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Credit Agreement

 

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Title:

Credit Agreement

Entities:

Citibank, NA; Citicorp North America, Inc.; Citigroup Global Markets Inc.; Hanger Orthopedic Group Inc.; LaSalle Bank, NA; Lehman Brothers Inc.; Lehman Commercial Paper Inc.; Bank of New York

Date:

2006

Size:

Preview shows 59KB of 322KB total

Price:

$99

ID:

#2281305

 

 

► Loans ► Credit Agreements
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$305,000,000

CREDIT AGREEMENT

among

HANGER ORTHOPEDIC GROUP, INC.,
as Borrower,

The Several Lenders
from Time to Time Parties Hereto,

LEHMAN BROTHERS INC. and CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Book-Runners,

CITICORP NORTH AMERICA, INC.,
as Administrative Agent

LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent

GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent

and

LASALLE BANK, N.A.,
as Co-Documentation Agent



Dated as of May 26, 2006

TABLE OF CONTENTS

Page
SECTION 1. DEFINITIONS   1
      1.1 Defined Terms   1
      1.2 Other Definitional Provisions 26
      1.3 Accounting Changes 26
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 27
      2.1 Tranche B Term Loan Commitments 27
      2.2 Procedure for Tranche B Term Loan Borrowing 27
      2.3 Repayment of Tranche B Term Loans 27
      2.4 Revolving Credit Commitments 28
      2.5 Procedure for Revolving Credit Borrowing 29
      2.6 Swing Line Commitment 29
      2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans 30
      2.8 Repayment of Loans; Evidence of Debt 31
      2.9 Commitment Fees, etc 32
      2.10 Termination or Reduction of Revolving Credit Commitments 32
      2.11 Optional Prepayments 33
      2.12 Mandatory Prepayments 33
      2.13 Conversion and Continuation Options 34
      2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches 35
      2.15 Interest Rates and Payment Dates 35
      2.16 Computation of Interest and Fees 36
      2.17 Inability to Determine Interest Rate 36
      2.18 Pro Rata Treatment and Payments 37
      2.19 Requirements of Law 39
      2.20 Taxes 40
      2.21 Indemnity 42
      2.22 Illegality 42
      2.23 Change of Lending Office 43

i

TABLE OF CONTENTS
(continued)

Page
      2.24 Replacement of Lenders under Certain Circumstances 43
SECTION 3. LETTERS OF CREDIT 43
      3.1 L/C Commitment 44
      3.2 Procedure for Issuance of Letter of Credit 44
      3.3 Fees and Other Charges 44
      3.4 L/C Participations 45
      3.5 Reimbursement Obligation of the Borrower 46
      3.6 Obligations Absolute 46
      3.7 Letter of Credit Payments 47
      3.8 Applications 47
SECTION 4. REPRESENTATIONS AND WARRANTIES 47
      4.1 Financial Condition 47
      4.2 No Change 48
      4.3 Corporate Existence; Compliance with Law 48
      4.4 Corporate Power; Authorization; Enforceable Obligations 49
      4.5 No Legal Bar 49
      4.6 No Material Litigation 49
      4.7 No Default 49
      4.8 Ownership of Property; Liens 49
      4.9 Intellectual Property 50
      4.10 Taxes 50
      4.11 Federal Regulations 50
      4.12 Labor Matters 50
      4.13 ERISA 50
      4.14 Investment Company Act; Public Utility Holding Company Act; Other Regulations 51
      4.15 Subsidiaries 51
      4.16 Use of Proceeds 51
      4.17 Environmental Matters 52
      4.18 Accuracy of Information, etc 53

ii

TABLE OF CONTENTS
(continued)

Page
      4.19 Security Documents 53
      4.20 Solvency 54
      4.21 Licenses; Permits; Approvals; Franchises 54
      4.22 Patriot Act 54
SECTION 5. CONDITIONS PRECEDENT 55
      5.1 Conditions to Initial Extension of Credit 55
      5.2 Conditions to Each Extension of Credit 59
SECTION 6. AFFIRMATIVE COVENANTS 59
      6.1 Repurchase of Existing Notes; Redemption of Preferred Stock 59
      6.2 Financial Statements 59
      6.3 Certificates; Other Information 60
      6.4 Payment of Obligations 62
      6.5 Conduct of Business and Maintenance of Existence, etc 62
      6.6 Maintenance of Property; Insurance 62
      6.7 Inspection of Property; Books and Records; Discussions 62
      6.8 Notices 62
      6.9 Environmental Laws 63
      6.10 Additional Collateral, etc 64
      6.11 Further Assurances 65
      6.12 Post-Closing Covenants 66
SECTION 7. NEGATIVE COVENANTS 66
      7.1 Financial Condition Covenants 66
      7.2 Limitation on Indebtedness 68
      7.3 Limitation on Liens 69
      7.4 Limitation on Fundamental Changes 71
      7.5 Limitation on Disposition of Property 71
      7.6 Limitation on Restricted Payments 72
      7.7 Limitation on Capital Expenditures 73
      7.8 Limitation on Investments 73

iii

TABLE OF CONTENTS
(continued)

Page
      7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc 75
      7.10 Limitation on Transactions with Affiliates 76
      7.11 Limitation on Sales and Leasebacks 76
      7.12 Limitation on Changes in Fiscal Periods 76
      7.13 Limitation on Negative Pledge Clauses 76
      7.14 Limitation on Restrictions on Subsidiary Distributions 76
      7.15 Limitation on Lines of Business 77
      7.16 Limitation on Hedge Agreements 77
SECTION 8. EVENTS OF DEFAULT 77
SECTION 9. THE ADMINISTRATIVE AGENT; THE AGENTS 80
      9.1 Authorization and Action 80
      9.2 Administrative Agent's Reliance, Etc 81
      9.3 Posting of Approved Electronic Communications 82
      9.4 The Administrative Agent Individually 83
      9.5 Lender Credit Decision 83
      9.6 Indemnification 84
      9.7 Successor Administrative Agent 84
      9.8 Concerning the Collateral and the Security Documents 85
SECTION 10. MISCELLANEOUS 86
      10.1 Amendments and Waivers 86
      10.2 Notices 89
      10.3 No Waiver; Cumulative Remedies 90
      10.4 Survival of Representations and Warranties 90
      10.5 Payment of Expenses 91
      10.6 Successors and Assigns; Participations and Assignments 92
      10.7 Adjustments; Set-off 95
      10.8 Counterparts 96
      10.9 Severability 96
      10.10 Integration 96

iv

TABLE OF CONTENTS
(continued)

Page
      10.11 GOVERNING LAW 97
      10.12 Submission To Jurisdiction; Waivers 97
      10.13 Acknowledgments 97
      10.14 Confidentiality 98
      10.15 Delivery of Lender Addenda 98
      10.16 WAIVERS OF JURY TRIAL 98












v

ANNEXES:

A Pricing Grid
B Existing Letters of Credit

SCHEDULES:

1.1(a) Existing Earn-Out Obligations
1.1(b) Existing Seller Notes
4.4 Consents, Authorizations, Filings and Notices
4.15(a) Subsidiaries
4.15(b) Agreements Relating to Capital Stock
4.19(a)-1 UCC Filing Jurisdictions
4.19(a)-2 UCC Financing Statements to Remain on File
4.19(a)-3 UCC Financing Statements to be Terminated
6.12 Post-Closing Covenants
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8(i) Existing Investments

EXHIBITS:

A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E Form of Legal Opinion of Foley & Lardner LLP
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
F-3 Form of Swing Line Note
G Form of Exemption Certificate
H Form of Lender Addendum
I Form of Borrowing Notice

        CREDIT AGREEMENT, dated as of May 26, 2006, among HANGER ORTHOPEDIC GROUP, Inc., a Delaware corporation (the Borrower), the several banks and other financial institutions or entities from time to time parties to this Agreement (the Lenders), LEHMAN BROTHERS INC., as joint lead arranger and joint bookrunner, CITIGROUP GLOBAL MARKETS INC., as joint lead arranger and joint bookrunner, CITICORP NORTH AMERICA, INC., (Citicorp) as administrative agent (in such capacity, the Administrative Agent), LEHMAN COMMERCIAL PAPER INC. (LCPI), as syndication agent (in such capacity, the Syndication Agent), GENERAL ELECTRIC CAPITAL CORPORATION (GECC), as codocumentation agent, and LASALLE BANK, N.A. (LaSalle), as co-documentation agent (LaSalle in its capacity as co-documentation agent together with GECC in its capacity as co-documentation agent, collectively, the Documentation Agents).

W I T N E S S E T H:

        WHEREAS, the Borrower has requested that the Lenders and the Issuing Lenders make available for the purposes specified in this agreement, certain term loan, revolving credit and letter of credit facilities;

        WHEREAS, the Lenders and the Issuing Lenders are willing to make such credit facilities available upon and subject to the terms and conditions hereinafter set forth;

        NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

    1.1        Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

        Adjustment Date: as defined in the Pricing Grid.

        Administrative Agent: as defined in the preamble hereto.

        Affiliate: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, control of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

        Agents: the collective reference to the Syndication Agent, the Documentation Agents and the Administrative Agent.

        Aggregate Exposure: with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lenders Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lenders Tranche B Term Loans and (ii) the amount of such Lenders Revolving Credit Commitment then in effect or, if the Revolving Credit Commitments have been terminated, the amount of such Lenders Revolving Extensions of Credit then outstanding.


 

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