EXECUTION COPY
$62,000,000
CREDIT AGREEMENT
Dated as of May 16, 2000
among
THE ENTITIES LISTED ON SCHEDULE I HERETO
as Borrowers
and
THE LENDERS PARTY HERETO
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
and
HELLER HEALTHCARE FINANCE, INC.
as Collateral and Documentation Agent
CREDIT AGREEMENT, dated as of May 16, 2000, among the entities
listed on Schedule I hereto (individually, the "Borrower" and collectively, the
"Borrowers"), the Lenders (as defined below), and THE CIT GROUP/BUSINESS CREDIT,
INC. ("CITBC"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent") and HELLER HEALTHCARE FINANCE, INC. ("HHF"), as
collateral and documentation agent for the Lenders (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers have requested that the Lenders make
available for the purposes specified in this Agreement a revolving credit and
letter of credit guaranty facility; and
WHEREAS, the Lenders are willing to make available to the
Borrowers such revolving credit and letter of credit guaranty facility upon the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
Article I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
Section 1.1. Defined Terms. As used in this Agreement, the following terms
have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Accounts" means all of the following, whether now existing or
arising in the future, with respect to each and all of the Borrowers: (a)
accounts receivable generated from the sale of medical, hospital or other
healthcare goods or the rendition of medical, hospital or other healthcare
services to patients and any and all instruments, documents, contract rights,
chattel paper and general intangibles relating to such accounts receivable,
including, without limitation, all accounts created by or arising from all of
such Borrowers' sales of medical, hospital or other healthcare goods or
rendition of medical, hospital or other healthcare services to patients of such
Borrower, and all accounts arising from such sales of goods or rendition of such
services made under any of the Borrowers' respective trade names or styles and
all rights of payment from all third party payors on any of such accounts; (b)
unpaid sellers' rights (including rescission, replevin, and reclamation)
relating to the foregoing or arising therefrom; (c) credit balances arising
thereunder; (d) guarantees or collateral for any of the foregoing; (e) insurance
policies or rights relating to any of the foregoing; and (f) cash and non-cash
proceeds of any and all of the foregoing.
"Account Debtor" means any Person obligated on any Account of
any Borrower, including without limitation, any Governmental Authority obligated
on any Governmental Receivable.
"Administrative Agent" has the meaning specified in the
preamble to this Agreement.
"Affiliate" means, with respect to any Person, any other
Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person who is the beneficial owner of
10% or more of any class of Voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agents" means the Administrative Agent and the Collateral
Agent.
"Agreement" means this Credit Agreement.
"Applicable Lending Office" means, with respect to each
Lender, its Domestic Lending Office in the case of a Base Rate Loan, and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means with respect to any (a) Base Rate
Loan, a rate equal to 1.5% per annum and (b) Eurodollar Rate Loan, a rate equal
to 3.75% per annum.
"Approved Fund" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund (other than an Investment Fund)
that invests in bank loans and is advised or managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Asset Sale" has the meaning specified in Section 8.4.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent in substantially the form of Exhibit A.
"Availability Reserves" means $3,000,000 as of the Closing
Date or such amounts as the Agents may from time to time thereafter establish
against the Facility based on the Borrowers' payment of cost settlements and
incurrence of cost settlement liabilities and such other amounts as the Agents
may from time to time establish against the Facility, in good faith, in their
reasonable judgment, based on the collectibility of Borrowers' Accounts
generated by sale of medical, hospital or other healthcare goods or rendition of
medical, hospital or other healthcare services to patients and the performance
of the Borrowers.
"Available Credit" means, at any time, an amount equal to (a)
the lesser of (i) the aggregate of the Revolving Credit Commitments in effect at
such time and (ii) the Borrowing Base at such time, minus (b) the sum of (i) the
aggregate Revolving Credit Outstandings at such time and (ii) any Availability
Reserves in effect at such time plus (c) the cash deposited in the Cash
Collateral Account.
"Bankruptcy Code" means title 11, United States Code, as
amended from time to time.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the rate of interest announced publicly by The Chase
Manhattan Bank, from time to time, as its prime rate in effect at its principal
office in New York City (the prime rate is not intended to be the lowest rate of
interest charged by The Chase Manhattan Bank to its borrowers). Each change in
the prime rate shall be effective on the date such change is publicly announced.
"Base Rate Loan" means any Loan during any period in which it
bears interest based on the Base Rate.
"Borrowing" means a borrowing consisting of Loans made on the
same day by the Lenders ratably according to their respective Revolving Credit
Commitments.
"Borrowing Base" means, as of any date, an amount equal to the
sum of (a) the lesser of (i) one and one-half times trailing 12 month EBITDA of
the operating entities for the Eligible Real Property (determined as of the last
day of the most recent completed month for which Financial Statements have been
delivered pursuant to Section 4.3(a) or Section 6.1) minus Eligible Real
Property Availability, and (ii) $10 million plus (b) 85% of all Borrowers',
except Flint River, Eligible Receivables, and 42.5% of Flint River's Eligible
Receivables; provided, however, that the Borrowing Base shall not include (A)
Flint River's Accounts upon any voluntary or involuntary bankruptcy filing with
respect to Flint River and (B) Metropolitan Eligible Receivables to the extent
85% of such Eligible Receivables is greater than the amount specified in the
proviso in Section 2.1(b); provided, further that if two-thirds of the Lenders,
in their sole discretion, determine that there is no bankruptcy risk associated
with Flint River, 85% of Flint River's Eligible Receivables will be included in
the Borrowing Base.
"Borrowing Base Certificate" means a certificate of the
Borrowers substantially in the form of Exhibit B.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for
any period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a balance sheet of such Person prepared in
conformity with GAAP, excluding interest capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease
of property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person,
the capitalized amount of all obligations of such Person under Capital Leases,
as determined in conformity with GAAP.
"Cash Collateral Account" means the interest-bearing account
established by the Borrowers under the sole and exclusive control of the
Collateral Agent, pursuant to the agreement attached hereto as Exhibit C ,
designated as the "Collateral Account in Favor or Heller Healthcare Finance,
Inc. as Collateral Agent," which is subject to the terms of Section 9.3.
"Cash Equivalents" means (a) securities issued or fully
guaranteed or insured by the United States government or any agency thereof with
maturities not exceeding 180 days, (b) domestic certificates of deposit or time
deposits or bankers' acceptances maturing within 180 days after the date of
acquisition thereof or investments in money market or mutual funds or accounts,
in each case issued or managed by any commercial bank or other financial
institution organized under the laws of the United States or any state thereof
or the District of Columbia or by any foreign bank which is a Lender, and in any
case having combined capital and surplus of not less than $100,000,000; (c)
deposits in any financial institution insured by the Federal Deposit Insurance
Corporation; (d) commercial paper of an issuer rated at least "A-1" by S&P or
"P-1" by Moody's with maturities not exceeding 180 days.
"Closing Date" means May ___, 2000.
"Code" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Borrower in or upon
which a Lien is granted under any of the Collateral Documents excluding such
property with respect to which the Collateral Agent has released its Lien
pursuant to this Agreement.
"Collateral Agent" has the meaning specified in the preamble
to this Agreement.
"Collateral Documents" means the Security Agreement, the
Mortgages, the Collection Account Agreements and any other document executed and
delivered by a Borrower granting a Lien on any of its property to secure payment
of the Obligations.
"Collection Account" has the meaning specified in Section
2.16(a).
"Collection Account Agreements" has the meaning specified in
Section 2.16(b).
"Compliance Certificate" has the meaning specified in Section
6.1(d).
"Concentration Account" has the meaning specified in Section
2.16(a).
"Constituent Documents" means, with respect to any Person, (a)
the articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (b) the by-laws (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.
"Contaminant" means any material, substance 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 any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding 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 properties is subject.
"Customary Permitted Liens" means, with respect to any Person,
any of the following Liens:
(a) Liens with respect to the payment of taxes, assessments or governmental
charges in all cases which are not yet due or which are being contested
in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained
to the extent required by GAAP;
(b) Liens of landlords (including contractual landlord liens to the extent
they are not on Collateral) and liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other liens imposed
by law created in the ordinary course of business for amounts not yet
due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by
GAAP;
(c) deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money) and deposits
made for surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of real
property or minor imperfections to title of real property other than
Eligible Real Property which do not materially detract from the value
of such real property or interfere with the ordinary conduct of the
business conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of real property which
do not in the aggregate materially detract from the value of such real
property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(f) encumbrances securing Capital Lease Obligations permitted by Section
8.1(c) and filings describing a lessor's rights in and
to operating leases;
(g) judgment Liens on appeal if and only if (i) the amount, applicability
or validity thereof is currently (at the time in question) being
contested in good faith by appropriate action promptly and diligently
conducted and adequate cash reserves or letters of credit, in each case
segregated to the extent required by GAAP have been set aside therefor,
(ii) levy and execution thereon have been stayed and continue to be
stayed and (iii) they do not in the aggregate materially detract from
the value of the property (whether now owned or hereafter acquired) of
the Person in question or materially impair the use of such property in
such Person's business; and
(h) any extension, renewal or replacement of any of the foregoing,
provided, however, that Liens permitted under this clause (h) shall not
be extended or spread to cover any additional Indebtedness or property
(whether now owned or hereafter acquired).
"Default" means any event which with the passing of time or
the giving of notice or both would become an Event of
Default.
"Dollars" and the sign "$" each mean the lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender as such Lender may from time to time
specify as such to the Borrowers and the Administrative Agent.
"EBITDA" means, with respect to any Borrower for any period,
an amount equal to (a) Net Income of such Borrower for such period plus (b) the
sum of, in each case to the extent included in the calculation of such Net
Income but without duplication, (i) any provision for income taxes, (ii)
Interest Expense, (iii) intercompany interest expense that would otherwise
eliminate in the consolidated financial statements of Paracelsus in conformance
with GAAP, (iv) intercompany management fees or other intercompany charges that
would otherwise eliminate in the consolidated financial statements of Paracelsus
in conformance with GAAP, (v) loss from extraordinary items, (vi) non-cash loss
from a change in accounting principles, (vii) depreciation and amortization
expense, (viii) any non-cash impairment charge, (ix) any non-cash compensation
deduction as the result of any grant of Stock or Stock Equivalents to employees,
officers, directors or consultants, (x) any aggregate net loss from the sale,
exchange or other disposition of capital assets by such Borrower and (xi) any
non-cash charge or loss separately reported on the face of Paracelsus' publicly
reported financial statements as an unusual, restructuring or similar charge to
the extent such charge or loss is attributable to the Borrowers minus (c) the
sum of, in each case to the extent included in the calculation of such Net
Income but without duplication, (i) any credit for income tax, (ii) interest
income, (iii) gains from extraordinary items for such period, (iv) non-cash gain
from a change in accounting principles, (v) any aggregate net gain from the
sale, exchange or other disposition of capital assets by such Borrower, (vi) any
non-cash gain separately reported on the face of Paracelsus' publicly reported
financial statements as an unusual restructuring or similar gain to the extent
such gain is attributable to the Borrowers, (vii) the reversal of any non-cash
compensation deduction as the result of any grant of Stock or Stock Equivalents
to employees, officers, directors or consultants and (viii) intercompany
management revenues or other intercompany income that would otherwise eliminate
in the consolidated financial statements of Paracelsus in conformance with GAAP.
"Eligible Assignee" means (a) a Lender or any Affiliate or
Approved Fund of such Lender; (b) a commercial bank having total assets in
excess of $5,000,000,000; (c) a finance company, insurance company, other
financial institution or fund reasonably acceptable to the Administrative Agent,
which is regularly engaged in making loans, and having a net worth, determined
in accordance with GAAP, in excess of $250,000,000 or, to the extent net worth
is less than such amount, such a finance company, insurance company, other
financial institution or fund, reasonably acceptable to the Administrative Agent
and the Borrowers; or (d) a savings and loan association or savings bank
organized under the laws of the United States or any State thereof which has a
net worth, determined in accordance with GAAP, in excess of $250,000,000.
"Eligible Real Property" means the real estate, tangible
personal property and fixtures of hospital facilities (i) leased or owned by
Lancaster Hospital Corporation and in the case of the real property leased by
Lancaster Hospital Corporation, owned by Paracelsus Real Estate Corporation and
(ii) owned by Paracelsus Mesquite Hospital, Inc. or such other property of
comparable value (based on the trailing 12 month EBITDA thereof) substituted as
collateral therefor with the consent of the Agents in their sole discretion.
"Eligible Real Property Availability" means the portion of the
Eligible Receivables of the Borrowers owning or operating the Eligible Real
Property included in clause (b) of the definition of Borrowing Base.
"Eligible Receivable" means the gross outstanding balance of
each Account of any Borrower generated in the ordinary course of such Borrower's
business from the sale of medical, hospital or other healthcare goods or
rendition of medical, hospital or other healthcare services; provided, however,
that no Account shall be an Eligible Receivable if: (a) the amount due on the
Account, including any deductible or copayment, is payable by an individual
beneficiary, recipient or subscriber individually ("Self Pay Amount") and not
directly to a Borrower by a Governmental Authority obligated on any Governmental
Receivable, employer funded health plan, managed care organization, or
commercial medical insurance carrier reasonably acceptable to Lenders (provided,
however, that the portion of the Account that is not a Self Pay Amount may be an
Eligible Receivable), (b) the Account remains unpaid more than 150 days past the
claim or invoice date (but in no event more than 180 days after the applicable
medical services have been rendered); (c) the Account is subject to any asserted
defense, set-off, counterclaim, deduction, discount, credit, chargeback, freight
claim, allowance, or adjustment of any kind; (d) any part of any goods the sale
of which has given rise to the Account has been returned, rejected, lost, or
damaged; (e) in the case of an Account which arises from the sale of goods by a
Borrower, the sale was not an absolute sale, or the sale was made on consignment
or on approval or on a sale-or-return basis, or the sale was made subject to any
other repurchase or return agreement, or the goods have not been shipped to the
Account Debtor or its designee; (f) in the case of an Account which arises from
the performance of medical services, the medical services have actually not been
performed or the medical services were undertaken in violation of any law; (g)
the Account is subject to a Lien other than a Lien in favor of the Collateral
Agent or Lien described by subclause (a) of the definition of Customary
Permitted Liens; (h) any Borrower knows or should have known of the bankruptcy,
receivership, reorganization, or insolvency of the Account Debtor; (i) the
Account is evidenced by chattel paper or an instrument of any kind, or has been
reduced to judgment; (j) the Account is an account of an Account Debtor having
its principal place of business or executive office outside the United States;
(k) the Account Debtor is an Affiliate or Subsidiary of any Borrower; (l) more
than (50%) of the aggregate balance of all Accounts of any Borrower owing from
the Account Debtor obligated on the Account are outstanding more than 150 days
past their invoice date; (m) (25%) or more of the aggregate unpaid Accounts of
any Borrower from any single Account Debtor other than from Governmental
Authorities obligated on any Governmental Receivable are not deemed Eligible
Receivables; (n) the total unpaid Accounts of any Borrower related to a single
Account Debtor, except for Account Debtors who are Governmental Authorities,
exceed (20%) of the net amount of all Eligible Receivables of such Borrower
(including Governmental Receivables); (o) any covenant, representation or
warranty contained in any Loan Document with respect to such Account has been
breached; (p) the hospital facility from which such Account arose has been sold
or closed; (q) such Account is generated by an Eligible Real Property and such
Eligible Real Property has been mortgaged other than in favor of the Collateral
Agent; or (r) the Account fails to meet such other specifications and
requirements which may from time to time be established by the Agents in good
faith, in their reasonable judgment based on collectibility of Borrowers'
Accounts and performance of the Borrowers.
"Environmental Laws" means all applicable Requirements of Law
now or hereafter in effect, as amended or supplemented from time to time,
relating to pollution or the regulation and protection of human health, safety,
the environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 USC.ss. 9601
et seq.); the Hazardous Material Transportation Act, as amended (49 USC.ss.
180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C.ss. 136 et seq.); the Resource Conservation and Recovery Act,
as amended (42 U.S.C.ss. 6901 et seq.); the Toxic Substance Control Act, as
amended (42 U.S.C.ss. 7401 et seq.); the Clean Air Act, as amended (42 USC.ss.
740 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C.ss.
1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C.ss.
651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C.ss. 300f et
seq.); and their state and local counterparts or equivalents.
"Environmental Liabilities and Costs" means, with respect to
any Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with any
Borrower within the meaning of Section 414 (b) or (c) of the Code.
"ERISA Event" means (a) a reportable event described in
Section 4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with
respect to a Title IV Plan or a Multiemployer Plan unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
withdrawal of any Borrower or 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 and immediately after such
withdrawal, the Title IV Plan has nonforfeitable benefits which are not fully
funded; (c) the complete or partial withdrawal of any Borrower or any ERISA
Affiliate from any Multiemployer Plan under circumstances that result in any
Withdrawal Liability; (d) notice of reorganization or insolvency of a
Multiemployer Plan; (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a 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 a Title IV Plan or Multiemployer Plan; (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on any Borrower or
any ERISA Affiliate; or (i) any other event or condition which 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 the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
"Eurodollar Base Rate" means, with respect to any Interest
Period for any Eurodollar Rate Loan, the rate (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined by the Administrative Agent to be the offered
rate for deposits in Dollars for the applicable Interest Period which appears on
the Dow Jones Markets Telerate Page 3750 as of 11:00 a.m., London time, on the
second full Business Day next preceding the first day of each Interest Period.
In the event that such rate does not appear on the Dow Jones Markets Telerate
Page 3750 (or otherwise on the Dow Jones Markets screen), the Eurodollar Base
Rate for the purposes of this definition shall be determined by reference to
such other comparable publicly available service for displaying Eurodollar Rates
as may be selected by the Administrative Agent.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify as such
to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period
for any Eurodollar Rate Loan, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage
equal to 100% minus the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City that is at
least the same size as any prime bank located in New York City and designated
from time to time by the Lenders consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities which includes
deposits by reference to which the Eurodollar Rate is determined) having a term
equal to such Interest Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1.
"Facility" means the Revolving Credit Commitments and the
provisions herein related to the Revolving Loans and Letters of Credit.
"Fair Market Value" means with respect to any asset or group
of assets at any date, the value of the consideration obtainable in a sale of
such asset at such date assuming a sale by a willing seller to a willing
purchaser dealing at arm's length and arranged in an orderly manner over a
reasonable period of time having regard to the nature and characteristics of
such asset, as reasonably determined by a Responsible Officer of such Borrower,
or, if such asset shall have been the subject of a relatively contemporaneous
appraisal by an independent third party appraiser, the basic assumptions
underlying which have not materially changed since its date, the value set forth
in such appraisal.
"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 published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"Financial Covenant Debt" of any Person means Indebtedness of
the type specified in clauses (a), (b), (c), (d), (e), (f) and (h) of the
definition of "Indebtedness," but excluding any outstanding Letter of Credit
Obligations to the extent they are cash collateralized by cash in the Cash
Collateral Account.
"Financial Statements" means the financial statements of the
Borrowers delivered in accordance with Sections 4.4 and
6.1.
"Fiscal Quarter" means each of the three month periods ending
on March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December
31.
"Flint River" means Paracelsus Macon County Medical Center,
Inc.
"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 Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board and/or their respective successors,
or in such other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" means any nation or federal, state or
local government, or any political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to the government.
"Governmental Receivables" means with respect to each
Borrower, the Accounts of such Borrower due from medicare, medicaid, TRICARE or
any other Governmental Authority.
"Guaranty Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness of another Person, if the purpose or intent of such
Person in incurring the Guaranty Obligation is to provide assurance to the
obligee of such Indebtedness that such Indebtedness will be paid or discharged,
or that any holder of such Indebtedness will be protected (in whole or in part)
against loss in respect thereof including, (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of Indebtedness of another Person and (b) any liability of such Person
for Indebtedness of another Person through any agreement (contingent or
otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness or
any security therefor, or to provide funds for the payment or discharge of such
Indebtedness (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss, or (v) to supply funds to or in
any other manner invest in such other Person (including to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of clause (b) of this sentence the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any Guaranty
Obligation shall be equal to the amount of the Indebtedness so guaranteed or
otherwise supported.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or which
bear interest, (c) all reimbursement and all obligations with respect to letters
of credit to the extent they are not cash collateralized pursuant to this
Agreement, bankers' acceptances, surety bonds and performance bonds, whether or
not matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business,
(e) all indebtedness of such Person created or arising under any conditional
sale or other title retention agreement 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), or pursuant to any sale-leaseback transaction (f) all Capital
Lease Obligations of such Person and the present value of future rental payments
under all synthetic leases, (g) all Guaranty Obligations of such Person, (h) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any Stock or Stock Equivalents of such Person, valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (i) all
payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person and (j) all Indebtedness of the type
referred to above to the extent 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 general intangibles) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"Indemnitees" has the meaning specified in Section 11.4
generally.
"Interest Expense" means, for any Person for any period, (a)
total interest expense of such Person for such period determined in conformity
with GAAP and including, in any event, interest capitalized during construction
for such period and net costs under interest rate contracts for such period
minus (b) the sum of (i) net gains of such Person under interest rate contracts
for such period determined in conformity with GAAP plus (ii) any interest income
of such Person for such period determined in conformity with GAAP.
"Interest Period" means, in the case of any Eurodollar Rate
Loan, (a) initially, the period commencing on the date such Eurodollar Rate Loan
is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two or three months thereafter, as selected by the
Borrowers in their Notice of Borrowing or Notice of Conversion or Continuation
given to the Administrative Agent pursuant to Section 2.2 or 2.9, and (b)
thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate
Loan pursuant to Section 2.9, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two or three
months thereafter, as selected by the Borrowers in their Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.9;
provided, however, that all of the foregoing provisions relating to Interest
Periods in respect of Eurodollar Rate Loans are subject to the following:
(i) if any Interest Period would otherwise end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day,
unless the result of such extension would be to extend such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period 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 a calendar month;
(iii) if any Interest Period would, pursuant to this definition, otherwise end
after the Revolving Credit Termination Date, such Interest Period shall end on
the Revolving Credit Termination Date;
(iv) no Borrower may select any Interest Period in respect of Loans having
an aggregate principal amount of less than $1,000,000;
and
(v) there shall be outstanding at any one time no more than six Interest
Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements and
interest rate insurance.
"Intermediate Concentration Account" has the meaning specified
in Section 2.16(a).
"Investment" means, with respect to any Person, (a) any
purchase or other acquisition by that Person of (i) any Security issued by, (ii)
a beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
and (c) any loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, accounts receivable and
similar items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business.
"Investment Fund" means (a) any single customer account,
pooled separate account or general account of an insurance company, or any other
account, the assets of which could be considered "plan assets" of any Plan under
any of Sections 3, 401 or 403 of ERISA, (b) any individual trust or common,
collective or group trust maintained by any bank, or any other trust, the assets
of which could be considered "plan assets" under any of Sections 3, 401 or 403
of ERISA, or (c) any entity or fund not previously mentioned whose underlying
assets include "plan assets" of any Plan by reason of the investment of the
entity or fund by "employee benefit plan" (within the meaning of Section 3(3) of
ERISA) or a "plan" (within the meaning of Section 4975(e)(1) of the Code) and
the application of the U.S. Department of Labor's "plan asset regulation."
"IRS" means the Internal Revenue Service of the United States
or any successor thereto.
"Issuing Bank" means The Chase Manhattan Bank or any other
bank mutually acceptable to CITBC and the relevant beneficiaries that issues a
Letter of Credit for the account of any Borrower.
"Leases" means, with respect to any Person, all of those
leasehold estates in real property of such Person, as lessee, as such may be
amended, supplemented or otherwise modified from time to time.
"Lender" means each financial institution or other entity that
(a) is listed on the signature pages hereof as a "Lender" or (b) from time to
time becomes a party hereto by execution of an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant
to Section 2.3.
"Letter of Credit Guaranties" shall mean both the guaranties
delivered by CITBC to any Issuing Bank providing for the guaranty of the
obligations of any Borrower to such Issuing Bank under the related letter of
credit application or reimbursement agreement (or other similar document)
between such Issuing Bank and such Borrower (and any other Borrower, if
applicable) and the execution by CITBC as a co-applicant of a letter of credit
application or reimbursement agreement (or other similar agreement) with any
Borrower or Borrowers for delivery to an Issuing Bank with regard to a Letter of
Credit.
"Letter of Credit Obligations" means, at any time, the
aggregate amount available to be drawn under all outstanding Letters of Credit
in respect of which Letter of Credit Guaranties are then outstanding.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge, deposit arrangement, encumbrance, lien
(statutory or other), security interest or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
intended to assure payment of any Indebtedness or other obligation, including
any conditional sale or other title retention agreement, the interest of a
lessor under a Capital Lease, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction naming the owner of the asset to which such Lien relates as debtor.
"Loan" means any loan made by any Lender pursuant to this
Agreement.
"Loan Documents" means, collectively, this Agreement, the
Revolving Credit Notes (if any), the Collateral Documents and each certificate,
agreement or document executed by a Borrower and delivered to the Administrative
Agent or any Lender in connection with or pursuant to any of the foregoing and
any amendments, modifications, supplements, renewals, extensions, or
restatements thereof.
"Material Adverse Effect" means any event or condition which,
alone or when taken with other events or conditions occurring or existing
concurrently with such event or condition (i) has a material adverse effect on
the business, operations, condition (financial or otherwise), assets,
liabilities, prospects, or properties of the Borrowers taken as a whole; (ii)
has any material adverse effect on the validity or enforceability of the Loan
Documents; (iii) materially impairs the ability of the Borrowers taken as a
whole to pay and perform their Obligations; (iv) materially impairs the ability
of the Lenders to enforce their rights and remedies under the Loan Documents;
(v) has any material adverse effect on the Collateral pledged to the Collateral
Agent, the Liens of the Lenders in the Collateral or the priority of such Liens;
or (vi) is reasonably expected to have any material adverse effect on the Liens
of the Lenders in the Collateral or the priority of such Liens; provided,
however, that any event or condition referred to in Sections 9.1(e), (f), or (j)
applicable to Flint River arising as a result of its existing bond debt which
does not constitute a Default or Event of Default by virtue of any of such
Sections, shall not in and of itself constitute a Material Adverse Effect to the
extent such event affects Flint River.
"Material Event of Default" means the Events of Default
specified in the following clauses of Section 9.1: clause (b) (to the extent the
provisions thereof relate to the Borrowing Base or the Financial Statements),
clause (c) (provided, however, that a breach of clauses (b), (c), (e) and (f)
of Section 7.12 and Sections 8.12, 8.14 and 8.15 shall not be a Material Event
of Default), and clauses (a), (d), (e), (f), (g), (j), (l) and (n).
"Maximum Credit" means, at any time, (a) the lesser of (i) the
aggregate of the Revolving Credit Commitments in effect at such time and (ii)
the Borrowing Base at such time minus (b) the aggregate amount of any
Availability Reserve in effect at such time plus (c) the cash deposited in the
Cash Collateral Account.
"Metropolitan" means Metropolitan Hospital, L.P., a Virginia
limited partnership.
"Mortgagee's Title Insurance Policy" means with respect to any
Eligible Real Property (a) a mortgagee's title policy (or policies) or marked up
unconditional binder (or binders) for such insurance (or other evidence
acceptable to the Administrative Agent proving ownership thereof) ("Mortgagee's
Title Insurance Policy") dated a date reasonably satisfactory to the
Administrative Agent, and such policy shall (A) be in an amount not less than
$10,000,000 (B) be issued at ordinary rates, (C) insure that the Lien granted
pursuant to the Mortgage insured thereby creates a valid first Lien on such
parcel free and clear of all defects and encumbrances, except such as may be
approved by the Administrative Agent and Customary Permitted Liens, (D) name the
Collateral Agent for the benefit of the Secured Parties as the insured
thereunder, (E) be in a form of Texas Form T-Z for Eligible Real Property in
Texas and be in the form of ALTA Loan Policy - 1992 (or such local equivalent
thereof as is reasonably satisfactory to the Administrative Agent) for Eligible
Real Property in other jurisdiction, (F) contain a comprehensive lender's
endorsement (including, but not limited to, a revolving credit endorsement and a
floating rate endorsement) and (G) be issued by Chicago Title Insurance Company,
Fidelity National Title Insurance Company, First American Title Insurance
Company, Lawyers Title Insurance Corporation or any other title company
reasonably satisfactory to the Collateral Agent (including any such title
companies acting as co-insurers or reinsurers), (i) evidence satisfactory to it
that all premiums in respect of each such policy , all recording fees and stamp,
documentary, intangible or mortgage taxes, if any, in connection with the
Mortgage have been paid and (ii) a copy of all documents referred to, or listed
as exceptions to title, in such title policy (or policies).
"Mortgages" means the mortgages, deeds of trust or other real
estate security documents made or required herein to be made by the Borrowers to
or for the benefit of the Agents and the Lenders in respect of the Eligible Real
Property.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Borrower, or any ERISA Affiliate has
any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by any Borrower
after the Closing Date in cash or Cash Equivalents from any Asset Sale permitted
under Section 8.4.
"Net Income" means, for any Person for any period, the net
income (or loss) of such Person for such period, determined in conformity with
GAAP, and in all events (a) the net income of any subsidiary or Affiliate of
such Person shall not be considered and shall be excluded, (b) any net gain (but
not loss) resulting from an Asset Sale by such Person other than in the ordinary
course of business shall be excluded, and (c) extraordinary gains and losses and
any one-time increase or decrease to net income which is required to be recorded
because of the adoption of new accounting policies, practices or standards
required by GAAP shall be excluded.
"Non-Funding Lender" has the meaning specified in Section
2.2(d).
"Non-U.S. Lender" means each Lender or Administrative Agent
that is not a United States person as defined in Section 7701(a)(30) of the
Code.
"Notice of Borrowing" has the meaning specified in Section
2.2(a).
"Notice of Conversion or Continuation" has the meaning
specified in Section 2.9.
"Obligations" means the Loans, the Letter of Credit
Obligations and all other advances, debts, liabilities, obligations, covenants
and duties owing by the Borrowers to the Administrative Agent, the Collateral
Agent, any Lender or any Indemnitee, of every type and description, present or
future, arising under this Agreement or under any other Loan Document, by reason
of an extension of credit, opening or amendment of a Letter of Credit Guaranty
or payment of any draft drawn thereunder, loan, indemnification, foreign
exchange transaction, Hedging Contract or otherwise, 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 and whether
or not evidenced by any note, guaranty or other instrument or for the payment of
money. The term "Obligations" includes all letter of credit guaranties, cash
management and other fees and all interest, charges, expenses, fees, attorneys'
fees and disbursements and other sums chargeable to the Borrowers under this
Agreement or any other Loan Document and all obligations of the Borrowers to
cash collateralize Letter of Credit Obligations.
"Paracelsus" means Paracelsus Healthcare Corporation.
"Paracelsus Virginia" means Paracelsus of Virginia, Inc., a
Virginia corporation and general partner of Metropolitan.
"Paribas" means Paribas.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, estate, trust, limited
liability company, unincorporated association, joint venture or other entity, or
a Governmental Authority.
"Prepayment Premium" means (a) on any date that is on or
before six months after the Closing Date, an amount equal to 1.5% of the lesser
of the amount of the Revolving Credit Commitments then being terminated or
$50,000,000 and (b) on any date after the date that is six months after the
Closing Date but on or before the first anniversary of the Closing Date, an
amount equal to 1% of the lesser of the amount of the Revolving Credit
Commitments then being terminated or $50,000,000.
"Protective Advances" means all expenses, disbursements and
advances incurred by the Administrative Agent pursuant to the Loan Documents
after the occurrence and during the continuance of an Event of Default which the
Administrative Agent reasonably deems necessary or desirable to preserve or
protect the Collateral or any portion thereof or to enhance the likelihood or
maximize the amount of repayment of the Obligations.
"Ratable Portion" or "ratably" means, with respect to any
Lender, the percentage obtained by dividing (a) the Revolving Credit Commitment
of such Lender by (b) the aggregate Revolving Credit Commitments of all Lenders
(or, at any time after the Revolving Credit Termination Date, the percentage
obtained by dividing the aggregate outstanding principal balance of the
Revolving Credit Outstandings owing to such Lender by the aggregate outstanding
principal balance of the Revolving Credit Outstandings owing to all Lenders).
"Register" has the meaning specified in Section 11.2(c).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrowers to CITBC with respect to payments made
under Letter of Credit Guaranties not provided by Sections 9.3 and 2.7(c).
"Release" means, with respect to any Person, any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration, in each case, of any Contaminant into the
indoor or outdoor environment or into or out of any property owned by such
Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
"Remaining Borrowers" has the meaning specified in Section
2.17.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant 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.
"Required Amount" means with respect to the applicable
Borrower, an amount equal to all Loans outstanding and the outstanding amount of
all other Obligations of all the Borrowers on the applicable date multiplied by
such Borrower's pro rata share of the Borrowing Base; a Borrower's pro rata
share of the Borrowing Base will be calculated by dividing (i) the Borrowing
Base less the Availability Reserves attributable to the Eligible Receivables of
such Borrower by (ii) the aggregate Borrowing Base less the Availability
Reserves attributable to the Eligible Receivables of all Borrowers.
"Requirement of Law" means, with respect to any Person, the
common law and all federal, state, local and foreign laws, rules and
regulations, orders, judgments, decrees and other determinations of any
Governmental Authority or arbitrator binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Requisite Lenders" means, collectively, Lenders having more
than fifty-one percent (51%) of the aggregate outstanding amount of the
Revolving Credit Commitments or, after the Revolving Credit Termination Date,
fifty-one percent (51%) of the aggregate Revolving Credit Outstandings.
"Responsible Officer" means, with respect to any Person, the
chief executive officer of such Person, the Treasurer of such Person, the chief
financial officer of such Person or the controller of Paracelsus.
"Restricted Payment" means any of the following, except those
made solely in Stock or Stock Equivalents: (a) any dividend or other
distribution, direct or indirect, on account of any Stock or Stock Equivalents
of any Borrower now or hereafter outstanding, except a dividend or distribution
payable solely to any Borrower or any partner of Metropolitan, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
any Borrower now or hereafter outstanding other than one payable solely to any
Borrower, and (c) any payment or prepayment of principal, premium (if any),
interest, fees (including fees to obtain any waiver or consent in connection
with any Security) or other charges on, or redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Indebtedness of
any Borrower to Paracelsus or any Affiliate of any Borrower other than any
Borrower, other than any required redemptions, retirement, purchases or other
payments in respect of Indebtedness owing to any Affiliate.
"Revolving Credit Borrowing" means Revolving Loans made on the
same day by the Lenders ratably according to their respective Revolving Credit
Commitments.
"Revolving Credit Commitment" means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and acquire
interests in other Revolving Credit Outstandings in the aggregate principal
amount outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule III under the caption "Revolving Credit Commitment," as amended
to reflect each Assignment and Acceptance executed by such Lender and as such
amount may be changed pursuant to this Agreement. The initial aggregate amount
of all the Revolving Credit Commitments is $62,000,000.
"Revolving Credit Note" means a joint and several promissory
note of the Borrowers , subject to Section 2.1(b), payable to the order of any
Lender in a principal amount equal to the amount of such Lender's Revolving
Credit Commitment evidencing the aggregate Indebtedness of the Borrowers to such
Lender resulting from the Revolving Loans owing to such Lender.
"Revolving Credit Outstandings" means, at any particular time,
the sum of (a) the principal amount of the Revolving Loans outstanding at such
time plus (b) the Letter of Credit Obligations outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of
(a) the Scheduled Termination Date, (b) the date of termination of the Revolving
Credit Commitments pursuant to Section 2.4 and (c) the date on which the
Obligations become due and payable pursuant to Section 9.2.
"Revolving Loan" has the meaning specified in Section 2.1.
"Scheduled Termination Date" means the third anniversary of
the date hereof.
"Secured Parties" means the Lenders and the Agents.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Security Agreement" means an agreement, in substantially the
form of Exhibit D, executed by the Borrowers.
"Solvent" means, with respect to any Person, that the value of
the assets of such Person (both at fair value and present fair saleable value)
is, on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such Person as of such
date and that, as of such date, such Person is able to pay all liabilities of
such Person as such liabilities mature and does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Stock" means shares of capital stock (whether denominated as
common stock or preferred stock), beneficial, partnership or membership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation, partnership, limited liability company or equivalent
entity, whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Tax Return" has the meaning specified in Section 4.7(a).
"Taxes" has the meaning specified in Section 2.14(a).
"Title IV Plan" means a pension plan, other than a
Multiemployer Plan, which is covered by Title IV of ERISA to which the Borrower
or any ERISA Affiliate has any obligation or liability (contingent or
otherwise).
"UCC" means the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York or, to the extent it may be
required to apply to any item or items of Collateral, the Uniform Commercial
Code as in effect in any other applicable jurisdiction.
"Unfunded Pension Liability" means, with respect to any
Borrower at any time, the sum of (a) the amount, if any, by which the present
value of all accrued benefits under each Title IV Plan (other than any Title IV
Plan subject to Section 4063 of ERISA) exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, as determined as of the most recent valuation date for such Title
IV Plan using the actuarial assumptions in effect under such Title IV Plan, and
(b) the aggregate amount of withdrawal liability that could be assessed under
Section 4063 with respect to each Title IV Plan subject to such Section,
separately calculated for each such Title IV Plan as of its most recent
valuation date and (c) for a period of five years following a transaction
reasonably likely to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by any Borrower, or any ERISA
Affiliate as a result of such transaction.
"Unused Commitment Fee" has the meaning specified in Section
2.10(a).
"Voting Stock" means Stock of any Person having ordinary power
to vote in the election of members of the board of directors, managers, trustees
or other controlling Persons, of such Person (irrespective of whether, at the
time, Stock of any other class or classes of such entity shall have or might
have voting power by reason of the happening of any contingency).
"Weekly Borrowing Base Certificate" has the meaning specified
in Section 6.1(g).
"Withdrawal Liability" means, with respect to any Borrower at
any time, the aggregate liability incurred (whether or not assessed) with
respect to all Multiemployer Plans pursuant to Section 4201 of ERISA or for
increases in contributions required to be made pursuant to Section 4243 of
ERISA.
Section 1.2. Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding" and the word "through" means "to and including."
Section 1.3. Accounting Terms and Principles.
(a) Except as set forth below, all accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the preparation of the
most recent Financial Statements referred to in Section 6.1 is hereafter
required or permitted by the rules, regulations, pronouncements and opinions of
the Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or any successors thereto) and such change is adopted by the
Borrowers without objection from its independent public accountants and results
in a change in any of the calculations required by Article V had such accounting
change not occurred, the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such change with the
desired result that the criteria for evaluating compliance with such covenants
by the Borrowers shall be the same after such change as if such change had not
been made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with any covenant contained in Article V or
Article VIII shall be given effect until such provisions are amended to reflect
such changes in GAAP.
Section 1.4. Certain Terms.
(a) The words "herein," "hereof" and "hereunder" and similar words refer to this
Agreement as a whole, and not to any particular Article, Section, subsection or
clause in this Agreement.
(b) References in this Agreement to an Exhibit, Schedule, Article, Section,
subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in this Agreement.
(c) Each agreement defined in this Article I shall include all appendices,
exhibits and schedules thereto. If the prior written consent of the Requisite
Lenders is required hereunder for an amendment, restatement, supplement or other
modification to any such agreement and such consent is obtained, references in
this Agreement to such agreement shall be to such agreement as so amended,
restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such statute as
amended or modified and in effect at the time any such reference is operative.
(e) The term "including" when used in any Loan Document means "including without
limitation" except when used in the computation of time periods.
(f) The terms "Lender," "Administrative Agent" and "Collateral Agent"
include their respective successors.
(g) Reference in any Loan Document to the "knowledge" or
"notice" of any Borrower means the actual knowledge or
notice of a Responsible Officer.
Article II
THE FACILITY
Section 2.1. The Revolving Credit Commitments.
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(a) On the terms and subject to the conditions contained in this Agreement, each
Lender severally agrees to make loans (each a "Revolving Loan") to the Borrowers
from time to time on any Business Day during the period from the Closing Date
until the Revolving Credit Termination Date in an aggregate amount not to exceed
at any time outstanding for all such loans by such Lender such Lender's
Revolving Credit Commitment; provided, however, that at no time shall any Lender
be obligated to make a Revolving Loan (i) in excess of such Lender's Ratable
Portion of the Available Credit and (ii) to the extent that the aggregate
Revolving Credit Outstandings, after giving effect to such Revolving Loan, would
exceed the Maximum Credit in effect at such time. Within the limits of each
Lender's Revolving Credit Commitment, amounts of Revolving Loans repaid may be
reborrowed under this Section 2.1.
(b) Each of the Borrowers, jointly and severally, will be obligated in respect
of the aggregate principal amount of all Loans, and the aggregate amount of
credit available hereunder to any of the Borrowers at any time shall be
determined taking into account all Loans outstanding and all Letter of Credit
Obligations, regardless of which of the Borrowers may have received the proceeds
of any of the Borrowings or the benefit of any of the Letters of Credit;
provided, however, that notwithstanding anything to the contrary herein or in
any other Loan Document, Metropolitan's liability with respect to the Loans and
Letter of Credit Obligations and all other Obligations under the Loan Documents
shall be limited to the greater of (a) the Loans and outstanding amounts of
Letters of Credit borrowed by it or directly used for its benefit and (b)
$16,000,000; provided further, that Metropolitan shall not be liable for any
Letter of Credit Obligations to the extent such obligations are cash
collateralized pursuant to Section 9.3.
Section 2.2. Borrowing Procedures.
(a) Each Revolving Credit Borrowing shall be made on notice given by the
Borrowers to the Administrative Agent (i) not later than 11:00 a.m. (New York
City time) on the same day, in the case of a Borrowing of Base Rate Loans and
(ii) not later than 1:00 p.m. (New York City time) three Business Days, in the
case of a Borrowing of Eurodollar Rate Loans, prior to the date of the proposed
Revolving Credit Borrowing. Each such notice shall be in substantially the form
of Exhibit E (a "Notice of Borrowing"), specifying (A) the date of such proposed
Revolving Credit Borrowing, (B) the aggregate amount of such proposed Revolving
Credit Borrowing, (C) whether any portion of the proposed Revolving Credit
Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (D) the initial
Interest Period or Periods for any such Eurodollar Rate Loans, and (E) the
Available Credit (after giving effect to the proposed Revolving Credit
Borrowing). The Revolving Loans shall be made as Base Rate Loans unless (subject
to Section 2.12) the Notice of Borrowing specifies that all or a portion thereof
shall be Eurodollar Rate Loans. Each Revolving Credit Borrowing shall be in an
aggregate amount of not less than $500,000 or an integral multiple of $100,000
in excess thereof.
(b) The Administrative Agent shall give to each Lender prompt notice of the
Administrative Agent's receipt of a Notice of Borrowing and, if Eurodollar Rate
Loans are properly requested in such Notice of Borrowing, the applicable
interest rate determined pursuant to Section 2.12(a). Each Lender shall, before
12:00 noon (New York City time) on the date of the proposed Borrowing, make
available to the Administrative Agent at The Chase Manhattan Bank, in
immediately available funds, such Lender's Ratable Portion of such proposed
Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Sections 3.1 (for the
initial Loans) and 3.2, the Administrative Agent will make such funds available
to the Borrowers in the manner specified in the Notice of Borrowing and will
endeavour to make such funds available to the Borrowers by 3:00 p.m. (New York
City time) on the date of the proposed Borrowing; provided, however, that in the
case of Base Rate Loans on the same day, the Administrative Agent shall
endeavour to make such funds available to the Borrowers by 5:00 p.m. (New York
City time) on the date of the proposed Borrowing.
(c) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any proposed Borrowing that such Lender will not make
available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender and
the Borrowers jointly and severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrowers until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrowers, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate for the first Business Day and thereafter at the interest rate applicable
at the time to the Loans comprising such Borrowing. If such Lender shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement. If the Borrowers shall repay to the Administrative Agent such
corresponding amount, such payment shall not relieve such Lender of any
obligation it may have hereunder to the Borrowers.
(d) The failure of any Lender to make the Loan or any payment required by it on
the date specified (a "Non-Funding Lender"), including any payment in respect of
its participation in Letter of Credit Obligations, shall not relieve any other
Lender of its obligations to make such Loan or payment on such date but no such
other Lender shall be responsible for the failure of any Non-Funding Lender to
make a Loan or payment required under this Agreement.
Section 2.3. Letter of Credit Guaranties.
(a) On the terms and subject to the conditions contained in this Agreement,
CITBC agrees to issue one or more Letter of Credit Guaranties at the request of
PHC/CHC Holdings, Inc. for the benefit of the Borrowers, from time to time
during the period commencing on the Closing Date and ending on the Scheduled
Termination Date; provided, however, that no Letter of Credit Guaranty shall be
issued if:
(i) after giving effect to the issuance of such Letter of Credit Guaranty, the
aggregate Revolving Credit Outstandings would exceed the Maximum Credit at such
time;
(ii) after giving effect to the issuance of such Letter of Credit Guaranty,
the Letter of Credit Obligations at such time exceeds
$15,000,000; or
(iii) any fees due in connection with a requested issuance have not been
paid.
(b) No Letter of Credit Guaranty shall be issued in respect of a Letter of
Credit that expires after the earlier of (x) twelve (12) months from the date of
issuance of such Letter of Credit or (y) sixty (60) days after the Scheduled
Termination Date; provided, however, that, the Borrowers shall (A) 30 days
before the Scheduled Termination Date, if a requested Letter of Credit Guaranty
relates to a Letter of Credit with an expiry date that actually falls after the
Scheduled Termination Date, or (B) on or before the Revolving Credit Termination
Date, if a requested Letter of Credit Guaranty relates to a Letter of Credit
with an expiry date that actually falls after the Revolving Credit Termination
Date, (i) cause the Issuing Banks in respect of all such Letters of Credit to
confirm in writing to CITBC that such Letters of Credit have been returned to
such Issuing Banks undrawn and marked "cancelled" or (ii) if the Borrowers are
unable to do so in whole or in part, deposit cash in the Cash Collateral Account
to the extent necessary so that the Cash Collateral Account holds an aggregate
amount at least equal to the then undrawn amount of all such outstanding Letters
of Credit as additional collateral security for the Borrowers' obligations in
connection with the Letter of Credit Guaranties.
(c) If PHC/CHC Holdings, Inc. wishes CITBC to issue a Letter of Credit Guaranty
on its behalf for the benefit of the Borrowers, PHC/CHC Holdings Inc. shall give
CITBC notice to that effect, specifying the proposed issuance date (which shall
be a Business Day) for such Letter of Credit Guaranty and the related Letter of
Credit, the stated amount of the Letter of Credit Guaranty so requested, the
proposed expiration date of such related Letter of Credit (which shall be the
same as the expiration date of such Letter of Credit Guaranty) and the name and
address of the Issuing Bank and of the beneficiary of such related Letter of
Credit (as well as such further information as CITBC may request). Such notice,
to be effective, must be received by CITBC not later than 11:00 A.M. (New York
City time) on the second Business Day prior to the requested issuance of such
Letter of Credit Guaranty.
(d) Subject to the satisfaction of the conditions set forth in this Section 2.3,
CITBC shall, on the requested date, issue a Letter of Credit Guaranty on behalf
of PHC/CHC Holdings, Inc. for the benefit of the Borrowers in accordance with
its usual and customary business practices. CITBC shall not issue any Letter of
Credit Guaranty in the period commencing on the first Business Day after it
receives written notice from any Lender that one or more of the conditions
precedent contained in Section 3.2 shall not on such date be satisfied, and
ending when such conditions are satisfied. CITBC shall not otherwise be required
to determine that, or take notice whether, the conditions precedent set forth in
Section 3.2 have been satisfied in connection with the issuance of any Letter of
Credit Guaranty.
(e) CITBC shall:
(i) give the Administrative Agent written notice (or telephonic notice confirmed
promptly thereafter in writing, which may be by telecopier) of the issuance of a
Letter of Credit Guaranty issued by it, of all payments under a Letter of Credit
Guaranty issued by it and request the reimbursement by the Administrative Agent
in accordance with Section 2.7(c) of any Reimbursement Obligation when due
(which notice the Administrative Agent shall promptly transmit by telecopy or
similar transmission to each Lender); and
(ii) upon the request of any Lender, furnish to such Lender copies of any
documentation as may reasonably be requested by such Lender.
(f) Immediately upon the issuance by CITBC of a Letter of Credit Guaranty in
accordance with the terms and conditions of this Agreement, CITBC shall be
deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from
CITBC, without recourse or warranty, an undivided interest and participation, to
the extent of such Lender's Ratable Portion, in such Letter of Credit Guaranty
and the obligations of the Borrowers with respect thereto (including all Letter
of Credit Obligations with respect thereto) and any security therefor.
(g) To the extent funds in the Cash Collateral Account are for any reason
insufficient to cover such obligation in accordance with Section 2.7(c), the
Borrowers agree to reimburse CITBC for any payment CITBC makes under any Letter
of Credit Guaranty immediately upon such payment, irrespective of any claim,
set-off, defense or other right which the Borrowers may have at any time against
CITBC or any other Person; provided, however, that the failure to reimburse
CITBC under this subsection (g) shall not constitute a Default or Event of
Default. In the event that CITBC makes any payment under any Letter of Credit
Guaranty and the Borrowers shall not have repaid such amount to CITBC pursuant
to this clause (g) or such payment is rescinded or set aside for any reason, the
Borrowers shall be deemed to request a Revolving Credit Loan in such amount and
CITBC shall promptly notify the Administrative Agent, which shall promptly
notify each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of CITBC the
amount of such Lender's Ratable Portion of such Reimbursement Obligation in
Dollars and in immediately available funds. If the Administrative Agent so
notifies such Lender prior to 11:00 A.M. (New York City time) on any Business
Day, such Lender shall make available to the Administrative Agent for the
account of CITBC its Ratable Portion of the amount of such Reimbursement
Obligation on such Business Day in immediately available funds. Upon such
payment by a Lender, such Lender shall, whether or not there shall be the
continuance of a Default or Event of Default and notwithstanding whether or not
the conditions precedent set forth in Section 3.2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive) be deemed to
have made a Revolving Loan to the Borrowers in the principal amount of such
Reimbursement Obligation. Whenever the amount of such Reimbursement Obligation
received from any Borrower as to which the Administrative Agent has received for
the account of CITBC any payment from a Lender pursuant to this clause (g),
CITBC shall pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Lender, in immediately available funds, an amount equal to
such Lender's Ratable Portion of the amount of such Reimbursement Obligation
adjusted, if necessary, to reflect the respective amounts the Lenders have paid
in respect of such Letter of Credit Guaranty.
(h) The obligation of the Borrowers to pay the Loans that arise as a result of
payments under Letter of Credit Guaranties shall be joint and several and all
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, including the occurrence of any Default or Event of Default, and
irrespective of:
(i) any lack of validity or enforceability of any related Letter of Credit
or any Loan Document, or any term or provision
therein;
(ii) any amendment or waiver of or any consent to departure from all or any
of the provisions of any related Letter of Credit or
any Loan Document;
(iii) the existence of any claim, set-off, defense or other right that any
Borrower or any other Person may at any time have against the beneficiary under
any Letter of Credit, the Issuing Bank, any Agent or any Lender or any other
Person, whether in connection with this Agreement, any other Loan Document or
any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit Guaranty or
related Letter of Credit proving to be forged, fraudulent, invalid or
insufficient (other than insufficiency on the face of such draft or other
document to the extent CITBC is excused thereby from paying under its Letter of
Credit Guaranty) in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against presentation of
a draft or other document that does not comply with the terms of such Letter of
Credit, provided, however, that such payment shall not have constituted gross
negligence or willful misconduct on the part of the Issuing Bank to the extent
CITBC is excused thereby from paying under its Letter of Credit Guaranty; and
(vi) any other act or omission to act or delay of any kind of the Issuing Bank,
the Lenders, the Agents 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, constitute a legal or equitable discharge of the
Borrowers' obligations hereunder; provided, however, that such event or
circumstances shall not have been the result of gross negligence or willful
misconduct of the Issuing Bank to the extent CITBC is excused thereby from
paying under its Letter of Credit Guaranty.
Any action taken or omitted to be taken by CITBC under or in connection with any
Letter of Credit Guaranty, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not put CITBC under any resulting
liability to any Borrower, any Agent or any Lender. In determining whether
documents presented in connection with a Letter of Credit Guaranty comply with
the terms thereof, CITBC may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit Guaranty CITBC may rely exclusively on the documents presented
to it under such Letter of Credit Guaranty as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit Guaranty, whether or not the amount due under the related
Letter of Credit equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit Guaranty proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit Guaranty proves to be forged or invalid or any statement
therein proves to be inaccurate or untrue in any respect whatsoever and any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit Guaranty with the terms thereof shall not, in each case, be
deemed to constitute willful misconduct or gross negligence of CITBC.
(i) If and to the extent any Lender shall not have made its Ratable Portion of
the amount of the payment required by clause (g) above available to the
Administrative Agent for the account of CITBC, such Lender agrees to pay to the
Administrative Agent for the account of CITBC forthwith on demand such amount
together with interest thereon, for the first Business Day after payment was
first due at the Federal Funds Rate, and thereafter until such amount is repaid
to the Administrative Agent for the account of CITBC, at the rate per annum
applicable to Base Rate Loans under the Facility. The failure of any Lender to
make available to the Administrative Agent for the account of CITBC its Ratable
Portion of any such payment shall not relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of CITBC
its Ratable Portion of any payment on the date such payment is to be made, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of CITBC such other
Lender's Ratable Portion of any such payment.
(j) Schedule 2.3 contains a schedule of certain letters of credit issued prior
to the Closing Date by Paribas for the account of the Borrowers. Subject to
satisfaction of the conditions in Sections 3.1 and 3.2 on the Closing Date, such
letters of credit, to the extent outstanding, will be guaranteed by a Letter of
Credit Guaranty issued by CITBC hereunder and such Letter of Credit Guaranty
shall be a Letter of Credit Guaranty hereunder for all purposes.
(k) If the Chase Manhattan Bank, as an Issuing Bank, requires PHC/CHC Holdings,
Inc. to deliver collateral to the Chase Manhattan Bank to secure any obligations
to it under any Letter of Credit issued by it, CITBC agrees, upon written notice
from Borrowers of such request from the Chase Manhattan Bank, to use its
reasonable best efforts to assist the Borrowers in finding another bank to act
as Issuing Bank hereunder and to turn over funds held in the Cash Collateral
Account if CITBC is released from any and all obligations it may have under any
Letter of Credit Guaranty or any Letter of Credit issued thereunder and all
Letter of Credit Obligations have been paid in full.
(l) If CITBC receives a notice by the Issuing Bank under the Letter of Credit
application filed with the Issuing Bank, CITBC will as soon as practicable send
such notice by telecopy or hand delivery of same to the Borrowers.
Section 2.4. Termination and Reduction of the Revolving Credit Commitments.
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(a) The Borrowers may, upon at least five Business Days' prior notice to the
Administrative Agent, and payment of (i) all principal, interest and fees then
due and payable under this Agreement, (ii) any amounts owing pursuant to Section
2.12 (e), and (iii) the Prepayment Premium, if any, terminate in whole the
respective Revolving Credit Commitments of the Lenders.
(b) The Borrowers may, upon at least five Business Days prior
notice to the Administrative Agent, and payment of (i) all principal, interest
and fees then due and payable under this Agreement, and (ii) any amount owing
pursuant to Section 2.12(e), reduce in part ratably the unused portions of the
respective Revolving Credit Commitments of the Lenders; provided, however, that
each partial reduction shall be in the aggregate amount of not less than
$2,500,000 or an integral multiple of $2,500,000 in excess thereof.
Section 2.5. Repayment of Loans. The Borrowers jointly and severally agree
to repay the entire unpaid principal amount of the Revolving Loans on the
Revolving Credit Termination Date.
Section 2.6. Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing Indebtedness of the Borrowers to such Lender resulting
from each Loan of such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(b) The Administrative Agent shall maintain accounts in accordance with its
usual practice in which it will record (i) the amount of each Loan made and, if
a Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable by the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrowers and each Lender's share thereof, if applicable.
(c) The entries made in the accounts maintained pursuant to clauses (a) and (b)
of this Section 2.6 shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations recorded therein;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrowers to repay the Loans in accordance with their terms.
(d) Notwithstanding any other provision of the Agreement, in the event that any
Lender requests that the Borrowers execute and deliver a promissory note or
notes payable to such Lender in order to evidence the Indebtedness owing to such
Lender by the Borrowers hereunder, the Borrowers will promptly execute and
deliver a Revolving Credit Note or Revolving Credit Notes to such Lender
evidencing any Revolving Credit Loans of such Lender, substantially in the form
of Exhibit F, and the interests evidenced by such note or notes shall at all
times (including after assignment of all or part of such interests) be evidenced
by one or more Revolving Credit Notes payable to the order of the payee named
therein.
Section 2.7. Mandatory Prepayments.
(a) Upon any sale of any hospital facility owned or operated by any Borrower,
the Borrowers shall immediately prepay the Loans in an amount equal to the
Required Amount with respect to such Borrower.
(b) If at any time, the aggregate principal amount of Revolving Credit
Outstandings exceed the Maximum Credit at such time, the Borrower shall
forthwith prepay the Revolving Loans then outstanding in an amount equal to such
excess. If any such excess remains after repayment in full of the aggregate
outstanding Revolving Loans, the Borrowers shall provide cash collateral for the
Letter of Credit Obligations in the manner set forth in Section 9.3 to the
extent required to eliminate such excess.
(c) The Administrative Agent shall, on behalf of the relevant Borrowers, make
funds held in the Cash Collateral Account available for any Reimbursement
Obligation then due to CITBC in respect of any Letter of Credit Guaranty.
Section 2.8. Interest.
(a) Rate of Interest. All Loans and the outstanding amount of all other
Obligations shall bear interest, in the case of Loans, on the unpaid principal
amount thereof from the date such Loans are made and, in the case of such other
Obligations, from the date such other Obligations are due and payable until, in
all cases, paid in full, except as otherwise provided in Section 2.8(c), as
follows:
(i) if a Base Rate Loan or such other Obligation, at a rate per annum equal to
the sum of (A) the Base Rate as in effect from time to time, plus (B) the
Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the
Eurodollar Rate determined for the applicable Interest Period, plus (B) the
Applicable Margin in effect from time to time during such Eurodollar Interest
Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan shall be
payable in arrears (A) on the last day of each calendar month, commencing on the
first such day following the making of such Base Rate Loan, and (B) if not
previously paid in full, at maturity (whether by acceleration or otherwise) of
such Base Rate Loan; (ii) interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on the last day of each Interest Period applicable to
such Loan, (B) upon the payment or prepayment thereof in full or in part, and
(C) to the extent not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Eurodollar Rate Loan; and (iii) interest
accrued on the amount of all other Obligations shall be payable on demand from
and after the time such Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest specified in Section
2.8(a) or elsewhere herein, effective immediately upon the occurrence of an
Event of Default, and for as long thereafter as such Event of Default shall be
continuing, the principal balance of all Loans and the amount of all other
Obligations shall bear interest at a rate which is two percent per annum in
excess of the rate of interest then applicable to such Obligations.
Section 2.9. Conversion/Continuation Option.
(a) The Borrowers may elect (i) at any time to convert Base Rate Loans or any
portion thereof to Eurodollar Rate Loans, or (ii) at the end of any applicable
Interest Period, to convert Eurodollar Rate Loans or any portion thereof into
Base Rate Loans or to continue such Eurodollar Rate Loans or any portion thereof
for an additional Interest Period; provided, however, that the aggregate amount
of the Eurodollar Loans for each Interest Period must be in the amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof. Each
conversion or continuation shall be allocated among the Loans of each Lender in
accordance with its Ratable Portion. Each such election shall be in
substantially the form of Exhibit G hereto (a "Notice of Conversion or
Continuation") and shall be made by giving the Administrative Agent at least
three Business Days' prior written notice specifying (A) the amount and type of
Loan being converted or continued, (B) in the case of a conversion to or a
continuation of Eurodollar Rate Loans, the applicable Interest Period, and (C)
in the case of a conversion, the date of conversion (which date shall be a
Business Day and, if a conversion from Eurodollar Rate Loans, shall also be the
last day of the applicable Interest Period).
(b) The Administrative Agent shall promptly notify each Lender of its receipt of
a Notice of Conversion or Continuation and of the options selected therein.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans to other Eurodollar Rate Loans upon the expiration of any
applicable Interest Period, shall be permitted at any time at which (i) a
Default or an Event of Default shall have occurred and be continuing or (ii) the
continuation of, or conversion into, would violate any of the provisions of
Section 2.12. If, within the time period required under the terms of this
Section 2.9, the Administrative Agent does not receive a Notice of Conversion or
Continuation from the Borrowers containing a permitted election to continue any
Eurodollar Rate Loans for an additional Interest Period or to convert any such
Loans, then, upon the expiration of the applicable Interest Period, such Loans
will be automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
Section 2.10. Fees.
(a) Unused Commitment Fee. The Borrowers agree jointly and severally to pay to
each Lender a commitment fee on the daily average amount by which the Revolving
Credit Commitment of such Lender exceeds such Lender's Ratable Portion of the
Revolving Credit Outstandings (the "Unused Commitment Fee") from the date hereof
until the Revolving Credit Termination Date at a rate equal to .375% per annum,
payable in arrears (i) on the last day of each calendar month, commencing on the
first such day following the date hereof and (ii) on the Revolving Credit
Termination Date.
(b) Minimum Revolving Credit Outstanding Fee. The Borrowers agree jointly and
severally to pay to the Administrative Agent for the ratable benefit of the
Lenders a fee equal to the amount by which the daily average of the Revolving
Credit Outstandings is below $32,000,000, multiplied by a rate equal to 1.25%
per annum, payable on the first anniversary of the Closing Date unless the
Revolving Credit Commitment has terminated and the Obligations are paid in full
prior thereto.
(c) Letter of Credit Fees. The Borrowers agree to pay the following
amounts with respect to Letters of Credit Guaranties issued
by CITBC:
(i) to the Administrative Agent for the account of CITBC, with respect to each
Letter of Credit Guaranty issued by CITBC, an issuance fee equal to 1.75% per
annum of the average daily maximum amount available from time to time to be
drawn under such Letter of Credit Guaranty, payable in arrears (A) on the last
day of each calendar month, commencing on the first such day following the
issuance of such Letter of Credit Guaranty and (B) on the Revolving Credit
Termination Date; and
(ii) CITBC, with respect to the issuance, amendment or transfer of each Letter
of Credit Guaranty and each payment made thereunder, documentary and processing
charges in accordance with CITBC's standard schedule for such charges in effect
at the time of issuance, amendment, transfer or payment, as the case may be.
(d) Closing Fees. The Borrowers jointly and severally agree to pay to the
Administrative Agent, for the ratable benefit of the Lenders, a facility fee
equal to .625% of the aggregate Revolving Credit Commitments in effect on the
Closing Date, payable on the Closing Date.
(e) Collateral Management Fee. The Borrowers jointly and severally agree to pay
to the Collateral Agent for the sole benefit of the Collateral Agent a
collateral management fee in the amount of $262,500, payable on the Closing Date
and each anniversary date of the Closing Date prior to the Revolving Credit
Termination Date. If any Obligations remain unpaid after the Revolving Credit
Termination Date, the Borrowers jointly and severally agree to pay to the
Collateral Agent for the sole benefit of the Collateral Agent a collateral
management fee in the amount of $21,875, payable on the first day immediately
after the Revolving Credit Termination Date and on the first day of each
calendar month thereafter until the date when all Obligations are paid in full.
Section 2.11. Payments and Computations.
(a) The Borrowers shall make each payment hereunder (including fees and
expenses) not later than 1:00 P.M. (New York City time) on the day when due, in
Dollars, to the Administrative Agent to its account at The Chase Manhattan Bank
at 4 New York Plaza, 15th Floor, New York, New York 10004, or to such other
address as determined by the Administrative Agent and as shall be notified to
the Borrowers in writing, in immediately available funds without set-off or
counterclaim. The Administrative Agent will promptly thereafter cause to be
distributed immediately available funds relating to the payment of principal or
interest or fees to the Lenders, in accordance with the application of payments
set forth in clauses (e) and (f) of this Section 2.11, as applicable, for the
account of their respective Applicable Lending Offices; provided, however, that
amounts payable pursuant to Sections 2.12(c), 2.12(e), 2.13 or 2.14 shall be
paid only to the affected Lender or Lenders. Payments received by the
Administrative Agent after 1:00 P.M. (New York City time) shall be deemed to be
received on the next Business Day.
(b) All computations of interest and of fees shall be made by the Administrative
Agent on the basis of a year of 360 days for Eurodollar Rate Loans and 365 days
for Base Rate Loans, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest and fees are payable. Each determination by the Administrative Agent of
an interest rate hereunder shall be presumed to be correct and binding for all
purposes, absent manifest error.
(c) Whenever any payment or other obligation hereunder shall be stated to be due
on a day other than a Business Day, such payment or performance shall be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in any computation of payment of interest or fees, as the case may
be; provided, however, that if such extension would cause payment of interest on
or principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day. The
Borrowers will have the right, as long as no Event of Default is continuing, to
direct the application of all repayments of Revolving Loans. Unless otherwise
directed by the Borrowers, all repayments of any Revolving Loans shall be
applied first to repay such Loans outstanding as Base Rate Loans and then to
repay such Loans outstanding as Eurodollar Rate Loans with those Eurodollar Rate
Loans which have earlier expiring Eurodollar Interest Periods being repaid prior
to those which have later expiring Eurodollar Interest Periods. The
Administrative Agent will use its best efforts to apply payments as directed by
the Borrowers but the Administrative Agent will not be required to correct, or
in any way be liable for, any misapplication of such payments directed by the
Borrowers absent willful misconduct on the Administrative Agent's part.
(d) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due hereunder that the
Borrowers will not make such payment in full, the Administrative Agent may
assume that the Borrowers have made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrowers
shall not have made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon at the Federal Funds
Rate, for the first Business Day, and, thereafter, at the rate applicable to
Base Rate Loans, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent.
(e) Subject to the provisions of clause (f) of this Section 2.11 (and except as
otherwise provided in Section 2.7), all payments and any other amounts received
by the Administrative Agent from or for the benefit of the Borrowers shall be
applied, first, to pay principal of and interest on any portion of the Loans
which the Administrative Agent may have advanced pursuant to the express
provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrowers; second, to pay all other Obligations then due and payable; and third,
as the Borrowers so designate. Payments in respect of Revolving Loans received
by the Administrative Agent shall be distributed to each Lender in accordance
with such Lender's Ratable Portion; and all payments of fees and all other
payments in respect of any other Obligation shall be allocated among such of the
Lenders and the Agents as are entitled thereto, and, if to the Lenders, in
proportion to their respective Ratable Portions, except for those amounts
payable pursuant to Sections 2.12(c), 2.12(e), 2.13 or 2.14 which shall be
payable ratably to the affected Lender(s).
(f) After the occurrence and during the continuance of an Event of Default, the
Borrowers hereby irrevocably waive the right to direct the application of any
and all payments in respect of the Obligations. During the continuance of a
Material Event of Default or upon acceleration of the Obligations pursuant to
Section 9.2, the Administrative Agent may, and shall upon the written direction
of the Requisite Lenders, apply all payments in respect of any Obligations, and
apply all funds on deposit in any Cash Collateral Account and all other proceeds
of Collateral, in the following order:
(i) first, to pay interest on and then principal of any portion of the Revolving
Loans which the Administrative Agent may have advanced on behalf of any Lender
for which the Administrative Agent has not then been reimbursed by such Lender
or the Borrowers;
(ii) second, to pay Obligations in respect of any expense reimbursements or
indemnities then due the Administrative Agent and the Collateral Agent;
(iii) third, to pay Obligations in respect of any expense reimbursements or
indemnities then due to the Lenders;
(iv) fourth, to pay Obligations in respect of any fees then due to the
Administrative Agent, the Collateral Agent and the Lenders;
(v) fifth, to pay interest then due and payable in respect of the Loans and
Reimbursement Obligations;
(vi) sixth, to pay principal payments then due and payable on the Loans and
Reimbursement Obligations and to provide cash collateral for outstanding Letter
of Credit Obligations in the manner described in Section 9.3, and thereafter to
prepay principal payments on the Loans; and
(vii) seventh, to the ratable payment of all other Obligations;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses first through seventh, the available funds being applied with
respect to any such Obligation (unless otherwise specified in such clause) shall
be allocated to the payment of such Obligations ratably, based on the proportion
of the Administrative Agent's, the Collateral Agent's and each Lender's interest
in the aggregate outstanding Obligations described in such clauses. The order of
priority set forth in clauses first through seventh of this Section 2.11(f) may
at any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrowers, or any other Person. The order of priority set forth in clauses first
through fourth of this Section 2.11(f) may be changed only with the prior
written consent of the Administrative Agent in addition to the Requisite
Lenders.
(g) At the option of the Administrative Agent, principal on the Reimbursement
Obligations to the extent not covered by the Cash Collateral Account in
accordance with Section 2.7(c), interest, fees, expenses and other sums then due
and payable in respect of the Revolving Loans and Protective Advances and not
paid by Borrower may be paid from the proceeds of Revolving Loans. The Borrowers
hereby authorize the Lenders to make Revolving Loans pursuant to Section 2.2(a),
from time to time in such Lender's discretion, which are in the amounts of any
and all principal then due and payable with respect to such Reimbursement
Obligations, interest, fees, expenses and other sums due and payable on
Revolving Loan and Protective Advances, and further authorizes the
Administrative Agent to give the Lenders notice of any Borrowing with respect to
such Revolving Loans and to distribute the proceeds of such Revolving Loans to
pay such amounts; provided, however, that in the event of any such Borrowing in
respect of Protective Advances, the Administrative Agent shall give the
Borrowers notice at least one Business Day prior to such Borrowing. The
Borrowers agree that all such Revolving Loans so made shall be deemed to have
been requested by them (irrespective of the satisfaction of the conditions in
Section 3.2, which conditions the Lenders irrevocably waive) and direct that all
proceeds thereof shall be used to pay such amounts.
Section 2.12. Special Provisions Governing Eurodollar Rate Loans.
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(a) Determination of Interest Rate. The Eurodollar Rate for each Interest Period
for Eurodollar Rate Loans shall be determined by the Administrative Agent
pursuant to the procedures set forth in the definition of "Eurodollar Rate." The
Administrative Agent's determination shall be presumed to be correct and binding
on the Borrowers, absent manifest error.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the event that (i)
the Administrative Agent determines that adequate and fair means do not exist
for ascertaining the Eurodollar Rate then being determined in accordance with
the definition therefor or (ii) the Requisite Lenders notify the Administrative
Agent that the Eurodollar Rate for any Interest Period will not adequately
reflect the cost to such Lenders of making or maintaining such Loans for such
Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and the Lenders, whereupon each Eurodollar Loan will automatically, on
the last day of the current Interest Period for such Loan, convert into a Base
Rate Loan and the obligations of the Lenders to make Eurodollar Rate Loans or to
convert Base Rate Loans into Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrowers that the Requisite Lenders have
determined that the circumstances causing such suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall determine that after the
date hereof the introduction of or any change in or in the interpretation of any
law, treaty or governmental rule, regulation or order (other than any change by
way of imposition or increase of reserve requirements included in determining
the Eurodollar Rate) or the compliance by such Lender with any guideline,
request or directive issued after the date hereof from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the actual cost to such Lender of agreeing to make or making,
funding or maintaining any Eurodollar Rate Loans, then the Borrowers shall from
time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrowers and the Administrative Agent by such Lender, shall be presumed
to be correct and binding for all purposes, absent manifest error.
(d) Illegality. Notwithstanding any other provision of this Agreement, if any
Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert after the date hereof that it is
unlawful, for any Lender or its Eurodollar Lending Office to make Eurodollar
Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on
notice thereof and demand therefor by such Lender to the Borrowers through the
Administrative Agent, (i) the obligation of such Lender to make or to continue
Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended, and each such Lender shall make a Base Rate Loan as part of
any requested Borrowing of Eurodollar Rate Loans and (ii) if the affected
Eurodollar Rate Loans are then outstanding, the Borrowers shall immediately
convert each such Loan into a Base Rate Loan. If at any time after a Lender
gives notice under this Section 2.12(d) such Lender determines that it may
lawfully make Eurodollar Rate Loans, such Lender shall promptly give notice of
that determination to the Borrowers and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other Lender.
Each Borrower's right to request, and such Lender's obligation, if any, to make
Eurodollar Rate Loans shall thereupon be restored.
(e) Breakage Costs. In addition to all amounts required to be paid by the
Borrowers pursuant to Section 2.8, the Borrower shall compensate each Lender,
upon demand, for all losses, expenses and liabilities (including any loss or
expense actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to the Borrowers but excluding any loss of the
Applicable Margin on the relevant Loans) which that Lender may actually sustain
(i) if for any reason a proposed Borrowing, conversion into or continuation of
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion or Continuation given by a Borrower or in a
telephonic request by it for borrowing or conversion or continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to Section 2.9, (ii) if for any reason any Eurodollar Rate Loan is
prepaid (including mandatorily pursuant to Section 2.7) on a date which is not
the last day of the applicable Interest Period, or (iii) as a consequence of a
required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of
any of the events indicated in Section 2.12(d) as a consequence of any failure
by the Borrowers to repay Eurodollar Rate Loans when required by the terms
hereof. The Lender making demand for such compensation shall deliver to the
Borrowers concurrently with such demand a written statement as to such losses,
expenses and liabilities, and this statement shall be presumed to be correct as
to the amount of compensation due to that Lender, absent manifest error.
(f) Any Lender claiming any additional amounts payable
pursuant to this Section 2.12 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which would be payable or may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
(g) If (a) the obligation of any Lender to make or continue or
convert Loans into Eurodollar Loans has been suspended pursuant to this Section
2.12, (b) any Lender has demanded compensation under this Section 2.12 or
Section 2.13 or (c) any Lender has notified the Borrowers that it is not capable
of receiving payments without deduction or withholding for taxes pursuant to
Section 2.14, the Borrowers may replace such Lender by designating in a notice
given to the Administrative Agent an Eligible Assignee to replace such Lender,
and the Administrative Agent may assist the Borrowers in finding an Eligible
Assignee willing to replace such Lender. If the Borrowers so designate an
Eligible Assignee, then the Administrative Agent shall give notice thereof to
the Lender to be replaced, and thereupon and concurrently with the payment in
full to such Lender of all amounts owed to such Lender, such Lender shall
promptly consummate an assignment, in accordance with Section 11.2 hereof, of
such Lender's Revolving Credit Commitment, Loans, Revolving Credit Notes,
participations in Letter of Credit Obligations and other rights and obligations
hereunder relative to the Revolving Credit Commitment of such Lender.
Section 2.13. Capital Adequacy. If at any time any Lender determines that (a)
the adoption of or any change in or in the interpretation of any law, treaty or
governmental rule, regulation or order after the date of this Agreement
regarding capital adequacy, (b) compliance with any such law, treaty, rule,
regulation, or order, or (c) compliance with any guideline or request or
directive from any central bank or other Governmental Authority issued after the
date of this Agreement (whether or not having the force of law) shall have the
effect of reducing the rate of return on such Lender's (or any corporation
controlling such Lender's) capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which such
Lender or such corporation could have achieved but for such adoption, change,
compliance or interpretation by an amount deemed by such Lender to be
significant, then, upon demand from time to time by such Lender (with a copy of
such demand to the Administrative Agent), the Borrowers shall pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to such amounts submitted to the
Borrowers and the Administrative Agent by such Lender shall be presumed to be
correct and binding for all purposes absent manifest error.
Section 2.14. Taxes.
(a) Any and all payments by the Borrowers under each Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding (i) in the case of each Lender and each Agent (A)
taxes measured by its net income, and franchise taxes imposed on it, by any
jurisdiction (or any political subdivision thereof) and (B) any United States
withholding taxes payable with respect to payments under the Loan Documents
under laws (including any statute, treaty or regulation) in effect on the
Closing Date (or, in the case of an Eligible Assignee, the date of the
Assignment and Acceptance) applicable to such Lender or Agent, as the case may
be, but not excluding any United States withholding payable as a result of any
change in such laws occurring after the Closing Date (or the date of such
Assignment and Acceptance) and (ii) in the case of each Lender, taxes measured
by its net income, and franchise taxes imposed on it, by any jurisdiction (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted from or in respect of any sum payable under any
Loan Document to any Lender or Agent (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.14) such
Lender or Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers shall
make such deductions, (iii) the Borrowers shall pay the full amount deducted to
the relevant taxing authority or other authority in accordance with applicable
law, and (iv) the Borrowers shall deliver to the Administrative Agent evidence
of such payment.
(b) In addition, the Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, which
arise from any payment made under any Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, any Loan Document
(collectively, "Other Taxes").
(c) Each Borrower will indemnify each Lender and Agent for the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.14) paid by such Lender or
Agent (as the case may be) and any liability (including for penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted excluding any of the
foregoing resulting from the gross negligence or willful misconduct of such
Lender or Agent. This indemnification shall be made within 30 days from the date
such Lender or Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes, the
Borrowers will furnish to the Administrative Agent, at its address referred to
in Section 11.8, the original or a certified copy of a receipt evidencing
payment thereof.
(e) Without prejudice to the survival of any other agreement of the Borrowers
hereunder, the agreements and obligations of the Borrowers contained in this
Section 2.14 shall survive the payment in full of the Obligations.
(f) Prior to the Closing Date in the case of each Non-U.S. Lender that is a
signatory hereto, and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender in the case of each other Non-U.S. Lender and from
time to time thereafter if requested by the Borrowers or the Administrative
Agent, each Non-U.S. Lender that is entitled at such time to an exemption from
United States withholding tax, or that is subject to such tax at a reduced rate
under an applicable tax treaty, shall provide the Administrative Agent and the
Borrowers with two completed copies of either IRS Form 4224 or Form 1001, or in
the case of a Non-U.S. Lender claiming exemption under Section 871(h) or 881(c)
of the Code with respect to "portfolio interest," a Form W-8 or Form W-9, or
other applicable form, certificate or document prescribed by the IRS certifying
as to such Non-U.S. Lender's entitlement 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 under the Loan Documents. Unless the Borrowers and the
Administrative 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 are
not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Borrowers or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate.
(g) Any Lender claiming any additional amounts payable pursuant to this Section
2.14 shall use its reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which would be payable or may
thereafter accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
Section 2.15. Certain Matters Relating to the Collateral. Without limiting the
agreements of each Borrower in Article V, subject to patient confidentiality
requirements each Borrower agrees to execute and deliver to the Collateral Agent
in such form and manner as the Collateral Agent may reasonably require, solely
for the Collateral Agent's convenience in maintaining records of Collateral,
such confirmatory schedules of Accounts as the Collateral Agent may reasonably
request, and such other appropriate reports designating, identifying and
describing the Accounts as the Collateral Agent may reasonably require. In
addition, upon the Collateral Agent's reasonable request, each Borrower shall,
subject to patient confidentiality requirements, provide the Collateral Agent
with copies of agreements with such Borrower's Account Debtors, and copies of
invoices to patients, proof of delivery of goods and services and such other
documentation and information relating to such Borrower's Accounts and other
Collateral as the Collateral Agent may reasonably require. Failure to provide
the Collateral Agent with any of the foregoing shall in no way affect, diminish,
modify or otherwise limit the security interests granted to the Collateral Agent
for the benefit of the Secured Parties.
Section 2.16. Matters Relating to Controlled Accounts. All collections from
Accounts shall be managed as provided in this section, except as otherwise
expressly provided in this Agreement.
(a) The Borrowers shall establish and maintain at their expense with the banks
identified in Schedule 2.16(a) the electronic funds transfer collection account
(the "EFT Collection Account") and the other accounts there identified (together
with the EFT Collection Account, the "Collection Accounts"), with the names
there indicated, and subject to such changes of depositories as the Agents may
approve in advance, such approval not to be unreasonably withheld. The Borrowers
shall ensure that all collections of Accounts are paid into the Collection
Accounts in accordance with the procedures and arrangements in place on the date
of this Agreement as previously described by the Borrowers to the Agents,
subject to such changes as may be approved in advance by the Agents. The
Borrowers shall also ensure that all funds paid into the Collection Accounts and
deemed collected (less an amount reasonably determined by the Borrowers in an
amount not to exceed $5,000 at any one time in each such Collection Account) are
first transferred by wire transfer or ACH initiated by the Borrowers' cash
manager (in accordance with the aforementioned procedures and arrangements), on
each Business Day, in next day funds into an intermediate concentration account
identified in Schedule 2.16(a) (the "Intermediate Concentration Account"), or in
the case of funds in the electronic funds transfer collection account, to
another Collection Account and then to the Intermediate Concentration Account,
and from the Intermediate Concentration Account, then transferred by wire
transfer initiated by the Borrowers' cash manager, on each Business Day, in
immediately available funds, into a depository account maintained by the
Collateral Agent at such commercial bank as may be selected by the Collateral
Agent in its sole discretion and communicated to the Borrowers (the
"Concentration Account"). The Borrowers acknowledge that they waive and shall
have no right to object to or seek to delay any such transfer or to cause any
other application of any such funds. The Borrowers shall accurately report in
all material respects to the Collateral Agent all amounts deposited in the
Concentration Account to ensure the proper transfer of funds as set forth above.
(b) The Borrowers shall cause (i) the banks at which the Collection Accounts,
other than the EFT Collection Accounts, and the Intermediate Concentration
Account are maintained to enter into agreements substantially in the form of
Exhibit H-1 hereto or otherwise in form and substance reasonably satisfactory to
the Agents (ii) the banks at which the EFT Collection Accounts are maintained to
enter into agreements substantially in the Form of Exhibit H-2 hereto or
otherwise in form and substance reasonably satisfactory to the Agents and
consistent with the Requirements of Law (collectively, the "Collection Account
Agreements"), providing for daily transfers by the Borrowers' cash manager in
accordance with the procedures identified in Section 2.16(a), acknowledging that
the items received or deposited in the Collection Accounts and the Intermediate
Concentration Account maintained with them are subject to the Lien granted in
favor of the Collateral Agent for the benefit of the Secured Parties, that such
bank has no Lien upon or right of set-off against any Collection Account or
Intermediate Concentration Account maintained with it or any of the items
received for deposit therein or the funds deposited from time to time therein,
except to the extent required by any such bank in respect of costs and charges
related solely to such Collection Account or Intermediate Concentration Account
and that, upon the occurrence of and during the continuance of a Material Event
of Default and the request of the Collateral Agent, such bank will wire or
otherwise transfer, in immediately available funds, on each Business Day, all
funds deposited or otherwise received in all the Collection Accounts or the
Intermediate Concentration Account maintained with it to the Concentration
Account in accordance with the terms and conditions of the applicable Collection
Account Agreement. The Collateral Agent will notify each such bank promptly upon
the cessation or cure of any such Event of Default.
(c) The Borrowers shall acknowledge that the Administrative Agent at all times
will maintain the Concentration Account as a designated collateral account and
that the Concentration Account will remain subject to the dominion and control
of the Administrative Agent pursuant to this Agreement, and the Borrowers agree
(and agree to confirm to all Persons) that the Borrowers shall at no time have
any right to make any withdrawal from or give any instructions to the depository
with respect to the Concentration Account.
(d) At all times when no Material Event of Default is continuing, the
Administrative Agent shall after application of the funds, on a daily basis, to
Obligations then due under this Agreement, automatically cause the funds
transferred to the Concentration Account pursuant to this Section 2.16 to be
released as promptly as practicable to the Borrowers by wiring the funds to
PHC/CHC Holdings, Inc.'s Account at PNC Bank or any other account designated by
the Borrowers from time to time which replaces such account so long as such
account is not a payroll account; at all times when a Material Event of Default
is continuing, the Administrative Agent shall not have any obligation to release
funds to the Borrowers and shall apply, on a daily basis, all funds transferred
into the Concentration Account pursuant to this Section 2.16 to reduce the
outstanding indebtedness of the Borrowers under the Loans and satisfy the
Borrowers' other Obligations under this Agreement. In the event the funds
transferred to the Concentration Account are received in the Concentration
Account no later than 12:00 p.m. (New York City time), then the Administrative
Agent shall endeavor to make all such funds that are to be released to the
Borrowers pursuant to this subsection (d) available to the Borrowers by 5:00
p.m.(New York City time) on the same day. To the extent that any collections of
Accounts or proceeds of other Collateral are not sent directly to the
appropriate Collection Account but are received by any Borrower, such
collections shall be held in trust for the benefit of the Secured Parties and
immediately remitted by the Borrower who received the relevant funds, in the
form received, to the appropriate Collection Account for transfer directly or
indirectly to the Concentration Account. Each Borrower acknowledges and agrees
that its compliance with the terms of this Section 2.16 is essential.
(e) All funds transferred from the Concentration Account for application to
amounts then due and payable by the Borrowers under this Agreement will be
credited against the relevant Obligations of the Borrowers two Business Days
after the Administrative Agent's receipt of "collected funds" at the
Concentration Account, if received no later than 1:00 p.m. (New York City time),
or on the third succeeding Business Day, if received after 1:00 p.m. (New York
City time). No checks, drafts or other instrument received in either the
Collection Account or the Concentration Account shall be treated as received
unless and until such instruments have actually been collected. Except as
otherwise expressly provided in this Agreement, the Administrative Agent shall,
for value at the time specified above in this provision, apply the funds
credited to the Concentration Account, first, to any expenses, indemnifications
or fees then due and payable pursuant to Article 2 or Article 11, second, to
interest then due and payable on the Loans of all the Lenders, provided,
however, that any interest which is paid by Borrowers on funds which have been
transferred from the Collection Account but not yet credited against the
relevant Obligations pursuant to the provisions of this subsection shall be
retained by CITBC and HHF and shared between them (pro rata in accordance with
their respective Revolving Credit Commitments) as compensation for their
services in administering the collections.
(f) For all purposes of this Agreement, including the calculation of interest
payable to the Lenders on the Loans and the calculation of the Unused Commitment
Fee, funds transferred to the Concentration Account that are released to the
Borrowers pursuant to the first sentence of subsection (e) of this Section 2.16
shall be deemed to have been applied to payment of the Borrowers obligations as
provided in subsection (e) of this Section 2.16, and the related release of
funds to the Borrowers shall be deemed a Borrowing of Base Rate Loans made on
the date of such release; provided, however, that such release of funds will not
be subject to any conditions that other Borrowings are subject to, including
without limitation the conditions set forth in Section 3.2, other than the
absence of a continuation of a Material Event of Default.
(g) The Administrative Agent will deliver to the Borrowers monthly a statement
of Loans, charges and payments made pursuant to this Agreement, and such
accounting shall be presumed to be correct and binding upon the Borrowers,
absent manifest error, subject to the following. A monthly statement delivered
pursuant to this provision shall be subject to correction determined by the
Administrative Agent to be necessary after receipt from the Borrowers of notice
identifying a mistake in such statement; provided such notice is received by the
Administrative Agent within sixty (60) days of the date the Borrowers received
such statement from the Administrative Agent. Any such notice shall be deemed an
objection only to those items specifically objected to in the notice.
Section 2.17. Withdrawal of Borrowers. The provisions of this Section 2.17
are in addition to the withdrawal of Borrowers permitted by Section 8.4.
(a) At any time there is no Default or Event of Default continuing any Borrower
may, at its option, upon not less than thirty days' prior written notice to the
Agents, choose to pledge Accounts to another lender in connection with a
financing secured by real estate and cease to be a Borrower hereunder so long as
immediately after giving effect thereto (i) there are at least five Borrowers
continuing under this Agreement (the "Remaining Borrowers") who operate hospital
facilities (including the Eligible Real Property) and the related Accounts of
such hospitals remain pledged as Collateral to the Collateral Agent, (ii) the
Available Credit with respect to the Remaining Borrowers is at least $5,000,000
and (iii) the Financial Covenant Debt of the Remaining Borrowers (including any
Obligations which continue to be owed to the Lenders by such Borrower after
giving effect to such Borrower's hospital facility having been mortgaged or such
Borrower's accounts receivable having been pledged) is not more than 3.25X the
trailing 12 month EBITDA of the Remaining Borrowers as of the last day of the
most recently completed month for which Financial Statements have been delivered
pursuant to Section 6.1; provided, however, that the EBITDA of PHC/CHC Holdings,
Inc. for the year ended December 31, 2000 shall be based on annualized results
for January 1, 2000 forward. Immediately upon or substantially simultaneously
with such pledge of Accounts by such Borrower, its Accounts shall be excluded
from the Borrowing Base and such Borrower shall immediately cease to be a
Borrower and immediately cease to have any obligation under any Loan Document.
(b) Any Borrower may, at its option, upon not less than thirty (30) days' prior
written notice to the Agents, choose to close its hospital facility and cease
operations and cease to be a Borrower hereunder so long as immediately after
giving effect thereto (i) there are at least five Borrowers continuing under
this Agreement who operate hospital facilities (including the Eligible Real
Property) and the related Accounts of such hospitals remain pledged as
Collateral to the Collateral Agent, (ii) the Available Credit with respect to
the Remaining Borrowers is at least $5,000,000 and (iii) the Financial Covenant
Debt of the Remaining Borrowers (including any Obligations which continue to be
owed to the Lenders by such Borrower after giving effect to such Borrower's
hospital facility being closed) is not more than 3.25X the trailing 12 month
EBITDA of the Remaining Borrowers as of the last day of the most recently
completed month for which Financial Statements have been delivered pursuant to
Section 6.1; provided, however, that the EBITDA of PHC/CHC Holdings, Inc. for
the year ended December 31, 2000 shall be based on annualized results for
January 1, 2000 forward. Immediately upon or substantially simultaneously with
such closure of a hospital facility by such Borrower, its Accounts shall be
excluded from the Borrowing Base and such Borrower shall immediately cease to be
a Borrower and immediately cease to have any obligation under any Loan Document.
(c) Any Borrower may, at its option, upon its failure to comply with any of
Sections 4.16, 7.10 or 8.16 and prior written notice to the Administrative
Agent, choose to cease being a Borrower hereunder or choose to have its Accounts
excluded from the Borrowing Base during any period when the hospital facility
owned or leased by such Borrower remains operational so long as (a) immediately
after giving effect to the choice to withdraw as a Borrower (i) there are at
least five Borrowers continuing under this Agreement who operate hospital
facilities (including the Eligible Real Property) and the related Accounts of
such hospitals remain pledged as Collateral to the Collateral Agent, (ii) the
Available Credit with respect to the Remaining Borrowers is at least $5,000,000
and (iii) Financial Covenant Debt of the Remaining Borrowers (including any
Obligations which continue to be owed to the Lenders by such Borrower being
excluded hereunder) is not more than 3.25X the trailing 12 month EBITDA of the
Remaining Borrowers as of the last day of the most recently completed month for
which Financial Statements have been delivered pursuant to Section 6.1;
provided, however, that the EBITDA of PHC/CHC Holdings, Inc. for the year ended
December 31, 2000 shall be based on annualized results for January 1, 2000
forward or (b) immediately after giving effect to a choice to exclude such
Borrower's Accounts from the Borrowing Base the Available Credit with respect to
the Borrowers is at least $2,500,000. Immediately upon or substantially
simultaneously with such Borrower ceasing to be a Borrower hereunder, its
Accounts shall be excluded from the Borrowing Base and such Borrower shall
immediately cease to be a Borrower and immediately cease to have any obligation
under any Loan Document.
Article III
CONDITIONS TO LOANS AND LETTER OF CREDIT GUARANTIES
Section 3.1. Conditions Precedent to Initial Loans and Letter of Credit
Guaranties. The obligation of each Lender to make the Loans requested to be made
by it on the Closing Date and the obligation of CITBC to issue Letter of Credit
Guaranties on the Closing Date is subject to the satisfaction of all of the
following conditions precedent:
(a) Certain Documents. The Administrative Agent shall have received on the
Closing Date each of the following, each dated the Closing Date unless otherwise
indicated or agreed to by the Agents, in form and substance satisfactory to the
Agents and in sufficient copies for each Lender:
(i) this Agreement, duly executed and delivered by the Borrowers and, for the
account of each Lender requesting the same, a Revolving Credit Note of the
Borrowers conforming to the requirements set forth herein;
(ii) the Security Agreement, duly executed by the Borrowers, together with
evidence satisfactory to the Agents that the Collateral Agent (for the benefit
of the Secured Parties) has a valid and perfected first priority security
interest in the Collateral, including (x) such documents duly executed by each
Borrower as the Agents may request with respect to the perfection of the Secured
Parties' security interests in the Collateral (including financing statements
under the UCC and other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens created by the Security Agreement) and
(y) copies of UCC search reports as of a recent date listing all effective
financing statements that name any Borrower as debtor, together with copies of
such financing statements, none of which shall cover the Collateral except for
those which shall be terminated on the Closing Date;
(iii) unless otherwise set forth in the Post Closing Agreement, the Mortgages
together with: (A) a Mortgagee's Title Insurance Policy for each Eligible Real
Property; (B) current as-built surveys, evidence of appropriate zoning
compliance and certificates of occupancy, in each case reasonably satisfactory
in form and substance to the Administrative Agent; (C) evidence that
counterparts of the Mortgages have been recorded in all places to the extent
necessary or desirable, to create a valid and enforceable first priority lien on
property described therein in favor of the Collateral Agent for the benefit of
the Secured Parties (or in favor of such other trustee as may be required or
desired under local law); and (D) an opinion of counsel in each state in which
any Mortgage is recorded in form and substance and from counsel satisfactory to
the Agents;
(iv) a favorable opinion of (A) Mayor, Day, Caldwell, Keeton, L.L.P., counsel to
the Borrowers, in substantially the form of Exhibit I, and (B) counsel to the
Borrowers in their respective states, in each case addressed to the Agents and
the Lenders and addressing such other matters as any Lender through the
Administrative Agent may reasonably request.
(v) a copy of the articles or certificate of incorporation (or equivalent
organizational documents) of each Borrower, certified as of a recent date by the
Secretary of State of the state of incorporation of such Borrower, together with
certificates of such official attesting to the good standing of each such
Borrower;
(vi) a certificate of the Secretary or an Assistant Secretary of each Borrower
certifying (A) the names and true signatures of each officer of such Borrower
who has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Borrower, (B) the by-laws (or equivalent Constituent Document) of such Borrower
as in effect on the date of such certification, (C) the resolutions of such
Borrower's Board of Directors (or equivalent governing body) approving and
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party and (D) that there have been no
changes in the certificate of incorporation (or equivalent Constituent Document)
of such Borrower from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to the immediately preceding clause;
(vii) a certificate of the chief financial officer or treasurer of each Borrower
or the Controller of Paracelsus, stating that such Borrower is Solvent after
giving effect to the initial Loans and Letters of Credit, the application of the
proceeds thereof in accordance with Section 7.9 and the payment of all estimated
legal, accounting and other fees related hereto and thereto;
(viii) a certificate of a Responsible Officer to the effect that (A) the
condition set forth in Section 3.2(b) has been satisfied and (B) no litigation
not listed on Schedule 4.6 shall have been commenced against any Borrower which,
if adversely determined, would have a Material Adverse Effect; and
(ix) evidence satisfactory to the Administrative Agent that the insurance
policies required by Section 7.5 and any Collateral Document are in full force
and effect, together with endorsements in respect of insurance on the Eligible
Real Property naming the Collateral Agent, on behalf of the Secured Parties, as
an additional insured and/or loss payee under all insurance policies to be
maintained with respect to the properties of Borrowers.
(b) Cash Management. The Administrative Agent shall have received evidence
reasonably satisfactory to Agents that, as of the Closing Date, the procedures
with respect to cash management required by Section 2.16 and the Collateral
Documents have been established and are currently being maintained by each
Borrower.
(c) Fee and Expenses Paid. There shall have been paid to the Administrative
Agent, for the account of the Administrative Agent, the Collateral Agent and the
Lenders, as applicable, all fees due and payable on or before the Closing Date,
and all expenses due and payable on or before the Closing Date.
(d) Consents, Etc. Each of the Borrowers shall have received all consents and
authorizations required pursuant to any material Contractual Obligation of such
Borrower with any other Person and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow each of the
Borrowers lawfully (A) to execute, deliver and perform, in all material
respects, their respective obligations hereunder, the Loan Documents to which
each of them, respectively, is, or shall be, a party and each other agreement or
instrument to be executed and delivered by each of them, respectively, pursuant
thereto or in connection therewith, and (B) to create and perfect the Liens on
the Collateral to be owned by each of them in the manner and for the purpose
contemplated by the Loan Documents.
(e) The Administrative Agent shall have received evidence reasonably
satisfactory to the Agents that all uncollected Accounts of the Borrowers
subject to the existing securitization program with Bankers Trust Company, as
trustee, have been reconveyed to the respective originating Borrowers, in form
and substance satisfactory to the Agents and that such trustee relinquishes any
interests it may have had in the Accounts.
(f) Paribas Liens. The Administrative Agent shall have received evidence
satisfactory to it that Paribas has released all liens against any Borrower or
any property of any Borrower.
(g) Additional Matters. The Administrative Agent shall have received such
additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
(h) Post Closing Agreement. The Administrative Agent shall have received a post
closing agreement with terms and conditions satisfactory to the Administrative
Agent obligating the Borrowers to provide the Administrative Agent with such
items as the Administrative Agent may require within such time periods as the
Administrative Agent shall specify therein, including, without limitation, a
Collection Account Agreement for each Collection Account and Intermediate
Concentration Account.
Section 3.2. Conditions Precedent to Each Loan and Letter of Credit Guaranty.
The obligation of each Lender on any date (including the Closing Date) to make
any Loan and of CITBC on any date (including the Closing Date) to issue any
Letter of Credit Guaranty is subject to the satisfaction of all of the following
conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit Guaranty. With respect
to any Loan, the Administrative Agent shall have received a duly executed Notice
of Borrowing and with respect to any Letter of Credit Guaranty, CITBC shall have
received notice pursuant to Section 2.3(c).
(b) Representations and Warranties; No Defaults. The following statements shall
be true on the date of such Loan or issuance, both before and after giving
effect thereto and, in the case of such Loan, to the application of the proceeds
therefrom:
(i) Except for Loans to reimburse drawings under any Letter of Credit Guaranty,
and except for conversions of Eurodollar Rate Loans into Base Rate Loans
pursuant to Section 2.9, the representations and warranties set forth in Article
IV and in the other Loan Documents shall be true and correct on and as of the
Closing Date and shall be true and correct in all material respects on and as of
any such date after the Closing Date with the same effect as though made on and
as of such date, except to the extent such representations and warranties
expressly relate to an earlier date;
(ii) Except for Loans to reimburse drawings under any Letter of Credit Guaranty,
and except for conversions of Eurodollar Rate Loans into Base Rate Loans
pursuant to Section 2.9, no Default or Event of Default has occurred and is
continuing; and
(iii) Except for Loans to reimburse drawings under any Letter of Credit
Guaranty, and except for conversions of Eurodollar Rate Loans into Base Rate
Loans pursuant to Section 2.9, the Borrowers shall have delivered the Borrowing
Base Certificate required by Section 6.1(h).
(c) Borrowing Base. After giving effect to the Loans or Letters of Credit
requested to be made or issued on any such date and the use of proceeds thereof,
the Revolving Credit Obligations shall not exceed the Maximum Credit at such
time.
(d) No Legal Impediments. The making of the Loans or the issuance of such Letter
of Credit on such date does not violate any Requirement of Law applicable to the
Borrowers on the date of or immediately following such Loan or issuance and is
not enjoined, temporarily, preliminarily or permanently.
(e) Title/Lien Priority. In jurisdictions where a revolving credit endorsement
is not available, the Administrative Agent shall have received such endorsements
to Mortgagee's Title Insurance Policies for each parcel of Eligible Real
Property, in form and substance reasonably satisfactory to the Administrative
Agent, as the Administrative Agent shall reasonably require, including "bring
down endorsements" to insure that, after giving effect to such advance of the
Loan or Letter of Credit, the Liens created by the applicable Mortgages and
insured by such Mortgagee's Title Insurance Policies constitute valid first
priority Liens on such parcels of Eligible Real Property, free and clear of all
defects and encumbrances, except those referred to in such Mortgagee's Title
Insurance Policies at the time such policies were originally issued to the
mortgagee, and that each Mortgagee's Title Insurance Policy is in an amount
equal to the value of the applicable parcel of Eligible Real Property reasonably
determined by the Administrative Agent as of the Closing Date of such Loan or
Letter of Credit.
Each submission by the Borrowers to the Administrative Agent of a Notice of
Borrowing and the acceptance by the Borrowers of the proceeds of each Loan
requested therein, and each submission by the Borrowers of a Letter of Credit
Guaranty Request and the issuance of each Letter of Credit Guaranty Requested
therein, shall be deemed to constitute a representation and warranty by the
Borrowers as to the matters specified in Section 3.2(b) on the date of the
making of such Loan or the issuance of such Letter of Credit Guaranty.
Article IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Agents to enter into this
Agreement, the Borrowers represent and warrant to the Lenders and the Agents
that, on and as of the Closing Date, after giving effect to the making of the
Loans and other financial accommodations on the Closing Date and on and as of
each date as required by Section 3.2(b):
Section 4.1. Corporate Existence; Compliance with Law. Each of the Borrowers (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where such
qualification is necessary, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect; (c) has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted except where the failure
to do so would not have a Material Adverse Effect; (d) is in compliance with its
Constituent Documents and is in compliance with all applicable Requirements of
Law except where the failure to be in compliance would not in the aggregate have
a Material Adverse Effect; and (e) has all necessary licenses, permits, consents
or approvals from or by, has made all necessary filings with, and has given all
necessary notices to, each Governmental Authority having jurisdiction, to the
extent required for such ownership, operation and conduct, except for licenses,
permits, consents, approvals or filings which can be obtained or made by the
taking of ministerial action to secure the grant or transfer thereof or the
failure to obtain or make would not in the aggregate have a Material Adverse
Effect.
Section 4.2. Corporate Power; Authorization; Enforceable Obligations.
-------------------------------------------------------
(a) The execution, delivery and performance by each Borrower of the Loan
Documents to which it is a party and the consummation of the transactions
contemplated thereby:
(i) are within such Borrower's corporate, limited liability company,
partnership or other powers;
(ii) have been or, at the time of delivery thereof pursuant to Article III
will have been duly authorized by all necessary corporate action,
including the consent of shareholders where required;
(iii) do not and will not (A) contravene any Borrower's respective
Constituent Documents, (B) violate any other Requirement of Law
applicable to any Borrower (including Regulations T, U and X of the
Federal Reserve Board), or any order or decree of any Governmental
Authority or arbitrator applicable to any Borrower, (C) conflict with
or result in the breach of, or constitute a default under, or result in
or permit the termination or acceleration of, any material Contractual
Obligation of any Borrower or (D) result in the creation or imposition
of any Lien upon any of the property of any Borrower other than those
in favor of the Secured Parties pursuant to the Collateral Documents or
otherwise permitted under Section 8.2 hereof; and
(iv) do not require the consent of, authorization by, approval of, notice
to, or filing or registration with, any Governmental Authority or any
other Person, (x) other than those the failure of which to obtain or
make would not have a Material Adverse Effect and (y) other than those
listed on Schedule 4.2(a) and which have been or will be, prior to the
Closing Date, obtained or made, copies of which have been or will be
delivered to the Administrative Agent pursuant to Section 3.1, and each
of which on the Closing Date will be in full force and effect and (z)
other than with respect to the Collateral, filings required to perfect
the Liens created by the Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents will have been
upon delivery thereof pursuant to the terms of this Agreement, duly executed and
delivered by each Borrower thereto. This Agreement is, and the other Loan
Documents will be, when delivered hereunder, the legal, valid and binding
obligation of each Borrower thereto, enforceable against such Borrower in
accordance with its terms.
Section 4.3. Financial Statements.
(a) The consolidated balance sheets of Paracelsus as at December 31, 1999, and
the related consolidated statements of operations, retained earnings and cash
flows of Paracelsus for the fiscal year then ended certified by Ernst & Young
LLP, copies of which have been furnished to each Lender, fairly present the
consolidated financial condition of Paracelsus as at such dates and the
consolidated results of the operations of Paracelsus for the period ended on
such dates, all in conformity with GAAP. The unaudited consolidating balance
sheets of Paracelsus (which includes the Borrowers) as at February 29, 2000 and
the related unaudited consolidating statements of operations, of Paracelsus
(which includes the Borrowers) for the period then ended, copies of which have
been furnished to each Lender, fairly present the financial condition of the
Borrowers as at such dates and the results of the operations of the Borrowers
for the period ended on such dates, all in conformity with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).
(b) None of the Borrowers has any material obligation, contingent liability or
liability for taxes, long-term leases or unusual forward or long-term commitment
which is not reflected in the Financial Statements referred to in clause (a)
above or in the notes thereto or permitted by this Agreement.
(c) The budget for the fiscal year ending December 31, 1999, a copy of which has
been delivered to each Lender, has been prepared by the Borrowers having
operating facilities in light of the past operations of its business. Such
budget is based upon estimates and assumptions stated therein, all of which the
applicable Borrowers believe to be reasonable and fair in light of current
conditions and current facts known to such Borrowers and, as of the date
prepared, reflected such Borrower's good faith and reasonable estimates of the
future financial performance of such Borrower and of the other information
projected therein for such Borrowers for the periods set forth therein.
Section 4.4. Material Adverse Effect. Since February 29, 2000 there have
been no events or developments that in the aggregate have had a Material Adverse
Effect.
Section 4.5. Solvency. Both before and after giving effect to (a) the Loans and
Letter of Credit Obligations to be made or extended on the Closing Date or such
other date as Loans and Letter of Credit Obligations requested hereunder are
made or extended, (b) the disbursement of the proceeds of such Loans pursuant to
the instructions of the Borrowers and (c) the payment and accrual of all
transaction costs in connection with the foregoing, each Borrower (other than
Flint River in the event that circumstances solely related to its existing bond
debt result in Flint River not being Solvent) is Solvent.
Section 4.6. Litigation. There are no pending or, to the knowledge of the
Borrowers, threatened actions, investigations or proceedings to which any
Borrower is a party, or any property of a Borrower is subject before any court,
Governmental Authority or arbitrator other than those that in the aggregate
would not have a Material Adverse Effect. The performance by any Borrower of its
obligation under any of the Loan Documents is not restrained or enjoined (either
temporarily, preliminarily or permanently). Schedule 4.6 lists all litigation
pending against any Borrower at the date hereof which would have a Material
Adverse Effect.
Section 4.7. Taxes.
(a) All material federal, state, local and foreign income and franchise and
other tax returns, reports and statements (collectively, the "Tax Returns")
required to be filed by the Borrowers have been filed with the appropriate
Governmental Authorities in all jurisdictions in which such Tax Returns are
required to be filed, and all taxes, charges and other impositions reflected
therein have been paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the respective Borrower in
conformity with GAAP. As of the Closing Date, except as disclosed on Schedule
4.7(a), no Tax Return is under audit or examination by any Governmental
Authority and no notice of such an 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 Borrower from its respective
employees for all periods in compliance in all material respects 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.
(b) Except as disclosed on Schedule 4.7(b), none of the Borrowers has (i) as of
the Closing Date, executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for the filing of any Tax Return or the assessment or
collection of any charges; (ii) any obligation under any tax sharing agreement
or arrangement other than that to which the Administrative Agent has a copy
prior to the date thereof; or (iii) been a member of an affiliated, combined or
unitary group other than the group of which the Borrowers are common
subsidiaries.
Section 4.8. Full Disclosure. The information prepared or furnished by or on
behalf of the Borrowers in connection with this Agreement, except any budget
delivered to the Lenders, or the consummation of the financing taken as a whole
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein or herein not
misleading. Any budget delivered to the Lenders in connection herewith is based
upon estimates and assumptions stated therein, all of which the Borrowers
believe, as of the date of the delivery thereof or, in the case of the initial
budget previously delivered to the Lenders pursuant to Section 4.3, as of the
date of preparation of such budget, to be reasonable and fair in light of the
then current conditions and the then current facts known to the Borrowers and
reflect the Borrowers' good faith and reasonable estimates of the future
financial performance of the Borrowers and of the other information provided
therein for the periods set forth therein. All facts known to the Borrowers
which the Borrowers reasonably believe are material to an understanding of the
financial condition, business, properties or prospects of the Borrowers taken as
one enterprise have been disclosed to the Lenders.
Section 4.9. Margin Regulations. No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U of the Federal Reserve Board), and no proceeds of
any Borrowing will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock in
contravention of Regulation T, U or X of the Federal Reserve Board.
Section 4.10. No Burdensome Restrictions; No Defaults.
(a) None of the Borrowers (i) is a party to any Contractual Obligation the
compliance with which would have a Material Adverse Effect or the performance of
which by any thereof, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Lien permitted under
Section 8.2) on the property or assets of any thereof or (ii) is subject to any
charter or corporate restriction which would have a Material Adverse Effect.
(b) Other than those defaults which in the aggregate would not have a Material
Adverse Effect, none of the Borrowers is in default under or with respect to any
Contractual Obligation owed by it and, to the knowledge of each of the
Borrowers, no other party is in default under or with respect to any Contractual
Obligation owed to any Borrower.
(c) No Default or Event of Default has occurred and is continuing.
Section 4.11. Investment Company Act; Public Utility Holding Company Act. None
of the Borrowers is (a) an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended or (b) a
"holding company," or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company," as each such term is defined and used in the
Public Utility Holding Act of 1935, as amended.
Section 4.12. Use of Proceeds. The proceeds of the Loans and the Letters of
Credit related to the Letter of Credit Guaranties are being used by the
Borrowers solely as follows: to provide funds to (i) Paracelsus, to pay for
actual expenses not exceeding $7,000,000 per calendar year, (ii) Affiliates
other than Paracelsus to pay for liabilities of sold, dormant, holding company
or discontinued entities that relate to workers' compensation claims,
malpractice insurance claims, medicare/medicaid cost report liabilities,
residual accounts payable, residual payroll checks and residual state taxes, in
any event not exceeding $5,000,000 per calendar year, (iii) pay for the transfer
of accounts receivable to the respective Borrowers who originated them from the
existing accounts receivable securitization program, (iv) refinance existing
accounts receivable working capital secured Indebtedness and letter of credit
exposure to Paribas, (v) finance capital expenditures, and (vi) for general
working capital and corporate and partnership purposes. Notwithstanding anything
to the contrary in this Section 4.12 or in Section 8.3 or Section 8.5, the
Borrowers may use proceeds of Letters of Credit related to the Letter of Credit
Guaranties, to the extent they are cash collateralized pursuant to Section 9.3,
for the benefit of any Affiliates on an unlimited basis.
Section 4.13. Insurance. All policies of insurance required to be maintained by
Section 7.5 are in full force and effect and are of a nature and provide such
coverage as is sufficient and as is customarily carried by businesses of the
size and character of such Person.
Section 4.14. Labor Matters.
(a) There are no strikes, work stoppages, slowdowns or lockouts pending or to
the knowledge of Borrowers threatened against or involving any of the Borrowers,
other than those which in the aggregate would not have a Material Adverse
Effect.
(b) There are no unfair labor practices, grievances or complaints pending, or,
to any Borrower's knowledge, threatened against or involving any Borrower, nor
are there any arbitrations or grievances threatened involving any Borrower,
other than those which, in the aggregate would not have a Material Adverse
Effect.
(c) Except as set forth on Schedule 4.14, as of the Closing Date, there is no
collective bargaining agreement covering any of the employees of any of the
Borrowers.
(d) Schedule 4.14 sets forth, as of the date hereof, all material
consulting agreements of each of the Borrowers.
Section 4.15. ERISA.
(a) Schedule 4.15 separately identifies as of the date hereof all Title IV
Plans, all Multiemployer Plans and all of the employee benefit plans within the
meaning of Section 3(3) of ERISA to which any Borrower has any obligation or
liability, contingent or otherwise.
(b) Each employee benefit plan of each Borrower which is intended to qualify
under Section 401 of the Code does so qualify, and any trust created thereunder
is exempt from tax under the provisions of Section 501 of the Code, except where
such failures in the aggregate would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with applicable
provisions of ERISA, the Code and other Requirements of Law except for
non-compliances that in the aggregate would not have a Material Adverse Effect.
(d) There has been no, nor is there reasonably expected to occur, any ERISA
Event which would have a Material Adverse Effect.
(e) Except to the extent set forth on Schedule 4.15, none of the Borrowers or
any ERISA Affiliate would have any Withdrawal Liability as a result of a
complete withdrawal as of the date hereof from any Multiemployer Plan.
Section 4.16. Environmental Matters.
(a) The operations of each Borrower have been and are in compliance with all
Environmental Laws, including obtaining and complying with Permits required by
Environmental Laws, other than non-compliances that would not have a reasonable
likelihood of any Borrower incurring Environmental Liabilities and Costs in
excess of $1,000,000 individually, and $2,500,000, in the aggregate for all of
the Borrowers.
(b) None of the Borrowers or any real property currently or, to the knowledge of
any Borrowers, previously owned, operated or leased by or for any Borrower is
subject to any pending or, to the knowledge of any Borrower, threatened, claim,
order, agreement, notice of violation, notice of potential liability or is the
subject of any pending or to the knowledge of any Borrower threatened proceeding
or investigation by any Governmental Authority under or pursuant to
Environmental Laws other than those that have a reasonable likelihood of
resulting in any Borrower incurring Environmental Liabilities and Costs in
excess of $1,000,000 individually, and $2,500,000 in the aggregate for all of
the Borrowers.
(c) Except as disclosed on Schedule 4.16, none of the Borrowers is a
treatment, storage or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C.ss. 6901 et seq., the regulations
thereunder or any state analog.
(d) There are no facts, circumstances or conditions arising out of or relating
to the operations or ownership of real property owned, operated or leased by any
Borrower which could reasonably be expected to give rise to Environmental
Liability Cost which are not specifically included in the financial information
furnished to the Lenders other than those that would not have a reasonable
likelihood of resulting in such Borrower incurring Environmental Liabilities and
Costs in excess of $1,000,000 individually, and $2,500,000 in the aggregate for
all of the Borrowers.
(e) As of the date hereof, no Environmental Lien has attached to any property of
any Borrower and, to the knowledge of any Borrower, no facts, circumstance or
conditions exist that could reasonably be expected to result in any such
Environmental Lien attaching to any such property.
(f) Each Borrower has provided the Lenders with copies of all environmental,
material health or material safety audits, studies, assessments, inspections,
investigations or other environmental material health and material safety
reports relating to any Eligible Real Property.
Section 4.17. Intellectual Property. Each Borrower owns or licenses or otherwise
has the right to use all licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
copyright applications, franchises, authorizations and other intellectual
property rights (including all Intellectual Property as defined in the Security
Agreement) that are necessary for the operations of their respective businesses,
without infringement upon or conflict with the rights of any other Person with
respect thereto, including all trade names associated with any private label
brands of any Borrower except where the failure to do so would not have a
Material Adverse Effect. To any Borrower's knowledge, no slogan or other
advertising device, product, process, method, substance, part or component, or
other material now employed, or now contemplated to be employed, by any Borrower
infringes upon or conflicts with any rights owned by any other Person, and no
claim or litigation regarding any of the foregoing is pending or threatened
which, in each case, would have a Material Adverse Effect.
Section 4.18. Title; Real Property.
(a) Each Borrower has good and marketable title to, or valid leasehold interests
in, all real property purported to be owned by it including those reflected on
the most recent Financial Statements delivered by the Borrowers and none of such
properties and assets is subject to any Lien, except Liens permitted under
Section 8.2. Each Borrower has received all deeds, assignments, waivers,
consents, non-disturbance and recognition or similar agreements, bills of sale
and other documents, and have duly effected all recordings, filings and other
actions necessary to establish, protect and perfect each Borrower's right, title
and interest in and to all such property, except to the extent that
noncompliance with this sentence would not have a material adverse effect on any
Eligible Real Property or a Material Adverse Effect.
(b) Except as permitted by Section 8.4, no Borrower owns or holds, or is
obligated under or a party to, any option, right of first refusal or other
contractual right to purchase, acquire, sell, assign or dispose of any hospital
facility owned or leased by such Borrower.
(c) Except to the extent that noncompliance with this Section 4.18(c) would not
have a material adverse effect on any Eligible Real Property or a Material
Adverse Effect (i) all components of all improvements included within the real
property owned or leased by any Borrower (collectively, "Improvements"),
including the roofs and structural elements thereof and the heating,
ventilation, air conditioning, plumbing, electrical, mechanical, sewer, waste
water, storm water, paving and parking equipment, systems and facilities
included therein, are in good working order and repair;. (ii) all water, gas,
electrical, steam, compressed air, telecommunication, sanitary and storm sewage
lines and systems and other similar systems serving the real property owned or
leased by any Borrower are installed and operating and are sufficient to enable
the real property owned or leased by such Borrower to continue to be used and
operated in the manner currently being used and operated, and no Borrower has
any knowledge of any factor or condition that could result in the termination or
material impairment of the furnishing thereof; and (iii) no Improvement or
portion thereof is dependent for its access, operation or utility on any land,
building or other Improvement not included in the real property owned or leased
by any Borrower.
(d) No portion of any Eligible Real Property owned or leased by any Borrower has
suffered any damage by fire or other casualty loss greater than $1,000,000 which
has not heretofore been completely repaired and restored to good working
condition except to the extent Borrowers have complied with Section 7.5. No
portion of any Eligible Real Property owned or leased by any Borrower is located
in a special flood hazard area as designated by any federal Governmental
Authority unless flood insurance is maintained therefor in accordance with
Section 7.5.
(e) All Permits required to have been issued or appropriate to enable all real
property owned or leased by any Borrower to be lawfully occupied and used for
all of the purposes for which they are currently occupied and used have been
lawfully issued and are in full force and effect, other than those which in the
aggregate would not have a Material Adverse Effect.
(f) None of the Borrowers has received any notice, or has any knowledge, of any
pending, threatened or contemplated condemnation proceeding affecting any real
property owned or leased by any Borrower or any part thereof, except those
which, in the aggregate, would not have a Material Adverse Effect.
Article V
FINANCIAL COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, each Borrower agrees with the Lenders and the Agents that:
Section 5.1. Minimum EBITDA. The Borrowers, on a consolidated basis, will
maintain during each calendar year (commencing with the calendar year ending
December 31, 2000), EBITDA of not less than zero for each cumulative period (a)
commencing on the first day of such calendar year and (b) ending on the last day
of each successive calendar month during such calendar year; provided, however,
for the calendar year ending December 31, 2000, EBITDA will be calculated for
the period commencing April 1, 2000 and ending on the last day of each
successive calendar month thereafter until and including December 31, 2000. For
purposes of this Section 5.1, EBITDA means, with respect to the consolidated
Borrowers for any period, (a) EBITDA (as defined in Section 1.1) of such
Borrowers minus (b) the sum of (i) capital expenditures of the Borrowers, (ii)
Interest Expense paid by the Borrowers to unaffiliated third parties, (iii)
principal payments by the Borrowers on any Indebtedness due to unaffiliated
third parties, (iv) Paracelsus overhead cost and (v) distributions to Paracelsus
(exclusive of Paracelsus overhead cost) and other Affiliates made by such
Borrowers provided that such distribution shall exclude (A) cash expenditures
made in conjunction with the termination of the receivable securitization
program with Sheffield Receivables Corporation made contemporaneously with the
closing hereof, and (B) net proceeds from Indebtedness permitted under Sections
8.1 (h) or 8.1(l) of this Agreement.
Article VI
REPORTING COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, each Borrower agrees with the Lenders, the Collateral Agent and the
Administrative Agent that:
Section 6.1. Financial Statements. The Borrowers shall furnish to the
Administrative Agent (with sufficient copies for each of the Lenders) the
following Financial Statements:
(a) Monthly Reports. Within 45 days after the end of each fiscal month in each
Fiscal Year, financial information regarding the Borrowers consisting of
unaudited balance sheets of Paracelsus showing consolidated and consolidating
figures (including figures for the Borrowers) as of the close of such month and
the related statements of income and related consolidated cash flow statements
for such month and that portion of the current Fiscal Year ending as of the
close of such month, setting forth in comparative form the figures for the
corresponding period in the prior year with respect to the income statement only
and the figures contained in the budget for the current Fiscal Year, in each
case certified by a Responsible Officer of each Borrower as fairly presenting
the consolidated and consolidating financial position of the Borrowers as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).
(b) Quarterly Reports. Within 45 days after the end of each Fiscal Quarter of
each Fiscal Year, financial information regarding the Borrowers consisting of
unaudited balance sheets of Paracelsus showing consolidated and consolidating
figures (including figures for the Borrowers) as of the close of such quarter
and the related statements of income and related consolidated cash flow
statements for such quarter and that portion of the Fiscal Year ending as of the
close of such quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and with respect to the income statement
only the figures contained in the budget for the current Fiscal Year, in each
case certified by a Responsible Officer of each Borrower as fairly presenting
the consolidated and consolidating financial position of the Borrowers as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).
(c) Annual Reports. Within 120 days after the end of each Fiscal Year, financial
information regarding the Borrowers consisting of consolidated balance sheets of
Paracelsus showing consolidated and consolidating figures (including figures for
all Borrowers) as of the end of such year and related statements of income and
related consolidated cash flow statements of Paracelsus for such Fiscal Year,
all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, by Ernst & Young LLP or other independent
public accountants of recognized national standing acceptable to the
Administrative Agent, together with the report of such accounting firm stating
that (i) such financial statements fairly present the consolidated financial
position of Paracelsus as at the dates indicated and the results of its
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
such independent certified public accountants have not objected and which shall
have been disclosed in the notes to the financial statements), and (ii) the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards, and accompanied by a certificate stating that in the course of the
regular audit of the business of the Borrowers such accounting firm has obtained
no knowledge that a Default or Event of Default in respect of the financial
covenants contained in Article V has occurred and is continuing, or, if in the
opinion of such accounting firm, a Default or Event of Default has occurred and
is continuing in respect of such financial covenants, a statement as to the
nature thereof.
(d) Compliance Certificate. Together with each delivery of any Financial
Statement pursuant to clauses (a), (b) and (c) of this Section 6.1, a
certificate of a Responsible Officer of a Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations used in
determining compliance with the financial covenant contained in Article V which
is tested on a monthly basis and (ii) stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, stating the nature thereof and the action which
the Borrowers propose to take with respect thereto.
(e) Budget. Not later than 60 days after the end of each Fiscal Year, (i) the
annual budget of the Borrowers having operating facilities for the next
succeeding Fiscal Year approved by the Board of Directors of Paracelsus, and
(ii) forecasts prepared by management of such Borrowers for each fiscal month in
the next succeeding Fiscal Year, including, in each instance described in clause
(i) and (ii) above (A) a projected year end consolidated and consolidating (on
an individual hospital basis) income statement and a consolidated balance sheet
of Paracelsus and a consolidated statement of cash flows of Paracelsus and (B) a
statement of all of the material assumptions on which such forecasts are based.
(f) Management Letters, Etc. Within five Business Days after receipt thereof by
the board of directors of Paracelsus, copies of each management letter,
exception report or similar letter or report received by Paracelsus from its
independent certified public accountants.
(g) Borrowing Base Certificates. No later than the third Business Day of each
week, a Borrowing Base Certificate as of the end of the immediately preceding
week (the "Weekly Borrowing Base Certificate"), executed by a Responsible
Officer of a Borrower (on behalf of the Borrowers) and no later than the
twenty-fifth day of each calendar month, a Borrowing Base Certificate as of the
end of the immediately preceding month, executed by a Responsible Officer of a
Borrower (on behalf of the Borrowers); provided, however, that each Weekly
Borrowing Base Certificate does not have to update any information on Accounts
specified in clauses (l), (m) and (n) of the definition of Eligible Receivable.
Section 6.2. Default Notices. As soon as practicable, and in any event within
three Business Days after a Responsible Officer of any Borrower has actual
knowledge of the existence of any Default, Event of Default or other event which
has had a Material Adverse Effect or which could reasonably be expected to cause
or result in a Material Adverse Effect, the Borrowers shall give the
Administrative Agent notice specifying the nature of such Default or Event of
Default or other event, including the anticipated effect thereof, which notice,
if given by telephone, shall be promptly confirmed in writing on the next
Business Day.
Section 6.3. Litigation. Promptly after the commencement thereof, the Borrowers
shall give the Administrative Agent written notice of the commencement of each
action, suit or proceeding before any domestic or foreign Governmental Authority
or arbitrator, to which any Borrower is a party, or any property of any Borrower
is subject, which in the reasonable judgment of the Borrowers, could reasonably
be expected to result in liability to the Borrowers (after taking insurance into
account) in an amount equal to $500,000 or more; provided, however, that nothing
in this Section 6.3 shall require disclosure of matters which could reasonably
be expected to result in a waiver of the attorney-client privilege or work
product protection of any Borrower or any of its Affiliates or a violation of an
obligation of any Borrower or any of its Affiliates imposed by court order or
otherwise imposed by law.
Section 6.4. Asset Sales. At least five Business Days prior to any Asset Sale,
except any Asset Sale described in clauses (a), (b), (c) and (f) of Section 8.4,
anticipated to generate in excess of $1,000,000 in Net Cash Proceeds and at
least 60 days prior to any Asset Sale pursuant to Section 8.4(f), Borrowers
shall send the Administrative Agent a notice (a) describing such Asset Sale or
the nature and material terms and conditions of such transaction and (b) stating
the estimated Net Cash Proceeds anticipated to be received by any Borrower.
Section 6.5. SEC Filings; Press Releases. Promptly after the sending or filing
thereof, the Borrowers shall send the Administrative Agent copies of (a) all
reports which Paracelsus sends to its Security holders generally, (b) all
reports and registration statements which Paracelsus files with the Securities
and Exchange Commission or any national or foreign securities exchange or the
National Association of Securities Dealers, Inc., (c) all press releases of
Paracelsus and (d) all other statements concerning material changes or
developments in the business of any Borrower made available by Paracelsus to the
public.
Section 6.6. Labor Relations. Promptly after becoming aware of the same, the
Borrowers shall give the Administrative Agent written notice of (a) any material
labor dispute to which any Borrower is or may become a party, including any
strikes, lockouts or other disputes relating to any of such Person's facilities,
and (b) any material Worker Adjustment and Retraining Notification Act or
related liability incurred with respect to the closing of any facility of any of
such Person.
Section 6.7. Tax Returns. Upon the request of the Agents, through the
Administrative Agent, the Borrowers will provide copies of all federal, state,
local and foreign tax returns and reports filed by each Borrower and Paracelsus,
as applicable, in respect of taxes measured by income (excluding sales, use and
like taxes).
Section 6.8. Insurance. As soon as is practicable and in any event within 90
days after the end of each Fiscal Year, the Borrowers will furnish the
Administrative Agent (in sufficient copies for each of the Lenders) with (a) a
report in form and substance satisfactory to the Agents outlining all material
insurance coverage maintained as of the date of such report in respect of the
Borrowers and the duration of such coverage and (b) an insurance broker's
statement that all premiums then due and payable with respect to such coverage
have been paid.
Section 6.9. ERISA Matters. Each Borrower shall furnish the Administrative Agent
(with sufficient copies for each of the Lenders):
(a) promptly and in any event within 30 days after such Borrower or ERISA
Affiliate knows or has reason to know that any ERISA Event has occurred;
(b) promptly and in any event within 10 days after such Borrower 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 written statement of a Responsible Officer of such Borrower describing such
ERISA Event or waiver request and the action, if any, which such Borrower
proposes to take with respect thereto and a copy of any notice filed with the
PBGC or the IRS pertaining thereto;
(c) simultaneously with the date that such Borrower or ERISA Affiliate files a
notice of intent to terminate any Title IV Plan, if such termination would
require material additional contributions in order to be considered a standard
termination within the meaning of Section 4041(b) of ERISA, a copy of each such
notice.
Section 6.10. Environmental Matters. The Borrowers shall provide to the
Administrative Agent, within 60 days of its request, an environmental site
assessment report prepared by a consultant reasonably acceptable to the
Administrative Agent and in a form and scope reasonably satisfactory to the
Administrative Agent for any Eligible Real Property. Each Borrower shall provide
the Administrative Agent promptly and in any event within 10 days of such
Borrower having knowledge of any of the following, written notice of any of the
following (in each case after giving effect to any recovery from insurance):
(a) that any Borrower is or may be liable to any Person as a result of a Release
or threatened Release which could reasonably be expected to subject such
Borrower to Environmental Liabilities and Costs of $500,000 or more;
(b) the receipt by any Borrower of notification that any real or personal
property of such Borrower is or is reasonably likely to be subject to any
Environmental Lien of $500,000 or more;
(c) the receipt by any Borrower of any notice of violation of or potential
liability under, or knowledge by such Borrower that there exists a condition
which could reasonably be expected to result in a violation by any Borrower of
or liability of any Borrower under any Environmental Law, except for violations
and liabilities the consequence of which in the aggregate would have no
reasonable likelihood of subjecting such Borrower to Environmental Liabilities
and Costs of $500,000 or more;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation by any Borrower of or liability of any
Borrower under any Environmental Law, which in the aggregate, if adversely
determined, would have a reasonable likelihood of subjecting such Borrower to
Environmental Liabilities and Costs of $500,000 or more;
(e) any proposed acquisition of stock, assets or real estate, or any proposed
leasing of property, or any other action by any Borrower other than those the
consequences of which in the aggregate have reasonable likelihood of subjecting
the Borrowers collectively to Environmental Liabilities and Costs of $500,000 or
more;
(f) any proposed action by any Borrower or any proposed change in Environmental
Laws which in the aggregate have a reasonable likelihood of requiring such
Borrower to obtain additional environmental, health or safety Permits or make
additional capital improvements to obtain compliance with Environmental Laws
that in the aggregate would cost $500,000 or more in a Fiscal Year or subject
such Borrower to additional Environmental Liabilities and Costs of $500,000 or
more; and
(g) upon written request by any Lender through the Administrative Agent, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
delivered pursuant to this Agreement.
Section 6.11. Borrowing Base Determination.
(a) The Administrative Agent may conduct, or may cause to be conducted, at the
Borrowers' expense such appraisals (which shall be conducted no more frequently
than once per fiscal year and only with respect to Eligible Real Property),
investigations and reviews as the Administrative Agent reasonably determines are
needed for the purpose of determining the Borrowing Base, all upon notice and at
such times during normal business hours and as often as may be reasonably
determined by the Administrative Agent (provided, however, that the
Administrative Agent shall not be required to provide such notice if there is an
Event of Default continuing). The Borrowers shall cooperate fully with the
Administrative Agent and all others involved with any such appraisal,
investigation or review to ensure that the Administrative Agent is able to
timely complete such appraisal, investigation or review.
(b) The Borrowers shall promptly notify the Administrative Agent in writing in
the event that at any time such Borrower knows that (i) the Borrowing Base of
all Borrowers is less than 85% of the Borrowing Base reflected in the most
recent Borrowing Base Certificate delivered pursuant to Section 6.1(h) or that
(ii) the outstanding Revolving Credit Outstandings exceed the Borrowing Base as
a result of a decrease therein, and the amount of such excess.
Section 6.12. Other Information. The Borrowers will provide the Administrative
Agent or any Lender with such other information respecting the business,
properties, condition, financial or otherwise, or operations of the Borrowers as
any Lender through the Administrative Agent may from time to time reasonably
request.
Article VII
AFFIRMATIVE COVENANTS
As long as the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Requisite Lenders otherwise consent in writing,
each Borrower agrees with the Lenders and the Agents that:
Section 7.1. Preservation of Corporate Existence, Etc. Each Borrower shall
preserve and maintain its corporate existence, rights (charter and statutory)
and franchises, except as permitted by Sections 8.3 and 8.4.
Section 7.2. Compliance with Laws, Etc. Each Borrower shall comply with all
applicable Requirements of Law, Contractual Obligations and Permits, except
where the failure so to comply would not in the aggregate have a Material
Adverse Effect.
Section 7.3. Conduct of Business. Except as expressly permitted in this
Agreement, each Borrower shall (a) conduct its business in the ordinary course
and (b) use its reasonable efforts, in the ordinary course and consistent with
past practice, to preserve its business and the goodwill and business of the
customers, advertisers, suppliers and others having business relations with such
Borrower, except in each case where the failure to comply with the covenants in
each of clauses (a) and (b) above would not in the aggregate have a Material
Adverse Effect.
Section 7.4. Payment of Taxes, Etc. Each Borrower shall pay and discharge before
the same shall become delinquent, all lawful governmental claims, taxes,
assessments, charges and levies which could reasonably be expected to adversely
affect the Accounts, except where contested in good faith, by proper proceedings
and adequate reserves therefor have been established on the books of such
Borrower in conformity with GAAP and all other material lawful governmental
claims, taxes, assessments, charges and levies, except where contested in good
faith, by proper proceedings and adequate reserves therefor have been
established on the books of such Borrower in conformity with GAAP and except
where such failure to pay will not have a Material Adverse Effect. The Borrowers
will promptly, but in any event within 5 Business Days, notify Administrative
Agent in writing upon (i) receipt of a notice to commence, or commencement of,
any material audit or examination by any Governmental Authority of any Tax
Return or any assertion of any material claim for Taxes by any Governmental
Authority or (ii) execution or filing with the IRS or any Governmental Authority
any agreement or other document extending, or having the effect of extending,
the period for the filing of any material Tax Return or the collection or
assessment of any charges.
Section 7.5. Maintenance of Insurance. Each Borrower shall (i) maintain,
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which such Borrower operates, and, in any event, all insurance required by any
Collateral Documents and (ii) cause all such insurance against loss on any
Eligible Real Property to name the Collateral Agent on behalf of the Secured
Parties as additional insured or loss payee, as appropriate, and to provide that
no cancellation, material addition in amount or material change in coverage on
such insurance shall be effective until after 30 days' written notice thereof to
the Collateral Agent. So long as no Event of Default is continuing, the
Borrowers shall have the right to use the proceeds of casualty insurance to
repair or replace damaged or destroyed property. Upon any loss with respect to
any Eligible Real Property, the Borrowers shall, as soon as practicable, repair
or replace such damaged or destroyed property and in the event of any such loss
greater than $1,000,000, within 30 days of such loss, the Borrowers shall at
their option, assign all the proceeds of the casualty insurance to the
Collateral Agent or pledge in favor of the Collateral Agent a new hospital
facility in substitution for such damaged Eligible Real Property, and deliver
appropriate documentation to evidence such substitution, all in form and
substance reasonably satisfactory to the Agents. Until the Collateral Agent
receives the assignment of the proceeds of the casualty insurance or the pledge
of a new hospital facility, in each case, in form and substance satisfactory to
the Agents, the Agents will have the right to reserve against the Facility
reasonable amounts determined by them, in good faith in their reasonable
judgement to reflect the loss of Collateral.
Section 7.6. Access. Subject to patient confidentiality requirements, each
Borrower shall from time to time permit the Administrative Agent and the
Lenders, or any agents or representatives thereof, upon reasonable notice by
telecopy, telephone or hand delivery of same, but in any event, not less than
five Business Days after written notification of the same (except that during
the continuance of an Event of Default, no such notice shall be required) to (a)
examine and make copies of and abstracts from the records and books of account
of such Borrower, (b) visit the properties of such Borrower, (c) discuss the
affairs, finances and accounts of such Borrower with any of its respective
financial officers or directors, and (d) communicate directly with such
Borrower's independent certified public accountants. Each Borrower shall
authorize its independent certified public accountants to discuss with the
Administrative Agent or any Lender any and all financial statements and other
information of any kind, as the Administrative Agent or any Lender reasonably
requests from such Borrower and which such accountants may have with respect to
the business, financial condition, results of operations or other affairs of
such Borrower.
Section 7.7. Keeping of Books. Each Borrower shall keep proper books of record
and account, in which full and correct entries shall be made in conformity with
GAAP of all financial transactions and the assets and business of such Borrower.
Section 7.8. Maintenance of Properties, Etc. Each Borrower shall maintain and
preserve, (a) all of its properties which are necessary in the conduct of its
business in good working order and condition (ordinary wear and tear excepted),
(b) all rights, permits, licenses, approvals and privileges (including all
Permits) which are used or useful or necessary in the conduct of its business,
and (c) all registered patents, trademarks, trade names, copyrights and service
marks with respect to its business; except where the failure to so maintain and
preserve in the case of each of (a), (b) and (c) would not in the aggregate have
a Material Adverse Effect.
Section 7.9. Application of Proceeds. Each Borrower shall use the entire
amount of the proceeds of the Loans as provided in Section 4.12.
Section 7.10. Environmental. Each Borrower shall comply in all material respects
with Environmental Laws and, without limiting the foregoing, such Borrower
shall, at its sole cost and expense, upon receipt of any notification or
otherwise obtaining knowledge of any Release or other event that has any
reasonable likelihood of such Borrower incurring Environmental Liabilities and
Costs in excess of $1,000,000 for each event or, $2,500,000 for all such events
in the aggregate, address in good faith and in a manner reasonably appropriate
under the circumstances of any such matter, including when applicable (a)
conducting or paying for consultants to conduct, tests or assessments of
environmental conditions at such operations or properties (including the
investigation and testing of subsurface conditions), and (b) taking such
Remedial Action, investigational or other action as required by Environmental
Laws or a Governmental Authority or that are appropriate and consistent with
good business practice to address the Release or event.
Section 7.11. Real Property.
(a) Each Borrower shall (i) comply in all material respects with all of its
respective obligations under all of its respective Leases now or hereafter held
respectively by it with respect to real property; provided, however, that any
default by Flint River under its lease solely as a result of its existing bond
debt shall not constitute a breach of this provision; (ii) not modify, amend,
cancel, extend or otherwise change in any materially adverse manner any of the
terms, covenants or conditions of any such Leases; (iii) not assign or sublet
any other Lease if such assignment or sublet would have a Material Adverse
Effect; and (iv) provide the Administrative Agent with a copy of each notice of
material default under any material Lease received by such Borrower promptly
upon receipt thereof and deliver to the Administrative Agent a copy of each
notice of default sent by such Borrower under any Lease substantially
simultaneously with its delivery of such notice under such Lease.
(b) At least 15 Business Days prior to (i) entering into any Lease (other than a
renewal of an existing Lease) for the principal place of business and chief
executive office of any Borrower or any other Lease (including any renewal) in
which the annual rental payments are anticipated to equal or exceed $1,000,000
or (ii) acquiring of any material owned real property, such Borrower shall
provide the Administrative Agent written notice thereof provided, however, that
Borrowers are not required to give any additional notice with respect to the
acquisition permitted pursuant to Section 8.1(i) .
Section 7.12. Matters Related to Accounts. Each Borrower shall comply with each
of the following covenants in connection with all Accounts, or in connection
with such Borrower's dealings with its patients or any Account Debtor, in each
case, in all respects subject to obligations of patient confidentiality and
other requirements of applicable law:
(a) in all material respects keep accurate and complete records of its Accounts
and payments and collections thereon and allow the Agents, and their respective
designated representatives, at reasonable times and upon reasonable notice, to
review such records as well as medical records, insurance verification forms,
assignment of benefits, and any relevant documentation thereon;
(b) if any of its Accounts in an aggregate face amount in excess of $250,000 in
the aggregate for such Borrower cease, to such Borrower's knowledge, to qualify
as Eligible Receivables, give each Agent notice of the circumstances promptly
and in any event not later than three Business Days after such Borrower becomes
aware of the circumstances;
(c) give each Agent prompt notice of any matter, to such Borrower's knowledge,
materially affecting the value, enforceability or collectibility of any of its
Account or Accounts (excluding any Self Pay Amount) in excess of $250,000 in the
aggregate for such Borrower outstanding at any time and of all material customer
disputes, offsets, defenses, counterclaims, returns, rejections and all
reclaimed or repossessed merchandise or goods;
(d) whether or not an Event of Default has occurred, take such action upon
request by the Administrative Agent to enable any of its officers, employees or
agents, at any time or times, in the name of Administrative Agent or such
Borrower, to verify the validity, amount or any other matter relating to any
Accounts of such Borrower, by mail, telephone, facsimile or otherwise, and
otherwise cooperate fully with the Administrative Agent to facilitate and
promptly conclude such verification process;
(e) in the first instance, endeavor to make collection of the Accounts of such
Borrower, to expedite collection, until such time as the Administrative Agent
has notified the Borrowers that a Material Event of Default has occurred and
that, thereafter, only the Collateral Agent will (subject to applicable law
regarding Medicaid/Medicare Account Debtors or other governmental payors), and
such Borrower shall not, endeavor to make collection of such Accounts; and after
such notice from the Administrative Agent, if the Administrative Agent so
requests, cooperate with the Collateral Agent to give notice to the Account
Debtors on such Borrowers' Accounts that such Accounts have been assigned to the
Collateral Agent for the benefit of the Secured Parties;
(f) in addition to clause (e) above, to the extent requested by the Collateral
Agent, (A) provide written notice to each private indemnity, managed care
(except with respect to Governmental Receivables) or other insurer who is an
Account Debtor on any Account of such Borrower and, thereafter, promptly after
such insurer (other than a Governmental Authority obligated on a Governmental
Receivable) becomes an Account Debtor on any such Account, provide written
notice to such insurer, that the Collateral Agent has been granted a first
priority lien and security interest in, upon and to all Accounts applicable to
such insurer and directs such Account Debtor to make payments into the
appropriate Collection Account, and (B) do anything further that may be
reasonably requested by the Agents to preserve or protect the security interests
in the Collateral contemplated in this Agreement and the Collateral Documents
and effectuate the intentions and objects of this Agreement and the Collateral
Documents, including, but not limited to, the execution and delivery of
Collection Account Agreements in accordance with Section 2.16(b), continuation
statements, amendments to financing statements, and any other documents required
under this Agreement and the Collateral Documents; and
(g) notify the Collateral Agent in writing three Business Days prior to any
termination or modification of the EFT Collection Account Agreement and execute
a new EFT Collection Account Agreement satisfactory in all respects to the
Agents before the actual termination or modification of the EFT Collection
Account Agreement.
Section 7.13. Trade Payables. Each Borrower shall pay all trade payables
incurred in the ordinary course of business as they become due, consistent with
current practices, except where the failure so to pay would not in the aggregate
have a Material Adverse Effect.
Article VIII
NEGATIVE COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, without the written consent of the Requisite
Lenders, each Borrower agrees with the Lenders and the Agents that:
Section 8.1. Indebtedness. Each Borrower will not create, incur, assume or
otherwise become or remain directly or indirectly
------------
liable with respect to any Indebtedness except:
(a) the Obligations;
(b) Indebtedness existing on the Closing Date and disclosed on Schedule 8.1;
(c) Capital Lease Obligations incurred by the Borrowers to finance the
acquisition of fixed assets in an aggregate outstanding principal amount not to
exceed $5,000,000 per year (not including any Capital Lease Obligations
permitted by Section 8.1(l));
(d) Purchase money Indebtedness;
(e) Renewals, extensions, refinancings and refundings of Indebtedness permitted
by clause (b), (c) or (d) of this Section 8.1; provided, however, that any such
renewal extension, refinancing or refunding in clause (c) and (d) is in an
aggregate principal amount not greater than the principal amount of, and is on
terms no less favorable to such Borrower, including as to weighted average
maturity, than the Indebtedness being renewed, extended, refinanced or refunded;
(f) Indebtedness arising from intercompany loans to such Borrower from any
other Affiliate;
(g) Indebtedness arising under any performance or surety bond entered into
in the ordinary course of business or any appeal or supersedeas bond;
(h) Indebtedness either secured by any property other than Collateral or
unsecured Indebtedness, in each case not otherwise permitted under this Section
8.1, in an aggregate outstanding principal amount not to exceed $75,000,000 at
any time in the aggregate for all of the Borrowers so long as after giving
effect to the incurrence of such Indebtedness (i) there are at least five
Borrowers continuing to operate hospital facilities (including the Eligible Real
Property) and the related Accounts of such hospitals remain pledged as
Collateral to the Collateral Agent, (ii) the Available Credit with respect to
the Remaining Borrowers is at least $5,000,000 and (iii) the Financial Covenant
Debt of the Remaining Borrowers is no more than 3.25X the trailing 12 month
EBITDA of such Remaining Borrowers as of the last day of the most recently
completed month for which Financial Statements have been delivered pursuant to
Section 6.1; provided, however, that the EBITDA of PHC/CHC Holdings, Inc. for
the year ended December 31, 2000 shall be based on annualized results for
January 1, 2000 forward;
(i) Approximately $1,800,000 in debt incurred by Metropolitan in connection
with the assumption of the debt related to the medical office building to be
acquired by Metropolitan;
(j) Hedging Contracts permitted by Section 8.15;
(k) each Borrower may guarantee the income or debts of individual health care
professionals (or of professional corporations or partnerships some or all of
which are owned by individual health care professionals) associated with its
respective hospital facility; provided, however, that all such guaranties, when
added to the loans and extension of credit made pursuant to Section 8.3(h), may
not exceed $15,000,000 in the aggregate at any one time outstanding for all of
the Borrowers; and
(l) sale-leasebacks of any medical office building pursuant to Section 8.4
(g); and
(m) Indebtedness in respect of Letter of Credit Guaranties or Letters of
Credit contemplated by Section 2.3(k).
Section 8.2. Liens, Etc. Each Borrower will not create or suffer to exist, any
Lien upon or with respect to any of its properties or assets, whether now owned
or hereafter acquired, or assign any right to receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed on Schedule
8.2;
(c) Customary Permitted Liens of any Borrower;
(d) Purchase money Liens granted by such Borrower (including the interest of a
lessor under a Capital Lease and Liens to which any property is subject at the
time of the Borrower's acquisition thereof) securing Indebtedness permitted
under Section 8.1(c) and (d) and limited in each case to the property purchased
with the proceeds of such purchase money Indebtedness or subject to such Capital
Lease and Liens granted by such Borrower securing Indebtedness permitted under
Section 8.1(l) and limited to the property subject to such lease;
(e) Any Lien securing the renewal, extension, refinancing or refunding of any
Indebtedness secured by any Lien permitted by clauses (b), (d) or (e) of this
Section 8.2 without any change in the assets subject to such Lien;
(f) Liens on equipment in favor of lessors securing operating leases of
such equipment;
(g) Liens on property other than Collateral granted in connection with the
incurrence of Indebtedness permitted under Section 8.1(h);
(h) Liens permitted under any Mortgage;
(i) Other Liens on property other than Accounts and other Liens to the extent
they are junior to the Collateral Agent's Lien, so long as the obligations
secured thereby do not exceed $1,000,000 in the aggregate at any one time
outstanding;
(j) Any Lien on property other than Collateral required to be pledged to The
Chase Manhattan Bank by the Letter of Credit application submitted by the
Borrowers to The Chase Manhattan Bank; and
(k) Liens on cash or Cash Equivalents to collateralize letters of credit at
any Issuing Bank contemplated by Section 2.3(k)
Section 8.3. Investments. Each Borrower will not, directly or indirectly,
make or maintain any Investment except:
(a) Investments existing on the date of this Agreement and disclosed on
Schedule 8.3;
(b) Investments in Cash and Cash Equivalents held in the Cash Collateral Account
or the Concentration Account with respect to which the Collateral Agent for the
benefit of the Secured Parties has a first priority perfected Lien;
(c) Investments in Cash and Cash Equivalents in existing accounts disclosed on
Schedule 8.3 under "Existing Accounts", in the amounts existing in such accounts
as of the close of business on the day before the Closing Date and disclosed on
Schedule 8.3 under "Existing Accounts";
(d) other Investments in Cash and Cash Equivalents;
(e) Investments in accounts, contract rights and chattel paper (each as defined
in the Uniform Commercial Code), notes receivable and similar items arising or
acquired in the ordinary course of business consistent with the past practice of
such Borrower;
(f) Investments received in settlement of amounts due to such Borrower
effected in the ordinary course of business;
(g) Investments by any Borrower in any other Borrower;
(h) Loans or advances to employees of the Borrower and/or physicians in the
ordinary course of business, consistent with current practices, which loans and
advances shall not exceed the aggregate outstanding principal amount of
$1,000,000 individually, and, when added to the Indebtedness incurred pursuant
to Section 8.1(k), $15,000,000 in the aggregate at any one time outstanding for
all of the Borrowers;
(i) Investments from the accounts described in Section 8.3(c) in the
amounts shown on Schedule 8.3 under "Existing Accounts".
(j) Investments from proceeds of the Indebtedness permitted by Section 8.1 (h)
or from proceeds of any equity investment (by an investor who is not a Borrower)
in such Borrower so long as no Default or Event of Default has occurred and is
continuing;
(k) Investments in Paracelsus from the proceeds of Revolving Credit Loans or
sources other than those identified in Sections 8.3(c), 8.(i) and 8.3(j) in an
aggregate amount, when added to the Restricted Payment described in Section
8.5(a), not to exceed $7,000,000 in any calendar year so long as the Available
Credit is at least $3,500,000 and no Event of Default has occurred and is
continuing;
(l) Investments in Affiliates other than Paracelsus or any other Borrower from
the proceeds of Revolving Credit Loans or sources other than those identified in
Sections 8.3(c), 8.3(i) and 8.3(j) in an aggregate amount, when added to the
Restricted Payment described in Section 8.5(b), not to exceed $5,000,000 in any
calendar year so long as the Available Credit is at least $2,500,000; and no
Material Event of Default has occurred and is continuing; provided, however,
that the restrictions in this section shall not apply to payments to PFC Funding
Corp II contemplated by clause (iii) of Section 4.12 and made on the Closing
Date; and
(m) seller notes received by such Borrower in connection with
the sale of any asset permitted under this Agreement so long as any such seller
note in an aggregate principal amount of $1,000,000 or more is pledged to the
Lender.
Section 8.4. Sale of Assets. Each Borrower will not sell, convey, transfer,
lease or otherwise dispose of, any of its assets or any interest therein
(including the sale or factoring at maturity or collection of any accounts) to
any Person, or permit or suffer any other Person to acquire any interest in any
of its assets (any such disposition being an "Asset Sale"), except:
(a) the sale or disposition of inventory in the ordinary course of
business;
(b) the sale or disposition of property no longer used or useful in the
ordinary course of business;
(c) the lease or sublease of real property not constituting a sale and
leaseback, to the extent not otherwise prohibited by this Agreement;
(d) assignments and licenses of intellectual property of such Borrower in
the ordinary course of business;
(e) sales or other dispositions other than real property or Collateral
between and among the Borrowers;
(f) as long as no Event of Default is continuing, the sale of any hospital
facility (and/or sale of the related Accounts of such hospital) other than the
Eligible Real Property, as long as after giving effect to such sale (i) there
are at least 5 Borrowers continuing to operate hospital facilities (including
the Eligible Real Property) and the related Accounts of such hospitals remain
pledged as Collateral to the Collateral Agent, (ii) the Available Credit with
respect to the Remaining Borrowers is at least $5,000,000 and (iii) the
Financial Covenant Debt of the Remaining Borrowers (including any Obligations
which continue to be owed to the Lenders by such Borrower after giving effect to
such Borrower's hospital facility having been sold or such Borrower's Accounts
having been sold) is no more than 3.25X the trailing 12 month EBITDA of such
Remaining Borrowers as of the last day of the most recently completed month for
which Financial Statements have been delivered pursuant to Section 6.1;
provided, however, that the EBITDA of PHC/CHC Holdings, Inc. for the year ended
December 31, 2000 shall be based on annualized results for January 1, 2000
forward; provided, further, that such Borrower may consummate such sale pursuant
to this clause (f) during the continuance of an Event of Default if, prior to
such sale, two-thirds of the Lenders and the Borrowers mutually agree upon the
disposition of the proceeds of such sale, provided, further, that no such sale
or application of proceeds shall require a mandatory reduction in the Revolving
Credit Commitment and
(g) Sale-leasebacks to the extent the debt associated with such
sale-leaseback is permitted under Section 8.1.
All Accounts of the Borrowers that are sold and all Accounts related to any
hospital facility sold pursuant to clause (f) above will be excluded from the
Borrowing Base immediately upon such sale and the Borrowers who owned or leased
the hospital facilities sold or the Accounts sold pursuant to clause (f) above,
will cease to be Borrowers hereunder immediately upon such sale and immediately
cease to have any obligation under any loan Document.
Section 8.5. Restricted Payments. Other than Restricted Payments made from
proceeds of Indebtedness permitted under Section 8.1(h), from the accounts
described in Section 8.3(c), from Investments described in Section 8.3 (i), or
from the proceeds of an equity investment (by an investor who is not a Borrower)
in such Borrower, each Borrower will not, directly or indirectly declare, order,
pay, make or set apart any sum for any Restricted Payment except Restricted
Payments (a) to Paracelsus in an aggregate amount, when added to the Investments
described in Section 8.3(k), not to exceed $7,000,000 in any calendar year so
long as after giving effect thereto, Available Credit is at least $3,500,000 and
(b) to Affiliates other than Paracelsus in an aggregate amount, when added to
the Investments described in Section 8.3(l), not to exceed $5,000,000 in any
calendar year so long as after giving effect thereto, Available Credit is at
least $2,500,000; provided, however, that no Restricted Payment, other than a
Restricted Payment from the accounts described in Section 8.3(c), shall be
permitted if an Event of Default has occurred and is continuing at the date of
declaration or payment thereof or would result therefrom.
Section 8.6. Restriction on Fundamental Changes; Permitted Acquisitions. Each
Borrower will not (a) merge with any Person, (b) consolidate with any Person,
(c) acquire all or substantially all of the Stock or Stock Equivalents of any
Person, (d) acquire all or substantially all of the assets of any Person or all
or substantially all of the assets constituting the business of a division,
branch or other unit operation of any Person, (e) enter into any joint venture
or partnership with any Person or (f) acquire or create any subsidiary;
provided, however, that Metropolitan may acquire certain equity interests in the
Metropolitan Medical Office Building Partnership in connection with the
incurrence of Indebtedness pursuant to Section 8.1(i);
Section 8.7. Change in Nature of Business. Each Borrower will not make any
material change in the nature or conduct of its business as carried on at the
date hereof.
Section 8.8. Transactions with Affiliates. Each Borrower will not, except as
otherwise expressly permitted pursuant to Sections 8.1, 8.3, 8.4 and 8.5, do any
of the following: (a) make any Investment in an Affiliate of such Borrower which
is not a Borrower; (b) transfer, sell, lease, assign or otherwise dispose of any
asset to any Affiliate of such Borrower which is not a Borrower; (c) merge into
or consolidate with or purchase or acquire assets from any Affiliate of such
Borrower which is not a Borrower hereunder; (d) repay any Indebtedness to any
Affiliate of such Borrower which is not a Borrower; or (e) enter into any other
transaction directly or indirectly with or for the benefit of any Affiliate of
such Borrower which is not a Borrower (including guaranties and assumptions of
obligations of any such Affiliate), except for (i) transactions in the ordinary
course of business on a basis no less favorable to such Borrower as would be
obtained in a comparable arm's length transaction with a Person not an Affiliate
and (ii) salaries and other employee compensation to officers or directors of
such Borrower commensurate with reasonable compensation levels; provided,
however, that Metropolitan may engage in transactions with its limited partners
consistent with past practice.
Section 8.9. Modification of Constituent Documents. Each Borrower will not
change its capital structure (including in the terms of its outstanding Stock)
or otherwise amend its Constituent Documents, except for changes and amendments
which do not materially affect the rights and privileges of such Borrower, or
materially and adversely affect the interests of the Agents and the Lenders
under the Loan Documents or in the Collateral.
Section 8.10. Accounting Changes; Fiscal Year. Each Borrower will not change its
(a) accounting treatment and reporting practices or tax reporting treatment,
except as permitted by GAAP or as required by any Requirement of Law and
disclosed to the Lenders and the Administrative Agent or (b) Fiscal Year.
Section 8.11. Margin Regulations. Each Borrower will not use any portion
of the proceeds of any credit extended hereunder to purchase or carry
Margin Stock.
Section 8.12. Operating Leases. Each Borrower will not become or remain liable
as lessee or guarantor or other surety with respect to any operating lease
(other than sale-leaseback transactions otherwise permitted), unless the
aggregate amount of all rents paid or accrued under all such operating leases
shall not exceed $10,000,000 in any Fiscal Year.
Section 8.13. Cancellation of Indebtedness Owed to It. Each Borrower will not
cancel any material claim or Indebtedness owed to it in an amount greater than
$1,000,000 or in an aggregate amount greater than $2,000,000 in any fiscal year
for all of the Borrowers; provided, however, the cancellation of a claim or
Indebtedness for purposes of this Section 8.13 shall not include the
cancellation of (i) any claim or Indebtedness required to be cancelled pursuant
to a bankruptcy, restructuring or plan of reorganization, (ii) any amount owed
in respect of any account in the ordinary course of business and consistent with
past practices and (iii) any obligation of PFC Funding Corp II solely in
connection with the termination of the existing accounts receivable
securitization program contemplated by clause (iii) of Section 4.12 that is to
occur on the Closing Date.
Section 8.14. No Speculative Transactions. Each Borrower will not engage in any
speculative transaction or in any transaction involving Hedging Contracts except
for the sole purpose of hedging in the normal course of business or consistent
with industry practices.
Section 8.15. Compliance with ERISA. Each Borrower will not cause or permit to
occur (a) an event which could result in the imposition of a Lien under Section
412 of the Code or Sections 302 or 4068 of ERISA or (b) an ERISA Event that
would have a Material Adverse Effect.
Section 8.16. Environmental. Each Borrower will not allow a Release of any
Contaminant in violation of any Environmental Law; provided, however, that any
Borrower shall not be deemed in violation of this Section 8.16 if, as the
consequence of any such Release, such Borrower would not incur Environmental
Liabilities and Costs in excess of $1,000,000 and as a consequence of all such
Releases, $2,500,000 in the aggregate for all of the Borrowers.
Article IX
EVENTS OF DEFAULT
Section 9.1. Events of Default. Each of the following events shall be an
Event of Default:
(a) The Borrowers shall fail to pay, repay or prepay on the due date thereof any
amount of principal of any Loan or Reimbursement Obligation (including, without
limitation payments required under Section 2.7), or within five (5) days after
the due date thereof any interest on any Loan, fees under the Loan Documents or
any other Obligation.
(b) Any representation or warranty made or deemed made by any Borrower in any
Loan Document or in any certificate, report, notice or financial statement
furnished at any time in connection therewith shall be false, misleading or
erroneous in any material respect when made or deemed to have been made.
(c) Any Borrower shall fail to perform, observe or comply with (i) clauses (a),
(b), (c), (d), (e) and (f) of Section 6.1 and such failure is not remedied to
the sole satisfaction of the Requisite Lenders or waived in writing by the
Requisite Lenders within five days after any Responsible Officer of any Borrower
has knowledge that, or any Lender has given such Borrower notice that, such
failure has occurred, (ii) clause (g) of Section 6.1, and such failure is not
remedied to the sole satisfaction of the Requisite Lenders or waived in writing
by the Requisite Lenders within two 2 Business Days after any Responsible
Officer of any Borrower has knowledge that, or any Lender has given such
Borrower notice that, such failure has occurred, or (iii) any other covenant,
agreement or term contained in any Loan Document other than Sections 4.16, 7.10
and 8.16 of this Agreement and such failure is not remedied to the sole
satisfaction of the Requisite Lenders or waived in writing by the Requisite
Lenders within 30 days after any Responsible Officer of any Borrower has
knowledge that, or any Lender has given such Borrower notice that, such failure
has occurred. Notwithstanding the foregoing, there shall be no requirement for
prior notice, knowledge or grace period in the event of or the failure of any
Borrower to comply with any term, covenant or agreement contained in Section
2.16, Article V, Sections 6.2, 6.11, 7.1, 7.6, 7.9, 7.12, or Article VIII (other
than Sections 8.10 or 8.12).
(d) Any Borrower shall fail to perform, observe or comply with Sections 4.16,
7.10 or 8.16 and such failure is not remedied to the sole satisfaction of the
Requisite Lenders or waived in writing by the Requisite Lenders within 30 days
after any Responsible Officer of any Borrower has knowledge that, or any Lender
has given such Borrower notice that, such failure has occurred; provided,
however, that such failure shall not constitute a Default or Event of Default if
such Borrower resolves the issue before such grace period expires by excluding
its Accounts from the Borrowing Base or by ceasing to be a Borrower hereunder,
all in accordance with Section 2.17(c); provided, further, that the
Administrative Agent shall include such excluded Accounts in the Borrowing Base
if such Borrower has not ceased being a Borrower once such Borrower has remedied
such failure and no Event of Default has occurred and is continuing;
(e) Any Borrower shall admit in writing its inability to, or be generally unable
to, pay its debts as such debts become due; provided however, that this
provision shall not be applicable in the event Flint River is unable to pay its
bond debt so long as Flint River ceases to be a Borrower and an amount equal to
the Required Amount with respect to Flint River are repaid immediately upon such
inability to pay the bond debt as it becomes due.
(f) Any Borrower shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, examiner, liquidator or
the like of itself or of all or any substantial part of its property, (ii) make
a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) institute any proceeding or file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, winding-up or composition
or readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate or
similar such action for the purpose of authorizing any of the foregoing;
provided, however, that this provision shall not be applicable to Flint River if
it has ceased to be a Borrower and an amount equal to the Required Amount with
respect to Flint River shall have been repaid prior to the occurrence of any
event in this subsection (f).
(g) A proceeding or case shall be commenced, without the application, approval
or consent of any Borrower in any court of competent jurisdiction, seeking (i)
its reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of any Borrower or of all
or any substantial part of its property, or (iii) similar relief in respect of
any Borrower under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for relief against any
Borrower shall be entered in an involuntary case under the Bankruptcy Code;
provided, however, that this provision shall not be applicable to Flint River if
it ceases to be a Borrower under the Facility immediately upon the occurrence of
any event in this paragraph and an amount equal to the Required Amount with
respect to Flint River shall be repaid and any amounts outstanding in excess of
the Available Credit as a result of the exclusion of Flint River's Accounts from
the Borrowing Base shall be paid no later than five Business Days after the
occurrence of any event in this paragraph. Borrowers other than Flint River will
continue to be able to borrow under the Facility (as long as they are otherwise
able to under the Facility) during such 5 Business Day grace period and no
Default shall be deemed to occur during such 5 day grace period solely because
of any occurrence of any event in this paragraph.
(h) Any Borrower shall fail to discharge within a period of 30 days after the
commencement thereof any order of attachment, sequestration, forfeiture or
similar order or orders involving an aggregate amount of $500,000 or more
against any of its properties.
(i) Any one or more judgments, settlements or decrees shall be entered against,
or agreed to by any Borrower involving an aggregate liability in the aggregate
amount at any time of $3,000,000 or more in excess of any amounts covered by
insurance, and all of such judgments, settlements and decrees shall not have
been vacated, discharged, satisfied, stayed or bonded pending appeal, or paid or
otherwise discharged, within 30 days from the date of entry thereof or agreement
thereto or, with respect to matters subject to appeal, within the later to occur
of such 30 days or within the time period available for appeal under applicable
law.
(j) Any Borrower shall fail to pay when due, after taking into account any
applicable cure or grace periods (and shall not have been waived or otherwise
cured), any principal of or interest on any debt having a principal amount of at
least $3,000,000, or the maturity of any such debt shall have been accelerated;
provided however, that this provision shall not be applicable in the event Flint
River is unable to pay its bond debt so long as Flint River ceases to be a
Borrower and an amount equal to the Required Amount with respect to Flint River
are repaid immediately upon such inability to pay the bond debt as it becomes
due.
(k) Any event shall have occurred, after taking into account any applicable cure
or grace periods (and shall not have been waived or otherwise cured) with
respect to any debt having a principal amount of at least $3,000,000, that
permits any holder or holders of such debt or any person acting on behalf of
such debt or any person acting on behalf of such holder or holders to accelerate
the maturity thereof; provided, however, that this provision shall not be
applicable to Flint River with respect to its existing bond debt.
(l) Any Loan Document shall cease to be in full force and effect or shall be
declared null and void or the validity or enforceability thereof shall be
contested or challenged by any Borrower or any of its shareholders, or any
Borrower shall deny that it has any further liability or obligation under any
Loan Document except to the extent such liability or obligation is released by
any Agent or Lender, as the case may be, or the Lien created by the Loan
Document shall for any reason cease to be a valid, first priority perfected
Lien, subject to Liens permitted by Section 8.2, upon any of the Collateral
purported to be covered thereby except to the extent such Lien is released by
the Collateral Agent.
(m) Any ERISA Event shall occur and the amount of all liabilities and
deficiencies resulting thereupon, whether or not assessed exceeds $2,500,000 in
the aggregate.
(n) An event or condition shall occur that results in a Material Adverse
Effect.
Notwithstanding anything to the contrary herein, any default by PHC/CHC
Holdings, Inc. under a Letter of Credit issued by The Chase Manhattan Bank
solely because of its failure to provide additional collateral to The Chase
Manhattan Bank will not result in a Default or Event of Default under this
Agreement.
Section 9.2. Remedies. During the continuance of any Event of Default, the
Administrative Agent (a) may, and shall at the request of the Requisite Lenders,
by notice to the Borrowers, declare that all or any portion of the Revolving
Credit Commitments be terminated, whereupon the obligation of each Lender to
make any Loan and CITBC to issue any Letter of Credit Guaranty shall immediately
terminate to the extent of such termination, and/or (b) may and shall at the
request of the Requisite Lenders, by notice to the Borrowers, declare the Loans,
all interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrowers; provided, however,
that upon the occurrence of the Event of Default specified in Section 9.1(f) or
(g) (A) the Revolving Credit Commitments of each Lender to make Loans and of
each Lender and CITBC to issue or participate in Letter of Credit Guaranties
shall automatically be terminated and (B) the Loans, all such interest and all
such amounts and Obligations shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrowers. In addition to the remedies set forth
above, the Collateral Agent may exercise any remedies provided for by the
Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable law.
Section 9.3. Actions in Respect of Letters of Credit. From and after the Closing
Date, the Borrowers shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office referred to in Section
12.3, for deposit in a Cash Collateral Account, an amount equal to 100% of the
sum of all outstanding Letter of Credit Obligations for application in
accordance with Section 2.7(c). If the cash (including any interest earned
thereon) in the Cash Collateral Account exceeds at any time the aggregate amount
of all outstanding Letter of Credit Obligations, the Administrative Agent shall
pay, or direct the applicable bank to release, the amount of such excess
promptly to the Borrowers as long as there is no Default or Event of Default
continuing.
Article X
THE ADMINISTRATIVE AGENT; THE AGENTS
Section 10.1. Authorization and Action.
(a) Each Lender hereby appoints CITBC as the Administrative Agent hereunder and
HHF as the Collateral Agent hereunder and each Lender authorizes the
Administrative Agent and the Collateral Agent to take such respective action as
agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to each of them under such agreements and
to exercise such powers as are reasonably incidental thereto. Without limiting
the foregoing, each Lender hereby authorizes the Administrative Agent to execute
and deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents and
each Lender agrees that under the Collateral Documents the Collateral Agent is
acting as agent for the other Secured Parties.
(b) As to any matters not expressly provided for by this Agreement and the other
Loan Documents (including enforcement or collection), Agents shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders provided, however, that the
Agents shall not be required to take any action which (i) the Agents in good
faith believe exposes them to personal liability unless the Agents receive an
indemnification satisfactory to them from the Lenders with respect to such
action or (ii) is contrary to this Agreement or applicable law. The Agents agree
to give to each Lender prompt notice of each notice given to them by any
Borrower pursuant to the terms of this Agreement or the other Loan Documents.
(c) In performing their functions and duties hereunder and under the other Loan
Documents, the Agents are acting solely on behalf of the Lenders and their
duties are entirely administrative in nature. The Agents do not assume and shall
not be deemed to have assumed any obligation other than as expressly set forth
herein and in the other Loan Documents or any other relationship as the agent,
fiduciary or trustee of or for any Lender or holder of any other Obligation. The
Agents may perform any of their duties under any of the Loan Documents by or
through their agents or employees.
Section 10.2. The Agents' Reliance, Etc. Neither of the Agents nor any of their
Affiliates or any of the respective directors, officers, agents or employees of
such Agents or any such Affiliate shall be liable for any action taken or
omitted to be taken by it, him, her or them under or in connection with this
Agreement or the other Loan Documents, except for any such Person's gross
negligence or willful misconduct. Without limiting the foregoing, each Agent (a)
may treat the payee of any Revolving Credit Note as its holder until such
Revolving Credit Note has been assigned in accordance with Section 11.2; (b) may
rely on the Register to the extent set forth in Section 11.2(c); (c) may consult
with legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (d) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
by or on behalf of the Borrowers in or in connection with this Agreement or any
of the other Loan Documents; (e) shall not have any duty to any Lender to
ascertain or to inquire either as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any of the other Loan
Documents or the financial condition of any Borrower, or the existence or
possible existence of any Default or Event of Default; (f) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (g) shall incur no liability to any Lender under or in
respect of this Agreement or any of the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopy) or any telephone message believed by it to be genuine and signed or
sent by the proper party or parties.
Section 10.3. The Agents Individually. With respect to its respective Ratable
Portion, each of CITBC and HHF shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent or Collateral Agent in its
individual capacity as a Lender or as one of the Requisite Lenders.
Section 10.4. Lender Credit Decision. Each Lender acknowledges that it shall,
independently and without reliance upon the Administrative Agent or any other
Lender, conduct its own independent investigation of the financial condition and
affairs of any Borrower in connection with the making and continuance of the
Loans and with the issuance of the Letters of Credit. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.
Section 10.5. Indemnification. Each Lender agrees to indemnify each Agent and
each of its Affiliates, and each of their respective directors, officers,
employees, agents and advisors (to the extent not reimbursed by the Borrowers),
from and against such Lender's aggregate Ratable Portion of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements (including fees and disbursements of legal
counsel) of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against, any Agent or any of its Affiliates, directors, officers,
employees, agents and advisors in any way relating to or arising out of this
Agreement or the other Loan Documents or any action taken or omitted by Agent
under this Agreement or the other Loan Documents; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the any Agent's or Affiliate's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse the
Agents promptly upon demand for its ratable share of any out-of-pocket expenses
(including fees and disbursements of legal counsel) incurred by the Agents in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or the other Loan Documents, to the
extent that the Agents are not reimbursed for such expenses by the Borrowers.
Section 10.6. Successor Agents. Subject to the acceptance of appointment by a
successor Agent as provided below, each of the Administrative Agent and the
Collateral Agent may resign at any time by giving written notice thereof to the
Lenders and the Borrowers. Upon any such resignation, the Requisite Lenders
shall have the right to appoint a successor Agent. If no successor Agent (i)
shall have been so appointed by the Requisite Lenders, and (ii) shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, selected from among the Lenders. In either case, such
appointment shall be subject to the prior written approval of the Borrowers
(which approval may not be unreasonably withheld or delayed and shall not be
required upon the occurrence and during the continuance for more than 30 days of
an Event of Default). Upon the acceptance of any appointment as Agent by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations from and
after such date under this Agreement and the other Loan Documents. Prior to any
retiring Agent's resignation hereunder as Agent, 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. After such resignation, the retiring
Agent shall continue to have the benefit of this Article X as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
the other Loan Documents.
Section 10.7. Concerning the Collateral and the Collateral Documents and
Releases of Borrowers.
(a) Each Lender agrees that any action taken by the Administrative Agent, the
Collateral Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or of the other Loan Documents, and the
exercise by the Administrative Agent, the Collateral Agent or the Requisite
Lenders (or, where so required, such greater proportion) of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Secured Parties.
Without limiting the generality of the foregoing, the Collateral Agent shall
have the sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders with respect to all payments and collections
arising in connection herewith and with the Collateral Documents; (ii) execute
and deliver each Collateral Document and accept delivery of each such agreement
delivered by the Borrowers; (iii) act as collateral agent for the other Secured
Parties for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein; provided,
however, that the Collateral Agent hereby appoints, authorizes and directs each
Lender to act as collateral sub-agent for the Administrative Agent and the
Lenders for purposes of the perfection of all security interests and Liens with
respect to the Borrowers' respective Collection, Intermediate Concentration and
Concentration Accounts maintained with, and cash and Cash Equivalents held by,
such Lender; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and Liens created or purported to be created
by the Collateral Documents; and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to the Collateral Agent and the Secured Parties with respect to
the Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(b) Each of the Lenders hereby directs, in accordance with the terms hereof, the
Collateral Agent to release (or, in the case of clause (ii) below, release or
subordinate) any Lien held by the Collateral Agent for the benefit of the
Lenders and the Collateral Agent hereby agrees to release any Lien held by the
Collateral Agent for the benefit of the Lenders:
(i) against all of the Collateral, upon termination of the Revolving Credit
Commitments and payment and satisfaction in full of all Loans, Reimbursement
Obligations and all other Obligations which have matured and which the
Collateral Agent has been notified in writing are then due and payable (and, in
respect of contingent Letter of Credit Obligations, with respect to which cash
collateral has been deposited or a back-up letter of credit has been issued, in
either case on terms satisfactory to the Collateral Agent and CITBC);
(ii) against any part of the Collateral that is subject to a Lien permitted
by Section 2.17(a);
(iii) against any part of the Collateral sold, closed or disposed of by a
Borrower if such sale, closure or disposition is permitted by Section 8.4(a),
(b) and (f) or Section 2.17(b) (or permitted pursuant to a waiver or consent of
a transaction otherwise prohibited by this Agreement);
(iv) against any other Collateral with a book value of up to $2,500,000, if such
release is consented to by the Requisite Lenders, or any part of the Collateral
in excess of such amount, if such release is consented to by all the Lenders;
and
(v) in connection with the substitution of Eligible Real Property in
accordance with the definition of such term.
Each of the Lenders hereby directs the Collateral Agent to and the Collateral
Agent shall execute and deliver or file such termination and partial release
statements and do such other things as are necessary to release Liens to be
released pursuant to this Section 10.7 and each of the Lenders hereby directs
the Agents to, and the Agents and the Lenders shall, release the relevant
Borrowers from their respective obligations under the Loan Documents as
contemplated by Section 2.17 and Section 8.4 promptly upon the effectiveness of
any such release pursuant to such respective Section.
(c) Each of the Agents and the Lenders agree to execute such documents and
instruments as any Borrower may reasonably request to evidence or effectuate the
release of any of the Collateral or of any Borrower from its Obligations
hereunder as permitted by Section 2.17 or Section 8.4.
Article XI
MISCELLANEOUS
Section 11.1. Amendments, Waivers, Etc.
(a) No amendment or waiver of any provision of this Agreement or any other Loan
Document nor consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be in writing and signed by the
Borrowers, the Agents and the Requisite Lenders, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by each Lender, in addition to the Requisite
Lenders, do any of the following:
(i) waive any of the conditions specified in Section 3.1 or 3.2 except with
respect to a condition based upon another provision hereof, the waiver of which
requires only the concurrence of the Requisite Lenders;
(ii) increase the Revolving Credit Commitments of the Lenders;
(iii) extend the scheduled final maturity of any Loan;
(iv) reduce the principal amount of any Loan or Reimbursement Obligation (other
than by the payment or prepayment thereof); (v) reduce the rate of interest on
any Loan or Reimbursement Obligations or any fee payable under Section 2.10;
(vi) postpone any scheduled date fixed for payment of such interest or fees;
(vii) change the aggregate Ratable Portions of the Lenders which shall be
required for the Lenders or any of them to take any action hereunder;
(viii) increase the Borrowing Base above the rates set forth in the definition
thereof;
(ix) release any of the Collateral or any Borrower from its obligations under
any of the Loan Documents except as provided in the last sentence of Section
10.7(b) (or permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement); or
(x) amend Section 10.7(b) or this Section 11.1 or the definition of the
terms "Requisite Lenders" or "Ratable Portion";
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the relevant Agent in addition to the Lenders required
above to take such action, affect the rights or duties of such Agent under this
Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on any Borrower in any case shall entitle such Borrower to
any other or further notice or demand in similar or other circumstances.
Section 11.2. Assignments and Participations.
(a) Each Lender may sell, transfer, negotiate or assign to one or more Eligible
Assignees all or a portion of its rights and obligations hereunder (including
all of its rights and obligations with respect to the Revolving Credit Loans and
the Letters of Credit); provided, however, that (i) such assignment shall cover
the same percentage of such Lender's Revolving Credit Outstandings and Revolving
Credit Commitment and (ii) the aggregate amount being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the Assignor's
entire interest) be less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof; provided, further, that in the case of any assignment to an
Eligible Assignee that is not, prior to the date of such assignment, a Lender,
an Affiliate of a Lender (other than any Investment Fund) or an Approved Fund of
a Lender, such assignment shall be subject to the prior consent of the
Administrative Agent and the Borrowers (which consent shall not be unreasonably
withheld or delayed) and in the case of any assignment to an Affiliate (other
than any Investment Fund) or Approved Fund of a Lender, such Lender shall give
the Borrowers at least five days' prior notice of such assignment; provided,
however, that notwithstanding any other provision of this Section 11.2, the
consent of the Borrowers shall not be required for any assignment which occurs
when any Event of Default shall have occurred and be continuing for more than 30
consecutive days.
(b) The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, together with any Revolving Credit Note (if the assigning Lender's
Loans are evidenced by a Revolving Credit Note) subject to such assignment. The
Administrative Agent shall give prior notice of such assignment to Borrowers in
the event the Borrowers do not have consent rights pursuant to Section 11.2(a).
Upon such execution, delivery, acceptance and recording and the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
$3,500 from and after the effective date specified in such Assignment and
Acceptance, (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 and Acceptance, have the rights and
obligations of a Lender, and if such Lender were CITBC, the rights of CITBC as
an issuer of Letter of Credit Guaranties hereunder and (ii) the assignor
thereunder shall, to the extent that rights and obligations under this Agreement
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except those which survive 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 and Acceptance 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).
(c) The Administrative Agent shall maintain at its address referred to in
Section 11.3 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recording of the names and addresses of the Lenders
and the Revolving Credit Commitments of and principal amount of the Loans and
Letter of Credit Obligations owing to each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender for all purposes of this Agreement. The Register shall be available for
inspection by the Borrowers, the Administrative Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Eligible Assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrowers. Within five Business Days
after its receipt of such notice, each Borrower, at its own expense, shall, if
requested by such assignee, execute and deliver to the Administrative Agent, new
Revolving Credit Notes to the order of such Eligible Assignee in an amount equal
to the Revolving Credit Commitments assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has surrendered any Revolving Credit
Note for exchange in connection with the assignment and has retained Revolving
Credit Commitments hereunder, new Revolving Credit Notes to the order of the
assigning Lender in an amount equal to the Revolving Credit Commitments retained
by it hereunder. Such new Revolving Credit Notes shall be dated the same date as
the surrendered Revolving Credit Notes and be in substantially the form of
Exhibit F.
(e) In addition to the other assignment rights provided in this Section 11.2,
each Lender may assign, as collateral or otherwise, any of its rights under this
Agreement (including rights to payments of principal or interest on the Loans)
to any Federal Reserve Bank pursuant to Regulation A of the Federal Reserve
Board without notice to or consent of the Borrower or the Administrative Agent;
provided, however, that no such assignment shall release the assigning Lender
from any of its obligations hereunder.
(f) Each Lender may sell participations to one or more Persons (other than an
Investment Fund) 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
Revolving Credit Loans and Letters of Credit). The terms of such participation
shall not, in any event, require the participant's consent to any amendments,
waivers or other modifications of any provision of any Loan Documents, the
consent to any departure by any Borrower therefrom, or to the exercising or
refraining from exercising any powers or rights which such Lender may have under
or in respect of the Loan Documents (including the right to enforce the
obligations of the Borrowers), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with Section
10.7(b). In the event of the sale of any participation by any Lender, (A) such
Lender's obligations under the Loan Documents shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties for the performance
of such obligations, (C) such Lender shall remain the holder of such Obligations
for all purposes of this Agreement, and (D) the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. In the case of any participation to an Eligible Assignee that is not
a Lender prior to the date of such participation, an Affiliate of a Lender or an
Approved Fund, such participation shall be subject to the prior consent of the
Borrowers so long as no Event of Default has occurred and is continuing for more
than 30 days (which consent shall not be unreasonably withheld or delayed). In
the case of any participation to an Affiliate or an Approved Fund of a Lender,
such Lender shall give the Borrowers at least five days prior written notice of
such participation. Each participant shall be entitled to the benefits of
Sections 2.12, 2.13 and 2.14 as if it were a Lender; provided, however, that
anything herein to the contrary notwithstanding, the Borrowers shall not, at any
time, be obligated to pay to any participant of any interest of any Lender,
under Sections 2.12, 2.13 or 2.14, any sum in excess of the sum which the
Borrowers would have been obligated to pay to such Lender in respect of such
interest had such participation not been sold.
Section 11.3. Costs and Expenses.
(a) Each Borrower jointly and severally agrees upon demand to pay, or reimburse
the Agents for, all of the Agents' reasonable internal and external audit,
legal, appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other reasonable costs and expenses of every
type and nature (including, without limitation, the reasonable fees, expenses
and disbursements of the Agents' counsel, Weil, Gotshal & Manges LLP, local
legal counsel, auditors, accountants, appraisers (for appraisals conducted no
more than once per year and only on the Eligible Real Property), insurance and
environmental advisers, and other consultants and agents) incurred by the Agents
in connection with (i) the Agents' audit and investigation of the Borrowers in
connection with the preparation, negotiation and execution of the Loan Documents
and any Agent's periodic audits of the Borrowers to the extent that the expenses
of each such periodic audit do not exceed $20,000; (ii) the preparation,
negotiation, execution and interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article III), the Loan Documents and any proposal letter or
commitment letter issued in connection therewith and the making of the Loans
hereunder; (iii) the creation, perfection or protection of the Liens under the
Loan Documents (including, without limitation, any reasonable fees and expenses
for local counsel in various jurisdictions); (iv) the ongoing administration of
this Agreement and the Loans, including consultation with attorneys in
connection therewith and with respect to the Agents' rights and responsibilities
hereunder and under the other Loan Documents; (v) the protection, collection or
enforcement of any of the Obligations or the enforcement of any of the Loan
Documents; (vi) the commencement, defense or intervention in any court
proceeding relating in any way to the Obligations, any Borrower, any Affiliate
of any Borrower, this Agreement or any of the other Loan Documents; (vii) the
response to, and preparation for, any subpoena or request for document
production with which any Agent is served or deposition or other proceeding in
which such Agent is called to testify, in each case, relating in any way to the
Obligations, any Borrower, any Affiliate of any Borrower this Agreement or any
of the other Loan Documents; and (viii) any amendments, consents, waivers,
assignments, restatements, or supplements to any of the Loan Documents and the
preparation, negotiation, and execution of the same.
(b) Each Borrower further agrees to pay or reimburse the Agents and each of the
Lenders upon demand for all reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees (including allocated costs of internal
counsel and costs of settlement), incurred by the Administrative Agent, the
Collateral Agent or such Lenders (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any other right
or remedy available by reason of an Event of Default; (ii) in connection with
any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a "work-out" or in any insolvency or bankruptcy proceeding;
(iii) in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Obligations, any Borrower, and related to or arising out of the
transactions contemplated hereby or by any of the other Loan Documents; and (iv)
in taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in clauses (i) through (iii) above. Each
Borrower further agrees to pay on demand for all of the Agents' reasonable costs
and expenses related to its due diligence in connection with the consummation of
the transactions contemplated by the Loan Documents less the good faith deposits
in the aggregate amount of $250,000 made to date.
Section 11.4. Indemnities.
(a) Each Borrower agrees to indemnify and hold harmless each Agent, each Lender
and each of their respective Affiliates, and each of the directors, officers,
employees, agents, representative, attorneys, consultants and advisors of or to
any of the foregoing (including those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article III) (each such Person being an "Indemnitee") from and against any and
all third party claims, damages, liabilities, obligations, losses, penalties,
actions, judgments, suits, costs, disbursements and expenses of any kind or
nature (including reasonable fees and disbursements of counsel to any such
Indemnitee) which may be imposed on, incurred by or asserted against any such
Indemnitee in connection with or arising out of any investigation, litigation or
proceeding, whether or not any such Indemnitee is a party thereto, whether
direct, indirect, or consequential and whether based on any federal, state or
local law or other statutory regulation, securities or commercial law or
regulation, or under common law or in equity, or on contract, tort or otherwise,
in any manner relating to or arising out of this Agreement, any other Loan
Document, any Obligation, any Letter of Credit Guaranty, or any act, event or
transaction related or attendant to any thereof, including, without limitation,
any act by a bank pursuant to any Collection Account Agreement, or the use or
intended use of the proceeds of the Loans or Letters of Credit related to Letter
of Credit Guaranty or in connection with any investigation of any potential
matter covered hereby (collectively, the "Indemnified Matters"); provided,
however, that such Borrower shall not have any obligation under this Section
11.4 to an Indemnitee with respect to any Indemnified Matter caused by or
resulting from the gross negligence or willful misconduct of any Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Without limiting the foregoing, Indemnified Matters include
(i) all Environmental Liabilities and Costs arising from or connected with the
past, present or future operations of the Borrowers or involving any property
subject to a Collateral Document, or damage to real or personal property or
natural resources or harm or injury alleged to have resulted from any Release of
Contaminants on, upon or into such property or any contiguous real estate
regardless of whether such releases are attributable to Borrower; (ii) any costs
or liabilities incurred in connection with any Remedial Action concerning the
Borrowers or any real property owned, operated or leased by Borrower; (iii) any
costs or liabilities incurred in connection with any Environmental Lien; (iv)
any costs or liabilities incurred in connection with any other matter under any
Environmental Law, including CERCLA and applicable state property transfer laws,
whether, with respect to any of such matters, such Indemnitee is a mortgagee
pursuant to any leasehold mortgage, a mortgagee in possession, the successor in
interest to any Borrower, or the owner, lessee or operator of any property of
any Borrower by virtue of foreclosure, except, with respect to those matters
referred to in clauses (i), (ii), (iii) and (iv) above, to the extent incurred
following (A) foreclosure by any Agent or any Lender or any Agent or any Lender
having become the successor in interest to such Borrower, or (B) attributable
directly to acts or omissions of any Agent, such Lender or any agent on behalf
of the Administrative Agent or such Lender to the extent any such Person a
"Person in Control" under any Environmental Law.
(b) Each Borrower shall indemnify each Agent and each Lender for, and hold each
Agent and each Lender harmless from and against, any and all claims for
brokerage commissions, fees and other compensation made against each Agent and
each Lender for any broker, finder or consultant with respect to any agreement,
arrangement or understanding made by or on behalf of any Borrower in connection
with the transactions contemplated by this Agreement.
(c) Each Agent and each Lender agree that in the event that any such
investigation, litigation or proceeding set forth in subparagraph (a) above is
asserted or threatened in writing or instituted against it or any other
Indemnitee, or any Remedial Action, is requested of it or any of its officers,
directors, agents and employees, for which any Indemnitee may desire indemnity
or defense hereunder, such Indemnitee shall promptly notify the Borrowers in
writing.
(d) Each Borrower, at the request of any Indemnitee, shall have the obligation
to defend against any such investigation, litigation or proceeding or requested
Remedial Action and such Borrower, in any event, may participate in the defense
thereof with legal counsel of such Borrower's choice. In the event that such
Indemnitee requests such Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, such Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice at its expense participate in such defense. No action taken by legal
counsel chosen by such Indemnitee in defending against any such investigation,
litigation or proceeding or requested Remedial Action, shall vitiate or in any
way impair any Borrower's obligation and duty hereunder to indemnify and hold
harmless such Indemnitee.
(e) Each Borrower agrees that any indemnification or other protection provided
to any Indemnitee pursuant to this Agreement (including pursuant to this Section
11.4) or any other Loan Document shall (i) survive payment in full of the
Obligations and (ii) inure to the benefit of any Person who was at any time an
Indemnitee under this Agreement or any other Loan Document.
Section 11.5. Limitation of Liability. Each Borrower agrees that no Indemnitee
shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to any Borrower or any of their equity holders or creditors for or in
connection with the transactions contemplated hereby and in the other Loan
Documents, except to the extent such liability is found in a final judgment by a
court of competent jurisdiction to have resulted from any such Indemnitee's
gross negligence or willful misconduct. In no event, however, shall any
Indemnified Party be liable on any theory of liability for any special,
indirect, consequential or punitive damages.
Section 11.6. Right of Set-off. Each Lender and each Affiliate of a Lender is
hereby authorized, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of the Borrowers (i) at any time
during the continuance of any Event of Default, against any and all Obligations
then due and payable and (ii) at any time during the continuance of a Material
Event of Default, against any and all of the Obligations now or hereafter
existing whether or not such Lender shall have made any demand under this
Agreement or any other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrowers after any such
set-off 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 set-off and application. The rights of each Lender under this Section 11.6
are in addition to the other rights and remedies (including other rights of
set-off) which such Lender may have.
Section 11.7. Sharing of Payments, Etc.
(a) If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of the
Revolving Loans made by it (other than pursuant to Sections 2.12, 2.13 or 2.14)
in excess of its Ratable Portion of payments obtained by all the Lenders on
account of such Obligations, such Lender (a "Purchasing Lender") shall forthwith
purchase from the other Lenders (each, a "Selling Lender") such participations
in their Loans or other Obligations as shall be necessary to cause such
Purchasing Lender to share the excess payment ratably with each of them.
(b) If all or any portion of any payment received by a Purchasing Lender is
thereafter recovered from such Purchasing Lender, such purchase from each
Selling Lender shall be rescinded and such Selling Lender shall repay to the
Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment to (ii)
the total amount so recovered from the Purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered.
(c) Each Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of such Borrower in the amount of such
participation.
Section 11.8. Notices, Etc. All notices, demands, requests and other
communications provided for in this Agreement shall be given in writing, or by
any telecommunication device capable of creating a written record, and addressed
to the party to be notified as follows (failure to provide a copy to the
respective counsel shall not be a Default or Event of Default hereunder):
(a) if to the Borrowers:
c/o PHC/CHC Holdings, Inc.
515 W. Greens Road, Suite 500
Houston, Texas 77067
Attention: Deborah Frankovich
Telecopy No: 281-774-5420 and 281-774-5250
with a copy to:
Mayor, Day Caldwell & Keeton LLP
760 Louisiana, Suite 1900
Houston, Texas 77002
Attention: Gail Merel, Esq.
Telecopy No: 713-225-7047
(b) if to any Lender, at its Domestic Lending Office specified opposite its
name on Schedule II or on the signature page of any
applicable Assignment and Acceptance;
(c) if to the Administrative Agent or CITBC as Lender:
The CIT Group/Business Credit, Inc.
Two Lincoln Centre
Suite 200
5420 LBJ Freeway
Dallas, TX 75240
Attention: Lan Haverfield
Telecopy No: 972-455-1690
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue,
New York, New York 10153-0119
Attention: Warren Buhle, Esq.
Telecopy No: (212) 310-8007
(d) if to the Collateral Agent or HHF as Lender:
Heller Healthcare Finance, Inc.
2 Wisconsin Circle, 4th Floor
Chevy Chase, MD 20815
Attention: Loan Administration
Telecopy No: 301-664-9890
with copies to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue,
New York, New York 10153-0119
Attention: Warren Buhle, Esq.
Telecopy No: (212) 310-8007
and
Streich Lang P.C.
One Renaissance Square
Two North Central Avenue
Phoenix, AZ 85004-2391
Attention: John Dawson
Telecopy No. (602) 229-5690
or at such other address as shall be notified in writing (i) in the case of the
Borrowers and the Agents, to the other parties and (ii) in the case of all other
parties, to the Borrowers and the Administrative Agent. All such notices and
communications shall be effective upon personal delivery (if delivered by hand,
including any overnight courier service), 3 Business Days after having been
deposited in the U.S. mails, certified mail return receipt requested (if sent by
U.S. mail), or when properly transmitted (if sent by a telecommunications
device); provided, however, that notices and communications to the
Administrative Agent pursuant to Article II or X shall not be effective until
received by the Administrative Agent. Notices to the Borrowers pursuant to
Section IX will not be sent by U.S. mail.
Section 11.9. No Waiver; Remedies. No failure on the part of any Lender or any
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 11.10. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrowers and the Agents and when the
Administrative Agent shall have been notified by each Lender that such Lender
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrowers, the Agents and each Lender and their respective successors and
permitted assigns, except that the Borrowers shall not have the right to assign
their rights hereunder or any interest herein without the prior written consent
of the Lenders.
Section 11.11. Governing Law. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 11.12. Submission to Jurisdiction; Service of Process.
(a) Any legal action or proceeding with respect to this Agreement or any other
Loan Document may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, each Borrower hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, which any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.
(b) Nothing contained in this Section 11.12 shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against any
Borrower in any other jurisdiction.
Section 11.13. Waiver of Jury Trial. EACH OF THE AGENTS, THE LENDERS AND
THE BORROWERS IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
Section 11.14. Marshaling; Payments Set Aside. None of the Agents or any Lender
shall be under any obligation to marshal any assets in favor of any Borrower or
any other party or against or in payment of any or all of the Obligations. To
the extent that any Borrower makes a payment or payments to the Administrative
Agent or the Lenders or any of such Persons receives payment from the proceeds
of the Collateral or exercise their rights of set-off, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently 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, right and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or set-off had not occurred.
Section 11.15. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
Section 11.16. Execution in Counterparts. 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 so that all signature pages are attached to the same document.
Section 11.17. Entire Agreement. This Agreement, together with all of the other
Loan Documents and all certificates and documents delivered hereunder or
thereunder, embodies the entire agreement of the parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
Section 11.18. Confidentiality. Each Lender and each Agent agrees to use
commercially reasonable efforts (equivalent to the efforts such Persons apply to
maintain the confidentiality of their own confidential information) to keep
non-public information obtained by it pursuant hereto and the other Loan
Documents or otherwise provided to its by or on behalf of the Borrowers,
confidential and agrees that it will only use such information in connection
with the transactions contemplated by this Agreement and not disclose any of
such information other than (a) to such Lender's or Agent's, as the case may be,
employees, representatives and agents who are or are expected to be involved in
the evaluation of such information in connection with the transactions
contemplated by this Agreement and who are advised of the confidential nature of
such information and who agree for the benefit of the Borrowers and their
Affiliates to be bound by the terms of this Section 11.18, (b) to the extent
such information presently is or hereafter becomes available to such Lender or
Agent, as the case may be, on a non-confidential basis from a source other than
any Borrower or any Affiliate of any Borrower, which source, to the actual
knowledge of such Lender or Agent at the time, is not then prohibited by duties
of confidentiality from transmitting such information to such Lender or Agent,
(c) as, in the reasonable opinion of any Lender or its counsel required by law,
regulation or judicial order or requested or required by bank regulators or
auditors, (d) to assignees or participants or potential assignees or
participants who agree to be bound by the provisions of this Section 11.18, (e)
in connection with any litigation to which the Lenders are a party, or (f) to
the extent such information ceases to be confidential through no fault of the
Lenders or the Agents; provided, however, that to the extent practicable, any
Lender or Agent disclosing any non-public information pursuant to clause (c) or
(e) shall endeavor in good faith to give the Borrowers prompt prior written
notice of such disclosure.
SIGNATURE PAGE TO CREDIT AGREEMENT
SIGNATURE PAGE TO CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE CIT GROUP/BUSINESS CREDIT, INC.
as Administrative Agent and Lender
By:
------------------------------------------
Name:
Title:
HELLER HEALTHCARE FINANCE, INC.
as Collateral and Documentation Agent
and Lender
By:
------------------------------------------
Name:
Title:
PHC/CHC HOLDINGS, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PHC-B OF MIDLAND, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
METROPOLITAN HOSPITAL, L.P.
By: PARACELSUS OF VIRGINIA, INC.
General Partner
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
LANCASTER HOSPITAL CORPORATION
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS CLAY COUNTY HOSPITAL, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS FENTRESS COUNTY GENERAL
HOSPITAL, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS MACON COUNTY MEDICAL CENTER,
INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS MESQUITE HOSPITAL, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS SANTA ROSA MEDICAL CENTER, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
BAYTOWN MEDICAL CENTER, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS HEALTHCARE CORPORATION OF
NORTH DAKOTA, INC.
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
PARACELSUS REAL ESTATE CORPORATION
By:
------------------------------------------
Name: Deborah H. Frankovich
Title: Vice President, Treasurer and
Assistant Secretary
SCHEDULE I
Borrowers
BAYTOWN MEDICAL CENTER, INC.
METROPOLITAN HOSPITAL, L.P.
LANCASTER HOSPITAL CORPORATION
PARACELSUS REAL ESTATE CORPORATION
PARACELSUS CLAY COUNTY HOSPITAL, INC.
PARACELSUS FENTRESS COUNTY GENERAL HOSPITAL, INC.
PARACELSUS HEALTHCARE CORPORATION OF NORTH DAKOTA, INC.
PARACELSUS MACON COUNTY MEDICAL CENTER, INC.
PARACELSUS MESQUITE HOSPITAL, INC.
PARACELSUS SANTA ROSA MEDICAL CENTER, INC.
PHC/CHC HOLDINGS, INC.
PHC-B OF MIDLAND, INC.
SCHEDULE II
APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
1. The CIT Group/Business Credit, Inc.: Domestic Lending Office:
The Chase Manhattan Bank
4 New York Plaza
15th Floor
New York, NY 10004
Attn: Lan Haverfield
Fax no: (972) 455-1690
Eurodollar Lending Office:
(same as Domestic Lending
Office)
2. Heller Healthcare Finance, Inc.: Domestic Lending Office:
Heller Healthcare Finance,
Inc.
2 Wisconsin Circle
4th Floor
Chevy Chase, MD 20815
Attn: Loan Administration
Fax no: (301) 664-9890
Eurodollar Lending Office:
(same as Domestic Lending
Office)
SCHEDULE III
COMMITMENTS
Revolving Credit
Lender Commitment
The CIT Group/Business Credit, Inc. $31,000,000
Heller Healthcare Finance, Inc. $31,000,000
iv
TABLE OF CONTENTS
Article I Definitions, Interpretation And Accounting Terms..................................1
Section 1.1........................................................................Defined Terms 1
Section 1.2..........................................................Computation of Time Periods 23
Section 1.3......................................................Accounting Terms and Principles 23
Section 1.4........................................................................Certain Terms 23
Article II The Facility.....................................................................24
Section 2.1.....................................................The Revolving Credit Commitments 24
Section 2.2.................................................................Borrowing Procedures 25
Section 2.3..........................................................Letter of Credit Guaranties 26
Section 2.4........................Termination and Reduction of the Revolving Credit Commitments 31
Section 2.5...................................................................Repayment of Loans 31
Section 2.6.....................................................................Evidence of Debt 31
Section 2.7................................................................Mandatory Prepayments 32
Section 2.8.............................................................................Interest 32
Section 2.9.......................................................Conversion/Continuation Option 33
Section 2.10................................................................................Fees 34
Section 2.11...........................................................Payments and Computations 35
Section 2.12..................................Special Provisions Governing Eurodollar Rate Loans 38
Section 2.13....................................................................Capital Adequacy 40
Section 2.14...............................................................................Taxes 40
Section 2.15..........................................Certain Matters Relating to the Collateral 42
Section 2.16.............................................Matters Relating to Controlled Accounts 42
Section 2.17.............................................................Withdrawal of Borrowers 45
Article III Conditions To Loans And Letter Of Credit Guaranties..............................47
Section 3.1................Conditions Precedent to Initial Loans and Letter of Credit Guaranties 47
Section 3.2......................Conditions Precedent to Each Loan and Letter of Credit Guaranty 49
Article IV Representations and Warranties...................................................51
Section 4.1.............................................Corporate Existence; Compliance with Law 51
Section 4.2..............................Corporate Power; Authorization; Enforceable Obligations 51
Section 4.3.................................................................Financial Statements 52
Section 4.4..............................................................Material Adverse Effect 53
Section 4.5.............................................................................Solvency 53
Section 4.6...........................................................................Litigation 53
Section 4.7................................................................................Taxes 53
Section 4.8......................................................................Full Disclosure 54
Section 4.9...................................................................Margin Regulations 54
Section 4.10.............................................No Burdensome Restrictions; No Defaults 55
Section 4.11..........................Investment Company Act; Public Utility Holding Company Act 55
Section 4.12.....................................................................Use of Proceeds 55
Section 4.13...........................................................................Insurance 55
Section 4.14.......................................................................Labor Matters 56
Section 4.15...............................................................................ERISA 56
Section 4.16...............................................................Environmental Matters 56
Section 4.17...............................................................Intellectual Property 57
Section 4.18................................................................Title; Real Property 58
Article V Financial Covenants..............................................................59
Section 5.1.......................................................................Minimum EBITDA 59
Article VI Reporting Covenants..............................................................60
Section 6.1.................................................................Financial Statements 60
Section 6.2......................................................................Default Notices 62
Section 6.3...........................................................................Litigation 62
Section 6.4..........................................................................Asset Sales 62
Section 6.5..........................................................SEC Filings; Press Releases 62
Section 6.6......................................................................Labor Relations 62
Section 6.7..........................................................................Tax Returns 63
Section 6.8............................................................................Insurance 63
Section 6.9........................................................................ERISA Matters 63
Section 6.10...............................................................Environmental Matters 63
Section 6.11........................................................Borrowing Base Determination 64
Section 6.12...................................................................Other Information 65
Article VII Affirmative Covenants............................................................65
Section 7.1............................................Preservation of Corporate Existence, Etc. 65
Section 7.2...........................................................Compliance with Laws, Etc. 65
Section 7.3.................................................................Conduct of Business. 65
Section 7.4...............................................................Payment of Taxes, Etc. 65
Section 7.5.............................................................Maintenance of Insurance 66
Section 7.6...............................................................................Access 66
Section 7.7.....................................................................Keeping of Books 67
Section 7.8......................................................Maintenance of Properties, Etc. 67
Section 7.9..............................................................Application of Proceeds 67
Section 7.10.......................................................................Environmental 67
Section 7.11.......................................................................Real Property 67
Section 7.12.........................................................Matters Related to Accounts 68
Section 7.13.....................................................................Trade Payables. 69
Article VIII Negative Covenants...............................................................70
Section 8.1.........................................................................Indebtedness 70
Section 8.2..........................................................................Liens, Etc. 71
Section 8.3..........................................................................Investments 72
Section 8.4.......................................................................Sale of Assets 73
Section 8.5..................................................................Restricted Payments 74
Section 8.6...........................Restriction on Fundamental Changes; Permitted Acquisitions 75
Section 8.7.........................................................Change in Nature of Business 75
Section 8.8.........................................................Transactions with Affiliates 75
Section 8.9................................................Modification of Constituent Documents 75
Section 8.10.....................................................Accounting Changes; Fiscal Year 75
Section 8.11..................................................................Margin Regulations 76
Section 8.12....................................................................Operating Leases 76
Section 8.13.............................................Cancellation of Indebtedness Owed to It 76
Section 8.14.........................................................No Speculative Transactions 76
Section 8.15...............................................................Compliance with ERISA 76
Section 8.16.......................................................................Environmental 76
Article IX Events of Default................................................................77
Section 9.2.............................................................................Remedies 80
Section 9.3..............................................Actions in Respect of Letters of Credit 80
Article X The Administrative Agent; the agents.............................................81
Section 10.1............................................................Authorization and Action 81
Section 10.2..........................................................The Agents' Reliance, Etc. 81
Section 10.3.............................................................The Agents Individually 82
Section 10.4..............................................................Lender Credit Decision 82
Section 10.5.....................................................................Indemnification 82
Section 10.6....................................................................Successor Agents 83
Section 10.7...................................................Concerning the Collateral and the
Collateral Documents and
Releases of Borrowers .................. 83
Article XI Miscellaneous...................................................................... 85
Section 11.1...........................................................Amendments, Waivers, Etc. 85
Section 11.2......................................................Assignments and Participations 86
Section 11.3..................................................................Costs and Expenses 89
Section 11.4.........................................................................Indemnities 90
Section 11.5.............................................................Limitation of Liability 91
Section 11.6....................................................................Right of Set-off 92
Section 11.7...........................................................Sharing of Payments, Etc. 92
Section 11.8.......................................................................Notices, Etc. 92
Section 11.9.................................................................No Waiver; Remedies 94
Section 11.10.....................................................................Binding Effect 94
Section 11.11......................................................................Governing Law 95
Section 11.12.....................................Submission to Jurisdiction; Service of Process 95
Section 11.13...............................................................Waiver of Jury Trial 95
Section 11.14.....................................................Marshaling; Payments Set Aside 95
Section 11.15.....................................................................Section Titles 95
Section 11.16..........................................................Execution in Counterparts 96
Section 11.17...................................................................Entire Agreement 96
Section 11.18....................................................................Confidentiality 96
SCHEDULES
Schedule I - Borrowers
Schedule II - Applicable Lending Offices and Addresses for
Notices
Schedule III Revolving Credit Commitments
Schedule 2.3 Letters of Credit
Schedule 2.16(a) Collection Accounts
Schedule 4.2(a) - Consents
Schedule 4.6 - Litigation
Schedule 4.7 - Tax Matters
Schedule 4.14 - Labor Matters
Schedule 4.15 ERISA Matters
Schedule 4.16 - Environmental Matters
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Cash Collateral Account
Exhibit D Form of Pledge & Security Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Revolving Credit Note
Exhibit G - Form of Notice of Conversion or Continuation
Exhibit H Forms of Collection Account Agreement
Exhibit I - Form of Opinion of Counsel for the Borrowers