and guidance.

 

4.15        Post-Closing Obligations

 

As a material inducement to Agent and Lenders entering into and performing their respective obligations under this Agreement, Borrower hereby agrees to satisfy the following conditions:

 

(a)           Consummation of MedPro Acquisition. Within five Business Days of the Closing Date, the MedPro Acquisition shall be consummated in accordance with the terms of the MedPro Acquisition Agreement and applicable law and the MedPro Acquisition shall be in full force and effect; and

 

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(b)           Other Post-Closing Items:  Borrower shall complete each item set forth on Schedule 4.15 hereto on or prior to the date indicated with respect thereto on Schedule 4.15.

 

ARTICLE V.
 NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) shall remain unpaid or unsatisfied:

 

5.1          Limitation on Liens.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter acquired, other than the following (“Permitted Liens”):

 

(a)           any Lien existing on the Property of a Credit Party or a Subsidiary of a Credit Party on the Closing Date and set forth in Schedule 5.1 securing Indebtedness outstanding on such date and permitted by Section 5.5(c), including replacement Liens on the Property currently subject to such Liens securing Indebtedness permitted by Section 5.5(c);

 

(b)           any Lien created under any Loan Document;

 

(c)           Liens for taxes, fees, assessments or other governmental charges (i) which are not past due or remain payable without penalty, or (ii) the non payment of which is permitted by Section 4.7;

 

(d)           carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other similar Liens arising in the Ordinary Course of Business which are not past due or remain payable without penalty or which are being contested in good faith and by appropriate proceedings diligently prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto and for which adequate reserves in accordance with GAAP are being maintained;

 

(e)           Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the Ordinary Course of Business in connection with workers’ compensation, unemployment insurance and other social security legislation or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeals bonds, bids, leases, governmental contract, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or to secure liability to insurance carriers;

 

(f)            Liens consisting of judgment or judicial attachment liens (other than for payment of taxes, assessments or other governmental charges), provided that the enforcement of such Liens is effectively stayed and all such Liens secure claims in the aggregate at any time outstanding for the Credit Parties and their Subsidiaries not exceeding $500,000;

 

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(g)           easements, rights of way, zoning and other restrictions, minor defects or other irregularities in title, and other similar encumbrances incurred in the Ordinary Course of Business which, either individually or in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the Property subject thereto or interfere in any material respect with the ordinary conduct of the businesses of any Credit Party or any Subsidiary of any Credit Party;

 

(h)           Liens on any Property acquired or held by any Credit Party or any Subsidiary of any Credit Party securing Indebtedness incurred or assumed for the purpose of financing (or refinancing) all or any part of the cost of acquiring such Property and permitted under Section 5.5(d); provided that (i) any such Lien attaches to such Property concurrently with or within twenty (20) days after the acquisition thereof, (ii) such Lien attaches solely to the Property so acquired in such transaction and the proceeds thereof, and (iii) the principal amount of the debt secured thereby does not exceed 100% of the cost of such Property;

 

(i)            Liens securing Capital Lease Obligations permitted under Section 5.5(d);

 

(j)            any interest or title of a lessor or sublessor under any lease permitted by this Agreement;

 

(k)           Liens arising from the filing of precautionary uniform commercial code financing statements with respect to any lease permitted by this Agreement;

 

(l)            non-exclusive licenses and sublicenses granted by a Credit Party and leases or subleases (by a Credit Party as lessor or sublessor) to third parties in the Ordinary Course of Business not interfering with the business of the Credit Parties or any of their Subsidiaries;

 

(m)          Liens in favor of collecting banks arising by operation of law under Section 4-210 of the Uniform Commercial Code or, with respect to collecting banks located in the State of New York, under 4-208 of the Uniform Commercial Code;

 

(n)           Liens (including the right of set-off) in favor of a bank or other depository institution arising as a matter of law encumbering deposits;

 

(o)           Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in connection with the importation of goods in the Ordinary Course of Business;

 

(p)           Liens on redeemed Stock of the Borrower arising under the Redemption Documents; and

 

(q)           Liens in favor of AmerisourceBergen on the AmeriSourceBergen Inventory Collateral.

 

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5.2          Disposition of Assets.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including the Stock of any Subsidiary of any Credit Party, whether in a public or a private offering or otherwise, and accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing, except:

 

(a)           dispositions to any Person other than an Affiliate of a Credit Party of (i) inventory, or (ii) worn out or surplus equipment having a fair market value not exceeding $750,000 in the aggregate in any Fiscal Year, in each case in the Ordinary Course of Business;

 

(b)           dispositions (other than of (i) the Stock of any Subsidiary of any Credit Party or (ii) any Accounts of any Credit Party) not otherwise permitted hereunder which are made for fair market value; provided, that (i) at the time of any disposition, no Event of Default shall exist or shall result from such disposition, (ii) not less than 75% of the aggregate sales price from such disposition shall be paid in cash, (iii) the aggregate fair market value of all assets so sold by the Credit Parties and their Subsidiaries, together, shall not exceed in any Fiscal Year $500,000 and (iv) after giving effect to such disposition, the Credit Parties are in compliance on a pro forma basis with the covenant set forth in Article VI, recomputed for the most recent fiscal month for which financial statements have been delivered;

 

(c)           (i) dispositions of Cash Equivalents in the Ordinary Course of Business made to a Person that is not an Affiliate of any Credit Party and (ii) conversions of Cash Equivalents into cash or other Cash Equivalents;

 

(d)           transactions permitted under Section 5.1(l); and

 

(e)           the Borrower may sell its Investment in Ageology, LLC to the Permitted Holders so long as (i) no Default or Event of Default shall then exist or would exist after giving effect thereto, (ii) 100% of the purchase price is paid in cash at the closing of such sale, (iii) all proceeds of the sale are applied to repay the Loans, and (iv) the purchase price is equal to the greater of (x) the purchase price paid by the Borrower for such Investment (including any additional investments made pursuant to Section 5.4(h)) and (y) fair market value for such Investment as reasonably determined by the Board of Directors of the Borrower.

 

5.3          Consolidations and Mergers.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, (a) merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except upon not less than five (5) Business Days prior written notice to Agent, (a) any Subsidiary of the Borrower may merge with, or dissolve or liquidate into, the Borrower or a Wholly-Owned Subsidiary of the Borrower which is a Domestic Subsidiary, provided that the Borrower or such Wholly-Owned Subsidiary which is a Domestic Subsidiary shall be the continuing or surviving entity and all actions required to maintain perfected Liens on the Stock of the surviving entity and other Collateral in favor of Agent shall have been completed and (b) any Foreign Subsidiary may merge with or 

 

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dissolve or liquidate into another Foreign Subsidiary provided if a First Tier Foreign Subsidiary is a constituent entity in such merger, dissolution or liquidation, such First Tier Foreign Subsidiary shall be the continuing or surviving entity.

 

5.4          Acquisitions; Loans and Investments.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, (i) purchase or acquire, or make any commitment to purchase or acquire any Stock or Stock Equivalents, or any obligations or other securities of, or any interest in, any Person, including the establishment or creation of a Subsidiary, or (ii) make or commit to make any Acquisitions, or any other acquisition of all or substantially all of the assets of another Person, or of any business or division of any Person, including without limitation, by way of merger, consolidation or other combination or (iii) make or purchase, or commit to make or purchase, any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including the Borrower, any Affiliate of the Borrower or any Subsidiary of the Borrower (the items described in clauses (i), (ii) and (iii) above are referred to as “Investments”), except for:

 

(a)           Investments in cash and Cash Equivalents;

 

(b)           Investments consisting of (i) extensions of credit or capital contributions by any Credit Party to or in any other then existing Credit Party, (ii) extensions of credit or capital contributions by the Borrower or any other Credit Party to or in any then existing Foreign Subsidiaries of a Borrower not to exceed $500,000 in the aggregate at any time outstanding for all such extensions of credit and capital contributions; provided, that (A) if any Credit Party executes and delivers to the Borrower a note (collectively, the “Intercompany Notes”) to evidence any Investments described in the foregoing clauses (i) and (ii), that Intercompany Note shall be pledged and delivered to Agent pursuant to the Guaranty and Security Agreement as additional collateral security for the Obligations; (B) the Borrower shall accurately record all intercompany transactions on its books and records; and (C) at the time any such intercompany loan or advance is made by the Borrower to any other Credit Party and after giving effect thereto, the Borrower shall be Solvent; (iii) extensions of credit or capital contributions by a Foreign Subsidiary of a Borrower to or in another then existing Foreign Subsidiary of a Borrower;

 

(c)           Investments received as the non-cash portion of consideration received in connection with transactions permitted pursuant to Section 5.2(b);

 

(d)           the Borrower’s Investment of no more than $5,000,000 in the Primrose Health Joint Venture;

 

(e)           Investments acquired in connection with the settlement of delinquent Accounts in the Ordinary Course of Business or in connection with the bankruptcy or reorganization of suppliers or customers;

 

(f)            Investments existing on the Closing Date and set forth in Schedule 5.4;

 

(g)           loans or advances to employees permitted under Section 5.6;

 

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(h)           additional Investments by the Borrower in Ageology, LLC in an aggregate amount of up to $2,500,000 so long as at the time of making any such Investment no Default or Event of Default shall then exist or would exist after giving effect thereto; provided that, if applicable, such amount shall be reduced by an amount equal to the original cost to the Borrower of that portion of the Investment sold by the Borrower pursuant to Section 5.2(f); and

 

(i)            Permitted Acquisitions.

 

5.5          Limitation on Indebtedness.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

 

(a)           the Obligations;

 

(b)           Indebtedness consisting of Contingent Obligations described in clause (j) of the definition of Indebtedness and permitted pursuant to Section 5.9;

 

(c)           Indebtedness existing on the Closing Date and set forth in Schedule 5.5 including Permitted Refinancings thereof;

 

(d)           (i) Indebtedness to ASD Healthcare, Inc. not to exceed $7,000,000 in the aggregate at any time outstanding secured solely by Liens permitted by Section 5.1(h) and (ii) other Indebtedness not to exceed $6,000,000 in the aggregate at any time outstanding, consisting of Capital Lease Obligations or secured solely by Liens permitted by Section 5.1(h) and Permitted Refinancings thereof;

 

(e)           unsecured intercompany Indebtedness permitted pursuant to Section 5.4(b);

 

(f)            Subordinated Indebtedness not to exceed $40,000,000 in the aggregate at any time outstanding evidenced by the Subordinated Indebtedness Documents;

 

(g)           the AmerisourceBergen Indebtedness;

 

(h)           the AHF Earnout in an aggregate amount not to exceed $2,000,000;

 

(i)            the MedPro Earnout in an aggregate amount not to exceed $11,500,000; and

 

(j)            other unsecured Indebtedness owing to Persons that are not Affiliates of the Credit Parties not exceeding $1,000,000 in the aggregate at any time outstanding.

 

5.6          Employee Loans and Transactions with Affiliates.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, enter into any transaction with any Affiliate of the Borrower or of any such Subsidiary, except:

 

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(a)           as expressly permitted by this Agreement;

 

(b)           in the Ordinary Course of Business and pursuant to the reasonable requirements of the business of such Credit Party or such Subsidiary upon fair and reasonable terms no less favorable to such Credit Party or such Subsidiary than would be obtained in a comparable arm’s length transaction with a Person not an Affiliate of the Borrower or such Subsidiary and which are disclosed in writing to Agent; and

 

(c)           loans or advances to employees of Credit Parties not to exceed $500,000 in the aggregate outstanding at any time.

 

All such transactions under clause (b) above existing as of the Closing Date are described in Schedule 5.6.

 

5.7          Compensation.

 

No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, pay any management, consulting or similar fees to any Affiliate of any Credit Party or to any officer, director or employee of any Credit Party or any Affiliate of any Credit Party except:

 

(a)           payment of reasonable compensation to officers and employees for actual services rendered to the Credit Parties and their Subsidiaries in the Ordinary Course of Business; and

 

(b)           payment of directors’ fees and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings not to exceed in the aggregate, with respect to all such items, $500,000 in any Fiscal Year of the Borrower.

 

5.8          Margin Stock; Use of Proceeds.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, use any portion of the Loan proceeds, directly or indirectly, to purchase or carry Margin Stock or repay or otherwise refinance Indebtedness of any Credit Party or others incurred to purchase or carry Margin Stock, or otherwise in any manner which is in contravention of any Requirement of Law or in violation of this Agreement.  In no event shall any Credit Party use any portion of the Loan proceeds to prepay any portion of the Subordinated Indebtedness.

 

5.9          Contingent Obligations.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations except in respect of the Obligations and except:

 

(a)           endorsements for collection or deposit in the Ordinary Course of Business;

 

(b)           Rate Contracts entered into in the Ordinary Course of Business for bona fide hedging purposes and not for speculation with Agent’s prior written consent;

 

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(c)           Contingent Obligations of the Credit Parties and their Subsidiaries existing as of the Closing Date and listed in Schedule 5.9, including extension and renewals thereof which do not increase the amount of such Contingent Obligations or impose materially more restrictive or adverse terms on the Credit Parties or their Subsidiaries as compared to the terms of the Contingent Obligation being renewed or extended;

 

(d)           Contingent Obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to Agent title insurance policies;

 

(e)           Contingent Obligations arising with respect to customary indemnification obligations in favor of (i) sellers in connection with Acquisitions permitted hereunder and (ii) purchasers in connection with dispositions permitted under Section 5.2(b);

 

(f)            Contingent Obligations arising under Letters of Credit;

 

(g)           Contingent Obligations arising under guaranties made in the Ordinary Course of Business of obligations of any Credit Party, which obligations are otherwise permitted hereunder; provided that if such obligation is subordinated to the Obligations, such guaranty shall be subordinated to the same extent; and

 

(h)           other Contingent Obligations not exceeding $250,000 in the aggregate at any time outstanding.

 

5.10        Compliance with ERISA.

 

No ERISA Affiliate shall cause or suffer to exist (a) any event that could result in the imposition of a Lien on any asset of a Credit Party or a Subsidiary of a Credit Party with respect to any Title IV Plan or Multiemployer Plan or (b) any other ERISA Event, that would, in the aggregate, result in Liabilities in excess of $250,000.  No Credit Party shall cause or suffer to exist any event that could result in the imposition of a Lien with respect to any Benefit Plan.

 

5.11        Restricted Payments.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any Stock or Stock Equivalent, (ii) purchase, redeem or otherwise acquire for value any Stock or Stock Equivalent now or hereafter outstanding or (iii) make any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, Subordinated Indebtedness (the items described in clauses (i), (ii) and (iii) above are referred to as “Restricted Payments”); except that any Wholly-Owned Subsidiary of the Borrower may declare and pay dividends to the Borrower or any Wholly-Owned Subsidiary of the Borrower, and except that:

 

(a)           the Borrower may make Restricted Payments provided all of the following conditions are satisfied:

 

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(i)            no Default or Event of Default has occurred and is continuing or would arise as a result of such Restricted Payment;

 

(ii)           after giving effect to such Restricted Payment, the Credit Parties are in compliance on a pro forma basis with the covenant set forth in Article VI, recomputed for the most recent fiscal month for which financial statements have been delivered;

 

(iii)          the aggregate Restricted Payments permitted in any Fiscal Year of the Borrower shall not exceed the lesser of (x) fifty percent (50%) of Excess Cash Flow for the immediately preceding Fiscal Year and (y) $15,000,000;

 

(iv)          for the most recent fiscal month for which financial statements have been delivered, average daily Availability was not less than $20,000,000; and

 

(v)           after giving effect to such Restricted Payment, Availability is not less than $20,000,000;

 

provided, however, that no later than five (5) Business Days prior to making any Restricted Payment, the Borrower shall have delivered to Agent a certificate duly executed and completed by a financial officer of the Borrower stating the amount of the Restricted Payment and containing a schedule, in reasonable detail, setting forth the calculation demonstrating compliance with this Section 5.11(b).

 

(b)           the Credit Parties may pay, as and when due and payable, regularly scheduled payments of principal and interest at the non-default rate on the Subordinated Indebtedness evidenced by the Subordinated Indebtedness Documents, to the extent permitted under the Subordination Agreement; provided, that no Default or Event of Default has occurred and is continuing or would arise as a result of such payment;

 

(c)           the Borrower may make one or more Restricted Payments constituting the Janus Series A Preferred Proceeds Distributions, on or before March 31, 2015; provided, that (w) no more than $29,000,000 in the aggregate of such Restricted Payments may be made after April 30, 2014, (x) no Default or Event of Default has occurred and is continuing or would arise as a result of such Restricted Payment, (y) after giving effect to such Restricted Payment, Availability is not less than $15,000,000, and (z) on the Business Day prior to each such Restricted Payment, the Borrower shall deliver to the Agent a certificate certifying that the conditions set forth in this Section 5.11(f) shall have been satisfied after giving effect to such Restricted Payment, setting forth the amount of the Restricted Payment to be made on such next Business Day, the aggregate amount of Janus Series A Preferred Proceeds Distributions made since the Seventh Amendment Effective Date after giving effect to such Restricted Payment and attaching an updated Schedule 3.19;

 

(d)           the Series A Preferred Stock may be converted into common stock of the Borrower; and

 

(e)           the Borrower may make a special distribution (i) to those Persons who were shareholders of the Borrower during 2013 in an amount sufficient to pay the federal income taxes owed by them in respect of the federal taxable income of the Borrower allocable to them 

 

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for 2013 (less any such amounts previously paid) and (ii) if the Borrower does not elect to revoke its election to be an S corporation as of the beginning of the Borrower’s current tax year under Section 1362(d)(1)(D)(i) of the Code, then to those Persons who were shareholders of the Company during 2014 prior to January 23, 2014, in an amount sufficient to pay the federal income taxes owed by them in respect of the federal taxable income of the Borrower allocable to them for the period from January 1, 2014 through January 23, 2014, taking into account any election under Section 1362(e)(3) of the Code to close the books of the Borrower as of January 23, 2014 (any such special distribution pursuant to this sentence, a “Special Tax Distribution”).

 

5.12        Change in Business.

 

No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, engage in any line of business different from those lines of business carried on by it on the Closing Date.

 

5.13        Change in Structure.

 

Except as expressly permitted under Section 5.3, no Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make any material changes in its equity capital structure, issue any Stock or Stock Equivalents or amend any of its Organization Documents in any material respect and, in each case, in any respect adverse to Agent or Lenders.  For the avoidance of doubt, this Section 5.13 does not restrict the Borrower from issuing “phantom stock options” to its executives or other employees.  Notwithstanding the foregoing, (i) the Borrower may complete a Qualified IPO and the Borrower may issue its common stock after a Qualified IPO, (ii) in connection with a Qualified IPO, upon at least 30 days prior written notice, the Borrower may form a parent company on terms and documentation acceptable to Agent and Required Lenders, and (ii) the Series A Preferred Stock may be converted into common stock of the Borrower.

 

5.14        Changes in Accounting, Name or Jurisdiction of Organization.

 

No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, (i) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (ii) change the Fiscal Year or method for determining Fiscal Quarters of any Credit Party or of any consolidated Subsidiary of any Credit Party, (iii) change its name as it appears in official filings in its jurisdiction of organization or (iv) change its jurisdiction of organization, in the case of clauses (iii) and (iv), without at least twenty (20) days’ prior written notice to Agent and the acknowledgement of Agent that all actions required by Agent, including those to continue the perfection of its Liens, have been completed.

 

5.15        Amendments to Related Agreements, Material Agreements and Subordinated Indebtedness.

 

(a)           No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, amend, supplement, waive or otherwise modify any provision of, any Related Agreement (other than the Subordinated Indebtedness Documents), any Material Agreement in a manner adverse to Agent or Lenders or which would reasonably be expected to have a Material Adverse Effect.

 

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(b)           No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries directly or indirectly to, change or amend the terms of any Subordinated Indebtedness Documents except to the extent permitted by the Subordination Agreements.

 

5.16        No Negative Pledges.

 

(a)           No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the ability of any Credit Party or Subsidiary to pay dividends or make any other distribution on any of such Credit Party’s or Subsidiary’s Stock or Stock Equivalents or to pay fees, including management fees, or make other payments and distributions to the Borrower or any other Credit Party.  No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, enter into, assume or become subject to any Contractual Obligation prohibiting or otherwise restricting the existence of any Lien upon any of its assets in favor of Agent, whether now owned or hereafter acquired except in connection with any document or instrument governing Liens permitted pursuant to Sections 5.1(h) and 5.1(i) provided that any such restriction contained therein relates only to the asset or assets subject to such permitted Liens.

 

(b)           No Credit Party shall issue any Stock or Stock Equivalents (i) if such issuance would result in an Event of Default under Section 7.1(k) and (ii) unless, prior to a Qualified IPO, such Stock and Stock Equivalents are pledged to Agent, for the benefit of the Secured Parties, as security for the Obligations, on substantially the same terms and conditions as the Stock and Stock Equivalents of the Credit Parties owned by the Permitted Holders are pledged to Agent as of the Closing Date; provided, however, the Borrower may issue options to its employees so long as the condition in Section 5.16(b)(i) is satisfied.

 

5.17        OFAC; Patriot Act.

 

No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to fail to comply with the laws, regulations and executive orders referred to in Sections 3.28 and 3.29.

 

5.18        Sale-Leasebacks.

 

No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, engage in a sale leaseback, synthetic lease or similar transaction involving any of its assets.

 

5.19        Hazardous Materials.

 

No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, cause or suffer to exist any Release of any Hazardous Material at, to or from any Real Estate that would violate any Environmental Law, form the basis for any Environmental Liabilities or otherwise adversely affect the value or marketability of any Real Estate (whether or not owned by any Credit Party or any Subsidiary of any Credit Party).

 

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5.20                        Prepayments of Other Indebtedness.

 

No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than (a) the Obligations, (b) Indebtedness secured by a Permitted Lien if the asset securing such Indebtedness has been sold or otherwise disposed of in a transaction permitted hereunder, (c) a Permitted Refinancing of Indebtedness permitted under Section 5.5(c), (d) or (h), (d) prepayments of other Indebtedness (excluding Subordinated Indebtedness) so long as the amounts prepaid do not exceed $1,000,000 in the aggregate, and (e) prepayment of intercompany Indebtedness to Credit Parties.

 

ARTICLE VI.
 FINANCIAL COVENANT

 

Each Credit Party covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) shall remain unpaid or unsatisfied:

 

6.1                               Fixed Charge Coverage Ratio.

 

If average daily Availability for any fiscal month reaches or falls below $20,000,000, the Credit Parties shall not permit the Fixed Charge Coverage Ratio to be less than 1.10x for the trailing 12 month period ending on the last day of such fiscal month.  The “Fixed Charge Coverage Ratio” shall be calculated in the manner set forth in Exhibit 4.2(b).

 

ARTICLE VII.
 EVENTS OF DEFAULT

 

7.1                               Events of Default.

 

Any of the following shall constitute an “Event of Default”:

 

(a)                                 Non-Payment.  Any Credit Party fails (i) to pay when and as required to be paid herein, any amount of principal of, or interest on, any Loan, including after maturity of the Loans, or to pay any L/C Reimbursement Obligation or (ii) to pay within three (3) Business Days after the same shall become due, any fee or any other amount payable hereunder or pursuant to any other Loan Document;

 

(b)                                 Representation or Warranty.  (i) Any representation, warranty or certification by or on behalf of any Credit Party or any of its Subsidiaries made or deemed made herein, in any other Loan Document, or which is contained in any certificate, document or financial or other statement by any such Person, or their respective Responsible Officers, furnished at any time under this Agreement, or in or under any other Loan Document, shall prove to have been incorrect in any material respect (without duplication of other materiality qualifiers contained therein) on or as of the date made or deemed made or (ii) any information contained in any Borrowing Base Certificate is untrue or incorrect in any respect (other than (A) inadvertent, immaterial errors not exceeding $250,000 in the aggregate in any Borrowing Base Certificate, 

 

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(B) errors understating the Borrowing Base and (C) errors occurring when Availability continues to exceed $20,000,000 after giving effect to the correction of such errors);

 

(c)                                  Specific Defaults.  Any Credit Party fails to perform or observe any term, covenant or agreement contained in any of Section 4.2(a), 4.2(b), 4.2(d), 4.3(a) or 9.10(d), Section 4.1, 4.6, 4.9, 4.10, 4.11 or 4.15 or Article V or VI;

 

(d)                                 Other Defaults.  Any Credit Party or Subsidiary of any Credit Party fails to perform or observe any other term, covenant or agreement contained in this Agreement or any other Loan Document, and such default shall continue unremedied for a period of fifteen (15) Business Day after the earlier to occur of (i) the date upon which a Responsible Officer of any Credit Party becomes aware of such default and (ii) the date upon which written notice thereof is given to the Borrower by Agent or Required Lenders;

 

(e)                                  Cross Default.  Any Credit Party or any Subsidiary of any Credit Party (i) fails to make any payment in respect of any Indebtedness (other than the Obligations) or Contingent Obligation (other than the Obligations) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $2,000,000 when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and such failure continues after the applicable grace or notice period, if any, specified in the document relating thereto on the date of such failure; or (ii) fails to perform or observe any other condition or covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any such Indebtedness or Contingent Obligation (other than Contingent Obligations owing by one Credit Party with respect to the obligations of another Credit Party permitted hereunder or earnouts permitted hereunder), if the effect of such failure, event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to be declared to be due and payable prior to its stated maturity (without regard to any subordination terms with respect thereto), or such Contingent Obligation to become payable or cash collateral in respect thereof to be demanded;

 

(f)                                   Insolvency; Voluntary Proceedings.  The Borrower, individually, ceases or fails, or the Credit Parties and their Subsidiaries on a consolidated basis, cease or fail, to be Solvent, or any Credit Party or any Subsidiary of any Credit Party:  (i) generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise; (ii) except as expressly permitted under Section 5.3, voluntarily ceases to conduct its business in the ordinary course; (iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes any action to effectuate or authorize any of the foregoing;

 

(g)                                  Involuntary Proceedings.  (i) Any involuntary Insolvency Proceeding is commenced or filed against any Credit Party or any Subsidiary of any Credit Party, or any writ, judgment, warrant of attachment, execution or similar process, is issued or levied against any such Person’s Properties with a value in excess of $500,000 individually or $1,000,000 in the aggregate and any such proceeding or petition shall not be dismissed, or such writ, judgment, 

 

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warrant of attachment, execution or similar process shall not be released, vacated or fully bonded within sixty (60) days after commencement, filing or levy; (ii) any Credit Party or Subsidiary of any Credit Party admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) any Credit Party or any Subsidiary of any Credit Party acquiesces in the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor), or other similar Person for itself or a substantial portion of its Property or business;

 

(h)                                 Monetary Judgments.  One or more judgments, non-interlocutory orders, decrees or arbitration awards shall be entered against any one or more of the Credit Parties or any of their respective Subsidiaries involving in the aggregate a liability of $500,000 or more (excluding amounts covered by insurance to the extent the relevant independent third party insurer has not denied coverage therefor), and the same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty (30) days after the entry thereof;

 

(i)                                     Non Monetary Judgments.  One or more non-monetary judgments, orders or decrees shall be rendered against any one or more of the Credit Parties or any of their respective Subsidiaries which has or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, and there shall be any period of fifteen (15) consecutive Business Days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

 

(j)                                    Collateral.  Any material provision of any Loan Document shall for any reason cease to be valid and binding on or enforceable against any Credit Party or any Subsidiary of any Credit Party party thereto or any Credit Party or any Subsidiary of any Credit Party shall so state in writing or bring an action to limit its obligations or liabilities thereunder; or any Collateral Document shall for any reason (other than pursuant to the terms thereof) cease to create a valid security interest in the Collateral purported to be covered thereby or such security interest shall for any reason cease to be a perfected and first priority security interest subject only to Permitted Liens;

 

(k)                                 Change of Control.  There occurs any Change of Control.

 

(l)                                     Invalidity of Subordination Provisions.  The subordination provisions of the Subordination Agreement or the AmerisourceBergen Intercreditor Agreement or any agreement or instrument governing any Subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the priority contemplated by this Agreement or such subordination provisions;

 

(m)                             Material Agreements.  Any default or breach by any Borrower occurs and is continuing under any Material Agreement or any Material Agreement is terminated for any reason;

 

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(n)                                 Damage; Casualty.  Any event occurs, whether or not insured or insurable, as a result of which revenue-producing activities cease or are substantially curtailed at facilities of the Credit Parties generating more than 25% of the Borrower’s consolidated revenue for the Fiscal Year preceding such event and such cessation or curtailment continues for more than thirty (30) days;

 

(o)                                 FDA.  (i) the FDA or any other Governmental Authority initiates enforcement action against any Credit Party or any of its Subsidiaries, or any suppliers that causes such Credit Party or Subsidiary to recall, withdraw, remove or discontinue marketing any of its Products which would reasonably be expected, in the aggregate, to have a Material Adverse Effect; (ii) the FDA or any other Governmental Authority issues a warning letter to any Credit Party or any of its Subsidiaries with respect to any Regulatory Matter which would reasonably be expected, in the aggregate, to have a Material Adverse Effect; (iii) any Credit Party or any of its Subsidiaries conducts a mandated or voluntary recall which could reasonably be expected to result in aggregate liability and expense to the Credit Parties and their Subsidiaries of $500,000 or more; or (iv) any Credit Party or any of its Subsidiaries enters into a settlement agreement with the FDA or any other Governmental Authority that results in aggregate liability as to any single or related series of transactions, incidents or conditions, of $500,000 or more, or that would reasonably be expected to have a Material Adverse Effect; or

 

(p)                                 Health Care.  There shall occur any revocation, suspension, termination, recession, non-renewal or forfeiture or any similar final administrative action with respect to one or more Health Care Permits, Third Party Payor Programs or Third Party Payor Authorizations, in each case of any Credit Party or any Subsidiary of any Credit Party which, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

7.2                               Remedies.

 

Upon the occurrence and during the continuance of any Event of Default, Agent may, and shall at the request of the Required Lenders:

 

(a)                                 declare all or any portion of the Commitment of each Lender to make Loans or of the L/C Issuer to Issue Letters of Credit to be suspended or terminated, whereupon such Commitments shall forthwith be suspended or terminated;

 

(b)                                 declare all or any portion of the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable; without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Credit Party; and/or

 

(c)                                  exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable law;

 

provided, however, that upon the occurrence of any event specified in Section 7.1(f) or 7.1(g) (in the case of Section 7.1(g)(i) upon the expiration of the sixty (60) day period mentioned therein), the obligation of each Lender to make Loans and the obligation of the L/C Issuer to Issue Letters of Credit shall automatically terminate and the unpaid principal amount of all outstanding Loans 

 

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and all interest and other amounts as aforesaid shall automatically become due and payable without further act of Agent, any Lender or the L/C Issuer.

 

7.3                               Rights Not Exclusive.

 

The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now existing or hereafter arising.

 

7.4                               Cash Collateral for Letters of Credit.

 

If an Event of Default has occurred and is continuing, this Agreement (or the Revolving Loan Commitment) shall be terminated for any reason or if otherwise required by the terms hereof, Agent may, and upon request of Required Lenders, shall, demand (which demand shall be deemed to have been delivered automatically upon any acceleration of the Loans and other obligations hereunder pursuant to Section 7.2), and the Borrower shall thereupon deliver to Agent, to be held for the benefit of the L/C Issuer, Agent and the Lenders entitled thereto, an amount of cash equal to 105% of the amount of L/C Reimbursement Obligations as additional collateral security for Obligations.  Agent may at any time apply any or all of such cash and cash collateral to the payment of any or all of the Credit Parties’ Obligations.  The remaining balance of the cash collateral will be returned to the Borrower when all Letters of Credit have been terminated or discharged, all Commitments have been terminated and all Obligations have been paid in full in cash.

 

ARTICLE VIII.
 THE AGENT

 

8.1                               Appointment and Duties.

 

(a)                                 Appointment of Agent.  Each Lender and each L/C Issuer hereby appoints GE Capital (together with any successor Agent pursuant to Section 8.9) as Agent hereunder and authorizes Agent to (i) execute and deliver the Loan Documents and accept delivery thereof on its behalf from any Credit Party, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expressly delegated to Agent under such Loan Documents and (iii) exercise such powers as are incidental thereto.

 

(b)                                 Duties as Collateral and Disbursing Agent.  Without limiting the generality of Section8.1(a), Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders and L/C Issuers), and is hereby authorized, to (i) act as the disbursing and collecting agent for the Lenders and the L/C Issuers with respect to all payments and collections arising in connection with the Loan Documents (including in any proceeding described in Section 7.1(g) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Loan Document to any Secured Party is hereby authorized to make such payment to Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of the Secured Parties with respect to any Obligation in any proceeding described in Section 7.1(f) or (g) or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Person), (iii) act as collateral agent for each Secured Party for purposes of the perfection of all 

 

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Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified in any Loan Document, exercise all remedies given to Agent and the other Secured Parties with respect to the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise and (vii) execute any amendment, consent or waiver under the Loan Documents on behalf of any Lender that has consented in writing to such amendment, consent or waiver; provided, however, that Agent hereby appoints, authorizes and directs each Lender and L/C Issuer to act as collateral sub-agent for Agent, the Lenders and the L/C Issuers for purposes of the perfection of Liens with respect to any deposit account maintained by a Credit Party with, and cash and Cash Equivalents held by, such Lender or L/C Issuer, and may further authorize and direct the Lenders and the L/C Issuers to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Agent, and each Lender and L/C Issuer hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed.

 

(c)                                  Limited Duties.  Under the Loan Documents, Agent (i) is acting solely on behalf of the Secured Parties (except to the limited extent provided in Section 1.4(b) with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and similar terms in any Loan Document to refer to Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender, L/C Issuer or any other Person and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document, and each Secured Party, by accepting the benefits of the Loan Documents, hereby waives and agrees not to assert any claim against Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above.

 

8.2                               Binding Effect.

 

Each Secured Party, by accepting the benefits of the Loan Documents, agrees that (i) any action taken by Agent or the Required Lenders (or, if expressly required hereby, a greater proportion of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken by Agent in reliance upon the instructions of Required Lenders (or, where so required, such greater proportion) and (iii) the exercise by Agent or the Required Lenders (or, where so required, such greater proportion) of the powers set forth herein or therein, together with such other powers as are incidental thereto, shall be authorized and binding upon all of the Secured Parties.

 

8.3                               Use of Discretion.

 

(a)                                 Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided, that Agent shall not be required 

 

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to take any action that, in its opinion or the opinion of its counsel, may expose Agent to liability or that is contrary to any Loan Document or applicable Requirement of Law; and

 

(b)                                 Agent shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Credit Party or its Affiliates that is communicated to or obtained by Agent or any of its Affiliates in any capacity; and

 

(c)                                  Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Agent in accordance with the Loan Documents for the benefit of all the Lenders and the L/C Issuer; provided that the foregoing shall not prohibit (i) Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other Loan Documents, (ii) each of the L/C Issuer and the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (iii) any Lender from exercising setoff rights in accordance with Section 9.11 or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any bankruptcy or other debtor relief law; and provided further that if at any time there is no Person acting as Agent hereunder and under the other Loan Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to Agent pursuant to Section 7.2 and (B) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 9.11, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

8.4                               Delegation of Rights and Duties.

 

Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party).  Any such Person shall benefit from this Article VIII to the extent provided by Agent.

 

8.5                               Reliance and Liability.

 

(a)                                 Agent may, without incurring any liability hereunder, (i) treat the payee of any Note as its holder until such Note has been assigned in accordance with Section 9.9, (ii) rely on the Register to the extent set forth in Section 1.4, (iii) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, any Credit Party) and (iv) rely and act upon any document and information (including those transmitted by Electronic Transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.

 

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(b)                                 None of Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any Loan Document, and each Secured Party, the Borrower and each other Credit Party hereby waive and shall not assert (and the Borrower shall cause each other Credit Party to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set forth herein.  Without limiting the foregoing, Agent:

 

(i)                                     shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Persons selected with reasonable care (other than employees, officers and directors of Agent, when acting on behalf of Agent);

 

(ii)                                  shall not be responsible to any Lender, L/C Issuer or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Loan Document;

 

(iii)                               makes no warranty or representation, and shall not be responsible, to any Lender, L/C Issuer or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of any Credit Party or any Related Person of any Credit Party in connection with any Loan Document or any transaction contemplated therein or any other document or information with respect to any Credit Party, whether or not transmitted or (except for documents expressly required under any Loan Document to be transmitted to the Lenders) omitted to be transmitted by Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Agent in connection with the Loan Documents; and

 

(iv)                              shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of any Credit Party or as to the existence or continuation or possible occurrence or continuation of any Default or Event of Default and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from the Borrower, any Lender or L/C Issuer describing such Default or Event of Default clearly labeled “notice of default” (in which case Agent shall promptly give notice of such receipt to all Lenders);

 

and, for each of the items set forth in Section 8.5(b)(i) through (iv), each Lender, L/C Issuer and the Borrower hereby waives and agrees not to assert (and the Borrower shall cause each other Credit Party to waive and agree not to assert) any right, claim or cause of action it might have against Agent based thereon.

 

(c)                                  Each Lender and L/C Issuer (i) acknowledges that it has performed and will continue to perform its own diligence and has made and will continue to make its own independent investigation of the operations, financial conditions and affairs of the Credit Parties and (ii) agrees that is shall not rely on any audit or other report provided by Agent or its Related 

 

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Persons (an “Agent Report”).  Each Lender and L/C Issuer further acknowledges that any Agent Report (i) is provided to the Lenders and L/C Issuers solely as a courtesy, without consideration, and based upon the understanding that such Lender or L/C Issuer will not rely on such Agent Report, (ii) was prepared by Agent or its Related Persons based upon information provided by the Credit Parties solely for Agent’s own internal use, (iii) may not be complete and may not reflect all information and findings obtained by Agent or its Related Persons regarding the operations and condition of the Credit Parties.  Neither Agent nor any of its Related Persons makes any representations or warranties of any kind with respect to (i) any existing or proposed financing, (ii) the accuracy or completeness of the information contained in any Agent Report or in any related documentation, (iii) the scope or adequacy of Agent’s and its Related Persons’ due diligence, or the presence or absence of any errors or omissions contained in any Agent Report or in any related documentation, and (iv) any work performed by Agent or Agent’s Related Persons in connection with or using any Agent Report or any related documentation.

 

(d)                                 Neither Agent nor any of its Related Persons shall have any duties or obligations in connection with or as a result of any Lender or L/C Issuer receiving a copy of any Agent Report. Without limiting the generality of the forgoing, neither Agent nor any of its Related Persons shall have any responsibility for the accuracy or completeness of any Agent Report, or the appropriateness of any Agent Report for any Lender’s or L/C Issuer’s purposes, and shall have no duty or responsibility to correct or update any Agent Report or disclose to any Lender or L/C Issuer any other information not embodied in any Agent Report, including any supplemental information obtained after the date of any Agent Report.  Each Lender and L/C Issuer releases, and agrees that it will not assert, any claim against Agent or its Related Persons that in any way relates to any Agent Report or arises out of any Lender or L/C Issuer having access to any Agent Report or any discussion of its contents, and agrees to indemnify and hold harmless Agent and its Related Persons from all claims, liabilities and expenses relating to a breach by any Lender or L/C Issuer arising out of such Lender’s or L/C Issuer’s access to any Agent Report or any discussion of its contents.

 

8.6                               Agent Individually.

 

Agent and its Affiliates may make loans and other extensions of credit to, acquire Stock and Stock Equivalents of, engage in any kind of business with, any Credit Party or Affiliate thereof as though it were not acting as Agent and may receive separate fees and other payments therefor.  To the extent Agent or any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and the terms “Lender”, “Required Lender” and any similar terms shall, except where otherwise expressly provided in any Loan Document, include, without limitation, Agent or such Affiliate, as the case may be, in its individual capacity as Lender or as one of the Required Lenders respectively.

 

8.7                               Lender Credit Decision.

 

(a)                                 Each Lender and each L/C Issuer acknowledges that it shall, independently and without reliance upon Agent, any Lender or L/C Issuer or any of their Related Persons or upon any document (including any offering and disclosure materials in connection with the syndication of the Loans) solely or in part because such document was transmitted by 

 

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Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of each Credit Party and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate.  Except for documents expressly required by any Loan Document to be transmitted by Agent to the Lenders or L/C Issuers, Agent shall not have any duty or responsibility to provide any Lender or L/C Issuer with any credit or other information concerning the business, prospects, operations, Property, financial and other condition or creditworthiness of any Credit Party or any Affiliate of any Credit Party that may come in to the possession of Agent or any of its Related Persons.

 

(b)                                 If any Lender or L/C Issuer has elected to abstain from receiving MNPI concerning the Credit Parties or their Affiliates, such Lender or L/C Issuer acknowledges that, notwithstanding such election, Agent and/or the Credit Parties will, from time to time, make available syndicate-information (which may contain MNPI) as required by the terms of, or in the course of administering the Loans to the credit contact(s) identified for receipt of such information on the Lender’s administrative questionnaire who are able to receive and use all syndicate-level information (which may contain MNPI) in accordance with such Lender’s compliance policies and contractual obligations and applicable law, including federal and state securities laws; provided, that if such contact is not so identified in such questionnaire, the relevant Lender or L/C Issuer hereby agrees to promptly (and in any event within one (1) Business Day) provide such a contact to Agent and the Credit Parties upon request therefor by Agent or the Credit Parties. Notwithstanding such Lender’s or L/C Issuer’s election to abstain from receiving MNPI, such Lender or L/C Issuer acknowledges that if such Lender or L/C Issuer chooses to communicate with Agent, it assumes the risk of receiving MNPI concerning the Credit Parties or their Affiliates.

 

8.8                               Expenses; Indemnities; Withholding.

 

(a)                                 Each Lender agrees to reimburse Agent and each of its Related Persons (to the extent not reimbursed by any Credit Party) promptly upon demand, severally and ratably, for any costs and expenses (including fees, charges and disbursements of financial, legal and other advisors and Other Taxes paid in the name of, or on behalf of, any Credit Party) that may be incurred by Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, consent, waiver or enforcement of, or the taking of any other action (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding (including, without limitation, preparation for and/or response to any subpoena or request for document production relating thereto) or otherwise) in respect of, or legal advice with respect to its rights or responsibilities under, any Loan Document.

 

(b)                                 Each Lender further agrees to indemnify Agent and each of its Related Persons (to the extent not reimbursed by any Credit Party), severally and ratably, from and against Liabilities (including, to the extent not indemnified pursuant to Section 8.8(c), taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to or for the account of any Lender) that may be imposed on, incurred by or asserted against Agent or any of its Related Persons in any matter relating to or arising out of, in 

 

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connection with or as a result of any Loan Document, any Related Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by Agent or any of its Related Persons under or with respect to any of the foregoing; provided, however, that no Lender shall be liable to Agent or any of its Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct of Agent or, as the case may be, such Related Person, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.

 

(c)                                  To the extent required by any applicable law, Agent may withhold from any payment to any Lender under a Loan Document an amount equal to any applicable withholding tax.  If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate certification form was not delivered, was not properly executed, or fails to establish an exemption from, or reduction of, withholding tax with respect to a particular type of payment, or because such Lender failed to notify Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), or Agent reasonably determines that it was required to withhold taxes from a prior payment but failed to do so, such Lender shall promptly indemnify Agent fully for all amounts paid, directly or indirectly, by such Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Agent, including legal expenses, allocated internal costs and out-of-pocket expenses.  Agent may offset against any payment to any Lender under a Loan Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender but which was not so withheld, as well as any other amounts for which Agent is entitled to indemnification from such Lender under this Section 8.8(c).

 

8.9                               Resignation of Agent or L/C Issuer.

 

(a)                                 Agent may resign at any time by delivering notice of such resignation to the Lenders and the Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice shall be effective in accordance with the terms of this Section 8.9.  If Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Agent.  If, within 30 days after the retiring Agent having given notice of resignation, no successor Agent has been appointed by the Required Lenders that has accepted such appointment, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent from among the Lenders.  Each appointment under this Section 8.9(a) shall be subject to the prior consent of the Borrower, which may not be unreasonably withheld but shall not be required during the continuance of an Event of Default.

 

(b)                                 Effective immediately upon its resignation, (i) the retiring Agent shall be discharged from its duties and obligations under the Loan Documents, (ii) the Lenders shall assume and perform all of the duties of Agent until a successor Agent shall have accepted a valid appointment hereunder, (iii) the retiring Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Agent was, or because such Agent had been, validly acting as Agent under the Loan Documents and (iv) subject to its rights under Section 8.3, the retiring Agent shall take such action as may be reasonably necessary to assign to the successor Agent its rights as Agent under the Loan Documents.  Effective immediately upon its acceptance

 

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of a valid appointment as Agent, a successor Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Agent under the Loan Documents.

 

(c)                                  Any L/C Issuer may refuse to Issue a Letter of Credit in its sole discretion.

 

8.10                        Release of Collateral or Guarantors.

 

Each Lender and L/C Issuer hereby consents to the release and hereby directs Agent to release (or, in the case of Section 8.10(b)(ii), release or subordinate) the following:

 

(a)                                 any Subsidiary of the Borrower from its guaranty of any Obligation if all of the Stock and Stock Equivalents of such Subsidiary owned by any Credit Party are sold or transferred in a transaction permitted under the Loan Documents (including pursuant to a waiver or consent);

 

(b)                                 any Lien held by Agent for the benefit of the Secured Parties against (i) any Collateral that is sold, transferred, conveyed or otherwise disposed of by a Credit Party in a transaction permitted by the Loan Documents (including pursuant to a waiver or consent), (ii) any Property subject to a Lien permitted hereunder in reliance upon Section 5.1(h) or 5.1(i) and (iii) all of the Collateral and all Credit Parties, upon (A) termination of the Revolving Loan Commitments, (B) payment and satisfaction in full of all Loans, all L/C Reimbursement Obligations and all other Obligations under the Loan Documents and all Obligations arising under Secured Rate Contracts, that Agent has theretofore been notified in writing by the holder of such Obligation are then due and payable, (C) deposit of cash collateral with respect to all contingent Obligations (or, as an alternative to cash collateral in the case of any Letter of Credit Obligation, receipt by Agent of a back-up letter of credit), in amounts and on terms and conditions and with parties satisfactory to Agent and each Indemnitee that is, or may be, owed such Obligations (excluding contingent Obligations (other than L/C Reimbursement Obligations) as to which no claim has been asserted) and (D) to the extent requested by Agent, receipt by Agent and the Secured Parties of liability releases from the Credit Parties each in form and substance acceptable to Agent; and

 

(c)                                  on the Closing Date, any Lien held by Agent for the benefit of the Secured Parties against any Stock or Stock Equivalents owned legally or beneficially by the Permitted Holders.

 

Each Lender and L/C Issuer hereby directs Agent, and Agent hereby agrees, upon receipt of at least five (5) Business Days’ advance notice from the Borrower, to execute and deliver or file such documents and to perform other actions reasonably necessary to release the guaranties and Liens when and as directed in this Section 8.10.

 

8.11                        Additional Secured Parties.

 

The benefit of the provisions of the Loan Documents directly relating to the Collateral or any Lien granted thereunder shall extend to and be available to any Secured Party that is not a Lender or L/C Issuer party hereto as long as, by accepting such benefits, such Secured Party agrees, as among Agent and all other Secured Parties, that such Secured Party is bound by (and, if requested by Agent, shall confirm such agreement in a writing in form and substance 

 

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acceptable to Agent) this Article VIII and Sections 9.3, 9.9, 9.10, 9.11, 9.17, 9.24 and 10.1 (and, solely with respect to L/C Issuers, Section 1.1(c)) and the decisions and actions of Agent and the Required Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders or other parties hereto as required herein) to the same extent a Lender is bound; provided, however, that, notwithstanding the foregoing, (a) such Secured Party shall be bound by Section 8.8 only to the extent of Liabilities, costs and expenses with respect to or otherwise relating to the Collateral held for the benefit of such Secured Party, in which case the obligations of such Secured Party thereunder shall not be limited by any concept of pro rata share or similar concept, (b) each of Agent, the Lenders and the L/C Issuers party hereto shall be entitled to act at its sole discretion, without regard to the interest of such Secured Party, regardless of whether any Obligation to such Secured Party thereafter remains outstanding, is deprived of the benefit of the Collateral, becomes unsecured or is otherwise affected or put in jeopardy thereby, and without any duty or liability to such Secured Party or any such Obligation and (c) except as otherwise set forth herein, such Secured Party shall not have any right to be notified of, consent to, direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral or under any Loan Document.

 

8.12                        Information Regarding Bank Products and Secured Rate Contracts.  Each Lender agrees that, upon the reasonable request of the Agent, it shall from time to time provide the Agent with updated information regarding the maximum dollar amount of obligations under Bank Products or obligations under Secured Rate Contracts in order to facilitate the Agent’s administration of the credit facilities hereunder.

 

ARTICLE IX.
 MISCELLANEOUS

 

9.1                               Amendments and Waivers.

 

(a)                                 No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by any Credit Party therefrom, shall be effective unless the same shall be in writing and signed by Agent, the Required Lenders (or by Agent with the consent of the Required Lenders), and the Borrower, and then such waiver shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Lenders directly affected thereby (or by Agent with the consent of all the Lenders directly affected thereby), in addition to Agent and the Required Lenders (or by Agent with the consent of the Required Lenders) and the Borrower, do any of the following:

 

(i)                                     increase or extend the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 7.2(a));

 

(ii)                                  postpone or delay any date fixed for, or reduce or waive, any scheduled installment of principal or any payment of interest, fees or other amounts (other than principal) due to the Lenders (or any of them) or L/C Issuer hereunder or under any other Loan Document;

 

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(iii)                               reduce the principal of, or the rate of interest specified herein or the amount of interest payable in cash specified herein on any Loan, or of any fees or other amounts payable hereunder or under any other Loan Document, including L/C Reimbursement Obligations;

 

(iv)                              amend or modify Section 1.10(c);

 

(v)                                 change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which shall be required for the Lenders or any of them to take any action hereunder;

 

(vi)                              amend this Section 9.1 or, subject to Section 9.1(e) below, the definition of Required Lenders or any provision providing for consent or other action by all Lenders; or

 

(vii)                           discharge any Credit Party from its respective payment Obligations under the Loan Documents, or release all or substantially all of the Collateral, except as otherwise may be provided in this Agreement or the other Loan Documents;

 

it being agreed that all Lenders shall be deemed to be directly affected by an amendment or waiver of the type described in Sections 9.1(a)(iv), (v), (vi) and (vii).

 

(b)                                 No amendment, waiver or consent shall, unless in writing and signed by Agent, the Swingline Lender or the L/C Issuer, as the case may be, in addition to the Required Lenders or all Lenders directly affected thereby, as the case may be (or by Agent with the consent of the Required Lenders or all the Lenders directly affected thereby, as the case may be), affect the rights or duties of Agent, the Swingline Lender or the L/C Issuer, as applicable, under this Agreement or any other Loan Document. No amendment, modification or waiver of this Agreement or any Loan Document altering the ratable treatment of Obligations arising under Secured Rate Contracts resulting in such Obligations being junior in right of payment to principal on the Loans or resulting in Obligations owing to any Secured Swap Provider becoming unsecured (other than releases of Liens permitted in accordance with the terms hereof), in each case in a manner adverse to any Secured Swap Provider, shall be effective without the written consent of such Secured Swap Provider or, in the case of a Secured Rate Contract provided or arranged by GE Capital or an Affiliate of GE Capital, GE Capital.

 

(c)                                  No amendment or waiver shall, unless signed by the Required Lenders (or by Agent with the consent of the Required Lenders):  (i) amend or waive compliance with the conditions precedent to the obligations of Lenders to make any Revolving Loan (or of L/C Issuer to Issue any Letter of Credit) in Section 2.2; (ii) waive any Default or Event of Default for the purpose of satisfying the conditions precedent to the obligations of Lenders to make any Revolving Loan (or of any L/C Issuer to Issue any Letter of Credit) in Section 2.2; (iii) amend or waive this Section 9.1(c) or the definitions of the terms used in this Section 9.1(c) insofar as the definitions affect the substance of this Section 9.1(c); or (iv) amend or modify the definitions of Eligible Accounts, Eligible Inventory or Borrowing Base, including any increase in the percentage advance rates in the definition of Borrowing Base, in a manner which would increase the availability of credit under the Revolving Loan.  No amendment or waiver shall, unless 

 

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signed by Agent and all Lenders (or by Agent with the consent of all Lenders) in addition to the Required Lenders (or by Agent with the consent of the Required Lenders), change the definition of (x) the term Required Lenders, (y) the percentage of Lenders which shall be required for Lenders to take any action hereunder or (z) any specific right of Required Lenders to grant or withhold consent or take or omit to take any action hereunder.

 

(d)                                 Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a “Lender” (or be, or have its Loans and Commitments, included in the determination of “Required Lenders” or “Lenders directly affected” pursuant to this Section 9.1) for any voting or consent rights under or with respect to any Loan Document, except that a Non-Funding Lender shall be treated as an “affected Lender” for purposes of Section 9.1(a)(i) and 9.1(a)(iii) solely with respect to an increase in such Non-Funding Lender’s Commitments, a reduction of the principal amount owed to such Non-Funding Lender or, unless such Non-Funding Lender is treated the same as the other Lenders holding Loans of the same type, a reduction in the interest rates applicable to the Loans held by such Non-Funding Lender.  Moreover, for the purposes of determining Required Lenders, the Loans and Commitments held by Non-Funding Lenders shall be excluded from the total Loans and Commitments outstanding.

 

(e)                                  Subject to the provisions of Section 9.1(a), notwithstanding anything set forth herein to the contrary, this Agreement may be amended with the written consent of Agent, the Borrower and the Required Lenders to (i) add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the outstanding principal and accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans and the accrued interest and fees in respect thereof and (ii) include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

 

(f)                                   Notwithstanding anything to the contrary contained in this Section 9.1, (i) the Borrower may amend Schedules 3.19 and 3.21 upon notice to Agent, (ii) Agent may amend Schedule 1.1(b) to reflect Sales entered into pursuant to Section 9.9, and (iii) Agent and the Borrower may amend or modify this Agreement and any other Loan Document to (1) cure any ambiguity, omission, defect or inconsistency therein, or (2) grant a new Lien for the benefit of the Secured Parties, extend an existing Lien over additional Property for the benefit of the Secured Parties or join additional Persons as Credit Parties; provided that no Accounts or Inventory of such Person shall be included as Eligible Accounts or Eligible Inventory until a field examination (and, if required by Agent, an Inventory appraisal) with respect thereto has been completed to the satisfaction of Agent, including the establishment of Reserves required in Agent’s Permitted Discretion.

 

9.2                               Notices.

 

(a)                                 Addresses.  All notices and other communications required or expressly authorized to be made by this Agreement shall be given in writing, unless otherwise expressly specified herein, and (i) addressed to the address set forth on the applicable signature page hereto (in the case of such notices and other communications to Agent, including a mandatory e-mail notice to the e-mail address on the applicable signature page hereto), (ii) posted to Syndtrak 

 

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Online® the extent such system is available and set up by or at the direction of Agent prior to posting) in an appropriate location by uploading such notice, demand, request, direction or other communication to www.SyndTrak.com or using such other means of posting to Syndtrak Online® as may be available and reasonably acceptable to Agent prior to such posting, (iii) posted to any other E-System approved by or set up by or at the direction of Agent or (iv) addressed to such other address as shall be notified in writing (A) in the case of the Borrower, Agent and the Swingline Lender, to the other parties hereto and (B) in the case of all other parties, to the Borrower and Agent.  Transmissions made by electronic mail or E-Fax to Agent shall be effective only (x) for notices where such transmission is specifically authorized by this Agreement, (y) if such transmission is delivered in compliance with procedures of Agent applicable at the time and previously communicated to Borrower, and (z) if receipt of such transmission is acknowledged by Agent.

 

(b)                                 Effectiveness.  (i)  All communications described in Section 9.2(a) and all other notices, demands, requests and other communications made in connection with this Agreement shall be effective and be deemed to have been received (i) if delivered by hand, upon personal delivery, (ii) if delivered by overnight courier service, one (1) Business Day after delivery to such courier service, (iii) if delivered by mail, three (3) Business Days after deposit in the mail, (iv) if delivered by facsimile (other than to post to an E-System pursuant to Section 9.2(a)(ii) or (a)(iii)), upon sender’s receipt of confirmation of proper transmission, and (v) if delivered by posting to any E-System, on the later of the Business Day of such posting and the Business Day access to such posting is given to the recipient thereof in accordance with the standard procedures applicable to such E-System; provided, however, that no communications to Agent pursuant to Article I shall be effective until received by Agent.

 

(ii)                                  The posting, completion and/or submission by any Credit Party of any communication pursuant to an E System shall constitute a representation and warranty by the Credit Parties that any representation, warranty, certification or other similar statement required by the Loan Documents to be provided, given or made by a Credit Party in connection with any such communication is true, correct and complete except as expressly noted in such communication or E-System.

 

(c)                                  Each Lender shall notify Agent in writing of any changes in the address to which notices to such Lender should be directed, of addresses of its Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as Agent shall reasonably request.

 

9.3                               Electronic Transmissions.

 

(a)                                 Authorization.  Subject to the provisions of Section 9.2(a), each of Agent, Lenders, each Credit Party and each of their Related Persons, is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Loan Document and the transactions contemplated therein.  Each Credit Party and each Secured Party hereto acknowledges and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.

 

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(b)                                 Signatures.  Subject to the provisions of Section 9.2(a), (i)(A) no posting to any E-System shall be denied legal effect merely because it is made electronically, (B) each E Signature on any such posting shall be deemed sufficient to satisfy any requirement for a “signature” and (C) each such posting shall be deemed sufficient to satisfy any requirement for a “writing”, in each case including pursuant to any Loan Document, any applicable provision of any UCC, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter, (ii) each such posting that is not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such posting, an E-Signature, upon which Agent, each Secured Party and each Credit Party may rely and assume the authenticity thereof, (iii) each such posting containing a signature, a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original and (iv) each party hereto or beneficiary hereto agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature on any such posting under the provisions of any applicable Requirement of Law requiring certain documents to be in writing or signed; provided, however, that nothing herein shall limit such party’s or beneficiary’s right to contest whether any posting to any E-System or E-Signature has been altered after transmission.

 

(c)                                  Separate Agreements.  All uses of an E-System shall be governed by and subject to, in addition to Section 9.2 and this Section 9.3, the separate terms, conditions and privacy policy posted or referenced in such E-System (or such terms, conditions and privacy policy as may be updated from time to time, including on such E System) and related Contractual Obligations executed by Agent and Credit Parties in connection with the use of such E-System.

 

(d)                                 LIMITATION OF LIABILITY.  ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”.  NONE OF AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION AND DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN.  NO WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS.  Each of the Borrower, each other Credit Party executing this Agreement and each Secured Party agrees that Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.

 

9.4                               No Waiver; Cumulative Remedies.

 

No failure to exercise and no delay in exercising, on the part of Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  No 

 

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course of dealing between any Credit Party, any Affiliate of any Credit Party, Agent or any Lender shall be effective to amend, modify or discharge any provision of this Agreement or any of the other Loan Documents.

 

9.5                               Costs and Expenses.

 

Any action taken by any Credit Party under or with respect to any Loan Document, even if required under any Loan Document or at the request of Agent or Required Lenders, shall be at the expense of such Credit Party, and neither Agent nor any other Secured Party shall be required under any Loan Document to reimburse any Credit Party or any Subsidiary of any Credit Party therefor except as expressly provided therein.  In addition, the Borrower agrees to pay or reimburse upon demand (a) Agent for all costs and expenses incurred by it or any of its Related Persons, in connection with the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or termination of, any Loan Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein, in each case including Attorney Costs of Agent, the cost of environmental audits, Collateral audits and appraisals, background checks and similar expenses, (b) Agent for all costs and expenses incurred by it or any of its Related Persons in connection with internal audit reviews, field examinations and Collateral examinations, including Agent’s internal field examination group (which shall be reimbursed, in addition to the out-of-pocket costs and expenses of such examiners, at the per diem rate per individual charged by Agent for its examiners), (c) each of Agent, its Related Persons, and L/C Issuer for all costs and expenses incurred in connection with (i) any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out”, (ii) the enforcement or preservation of any right or remedy under any Loan Document, any Obligation, with respect to the Collateral or any other related right or remedy or (iii) the commencement, defense, conduct of, intervention in, or the taking of any other action (including, without limitation, preparation for and/or response to any subpoena or request for document production relating thereto) with respect to, any proceeding (including any bankruptcy or insolvency proceeding) related to any Credit Party, any Subsidiary of any Credit Party, Loan Document, Obligation or Related Transaction, including Attorney Costs and (d) fees and disbursements of Attorney Costs of one law firm for each Lender (other than Agent) incurred in connection with any of the matters referred to in clause (c) above.

 

9.6                               Indemnity.

 

(a)                                 Each Credit Party agrees to indemnify, hold harmless and defend Agent, each Lender, each L/C Issuer and each of their respective Related Persons (each such Person being an “Indemnitee”) from and against all Liabilities (including brokerage commissions, fees and other compensation) that may be imposed on, incurred by or asserted against any such Indemnitee in any matter relating to or arising out of, in connection with or as a result of (i) any Loan Document, any Related Agreement, any Obligation (or the repayment thereof), any Letter of Credit, the use or intended use of the proceeds of any Loan or the use of any Letter of Credit or any securities filing of, or with respect to, any Credit Party, (ii) any commitment letter, proposal letter or term sheet with any Person or any Contractual Obligation, arrangement or understanding with any broker, finder or consultant, in each case entered into by or on behalf of 

 

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any Credit Party or any Affiliate of any of them in connection with any of the foregoing and any Contractual Obligation entered into in connection with any E-Systems or other Electronic Transmissions, (iii) any actual or prospective investigation, litigation or other proceeding, whether or not brought by any such Indemnitee or any of its Related Persons, any holders of securities or creditors (and including attorneys’ fees in any case), whether or not any such Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not based on any securities or commercial law or regulation or any other Requirement of Law or theory thereof, including common law, equity, contract, tort or otherwise or (iv) any other act, event or transaction related, contemplated in or attendant to any of the foregoing (collectively, the “Indemnified Matters”); provided, however, that no Credit Party shall have any liability under this Section 9.6 to any Indemnitee with respect to any Indemnified Matter, and no Indemnitee shall have any liability with respect to any Indemnified Matter other than (to the extent otherwise liable), to the extent such liability has resulted primarily from the gross negligence or willful misconduct of such Indemnitee, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.  Furthermore, each of the Borrower and each other Credit Party executing this Agreement waives and agrees not to assert against any Indemnitee, and shall cause each other Credit Party to waive and not assert against any Indemnitee, any right of contribution with respect to any Liabilities that may be imposed on, incurred by or asserted against any Related Person.

 

(b)                                 Without limiting the foregoing, “Indemnified Matters” includes all Environmental Liabilities, including those arising from, or otherwise involving, any Property of any Credit Party or any Related Person of any Credit Party or any actual, alleged or prospective damage to Property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such Property or natural resource or any Property on or contiguous to any Real Estate of any Credit Party or any Related Person of any Credit Party, whether or not, with respect to any such Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor-in-interest to any Credit Party or any Related Person of any Credit Party or the owner, lessee or operator of any Property of any Related Person through any foreclosure action, in each case except to the extent such Environmental Liabilities (i) are incurred solely following foreclosure by Agent or following Agent or any Lender having become the successor-in-interest to any Credit Party or any Related Person of any Credit Party and (ii) are attributable solely to acts of such Indemnitee.

 

9.7                               Marshaling; Payments Set Aside.

 

No Secured Party shall be under any obligation to marshal any Property in favor of any Credit Party or any other Person or against or in payment of any Obligation.  To the extent that any Secured Party receives a payment from the Borrower, from any other Credit Party, from the proceeds of the Collateral, from the exercise of its rights of setoff, any enforcement action or otherwise, and such payment is subsequently, in whole or in part, invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not occurred.

 

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9.8                               Successors and Assigns.

 

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that any assignment by any Lender shall be subject to the provisions of Section 9.9, and provided further that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Agent and each Lender.

 

9.9                               Assignments and Participations; Binding Effect.

 

(a)                                 Binding Effect.  This Agreement shall become effective when it shall have been executed by the Borrower, the other Credit Parties signatory hereto and Agent and when Agent shall have been notified by each Lender that such Lender has executed it.  Thereafter, it shall be binding upon and inure to the benefit of, but only to the benefit of, the Borrower, the other Credit Parties hereto (in each case except for Article VIII), Agent, each Lender and each L/C Issuer receiving the benefits of the Loan Documents and, to the extent provided in Section 8.11, each other Secured Party and, in each case, their respective successors and permitted assigns.  Except as expressly provided in any Loan Document (including in Section 8.9), none of the Borrower, any other Credit Party, any L/C Issuer or Agent shall have the right to assign any rights or obligations hereunder or any interest herein.

 

(b)                                 Right to Assign.  Each Lender may sell, transfer, negotiate or assign (a “Sale”) all or a portion of its rights and obligations hereunder (including all or a portion of its Commitments and its rights and obligations with respect to Loans and Letters of Credit) to (i) any existing Lender (other than a Non-Funding Lender or Impacted Lender), (ii) any Affiliate or Approved Fund of any existing Lender (other than a Non-Funding Lender or Impacted Lender) or (iii) any other Person acceptable (which acceptance shall not be unreasonably withheld or delayed) to Agent and, with respect to Sales of Revolving Loan Commitments, each L/C Issuer that is a Lender and, as long as no Event of Default is continuing, the Borrower (which acceptances shall be deemed to have been given unless an objection is delivered to Agent within five (5) Business Days after notice of a proposed sale is delivered to the Borrower); provided, however, that (v) such Sales must be ratable among the obligations owing to and owed by such Lender with respect to the Revolving Loans, (w) for each Loan, the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of the Loans, Commitments and Letter of Credit Obligations subject to any such Sale shall be in a minimum amount of $1,000,000, unless such Sale is made to an existing Lender or an Affiliate or Approved Fund of any existing Lender, is of the assignor’s (together with its Affiliates and Approved Funds) entire interest in such facility or is made with the prior consent of the Borrower (to the extent required) and Agent, (x) such Sales shall be effective only upon the acknowledgement in writing of such Sale by Agent, (y) interest accrued prior to and through the date of any such Sale may not be assigned, and (z) such Sales by Lenders who are Non-Funding Lenders due to clause (a) of the definition of Non-Funding Lender shall be subject to Agent’s prior written consent in all instances, unless in connection with such Sale, such Non-Funding Lender cures, or causes the cure of, its Non-Funding Lender status as contemplated in Section 1.11(e)(v).  Agent’s refusal to accept a Sale to a Credit Party, an Affiliate of a Credit Party, a holder of Subordinated Indebtedness or an Affiliate of such a holder, or to any Person that would be a Non-Funding Lender or an Impacted Lender, or the imposition of conditions or limitations 

 

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(including limitations on voting) upon Sales to such Persons, shall not be deemed to be unreasonable.

 

(c)                                  Procedure.  The parties to each Sale made in reliance on Section 9.9(b) (other than those described in Section 9.9(e) or (f)) shall execute and deliver to Agent an Assignment via an electronic settlement system designated by Agent (or, if previously agreed with Agent, via a manual execution and delivery of the Assignment) evidencing such Sale, together with any existing Note subject to such Sale (or any affidavit of loss therefor acceptable to Agent), any tax forms required to be delivered pursuant to Section 10.1 and payment of an assignment fee in the amount of $3,500 to Agent, unless waived or reduced by Agent; provided, that (i) if a Sale by a Lender is made to an Affiliate or an Approved Fund of such assigning Lender, then no assignment fee shall be due in connection with such Sale, and (ii) if a Sale by a Lender is made to an assignee that is not an Affiliate or Approved Fund of such assignor Lender, and concurrently to one or more Affiliates or Approved Funds of such Assignee, then only one assignment fee of $3,500 shall be due in connection with such Sale (unless waived or reduced by Agent).  Upon receipt of all the foregoing, and conditioned upon such receipt and, if such Assignment is made in accordance with clause (iii) of Section 9.9(b), upon Agent (and the Borrower, if applicable) consenting to such Assignment, from and after the effective date specified in such Assignment, Agent shall record or cause to be recorded in the Register the information contained in such Assignment.

 

(d)                                 Effectiveness.  Subject to the recording of an Assignment by Agent in the Register pursuant to Section 1.4(b), (i) the assignee thereunder shall become a party hereto and, to the extent that rights and obligations under the Loan Documents have been assigned to such assignee pursuant to such Assignment, shall have the rights and obligations of a Lender, (ii) any applicable Note shall be transferred to such assignee through such entry and (iii) the assignor thereunder shall, to the extent that rights and obligations under this Agreement have been assigned by it pursuant to such Assignment, relinquish its rights (except for those surviving the termination of the Commitments and the payment in full of the Obligations) and be released from its obligations under the Loan Documents, other than those relating to events or circumstances occurring prior to such assignment (and, in the case of an Assignment covering all or the remaining portion of an assigning Lender’s rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto).

 

(e)                                  Grant of Security Interests.  In addition to the other rights provided in this Section 9.9, each Lender may grant a security interest in, or otherwise assign as collateral, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Loans), to (A) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board), without notice to Agent or (B) any holder of, or trustee for the benefit of the holders of, such Lender’s Indebtedness or equity securities, by notice to Agent; provided, however, that no such holder or trustee, whether because of such grant or assignment or any foreclosure thereon (unless such foreclosure is made through an assignment in accordance with Section 9.9(b)), shall be entitled to any rights of such Lender hereunder and no such Lender shall be relieved of any of its obligations hereunder.

 

(f)                                   Participants and SPVs.  In addition to the other rights provided in this Section 9.9, each Lender may, (x) with notice to Agent, grant to an SPV the option to make all or 

 

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any part of any Loan that such Lender would otherwise be required to make hereunder (and the exercise of such option by such SPV and the making of Loans pursuant thereto shall satisfy the obligation of such Lender to make such Loans hereunder) and such SPV may assign to such Lender the right to receive payment with respect to any Obligation and (y) without notice to or consent from Agent or the Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Loan Documents (including all its rights and obligations with respect to the Revolving Loans and Letters of Credit); provided, however, that, whether as a result of any term of any Loan Document or of such grant or participation, (i) no such SPV or participant shall have a commitment, or be deemed to have made an offer to commit, to make Loans hereunder, and, except as provided in the applicable option agreement, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations of the Credit Parties and the Secured Parties towards such Lender, under any Loan Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the Obligations in the Register, except that (A) each such participant and SPV shall be entitled to the benefit of Article X, but, with respect to Section 10.1, only to the extent such participant or SPV delivers the tax forms such Lender is required to collect pursuant to Section 10.1(f) and then only to the extent of any amount to which such Lender would be entitled in the absence of any such grant or participation and (B) each such SPV may receive other payments that would otherwise be made to such Lender with respect to Loans funded by such SPV to the extent provided in the applicable option agreement and set forth in a notice provided to Agent by such SPV and such Lender, provided, however, that in no case (including pursuant to clause (A) or (B) above) shall an SPV or participant have the right to enforce any of the terms of any Loan Document, and (iii) the consent of such SPV or participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Loan Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Loan Documents (including the right to enforce or direct enforcement of the Obligations), except for those described in clauses (ii) and (iii) of Section 9.1(a) with respect to amounts, or dates fixed for payment of amounts, to which such participant or SPV would otherwise be entitled and, in the case of participants, except for those described in Section 9.1(a)(vi).  No party hereto shall institute (and the Borrower shall cause each other Credit Party not to institute) against any SPV grantee of an option pursuant to this Section 9.9(f) any bankruptcy, reorganization, insolvency, liquidation or similar proceeding, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper of such SPV; provided, however, that each Lender having designated an SPV as such agrees to indemnify each Indemnitee against any Liability that may be incurred by, or asserted against, such Indemnitee as a result of failing to institute such proceeding (including a failure to be reimbursed by such SPV for any such Liability).  The agreement in the preceding sentence shall survive the termination of the Commitments and the payment in full of the Obligations.

 

9.10                        Non-Public Information; Confidentiality.

 

(a)                                 Non-Public Information.  Each of Agent, each Lender and L/C Issuer acknowledges and agrees that it may receive material non-public information (“MNPI”) hereunder concerning the Credit Parties and their Affiliates and agrees to use such information in

 

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compliance with all relevant policies, procedures and applicable Requirements of Laws (including United States federal and state security laws and regulations).

 

(b)                                 Confidential Information.  Each of Agent, each Lender and each L/C Issuer and Agent agrees to use all reasonable efforts to maintain, in accordance with its customary practices, the confidentiality of information obtained by it pursuant to any Loan Document and designated in writing by any Credit Party as confidential, except that such information may be disclosed (i) with the Borrower’s consent, (ii) to Related Persons of such Lender, L/C Issuer or Agent, as the case may be, or to any Person that any L/C Issuer causes to Issue Letters of Credit hereunder, that are advised of the confidential nature of such information and are instructed to keep such information confidential in accordance with the terms hereof, (iii) to the extent such information presently is or hereafter becomes (A) publicly available other than as a result of a breach of this Section 9.10 or (B) available to such Lender, L/C Issuer or Agent or any of their Related Persons, as the case may be, from a source (other than any Credit Party) not known by them to be subject to disclosure restrictions, (iv) to the extent disclosure is required by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority, (v) to the extent necessary or customary for inclusion in league table measurements, (vi) (A) to the National Association of Insurance Commissioners or any similar organization, any examiner or any nationally recognized rating agency or (B) otherwise to the extent consisting of general portfolio information that does not identify Credit Parties, (vii) to current or prospective assignees, SPVs (including the investors or prospective investors therein) or participants, direct or contractual counterparties to any Secured Rate Contracts and to their respective Related Persons, in each case to the extent such assignees, investors, participants, counterparties or Related Persons agree to be bound by provisions substantially similar to the provisions of this Section 9.10 (and such Person may disclose information to their respective Related Persons in accordance with clause (ii) above), (viii) to any other party hereto, and (ix) in connection with the exercise or enforcement of any right or remedy under any Loan Document, in connection with any litigation or other proceeding to which such Lender, L/C Issuer or Agent or any of their Related Persons is a party or bound, or to the extent necessary to respond to public statements or disclosures by Credit Parties or their Related Persons referring to a Lender, L/C Issuer or Agent or any of their Related Persons.  In the event of any conflict between the terms of this Section 9.10 and those of any other Contractual Obligation entered into with any Credit Party (whether or not a Loan Document), the terms of this Section 9.10 shall govern.

 

(c)                                  Tombstones.  Each Credit Party consents to the publication by Agent or any Lender of any press releases, tombstones, advertising or other promotional materials (including, without limitation, via any Electronic Transmission) relating to the financing transactions contemplated by this Agreement using such Credit Party’s name, product photographs, logo or trademark.

 

(d)                                 Press Release and Related Matters.  No Credit Party shall, and no Credit Party shall permit any of its Affiliates to, issue any press release or other public disclosure (other than any document filed with any Governmental Authority relating to a public offering of securities of any Credit Party) using the name, logo or otherwise referring to GE Capital or of any of its Affiliates, the Loan Documents or any transaction contemplated herein or therein to which GE Capital or any of its affiliates is party without the prior written consent of GE Capital 

 

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or such Affiliate except to the extent required to do so under applicable Requirements of Law and then, only after consulting with GE Capital.

 

(e)                                  Distribution of Materials to Lenders and L/C Issuers.  The Credit Parties acknowledge and agree that the Loan Documents and all reports, notices, communications and other information or materials provided or delivered by, or on behalf of, the Credit Parties hereunder (collectively, the “Borrower Materials”) may be disseminated by, or on behalf of, Agent, and made available, to the Lenders and the L/C Issuers by posting such Borrower Materials on an E-System. The Credit Parties authorize Agent to download copies of their logos from its website and post copies thereof on an E-System.

 

(f)                                   Material Non-Public Information.  The Credit Parties hereby agree that if either they, any parent company or any Subsidiary of the Credit Parties has publicly traded equity or debt securities in the U.S., they shall (and shall cause such parent company or Subsidiary, as the case may be, to) (i) identify in writing, and (ii) to the extent reasonably practicable, clearly and conspicuously mark such Borrower Materials that contain only information that is publicly available or that is not material for purposes of U.S. federal and state securities laws as “PUBLIC”. The Credit Parties agree that by identifying such Borrower Materials as “PUBLIC” or publicly filing such Borrower Materials with the Securities and Exchange Commission, then Agent, the Lenders and the L/C Issuers shall be entitled to treat such Borrower Materials as not containing any MNPI for purposes of U.S. federal and state securities laws. The Credit Parties further represent, warrant, acknowledge and agree that the following documents and materials shall be deemed to be PUBLIC, whether or not so marked, and do not contain any MNPI:  (A) the Loan Documents, including the schedules and exhibits attached thereto, and (B) administrative materials of a customary nature prepared by the Credit Parties or Agent (including, Notices of Borrowing, Notices of Conversion/Continuation, L/C Requests, Swingline requests and any similar requests or notices posted on or through an E-System). Before distribution of any Borrower Materials, the Credit Parties agree to execute and deliver to Agent a letter authorizing distribution of the evaluation materials to prospective Lenders and their employees willing to receive MNPI, and a separate letter authorizing distribution of evaluation materials that do not contain MNPI and represent that no MNPI is contained therein.

 

9.11                        Set-off; Sharing of Payments.

 

(a)                                 Right of Setoff.  Each of Agent, each Lender, each L/C Issuer and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by each Credit Party), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements of Law, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by Agent, such Lender, such L/C Issuer or any of their respective Affiliates to or for the credit or the account of the Borrower or any other Credit Party against any Obligation of any Credit Party now or hereafter existing, whether or not any demand was made under any Loan Document with respect to such Obligation and even though such Obligation may be unmatured.  No Lender or L/C Issuer shall exercise any such right of setoff without the prior consent of Agent or Required Lenders. Each of Agent, each Lender and each 

 

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L/C Issuer agrees promptly to notify the Borrower and Agent after any such setoff and application made by such Lender or its Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application.  The rights under this Section 9.11 are in addition to any other rights and remedies (including other rights of setoff) that Agent, the Lenders, the L/C Issuer, their Affiliates and the other Secured Parties, may have.

 

(b)                                 Sharing of Payments, Etc.  If any Lender, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Credit Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or “proceeds” (as defined under the applicable UCC) of Collateral) other than pursuant to Section 9.9 or Article X and such payment exceeds the amount such Lender would have been entitled to receive if all payments had gone to, and been distributed by, Agent in accordance with the provisions of the Loan Documents, such Lender shall purchase for cash from other Lenders such participations in their Obligations as necessary for such Lender to share such excess payment with such Lenders to ensure such payment is applied as though it had been received by Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of the Borrower, applied to repay the Obligations in accordance herewith); provided, however, that (i) if such payment is rescinded or otherwise recovered from such Lender or L/C Issuer in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender or L/C Issuer without interest and (ii) such Lender shall, to the fullest extent permitted by applicable Requirements of Law, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of the applicable Credit Party in the amount of such participation.  If a Non-Funding Lender receives any such payment as described in the previous sentence, such Lender shall turn over such payments to Agent in an amount that would satisfy the cash collateral requirements set forth in Section 1.11(e).

 

9.12                        Counterparts; Facsimile Signature.

 

This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

9.13                        Severability.

 

The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

 

9.14                        Captions.

 

The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

 

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9.15                        Independence of Provisions.

 

The parties hereto acknowledge that this Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters, and that such limitations, tests and measurements are cumulative and must each be performed, except as expressly stated to the contrary in this Agreement.

 

9.16                        Interpretation.

 

This Agreement is the result of negotiations among and has been reviewed by counsel to Credit Parties, Agent, each Lender and other parties hereto, and is the product of all parties hereto.  Accordingly, this Agreement and the other Loan Documents shall not be construed against the Lenders or Agent merely because of Agent’s or Lenders’ involvement in the preparation of such documents and agreements.  Without limiting the generality of the foregoing, each of the parties hereto has had the advice of counsel with respect to Sections 9.18 and 9.19.

 

9.17                        No Third Parties Benefited.

 

This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Lenders, the L/C Issuers party hereto, Agent and, subject to the provisions of Section 8.11, each other Secured Party, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents.  Neither Agent nor any Lender shall have any obligation to any Person not a party to this Agreement or the other Loan Documents.

 

9.18                        Governing Law and Jurisdiction.

 

(a)                                 Governing Law.  The laws of the State of New York shall govern all matters arising out of, in connection with or relating to this Agreement, including, without limitation, its validity, interpretation, construction, performance and enforcement (including, without limitation, any claims sounding in contract or tort law arising out of the subject matter hereof and any determinations with respect to post-judgment interest).

 

(b)                                 Submission to Jurisdiction.  Any legal action or proceeding with respect to any Loan Document shall be brought exclusively in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, the Borrower and each other Credit Party executing this Agreement hereby accepts for itself and in respect of its Property, generally and unconditionally, the jurisdiction of the aforesaid courts; provided that nothing in this Agreement shall limit the right of Agent to commence any proceeding in the federal or state courts of any other jurisdiction to the extent Agent determines that such action is necessary or appropriate to exercise its rights or remedies under the Loan Documents.  The parties hereto (and, to the extent set forth in any other Loan Document, each other Credit Party) hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.

 

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(c)                                  Service of Process.  Each Credit Party hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with any Loan Document by any means permitted by applicable Requirements of Law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of the Borrower specified herein (and shall be effective when such mailing shall be effective, as provided therein).  Each Credit Party 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 contained in this Section 9.18 shall affect the right of Agent or any Lender to serve process in any other manner permitted by applicable Requirements of Law.

 

9.19                        WAIVER OF JURY TRIAL.

 

THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY.  THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.

 

9.20                        ENTIRE AGREEMENT; RELEASE; SURVIVAL.

 

(a)                                 THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER THEREOF AND ANY PRIOR LETTER OF INTEREST, COMMITMENT LETTER, CONFIDENTIALITY AND SIMILAR AGREEMENTS INVOLVING ANY CREDIT PARTY AND ANY LENDER OR ANY L/C ISSUER OR ANY OF THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF SUBSTANTIALLY SIMILAR FORM, PURPOSE OR EFFECT OTHER THAN THE FEE LETTER.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT, THE TERMS OF THIS AGREEMENT SHALL GOVERN (UNLESS OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN DOCUMENT OR SUCH TERMS OF SUCH OTHER LOAN DOCUMENTS ARE NECESSARY TO COMPLY WITH APPLICABLE REQUIREMENTS OF LAW, IN WHICH CASE SUCH TERMS SHALL GOVERN TO THE EXTENT NECESSARY TO COMPLY THEREWITH).

 

(b)                                 Execution of this Agreement by the Credit Parties constitutes a full, complete and irrevocable release of any and all claims which each Credit Party may have at law or in equity in respect of all prior discussions and understandings, oral or written, relating to the subject matter of this Agreement and the other Loan Documents.  In no event shall any Indemnitee be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings).  Each of the Borrower and each other Credit Party signatory hereto hereby waives, releases and agrees (and shall cause each other Credit Party to waive, release and agree) not to sue upon any such claim for any 

 

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special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

(c)                                  (i) Any indemnification or other protection provided to any Indemnitee pursuant to this Section 9.20, Sections 9.5 (Costs and Expenses) and 9.6 (Indemnity) and Article VIII (Agent) and Article X (Taxes, Yield Protection and Illegality) and (ii) the provisions of Section 8.1 of the Guaranty and Security Agreement, in each case, shall (x) survive the termination of the Commitments and the payment in full of all other Obligations and (y) with respect to clause (i) above, inure to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its successors and permitted assigns.

 

9.21                        Patriot Act.

 

Each Lender that is subject to the Patriot Act hereby notifies the Credit Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender to identify each Credit Party in accordance with the Patriot Act.

 

9.22                        Replacement of Lender.

 

Within forty-five days after:  (i) receipt by the Borrower of written notice and demand from any Lender that is not Agent or an Affiliate of Agent (an “Affected Lender”) for payment of additional costs as provided in Sections 10.1, 10.3 and/or 10.6; or (ii) any failure by any Lender (other than Agent or an Affiliate of Agent) to consent to a requested amendment, waiver or modification to any Loan Document in which Required Lenders have already consented to such amendment, waiver or modification but the consent of each Lender (or each Lender directly affected thereby, as applicable) is required with respect thereto, the Borrower may, at its option, notify Agent and such Affected Lender (or such non-consenting Lender) of the Borrower’s intention to obtain, at the Borrower’s expense, a replacement Lender (“Replacement Lender”) for such Affected Lender (or such non-consenting Lender), which Replacement Lender shall be reasonably satisfactory to Agent.  In the event the Borrower obtains a Replacement Lender within forty-five (45) days following notice of its intention to do so, the Affected Lender (or such non-consenting Lender) shall sell and assign its Loans and Commitments to such Replacement Lender, at par, provided that the Borrower has reimbursed such Affected Lender for its increased costs for which it is entitled to reimbursement under this Agreement through the date of such sale and assignment.  In the event that a replaced Lender does not execute an Assignment pursuant to Section 9.9 within five (5) Business Days after receipt by such replaced Lender of notice of replacement pursuant to this Section 9.22 and presentation to such replaced Lender of an Assignment evidencing an assignment pursuant to this Section 9.22, the Borrower shall be entitled (but not obligated) to execute such an Assignment on behalf of such replaced Lender, and any such Assignment so executed by the Borrower, the Replacement Lender and Agent, shall be effective for purposes of this Section 9.22 and Section 9.9.  Notwithstanding the foregoing, with respect to a Lender that is a Non-Funding Lender or an Impacted Lender, Agent may, but shall not be obligated to, obtain a Replacement Lender and execute an Assignment on behalf of such Non-Funding Lender or Impacted Lender at any time with three (3) Business Days’ prior notice to such Lender (unless notice is not practicable under the circumstances) and 

 

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cause such Lender’s Loans and Commitments to be sold and assigned, in whole or in part, at par.  Upon any such assignment and payment and compliance with the other provisions of Section 9.9, such replaced Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such replaced Lender to indemnification hereunder shall survive.

 

9.23                        Joint and Several.

 

The obligations of the Credit Parties hereunder and under the other Loan Documents are joint and several.

 

9.24                        Creditor-Debtor Relationship.

 

The relationship between Agent, each Lender and the L/C Issuer, on the one hand, and the Credit Parties, on the other hand, is solely that of creditor and debtor.  No Secured Party has any fiduciary relationship or duty to any Credit Party arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Secured Parties and the Credit Parties by virtue of, any Loan Document or any transaction contemplated therein.

 

9.25                        Actions in Concert.

 

Notwithstanding anything contained herein to the contrary, each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or enforce its rights against any Credit Party arising out of this Agreement or any other Loan Document (including exercising any rights of setoff) without first obtaining the prior written consent of Agent or Required Lenders, it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and the other Loan Documents shall be taken in concert and at the direction or with the consent of Agent or Required Lenders.

 

9.26                        Keepwell.

 

Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Credit Party to honor all of its obligations under the Guaranty and Security Agreement in respect of Swap Obligations under any Secured Rate Contract (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 9.26 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 9.26, or otherwise under the Guaranty and Security Agreement, voidable under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 9.26 shall remain in full force and effect until the guarantees in respect of Swap Obligations under each Secured Rate Contract have been discharged, or otherwise released or terminated in accordance with the terms of this Agreement. Each Qualified ECP Guarantor intends that this Section 9.26 constitute, and this Section 9.26 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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ARTICLE X.
 TAXES, YIELD PROTECTION AND ILLEGALITY

 

10.1                        Taxes.

 

(a)                                 Except as otherwise provided in this Section 10.1, each payment by any Credit Party under any Loan Document shall be made free and clear of all present or future taxes, levies, imposts, deductions, charges or withholdings imposed by any Governmental Authority and all liabilities with respect thereto (and without deduction for any of them) (collectively, but excluding Excluded Taxes, the “Taxes”).

 

(b)                                 If any Taxes shall be required by any Requirement of Law to be deducted from or in respect of any amount payable under any Loan Document to any Secured Party (i) such amount shall be increased as necessary to ensure that, after all required deductions for Taxes are made (including deductions applicable to any increases to any amount under this Section 10.1), such Secured Party receives the amount it would have received had no such deductions been made, (ii) the relevant Credit Party shall make such deductions, (iii) the relevant Credit Party shall timely pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable Requirements of Law and (iv) within 30 days after such payment is made, the relevant Credit Party shall deliver to Agent an original or certified copy of a receipt evidencing such payment or other evidence of payment reasonably satisfactory to Agent.

 

(c)                                  In addition, the Borrower agrees to pay, and authorize Agent to pay in their name, any stamp, documentary, excise or property tax, charges or similar levies imposed by any applicable Requirement of Law or Governmental Authority and all Liabilities with respect thereto (including by reason of any delay in payment thereof), in each case arising from the execution, delivery or registration of, or otherwise with respect to, any Loan Document or any transaction contemplated therein (collectively, “Other Taxes”).  The Swingline Lender may, without any need for notice, demand or consent from the Borrower, by making funds available to Agent in the amount equal to any such payment, make a Swing Loan to the Borrower in such amount, the proceeds of which shall be used by Agent in whole to make such payment.  Within 30 days after the date of any payment of Other Taxes by any Credit Party, the Borrower shall furnish to Agent, at its address referred to in Section 9.2, the original or a certified copy of a receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to Agent.

 

(d)                                 The Borrower shall reimburse and indemnify, within 30 days after receipt of demand therefor (with copy to Agent), each Secured Party for all Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 10.1) paid by such Secured Party and any Liabilities arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  A certificate of the Secured Party (or of Agent on behalf of such Secured Party) claiming any compensation under this Section 10.1(d), setting forth the amounts to be paid thereunder and delivered to the Borrower with copy to Agent, shall be conclusive, binding and final for all purposes, absent manifest error.  In determining such amount, Agent and such Secured Party may use any reasonable averaging and attribution methods.

 

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(e)                                  Any Lender claiming any additional amounts payable pursuant to this Section 10.1 shall use its commercially reasonable efforts (consistent with its internal policies and Requirements of Law) to change the jurisdiction of its Lending Office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender.

 

(f)                                   (i)                                     Each Non-U.S. Lender Party that, at any of the following times, is entitled to an exemption from United States withholding tax or is subject to such withholding tax at a reduced rate under an applicable tax treaty, shall (w) on or prior to the date such Non-U.S. Lender Party becomes a “Non-U.S. Lender Party” hereunder, (x) on or prior to the date on which any such form or certification expires or becomes obsolete, (y) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this Section 10.1(f)(i) and (z) from time to time if requested by the Borrower or Agent (or, in the case of a participant or SPV, the relevant Lender), provide Agent and the Borrower (or, in the case of a participant or SPV, the relevant Lender) with two completed originals of each of the following, as applicable:  (A) Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is effectively connected with a U.S. trade or business), W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under an income tax treaty) and/or W-8IMY (together with appropriate forms, certifications and supporting statements) or any successor forms, (B) in the case of a Non-U.S. Lender Party claiming exemption under Sections 871(h) or 881(c) of the Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to Agent that such Non-U.S. Lender Party is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS certifying as to the entitlement of such Non-U.S. Lender Party to such exemption from United States withholding tax or reduced rate with respect to all payments to be made to such Non-U.S. Lender Party under the Loan Documents.  Unless the Borrower and Agent have received forms or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-U.S. Lender Party are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Credit Parties and Agent shall withhold amounts required to be withheld by applicable Requirements of Law from such payments at the applicable statutory rate.

 

(ii)                                  Each U.S. Lender Party shall (A) on or prior to the date such U.S. Lender Party becomes a “U.S. Lender Party” hereunder, (B) on or prior to the date on which any such form or certification expires or becomes obsolete, (C) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this Section 10.1(f) and (D) from time to time if requested by the Borrower or Agent (or, in the case of a participant or SPV, the relevant Lender), provide Agent and the Borrower (or, in the case of a participant or SPV, the relevant Lender) with two completed originals of Form W-9 (certifying that such U.S. Lender Party is entitled to an exemption from U.S. backup withholding tax) or any successor form.

 

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(iii)                               Each Lender having sold a participation in any of its Obligations or identified an SPV as such to Agent shall collect from such participant or SPV the documents described in this Section 10.1(f) and provide them to Agent.

 

(iv)                              If a payment made to a Non-U.S. Lender Party would be subject to United States federal withholding tax imposed by FATCA if such Non-U.S. Lender Party fails to comply with the applicable reporting requirements of FATCA, such Non-U.S. Lender Party shall deliver to Agent and the Borrower any documentation under any Requirement of Law or reasonably requested by Agent or the Borrower sufficient for Agent or the Borrower to comply with their obligations under FATCA and to determine that such Non-U.S. Lender has complied with such applicable reporting requirements.

 

10.2                        Illegality.

 

If after the date hereof any Lender shall determine that the introduction of any Requirement of Law, or any change in any Requirement of Law or in the interpretation or administration thereof, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to make LIBOR Rate Loans, then, on notice thereof by such Lender to the Borrower through Agent, the obligation of that Lender to make LIBOR Rate Loans shall be suspended until such Lender shall have notified Agent and the Borrower that the circumstances giving rise to such determination no longer exists.

 

(a)                                 Subject to Section 10.2(c) below, if any Lender shall determine that it is unlawful to maintain any LIBOR Rate Loan, the Borrower shall prepay in full all LIBOR Rate Loans of such Lender then outstanding, together with interest accrued thereon, either on the last day of the Interest Period thereof if such Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Rate Loans, together with any amounts required to be paid in connection therewith pursuant to Section 10.4.

 

(b)                                 If the obligation of any Lender to make or maintain LIBOR Rate Loans has been terminated, the Borrower may elect, by giving notice to such Lender through Agent that all Loans which would otherwise be made by any such Lender as LIBOR Rate Loans shall be instead Base Rate Loans.

 

(c)                                  Before giving any notice to Agent pursuant to this Section 10.2, the affected Lender shall designate a different Lending Office with respect to its LIBOR Rate Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of such Lender, be illegal or otherwise disadvantageous to such Lender.

 

10.3                        Increased Costs and Reduction of Return.

 

(a)                                 If any Lender or L/C Issuer shall determine that, due to either (i) the introduction of, or any change in, or in the interpretation of, any Requirement of Law or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), in the case of either clause (i) or (ii) above subsequent to the date hereof, there shall be any increase in the cost to such Lender or L/C Issuer 

 

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of agreeing to make or making, funding or maintaining any LIBOR Rate Loans or of issuing or maintaining any Letter of Credit, then the Borrower shall be liable for, and shall from time to time, within thirty (30) days of demand therefor by such Lender or L/C Issuer (with a copy of such demand to Agent), pay to Agent for the account of such Lender or L/C Issuer, additional amounts as are sufficient to compensate such Lender or L/C Issuer for such increased costs; provided, that the Borrower shall not be required to compensate any Lender or L/C Issuer pursuant to this Section 10.3(a) for any increased costs incurred more than 180 days prior to the date that such Lender or L/C Issuer notifies the Borrower, in writing of the increased costs and of such Lender’s or L/C Issuer’s intention to claim compensation thereof; provided, further, that if the circumstance giving rise to such increased costs is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(b)                                 If any Lender or L/C Issuer shall have determined that:

 

(i)                                     the introduction of any Capital Adequacy Regulation;

 

(ii)                                  any change in any Capital Adequacy Regulation;

 

(iii)                               any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof; or

 

(iv)                              compliance by such Lender or L/C Issuer (or its Lending Office) or any entity controlling such Lender or L/C Issuer, with any Capital Adequacy Regulation;

 

affects the amount of capital required or expected to be maintained by such Lender or L/C Issuer or any entity controlling such Lender or L/C Issuer and (taking into consideration such Lender’s or such entities’ policies with respect to capital adequacy and such Lender’s or L/C Issuer’s desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitment(s), loans, credits or obligations under this Agreement, then, within thirty (30) days of demand of such Lender or L/C Issuer (with a copy to Agent), the Borrower shall pay to such Lender or L/C Issuer, from time to time as specified by such Lender or L/C Issuer, additional amounts sufficient to compensate such Lender or L/C Issuer (or the entity controlling the Lender or L/C Issuer) for such increase; provided, that the Borrower shall not be required to compensate any Lender or L/C Issuer pursuant to this Section 10.3(b) for any amounts incurred more than 180 days prior to the date that such Lender or L/C Issuer notifies the Borrower, in writing of the amounts and of such Lender’s or L/C Issuer’s intention to claim compensation thereof; provided, further, that if the event giving rise to such increase is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(c)                                  Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision or any successor or similar authority shall, in each case, be deemed to be a change in

 

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a Requirement of Law under Section 10.3(a) and/or a change in a Capital Adequacy Regulation under Section 10.3(b) above, as applicable, regardless of the date enacted, adopted or issued.

 

10.4                        Funding Losses.

 

The Borrower agrees to reimburse each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of:

 

(a)                                 the failure of the Borrower to make any payment or mandatory prepayment of principal of any LIBOR Rate Loan (including payments made after any acceleration thereof);

 

(b)                                 the failure of the Borrower to borrow, continue or convert a Loan after it has given (or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;

 

(c)                                  the failure of the Borrower to make any prepayment after it has given a notice in accordance with Section 1.7;

 

(d)                                 the prepayment (including pursuant to Section 1.8) of a LIBOR Rate Loan on a day which is not the last day of the Interest Period with respect thereto; or

 

(e)                                  the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base Rate Loan on a day that is not the last day of the applicable Interest Period;

 

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained; provided that, with respect to the expenses described in Section 10.4(d) and (e), such Lender shall have notified Agent of any such expense within two (2) Business Days of the date on which such expense was incurred.  Solely for purposes of calculating amounts payable by the Borrower to the Lenders under this Section 10.4 and under Section 10.3(a):  each LIBOR Rate Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR used in determining the interest rate for such LIBOR Rate Loan by a matching deposit or other borrowing in the interbank Eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Rate Loan is in fact so funded.

 

10.5                        Inability to Determine Rates.

 

If Agent shall have determined in good faith that for any reason adequate and reasonable means do not exist for ascertaining the LIBOR for any requested Interest Period with respect to a proposed LIBOR Rate Loan or that the LIBOR applicable pursuant to Section 1.3(a) for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders of funding or maintaining such Loan, Agent will forthwith give notice of such determination to the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate Loans hereunder shall be suspended until Agent revokes such notice in writing.  Upon receipt of such notice, the Borrower may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.  If the Borrower 

 

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does not revoke such notice, the Lenders shall make, convert or continue the Loans, as proposed by the Borrower, in the amount specified in the applicable notice submitted by the Borrower, but such Loans shall be made, converted or continued as Base Rate Loans.

 

10.6                        Reserves on LIBOR Rate Loans.

 

The Borrower shall pay to each Lender, as long as such Lender shall be required under regulations of the Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional costs on the unpaid principal amount of each LIBOR Rate Loan equal to actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), payable on each date on which interest is payable on such Loan provided the Borrower shall have received at least fifteen (15) days’ prior written notice (with a copy to Agent) of such additional interest from the Lender.  If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest shall be payable fifteen (15) days from receipt of such notice.

 

10.7                        Certificates of Lenders.

 

Any Lender claiming reimbursement or compensation pursuant to this Article X shall deliver to the Borrower (with a copy to Agent) a certificate setting forth in reasonable detail the amount payable to such Lender hereunder and such certificate shall be conclusive and binding on the Borrower in the absence of manifest error.

 

ARTICLE XI.
 DEFINITIONS

 

11.1                        Defined Terms.

 

The following terms are defined in the Sections referenced opposite such terms:

 

	
“Affected   Lender”
    	
 
    	
9.22
    
	
“Agent Report”
    	
 
    	
8.5(c)
    
	
“Aggregate   Excess Funding Amount”
    	
 
    	
1.11(e)(iv)
    
	
“Borrower”
    	
 
    	
Preamble
    
	
“Borrower   Materials”
    	
 
    	
9.10(e)
    
	
“Controlled   Collateral Account”
    	
 
    	
4.11(a)
    
	
“EBITDA”
    	
 
    	
Exhibit 4.2(b)
    
	
“Eligible   Accounts”
    	
 
    	
1.13
    
	
“Eligible   Inventory”
    	
 
    	
1.14
    
	
“Event of   Default”
    	
 
    	
7.1
    
	
“Excess Cash   Flow”
    	
 
    	
Exhibit 4.2(b)
    
	
“Fee Letter”
    	
 
    	
1.9(a)
    
	
“Fixed Charge   Coverage Ratio”
    	
 
    	
Exhibit 4.2(b)
    
	
“Incremental   Facility”
    	
 
    	
1.1(e)
    
	
“Indemnified   Matters”
    	
 
    	
9.6(a)
    
	
“Indemnitees”
    	
 
    	
9.6
    

 

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“Interest   Expense”
    	
 
    	
Exhibit 4.2(b)
    
	
“Investments”
    	
 
    	
5.4
    
	
“L/C   Reimbursement Agreement”
    	
 
    	
1.1(c)(i)(C)
    
	
“L/C   Reimbursement Date”
    	
 
    	
1.1(c)(v)
    
	
“L/C Request”
    	
 
    	
1.1(c)(ii)
    
	
“L/C Sublimit”
    	
 
    	
1.1(c)(i)(A)
    
	
“Lender”
    	
 
    	
Preamble
    
	
“Letter of   Credit Fee”
    	
 
    	
1.9(c)
    
	
“Maximum   Revolving Loan Balance”
    	
 
    	
1.1(b)(i)
    
	
“Maximum Lawful   Rate”
    	
 
    	
1.3(d)
    
	
“MNPI”
    	
 
    	
9.10(a)
    
	
“Notice of   Conversion/Continuation”
    	
 
    	
1.6(a)
    
	
“OFAC”
    	
 
    	
3.28
    
	
“Other Taxes”
    	
 
    	
10.1(c)
    
	
“Permitted   Liens”
    	
 
    	
5.1
    
	
“Register”
    	
 
    	
1.4(b)
    
	
“Restricted   Payments”
    	
 
    	
5.11
    
	
“Replacement Lender”
    	
 
    	
9.22
    
	
“Revolving Loan   Commitment”
    	
 
    	
1.1(b)(i)
    
	
“Revolving Loan”
    	
 
    	
1.1(b)(i)
    
	
“Sale”
    	
 
    	
9.9(b)
    
	
“SDN List”
    	
 
    	
3.28
    
	
“Settlement   Date”
    	
 
    	
1.11(b)
    
	
“Swing Loan”
    	
 
    	
1.1(d)(i)
    
	
“Swingline   Request”
    	
 
    	
1.1(d)(ii)
    
	
“Tax Returns”
    	
 
    	
3.10
    
	
“Taxes”
    	
 
    	
10.1(a)
    
	
“Unused Commitment   Fee”
    	
 
    	
1.9(b)
    

 

In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

 

“Account” means, as at any date of determination, all “accounts” (as such term is defined in the UCC) of the Credit Parties, including, without limitation, the unpaid portion of the obligation of a customer of a Credit Party in respect of Inventory purchased by and shipped to such customer and/or the rendition of services by a Credit Party, as stated on the respective invoice of a Credit Party, net of any credits, rebates or offsets owed to such customer.

 

“Account Debtor” means the customer of a Credit Party who is obligated on or under an Account.

 

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of fifty percent (50%) of the Stock and Stock Equivalents of any Person or otherwise causing any Person to become a Subsidiary of the Borrower, or (c) a merger or consolidation or any other combination with another Person.

 

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“Affiliate” means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other Person that directly or indirectly controls, controlled by, or is under common control with, such Person; provided, however, that no Secured Party shall be an Affiliate of any Credit Party or of any Subsidiary of any Credit Party solely by reason of the provisions of the Loan Documents.  For purposes of this definition, “control” means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the voting Stock of such Person (either directly or through the ownership of Stock Equivalents) or (b) the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agent” means GE Capital in its capacity as administrative agent for the Lenders hereunder, and any successor administrative agent.

 

“Aggregate Revolving Loan Commitment” means the combined Revolving Loan Commitments of the Lenders, which as of the Closing Date shall be in the amount of $120,000,000, as such amount may be adjusted from time to time pursuant to this Agreement.

 

“AHF” means American Homecare Federation, Inc., a Connecticut corporation.

 

“AHF Acquisition” means the Acquisition by Borrower of all of the outstanding Stock of AHF pursuant to the AHF Acquisition Agreement.

 

“AHF Acquisition Agreement” means that certain Stock Purchase Agreement dated as of December 16, 2013, by and among Borrower, AHF and the stockholders of AHF party thereto.

 

“AHF Acquisition Documents” means, collectively, the AHF Acquisition Agreement, and all other agreements and documents required to be entered into or delivered pursuant thereto or in connection with the AHF Acquisition, each in the form delivered to the Agent, and as may be amended, modified or supplemented from time to time as permitted hereunder.

 

“AHF Earnout” means the “Contingent Payments”, if any, payable to the former shareholders of AHF under the AHF Acquisition Agreement.

 

“AmerisourceBergen” means AmerisourceBergen Drug Corporation, a Delaware corporation.

 

“AmerisourceBergen Vendor Contract” means the contracts giving rise to the AmerisourceBergen Indebtedness or pursuant to which a Lien is granted by Borrower or any Subsidiary in favor AmerisourceBergen, including but not limited to the Prime Vendor Agreement dated as of January 1, 2012 among Borrower, the other Credit Parties party thereto and AmerisourceBergen and the Credit Agreement dated July 13, 2010 among Borrower, the other Credit Parties party thereto and AmerisourceBergen.

 

“AmerisourceBergen Indebtedness” has the meaning provided in the AmerisourceBergen Intercreditor Agreement.

 

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“AmerisourceBergen Intercreditor Agreement” means the Intercreditor Agreement dated on or about the Original Closing Date, between AmerisourceBergen and Agent, as amended or modified from time to time.

 

“AmerisourceBergen Inventory Collateral” has the meaning provided in the AmerisourceBergen Intercreditor Agreement.

 

“Applicable Margin” means with respect to Revolving Loans and Swing Loans:  (i) if a Base Rate Loan, three quarters of one percent (0.75%) per annum and (ii) if a LIBOR Rate Loan, one and three quarters percent (1.75%) per annum.  Notwithstanding anything herein to the contrary, Swing Loans may not be LIBOR Rate Loans.

 

“Approved Fund” means, with respect to any Lender, any Person (other than a natural Person) that (a) (i) is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the Ordinary Course of Business or (ii) temporarily warehouses loans for any Lender or any Person described in clause (i) above and (b) is advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an individual) or any Affiliate of any Person (other than an individual) that administers or manages such Lender.

 

“Assignment” means an assignment agreement entered into by a Lender, as assignor, and any Person, as assignee, pursuant to the terms and provisions of Section 9.9 (with the consent of any party whose consent is required by Section 9.9), accepted by Agent, substantially in the form of Exhibit 11.1(a) or any other form approved by Agent.

 

“Attorney Costs” means and includes all fees and disbursements of any law firm or other external counsel.

 

“Availability” means, as of any date of determination, the amount by which (a) the Maximum Revolving Loan Balance, exceeds (b) the aggregate outstanding principal balance of Revolving Loans; provided that, solely for the purposes of calculating average daily Availability under Sections 4.9, 5.11 and 6.1 and clause (f) of the definition of Permitted Acquisition, “Availability” means, as of any date of determination, the amount by which (i) the Maximum Revolving Loan Balance exceeds (ii) the aggregate outstanding principal balance of Revolving Loans minus the aggregate amount on deposit in the Controlled Collateral Account at the end of such date of determination to the extent applied to the outstanding principal balance of Revolving Loans on the next Business Day.

 

“Bank Products” means any of the following provided to any Credit Party by any Lender or an Affiliate of any Lender:  (a) lockbox, depository or disbursement services, automatic clearing house transfer of funds, overdrafts, and other cash management services and (b) commercial credit cards and stored value cards.

 

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978.

 

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal 

 

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Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by Agent) or any similar release by the Federal Reserve Board (as determined by Agent), (b) the sum of 0.50% per annum and the Federal Funds Rate, and (c) the sum of (x) LIBOR calculated for each such day based on an Interest Period of one month determined two (2) Business Days prior to such day, plus (y) the excess of the Applicable Margin for LIBOR Rate Loans over the Applicable Margin for Base Rate Loans, in each instance, as of such day.  Any change in the Base Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the Federal Funds Rate or LIBOR for an Interest Period of three months.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Credit Party incurs or otherwise has any obligation or liability, contingent or otherwise.

 

“Borrowing” means a borrowing hereunder consisting of Loans made to or for the benefit of the Borrower on the same day by the Lenders pursuant to Article I.

 

“Borrowing Base” means, as of any date of determination by Agent, from time to time, an amount equal to the sum at such time of:

 

(a)                                 85% of the book value of Eligible Accounts at such time; and

 

(b)                                 on and after the Eligible Inventory Inclusion Date, the lowest of (i) 65% of the book value of Eligible Inventory valued at the lower of cost or market on a first-in, first-out basis, (ii) the book value of Eligible Inventory multiplied by the NOLV Factor multiplied by 85% and (iii) the Inventory Sublimit.

 

in each case less Reserves established by Agent at such time in its Permitted Discretion.

 

“Borrowing Base Certificate” means a certificate of the Borrower, on behalf of each Credit Party, in substantially the form of Exhibit 11.1(b) hereto, duly completed as of a date acceptable to Agent in its sole discretion.

 

“Business Day” means any day that is not a Saturday, Sunday or a day on which banks are required or authorized to close in New York City and, when determined in connection with notices and determinations in respect of LIBOR or any LIBOR Rate Loan or any funding, conversion, continuation, Interest Period or payment of any LIBOR Rate Loan, that is also a day on which dealings in Dollar deposits are carried on in the London interbank market.

 

“Capital Adequacy Regulation” means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any Lender or of any corporation controlling a Lender.

 

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“Capital Lease” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

 

“Capital Lease Obligations” means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

 

“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) “adequately capitalized” (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of clause (a), (b), (c) or (d) above shall not exceed 365 days.

 

“CHAMPVA” means, collectively, the Civilian Health and Medical Program of the Department of Veterans Affairs, a program of medical benefits covering retirees and dependents of former members of the armed services administered by the United States Department of Veterans Affairs, and all laws, rules, regulations, manuals, orders, or requirements pertaining to such program.

 

“Change of Control” means an event or series of events by which:

 

(a)                               at any time prior to a Qualified IPO, the Permitted Holders shall cease to own and control, at least 51% of the issued and outstanding Stock of the Borrower (as the same may be adjusted for any combination, recapitalization or reclassification into a greater or smaller number of shares, interests or other unit of equity security), or in any event, Stock representing voting control of the Borrower, free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, other than Liens in favor of Agent, for the benefit of the Secured Parties;

 

105

 

(b)                               at any time after a Qualified IPO, any “person” or “group” (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934) other than Permitted Holders shall own or control, directly or indirectly, legally and beneficially, Voting Equity Interests representing (x) more than 35% of the Voting Equity Interests of the Borrower and (y) a greater percentage of the Voting Equity Interests of the Borrower than is then owned, legally and beneficially, directly or indirectly, by the Permitted Holders; or

 

(c)                                a majority of the seats on the Borrower’s board of directors (or similar governing body) (other than vacant seats) is or becomes occupied by individuals who were neither (x) nominated by the board of directors (or similar governing body) of the Borrower or by the Permitted Holders nor (y) appointed by directors so nominated or by members of the board of directors (or similar governing body or the Permitted Holders) of the Borrower on the Closing Date; or

 

(d)                               any “change of control” or similar event under the Subordinated Indebtedness Documents; or

 

(e)                                any event occurs which would permit any holder of Series A Preferred Stock to deliver a “Redemption Request” under and as defined in Section 6(a) of the Restated Charter.

 

“Closing Date” means June 26, 2014.

 

“CMS” means The Centers for Medicare and Medicaid Services, which administers the Medicare and Medicaid programs under the Department of Health and Human Services, and any successor thereto.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all Property and interests in Property and proceeds thereof now owned or hereafter acquired by any Credit Party, any of their respective Subsidiaries and any other Person who has granted a Lien to Agent, in or upon which a Lien is granted or purported to be granted or now or hereafter exists in favor of any Lender or Agent for the benefit of Agent, Lenders and other Secured Parties, whether under this Agreement or under any other documents executed by any such Persons and delivered to Agent.

 

“Collateral Documents” means, collectively, the Guaranty and Security Agreement, the Mortgages (if any), each Control Agreement, and all other security agreements, pledge agreements, patent and trademark security agreements, lease assignments, guarantees and other similar agreements, and all amendments, restatements, modifications or supplements thereof or thereto, by or between any one or more of any Credit Party, any of their respective Subsidiaries or any other Person pledging or granting a lien on Collateral or guaranteeing the payment and performance of the Obligations, and any Lender or Agent for the benefit of Agent, the Lenders and other Secured Parties now or hereafter delivered to the Lenders or Agent pursuant to or in connection with the transactions contemplated hereby, and all financing statements (or comparable documents now or hereafter filed in accordance with the UCC or comparable law) against any such Person as debtor in favor of any Lender or Agent for the benefit of Agent, the Lenders and the other Secured Parties, as secured party, as any of the foregoing may be amended, restated and/or modified from time to time.

 

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“Commitment” means, for each Lender, its Revolving Loan Commitment.

 

“Commitment Percentage” means, as to any Lender, the percentage equivalent of such Lender’s Revolving Loan Commitment, divided by the Aggregate Revolving Loan Commitment; provided, that following acceleration of the Loans, such term means, as to any Lender, the percentage equivalent of the principal amount of the Loans held by such Lender, divided by the aggregate principal amount of the Loans held by all Lenders.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person:  (a) with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; (b) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (c) under any Rate Contracts; (d) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for the obligations of another Person through any agreement to purchase, repurchase or otherwise acquire such obligation or any Property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another Person.  The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum amount so guaranteed or supported.

 

“Contractual Obligations” means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

 

“Control Agreement” means, with respect to any deposit account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance satisfactory to Agent, among Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Credit Party maintaining such account, effective to grant “control” (within the meaning of Articles 8 and 9 under the applicable UCC) over such account to Agent.

 

“Conversion Date” means any date on which the Borrower converts a Base Rate Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.

 

“Copyrights” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

 

107

 

“Credit Parties” means the Borrower and each other Person (i) which executes a guaranty of the Obligations, (ii) which grants a Lien on all or substantially all of its assets to secure payment of the Obligations and (iii) all of the Stock of which is pledged to Agent for the benefit of the Secured Parties.

 

“Default” means any event or circumstance which, with the giving of notice, the lapse of time or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.

 

“Disposition” means (a) the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly permitted under Sections 5.2(a), 5.2(c) and 5.2(d), and (b) the sale or transfer by the Borrower or any Subsidiary of the Borrower of any Stock or Stock Equivalent issued by any Subsidiary of the Borrower and held by such transferor Person.

 

“Dollars”, “dollars” and “$” each mean lawful money of the United States of America.

 

“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

 

“Electronic Transmission” means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from an E-System.

 

“Eligible Inventory Inclusion Date” means the date determined by Agent and the Required Lenders for inclusion of Eligible Inventory in the Borrowing Base following completion of due diligence with respect to Inventory, including field examinations and appraisals.

 

“Eligible Inventory Sublimit” means the sublimit for the Eligible Inventory component of the Borrowing Base, as determined by Agent and the Required Lenders in their Permitted Discretion.

 

“Environmental Laws” means all present and future Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.

 

“Environmental Liabilities” means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of investigation and feasibility studies, including the cost of environmental consultants and the reasonable cost of attorney’s fees) that may be imposed on, incurred by or asserted against any Credit Party or any Subsidiary of any Credit Party as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of Property by any Credit Party or any Subsidiary of any Credit Party, whether on, prior or after the date hereof.

 

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“Equipment” means all “equipment,” as such term is defined in the UCC, now owned or hereafter acquired by any Credit Party, wherever located.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means, collectively, any Credit Party and any Person under common control or treated as a single employer with, any Credit Party, within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“ERISA Event” means any of the following:  (a) a reportable event described in Section 4043(b) of ERISA (or, unless the 30-day notice requirement has been duly waived under the applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan amendment as termination) under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan amendment as termination) under Section 4041 of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder; (j) a Title IV plan is in “at risk” status within the meaning of Code Section 430(i); (k) a Multiemployer Plan is in “endangered status” or “critical status” within the meaning of Section 432(b) of the Code; and (l) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any material liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.

 

“Event of Loss” means, with respect to any Property, any of the following:  (a) any loss, destruction or damage of such Property; (b) any pending or threatened institution of any proceedings for the condemnation or seizure of such Property or for the exercise of any right of eminent domain; or (c) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.

 

“Excluded Rate Contract Obligation” means, with respect to any Guarantor, any guarantee of any Swap Obligations under a Secured Rate Contract if, and only to the extent that and for so long as, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation under a Secured Rate Contract (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the 

 

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guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation under a Secured Rate Contract.  If a Swap Obligation under a Secured Rate Contract arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation under a Secured Rate Contract that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

 

“Excluded Tax” means with respect to any Secured Party (a) taxes measured by net income (including branch profits taxes) and franchise taxes imposed in lieu of net income taxes, in each case imposed on any Secured Party as a result of a present or former connection between such Secured Party and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than such connection arising solely from any Secured Party having executed, delivered or performed its obligations or received a payment under, or enforced, any Loan Document); (b) withholding taxes to the extent that the obligation to withhold amounts existed on the date that such Person became a “Secured Party” under this Agreement in the capacity under which such Person makes a claim under Section 10.1(b) or designates a new Lending Office, except in each case to the extent such Person is a direct or indirect assignee (other than pursuant to Section 9.22) of any other Secured Party that was entitled, at the time the assignment to such Person became effective, to receive additional amounts under Section 10.1(b); (c) taxes that are directly attributable to the failure (other than as a result of a change in any Requirement of Law) by any Secured Party to deliver the documentation required to be delivered pursuant to Section 10.1(f), and (d) in the case of a Non-U.S. Lender Party, any United States federal withholding taxes imposed on amounts payable to such Non-U.S. Lender Party as a result of such Non-U.S. Lender Party’s failure to comply with FATCA to establish a complete exemption from withholding thereunder.

 

“E-Fax” means any system used to receive or transmit faxes electronically.

 

“E-Signature” means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent to sign, authenticate or accept such Electronic Transmission.

 

“E-System” means any electronic system approved by Agent, including SyndTrak Online® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by Agent, any of its Related Persons or any other Person, providing for access to data protected by passcodes or other security system.

 

“FATCA” means sections 1471, 1472, 1473 and 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), current or future United States Treasury Regulations promulgated thereunder and published guidance with respect thereto, and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“FDA” means the United States Food and Drug Administration and any successor thereto.

 

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“Federal Flood Insurance” means federally backed Flood Insurance available under the National Flood Insurance Program to owners of real property improvements located in Special Flood Hazard Areas in a community participating in the National Flood Insurance Program.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as determined by Agent in a commercially reasonable manner.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

 

“Federal/State Healthcare Program Account Debtor” means any Account Debtor which is (a) the United States of America acting under the Medicaid/Medicare program established pursuant to the Social Security Act, the Tricare/CHAMPUS Program or any other Federally sponsored healthcare program other than the healthcare programs for which Federal government employees are beneficiaries, (b) any state or the District of Columbia acting pursuant to a health plan adopted pursuant to Title XIX of the Social Security Act or other Federal or State statute or (c) any agent, carrier, contractor, administrator or intermediary for any of the foregoing.

 

“FEMA” means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

 

“Final Availability Date” means the earlier of the Revolving Termination Date and one (1) Business Day prior to the date specified in clause (a) of the definition of Revolving Termination Date.

 

“First Tier Foreign Subsidiary” means a Foreign Subsidiary held directly by a Credit Party or indirectly by a Credit Party through one or more Domestic Subsidiaries.

 

“Fiscal Quarter” means any of the quarterly accounting periods of the Credit Parties, ending on March 31, June 30, September 30, and December 31 of each year.

 

“Fiscal Year” means any of the annual accounting periods of the Credit Parties ending on December 31 of each year.

 

“Flood Insurance” means, for any Real Estate located in a Special Flood Hazard Area, Federal Flood Insurance or private insurance that (a) meets the requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines and (b) shall be in an amount equal to the full, unpaid balance of the Loans and any prior liens on the Real Estate up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Agent, with deductibles not to exceed $50,000.

 

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such Person that is a “controlled foreign corporation” under Section 957 of the Code.

 

“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time, set forth in the opinions and pronouncements of the 

 

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Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions and comparable stature and authority within the accounting profession) that are applicable to the circumstances as of the date of determination.  Subject to Section 11.3, all references to “GAAP” shall be to GAAP applied consistently with the principles used in the preparation of the financial statements described in Section 3.11(a).

 

“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).  The term “Governmental Authority” shall further include (i) any institutional review board, ethics committee, data monitoring committee, state pharmacy board or other committee or entity with defined authority to oversee Regulatory Matters and (ii) any agency, branch or other governmental body charged with the responsibility and/or vested with the authority to administer and/or enforce any Health Care Laws, including any Medicare or Medicaid contractors, intermediaries or carriers.

 

“Governmental Payor” means Medicare, Medicaid, TRICARE, CHAMPVA, any state health plan adopted pursuant to Title XIX of the Social Security Act, any other state or federal health care program and any other Governmental Authority which presently or in the future maintains a Third Party Payor Program.

 

“Guaranty and Security Agreement” means that certain Amended and Restated Guaranty and Security Agreement, dated as of the Closing Date, in form and substance reasonably acceptable to Agent and the Borrower, made by the Credit Parties in favor of Agent, for the benefit of the Secured Parties, as the same may be amended, restated and/or modified from time to time.

 

“Hazardous Material” means any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including, without limitation, petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.

 

“Headquarters Due Care Plan” means the May 2, 2010 Due Care Plan for the Commercial Property Located at 4100 South Saginaw Street and 325 South Atherton Road, Flint, Michigan, prepared by PM Environmental, Inc.

 

“Health Care Laws” means all Requirements of Law relating to (a) fraud and abuse (including without limitation the following statutes, as amended, modified or supplemented from time to time and any successor statutes thereto and regulations promulgated from time to time thereunder:  the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)); the Stark Law (42 U.S.C. § 1395nn and §1395(q)); the civil False Claims Act (31 U.S.C. § 3729 et seq.); Sections 1320a-7 and 1320a-7a and 1320a-7b of Title 42 of the United States Code; the Medicare 

 

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Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. No. 108-173)); (b) Medicare, Medicaid, CHAMPVA, TRICARE or other Third Party Payor Programs; (c) the licensure or regulation of healthcare providers, suppliers, professionals, facilities or payors; (d) the provision of, or payment for, health care services, items or supplies; (e) patient health care; (f) quality, safety certification and accreditation standards and requirements; (g) the billing, coding or submission of claims or collection of accounts receivable or refund of overpayments; (h) HIPAA; (i) certificates of operations and authority; (o) laws regulating the provision of free or discounted care or services; and (j) any and all other applicable federal, state or local health care laws, rules, codes, statutes, regulations, manuals, orders, ordinances, statutes, policies, professional or ethical rules, administrative guidance and requirements, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto.

 

“Health Care Permits” means any and all Permits issued or required under applicable Health Care Laws.

 

“HIPAA” means the (a) Health Insurance Portability and Accountability Act of 1996; (b) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009); and (c) any state and local laws regulating the privacy and/or security of individually identifiable information, including state laws providing for notification of breach of privacy or security of individually identifiable information, in each case with respect to the laws described in clauses (a), (b) and (c) of this definition, as the same may be amended, modified or supplemented from time to time, any successor statutes thereto, any and all rules or regulations promulgated from time to time thereunder.

 

“Impacted Lender” means any Lender that fails to provide Agent, within three (3) Business Days following Agent’s written request, satisfactory assurance that such Lender will not become a Non-Funding Lender.

 

“Indebtedness” of any Person means, without duplication:  (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of Property or services (other than trade payables entered into in the Ordinary Course of Business and which are not secured by a Lien); (c) the face amount of all letters of credit issued for the account of such Person and without duplication, all drafts drawn thereunder and all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments issued by such Person; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of Property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property); (f) all Capital Lease Obligations; (g) the principal balance outstanding under any synthetic lease, off-balance sheet loan or similar off balance sheet financing product; (h) all indebtedness referred to in clauses (a) through (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and 

 

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(j) all Contingent Obligations described in clause (a) of the definition thereof in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (i) above.

 

“Insolvency Proceeding” means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case in (a) and (b) above, undertaken under U.S. federal, state or foreign law, including the Bankruptcy Code.

 

“Intellectual Property” means all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.

 

“Interest Payment Date” means, (a) with respect to any LIBOR Rate Loan (other than a LIBOR Rate Loan having an Interest Period of six (6) months) the last day of each Interest Period applicable to such Loan, (b) with respect to any LIBOR Rate Loan having an Interest Period of six (6) months, the last day of each three (3) month interval and, without duplication, the last day of such Interest Period, and (c) with respect to Base Rate Loans (including Swing Loans) the first day of each month.

 

“Interest Period” means, with respect to any LIBOR Rate Loan, the period commencing on the Business Day such Loan is disbursed or continued or on the Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan and ending on the date one, two, three, or six, months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation; provided that:

 

(a)                                 if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

 

(b)                                 any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(c)                                  no Interest Period for any Revolving Loan shall extend beyond the Revolving Termination Date.

 

“Internet Domain Name” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to internet domain names.

 

“Inventory” means all of the “inventory” (as such term is defined in the UCC) of the Credit Parties, including, but not limited to, all merchandise, raw materials, parts, supplies, work 

 

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in process and finished goods intended for sale, together with all the containers, packing, packaging, shipping and similar materials related thereto, and including such inventory as is temporarily out of a Credit Party’s custody or possession, including inventory on the premises of others and items in transit.

 

“IP Ancillary Rights” means, with respect to any Intellectual Property, as applicable, all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

 

“IP License” means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in or relating to any Intellectual Property.

 

“IRS” means the Internal Revenue Service of the United States and any successor thereto.

 

“Issue” means, with respect to any Letter of Credit, to issue, extend the expiration date of, renew (including by failure to object to any automatic renewal on the last day such objection is permitted), increase the face amount of, or reduce or eliminate any scheduled decrease in the face amount of, such Letter of Credit, or to cause any Person to do any of the foregoing.  The terms “Issued” and “Issuance” have correlative meanings.

 

“Janus Series A Preferred Issuance” means the issuance of Series A Preferred Stock of Borrower pursuant to the Janus Series A Preferred Stock Purchase Agreement.

 

“Janus Series A Preferred Proceeds Distributions” means, collectively, the distribution to currently existing holders of Borrower’s common stock and currently existing holders of options to acquire Borrower’s common stock in an aggregate amount of up to $54,000,000 with the proceeds from the Janus Series A Preferred Issuance in the form of redemptions of stock and/or stock options.

 

“Janus Series A Preferred Stock Purchase Agreement” means the Janus Series A Preferred Stock Purchase Agreement dated as of March 31, 2014, by and among Borrower and each of those persons and entities whose names are set forth on the Schedule of Purchasers attached thereto.

 

“Janus Series A Preferred Transaction Documents” means the “Transaction Agreements” as defined in the Janus Series A Preferred Stock Purchase Agreement.

 

“L/C Issuer” means any Lender or an Affiliate thereof or a bank or other legally authorized Person, in each case, reasonably acceptable to Agent, in such Person’s capacity as an issuer of Letters of Credit hereunder.

 

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“L/C Reimbursement Obligation” means, for any Letter of Credit, the obligation of the Borrower to the L/C Issuer thereof or to Agent, as and when matured, to pay all amounts drawn under such Letter of Credit.

 

“Lender” means each Lender with a Revolving Loan Commitment (or if the Revolving Loan Commitments have terminated, who hold Revolving Loans or participations in Swing Loans.)

 

“Lending Office” means, with respect to any Lender, the office or offices of such Lender specified as its “Lending Office” beneath its name on the applicable signature page hereto, or such other office or offices of such Lender as it may from time to time notify the Borrower and Agent.

 

“Letter of Credit” means documentary or standby letters of credit Issued for the account of the Borrower by L/C Issuers, and bankers’ acceptances issued by the Borrower, for which Agent and Lenders have incurred Letter of Credit Obligations.

 

“Letter of Credit Obligations” means all outstanding obligations incurred by Agent and Lenders at the request of the Borrower, whether direct or indirect, contingent or otherwise, due or not due, in connection with the issuance of Letters of Credit by L/C Issuers or the purchase of a participation as set forth in Section 1.1(c) with respect to any Letter of Credit.  The amount of such Letter of Credit Obligations shall equal the maximum amount that may be payable by Agent and Lenders thereupon or pursuant thereto.

 

“Liabilities” means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursements and expenses (including, without limitation, those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

 

“LIBOR” means, for each Interest Period, the highest of the offered rate per annum for deposits of Dollars for the applicable Interest Period that appears on Reuters Screen LIBOR 01 Page as of 11:00 A.M. (London, England time) two (2) Business Days prior to the first day in such Interest Period.  If no such offered rate exists, such rate will be the rate of interest per annum, as determined by Agent at which deposits of Dollars in immediately available funds are offered at 11:00 A.M. (London, England time) two (2) Business Days prior to the first day in such Interest Period by major financial institutions reasonably satisfactory to Agent in the London interbank market for such Interest Period for the applicable principal amount on such date of determination.

 

“LIBOR Rate Loan” means a Loan that bears interest based on LIBOR.

 

“Licensed Personnel” means any Person (including any pharmacist) involved in the delivery of health care or medical items, services or supplies, employed or retained by any Credit Party or any Subsidiary of any Credit Party.

 

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“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or otherwise), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever (including those created by, arising under or evidenced by any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

 

“Loan” means any loan made or deemed made by any Lender hereunder.

 

“Loan Documents” means this Agreement, the Notes, the Fee Letter, the Collateral Documents, the Master Agreement for Standby Letters of Credit, the Master Agreement for Documentary Letters of Credit, the Subordination Agreements, the AmerisourceBergen Intercreditor Agreement and all documents delivered to Agent and/or any Lender in connection with any of the foregoing.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

 

“Material Adverse Effect” means an effect that results in or causes, or could reasonably be expected to result in or cause, a material adverse change in any of (a) the condition (financial or otherwise) or prospects of any Credit Party or business, performance, operations or Property of the Credit Parties and their Subsidiaries taken as a whole; (b) the ability of any Credit Party, any Subsidiary of any Credit Party or any other Person (other than Agent or Lenders) to perform its obligations under any Loan Document; or (c) the validity or enforceability of any Loan Document or the rights and remedies of Agent, the Lenders and the other Secured Parties under any Loan Document.  Without limiting the generality of the foregoing, any event or occurrence which results or would reasonably be expected to result in Liabilities to the Credit Parties in excess of $6,000,000 individually or in the aggregate shall be deemed to have a Material Adverse Effect.

 

“Material Agreement” means each of the AmerisourceBergen Vendor Contract and the Distribution and Services Agreement dated as of July 1, 2011 between Celgene Corporation and Borrower.

 

“Material Environmental Liabilities” means Environmental Liabilities exceeding $500,000 in the aggregate.

 

“Medicaid” means, collectively, the health care assistance program established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and any statutes succeeding thereto, and all laws, rules, regulations, manuals, orders or requirements pertaining to such program, including (a) all federal statutes affecting such program; (b) all state statutes and plans for medical assistance enacted in connection with such program and federal rules and regulations promulgated in connection with such program; and (c) all applicable provisions of all rules, regulations, manuals, orders and administrative, reimbursement, and requirements of all Governmental Authorities promulgated in connection with such program (whether or not having 

 

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the force of law), in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

“Medicare” means, collectively, the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and any statutes succeeding thereto, and all laws, rules, regulations, manuals, orders or requirements pertaining to such program including (a) all federal statutes (whether set forth in Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) or elsewhere) affecting such program; and (b) all applicable provisions of all rules, regulations, manuals, orders, administrative, reimbursement and requirements of all Governmental Authorities promulgated in connection with such program (whether or not having the force of law), in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

“MedPro” means MedPro Rx, Inc., a North Carolina corporation.

 

“MedPro Acquisition” means the Acquisition by Borrower of all of the outstanding Stock of MedPro pursuant to the MedPro Acquisition Agreement.

 

“MedPro Acquisition Agreement” means that certain Stock Purchase Agreement dated as of or about June 27, 2014, by and among Borrower, MedPro and the stockholders of MedPro party thereto, in the form delivered to Agent and Lenders on the Closing Date.

 

“MedPro Acquisition Closing Date” means the “Closing Date” as defined in the MedPro Acquisition Agreement.

 

“MedPro Acquisition Documents” means, collectively, the MedPro Acquisition Agreement, and all other agreements and documents required to be entered into or delivered pursuant thereto or in connection with the MedPro Acquisition, each in the form delivered to the Agent on the Closing Date and as may be amended, modified or supplemented from time to time as permitted hereunder.

 

“MedPro Earnout” means the “Contingent Payments”, if any, payable to the former shareholders of MedPro under the MedPro Acquisition Agreement.

 

“Mortgage” means any deed of trust, leasehold deed of trust, mortgage, leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other document creating a Lien on Real Estate or any interest in Real Estate.

 

“Multiemployer Plan” means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

 

“National Flood Insurance Program” means the program created by the U.S. Congress pursuant to the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as revised by the National Flood Insurance Reform Act of 1994, that mandates the purchase of flood insurance to cover real property improvements located in Special Flood Hazard Areas in participating communities and provides protection to property owners through a federal insurance program.

 

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“Net Issuance Proceeds” means, in respect of any issuance of debt or equity, cash proceeds (including cash proceeds as and when received in respect of non-cash proceeds received or receivable in connection with such issuance), net of underwriting discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of the Borrower.

 

“Net Orderly Liquidation Value” means the cash proceeds of Inventory and/or Equipment, as applicable, which could be obtained in an orderly liquidation (net of all liquidation expenses, costs of sale, operating expenses and retrieval and related costs), as determined pursuant to the most recent third-party appraisal of such Inventory and/or Equipment delivered to Agent by an appraiser reasonably acceptable to Agent.

 

“Net Proceeds” means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when received by the Person making a Disposition, and insurance proceeds and condemnation and similar awards received on account of an Event of Loss, net of:  (a) in the event of a Disposition (i) the direct costs relating to such Disposition excluding amounts payable to the Borrower or any Affiliate of the Borrower, (ii) sale, use or other transaction taxes paid or payable as a result thereof, and (iii) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject of such Disposition and (b) in the event of an Event of Loss, (i) so long as no Default or Event of Default has occurred and is continuing, all money actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking, (ii) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (iii) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments.

 

“NOLV Factor” means, as of the date of the appraisal of Inventory most recently received by Agent, the quotient of the Net Orderly Liquidation Value of Inventory divided by the book value of Inventory, expressed as a percentage.  The NOLV Factor will be increased or reduced promptly upon receipt by Agent of each updated appraisal.

 

“Non-Funding Lender” means any Lender that has (a) failed to fund any payments required to be made by it under the Loan Documents within two (2) Business Days after any such payment is due (excluding expense and similar reimbursements that are subject to good faith disputes), (b) given written notice (and Agent has not received a revocation in writing), to a Borrower, Agent, any Lender, or the L/C Issuer or has otherwise publicly announced (and Agent has not received notice of a public retraction) that such Lender believes it will fail to fund payments or purchases of participations required to be funded by it under the Loan Documents or one or more other syndicated credit facilities, (c) failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under one or more other syndicated credit facilities, unless subject to a good faith dispute, or (d) (i) become subject to a voluntary or involuntary case under the Bankruptcy Code or any similar bankruptcy laws, (ii) a custodian, conservator, receiver or similar official appointed for it or any substantial part of such Person’s assets, or (iii) made a general assignment for the benefit of creditors, been liquidated, or otherwise been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for this clause (d), Agent 

 

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has determined that such Lender is reasonably likely to fail to fund any payments required to be made by it under the Loan Documents.

 

“Non-U.S. Lender Party” means each of Agent, each Lender, each L/C Issuer, each SPV and each participant, in each case that is not a United States person as defined in Section 7701(a)(30) of the Code.

 

“Note” means any Revolving Note or Swingline Note and “Notes” means all such Notes.

 

“Notice of Borrowing” means a notice given by the Borrower to Agent pursuant to Section 1.5, in substantially the form of Exhibit 11.1(c) hereto.

 

“Obligations” means all Loans, and other Indebtedness, advances, debts, liabilities, obligations, covenants and duties owing by any Credit Party to any Lender, Agent, any L/C Issuer, any Secured Swap Provider, and provider of Bank Products or any other Person required to be indemnified, that arises under any Loan Document, any Secured Rate Contract or any Bank Product, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired; provided, that Obligations of any Guarantor shall not include any Excluded Rate Contract Obligations solely of such Guarantor.

 

“Ordinary Course of Business” means, in respect of any transaction involving any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

 

“Original Closing Date” means July 20, 2012.

 

“Organization Documents” means, (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation and any shareholder rights agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating agreement and articles or certificate of formation or (d) any other document setting forth the manner of election or duties of the officers, directors, managers or other similar persons, or the designation, amount or relative rights, limitations and preference of the Stock of a Person.

 

“Patents” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.

 

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56.

 

“PBGC” means the United States Pension Benefit Guaranty Corporation any successor thereto.

 

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“Permits” means, with respect to any Person, any permit, approval, consent, clearance, authorization, license, registration, accreditation, certificate, certification, certificate of need, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or Products or to which such Person or any of its property or Products is subject, including without limitation all Registrations and all Health Care Laws.

 

“Permitted Holders” means Philip R. Hagerman and trusts for his benefit and that of his family.

 

“Permitted Acquisition” means any Acquisition by (i) a Credit Party of substantially all of the assets of a Target, which assets are located in the United States or (ii) a Credit Party of 100% of the Stock and Stock Equivalents of a Target organized under the laws of any State in the United States or the District of Columbia, in each case, to the extent that each of the following conditions shall have been satisfied:

 

(a)                                 to the extent the Acquisition will be financed in whole or in part with the proceeds of any Loan, the conditions set forth in Section 2.2 shall have been satisfied;

 

(b)                                 the Borrower shall have notified Agent and Lenders of such proposed Acquisition at least thirty (30) days prior to the consummation thereof and furnished to Agent and Lenders at least fifteen (15) days prior to the consummation thereof (1) an executed term sheet and/or letter of intent (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of Agent, such other information and documents that Agent may request, including, without limitation, executed counterparts of the respective agreements, documents or instruments pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, documents or instruments and all other material ancillary agreements, instruments and documents to be executed or delivered in connection therewith, (2) pro forma financial statements of the Borrower and its Subsidiaries after giving effect to the consummation of such Acquisition, (3) a certificate of a Responsible Officer of the Borrower demonstrating on a pro forma basis compliance with the covenants set forth in Article VI after giving effect to the consummation of such Acquisition and (4) copies of such other agreements, instruments and other documents as Agent reasonably shall request;

 

(c)                                  the Borrower and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Section 4.13 and Agent shall have received, for the benefit of the Secured Parties, a collateral assignment of the seller’s representations, warranties and indemnities to the Borrower or any of its Subsidiaries under the acquisition documents;

 

(d)                                 such Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar body) and/or the stockholders or other equityholders of the Target;

 

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(e)                                  no Default or Event of Default shall then exist or would exist after giving effect thereto;

 

(f)                                   average daily Availability shall not be less than $30,000,000 for the ninety (90) day period preceding such Acquisition and, on a pro forma basis, Availability shall not be less than $25,000,000 after giving effect to such Acquisition;

 

(g)                                  the total consideration paid or payable (including without limitation, all transaction costs, assumed Indebtedness and Liabilities incurred, assumed or reflected on a consolidated balance sheet of the Credit Parties and their Subsidiaries after giving effect to such Acquisition and the maximum amount of all deferred payments) for all Acquisitions consummated after the Closing Date (exclusive of the MedPro Acquisition) during (i) any calendar year shall not exceed $30,000,000 in the aggregate for all such Acquisitions and (ii) the term of this Agreement shall not exceed $60,000,000 in the aggregate for all such Acquisitions; and

 

(h)                                 the Target has EBITDA, subject to pro forma adjustments acceptable to Agent, for the most recent four quarters prior to the acquisition date for which financial statements are available, greater than zero

 

Notwithstanding the foregoing, no Accounts or Inventory acquired by a Credit Party in a Permitted Acquisition shall be included as Eligible Accounts or Eligible Inventory until a field examination (and, if required by Agent, an Inventory appraisal) with respect thereto has been completed to the satisfaction of Agent, including the establishment of Reserves required in Agent’s Permitted Discretion; provided that field examinations and appraisals in connection with Permitted Acquisitions shall not count against the limited number of field examinations or appraisals for which expense reimbursement may be sought.

 

“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Refinancing” means Indebtedness constituting a refinancing or extension of Indebtedness permitted under Section 5.5(c), 5.5(d) or 5.5(h) that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Indebtedness being refinanced or extended, (b) has a weighted average maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Indebtedness being refinanced or extended, (c) is not entered into as part of a sale leaseback transaction, (d) is not secured by a Lien on any assets other than the collateral securing the Indebtedness being refinanced or extended, (e) the obligors of which are the same as the obligors of the Indebtedness being refinanced or extended, and (f) is otherwise on terms no less favorable to the Credit Parties and their Subsidiaries, taken as a whole, than those of the Indebtedness being refinanced or extended.

 

“Person” means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

 

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“Pledged Collateral” has the meaning specified in the Guaranty and Security Agreement and shall include any other Collateral required to be delivered to Agent pursuant to the terms of any Collateral Document.

 

“Primrose Health Joint Venture” means a limited liability company to be formed in the State of Delaware of which an aggregate of fifty one (51%) of the voting Stock will be owned directly or indirectly by Borrower, which will conduct business with the primary purpose of reducing Hepatitis C treatment cost-per-member for contracted healthplans.

 

“Proceeding” means any investigation, inquiry, litigation, review, hearing, suit, claim, audit, arbitration, proceeding or action (in each case, whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

 

“Pro Forma EBITDA” means, with respect to any Target, EBITDA for such Target for the most recent twelve (12) fiscal month period for which financial statements are available at the time of determination thereof, adjusted by verifiable expense reductions, including excess owner compensation, if any, which are expected to be realized, in each case calculated by the Borrower and approved by Agent and Required Lenders.

 

“Products” means any item or any service that is designed, created, manufactured, managed, performed, or otherwise used, offered, or handled by or on behalf of the Credit Parties or any of their Subsidiaries.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

 

“Public Health Laws” means all applicable Requirements of Law relating to the procurement, development, manufacture, production, analysis, distribution, dispensing, importation, exportation, use, handling, quality, sale, or promotion of any drug, medical device, food, dietary supplement, or other product (including, without limitation, any ingredient or component of the foregoing products) subject to regulation under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. et seq.) and similar state laws, controlled substances laws, pharmacy laws, or consumer product safety laws.

 

“Qualified ECP Guarantor” means, in respect of any Swap Obligation under a Secured Rate Contract, each Credit Party that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation under a Secured Rate Contract or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Qualified IPO” means a bona fide underwritten sale to the public of common stock of the Borrower (or any direct or indirect parent company of Borrower) pursuant to a registration statement (other than on Form S-8 or any other form relating to securities issuable under any benefit plan of the Borrower) that is declared effective by the SEC.

 

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“Rate Contracts” means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest or currency exchange rates.

 

“Real Estate” means any Real Estate owned, leased, subleased or otherwise operated or occupied by any Credit Party or any Subsidiary of any Credit Party.

 

“Redemption” means the purchase for redemption of the Stock of the Borrower held by Jeffrey Rowe or purchase for cancellation of Stock Equivalents of the Borrower held by Steven Lund, as the case may be, in accordance with the terms of the Redemption Documents.

 

“Redemption Documents” means (i) with respect to the Redemptions, the Stock Redemption Agreement between the Borrower and Jeffrey M. Rowe, the Stock Option Redemption Agreement between the Borrower and Steven M. Lund, the Escrow and Pledge Agreement between Borrower and Jeffrey M. Rowe and the Subordinated Indebtedness Documents entered into in connection therewith, in each case, in the form provided to the Agent and Lenders prior to the Original Closing Date or otherwise in form and substance acceptable to Agent in its sole discretion and (ii) the Stock Redemption Agreement dated February 1, 2012 between the Borrower and M. Steven Chaffee and trusts for his benefit and for the benefit of his family (collectively, “Chaffee”), the Pledge and Escrow Agreement dated February 1, 2012 between the Borrower and Chaffee, and Subordinated Indebtedness Documents entered into in connection therewith.

 

“Regulatory Matters” means, collectively, activities and Products that are subject to Public Health Laws.

 

“Registrations” means all Permits and exemptions issued or allowed by any Governmental Authority (including but not limited to new drug applications, abbreviated new drug applications, biologics license applications, investigational new drug applications, over-the-counter drug monograph, device pre-market approval applications, device pre-market notifications, investigational device exemptions, product recertifications, manufacturing approvals and authorizations, CE Marks, pricing and reimbursement approvals, labeling approvals or their foreign equivalent, controlled substance registrations, pharmacy registrations, and wholesale distributor permits) held by, or applied by contract to, any Credit Party or any of its Subsidiaries, that are required for the research, development, manufacture, distribution, marketing, storage, transportation, use and sale of the Products of any Credit Party or any of its Subsidiaries.

 

“Related Agreements” means the AmerisourceBergen Vendor Contract, the Subordinated Indebtedness Documents, the Redemption Documents, the AHF Acquisition Documents and the MedPro Acquisition Documents.

 

“Related Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth in Article II) and other consultants and agents of or to such Person or any of its Affiliates.

 

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“Related Transactions” means the transactions contemplated by the Related Agreements and includes, without limitation, the Redemption, the AHF Acquisition, the MedPro Acquisition and the related issuances of Subordinated Indebtedness.

 

“Releases” means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.

 

“Remedial Action” means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre remedial studies and investigations and post-remedial monitoring and care with respect to any Hazardous Material.

 

“Required Lenders” means at any time (a) if there are only two Lenders, then both Lenders, (b) if there are more than two Lenders, then at least two Lenders holding more than sixty six and 2/3 percent (66 2/3%) of the sum of the Aggregate Revolving Loan Commitments then in effect, or (c) if the Aggregate Revolving Loan Commitments have terminated and there are more than two Lenders, then at least two Lenders then holding more than sixty six and 2/3 percent (66 2/3%) of the sum of the aggregate outstanding amount of Revolving Loans, outstanding Letter of Credit Obligations, amounts of participations in Swing Loans and the principal amount of unparticipated portions of Swing Loans; provided, that in the case of Section 2.2, “Required Lenders” means one or more Lenders then holding at least 50% of the sum of the Aggregate Revolving Loan Commitments then in effect; provided further, that in the case of Section 2.2, if one Lender holds more than 50% of the sum of the Aggregate Revolving Loan Commitments then in effect, “Required Lenders” means all the other Lenders.  For purposes of this definition, a Lender and any of its Affiliates or Approved Funds that are Lenders shall be deemed a single Lender.

 

“Requirement of Law” means with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or Products or to which such Person or any of its Property or Products is subject. For the avoidance of doubt, the term “Requirement of Law” shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

 

“Reserves” means, with respect to the Borrowing Base (a) reserves established by Agent from time to time against Eligible Accounts pursuant to Section 1.13 and Eligible Inventory pursuant to Section 1.14, and (b) such other reserves against Eligible Accounts, Eligible Inventory or Availability that Agent may, in its Permitted Discretion, establish from time to time.  Without limiting the generality of the foregoing, Reserves established to ensure the payment of 

 

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accrued interest expenses or Indebtedness shall be deemed to be an exercise of Agent’s Permitted Discretion, including reserves in respect of Bank Products and Secured Rate Contracts.

 

“Responsible Officer” means the chief executive officer or the president of the Borrower or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants or delivery of financial information, the chief financial officer or the treasurer of the Borrower or any other officer having substantially the same authority and responsibility.

 

“Restated Charter” means the Second Amended and Restated Articles of Incorporation of Borrower in the form attached as Exhibit B to the Janus Series A Preferred Stock Purchase Agreement and filed with the Michigan Department of Licensing and Regulatory Affairs on or about March 31, 2014.

 

“Revolving Note” means a promissory note of the Borrower payable to a Lender in substantially the form of Exhibit 11.1(d) hereto, evidencing Indebtedness of the Borrower under the Revolving Loan Commitment of such Lender.

 

“Revolving Termination Date” means the earliest to occur of:  (a) July 20, 2017; (b) the date on which the Aggregate Revolving Loan Commitment shall terminate in accordance with the provisions of this Agreement and (c) the date that is three months prior to the earliest maturity date of any Subordinated Indebtedness if such Subordinated Indebtedness is outstanding and has not been extended or renewed with a maturity date at least 180 days after the date specified in clause (a) above.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Party” means Agent, each Lender, each L/C Issuer, each other Indemnitee and each other holder of any Obligation of a Credit Party including each Secured Swap Provider and each provider of Bank Products.

 

“Secured Rate Contract” means any Rate Contract between the Borrower and the counterparty thereto, which (i) has been provided or arranged by GE Capital or an Affiliate of GE Capital, or (ii) Agent has acknowledged in writing constitutes a “Secured Rate Contract” hereunder.

 

“Secured Swap Provider” means (i) a Lender or an Affiliate of a Lender (or a Person who was a Lender or an Affiliate of a Lender at the time of execution and delivery of a Rate Contract) who has entered into a Secured Rate Contract with the Borrower, or (ii) a Person with whom the Borrower has entered into a Secured Rate Contract provided or arranged by GE Capital or an Affiliate of GE Capital, and any assignee thereof.

 

“Segregated Governmental Account” means a deposit account of a Credit Party maintained in accordance with the requirements of Section 4.11, the only funds on deposit in which constitute the direct proceeds of Medicare and Medicaid payments made by Governmental Payors.

 

“Series A Preferred Stock” has the meaning provided in the Restated Charter.

 

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“Software” means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.

 

“Solvent” means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such Person (both at fair value and present fair saleable value) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Special Flood Hazard Area” means an area that FEMA’s current flood maps indicate has at least a one percent (1%) chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year.

 

“SPV” means any special purpose funding vehicle identified as such in a writing by any Lender to Agent.

 

“Stock” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

 

“Stock Equivalents” means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

 

“Subordinated Indebtedness” means the Indebtedness of any Credit Party or any Subsidiary of any Credit Party described on Schedule 11.1B and any other Indebtedness of any Credit Party or any Subsidiary of any Credit Party that is subordinated to the Obligations in a manner and form satisfactory to Agent, in its sole discretion, as to right and time of payment and as to other rights and remedies thereunder and issued pursuant to terms, conditions and documentation satisfactory to Agent, in its sole discretion, which shall at all times be subject to a Subordination Agreement.

 

“Subordinated Indebtedness Documents” means the documents governing the Subordinated Indebtedness, including any notes or note agreements, and specifically including the Subordination Agreements, in each case, in form and substance satisfactory to Agent.

 

“Subordinated Noteholders” means the holders of Subordinated Indebtedness under the Subordinated Indebtedness Documents.

 

“Subordination Agreement”, individually, and “Subordination Agreements”, collectively, means each of the Subordination Agreements or Subordination and Intercreditor Agreements by 

 

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and among Agent, the Borrower, the other Credit Parties and the Subordinated Noteholders, as each of the same may be amended, restated and/or modified from time to time subject to the terms thereof.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than fifty percent (50%) of the voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more Subsidiaries of such Person.

 

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swartz Creek Property” means that certain real property owned by Diplomat Corporate Properties, LLC commonly known as 2029 & 2033 South Elms Road, Swartz Creek, Michigan.

 

“Sweep Agreement” has the meaning set forth in Section 4.11(e).

 

“Swingline Commitment” means $5,000,000.

 

“Swingline Lender” means, each in its capacity as Swingline Lender hereunder, GE Capital or, upon the resignation of GE Capital as Agent hereunder, any Lender (or Affiliate or Approved Fund of any Lender) that agrees, with the approval of Agent (or, if there is no such successor Agent, the Required Lenders) and the Borrower, to act as the Swingline Lender hereunder.

 

“Swingline Note” means a promissory note of the Borrower payable to the Swingline Lender, in substantially the form of Exhibit 11.1(e) hereto, evidencing the Indebtedness of the Borrower to the Swingline Lender resulting from the Swing Loans made to the Borrower by the Swingline Lender.

 

“Target” means any Person or business unit or asset group of any Person acquired or proposed to be acquired in an Acquisition.

 

“Tax Affiliate” means, (a) the Borrower and its Subsidiaries and (b) any Affiliate of the Borrower with which the Borrower files or is eligible to file consolidated, combined or unitary tax returns.

 

“Third Party Payor” means any Governmental Payor, Blue Cross and/or Blue Shield, private insurers, managed care plans, and any other person or entity which presently or in the future maintains Third Party Payor Programs.

 

“Third Party Payor Programs” means all payment or reimbursement programs, sponsored or maintained by any Third Party Payor, in which any Credit Party or any Subsidiary or a Credit Party participates.

 

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“Third Party Payor Authorizations” means all participation agreements, provider or supplier agreements, enrollments, accreditations and billing numbers necessary to participate in and receive reimbursement from a Third Party Payor Program, including all Medicare and Medicaid participation agreements.

 

“Title IV Plan” means a pension plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

 

“Trade Secrets” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.

 

“Trademark” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

 

“TRICARE” means, collectively, a program of medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and administered by the United States Departments of Defense, Health and Human Services and Transportation, and all laws applicable to such programs.

 

“UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect from time to time in the State of New York.

 

“United States” and “U.S.” each means the United States of America.

 

“U.S. Lender Party” means each of Agent, each Lender, each L/C Issuer, each SPV and each participant, in each case that is a United States person as defined in Section 7701(a)(30) of the Code.

 

“Wholly-Owned Subsidiary” of a Person means any Subsidiary of such Person, all of the Stock and Stock Equivalents of which (other than directors’ qualifying shares required by law) are owned by such Person, either directly or through one or more Wholly-Owned Subsidiaries of such Person.

 

11.2                        Other Interpretive Provisions.

 

(a)                                 Defined Terms.  Unless otherwise specified herein or therein, all terms defined in this Agreement or in any other Loan Document shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.  The meanings of defined terms shall be equally applicable to the singular and plural forms of the defined terms.  Terms (including uncapitalized terms) not otherwise defined herein and that are defined in the UCC shall have the meanings therein described.

 

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(b)                                 The Agreement.  The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement or any other Loan Document shall refer to this Agreement or such other Loan Document as a whole and not to any particular provision of this Agreement or such other Loan Document; and subsection, section, schedule and exhibit references are to this Agreement or such other Loan Documents unless otherwise specified.

 

(c)                                  Certain Common Terms.  The term “documents” includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.  The term “including” is not limiting and means “including without limitation.”

 

(d)                                 Performance; Time.  Whenever any performance obligation hereunder or under any other Loan Document (other than a payment obligation) shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding Business Day.  For the avoidance of doubt, the initial payments of interest and fees relating to the Obligations (other than amounts due on the Closing Date) shall be due and paid on the first day of the first month or quarter, as applicable, following the entry of the Obligations onto the operations systems of Agent, but in no event later than the first day of the second month or quarter, as applicable, following the Closing Date.  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.” If any provision of this Agreement or any other Loan Document refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action.

 

(e)                                  Contracts.  Unless otherwise expressly provided herein or in any other Loan Document, references to agreements and other contractual instruments, including this Agreement and the other Loan Documents, shall be deemed to include all subsequent amendments, thereto, restatements and substitutions thereof and other modifications and supplements thereto which are in effect from time to time, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document.

 

(f)                                   Laws.  References to any statute or regulation may be made by using either the common or public name thereof or a specific cite reference and are to be construed as including all statutory and regulatory provisions related thereto or consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

 

11.3                        Accounting Terms and Principles.

 

All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP.  No change in the accounting principles used in the preparation of any financial statement hereafter adopted by the Borrower shall be given effect for purposes of measuring compliance with any provision of Article V or VI unless the Borrower, Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP and, unless such provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after 

 

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giving effect to such change in GAAP.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article V and Article VI shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value.”  A breach of a financial covenant contained in Article VI shall be deemed to have occurred as of any date of determination by Agent or as of the last day of any specified measurement period, regardless of when the financial statements reflecting such breach are delivered to Agent.

 

11.4                        Payments.

 

Agent may set up standards and procedures to determine or redetermine the equivalent in Dollars of any amount expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Credit Party or any L/C Issuer.  Any such determination or redetermination by Agent shall be conclusive and binding for all purposes, absent manifest error.  No determination or redetermination by any Secured Party or any Credit Party and no other currency conversion shall change or release any obligation of any Credit Party or of any Secured Party (other than Agent and its Related Persons) under any Loan Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted.  Agent may round up or down, and may set up appropriate mechanisms to round up or down, any amount hereunder to nearest higher or lower amounts and may determine reasonable de minimis payment thresholds.

 

[Signature Pages Follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
DIPLOMAT   PHARMACY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN:
    	
38-2063100
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
Address for wire   transfers:
    
	
 
    	
 
    
	
 
    	
 
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

 

	
 
    	
NAVIGATOR HEALTH SERVICES,   LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN:
    	
45-5542014
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    	
 
    
	
 
    	
DIPLOMAT HEALTH SERVICES,   LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN:
    	
45-5545741
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DIPLOMAT SPECIALTY PHARMACY   OF FLINT, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN: 20-2372657
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
DIPLOMAT SPECIALTY PHARMACY   OF GRAND RAPIDS, LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN: 20-2372751
    
	
 
    	
 
    
	
 
    	
Address for notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DIPLOMAT SPECIALTY PHARMACY   OF CHICAGO, LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN: 20-3855530
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DIPLOMAT SPECIALTY PHARMACY   OF FT. LAUDERDALE, LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN: 26-0146551
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
DIPLOMAT SPECIALTY PHARMACY   OF SOUTHERN CALIFORNIA, LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat Pharmacy, Inc.,   its member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN: 27-1148085
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DIPLOMAT SPECIALTY PHARMACY   GREAT LAKES DISTRIBUTION CENTER, LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN: 20-8576702
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DSP FLINT REAL ESTATE, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN: 27-2176462
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
DSP-BUILDING C, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN: 27-2499399
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DIPLOMAT CORPORATE   PROPERTIES, LLC
    
	
 
    	
 
    
	
 
    	
By: Diplomat   Pharmacy, Inc., its member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN:
    	
38-3453193
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
DIPLOMAT INFUSION SERVICES,   LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN:
    	
45-5554285
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
DIPLOMAT HOLDING, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name: Philip R.   Hagerman
    
	
 
    	
Title: Manager
    
	
 
    	
FEIN: 45-5566673
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIPLOMAT HEALTH MANAGEMENT,   LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Philip R.   Hagerman
    
	
 
    	
Name:
    	
Philip R.   Hagerman
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN: 45-5579620
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ENVOY HEALTH MANAGEMENT, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey Rowe
    
	
 
    	
Name:
    	
Jeffrey Rowe
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN:
    	
45-2301399
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
AMERICAN HOMECARE   FEDERATION, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey Rowe
    
	
 
    	
Name:
    	
Jeffrey Rowe
    
	
 
    	
Title:
    	
President
    
	
 
    	
FEIN:
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
AMBASSADOR COMPOUNDING, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey Rowe
    
	
 
    	
Name:
    	
Jeffrey Rowe
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN:
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
	
 
    	
 
    
	
 
    	
MEDPRO RX, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey Rowe
    
	
 
    	
Name:
    	
Jeffrey Rowe
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
FEIN:
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
c/o Diplomat   Pharmacy, Inc.
    
	
 
    	
4100 S. Saginaw   Street
    
	
 
    	
Flint, MI 18507
    
	
 
    	
Attn: Sean   Whelan, Chief Financial Officer
    
	
 
    	
Facsimile:
    	
810-282-0195
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

 

	
 
    	
GENERAL ELECTRIC CAPITAL   CORPORATION, as Agent and Swingline Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jason M.   Dufour
    
	
 
    	
Name: Jason M.   Dufour
    
	
 
    	
Title: Duly   Authorized Signatory
    

 

	
Address for Notices:
    	
Address for payments:
    
	
 

General   Electric Capital Corporation

Two   Bethesda Metro Center, Suite 600

Bethesda,  Maryland    20814

Attn:   Diplomat Pharmacy, Inc. Account Mgr.

Facsimile:  (301) 664-9855

 

E-mail:  CapitalGECHFSABLReporting@ge.com

 

With copies to:

 

General   Electric Capital Corporation

c/o GE   Healthcare Financial Services, Inc.

Two   Bethesda Metro Center, Suite 600

Bethesda,  Maryland    20814

Attention:   General Counsel

Phone:   (301) 961-1640

Facsimile:  (301) 664-9866

 

And

 

General   Electric Capital Corporation

500 W.   Monroe Street, 14th Floor

Chicago, Illinois   60661

Attention:  Ted Tuerk

Facsimile:   (312) 873-4367
    	

    ABA No. 021-001-033

Account Number   50287265

Deutsche Bank   Trust Company Americas

New York, New   York

Account Name:   GECC HFS CF Agented

Reference:   HFS3117 / Diplomat Pharmacy
    

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

 

	
 
    	
GE CAPITAL BANK,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey   Thoms
    
	
 
    	
Name:
    	
Jeffrey Thoms
    
	
 
    	
Title:
    	
Duly Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
 
    
	
 
    	
GE Capital Bank
    
	
 
    	
c/o General   Electric Capital Corporation
    
	
 
    	
Two Bethesda   Metro Center, Suite 600
    
	
 
    	
Bethesda,   Maryland 20814
    
	
 
    	
Attn: Diplomat   Pharmacy, Inc. Account Mgr.
    
	
 
    	
Facsimile: (301)   664-9855
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
GE Capital Bank
    
	
 
    	
6510   Millrock Drive
    
	
 
    	
Suite 200
    
	
 
    	
Salt Lake   City, Utah 84121
    
	
 
    	
Attn: Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
Lending office:
    
	
 
    	
 
    
	
 
    	
GE Capital Bank
    
	
 
    	
c/o General   Electric Capital Corporation
    
	
 
    	
Two Bethesda   Metro Center, Suite 600
    
	
 
    	
Bethesda, Maryland   20814
    
	
 
    	
Attn: Diplomat   Pharmacy, Inc. Account Mgr.
    
	
 
    	
Facsimile: (301)   664-9855
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
GE Capital Bank
    
	
 
    	
6510 Millrock   Drive
    
	
 
    	
Suite 200
    
	
 
    	
Salt Lake City,   Utah 84121
    
	
 
    	
Attn: Chief   Financial Officer
    
				

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
COMERICA BANK,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael   Cliff
    
	
 
    	
Name:
    	
Michael Cliff
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
411 W. Lafayette
    
	
 
    	
Detroit, MI   48226
    
	
 
    	
Attn: Michael   Cliff
    
	
 
    	
Facsimile: (313)   222-1237
    
	
 
    	
 
    
	
 
    	
Lending office:
    
	
 
    	
 
    
	
 
    	
Same as above
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN CHASE BANK, N.A.,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Wieslaw R.   Sliwinski
    
	
 
    	
Name: Wieslaw R.   Sliwinski
    
	
 
    	
Title:   Underwriter II - CB
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
JPMorgan Chase   Bank, N.A.
    
	
 
    	
28660   Northwestern Highway
    
	
 
    	
Southfield,   Michigan 48034
    
	
 
    	
Attn: Wieslaw   (Wes) R. Sliwinski
    
	
 
    	
Facsimile:   855-897-9864
    
	
 
    	
 
    
	
 
    	
Lending office:
    
	
 
    	
 
    
	
 
    	
Same as above
    
				

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
WELLS FARGO BANK, N.A.,
    
	
 
    	
 
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Steve Scott
    
	
 
    	
Name: Steve   Scott
    
	
 
    	
Title: Duly   Authorized Signatory
    
	
 
    	
 
    
	
 
    	
Address for   notices:
    
	
 
    	
Wells Fargo   Bank, National Association
    
	
 
    	
2450 Colorado   Avenue, Suite 3000 West
    
	
 
    	
Santa Monica,   California 90404
    
	
 
    	
Attn: 
    	
Specialty   Finance Loan Portfolio Manager
    
	
 
    	
Facsimile: 
    	
(866) 358-0913
    
	
 
    	
 
    
	
 
    	
Lending office:
    
	
 
    	
 
    
	
 
    	
 
    
					

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

SCHEDULE 1.1(b)

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

Revolving Loan Commitments

 

	
GE Capital Bank
    	
 
    	
$
    	
51,000,000
    	
 
    
	
Comerica Bank
    	
 
    	
$
    	
25,500,000
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
$
    	
25,500,000
    	
 
    
	
Wells Fargo Bank, N.A.
    	
 
    	
$
    	
18,000,000
    	
 
    
	
Aggregate Commitments
    	
 
    	
$
    	
120,000,000
    	
 
    

 

 

SCHEDULE 3.5
 TO
 AMENDED AND RESTATED CREDIT AGREEMENT

 

LITIGATION

 

None.

 

 

SCHEDULE 3.7

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

ERISA PLANS

 

·                  BCBS PPO 500— Medical

·                  BCBS PPO 1500— Medical

·                  BCBS PPO 2500— Medical

·                  BCN HMO 1000— Medical

·                  BCN HMO2500— Medical

·                  Priority Health HMO — Medical

·                  Met Life — Dental, Short-term Disability, Long-Term Disability, Life (Basic — company paid, Voluntary — employee paid)

·                  Paychex — Section125, Flexible Spending Account

·                  Paychex — 401K (Safe Harbor)

·                  ENI - Employee Assistance Program

 

 

SCHEDULE 3.9

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

REAL ESTATE

 

Owned Real Estate

 

	
Owner
    	
 
    	
Address
    	
 
    	
Leases of Owned Real Property
    
	
DSP-Building C, LLC
    	
 
    	
4100   S. SAGINAW STREET
   FLINT, MI 48507-2687
   (Building C)
    	
 
    	
Lease   between DSP Building C, LLC as Lessor, and Diplomat Pharmacy, Inc. as   Lessee dated 6/1/10

 

Lease   between DSP Building C, LLC as Lessor, and Navigator Pharmacy Services, LLC   as Lessee dated 6/1/11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
DSP Flint Real Estate, LLC
    	
 
    	
325   W. ATHERTON ROAD
   FLINT, MI 48507-2601
   (Buildings B & D)
    	
 
    	
Lease   between DSP Flint Real Estate, LLC as Lessor, and Diplomat   Pharmacy, Inc. as Lessee dated 6/1/10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Diplomat Corporate Properties, LLC
    	
 
    	
G-3320   BEECHER ROAD
   FLINT, MI 48532
    	
 
    	
n/a
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Diplomat Corporate Properties, LLC
    	
 
    	
2029 &   2033 S. ELMS ROAD
   SWARTZ CREEK, MI 48473
    	
 
    	
Lease   between Diplomat Corporate Properties, LLC and Schindler Elevator Corporation   dated June 1, 2011

 

Lease   between Diplomat Corporate Properties, LLC and Growth Management   Group, Inc. dated November 22, 2010
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Lease   between Diplomat Corporate Properties, LLC and Flenniken Financial dated   September 26, 2005
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Lease   between Diplomat Corporate Properties, LLC and RGIS Inventory Specialists   dated November 1, 2013
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Lease   between Diplomat Corporate Properties, LLC and Future Engineering, Inc.   dated July 6, 2005
    

 

 

Leased Real Estate

 

	
Lessee
    	
 
    	
Address
    	
 
    	
Landlord
    	
 
    	
Date of Lease
   Agreement
    
	
Diplomat   Pharmacy, Inc.
    	
 
    	
214   E. FULTON STREET
   GRAND RAPIDS, MI 49503-3211
    	
 
    	
The Ellen Van Assen Trust
    	
 
    	
December 16, 2004
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Diplomat   Specialty Pharmacy of Chicago, LLC
    	
 
    	
1370   BUSCH PARKWAY
   BUFFALO GROVE, IL 60089-4505
    	
 
    	
CGA Investment Company, L.L.C.
    	
 
    	
December 6, 2010
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Diplomat   Specialty Pharmacy of Ft. Lauderdale, LLC
    	
 
    	
500   SE 15TH STREET, STE. 102
   FT. LAUDERDALE, FL 33316-1952
    	
 
    	
500 Tarpon LLC
    	
 
    	
May 3,   2012
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Diplomat   Specialty Pharmacy of Southern California, LLC
    	
 
    	
1809   EXCISE AVENUE, STE. 205-208
   ONTARIO, CA 91761-8560
    	
 
    	
ACCO Airport CenterI, LLC
    	
 
    	
December 15, 2011
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
American   Homecare Federation, Inc.
    	
 
    	
95   Ashley Avenue
   West Springfield, Massachusetts
    	
 
    	
Ashley   Associates, LLC
    	
 
    	
February 26,   2009
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
American   Homecare Federation, Inc.
    	
 
    	
31   Moody Road
   Enfield, Connecticut
   Hartford County
    	
 
    	
31   Moody Road, LLC
    	
 
    	
December 16,   2013
    

 

 

SCHEDULE 3.12

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

ENVIRONMENTAL

 

3.12(a)(v)

 

Due Care Plan and Phase II Environmental Site Assessment and Category-N Baseline Environmental Assessment, dated May 2, 2010 prepared by PM Environmental, Inc.

 

 

SCHEDULE 3.15

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

LABOR RELATIONS

 

None

 

 

SCHEDULE 3.16

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

INTELLECTUAL PROPERTY

 

Trademarks

 

	
Trademark
    	
 
    	
Jurisdiction
    	
 
    	
Registration
    Number
    	
 
    	
Serial
    Number
    	
 
    	
Status/Status
    Date
    	
 
    	
Owner
    	
 
    	
Filing
    Date
    	
 
    	
Registration
    Date
    	
 
    	
Full Goods/Services
    	
 
    	
Licenses
    Granted
    
	
DIPLOMAT   SPECIALTY PHARMACY
    	
 
    	
USPTO
    	
 
    	
3,875,888
    	
 
    	
77-896402
    	
 
    	
Registered   November 16, 2010
    	
 
    	
Diplomat   Pharmacy, Inc.
    	
 
    	
December   18, 2009
    	
 
    	
November   16, 2010
    	
 
    	
(Int’l   Class: 44) Pharmacy services
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ENAV
    	
 
    	
USPTO
    	
 
    	
3,859,520
    	
 
    	
77-896403
    	
 
    	
Registered   October 12, 2010
    	
 
    	
Diplomat   Pharmacy, Inc.
    	
 
    	
December   18, 2009
    	
 
    	
October   12, 2010
    	
 
    	
(Int’l   Class: 44) Pharmacy services and providing an internet web site for medical   professionals and medical patients for patient care that allows for the   exchange of information from remote locations using devices that feed   information to the web site that is then processed and can be accessed in   real-time by users
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
KEEPING   PATIENTS HEALTHIER...LONGER
    	
 
    	
USPTO
    	
 
    	
3,824,892
    	
 
    	
77-896405
    	
 
    	
Registered   July 27, 2010
    	
 
    	
Diplomat   Pharmacy, Inc.
    	
 
    	
December   18, 2009
    	
 
    	
July   27, 2010
    	
 
    	
(Int’l   Class: 44) Pharmacy services
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
DIPLOMAT
    	
 
    	
USPTO
    	
 
    	
4365666
    	
 
    	
SN:85-589865
    	
 
    	
Registered   July 9, 2013
    	
 
    	
Diplomat   Pharmacy, Inc.
    	
 
    	
April   5, 2012
    	
 
    	
July   9, 2013
    	
 
    	
(Int’l   Class: 44) Pharmacy services
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	

    	
 
    	
USPTO
    	
 
    	
1720982
    	
 
    	
74235173
    	
 
    	
Registered   September 29, 1992
    	
 
    	
American   Homecare Federation, Inc.
    	
 
    	
January   6, 1992
    	
 
    	
September   29, 1992
    	
 
    	
INT. CL. 42 hemophilia homecare   delivery services; namely, delivering to customers, medicine, gauze, needles,   syringes, and other related supplies
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AHF
    	
 
    	
USPTO
    	
 
    	
1722812
    	
 
    	
74233719
    	
 
    	
Registered   October 6, 1992
    	
 
    	
American   Homecare Federation, Inc.
    	
 
    	
December   27, 1991
    	
 
    	
October   6, 1992
    	
 
    	
INT. CL. 42 hemophilia homecare   delivery services; namely, delivering to customers medicine, gauze, needles,   syringes, and other related supplies
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AHF
    	
 
    	
North   Dakota
    	
 
    	
27448100
    	
 
    	
n/a
    	
 
    	
Registered   November 23, 2010
    	
 
    	
American   Homecare Federation, Inc.
    	
 
    	
n/a
    	
 
    	
November   23, 2010
    	
 
    	
n/a
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ENVOYHEALTH
    	
 
    	
USPTO
    	
 
    	
n/a
    	
 
    	
86212969
    	
 
    	
Applied   March 6, 2014
    	
 
    	
Diplomat   Pharmacy, Inc.
    	
 
    	
March   6, 2014
    	
 
    	
n/a
    	
 
    	
(Int’l   Class 35) Providing electronic healthcare administrative services.
    	
 
    	
None
    

 

 

Patents

 

None.

 

Registered Copyrights

 

None.

 

Software

 

	
Owner
    	
 
    	
Title
    	
 
    	
Jurisdiction
    	
 
    	
Registration #/
   Application #
    	
 
    	
Licenses Granted
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
eNAV 
   (Diplomat Pharmacy, Inc. possesses an unregistered copyright.)
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Non-exclusive, non-transferable   license to Costco Wholesale Corporation
    

 

Domain Names

 

	
Owner
    	
 
    	
Title
    	
 
    	
Jurisdiction
    	
 
    	
Registration #/
   Application #
    	
 
    	
Licenses Granted
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://diplomatpharmacy.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://diplomatpharmacy.wordpress.com/
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://hemophilianavigator.com/
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://diplomatuniversity.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://diplomatconnect.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://callnhs.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://cfnavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://chronsnavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://ckdnav.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://crohnsnavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://diplomathelpinghands.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://ghnavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://hepatitisnavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://oncologynav.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://psoriasisnavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    

 

 

	
Diplomat Pharmacy, Inc.
    	
 
    	
http://ranavigator.com
    	
 
    	
Register.com
    	
 
    	
N/A
    	
 
    	
None
    
	
American Homecare Federation, Inc.
    	
 
    	
http://Ahfinfo.com
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
None
    
	
Diplomat Pharmacy, Inc.
    	
 
    	
http://diplomat.is
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
None
    

 

 

SCHEDULE 3.18

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

INSURANCE CERTIFICATE

 

 

SCHEDULE 3.19

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK

 

1)             The ownership of Diplomat Pharmacy, Inc. is as set forth on the attached capitalization table (the “Cap Table”)

 

·                  Note: Pursuant to a Stock Redemption Agreement, dated January 17, 2005, as amended by that certain Amendment #1 to the Stock Redemption Agreement dated June 7, 2012, in the event that (a) Philip R. Hagerman sells his shares of Diplomat Pharmacy, Inc. so that following such sale he is no longer the majority shareholder of Diplomat Pharmacy, Inc. or (b) substantially all of the assets of Diplomat Pharmacy, Inc. are sold (collectively, the “Sale”), Deborah L. Ward shall receive one percent (1%) of the net proceeds of the Sale.

 

·                  In February 2012, Diplomat Pharmacy, Inc. redeemed 650 shares owned by Steve Chafee and the Chaffee Family Trust.  These shares were redeemed for $2,000,000 cash along with an $18,716,963 promissory note payable over five years in quarterly installments of $725,001 from July 2012 through October 2013, then $845,835 from January 2014 through October 2016, including interest along with a final payment of $5,000,000, plus any remaining principal and accrued interest, due at maturity.  It bears interest at 1.3% and matures on January 10, 2017.  This note is secured by redeemed shares, which are held in escrow until released pursuant to the associated Pledge and Escrow Agreement.

 

·                  In September 2012, Diplomat Pharmacy, Inc. redeemed 275 shares owned by Jeffrey Rowe.  These shares were redeemed for $785,700 cash along with an $8,061,966  promissory note payable over five years in quarterly installments of $100,000, along with a final payment of $6,161,966, plus any remaining principal and accrued interest, due at maturity.  It bears interest at 1.3% and matures on July 20, 2017.  This note is secured by redeemed shares, which are held in escrow until released pursuant to the associated Pledge and Escrow Agreement.

 

2)             All of the issued and outstanding equity interests of each of the following subsidiaries are 100% owned directly by Diplomat Pharmacy, Inc.:

 

ENVOY HEALTH MANAGEMENT, LLC 

NAVIGATOR HEALTH SERVICES, LLC

DIPLOMAT HEALTH SERVICES, LLC

DIPLOMAT SPECIALTY PHARMACY OF FLINT, LLC

DIPLOMAT SPECIALTY PHARMACY OF GRAND RAPIDS, LLC

DIPLOMAT SPECIALTY PHARMACY OF CHICAGO, LLC

DIPLOMAT SPECIALTY PHARMACY OF FT. LAUDERDALE, LLC

 

 

DIPLOMAT SPECIALTY PHARMACY OF SOUTHERN CALIFORNIA, LLC

DIPLOMAT SPECIALTY PHARMACY GREAT LAKES DISTRIBUTION CENTER, LLC

DSP FLINT REAL ESTATE, LLC          

DSP-BUILDING C, LLC

DIPLOMAT CORPORATE PROPERTIES, LLC

DIPLOMAT HOLDING, LLC

DIPLOMAT INFUSION SERVICES, LLC

DIPLOMAT HEALTH MANAGEMENT, LLC

AMERICAN HOMECARE FEDERATION, INC.

AMBASSADOR COMPOUNDING, LLC

 

3)             Diplomat Pharmacy, Inc. is engaged in a joint venture with Ageology LLC (formerly WorkSmartMD LLC).

 

4)             Diplomat has entered into stock option award agreements with the option holders identified on the Cap Table.

 

5)             First Amended and Restated Investors’ Rights Agreement, dated March 31, 2014, between Diplomat Pharmacy, Inc. and the holders of the Company’s Series A Preferred Stock 

 

6)             First Amended and Restated Right of First Refusal, Co-Sale and Drag-Along Agreement, dated March 31, 2014, between Diplomat Pharmacy, Inc. and the other parties thereto

 

7)             Restated Charter

 

8)             Organizational Chart: See Attached

 

 

 

 

SCHEDULE 3.20

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE

 

Each Credit Party is organized in the State of Michigan and the chief executive office is located at 4100 S. Saginaw St., Flint, Michigan.

 

	
CREDIT PARTY
    	
 
    	
ORGANIZATIONAL
   ID
    
	
DIPLOMAT PHARMACY, INC.
    	
 
    	
099705
    
	
ENVOY HEALTH MANAGEMENT, LLC
    	
 
    	
D5993K
    
	
NAVIGATOR HEALTH SERVICES, LLC
    	
 
    	
D3758P
    
	
DIPLOMAT HOLDING, LLC
    	
 
    	
D0056Q
    
	
DIPLOMAT SPECIALTY PHARMACY OF FLINT, LLC
    	
 
    	
B7143L
    
	
DIPLOMAT SPECIALTY PHARMACY OF GRAND RAPIDS,   LLC
    	
 
    	
B1155L
    
	
DIPLOMAT SPECIALTY PHARMACY OF CHICAGO, LLC
    	
 
    	
B6616Y
    
	
DIPLOMAT SPECIALTY PHARMACY OF FT.   LAUDERDALE, LLC
    	
 
    	
D15734
    
	
DIPLOMAT SPECIALTY PHARMACY OF SOUTHERN   CALIFORNIA, LLC
    	
 
    	
D2823M
    
	
DIPLOMAT SPECIALTY PHARMACY GREAT LAKES   DISTRIBUTION CENTER, LLC
    	
 
    	
D1555U
    
	
DSP FLINT REAL ESTATE, LLC
    	
 
    	
D3982L
    
	
DSP-BUILDING C, LLC
    	
 
    	
D42349
    
	
DIPLOMAT CORPORATE PROPERTIES, LLC
    	
 
    	
E15980
    
	
DIPLOMAT HEALTH SERVICES, LLC
    	
 
    	
D37755P
    
	
DIPLOMAT INFUSION SERVICES, LLC
    	
 
    	
D06531
    
	
DIPLOMAT HEALTH MANAGEMENT, LLC
    	
 
    	
D06532
    
	
AMERICAN HOMECARE FEDERATION, INC.
    	
 
    	
0608788
    
	
AMBASSADOR COMPOUNDING, LLC
    	
 
    	
E3846U
    

 

Former Names

 

	
Credit Party
    	
 
    	
Former Name
    	
 
    	
Date of Change
    
	
Diplomat Holding, LLC
    	
 
    	
Diplomat Health Services, LLC
    	
 
    	
June 27, 2006
    
	
Diplomat Specialty Pharmacy of Flint, LLC
    	
 
    	
Diplomat Specialty Pharmacy, LLC
    	
 
    	
January 18, 2010
    
	
Diplomat Specialty Pharmacy Great Lakes   Distribution Center, LLC
    	
 
    	
Diplomat Specialty Pharmacy of Swartz Creek,   LLC
    	
 
    	
March 6, 2007
    
	
Envoy Health Management, LLC
    	
 
    	
Navigator Pharmacy Services, LLC
    	
 
    	
February 10, 2014
    

 

 

SCHEDULE 3.21

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

LOCATIONS OF INVENTORY, EQUIPMENT AND BOOKS AND RECORDS

 

	
Credit Party
    	
 
    	
Collateral Locations
    
	
Diplomat   Pharmacy, Inc.
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
 
    	
 
    	
2029 &   2033 S. ELMS ROAD
   SWARTZ CREEK, MI 48473
    
	
 
    	
 
    	
1370   BUSCH PARKWAY
   BUFFALO GROVE, IL 60089-4505
    
	
 
    	
 
    	
G-3320   BEECHER ROAD
    FLINT, MI 48532
    
	
 
    	
 
    	
500   SE 15TH STREET, STE. 102
    FT. LAUDERDALE, FL 33316-1952
    
	
 
    	
 
    	
214   E. FULTON STREET
    GRAND RAPIDS, MI 49503-3211
    
	
 
    	
 
    	
1809   EXCISE AVENUE, STE. 205-208
    ONTARIO, CA 91761-8560
    
	
 
    	
 
    	
325   W. ATHERTON ROAD
    FLINT, MI 48507-2601
    
	
Diplomat   Corporate Properties, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Health Management, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Holding, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Health Services, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Infusion Services, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Specialty Pharmacy Great Lakes Distribution Center, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Specialty Pharmacy of Chicago, LLC
    	
 
    	
*1370   BUSCH PARKWAY
   BUFFALO GROVE, IL 60089-4505
    
	
 
    	
 
    	
4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Specialty Pharmacy of Flint, LLC
    	
 
    	
*G-3320   BEECHER ROAD
    FLINT, MI 48532
    
	
 
    	
 
    	
4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Specialty Pharmacy of Ft. Lauderdale, LLC
    	
 
    	
*500   SE 15TH STREET, STE. 102
    FT. LAUDERDALE, FL 33316-1952
    
	
 
    	
 
    	
4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Specialty Pharmacy of Grand Rapids, LLC
    	
 
    	
*214   E. FULTON STREET
    GRAND RAPIDS, MI 49503-3211
    
	
 
    	
 
    	
4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
Diplomat   Specialty Pharmacy of Southern California, LLC
    	
 
    	
*1809   EXCISE AVENUE, STE. 205-208
    ONTARIO, CA 91761-8560
    

 

 

	
Credit Party
    	
 
    	
Collateral Locations
    
	
 
    	
 
    	
4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
DSP-Building   C, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
    FLINT, MI 48507-2687
    
	
DSP   Flint Real Estate, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
    FLINT, MI 48507-2687
    
	
Navigator   Health Services, LLC
    	
 
    	
*4100   S. SAGINAW STREET, SUITE D
    FLINT, MI 48507-2687
    
	
Envoy   Health Management, LLC
    	
 
    	
*325   W. ATHERTON ROAD
    FLINT, MI 48507-2601
    
	
 
    	
 
    	
4100   S. SAGINAW STREET, SUITE D
   FLINT, MI 48507-2687
    
	
 
    	
 
    	
*31 MOODY ROAD, ENFIELD, HARTFORD COUNTY,
   CONNECTICUT
    
	
American   Homecare Federation, Inc.
    	
 
    	
95 ASHLEY AVENUE, WEST SPRINGFIELD,
   MASSACHUSETTS
    
	
 
    	
 
    	
30 LOCUST ST, NORTHAMPTON, MA 01061
    

 

*Indicates books and records of Credit Party maintained at location.

 

 

SCHEDULE 3.22

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

DEPOSIT ACCOUNTS AND OTHER ACCOUNTS

 

 

SCHEDULE 3.23

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

GOVERNMENT CONTRACTS

 

None

 

 

SCHEDULE 3.25

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

BONDING

 

None

 

 

SCHEDULE 3.31

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

REGULATORY MATTERS

 

(See attached)

 

 

DIPLOMAT SPECIALTY PHARMACY

PHARMACY LICENSES

 

	
Summary Tab
    	
 
    	
State License Expiration Dates (Check individual tabs for more information)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Grand
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
State
    	
 
    	
CHI –
    	
 
    	
Flint–
    	
 
    	
 
    	
 
    	
Rapids
    	
 
    	
Ontario CA –
    	
 
    	
GLDC
    	
 
    	
GLDC
    	
 
    	
DPS Envoy
    	
 
    	
Envoy
    	
 
    	
 
    	
 
    	
 
    	
 
    	
FLO
    	
 
    
	
State
    	
 
    	
Abbr.
    	
 
    	
Pharmacy
    	
 
    	
Pharmacy
    	
 
    	
Ft. Lauderdale
    	
 
    	
Pharmacy
    	
 
    	
Pharmacy
    	
 
    	
Pharmacy
    	
 
    	
Wholesale
    	
 
    	
Wholesale
    	
 
    	
Pharmacy
    	
 
    	
AHF CT
    	
 
    	
AHF MA
    	
 
    	
Wholesale
    	
 
    
	
Alabama
    	
 
    	
AL
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Alabama CS
    	
 
    	
AL
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Alaska
    	
 
    	
AK
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2016
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Arizona
    	
 
    	
AZ
    	
 
    	
—
    	
 
    	
10/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10/31/2015
    	
 
    	
10/31/2015
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Arkansas
    	
 
    	
AR
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2015
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
California
    	
 
    	
CA
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
11/1/2014
    	
 
    	
10/1/2014
    	
 
    	
—
    	
 
    	
2/1/2015
    	
 
    	
2/1/2015
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
CA Compounding
    	
 
    	
CA
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Colorado
    	
 
    	
CO
    	
 
    	
—
    	
 
    	
10/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
—
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Connecticut
    	
 
    	
CT
    	
 
    	
—
    	
 
    	
8/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
8/31/2014
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
8/31/2014
    	
 
    	
8/31/2014
    	
 
    	
8/31/2014
    	
 
    	
 
    	
 
    
	
Delaware
    	
 
    	
DE
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Florida
    	
 
    	
FL
    	
 
    	
—
    	
 
    	
2/28/2015
    	
 
    	
2/28/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
2/28/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
2/28/2015
    	
 
    	
2/28/2015
    	
 
    	
—
    	
 
    	
1/31/2016
    	
 
    
	
Georgia
    	
 
    	
GA
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
N/A
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
N/A
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Hawaii
    	
 
    	
HI
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Idaho
    	
 
    	
ID
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Idaho CS
    	
 
    	
ID
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Illinois
    	
 
    	
IL
    	
 
    	
3/31/2016
    	
 
    	
3/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3/31/2016
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
3/31/2016
    	
 
    	
3/31/2016
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Illinois CS
    	
 
    	
IL
    	
 
    	
3/31/2016
    	
 
    	
3/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Indiana
    	
 
    	
IN
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Iowa
    	
 
    	
IA
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

1

 

	
Summary Tab
    	
 
    	
State License Expiration Dates (Check individual tabs for more information)
    	
 
    
	
State
    	
 
    	
State
   Abbr.
    	
 
    	
CHI
   Pharmacy
    	
 
    	
Flint-
    Pharmacy
    	
 
    	
Ft. Lauderdale
    	
 
    	
Grand
   Rapids
   Pharmacy
    	
 
    	
Ontario CA —
   Pharmacy
    	
 
    	
GLDC
   Pharmacy
    	
 
    	
GLDC
   Wholesale
    	
 
    	
DPS Envoy
   Wholesale
    	
 
    	
Envoy
   Pharmacy
    	
 
    	
AHF CT
    	
 
    	
AHF MA
    	
 
    	
FLO
   Wholesale
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kansas
    	
 
    	
KS
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Kentucky
    	
 
    	
KY
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
6/30/2014
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Louisiana
    	
 
    	
LA
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Maine
    	
 
    	
ME
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
 
    	
 
    
	
Maryland
    	
 
    	
MD
    	
 
    	
—
    	
 
    	
5/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
5/31/2016
    	
 
    	
 
    	
 
    	
5/31/2015
    	
 
    	
5/31/2014
    	
 
    	
5/31/2016
    	
 
    	
5/31/2016
    	
 
    	
 
    	
 
    
	
Maryland CS
    	
 
    	
MD
    	
 
    	
 
    	
 
    	
5/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
2/29/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
1/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Massachusetts
    	
 
    	
MA
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
N/A
    	
 
    	
—
    	
 
    	
—
    	
 
    	
N/A
    	
 
    	
n/a
    	
 
    	
12/31/2015
    	
 
    	
 
    	
 
    
	
Massachusetts CS
    	
 
    	
MA
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
 
    	
 
    
	
Michigan
    	
 
    	
MI
    	
 
    	
6/30/2015
    	
 
    	
6/30/2016
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
6/30/2016
    	
 
    	
6/30/2015
    	
 
    	
6/30/2016
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Michigan CS
    	
 
    	
MI
    	
 
    	
6/30/2015
    	
 
    	
6/30/2016
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
6/30/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Minnesota
    	
 
    	
MN
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
5/31/2014
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Mississippi
    	
 
    	
MS
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Mississippi CS
    	
 
    	
MS
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Missouri
    	
 
    	
MO
    	
 
    	
10/31/2015
    	
 
    	
10/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10/31/2015
    	
 
    	
10/31/2015
    	
 
    	
10/31/2015
    	
 
    	
10/31/2015
    	
 
    	
10/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Montana
    	
 
    	
MT
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
11/30/2014
    	
 
    	
11/30/2014
    	
 
    	
11/30/2014
    	
 
    	
11/30/2014
    	
 
    	
11/30/2014
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Nebraska
    	
 
    	
NE
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
11/25/2014
    	
 
    	
7/1/2014
    	
 
    	
7/1/2014
    	
 
    	
11/17/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Nevada
    	
 
    	
NV
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
New Hampshire
    	
 
    	
NH
    	
 
    	
3/31/2015
    	
 
    	
3/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3/31/2015
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
3/31/2015
    	
 
    	
3/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
New Jersey
    	
 
    	
NJ
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
1/31/2015
    	
 
    	
1/31/2015
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
New Mexico
    	
 
    	
NM
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2015
    	
 
    	
12/31/2014
    	
 
    	
12/31/2015
    	
 
    	
12/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    

 

 

	
Summary Tab
    	
 
    	
State License Expiration Dates (Check individual tabs for more information)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Grand
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
State
    	
 
    	
CHI
    	
 
    	
Flint-
    	
 
    	
 
    	
 
    	
Rapids
    	
 
    	
Ontario CA –
    	
 
    	
GLDC
    	
 
    	
GLDC
    	
 
    	
DPS Envoy
    	
 
    	
Envoy
    	
 
    	
 
    	
 
    	
 
    	
 
    	
FLO
    	
 
    
	
State
    	
 
    	
Abbr.
    	
 
    	
Pharmacy
    	
 
    	
Pharmacy
    	
 
    	
Ft. Lauderdale
    	
 
    	
Pharmacy
    	
 
    	
Pharmacy
    	
 
    	
Pharmacy
    	
 
    	
Wholesale
    	
 
    	
Wholesale
    	
 
    	
Pharmacy
    	
 
    	
AHF CT
    	
 
    	
AHF MA
    	
 
    	
Wholesale
    	
 
    
	
New Mexico CS
    	
 
    	
NM
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
New York
    	
 
    	
NY
    	
 
    	
12/31/2016
    	
 
    	
9/30/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
4/30/2017
    	
 
    	
12/31/2014
    	
 
    	
10/31/2014
    	
 
    	
10/31/2014
    	
 
    	
3/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
North Carolina
    	
 
    	
NC
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
North Dakota
    	
 
    	
ND
    	
 
    	
6/30/2015
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Ohio
    	
 
    	
OH
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
6/30/2015
    	
 
    	
6/30/2014
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Ohio CS
    	
 
    	
OH
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Oklahoma
    	
 
    	
OK
    	
 
    	
6/30/2014
    	
 
    	
1/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
1/31/2015
    	
 
    	
2/28/2015
    	
 
    	
4/30/2015
    	
 
    	
9/30/2014
    	
 
    	
1/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Oregon
    	
 
    	
OR
    	
 
    	
—
    	
 
    	
3/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3/31/2015
    	
 
    	
3/31/2015
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
3/31/2015
    	
 
    	
3/31/2015
    	
 
    	
3/31/2015
    	
 
    	
 
    	
 
    
	
Pennsylvania
    	
 
    	
PA
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
N/A
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Rhode Island
    	
 
    	
RI
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
 
    	
 
    
	
Rhone Island
    	
 
    	
RI
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2014
    	
 
    	
1/0/1900
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
South Carolina
    	
 
    	
SC
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
South Dakota
    	
 
    	
SD
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
12/31/2014
    	
 
    	
12/31/2014
    	
 
    	
6/30/2015
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Tennessee
    	
 
    	
TN
    	
 
    	
—
    	
 
    	
3/31/2015
    	
 
    	
2/28/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
11/30/2014
    	
 
    	
1/31/2015
    	
 
    	
4/30/2016
    	
 
    	
9/30/2015
    	
 
    	
n/a
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Texas
    	
 
    	
TX
    	
 
    	
3/31/2015
    	
 
    	
2/28/2015
    	
 
    	
1/0/1900
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3/31/2016
    	
 
    	
10/1/2015
    	
 
    	
9/5/2015
    	
 
    	
4/30/2016
    	
 
    	
4/30/2016
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Utah
    	
 
    	
UT
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2015
    	
 
    	
9/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2015
    	
 
    	
9/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Utah CS
    	
 
    	
UT
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2015
    	
 
    	
9/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
9/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Vermont
    	
 
    	
VT
    	
 
    	
7/31/2015
    	
 
    	
7/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
7/31/2015
    	
 
    	
7/31/2015
    	
 
    	
7/31/2015
    	
 
    	
7/31/2015
    	
 
    	
7/31/2017
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Virginia
    	
 
    	
VA
    	
 
    	
—
    	
 
    	
4/30/2015
    	
 
    	
4/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
4/30/2015
    	
 
    	
2/28/2015
    	
 
    	
 
    	
 
    	
4/30/2015
    	
 
    	
4/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Washington
    	
 
    	
WA
    	
 
    	
—
    	
 
    	
5/31/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
5/31/2014
    	
 
    	
5/31/2015
    	
 
    	
9/30/2014
    	
 
    	
9/30/2014
    	
 
    	
5/31/2014
    	
 
    	
5/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    

 

 

	
Summary Tab
    	
 
    	
State License Expiration Dates (Check individual tabs for more information)
    	
 
    
	
State
    	
 
    	
State
   Abbr.
    	
 
    	
CHI
   Pharmacy
    	
 
    	
Flint-
    Pharmacy
    	
 
    	
Ft. Lauderdale
    	
 
    	
Grand
   Rapids
   Pharmacy
    	
 
    	
Ontario CA —
   Pharmacy
    	
 
    	
GLDC
   Pharmacy
    	
 
    	
GLDC
   Wholesale
    	
 
    	
DPS Envoy
   Wholesale
    	
 
    	
Envoy
   Pharmacy
    	
 
    	
AHF CT
    	
 
    	
AHF MA
    	
 
    	
FLO
   Wholesale
    	
 
    
	
Washington DC
    	
 
    	
D.C.
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
5/31/2015
    	
 
    	
6/30/2014
    	
 
    	
10/31/2014
    	
 
    	
5/31/2015
    	
 
    	
3/31/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
West Virginia
    	
 
    	
WV
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
West Virginia CS
    	
 
    	
WV
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Wisconsin
    	
 
    	
WI
    	
 
    	
5/31/2016
    	
 
    	
5/31/2016
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
5/31/2016
    	
 
    	
5/31/2016
    	
 
    	
5/31/2016
    	
 
    	
5/31/2016
    	
 
    	
5/31/2016
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
Wyoming
    	
 
    	
WY
    	
 
    	
—
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6/30/2014
    	
 
    	
6/30/2014
    	
 
    	
1/0/1900
    	
 
    	
6/30/2015
    	
 
    	
6/30/2014
    	
 
    	
6/30/2015
    	
 
    	
—
    	
 
    	
 
    	
 
    

 

 

SCHEDULE 4.15

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

POST CLOSING OBLIGATIONS

 

Delivery of following items:

 

·                  Joinder to Guaranty and Security Agreement and Credit Agreement

·                  Pledge Amendment for MedPro Shares

·                  Assignment of Representations, Warranties, Covenants, Indemnities

·                  UCC termination for following:

 

	
MedPro   RX, Inc.
    	
 
    	
North   Carolina
    	
 
    	
1/9/12
    	
 
    	
20120002765G
    

 

·                  Opinion of Honigman Miller Schwartz and Cohn LLP with respect to Loan Documents for MedPro Joinder

·                  Officer’s Certificate Regarding MedPro Acquisition Documents

·                  Officer’s Certificate of MedPro

·                  Certificate of a Responsible Officer of the Borrower to the effect that each of the requirements for the MedPro Acquisition to be a Permitted Acquisition has been satisfied

 

Deliver of following items within one Business Day after the MedPro Acquisition Closing Date:

 

·      Stock Certificates and Blank Stock Powers as set forth in Pledge Amendment for MedPro Shares

 

 

SCHEDULE 5.1

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

LIENS

 

None.

 

 

SCHEDULE 5.4

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

INVESTMENTS

 

Diplomat Pharmacy, Inc. directly owns 25% of the issued and outstanding equity interests of Ageology LLC (formerly WorkSmartMC LLC).

 

All of the issued and outstanding equity interests of each of the following subsidiaries are 100% owned directly by Diplomat Pharmacy, Inc.:

 

ENVOY HEALTH MANAGEMENT, LLC

NAVIGATOR HEALTH SERVICES, LLC

DIPLOMAT HEALTH SERVICES, LLC

DIPLOMAT SPECIALTY PHARMACY OF FLINT, LLC

DIPLOMAT SPECIALTY PHARMACY OF GRAND RAPIDS, LLC

DIPLOMAT SPECIALTY PHARMACY OF CHICAGO, LLC

DIPLOMAT SPECIALTY PHARMACY OF FT. LAUDERDALE, LLC

DIPLOMAT SPECIALTY PHARMACY OF SOUTHERN CALIFORNIA, LLC

DIPLOMAT SPECIALTY PHARMACY GREAT LAKES DISTRIBUTION CENTER, LLC

DSP FLINT REAL ESTATE, LLC

DSP-BUILDING C, LLC

DIPLOMAT CORPORATE PROPERTIES, LLC

DIPLOMAT HOLDING, LLC

DIPLOMAT INFUSION SERVICES, LLC

DIPLOMAT HEALTH MANAGEMENT, LLC

AMERICAN HOMECARE FEDERATION, INC.

AMBASSADOR COMPOUNDING, LLC

 

 

SCHEDULE 5.5

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

INDEBTEDNESS

 

None.

 

 

SCHEDULE 5.6

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

TRANSACTIONS WITH AFFILIATES

 

None

 

 

SCHEDULE 5.9

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

CONTINGENT OBLIGATIONS

 

None.

 

 

SCHEDULE 11.1B

TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

SUBORDINATED INDEBTEDNESS

 

1.              Non-Negotiable Promissory Note by Diplomat Pharmacy, Inc. in favor of Steven Chaffee, dated February 1, 2012, in an aggregate principal amount of $18,716,963, pursuant to the Stock Redemption Agreement dated February 1, 2012, between Steven Chaffee and Diplomat Pharmacy, Inc.

 

2.              Promissory Note #2 by Diplomat Pharmacy, Inc. in favor of Deborah L. Ward, dated June 7, 2012, in an aggregate principal amount of $480,000.

 

3.              Non-Negotiable Promissory Note by Diplomat Pharmacy, Inc. (the “Rowe Note”) in favor of Jeffrey Rowe, dated September 18, 2012 in an aggregate principal amount of $8,061,966, pursuant to the Stock Redemption Agreement dated September 18, 2012, between Jeffrey Rowe and Diplomat Pharmacy, Inc.

 

4.              Non-Negotiable Promissory Note by Diplomat Pharmacy, Inc. in favor of Stephen M. Lund (the “Lund Note”) dated October 1, 2012 in an aggregate amount of $1,423,013.

 

 

EXHIBIT 1.1(c)
 TO
 CREDIT AGREEMENT

 

FORM OF L/C REQUEST

[NAME OF L/C ISSUER], as L/C Issuer
 under the Credit Agreement referred to below

 

                      , 20    

 

Re:                             Diplomat Pharmacy, Inc. (the “Borrower”)

 

Reference is made to the Amended and Restated Credit Agreement, dated as of June      , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, each other “Credit Party” that is a party thereto, the Lenders, L/C Issuers party thereto and General Electric Capital Corporation, as administrative agent for the Lenders.  Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

 

The Borrower hereby gives you notice, irrevocably, pursuant to Section 1.1(c) of the Credit Agreement, of its request for your Issuance of a Letter of Credit, in the form attached hereto, for the benefit of [Name of Beneficiary], in the amount of $            , to be issued on               ,           (the “Issue Date”) with an expiration date of                ,         .

 

The undersigned hereby certifies that, except as set forth on Schedule A attached hereto, the following statements are true on the date hereof and will be true on the Issue Date, both before and after giving effect to the Issuance of the Letter of Credit requested above and any Loan to be made or any other Letter of Credit to be Issued on or before the Issue Date:

 

(i)                                     the representations and warranties set forth in Article III of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein), except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date;

 

(ii)                                  no Default or Event of Default has occurred and is continuing; and

 

(iii)                               the aggregate outstanding amount of Revolving Loans does not exceed the Maximum Revolving Loan Balance.

[Signature page follows]

 

 

	
 
    	
DIPLOMAT   PHARMACY, INC., as the Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURE PAGE TO L/C REQUEST]

 

 

EXHIBIT 1.1(d)

to

Credit Agreement

 

FORM OF SWINGLINE REQUEST

 

GENERAL ELECTRIC CAPITAL CORPORATION
 as Agent under the Credit Agreement referred to below

 

                      ,        

 

Re:                             Diplomat Pharmacy, Inc.(the “Borrower”)

 

Reference is made to the Amended and Restated Credit Agreement, dated as of June      , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, each other “Credit Party” that is a party thereto, the Lenders, L/C Issuers party thereto and General Electric Capital Corporation, as administrative agent for the Lenders.  Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

 

The Borrower hereby gives you irrevocable notice pursuant to Section 1.1(d) of the Credit Agreement that it requests Swing Loans under the Credit Agreement (the “Proposed Advance”) and, in connection therewith, sets for the following information:

 

A.                                    The date of the Proposed Advance is                  ,           (the “Funding Date”).

 

B.                                    The aggregate principal amount of Proposed Advance is $               .

 

The undersigned hereby certifies that, except as set forth on Schedule A attached hereto, the following statements are true on the date hereof both before and after giving effect to the Proposed Advance and any other Loan to be made or Letter of Credit to be issued on or before the Funding Date:

 

(i)                                     the representations and warranties set forth in Article III of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) with the same effect as though made on and as of such Funding Date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date;

 

 

(ii)                                  the aggregate principal amount of all Revolving Loans does not exceed the Maximum Revolving Loan Balance; and

 

(iii)                               no Default or Event of Default is continuing.

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
DIPLOMAT PHARMACY, INC., a Michigan 
    
	
 
    	
corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[SIGNATURE PAGE TO SWINGLINE REQUEST DATED                ,      ]

 

 

EXHIBIT 1.6
 TO
 CREDIT AGREEMENT

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

GENERAL ELECTRIC CAPITAL CORPORATION
 as Agent under the Credit Agreement referred to below

 

                       ,         

 

Re:                             Diplomat Pharmacy, Inc. (the “Borrower”)

 

Reference is made to the Amended and Restated Credit Agreement, dated as of June       , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, each other “Credit Party” that is a party thereto, the Lenders, L/C Issuers party thereto and General Electric Capital Corporation, as administrative agent for the Lenders.  Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

 

The Borrower, hereby gives you irrevocable notice, pursuant to Section 1.6 of the Credit Agreement of its request for the following (the “Proposed Conversion/Continuation”):

 

(i)                                     a continuation, on              ,          , as LIBOR Rate Loans having an Interest Period of            months of Revolving Loans in an aggregate outstanding principal amount of $                  having an Interest Period ending on the proposed date for such continuation;

 

(ii)                                  a conversion, on                 ,           , to LIBOR Rate Loans having an Interest Period of           months of Revolving Loans in an aggregate outstanding principal amount of $             ; and(1)

 

(iii)                               a conversion, on               ,             , to Base Rate Loans, of Revolving Loans in an aggregate outstanding principal amount of $                   .

 

The undersigned hereby certifies that, except as set forth on Schedule A attached hereto, the following statements are true on the date hereof both before and after giving effect to the Proposed Conversion/Continuation:

 

(i)                                     the representations and warranties set forth in Article III of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) with the same effect as though made on and as of such Funding Date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date;

 

(1)    Cannot be used prior to the Syndication Completion Date.

 

1

 

(ii)                                  the aggregate principal amount of all Revolving Loans does not exceed the Maximum Revolving Loan Balance; and

 

(iii)                               no Default or Event of Default is continuing.

 

	
 
    	
DIPLOMAT   PHARMACY, INC., a Michigan 
    
	
 
    	
corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[SIGNATURE PAGE TO NOTICE OF CONVERSION/CONTINUATION DATED                 ,        ]

 

 

EXHIBIT 2.1

CLOSING CHECKLIST

 

 

EXHIBIT 4.2(b)

 

COMPLIANCE CERTIFICATE

 

DIPLOMAT PHARMACY, INC.

 

Date: [               , 201   ]

 

This Compliance Certificate (this “Certificate”) is given by Diplomat Pharmacy, Inc., a Michigan corporation (the “Borrower”), pursuant to Section 4.2(b) of that certain Amended and Restated Credit Agreement, dated as of June     , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, each other “Credit Party” that is a party thereto, the Lenders, L/C Issuers party thereto and General Electric Capital Corporation, as administrative agent for the Lenders.  Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

 

The officer executing this Certificate is a Responsible Officer of the Borrower and as such is duly authorized to execute and deliver this Certificate on behalf of the Borrower.  By executing this Certificate, such officer hereby certifies to Agent, Lenders and L/C Issuer, on behalf of the Borrower, that:

 

(a)                                 the financial statements delivered with this Certificate in accordance with Section 4.1(a) and/or 4.1(b) of the Credit Agreement fairly present, in all material respects, in accordance with GAAP the financial position and the results of operations of the Borrower and its Subsidiaries as of the dates of and for the periods covered by such financial statements (subject, in the case of interim financial statements, to normal year-end adjustments and the absence of footnote disclosure);

 

(b)                                 to the best of such officer’s knowledge, each Credit Party and each of their Subsidiaries, during the period covered by such financial statements, has observed and performed all of their respective covenants and other agreements in the Credit Agreement and the other Loan Documents to be observed, performed or satisfied by them, and such officer had not obtained knowledge of any Default or Event of Default [except as specified on the written attachment hereto];

 

(c)                                  Exhibit A hereto is a correct calculation of the financial covenant contained in Article VI of the Credit Agreement;

 

(d)                                 If the financial covenant set forth in Article VI was currently being tested, the Borrower and each of its Subsidiaries [are/are not] in compliance with such financial covenant.(2)

 

Exhibit B hereto is a correct calculation of Excess Cash Flow for the year ended [December 31, 201   ]; and

 

(2) Whether such financial covenant is currently being tested is based on average daily Availability as described in Section 6.1 of the Credit Agreement.

 

 

(e)                                  since the Closing Date and except as disclosed in prior Compliance Certificates delivered to Agent, no Credit Party and no Subsidiary of any Credit Party has:

 

(i)                                     changed its legal name, identity, jurisdiction of incorporation, organization or formation or organizational structure or formed or acquired any Subsidiary except as follows:                                                                         ;

 

(ii)                                  acquired the assets of, or merged or consolidated with or into, any Person, except as follows:                                                                                                   ; or

 

(iii)                               changed its address or otherwise relocated, acquired fee simple title to any real property or entered into any real property leases, except as follows:                                                                                                        .

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed by one of its Responsible Officers this            day of                               , 201   .

 

 

	
 
    	
DIPLOMAT   PHARMACY, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

Note:  Unless otherwise specified, all financial covenants are calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP and all calculations are without duplication.

 

 

EXHIBIT A TO EXHIBIT 4.2(b)

 

COMPLIANCE CERTIFICATE

 

Covenant 6.1 Fixed Charge Coverage

 

	
Fixed Charge Coverage is defined as follows:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Net Cash Flow:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Cash Flow (defined below)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Minus:     Restricted   Payments paid in cash during such period (excluding dividends from   Subsidiaries of the Borrower to the Borrower or other Subsidiaries of the   Borrower, Special Tax Distributions and other Tax Distributions (as defined   in the Existing Credit Agreement), the initial Series A Preferred Proceeds   Distribution (as defined in the Existing Credit Agreement), the Janus   Series A Preferred Proceeds Distribution and Restricted Payments which   constitute Fixed Charges (defined below))
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Net Cash Flow
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Fixed Charges:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Net Interest Expense (defined below)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Plus:                 Scheduled   principal payments of Indebtedness during such period
   (including on Subordinated Indebtedness)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Fixed Charges
    	
 
    	
$               
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Fixed Charge Coverage (Net Cash Flow divided by Fixed Charges)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Required Fixed Charge Coverage
    	
 
    	
1.10x
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
In Compliance
    	
 
    	
[Yes/No]
    	
 
    

 

 

Calculation of Net Interest Expense

 

	
Net Interest Expense is defined as follows:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Gross   interest expense for such period paid or required to be paid in cash (including   all commissions, discounts, fees and other charges in connection with letters   of credit and similar instruments and net amounts paid or payable and/or   received or receivable under permitted Rate Contracts in respect of interest   rates) for the Borrower and its Subsidiaries on a consolidated basis,   including on Subordinated Indebtedness
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Less:                    Interest   income received in cash for such period
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Interest Expense (used in calculation of Fixed   Charge Coverage and Excess Cash Flow)
    	
 
    	
$               
    	
 
    

 

 

Calculation of EBITDA

 

	
EBITDA is defined as follows:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Net   income (or loss) for the applicable period of measurement of the Borrower and   its Subsidiaries on a consolidated basis determined in accordance with GAAP,   but excluding: (a) the income (or loss) of any joint venture or other   Person which is not a Subsidiary of the Borrower, except to the extent of the   amount of dividends or other distributions actually paid to the Borrower or   any of its Subsidiaries in cash by such Person during such period   (b) the undistributed earnings of any Subsidiary of the Borrower if the   payment of dividends or similar distributions by that Subsidiary is not   permitted by operation of the terms of its charter or of any agreement or   Requirement of Law applicable to that Subsidiary; (c) the income (or   loss) of any Person accrued prior to the date it becomes a Subsidiary of the   Borrower or is merged into or consolidated with the Borrower or any of its   Subsidiaries or that Person’s assets are acquired by the Borrower or any of   its Subsidiaries; (d) any net gain from the collection of life insurance   proceeds; (e) any aggregate net gain, and any aggregate net loss of up   to $500,000 in any measurement period, from the sale, exchange, transfer or   other disposition of Property or assets not in the Ordinary Course of   Business of the Borrower and its Subsidiaries, and related tax effects in   accordance with GAAP; and (f) any other extraordinary gains or losses of   the Borrower or its Subsidiaries, and related tax effects in accordance with   GAAP
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plus:                      All amounts   deducted in calculating net income (or loss) for depreciation or amortization   for such period
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net   Interest Expense
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
All   taxes, accrued or payable, on or measured by income to the extent deducted in   calculating net income (or loss) for such period
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
The   amount of any non-cash deduction from net income as a result of any grant of   Stock or Stock Equivalents to employees
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Minus: All tax credits 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
All   non-cash income or gains (including without limitation, income arising from   the cancellation of Indebtedness.)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EBITDA 
    	
 
    	
$
    	
 
    	
 
    

 

 

Calculation of Cash Flow

 

	
Cash Flow is defined as follows:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
EBITDA (defined above) for the applicable period   of measurement:
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:                    Unfinanced   Capital Expenditures (defined below)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Special   Tax Distributions and other Tax Distributions (as defined in the Existing   Credit Agreement) during such period
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Taxes   on or measured by income paid or payable in cash during such period
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Investments   made under Section 5.4(h) during such period, provided that, if   applicable, such amount shall be reduced by an amount equal to the original   cost to the Borrower of that portion of the Investment sold by the Borrower   pursuant Section 5.2(e);
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Investments   made under Section 5.4(d) during such period
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Plus:                 Proceeds   received in cash by the Borrower or its Subsidiaries from the sale of tax   credits, to the extent constituting an extraordinary gain
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Cash Flow (used in calculation of Excess Cash Flow   and Fixed Charge Coverage)
    	
 
    	
$               
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
For   purposes of calculating Cash Flow, Capital Expenditures and Unfinanced   Capital Expenditures are defined as follows:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
The   aggregate of all expenditures and other obligations for the twelve month   period ending on the last day of the month covered by such financial statements   which should be capitalized under GAAP
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:                    Net Proceeds   from Dispositions and/or Events of Loss which are included above
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
To   the extent included above, amounts paid as the purchase price for a Target in   a Permitted Acquisition 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Capital Expenditures 
    	
 
    	
$               
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:   Portion of Capital Expenditures financed under Capital Leases or with   proceeds of other long term Indebtedness incurred substantially concurrently   with such expenditure (Indebtedness, for this purpose, does not include   drawings under the Revolving Loan Commitment)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Unfinanced Capital Expenditures (used in   calculation of Cash Flow)
    	
 
    	
$               
    	
 
    

 

 

EXHIBIT B TO EXHIBIT 4.2(b)

 

COMPLIANCE CERTIFICATE

 

Excess Cash Flow

 

	
Excess Cash Flow is defined as follows:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Cash Flow (per Exhibit A to this   Exhibit 4.2(b))
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:                    Scheduled   principal payments with respect
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
to   Indebtedness actually paid in cash (including on Subordinated Indebtedness)
    	
 
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Net Interest Expense (defined above) actually paid   in cash
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Restricted Payments made in cash (excluding the   the Series A Preferred Proceeds Distribution (as defined in the Existing   Credit Agreement and the Janus Series A Preferred Proceeds Distribution)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Increase in Working Capital (defined below)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Plus:                      Decrease in   Working Capital
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Excess Cash Flow
    	
 
    	
$
    	
 
    	
 
    

 

 

Decrease (increase) in Working Capital, for the purposes of the calculation of Excess Cash Flow, means the following:

 

	
 
    	
 
    	
Beg. of Period
    	
 
    	
End of Period
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current assets:
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Less (to the extent included in current assets):
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash Equivalents
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Adjusted current assets
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current liabilities:
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Less (to the extent included in current Liabilities):
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Revolving Loans
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Swing Loans
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current portion of Indebtedness
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Adjusted current liabilities
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
Working   Capital (adjusted current assets minus adjusted current liabilities)
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Decrease (Increase) in Working Capital (beginning of period minus end   of period Working Capital)
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    

 

To the extent the Borrower or any of its Subsidiaries consummates an acquisition during such period, Beginning of Period Working Capital shall be recalculated on a pro forma basis to include Working Capital acquired in such acquisition.

 

 

EXHIBIT 11.1(a)
 TO
 CREDIT AGREEMENT

 

FORM OF ASSIGNMENT

 

This ASSIGNMENT, dated as of the Effective Date, is entered into between                        (“the Assignor”) and                             (“the Assignee”).

 

The parties hereto hereby agree as follows:

 

	
Borrower:
    	
 
    	
Diplomat   Pharmacy, Inc., a Michigan corporation (the “Borrower”)
    
	
 
    	
 
    	
 
    
	
Agent:
    	
 
    	
General   Electric Capital Corporation, as administrative agent for the Lenders and L/C   Issuers (in such capacity and together with its successors and permitted   assigns, the “Agent”)
    
	
 
    	
 
    	
 
    
	
Credit   Agreement:
    	
 
    	
Amended   and Restated Credit Agreement, dated as of June       ,   2014 among the Borrower, the other Credit Parties party thereto, the Lenders   and L/C Issuers party thereto and the Agent (as the same may be amended,   restated, supplemented or otherwise modified from time to time, the “Credit   Agreement”; capitalized terms used herein without definition are used as   defined in the Credit Agreement)
    
	
 
    	
 
    	
 
    
	
[Trade   Date:
    	
 
    	
                ,                ](2)
    
	
 
    	
 
    	
 
    
	
Effective   Date:
    	
 
    	
               ,                 (3)
    

 

(2)                             Insert for informational purposes only if needed to determine other arrangements between the assignor and                                             the assignee.

 

(3)                              To be filled out by Agent upon entry in the Register.

 

1

 

	
Loan/
   Commitment 
   Assigned(4)
    	
 
    	
Aggregate amount of 
   Commitments or 
   principal amount of 
   Loans for all Lenders(5)
    	
 
    	
Aggregate amount of 
   Commitments(5) or 
   principal amount of 
   Loans Assigned(6)
    	
 
    	
Percentage Assigned(7)
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
.    
    	
%
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
.    
    	
%
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
.    
    	
%
    

 

[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

 

(4)                             Fill in the appropriate defined term for the type of Loan and/or Commitment under the Credit Agreement that are being assigned under this Assignment.  (e.g., “Revolving Loan Commitment”, etc.)

 

(5)                              In the case of the Revolving Loan Commitment, including Revolving Loans and interests, participations and obligations to participate in Letter of Credit Obligations and Swing Loans.

 

(6)                              Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.  The aggregate amounts are inserted for informational purposes only to help in calculating the percentages assigned which, themselves, are for informational purposes only.

 

(7)                                Set forth, to at least 9 decimals, the Assigned Interest as a percentage of the aggregate Commitment or Loans in the Facility.  This percentage is set forth for informational purposes only and is not intended to be binding.  The assignments are based on the amounts assigned not on the percentages listed in this column.

 

 

Section 1.                                           Assignment.  Assignor hereby sells and assigns to Assignee, and  Assignee hereby purchases and assumes from Assignor, Assignor’s rights and obligations in its capacity as Lender under the Credit Agreement (including Liabilities owing to or by  Assignor thereunder) and the other Loan Documents, in each case to the extent related to the amounts identified above (the “Assigned Interest”).

 

Section 2.                                           Representations, Warranties and Covenants of Assignors.  Assignor (a) represents and warrants to Assignee and the Agent that (i) it has full power and authority, and has taken all actions necessary for it, to execute and deliver this Assignment and to consummate the transactions contemplated hereby and (ii) it is the legal and beneficial owner of its Assigned Interest and that such Assigned Interest is free and clear of any Lien and other adverse claims and (iii) by executing, signing and delivering this assignment via ClearPar® or any other electronic settlement system designated by the Agent, the Person signing, executing and delivering this Assignment on behalf of the Assignor is an authorized signatory for the Assignor and is authorized to execute, sign and deliver this Agreement, (b) makes no other representation or warranty and assumes no responsibility, including with respect to the aggregate amount of the Loans and Commitments, the percentage of the Loans and Commitments represented by the amounts assigned, any statements, representations and warranties made in or in connection with any Loan Document or any other document or information furnished pursuant thereto, the execution, legality, validity, enforceability or genuineness of any Loan Document or any document or information provided in connection therewith and the existence, nature or value of any Collateral, (c) assumes no responsibility (and makes no representation or warranty) with respect to the financial condition of any Credit Party or the performance or nonperformance by any Credit Party of any obligation under any Loan Document or any document provided in connection therewith and (d) attaches any Notes held by it evidencing at least in part the Assigned Interest of such Assignor (or, if applicable, an affidavit of loss or similar affidavit therefor) and requests that the Agent exchange such Notes for new Notes in accordance with Section 1.2 of the Credit Agreement.

 

Section 3.                                           Representations, Warranties and Covenants of Assignees.  Assignee (a) represents and warrants to Assignor and the Agent that (i) it has full power and authority, and has taken all actions necessary for Assignee, to execute and deliver this Assignment and to consummate the transactions contemplated hereby, (ii) it is [not] an Affiliate or an Approved Fund of            , a Lender and (iii) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest assigned to it hereunder and either Assignee or the Person exercising discretion in making the decision for such assignment is experienced in acquiring assets of such type, (iv) by executing, signing and delivering this Assignment via ClearPar® or any other electronic settlement system designated by the Agent, the Person signing, executing and delivering this Assignment on behalf of the Assignor is an authorized signatory for the Assignor and is authorized to execute, sign and deliver this Agreement  (b) appoints and authorizes the Agent to take such action as administrative agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (c) shall perform in accordance with their terms all obligations that, by the terms of the Loan Documents, are required to be performed by it as a Lender, (d) confirms it has received such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and shall continue to make its own credit decisions in taking or not taking any action under any Loan

 

 

Document independently and without reliance upon Agent, any L/C Issuer, any Lender or any other Indemnitee and based on such documents and information as it shall deem appropriate at the time, (e) acknowledges and agrees that, as a Lender, it may receive material non-public information and confidential information concerning the Credit Parties and their Affiliates and their Stock and agrees to use such information in accordance with Section 9.10 of the Credit Agreement, (f) specifies as its applicable lending offices (and addresses for notices) the offices at the addresses set forth beneath its name on the signature pages hereof, (g) shall pay to the Agent an assignment fee in the amount of $3,500 to the extent such fee is required to be paid under Section 9.9 of the Credit Agreement and (h) to the extent required pursuant to Section 10.1(f) of the Credit Agreement, attaches two completed originals of Forms W-8ECI, W-8BEN, W-8IMY or W-9 and, if applicable, a portfolio interest exemption certificate.

 

Section 4.                                           Determination of Effective Date; Register.  Following the due execution and delivery of this Assignment by Assignor, Assignee and, to the extent required by Section 9.9 of the Credit Agreement, the Borrower and each L/C Issuer that is a Lender, this Assignment (including its attachments) will be delivered to the Agent for its acceptance and recording in the Register.  The effective date of this Assignment (the “Effective Date”) shall be the later of (i) the acceptance of this Assignment by the Agent and (ii) the recording of this Assignment in the Register.  The Agent shall insert the Effective Date when known in the space provided therefor at the beginning of this Assignment.

 

Section 5.                                           Effect.  As of the Effective Date, (a) Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Lender under the Credit Agreement and (b) Assignor shall, to the extent provided in this Assignment, relinquish its rights (except those surviving the termination of the Commitments and payment in full of the Obligations) and be released from its obligations under the Loan Documents other than those obligations relating to events and circumstances occurring prior to the Effective Date.

 

Section 6.                                           Distribution of Payments.  On and after the Effective Date, the Agent shall make all payments under the Loan Documents in respect of each Assigned Interest (a) in the case of amounts accrued to but excluding the Effective Date, to Assignor and (b) otherwise, to Assignee.

 

Section 7.                                           Miscellaneous.  (a) The parties hereto, to the extent permitted by law, waive all right to trial by jury in any action, suit, or proceeding arising out of, in connection with or relating to, this Assignment and any other transaction contemplated hereby.  This waiver applies to any action, suit or proceeding whether sounding in tort, contract or otherwise.

 

(b)                                 On and after the Effective Date, this Assignment shall be binding upon, and inure to the benefit of, the Assignor, Assignee, the Agent and their Related Persons and their successors and assigns.

 

(c)                                  This Assignment shall be governed by, and be construed and interpreted in accordance with, the law of the State of New York.

 

 

(d)                                 This Assignment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

(e)                                  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Assignment by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart of this Assignment.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	
 
    	
[NAME   OF ASSIGNOR]
    
	
 
    	
as Assignor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNEE]
    
	
 
    	
as Assignee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lending   Office for LIBOR Rate Loans:
    
	
 
    	
 
    
	
 
    	
[Insert   Address (including contact name, fax number and e-mail address)]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lending   Office (and address for notices)
    
	
 
    	
for any other purpose:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Insert   Address (including contact name, fax number and e-mail address)]
    

 

 

	
ACCEPTED   and AGREED
    	
 
    
	
this        day of                           :
    	
 
    
	
 
    	
 
    
	
GENERAL   ELECTRIC CAPITAL CORPORATION
    	
 
    
	
as   Agent
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
DIPLOMAT   PHARMACY, INC.,
    	
 
    
	
a   Michigan corporation
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[NAME   OF L/C ISSUER](7)
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
					

 

[SIGNATURE PAGE FOR ASSIGNMENT FOR DIPLOMAT PHARMACY’S CREDIT AGREEMENT]

 

 

EXHIBIT 11.1(b)
 to
  CREDIT AGREEMENT

 

FORM OF CONSOLIDATED BORROWING BASE CERTIFICATE

 

This Certificate is given by Diplomat Pharmacy, Inc. (the “Borrower”), pursuant to subsection 4.2(d) of that certain Amended and Restated Credit Agreement, dated as of June    , 2014 among the Borrower, the other Credit Parties party thereto, the Lenders from time to time party thereto and General Electric Capital Corporation, as agent for the Lenders and other Secured Parties (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

 

The undersigned is duly authorized to execute and deliver this Borrowing Base Certificate on behalf of the Borrower.  By executing this Certificate such officer of the Borrower hereby certifies to Agent and Lenders on behalf of the Borrower and without personal liability that:

 

(a)                                 Attached hereto as Schedule 1 is a calculation of the Borrowing Base for the period ending on                                  (the “Reporting Date”);

 

(b)                                 Based on such schedule, the Borrowing Base as of the Reporting Date is:

 

$[            ]

 

(c)                                  The effective date of this Borrowing Base Certificate will be the date this Certificate is received by Agent.

 

1

 

IN WITNESS WHEREOF, the Borrower has caused this Borrowing Base Certificate to be executed by its [         ] this [       day of          , 20      ].

 

	
 
    	
DIPLOMAT   PHARMACY, INC., a 
    
	
 
    	
Michigan   corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[SIGNATURE PAGE TO BORROWING BASE CERTIFICATE DATED                   ,         ]

 

 

EXHIBIT 11.1(c)
 TO
 CREDIT AGREEMENT

 

FORM OF NOTICE OF BORROWING

 

GENERAL ELECTRIC CAPITAL CORPORATION

as Agent under the Credit Agreement referred to below

 

                           ,         

 

Re:          Diplomat Pharmacy, Inc. (the “Borrower”)

 

Reference is made to the Amended and Restated Credit Agreement, dated as of June      , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the other Credit Parties, the Lenders and L/C Issuers party thereto and General Electric Capital Corporation, as administrative agent for such Lenders and L/C Issuers.  Capitalized terms used herein without definition are used as defined in the Credit Agreement.

 

The Borrower hereby gives you irrevocable notice, pursuant to Section 1.5 of the Credit Agreement of its request of a Borrowing (the “Proposed Borrowing”) under the Credit Agreement and, in that connection, sets forth the following information:

 

A.            The date of the Proposed Borrowing is               ,         (the “Funding Date”).

 

B.            The aggregate principal amount of requested Revolving Loans is $             , of which $              consists of Base Rate Loans and $              consists of LIBOR Rate Loans having an initial Interest Period of             months.

 

The undersigned hereby certifies that, except as set forth on Schedule A attached hereto, the following statements are true on the date hereof and will be true on the Funding Date, both before and after giving effect to the Proposed Borrowing and any other Loan to be made or Letter of Credit to be Issued on or before the Funding Date:

 

(i)            the representations and warranties set forth in Article III of the Credit Agreement and elsewhere in the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein), except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date (without duplication of any materiality qualifier contained therein);

 

(ii)           no Default or Event of Default has occurred and is continuing; and

 

 

(iii)          the aggregate outstanding amount of Revolving Loans does not exceed the Maximum Revolving Loan Balance.

 

	
 
    	
DIPLOMAT   PHARMACY, INC., 
    
	
 
    	
a   Michigan corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[SIGNATURE PAGE TO BORROWING BASE CERTIFICATE DATED                 ,         ]

 

 

EXHIBIT 11.1(d)
 TO
 CREDIT AGREEMENT

 

FORM OF REVOLVING LOAN NOTE

 

	
 
    	
New York, New York
    
	
Lender:   [NAME OF LENDER]
    	
 
    
	
Principal   Amount:  $           
    	
               ,   20      
    

 

FOR VALUE RECEIVED, the undersigned, Diplomat Pharmacy, Inc., a Michigan corporation (the “Borrower”), hereby promises to pay to the Lender set forth above (the “Lender”) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of all Revolving Loans (as defined in the Credit Agreement referred to below) of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement.

 

The Borrower hereby promises to pay interest on the unpaid principal amount of the Revolving Loans from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement.  Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.

 

Both principal and interest are payable in Dollars to General Electric Capital Corporation, as Agent, at the address set forth in the Credit Agreement, in immediately available funds.

 

This Note is one of the Notes referred to in, and is entitled to the benefits of, the Amended and Restated Credit Agreement, dated as of June    , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the other Credit Parties party thereto, the Lenders and the L/C Issuers party thereto and General Electric Capital Corporation, as administrative agent for the Lenders and L/C Issuers.  Capitalized terms used herein without definition are used as defined in the Credit Agreement.

 

The Credit Agreement, among other things, (a) provides for the making of Revolving Loans by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such Revolving Loans being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.

 

This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Credit Agreement, including Sections 9.18(b) (Submission to Jurisdiction),  9.19 (Waiver of Jury Trial), 9.23 (Joint and Several) and 11.2 (Other Interpretive Provisions) thereof.

 

1

 

This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.

 

This Note shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 

[Remainder of page intentionally left blank;

signature page follows]

 

2

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.

 

	
 
    	
DIPLOMAT   PHARMACY, INC., 
    
	
 
    	
a   Michigan corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[$             ] REVOLVING LOAN NOTE OF DIPLOMAT PHARMACY, INC. FOR THE BENEFIT OF [NAME OF LENDER]

 

 

EXHIBIT 11.1(e)
 TO
 CREDIT AGREEMENT

 

FORM OF SWINGLINE NOTE

 

	
 
    	
New York, New York
    
	
Swingline   Lender: General Electric Capital Corporation
    	
 
    
	
Principal   Amount: $5,000,000
    	
                     , 20     
    

 

FOR VALUE RECEIVED, the undersigned, Diplomat Pharmacy, Inc., a Michigan Corporation (the “Borrower”), hereby promises to pay to the Swingline Lender set forth above (the “Swingline Lender”) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of all Swing Loans (as defined in the Credit Agreement referred to below) of the Swingline Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement.

 

The Borrower hereby promises to pay interest on the unpaid principal amount of the Swing Loans from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement.  Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.

 

Both principal and interest are payable in Dollars to General Electric Capital Corporation, as Agent, at the address set forth in the Credit Agreement, in immediately available funds.

 

This Note is one of the Notes referred to in, and is entitled to the benefits of, the Amended and Restated Credit Agreement, dated as of June     , 2014 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the other Credit Parties party thereto, the Lenders, the L/C Issuer, the Swingline Lender and General Electric Capital Corporation, as administrative agent for the Lenders and L/C Issuer.  Capitalized terms used herein without definition are used as defined in the Credit Agreement.

 

The Credit Agreement, among other things, (a) provides for the making of Swing Loans by the Swingline Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such Swing Loans being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.

 

This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Credit Agreement, including Sections 9.18(b) (Submission to Jurisdiction),  9.19 (Waiver of Jury Trial), 9.23 (Joint and Several) and 11.2 (Other Interpretive Provisions) thereof.

 

 

This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.

 

This Note shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 

[Remainder of page intentionally left blank;

signature page follows]

 

2

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.

 

	
 
    	
DIPLOMAT   PHARMACY, INC., a Michigan corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[$5,000,000 SWINGLINE NOTE OF DIPLOMAT PHARMACY, INC. FOR THE BENEFIT OF GE CAPITAL]

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