Exhibit 10.49
RESPONSE ONCOLOGY, INC.
Borrower
LOAN AGREEMENT
$22,000,000.00 REVOLVING ACQUISITION LOAN
$5,500,000.00 REVOLVING WORKING CAPITAL LOAN
Dated as of May 31, 1996
NATIONSBANK OF TENNESSEE, N.A., AGENT
NATIONSBANK OF TENNESSEE, N.A.
UNION PLANTERS NATIONAL BANK
Lenders
TABLE OF CONTENTS
RECITALS 1
I. DEFINITIONS 1
1.1 Terms Defined in This Agreement. 1
1.2 Terms Generally. 17
II. LOANS 18
2.1 Acquisition Loan. 18
2.2 Use of Proceeds of Acquisition Loan. 18
2.3 Acquisition Loan Notes 18
2.4 Working Capital Loan. 18
2.5 Use of Proceeds of Working Capital Loan. 18
2.6 Working Capital Loan Notes 18
2.7 Separate Commitments of Lender 18
2.8 Advances of Loans. 18
2.9 Interest 21
2.10 Alternate Rate of Interest if LIBOR Unavailable 22
2.11 Change in Circumstances 23
2.12 Change in Legality of LIBOR Loans 24
2.13 Principal Repayment. 25
2.14 Prepayment of LIBOR Loans 25
2.15 Prepayment of Prime Rate Loans 26
2.16 Fixed Commitment Fees 26
2.17 Periodic Commitment Fee Based
on Use of Facilities 26
2.18 Agent's Fee 26
III. CONDITIONS PRECEDENT 26
3.1 Conditions to Initial Advance. 26
3.2 Conditions to Subsequent Loans. 29
IV. REPRESENTATIONS AND WARRANTIES 29
4.1 Capacity. 29
4.2 Authorization. 29
4.3 Binding Obligations. 29
4.4 No Conflicting Law or Agreement. 30
4.5 No Consent Required. 30
4.6 Financial Statements. 30
4.7 Fiscal Year. 30
4.8 Litigation. 30
4.9 Taxes; Governmental Charges. 30
4.10 Title to Properties. 31
4.11 No Default. 31
4.12 Casualties; Taking of Properties. 31
4.13 Compliance with Laws. 31
4.14 Compliance with Fraud and Abuse Laws. 31
4.15 ERISA. 31
4.16 Full Disclosure of Material Facts. 32
4.17 Accuracy of Projections 32
4.18 Investment Company Act. 32
4.19 Personal Holding Company. 32
4.20 Solvency. 32
4.21 Chief Executive Office. 32
4.22 Subsidiaries. 32
4.23 Ownership of Patents, Licenses, Etc. 32
4.24 Environmental Compliance. 32
4.25 Labor Matters. 33
4.26 OSHA Compliance. 33
4.27 Regulation U 33
4.28 Affiliate Transactions 33
V. AFFIRMATIVE COVENANTS 33
5.1 Payment of Obligations. 33
5.2 Maintenance of Existence and Business. 33
5.3 Financial Statements and Reports 34
5.4 Additional Information 35
5.5 Certain Additional Reporting Requirements 35
5.6 Taxes and Other Encumbrances. 36
5.7 Payment of Liabilities. 37
5.8 Compliance with Laws. 37
5.9 Maintenance of Property. 37
5.10 Compliance with Contractual Obligations 37
5.11 Further Assurances. 37
5.12 Security Interest; Setoff 38
5.13 Insurance. 38
5.14 Accounts and Records. 38
5.15 Official Records. 39
5.16 Banking Relationships. 39
5.17 Right of Inspection. 39
5.18 ERISA Information and Compliance. 39
5.19 Indemnity; Expenses. 39
5.20 Assistance in Litigation. 40
5.21 Name Changes. 41
5.22 Estoppel Letters. 41
5.23 Environmental Matters. 41
5.24 Opinions of Counsel 42
5.25 Additional Collateral Upon Certain Event 42
VI. NEGATIVE COVENANTS 43
6.1 Debts, Guaranties, and Other Obligations 43
6.2 Change of Management 44
6.3 Change of Ownership 44
6.4 Distributions 44
6.5 Encumbrances. 44
6.6 Investments 44
6.7 Sales and Leasebacks. 45
6.8 Change of Control. 45
6.9 Nature of Business. 45
6.10 Further Acquisitions, Mergers, Etc. 45
6.11 Advances. 45
6.12 Disposition of Assets. 45
6.13 Inconsistent Agreements. 45
6.14 Fictitious Names. 45
6.15 Subsidiaries and Affiliates. 46
6.16 Place of Business. 46
6.17 Adverse Action With Respect to Plans. 46
6.18 Transactions With Affiliates. 46
6.19 Constituent Document Amendments. 46
6.20 Adverse Transactions 46
6.21 Margin Securities. 46
6.22 Accounting Changes 46
6.23 Action Outside Ordinary Course. 46
VII. FINANCIAL COVENANTS 47
7.1 Current Ratio. 47
7.2 Total Funded Debt to Capital. 47
7.3 Total Funded Debt to Consolidated EBITDA 47
7.4 Fixed Charge Coverage. 47
7.5 Net Worth. 47
7.6 Capital Expenditures. 47
VIII. EVENTS OF DEFAULT 47
8.1 Events of Default. 47
8.2 Remedies. 50
IX. AGENT 50
9.1 Appointment of Agent 50
9.2 Powers of Agent 50
9.3 Duties of Agent 51
9.4 Indemnification of Agent 53
9.5 No Representations by Agent 53
9.6 Independent Investigations by Lenders 53
9.7 Notice of Default 54
9.8 Funding of Loans Pursuant to Borrowing Notices 54
9.9 Agent in its Individual Capacity 54
9.10 Holders 54
9.11 Successor Agent 55
9.12 Sharing of Payments, etc 55
9.13 Separate Liens on Collateral 55
9.14 Payments Between Agent and Lenders 55
9.15 Assignments and Participations 56
9.16 Bankruptcy Provisions 56
9.17 Foreclosure of Collateral 56
9.18 Procedures for Notices and Approvals 56
9.19 Amendments to Article IX 56
X. GENERAL PROVISIONS 57
10.1 Notices 57
10.2 Renewal, Extension, or Rearrangement. 58
10.3 Application of Payments. 58
10.4 Counterparts. 58
10.5 Negotiated Document. 58
10.6 Consent to Jurisdiction; Exclusive Venue. 58
10.7 Not Partners; No Third Party Beneficiaries. 59
10.8 No Reliance on Lenders' Analysis 59
10.9 No Marshaling of Assets. 59
10.10 Impairment of Collateral. 59
10.11 Business Days. 59
10.12 Participations. 59
10.13 Standard of Care; Limitation of Damages 59
10.14 Incorporation of Schedules. 60
10.15 Indulgence Not Waiver. 60
10.16 Cumulative Remedies. 60
10.17 Amendment and Waiver in Writing. 60
10.18 Assignment. 60
10.19 Entire Agreement. 60
10.20 Severability. 60
10.21 Time of Essence. 60
10.22 Applicable Law. 60
10.23 Captions Not Controlling. 61
10.24 Arbitration. 61
10.25 Facsimile Signatures. 62
LOAN AGREEMENT
This Loan Agreement is entered into as of the 31st day of May, 1996, by and
among RESPONSE ONCOLOGY, INC. ("Borrower"), a Tennessee corporation;
NATIONSBANK OF TENNESSEE, N.A. ("NationsBank"), a national banking
association, and UNION PLANTERS NATIONAL BANK ("Union Planters"), a
national banking association (collectively "Lenders"); and NATIONSBANK OF
TENNESSEE, N.A., in its capacity as Agent for Lenders ("Agent").
RECITALS
WHEREAS, Lenders have agreed to extend a revolving acquisition loan
facility and a revolving working capital facility to Borrower, on certain
terms and conditions, as set forth in detail in this Agreement; and
WHEREAS, Lenders wish to appoint Agent to administer the loans extended by
Lenders to Borrower; and
NOW, THEREFORE, as an inducement to cause Lenders to extend credit to
Borrower, and for other valuable consideration, the receipt and sufficiency
of which are acknowledged, it is agreed as follows:
I. DEFINITIONS
I.1 Terms Defined in This Agreement. As used below in this Agreement, the
following capitalized terms shall have the following meanings, unless the
context expressly requires otherwise:
"Acquisition EBITDA" means, with respect to a Practice acquired by a
Consolidated Entity and covered by a Service Agreement, (i) the pro forma
income to the Consolidated Entities that would have arisen under the
applicable Service Agreement preceding the effective date of the
acquisition, determined based upon the actual financial performance of the
acquired Practice over the period for which a calculation of Consolidated
EBITDA is made, without adjustment, (ii) less the pro forma amount of
expenses (other than interest, taxes, depreciation and amortization) that
the Consolidated Entities would have incurred over the same period on
account of the acquired Practice (including, but not limited to, additional
expense of administrative personnel), in each case calculated as if the
Practice had been acquired effective as of the beginning of the relevant
financial period.
"Acquisition Loan" means the revolving credit facility described by amount
and use in Sections 2.1 and 2.2 hereof.
"Affiliate" means, with respect to any Person, another Person that,
directly or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such Person.
"Agent" means NationsBank of Tennessee, N.A., in its capacity as described
in Article IX of this Agreement, its lawful corporate successors and any
successor agent appointed pursuant to Article IX hereof.
"Agreement" means this Loan Agreement (including all schedules and exhibits
hereto), as the same may be amended from time to time.
"Applicable Commitment Fee," "Applicable LIBO Rate Margin," and "Applicable
Prime Rate Margin" mean, with respect to Loans advanced under and the
commitment fee respecting the Acquisition Loan, during any Effective
Period, the percentage rates per annum set forth opposite the appropriate
test in the pricing grid below (ratio values shall be rounded to the
nearest one-hundredth, with any value of .005 rounded upward):
Total Funded Debt to Prime Rate LIBOR Commitment
Consolidated EBITDA Margin Margin Fee in Basis
- ------------------- ---------- ------ ------------
Less than or equal
to 1.00 .25% 1.50% 20bps
Greater than or
equal to 1.01 and
less than or equal
to 2.00 .50% 1.75% 25bps
Greater than or
equal to 2.01 and
less than or equal
to 3.00 .75% 2.125% 30bps
Greater than or equal
to 3.01 1.00% 2.625% 35bps
Additionally, with respect to Loans advanced under and the commitment fee
respecting the Working Capital Loan, "Applicable Commitment Fee,"
"Applicable LIBO Rate Margin," and "Applicable Prime Rate Margin" mean,
during any Effective Period, the percentage rates per annum set forth
opposite the appropriate test in the pricing grid below (ratio values shall
be rounded to the nearest one-hundredth, with any value of .005 rounded
upward):
Total Funded Debt to Prime Rate LIBOR Commitment
Consolidated EBITDA Margin Margin Fee in Basis
- ------------------- ---------- ------ ------------
Less than or equal
to 1.00 0% 1.25% 15bps
Greater than or
equal to 1.01 and
less than or equal
to 2.00 .25% 1.50% 20bps
Greater than or
equal to 2.01 and
less than or equal
to 3.00 .50% 1.875% 25bps
Greater than or equal
to 3.01 .75% 2.375% 30bps
The Total Funded Debt to Consolidated EBITDA ratio shall be established by
Agent on the basis of the consolidated quarterly financial statements of
and schedules prepared by Borrower delivered to Agent pursuant to this
Agreement and shall be calculated as set forth in Section 7.3 hereof.
Notwithstanding the foregoing, at the end of any Effective Period, and
during the existence and continuation of an Event of Default, and during
any period of time for which Pricing Values may be set by Agent pursuant to
Section 8.1.5 hereof, the Pricing Values with respect to the Loans shall
automatically become the highest values provided for in the applicable
pricing grid set forth above in respect of the two respective Credit
Facilities. Additionally, the Applicable Prime Rate Margin for Prime Rate
Loans and the Applicable LIBO Rate Margin for LIBOR Loans shall each be
reduced by one-fourth of one percent (1/4%) if Borrower shall receive
aggregate Net Equity Proceeds after the Closing Date from the public
offering of its equity securities of at least Thirty Million and No/100
Dollars ($30,000,000.00).
"Assumed Debt" means Purchase Money Debt assumed by a Consolidated Entity,
or Purchase Money Debt secured by a Purchase Money Security Interest in
Property acquired by a Consolidated Entity, whether or not the Purchase
Money Debt is contractually assumed, occurring in either case in the course
of a Permitted Acquisition.
"Banking Day" means a Business Day, subject to the following additional
convention. As to notices or payments received by Agent on a Business Day
at or before 12:00 p.m. (noon) Nashville time, the Banking Day shall
correspond to the Business Day of receipt. As to notices or payments
received by Agent on a Business Day after 12:00 p.m. (noon) Nashville time,
the Banking Day of receipt shall be deemed to be the next following
Business Day.
"Bankruptcy Code" means Title I of the Bankruptcy Reform Act of 1978, as it
may be amended from time to time.
"Best of Borrower's Knowledge" means the actual knowledge, information and
belief of the Chairman, Chief Executive Officer, Chief Financial Officer,
Controller or General Counsel of Borrower, with no duty of inquiry.
"Borrower" means Response Oncology, Inc., a Tennessee corporation, its
successors and assigns. This definition does not abrogate the requirements
set forth below restricting Borrower's ability to assign any rights under
this Agreement.
"Borrower's Portion" means the percentage of equity interest that Borrower
acquires in an entity acquired in or created in connection with a Permitted
Acquisition. Additionally, if an acquisition is of less than all of the
interest or assets of a Seller, or if a Seller had a declining number of
Practices over the relevant accounting period, the Borrower's Portion shall
include only such of the operations of the Seller as were acquired by a
Consolidated Entity in a Permitted Acquisition.
"Borrowing Base" means (i) Borrower's Consolidated EBITDA for the most
recent four fiscal quarters, as determined by the quarterly financial
statements and schedules delivered to Agent from time to time pursuant to
this Agreement, (ii) multiplied by 2.5.
"Borrowing Notice" has the meaning assigned in Section 2.8.1(b) hereof.
"Business Day" means any day on which Agent is open for the conduct of
ordinary business; provided however, that when used in connection with
determining the LIBO Rate, the term "Business Day" shall exclude any day on
which banks are not open for dealings in U.S. Dollar deposits in the London
Interbank Market.
"Capital Expenditures" means expenditures, determined according to GAAP on
a consolidated basis, that would be capitalized and depreciated over more
than one annual accounting period.
"Capital Lease" means a lease that would be characterized as a financed
sale or purchase under GAAP.
"Change of Control" means the occurrence, after the date of this Agreement,
of (i) any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of Borrower (or other
securities convertible into such securities) representing 51% or more of
the combined voting power of all securities thereof entitled to vote in the
election of directors; or (ii) during any period of up to 12 consecutive
months, commencing after the date of this Agreement, individuals who at the
beginning of such 12-month period were directors of Borrower ceasing for
any reason to constitute a majority of the Board of Directors thereof
unless the Persons replacing such individuals were nominated by the Board
of Directors of Borrower; or (iii) any Person or two or more Persons acting
in concert acquiring by contract or otherwise, or entering into a contract
or arrangement which upon consummation will result in its acquisition of,
or control over, securities of Borrower (or other securities convertible
into such securities) representing 51% or more of the combined voting power
of all securities of Borrower entitled to vote in the election of
directors.
"Closing Date" means the date of this Agreement.
"CMLTD" means scheduled principal payments in respect of long-term
Liabilities payable during the 12 months following the date of
determination.
"Collateral" means all Property now or hereafter securing the Obligations.
"Commitment" means the amount of each Lender's commitment to fund the
respective Credit Facilities. Each Lender's several Commitment for the
Acquisition Loan shall be as follows:
NationsBank Sixteen Million and No/100 Dollars ($16,000,000.00)
Union Planters Six Million and No/100 Dollars ($6,000,000.00)
Each Lender's several Commitment for the Working Capital Loan shall be as
follows:
NationsBank Four Million and No/100 Dollars ($4,000,000.00)
Union Planters One Million Five Hundred Thousand and No/100 Dollars
($1,500,000.00)
"Consolidated Capital" means Consolidated Net Worth plus Total Funded Debt.
"Consolidated Current Ratio" means current assets, determined on a
consolidated basis according to GAAP, divided by current liabilities,
determined on a consolidated basis according to GAAP.
"Consolidated EBITDA" means the EBITDA of the Borrower, determined on a
consolidated basis, and adjusted as follows with respect to acquisitions.
The positive Acquisition EBITDA of acquired Practices shall be included in
Consolidated EBITDA only if Agent is satisfied, in its reasonable
discretion, as to the accuracy and reliability of the financial information
related thereto. In assessing the accuracy and reliability of such
financial information, (i) unqualified audited financial statements
prepared by a regional or national accounting firm shall be acceptable, and
(ii) financial statements reviewed (but not audited) by such a firm shall
also be acceptable unless Agent in good faith determines that reviewed
statements for a particular enterprise are subject to material doubt as to
their accuracy. The negative Acquisition EBITDA for any Practice shall be
included in Consolidated EBITDA, based upon the best information available.
Notwithstanding any other provision hereof, the EBITDA attributed to Non-
Corporate Unperfected Subsidiaries shall not be included in Consolidated
EBITDA if Non-Corporate Unperfected Subsidiaries would account for more
than ten percent (10%) of total Consolidated EBITDA.
"Consolidated Entities" means Borrower and all Subsidiaries of Borrower,
from time to time.
"Consolidated Net Income" means net income, determined on a consolidated
basis according to GAAP.
"Consolidated Net Worth" means shareholders' equity, determined on a
consolidated basis according to GAAP.
"Control" or "Controlled" means that a Person has the direct or indirect
power to conduct or govern the policies of another Person, whether this
power exists as a matter of right or through economic compulsion.
"Credit Ceiling" means, with respect to a Credit Facility, the amount
determined by subtracting from the Borrowing Base the principal amount
outstanding under the other Credit Facility, to the effect that the total
principal amount outstanding under the Credit Facilities shall not in total
exceed the Borrowing Base at any time.
"Credit Facilities" means the Acquisition Loan and the Working Capital
Loan.
"Default Rate" means the Maximum Lawful Amount of interest that can be
charged.
"EBITDA" means the sum of net income before extraordinary items plus
Interest Expense and expenses for taxes, depreciation and amortization,
determined according to GAAP.
"Effective Period" means a period of up to one calendar quarter, determined
as follows. Pursuant to other provisions of this Agreement, Borrower's
financial information for each quarter-end is to be submitted during the
succeeding quarter, except that year-end financial statements are not due
until April 30 of the following year. The performance pricing provisions
of this Agreement reevaluate pricing quarterly, based upon those quarterly
financial results. An Effective Period imposing pricing based upon a
quarter other than the quarter ending December 31 shall begin on the later
of (i) the first day of the third month of the following fiscal quarter, or
(ii) if financial statements are submitted later than required under this
Agreement and Agent waives any Event of Default arising therefrom, five (5)
Business Days after the submission of required financial statements. An
Effective Period imposing pricing based upon the quarter ending December 31
shall begin "as of" the first day of the third month of the following
fiscal quarter, with a retroactive adjustment of interest to be made when
the year-end financial statements are timely submitted, if necessary to
reflect an increase or decrease of the interest rates or fees based upon
performance for the period ending December 31. If year-end financial
statements are not timely submitted, but are nonetheless accepted by Agent
and Agent waives any Event of Default arising therefrom, the Effective
Period imposing pricing based upon the quarter ending December 31 shall
begin "as of" five (5) Business Days after the submission of the required
annual financial statements. The Effective Period shall end on the last day
of the second month of each fiscal quarter following the quarter in which
the Effective Period was scheduled to begin. Therefore, assuming the
timely delivery of all required financial statements, the Effective Periods
will be determined as follows:
Financial Statements Due By Effective Period
May 15 June 1 - August 31
August 15 September 1 - November 30
November 15 December 1 - February 28/29
April 30 March 1 (retroactive) - May 31
An initial Effective Period shall commence on the Closing Date and continue
through the last day of August, 1996, and Pricing Values shall be
determined during this initial Effective Period based on the financial
reports as of and for the period ended March 31, 1996.
"Encumbrance" means any interest in Property in favor of one not the owner
thereof, whether voluntary or involuntary, including, but not limited to,
(i) the lien or security interest arising from a deed of trust, mortgage,
pledge, security agreement, conditional sale, Capital Lease, consignment,
or bailment for security purposes, and (ii) reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other such title encumbrances.
"Environmental Laws" means the Environmental Protection Act, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Hazardous Materials
Transportation Act and any other federal, state or municipal law, rule or
regulation relating to air emissions, water discharge, noise emissions,
solid or liquid waste disposal, hazardous or toxic waste or materials, or
other environmental or health matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is
a member of Borrower's controlled group, or under common control with
Borrower, within the meaning of Section 414 of the IRC, the regulations
promulgated pursuant thereto and the published revenue rulings issued
thereunder.
"ERISA Event" means (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA);
(iii) the cessation of operations at a facility in the circumstances
described in Section 4068(f) of ERISA; (iv) the withdrawal by Borrower or
an ERISA Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in 4001(a)(2) of ERISA;
(v) the failure by Borrower or any ERISA Affiliate to make a material
payment to a Plan required under Section 302(f)(1) of ERISA; (vi) the
adoption of an amendment to a Plan requiring the provision of initial or
additional security to such Plan, pursuant to Section 307 of ERISA; or
(vii) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, a Plan.
"Event of Default" means the occurrence of any of the events specified in
Section 8.1 hereof, as to which any requirement for notice or lapse of time
has been satisfied.
"Financial Projections" means the financial projections prepared by
Borrower, a copy of which is attached hereto as Exhibit 1.1.
"Financial Statements" means the audited consolidated balance sheet, income
statement, and statement of cash flows for Borrower dated December 31, 1995
and the unaudited consolidated financial statements dated March 31, 1996
delivered by Borrower to Lender, and all notes thereto.
"Fixed Charge Coverage Ratio" means (i) Consolidated EBITDA, plus expenses
incurred under Operating Leases, and less a charge of Ten Thousand and
No/100 Dollars ($10,000.00) per year per wholly-owned IMPACT Center and
Five Thousand and No/100 Dollars ($5,000.00) per year for each IMPACT
Center that is not wholly-owned by a Consolidated Entity to allow for
maintenance Capital Expenditures, and less loans advanced to Providers,
divided by (ii) the sum of Interest Expense plus CMLTD (including implied
amortization calculated as one-seventh of the outstanding principal amount
of the Credit Facilities as of the end of the applicable period), plus
expenses incurred under Operating Leases. The values for the fixed charges
used in the calculation of this ratio will be determined on a pro forma
basis as though the acquisitions occurring during the period over which the
Fixed Charge Coverage Ratio is being determined had occurred as of the
beginning of that period, with such calculations to take into account,
along with other adjustments that Agent may approve, in its reasonable
discretion, (i) the exclusion of Interest Expense, CMLTD, Capital Lease
expense and Operating Lease expense of the target related to debts, leases
and obligations that were extinguished in connection with the acquisition,
(ii) the inclusion of Interest Expense, CMLTD, Capital Lease expense and
Operating Lease expense obligations of the target that survived the
acquisition, and (iii) the inclusion of Interest Expense, CMLTD, Capital
Lease expense and Operating Lease Expense arising from obligations incurred
in connection with the acquisition (including, but not limited to, added
Interest Expense arising from Seller Debt or from Loans advanced under this
Agreement incidental to the acquisition).
"Fraud and Abuse Laws" means Section 1128B(b) of the Social Security Act,
42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act,
42 U.S.C. Section 1877, as from time to time amended; any successor
statute(s) thereto; all rules and regulations promulgated thereunder; and
any other Law relating to the ownership of medical facilities by providers
of medical services or the referral of patients to medical facilities owned
by providers of medical services.
"GAAP" means generally accepted accounting principles pronounced by the
Financial Accounting Standards Board or any successor thereto, as in effect
from time to time.
"Governmental Authority" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"Hazardous Substances" means those substances included from time to time
within the definition of hazardous substances, hazardous materials, toxic
substances, or solid
waste under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended, 42 U.S.C. 9601 et seq.; the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; the Clean
Water Act, 33 U.S.C. Section 1251 et. seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et. seq., and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or
become regulated under any applicable local, state, or federal law or
regulation addressing environmental hazards.
"IMPACT Center" means a high dose chemotherapy cancer treatment center
operated by a Consolidated Entity.
"Interest Expense" means expenses for interest (and including the interest
portion of current charges on Capital Leases) and expenses for any interest
rate swaps or similar derivative contracts used for the management of
interest expense.
"Interest Payment Date" means, (i) as to Prime Rate Loans, the first day of
each month, and (ii) as to any LIBOR Loan, the last day of the Interest
Period applicable to such Loan and, in addition, in the case of a LIBOR
Loan with an Interest Period of six (6) or twelve (12) months' duration,
the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 3, 6, 9
and 12 months, as applicable, after the commencement of the Interest
Period.
"Interest Period" means, as to any LIBOR Loan, the period commencing on the
date of such LIBOR Loan and ending on the numerically corresponding day
(or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3, 6 or 12 months thereafter, as Borrower may
elect; provided, however, that (x) if any Interest Period would end on a
day that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, with respect to LIBOR Loans, such
next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business
Day and (y) no Interest Period with respect to any Loan shall end later
than the Maturity Date. Interest shall accrue from and including the first
Banking Day of an Interest Period to but excluding the last Banking Day of
such Interest Period.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"Law" or "Laws" means all applicable constitutional provisions, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
"Lenders" means NationsBank and Union Planters, their respective successors
and assigns.
"Liability" means, with respect to any Person, an obligation, contingent or
otherwise, that would be classified under GAAP as a liability of that
Person including, but not limited to, any nonrecourse obligation secured by
Property of that Person.
"LIBO Rate" means, for any given Interest Period with respect to a given
LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
LIBO Rate shall mean, for any given Interest Period with respect to a given
LIBOR Loan, the rate per annum appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates.
"LIBO Rate Reserve Percentage" means the reserve percentage applicable
during any Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for Lenders with
respect to liabilities or assets consisting of or including LIBOR
Liabilities having a term equal to such Interest Period.
"LIBOR Liabilities" means deposit liabilities incurred through the London
Interbank Market.
"LIBOR Loan" means a Loan for which Borrower has elected application of an
interest rate based on the LIBO Rate.
"Loan" means a loan advanced under the Credit Facilities.
"Loan Documents" means, collectively, each writing delivered at any time by
Borrower to Lenders or Agent relating to the Credit Facilities.
"Material Adverse Change" means any material and adverse change in the
business, Properties, or operations of the Consolidated Entities.
"Material Adverse Effect" means any event or condition which, singly or in
the aggregate with other events or conditions, materially and adversely
affects the business, Properties, or operations of the Consolidated
Entities, considered collectively.
"Maturity Date" means May 31, 1998, with respect to the Acquisition Loan,
and May 31, 1997, with respect to the Working Capital Loan; provided,
however, that Borrower may extend the Maturity Date for the Working Capital
Loan to May 31, 1998, by giving Agent written notice of such election in
the form set forth in Exhibit 1.2 hereto and paying an extension fee of
Thirteen Thousand Seven Hundred Fifty and No/100 Dollars ($13,750.00), to
be apportioned to Lenders Pro Rata in accordance with their respective
Commitments for the Working Capital Loan.
"Maximum Lawful Amount" means the maximum lawful amount of interest, loan
charges, commitment fees or other charges that may be assessed under
Tennessee law or, if higher, under applicable federal law.
"Miami Debt" means the obligations of Borrower under that Non-Negotiable
Promissory Note made by Borrower dated January 2, 1996 in the original
principal amount of Five Million Nine Hundred Fifty-Nine Thousand Nine
Hundred Seventy-Two and No/100 Dollars ($5,959,972.00), and any
modification, extension or renewal thereof approved by Agent.
"NationsBank" means NationsBank of Tennessee, N.A., its successors and
assigns.
"Net Equity Proceeds" means the Net Proceeds of issuances of equity by
Borrower, less any amount of such Net Proceeds used to redeem existing,
outstanding equity securities of Borrower.
"Net Proceeds" means gross proceeds of a transaction less reasonable and
customary underwriter and brokerage fees and commissions, the fees and
expenses of trustees and attorneys, and other reasonable and customary
closing fees and expenses.
"Non-Corporate Subsidiary" means a Permitted Subsidiary that is other than
a corporation.
"Non-Corporate Unperfected Subsidiary" means a Non-Corporate Subsidiary,
Borrower's interest in which is not subject to a perfected security
interest to secure the Obligations.
"Note" means any of the Acquisition Loan Notes or the Working Capital Loan
Notes referred to in Sections 2.3 and 2.6 hereof, respectively.
"Obligations" means the obligations of Borrower to Lenders to repay the
Credit Facilities and all other obligations of Borrower and the
Consolidated Entities to Lenders and to Agent under this Agreement and the
other Loan Documents.
"Operating Leases" means leases that are not Capital Leases.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means the acquisition (by asset purchase, stock
purchase, merger or otherwise, subject to the other requirements of this
definition set forth below) by Borrower of the assets of a Practice in the
ordinary course of business (it being acknowledged that medical records and
certain other professional assets that are required by Law to be owned by a
physician Provider are not acquired in these transactions), which purchase
meets all of the following criteria:
(a) The form of the acquisition shall have been of the assets of a
Practice or, if for stock or other equity interest, the target acquired
shall become a Permitted Subsidiary concurrently with the closing of the
acquisition.
(b) Borrower shall have delivered to Lender, prior to closing the
acquisition, unaudited pro forma financial statements or certificates
demonstrating continued compliance with all covenants in this Agreement
following the acquisition.
(c) Agent shall have given its written consent to the acquisition prior
to the closing thereof, in the cases of those acquisitions (i) for which
the total consideration is greater than seven (7) times Acquisition EBITDA
over the previous twelve (12) months (with Acquisition EBITDA determined
for the purpose of this Subsection (i) only based upon the pro forma
financial performance of the acquired Practice over the twelve (12) -month
period, including adjustment for cost savings that Borrower can establish
will occur immediately following the transaction), (ii) for which the
portion of the purchase price consisting of cash, Assumed Debt and Seller
Debt exceeds three percent (3%) of Borrower's total assets as reported by
Borrower pursuant to this Agreement most recently prior to the date of
determination, (iii) in which the Acquisition EBITDA of the target is
negative for either of the previous two (2) fiscal years, (iv) of more than
three (3) Practices in a single transaction, or (v) which, together with
previous acquisitions within a single calendar year, total seven (7) or
more Practices.
"Permitted Encumbrances" means all of the following:
(a) Encumbrances securing the payment of any of the Obligations.
(b) Encumbrances securing taxes, assessments, or other governmental
charges not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted, if Borrower
has made reserve therefor as required by GAAP.
(c) Mechanics', repairmen's, materialmen's, warehousemen's, landlords'
and other like liens arising by operation of law securing accounts that are
not delinquent.
(d) Encumbrances on real property used by Borrower not securing
monetary obligations, provided that the Encumbrances are of a type
customarily placed on real property and do not materially impair the value
of the affected property.
(e) Pledges or deposits in the ordinary course of business to secure
nondelinquent obligations under workman's compensation or unemployment laws
or similar legislation or to secure the performance of leases or contracts
entered into in the ordinary course of business.
(e) Purchase Money Security Interests, to the extent permitted by
Section 6.1.7 hereof.
"Permitted Subsidiary" means a Subsidiary that (i) is now or hereafter
becomes a Borrower or a guarantor under this Agreement, (ii) is owned, in
both economic interest and voting rights, by Borrower in an amount
exceeding 50%, (iii) is owned by Borrower in a proportion sufficient to
allow Borrower to Control the Subsidiary, including the right to cause the
Subsidiary to make lawful distributions of income, and the financial
interest of Borrower therein is, in Agent's reasonable judgment, freely
alienable by Borrower through a security interest granted therein or
otherwise, and (iv) as to which Borrower has granted to Agent as additional
security for the Loans, a first priority perfected security interest in its
stock or other equity interest in the Subsidiary pursuant to documentation
in form and substance acceptable to Agent and its counsel, with the
validity and perfection of the security interest and other matters as Agent
may reasonably require confirmed to Agent by an opinion of Borrower's
outside counsel satisfactory to Agent in all respects, and with all
expenses related to such documentation (including, but not limited to,
filing fees and taxes and the reasonable fees and expenses of Lenders' and
Agent's attorneys) to be paid by Borrower; provided, however, that Borrower
need not grant a perfected security interest in its equity interest in a
Non-Corporate Subsidiary in order for such Subsidiary to be a Permitted
Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization,
government, governmental agency or political subdivision thereof, or any
other form of entity.
"Plan" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Borrower or any Subsidiary and
covered by Title IV of ERISA or to which Section 412 of the IRC applies.
"Practice" means an oncology or hematology treatment center or an oncology
or hematology medical practice. Whenever in this Agreement "Practice" is
used in describing an acquisition by Borrower, and if the reference relates
to a medical practice, such reference is to the acquisition of the assets
used in the operation of the Practice that can lawfully be acquired by
Borrower or to the acquisition of an interest in an entity that owns, as of
the time of purchase, only those assets that can be lawfully acquired by
Borrower.
"Pricing Values" means the Applicable LIBO Rate Margin and Applicable Prime
Rate Margin for both of the Credit Facilities and the Applicable Commitment
Fee.
"Prime Rate" shall be that rate announced by Agent from time to time as its
Prime Rate and is one of several interest rate bases used by Agent.
Lenders and Agent lend at rates both above and below Agent's Prime Rate and
Borrower acknowledges that the Prime Rate is not represented or intended to
be the lowest or most favorable rate of interest offered by any Lender or
Agent.
"Prime Rate Loan" means a Loan for which Borrower has elected application
of an interest rate based on the Prime Rate.
"Pro Rata" or "Pro Rata Share" refer to the apportionment among Lenders
according to their respective total Commitments at the time of
determination; provided, however, if at a time of determination there are
principal amounts outstanding under either or both of the Credit
Facilities, and if any Lender has failed to fund any unrepaid Loan that was
funded by any other Lender or Lenders, this apportionment shall be
determined according to the respective total principal amounts of the
Credit Facilities held by the respective Lenders rather than by their
Commitments.
"Property" or "Properties" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"Provider" means an oncologist, hematologist, radiologist or other medical
doctor whose specialty is complementary to the practice of oncology or
hematology and who performs professional services respecting a Practice
that is either managed by Borrower or the assets of which are owned by
Borrower.
"Purchase Money Debt" means a Liability that is secured by a Purchase Money
Security Interest.
"Purchase Money Security Interest" means an Encumbrance on specific
equipment (including the Encumbrance arising under a Capital Lease),
provided that (i) the Liability secured by any such Encumbrance shall have
arisen at the time of the acquisition thereof and shall not exceed 100% of
the cost of the equipment to the entity acquiring the same, and (ii) each
such Encumbrance shall attach only to the equipment so acquired with the
proceeds of the Liability secured thereby.
"Required Lenders" means Lenders holding at least 66 2/3% of the total
Commitments for the Credit Facilities; provided, however, if at a time of
determination there are principal amounts outstanding under either or both
of the Credit Facilities, and if any Lender has failed to fund any unrepaid
Loan that was funded by any other Lender or Lenders, this determination
shall be made according to Lenders holding the required percentage of
principal amounts of the Credit Facilities rather than by the outstanding
Commitments.
"Seafield Position" means the equity interest of Seafield Capital
Corporation in Borrower.
"Seller" means the former owner of a Practice that is acquired by a
Consolidated Entity.
"Seller Debt" means a Liability incurred in favor of one or more Sellers
representing part of the purchase price of a Practice.
"Service Agreement" means one of those service or management agreements now
in effect or hereafter entered into by Borrower and Providers in connection
with the management of oncology practices and/or IMPACT Centers.
"Significant Consolidated Entity" means (i) Borrower, or (ii) any
Consolidated Entity other than Borrower that accounts for more than five
percent (5%) of either Borrower's total assets determined on a consolidated
basis as of the end of the most recent fiscal quarter or of Borrower's
Consolidated EBITDA for the most recent fiscal quarter, from time to time;
provided, however, that for as long as any facts that would otherwise
constitute Events of Default exist with respect to more than one
Consolidated Entity at any time, such that the total contribution of all
affected Consolidated Entities exceeds more than five percent (5%) of
either Borrower's total assets determined on a consolidated basis as of the
end of the most recent fiscal quarter or of Borrower's Consolidated EBITDA
for the most recent fiscal quarter, each Consolidated Entity shall be
considered a Significant Consolidated Entity.
"Solvent" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is
(a) greater than the then total amount of liabilities (including
subordinated liabilities) of such Person and (b) greater than the amount
that will be required to pay such Person's probable liability on such
Person's then existing debts as they become absolute and matured, (ii) such
Person's capital is not unreasonably small in relation to its business, and
(iii) such Person has not incurred and does not intend to incur, or believe
or reasonably should believe that it will incur, debts beyond its ability
to pay such debts as they become due.
"Subordinated Debt" means any unsecured Liability that is subordinated as
to payment, liquidation, collection and collection in bankruptcy to the
obligations of Borrower to Lenders pursuant to subordination documentation
in form and substance acceptable to Agent and which has a maturity of no
earlier than six (6) months following the latest applicable Maturity Date.
The Miami Debt shall be regarded as Subordinated Debt for all purposes in
this Agreement at any time that the average (mean) closing bid price for
Borrower's stock is greater than Seventeen and 50/100 Dollars ($17.50) for
the ten market days prior to the date of determination.
"Subsidiary" means any present or future corporation, joint venture,
limited liability company, or partnership, at least a majority of whose
outstanding voting stock or other voting securities or interests shall at
the time be owned directly or indirectly by Borrower.
"Taxes" means all taxes and assessments, whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may
be assessed, levied, confirmed or imposed on the Consolidated Entities or
on any of their properties or assets or any part thereof or in respect of
any of their franchises, businesses, income or profits.
"Total Funded Debt" means all obligations for borrowed money, including,
but not limited to, advances under the Credit Facilities, all Seller Debt
and all Capitalized Leases, whether short-term or long-term. Subordinated
Debt is not included in Total Funded Debt.
"UCC" means the Uniform Commercial Code as adopted in Tennessee, as it may
be amended from time to time.
"Union Planters" means Union Planters National Bank, its successors and
assigns.
"Unmatured Default" means any event or condition that, but for the giving
of any required notice by Agent and/or the passing of time, would be an
Event of Default hereunder.
"Working Capital Loan" means the revolving credit facility described in
Sections 2.4 and 2.5 hereof.
I.2 Terms Generally.
I.2.1 Computations; Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined, or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, such determination
or calculation, to the extent applicable and except as otherwise specified
in this Agreement, shall be made in accordance with GAAP. If a change in
GAAP after the date of this Agreement would require a change affecting the
calculation of any requirement under this Agreement, then Agent and
Borrower shall negotiate in good faith for the amendment of the affected
requirements; provided, however, until and unless such an amendment is
agreed upon, the requirements of this Agreement shall remain as written and
compliance therewith shall be determined according to GAAP as in effect
prior to the change.
I.2.2 Gender and Number. Words used herein indicating gender or number
shall be read as context may require.
I.2.3 References Include Successors. References herein to specific Laws,
regulatory bodies, parties or agreements also refer to any successor Laws,
regulatory bodies, and parties, and to all modifications, extensions,
renewals and restatements of agreements.
I.2.4 References to This Agreement. "Herein," "hereof" and words of
similar import refer to this Agreement as a whole and not to any particular
provision hereof, unless otherwise expressly stated.
I.2.5 Limitations of Knowledge. Certain representations and warranties
are made herein the Best of Borrower's Knowledge. These limitations
reflect only Borrower's special interest in disclosing that no targeted
diligence has been performed as to these matters in connection with this
Agreement. Should any matter so represented or warranted be discovered to
be false, then, irrespective of the knowledge qualification, the
representation or warranty shall be deemed breached and shall constitute an
Event of Default or Unmatured Default hereunder, as may apply.
II. LOANS
Concurrently with the execution of this Agreement, Lenders agree on a
several basis, and not on a joint basis, in accordance with their
respective Commitments, to make the Acquisition Loan and the Working
Capital Loan to Borrower, under the following terms and conditions:
II.1 Acquisition Loan. The principal indebtedness of Borrower to Lenders
under the Acquisition Loan shall not exceed the lesser of (i) Twenty-Two
Million and No/100 Dollars ($22,000,000.00), or (ii) the Credit Ceiling in
effect from time to time.
II.2 Use of Proceeds of Acquisition Loan. The proceeds of the Acquisition
Loan shall be used by Borrower for (i) Permitted Acquisitions, (ii) other
Capital Expenditures, and (iii) the development of IMPACT Centers.
II.3 Acquisition Loan Notes. Borrower's obligations under the
Acquisition Loan shall be evidenced by Acquisition Loan Notes in favor of
the respective Lenders in the form included as Exhibit 2.3 hereto payable
to each Lender for its Commitment under the Acquisition Loan.
II.4 Working Capital Loan. The principal indebtedness of Borrower to
Lenders under the Working Capital Loan shall not exceed the lesser of (i)
Five Million Five Hundred Thousand and No/100 Dollars ($5,500,000.00), or
(ii) the Credit Ceiling in effect from time to time.
II.5 Use of Proceeds of Working Capital Loan. The proceeds of Loans
advanced under the Working Capital Loan shall be used by Borrower for (i)
working capital purposes, and (ii) to the extent that the Acquisition Loan
may be fully drawn, for the same purposes permitted under the Acquisition
Loan.
II.6 Working Capital Loan NotesError! Bookmark not defined.. Borrower's
obligations under the Working Capital Loan shall be evidenced by Working
Capital Loan Notes in favor of the respective Lenders in the form included
as Exhibit 2.6 hereto payable to each Lender for its Commitment under the
Working Capital Loan.
II.7 Separate Commitments of LenderError! Bookmark not defined.s.
Borrower acknowledges that each Lender's commitment to fund its portion of
the Credit Facilities is made by each Lender severally, and neither Agent
nor any Lender shall be liable for the failure of another Lender to timely
perform under this Agreement.
II.8 Advances of Loans. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Loans under the Credit
Facilities, provided that the outstanding principal balance of the
Acquisition Loan and the Working Capital Loan, respectively, shall not at
any time exceed the amounts permitted under Sections 2.1 and 2.4 above.
Loans shall be disbursed as follows:
II.8.1 Loans Advanced Pursuant to Borrowing Notices.
II.8.1(a) Applicability. Loans under the Credit Facilities may be LIBOR
Loans, Prime Rate Loans, or a combination thereof, and the funding thereof
shall be subject to this Section 2.8.1.
II.8.1(b) Borrowing Notices. As long as Borrower meets the conditions for
funding stated in this Agreement, Borrower may submit requests for Loans
("Borrowing Notices") to Agent. All requests shall be made in writing (or
by telephone, subject to such security procedures as Agent may require from
time to time, provided that all telephonic notices shall be confirmed by
written Borrowing Notices within one (1) Business Day) and shall specify
the proposed disbursement date for the requested Loan; the Credit Facility
from which the Loan is requested; the amount of the Loan; the purpose of
the Loan (characterized in accordance with Sections 2.2 and 2.5 above); the
type of Loan, i.e., LIBOR Loan or Prime Rate Loan; and if a LIBOR Loan, the
designated Interest Period. Each Borrowing Notice shall irrevocably
obligate Borrower to accept the Loan requested thereby. Borrowing Notices
shall be in the form of Exhibit 2.8.1(b) hereto or such other form as Agent
may from time to time require.
II.8.1(c) Funding of Loans. Lenders shall fund their respective portions
of requested Loans on the next following Banking Day after the Banking Day
of Agent's receipt of the Borrowing Notice, in the case of Prime Rate
Loans, and on the second (2nd) Banking Day following the Banking Day of
Agent's receipt of the Borrowing Notice, in the case of LIBOR Loans. All
funds shall be disbursed directly into an account maintained by Borrower
with Agent. Borrower agrees that if any Lender elects to fund any
requested Loan(s) sooner after requested than is required hereunder, the
Lender may nevertheless use the entire response period allowed hereunder
upon receipt of any subsequent request, at the Lender's sole option.
II.8.1(d) Prime Rate Loan Limitations. Individual Prime Rate Loans shall
be in the minimum amount of One Hundred Thousand and No/100 Dollars
($100,000.00) each. Any number of Prime Rate Loans may be outstanding at
any one time.
II.8.1(e) LIBOR Loan Limitations. Individual LIBOR Loans shall be in the
minimum amount of Five Hundred Thousand and No/100 Dollars ($500,000.00)
each. No more than three (3) LIBOR Loans may be outstanding under either
of the Credit Facilities (for a maximum total of six (6)) at any one time.
II.8.1(f) Additional Limitation on LIBOR Interest Periods.
Notwithstanding anything to the contrary in this Agreement, if an Event of
Default shall have occurred and be continuing, no additional LIBOR Loans
may be created or continued and no Prime Rate Loan may be converted into a
LIBOR Loan.
II.8.2 Conversion of Loans. Borrower shall have the right, on prior
irrevocable written notice to Agent given two (2) Banking Days prior to the
date of any requested conversion, to convert any Prime Rate Loan or LIBOR
Loan into a Loan of another type, or to continue any LIBOR Loan for another
Interest Period, subject in each case to the following:
II.8.2(a) Application of Loans. Each conversion shall be effected by
applying the proceeds of the new LIBOR Loan and/or Prime Rate Loan, as the
case may be, to the Loan (or portion thereof) being converted.
II.8.2(b) Notices of Conversions. Each notice pursuant to this Section
2.8.2(b) shall be irrevocable and shall refer to this Agreement and specify
the identity and principal amount of the particular Loan that Borrower
requests be converted or continued; if such notice requests conversion, the
date of such conversion (which shall be a Business Day); and if a Loan is
to be converted to a LIBOR Loan or a LIBOR Loan is to be continued, the
Interest Period with respect thereto. No LIBOR Loan shall be converted at
any time other than at the end of the Interest Period applicable thereto,
except in accordance with Section 2.9 hereof. Conversion notices shall be
in the form attached as Exhibit 2.8.1(b) hereto.
II.8.3 Absence of Election. If Borrower fails to give Agent notice to
continue any LIBOR Loan for a subsequent period, such LIBOR Loan (unless
repaid) shall automatically be converted into a Prime Rate Loan. If
Borrower fails to specify in any Borrowing Notice the type of borrowing or,
in the case of a LIBOR Loan, the applicable Interest Period, Borrower will
be deemed to have requested a Prime Rate Loan.
II.8.4 Implied Representations Upon Request for Loan. Upon making any
request for any Loan, Borrower shall be deemed to have warranted to Agent
and Lenders that all conditions to funding set forth in Article III hereof
are satisfied.
II.8.5 Advance Not Waiver. Either Lender's making of any Loan that it is
not obligated to make under any provision of Article III hereof or any
other provision hereof shall not be construed as a waiver of the Lender's
right to withhold future Loans, declare an Event of Default, or otherwise
demand strict compliance with this Agreement, acting through Agent as
permitted by the terms hereof.
II.8.6 Draws by Debit Memorandum. Agent may cause Lenders to draw amounts
that may be available under the Credit Facilities to pay any Obligation
that is not otherwise timely paid.
II.9 Interest. Interest shall accrue on each Loan as follows:
II.9.1 Prime Rate Loans. Interest shall accrue on each Prime Rate Loan at
an annual rate equal to the Prime Rate plus the Applicable Prime Rate
Margin, said rate to change contemporaneously with any change in the Prime
Rate.
II.9.2 LIBOR Loans. Interest shall accrue on each LIBOR Loan at a rate
equal to the LIBO Rate for the selected Interest Period plus the Applicable
LIBO Rate Margin.
II.9.3 Additional Interest on LIBOR Loans. In addition to the interest
described above, Borrower shall pay to Lenders, if and so long as Lenders
shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including LIBOR Liabilities, additional interest on
the unpaid principal amount of each LIBOR Loan, from the date of such
advance until said principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i)
the LIBO Rate for the Interest Period from (ii) the rate obtained by
dividing the LIBO Rate by a percentage equal to 100% minus the LIBO Rate
Reserve Percentage for such Interest Period. This additional interest
shall be payable on each date on which interest is payable. The amount of
additional interest shall be determined by each Lender, who shall notify
Borrower and Agent thereof and whose determination shall be conclusive,
absent manifest error.
II.9.4 Calculation of Interest. Interest for both Prime Rate Loans and
LIBOR Loans shall be computed on the basis of a 360-day year counting the
actual number of days elapsed. Interest shall accrue on the Business Day a
Loan is extended and shall accrue through the Business Day on which it is
repaid.
II.9.5 Default Rate. Notwithstanding the foregoing, upon the occurrence
of an Event of Default and during the continuation of such Event of
Default, interest shall be charged at the Default Rate, regardless of
whether Lenders have elected to exercise any other remedies available to
Lender, including, without limitation, acceleration of the maturity of the
outstanding principal of the Credit Facilities. All such interest shall be
paid without demand on the Interest Payment Dates applicable to Prime Rate
Loans.
II.9.6 Payment of Interest. Interest for Prime Rate Loans and LIBOR Loans
shall be due and payable in arrears, without notice, on each Interest
Payment Date.
II.9.7 Usury Savings Provision. It is the intention of the parties that
all charges under or in connection with this Agreement and the Obligations,
however denominated, and including (without limitation) all interest,
commitment fees, late charges and loan charges, shall be limited to the
Maximum Lawful Amount. Such charges hereunder shall be characterized and
all provisions of the Loan Documents shall be construed as to uphold the
validity of charges provided for therein to the fullest possible extent.
Additionally, all charges hereunder shall be spread over the full permitted
term of the Obligations for the purpose of determining the effective rate
thereof to the fullest possible extent, without regard to prepayment of or
the right to prepay the Obligations. If for any reason whatsoever,
however, any charges paid or contracted to be paid in respect of the
Obligations shall exceed the Maximum Lawful Amount, then, without any
specific action by Lenders, Agent or Borrower, the obligation to pay such
interest and/or other charges shall be reduced to the Maximum Lawful Amount
in effect from time to time, and any amounts collected by Lenders that
exceed the Maximum Lawful Amount shall be applied to the reduction of the
principal balance of the Obligations and/or refunded to Borrower so that at
no time shall the interest or loan charges paid or payable in respect of
the Obligations exceed the Maximum Lawful Amount. This provision shall
control every other provision herein and in any and all other agreements
and instruments now existing or hereafter arising between Borrower and
Lenders with respect to the Obligations.
II.10 Alternate Rate of Interest if LIBOR Unavailable. In the event, and
on each occasion, that on the date of commencement of any Interest Period
for a LIBOR Loan, a Lender shall have determined (i) that dollar deposits
in the amount of the requested principal amount of such LIBOR Loan are not
generally available in the London Interbank Market; (ii) that the rate at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to the Lender of making or maintaining such LIBOR Loan
during such Interest Period; or (iii) that reasonable means do not exist
for ascertaining the LIBO Rate, the Lender shall, as soon as practicable
thereafter, give written or telephonic notice of such determination to
Borrower. In the event of any such determination, any request by Borrower
for a LIBOR Loan under this Agreement shall, until the circumstances giving
rise to such notice no longer exist, be deemed to be a request for a Prime
Rate Loan. Each determination by the Lender hereunder shall be conclusive
absent manifest error.
II.11 Change in Circumstances.
II.11.1 Imposition of Requirements. Notwithstanding any other provision
herein, if after the date of this Agreement any change in applicable Laws
or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof
(whether or not having the force of Law) shall change the basis of taxation
of payments to a Lender under any LIBOR Loan made by the Lender or any
other fees or amounts payable hereunder (other than taxes imposed on the
overall net income, gross receipts or added value of a Lender by the
country in which the Lender is located, or by the jurisdiction in which a
Lender has its principal office, or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve
requirement, special deposit, insurance charge (including FDIC insurance on
LIBOR Liabilities) or similar requirement against assets of, deposits with
or for the account of, or credit extended by, a Lender or shall impose on a
Lender or the London Interbank Market any other condition affecting this
Agreement or LIBOR Loans made by a Lender, and the result of any of the
foregoing shall be to increase the cost to the Lender of making or
maintaining its LIBOR Loan or to reduce the amount of any sum received or
receivable by a Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by the affected Lender to
be material, then Borrower will pay to such Lender such additional amount
or amounts as will compensate the Lender for such additional costs of
reduction.
II.11.2 Other Changes. If either (i) the introduction of, or any change
in, or in the interpretation of, any United States or foreign Law; or (ii)
compliance with any directive, guidelines or request from any central bank
or other United States or foreign Governmental Authority (whether or not
having the force of law) promulgated or made after the date hereof, affects
or would affect the amount of capital required or expected to be maintained
by a Lender (or any lending office of a Lender) or any corporation directly
or indirectly owning or controlling a Lender (or any lending office of a
Lender) based upon the existence of this Agreement, and the Lender shall
have determined that such introduction, change or compliance has or would
have the effect of reducing the rate of return on the Lender's capital or
on the capital of such owning or controlling corporation as a consequence
of its obligations hereunder (including its commitment) to a level below
that which the Lender or such owning or controlling corporation could have
achieved but for such introduction, change or compliance (after taking into
account that Lender's policies or the policies of such owning or
controlling corporation, as the case may be, regarding capital adequacy) by
an amount deemed by the Lender (in its sole discretion) to be material,
then, from time to time, Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender for such reduction
attributable to making, funding and maintaining its commitment and Loans
hereunder.
II.11.3 Computation of Amounts. A certificate of a Lender setting forth
the basis and method of computation of such amount or amounts specified in
Sections 2.11.1 and 2.11.2 hereof as shall be necessary to compensate the
Lender (or its participating banks) as specified above, as the case may be,
shall be delivered to Borrower and shall be conclusive absent manifest
error; provided however, that Borrower shall be responsible for compliance
herewith and the payment of increased costs only to the extent that (i) any
change in Laws giving rise to increased costs occurs after the date of this
Agreement; and (ii) the Lender gives notice of the change giving rise to
increased costs within one hundred eighty (180) Business Days after the
Lender has, or with reasonable diligence should have had, knowledge of the
change, or else Lender can only collect costs from and after the date of
the notice. Subject to the foregoing, Borrower shall pay the affected
Lender the amount shown as due on any such certificate within ten (10)
Business Days after its receipt of such certificate.
II.11.4 No Duty to Contest. The protection of this Section 2.11 shall be
available to a Lender regardless of any possible contention of invalidity
or inapplicability of the Law or condition that shall have been imposed.
Should a Lender assess any charge to Borrower under this Section 2.11, and
provided that Borrower pays the assessment to the Lender, Borrower may
thereafter undertake, at Borrower's own expense, any contest of the matters
giving rise to the charge that may, in the opinion of Borrower's
independent counsel issued to the affected Lender, and concurred in by
counsel to the Lender, have a reasonable chance of success, provided
further that the contest would not require the assertion of any position
contrary to a position taken by the Lender generally with taxing
authorities or any other involved parties and that there does not exist any
other circumstance that would disadvantage the Lender in the event of such
contest, as the affected Lender may determine in its discretion. The
affected Lender shall offer reasonable participation to Borrower for the
purpose of enabling Borrower to pursue the contest of such issue, with all
expenses, including fees and expenses of the affected Lender's counsel, to
be paid by Borrower.
II.12 Change in Legality of LIBOR LoansError! Bookmark not defined..
Notwithstanding anything to the contrary herein contained, if any change in
any Law or in interpretation thereof by any Governmental Authority charged
with the administration or interpretation thereof shall make it unlawful
for a Lender to make or maintain any LIBOR Loan or to give effect to its
obligations as contemplated hereby, then, by written notice to Borrower,
the Lender may (i) declare that LIBOR Loans will not thereafter be made by
the Lender hereunder, whereupon Borrower shall be prohibited from
requesting LIBOR Loans from the Lender hereunder unless such declaration is
subsequently withdrawn; and (ii) require that all outstanding LIBOR Loans
made by it be converted to Prime Rate Loans, in which event (a) all such
LIBOR Loans shall be automatically converted to Prime Rate Loans (but
without imposition of any additional charge that would normally become due
under Section 2.11 hereof) as of the effective date of such notice, and (b)
all payments and prepayments of principal that would otherwise have been
applied to repay the converted LIBOR Loans shall instead be applied to
repay the Prime Rate Loans resulting from the conversion of such LIBOR
Loans. For purposes of this Section 2.12, a notice to Borrower by the
Lender pursuant to (a) above shall be effective, if lawful, on the last day
of the then current Interest Period; in all other cases, such notice shall
be effective on the date of receipt by Borrower.
II.13 Principal Repayment. Principal payments under the Credit Facilities
shall become due immediately and without notice at such time that the
outstanding principal balance of the Credit Facilities may exceed the
Credit Ceiling, in an amount sufficient to reduce the outstanding principal
balance to an amount no greater than the Credit Ceiling. All remaining
principal outstanding under the Credit Facilities shall become due on the
Maturity Date or the earlier acceleration of the Credit Facilities in
accordance with the terms of this Agreement.
II.14 Prepayment of LIBOR Loans.
II.14.1 Notice of LIBOR Loan Prepayment. Borrower may, upon two (2)
Banking Days' prior written notice to Agent, and upon payment of all
applicable premiums set forth in Section 2.14.3 hereof, prepay any
outstanding LIBOR Loans prior to any Interest Payment Date for such LIBOR
Loans, in whole or in part. Each notice of prepayment of any LIBOR Loan
shall specify the date and amount of such prepayment and shall be
irrevocable.
II.14.2 Amount of LIBOR Loan Prepayment. Each partial prepayment of any
LIBOR Loan shall be in an aggregate principal amount which is the lesser of
(i) the then outstanding principal balance of the one or more LIBOR Loans
to be prepaid, or (ii) Five Hundred Thousand and No/100 Dollars
($500,000.00) or an integral multiple thereof. Interest on the amount
prepaid accrued to the prepayment date shall be paid on such date.
II.14.3 LIBOR Loan Prepayment Premium. Upon prepayment of any LIBOR Loan
on a date other than the relevant Interest Payment Date for such borrowing,
Borrower shall pay to Lenders, in addition to all other payments then due
and owing Lenders, premiums which shall be equal to an amount, if any,
reasonably determined by Agent to be the difference between the rate of
interest then applicable to the relevant LIBOR Loan and the yield Lenders
would receive upon reinvestment of so much of the relevant LIBOR Loans as
is prepaid for the remainder of the term of the relevant LIBOR Loan or
Loans. Anything in this Section 2.14.3 to the contrary notwithstanding,
the premiums payable upon any such prepayment shall not exceed the amount,
if any, determined by Agent to be the difference between the rate of
interest then applicable to the relevant LIBOR Loan and the yield that
Lenders could receive upon reinvestment in the "Floor Reinvestment" of so
much of the relevant LIBOR Loan as is prepaid for the remainder of the term
of the relevant LIBOR Loan. For purposes hereof, "Floor Reinvestment"
shall mean an investment for the time period from the date of such
prepayment to the end of the relevant Interest Period applicable to such
LIBOR Loan at an interest rate per annum equal to the federal funds
"offered" rate as published in the Wall Street Journal on the date of such
prepayment. All determinations, estimates, assumptions, allocations and
the like required for the determination of such premiums shall be made by
Agent in good faith and shall be presumed correct absent manifest error.
II.15 Prepayment of Prime Rate Loans. Borrower may at any time prepay any
outstanding Prime Rate Loans prior to the Maturity Date in whole or in part
without premium or penalty.
II.16 Fixed Commitment Fees. Borrower shall pay a commitment fee to
Lenders on a Pro Rata basis upon the execution of this Agreement (i) with
respect to the Acquisition Loan, in the amount of One Hundred Ten Thousand
and No/100 Dollars ($110,000.00) and (ii) with respect to the Working
Capital Loan, in the amount of Thirteen Thousand Seven Hundred Fifty and
No/100 Dollars ($13,750.00). An additional commitment fee shall become due
with respect to the Working Capital Loan under certain circumstances as set
forth in the definition of "Maturity Date" above in this Agreement. These
commitment fees are not refundable or proratable.
II.17 Periodic Commitment Fee Based on Use of FacilitiesError! Bookmark
not defined.. Borrower shall pay to Agent for distribution to Lenders Pro
Rata an additional commitment fee for the unused portion of the Credit
Facilities. This fee shall be determined by applying the Applicable
Commitment Fee to the average daily unused balance of the Credit
Facilities. The commitment fee shall be paid in arrears on each Interest
Payment Date applicable to Prime Rate Loans. This commitment fee is not
refundable or proratable.
II.18 Agent's Fee. On the Closing Date, and on each subsequent
anniversary thereof excepting only an anniversary corresponding to the
Maturity Date, Borrower shall pay to Agent a fee of Five Thousand and
No/100 Dollars ($5,000.00) for each Lender (inclusive of Agent) then a
party to this Agreement. If any additional Lender becomes a party to this
Agreement between anniversary dates as to increase the total number of
Lenders, a like fee shall be paid to Agent with respect to that Lender upon
its entry, prorated to reflect the balance of the year remaining until the
next anniversary of the Closing Date.
III. CONDITIONS PRECEDENT
III.1 Conditions to Initial Advance. Lenders shall not be obligated to
make their initial Loan pursuant to this Agreement unless and until
Borrower satisfies the following conditions:
III.1.1 Loan Documents. Borrower shall have delivered to Lenders and to
Agent the following documents, fully executed and in form and substance
acceptable to the Agent:
III.1.1(a) Loan Agreement. This Agreement.
III.1.1(b) Acquisition Loan Notes. The Acquisition Loan Notes made by
Borrower payable to the order of the respective Lenders in the maximum
principal amounts of Sixteen Million and No/100 Dollars ($16,000,000.00)
and Six Million and No/100 Dollars ($6,000,000.00), respectively.
III.1.1(c) Working Capital Loan Notes. The Working Capital Loan Notes made
by Borrower payable to the order of the respective Lenders in the maximum
principal amounts of Four Million and No/100 Dollars ($4,000,000.00) and
One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00),
respectively.
III.1.1(d) Guaranties of Subsidiaries. Unconditional Continuing Guaranties
executed by all Subsidiaries of Borrower other than Non-Corporate
Subsidiaries.
III.1.1(e) Pledge of Stock of Subsidiaries. Stock Pledge Agreement,
Irrevocable Proxies and Blank Stock Powers evidencing a first priority
perfected security interest in all of the stock of Borrower's corporate
Subsidiaries and all dividends, distributions and other property related
thereto, together with the original certificates evidencing the pledged
stock.
III.1.1(f) Charters. Certified Copies of the Consolidated Entities'
corporate charters and all amendments thereto, issued by the Secretaries of
State for their states of domicile.
III.1.1(g) Bylaws. Certified Copies of Bylaws for the Consolidated
Entities.
III.1.1(h) Certificates of Good Standing. Certificates of good standing or
existence, as applicable, issued as to the Consolidated Entities by the
Secretaries of State for the states of their domicile.
III.1.1(i) Foreign Qualification. Certificates of Qualification issued by
the Secretaries of State for each state in which a Consolidated Entity is
required to qualify as a foreign corporation.
III.1.1(j) Resolutions. Certified Copies of Resolutions authorizing the
execution of all applicable Loan Documents on behalf of Consolidated
Entities.
III.1.1(k) Opinions of Borrower's Counsel. Opinions of counsel to the
Consolidated Entities addressed to Agent and Lenders, addressing matters
reasonably required by Lenders, Agent and their counsel.
III.1.1(l) UCC Searches. UCC search reports on Borrower from such
jurisdictions and filing offices as Lenders and Agent may require.
III.1.1(m) Closing Statement and Funding of Expenses. Loan Closing
Statement describing expenses and fees due in connection with the closing
of the Credit Facilities and payment thereof in immediately available
funds.
III.1.1(n) Other Documents. Such other documents as Lenders or Agent may
reasonably require.
III.1.1(o) Completion of Exhibits and Schedules. The completion of all
exhibits and schedules to this Agreement, which shall be satisfactory to
Agent, in its sole discretion.
III.1.2 Additional Conditions. Borrower shall have satisfied the
following additional conditions, to Lenders' and Agent's satisfaction:
III.1.2(a) Warranties. All warranties made in the Loan Documents must be
true in all material respects and shall be true in all material respects
taking into account the funding of the requested Loan.
III.1.2(b) Covenants. All covenants made in the Loan Documents must have
been complied with and shall have been complied with taking into account
the funding of the requested Loan.
III.1.2(c) Absence of Unmatured Default. No Event of Default or Unmatured
Default shall exist under this Agreement.
III.1.2(d) No Adverse Change. There must be no Material Adverse Change
since the date of the Financial Statements.
III.1.2(e) Regulatory Diligence. The completion of healthcare regulatory
diligence to the satisfaction of Agent and its counsel.
III.2 Conditions to Subsequent Loans. Lenders shall not be obligated to
make any Loan unless all of the following conditions are satisfied as of
the time of the request and of funding:
III.2.1 Conditions to Initial Advance. All of the conditions in Section
3.1 hereof must have been satisfied.
III.2.2 Warranties. All warranties made in the Loan Documents must be
true in all material respects and shall be true in all material respects
taking into account the funding of the requested Loan.
III.2.3 Covenants. All covenants made in the Loan Documents must have
been complied and shall have been complied with taking into account the
funding of the requested Loan.
III.2.4 Absence of Unmatured Default. No Event of Default or Unmatured
Default shall exist under this Agreement.
III.2.5 Material Adverse Change. There shall not have occurred a Material
Adverse Change.
IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent that:
IV.1 Capacity. Each Consolidated Entity is a corporation or other entity
as set forth in Schedule 4.1 hereof, and is duly organized, validly
existing and in good standing under the laws of the state of its domicile
as set forth in Schedule 4.1. Each Consolidated Entity is qualified or
authorized to do business in all jurisdictions in which its ownership of
property or conduct of business requires such qualification or
authorization or where the failure to be so qualified or authorized would
not have a Material Adverse Effect. Each Consolidated Entity has the power
and authority to own its Properties and to carry on its business as now
being conducted and as proposed to be conducted after the execution hereof,
to execute and deliver this Agreement and the other Loan Documents, and to
perform its obligations hereunder and under the other Loan Documents.
IV.2 Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Consolidated Entity
executing such documents has been duly authorized by all requisite action.
IV.3 Binding Obligations. This Agreement is and the other Loan Documents,
when executed and delivered to Lender, will be, legal, valid and binding
upon each Consolidated Entity who is a party thereto, enforceable in
accordance with its respective terms, subject only to principles of equity
and laws applicable to creditors generally, including bankruptcy laws.
IV.4 No Conflicting Law or Agreement. The execution, delivery and
performance of this Agreement and the other Loan Documents by each
Consolidated Entity does not constitute a breach of or default under, and
will not violate or conflict with, any provisions of the corporate charter
or other constituent documents of a Consolidated Entity; any contract,
financing agreement, lease, or other agreement to which a Consolidated
Entity is a party or by which its Properties may be affected, the violation
of which could have a Material Adverse Effect; or any Law to which a
Consolidated Entity is subject or by which its Properties may be affected,
the violation of which could have a Material Adverse Effect; nor will the
same result in the creation or imposition of any Encumbrance upon any
Property of any Consolidated Entity, other than those contemplated by the
Loan Documents.
IV.5 No Consent Required. The execution, delivery, and performance of this
Agreement and the other Loan Documents by the Consolidated Entities do not
require the consent or approval of or the giving of notice to any Person
except for those consents which have been duly obtained and are in full
force and effect on the date hereof and others, if any, which by their
omission could not result in a Material Adverse Effect.
IV.6 Financial Statements. The Financial Statements are complete and
correct, have been prepared in accordance with GAAP, and present fairly the
financial condition and results of operations of the Consolidated Entities
as of the date and for the period stated therein, subject to year-end
adjustments. No Material Adverse Change has occurred since the date of the
Financial Statements. Borrower acknowledges that Lenders have advanced (or
shall advance) the Credit Facilities in reliance upon the Financial
Statements.
IV.7 Fiscal Year. Each Consolidated Entity's fiscal year ends on December
31 of each year.
IV.8 Litigation. Except as disclosed on Schedule 4.8 hereto, (i) there is
no litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature pending against
any Consolidated Entity or any of its Properties, and (ii) there is no
litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature threatened in
writing against a Consolidated Entity which, if adversely determined, could
have a Material Adverse Effect. No Consolidated Entity is subject to any
outstanding court, arbitral or administrative order, writ or injunction. To
the Best of Borrower's Knowledge, no facts exist under which third parties
have unasserted claims against any Consolidated Entity which, if adversely
determined, could have a Material Adverse Effect.
IV.9 Taxes; Governmental Charges. Each Consolidated Entity has filed or
caused to be filed or has lawfully extended the deadline for filing all tax
returns and reports required to be filed. Each Consolidated Entity has
paid, or made adequate provision for the payment of, all Taxes that have or
may have become due pursuant to such returns or otherwise, or pursuant to
any assessment received by it, except such Taxes, if any, as are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided. To the Best of Borrower's knowledge, there is
no proposed material tax assessment against any Consolidated Entity. No
extension of time for the assessment of federal, state or local taxes of
any Consolidated Entity is in effect or has been requested, except as
disclosed in Schedule 4.9 hereto. Each Consolidated Entity has timely made
all required remittances of withholding deposits and other assessments
against payroll expenditures.
IV.10 Title to Properties. Each Consolidated Entity has good and
marketable title to its Properties, free and clear of all Encumbrances
except for Permitted Encumbrances.
IV.11 No Default. No Consolidated Entity is in default in any respect that
affects its business, Properties, operations, or condition, financial or
otherwise, under any indenture, mortgage, deed of trust, obligation to
equity holders, credit agreement, note, agreement, lease, sale agreement or
other instrument to which any Consolidated Entity is a party or by which
its Properties are bound, which default could have a Material Adverse
Effect. To the Best of Borrower's Knowledge, no other party to any
contract with any Consolidated Entity under which a default could have a
Material Adverse Effect is in default or breach thereof and no circum-
stances exist which, with the giving of notice and/or the passing of time
would constitute such default or breach. No Event of Default or Unmatured
Default exists under this Agreement.
IV.12 Casualties; Taking of Properties. Neither the business nor the
Property of any Consolidated Entity is presently impaired as a result of
any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of
property, cancellation of contracts, permits, concessions by any domestic
or foreign government or any agency thereof, riot, activities of armed
forces or acts of God or of any public enemy, in any case as could have a
Material Adverse Effect.
IV.13 Compliance with Laws. No Consolidated Entity is in violation of any
Law to which it, its business or any of its Properties are subject, the
violation of which would likely have a Material Adverse Effect, and, to the
Best of Borrower's Knowledge, there are no outstanding citations, notices
or orders of noncompliance issued to any Consolidated Entity under any such
Law, the violation of which would likely have a Material Adverse Effect.
Each Consolidated Entity has obtained all licenses, permits, franchises, or
other governmental authorizations necessary to the ownership of its
Properties or to the conduct of its business, except for those which, if
not obtained, could not have a Material Adverse Effect.
IV.14 Compliance with Fraud and Abuse Laws. Without limiting any other
provision of this Agreement, no Consolidated Entity and no Provider is in
violation of any Fraud and Abuse Law, the violation of which could have a
Material Adverse Effect.
IV.15 ERISA. No ERISA Event has occurred with respect to any Plan or is
reasonably expected to occur with respect to any Plan.
IV.16 Full Disclosure of Material Facts. Borrower has fully advised
Lenders of all matters involving the financial condition, business,
operations and Properties of the Consolidated Entities that would be
reasonably expected to have a Material Adverse Effect. No information,
exhibit, or report furnished or to be furnished by Borrower to Lenders in
connection with this Agreement contains, as of the date thereof, any
misrepresentation of fact or failed or will fail to state any material
fact, the omission of which would render the statements therein materially
false or misleading.
IV.17 Accuracy of Projections. With respect to all business plans and
other forecasts and projections furnished by or on behalf of Borrower and
made available to Lenders relating to the financial condition, business,
operations or Properties of the Consolidated Entities, all facts stated as
such therein were true and complete in all material respects as of the time
made and all estimates and assumptions were made in good faith and believed
to be reasonable at the time made. As of the Closing Date, nothing has
since come to the attention of Borrower that has changed its assessment of
any such matters, except for changes that could not have a Material Adverse
Effect.
IV.18 Investment Company Act. No Consolidated Entity is an "investment
company" under the Investment Company Act of 1940, as amended.
IV.19 Personal Holding Company. No Consolidated Entity is a "personal
holding company" as defined in Section 542 of the IRC.
IV.20 Solvency. Each Consolidated Entity is Solvent as of the Closing Date
and will remain Solvent upon the consummation of the transactions
contemplated hereby.
IV.21 Chief Executive Office. The address designated herein to which
notices are to be sent under this Agreement is the Borrower's chief
executive office within the meaning of Tennessee Code Annotated Section 47-
9-103(3)(d).
IV.22 Subsidiaries. Borrower has no Subsidiaries, except for those listed
on Schedule 4.22 hereto.
IV.23 Ownership of Patents, Licenses, Etc. The Consolidated Entities own
all licenses, permits, franchises, registrations, patents, copyrights,
trademarks, trade names or service marks, or the rights to use the
foregoing, that are necessary for the continued operation of their business
except for such licenses, etc., which, if not held or owned, could not have
a Material Adverse Effect.
IV.24 Environmental Compliance. Each Consolidated Entity has duly complied
with, and their Properties are owned and operated in compliance with, all
Environmental Laws, the violation of which could have a Material Adverse
Effect. There have been no citations, notices or orders of non-compliance
issued to any Consolidated Entity or, to the Best of Borrower's knowledge,
relating to their business or Properties pursuant to any Environmental Law.
Each Consolidated Entity has obtained all required federal, state and
local licenses, certificates or permits relating to them and their
Properties as required by applicable Environmental Laws, except for those
which, if not obtained, could not have a Material Adverse Effect
IV.25 Labor Matters. No Consolidated Entity is subject to any collective
bargaining agreements or any decrees or orders requiring them to recognize,
deal with or employ any Person. No demand for collective bargaining has
been asserted against any Consolidated Entity by any union or organization.
No Consolidated Entity has experienced any strike, labor dispute, slowdown
or work stoppage due to labor dispute and, to the best knowledge of
Borrower, there is no such strike, dispute, slowdown or work stoppage
threatened against any Consolidated Entity. All Consolidated Entities are
in compliance in all material respects with the Fair Labor Standards Act of
1938, as amended.
IV.26 OSHA Compliance. All Consolidated Entities are in compliance in all
material respects with the Federal Occupational Safety and Health Act, as
amended, and all regulations under the foregoing.
IV.27 Regulation U. No Consolidated Entity is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System). No proceeds of any Loan will be used to purchase
or carry any margin stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System) in violation of
applicable law, including, without limitation, Regulation U issued by the
Board of Governors of the Federal Reserve System.
IV.28 Affiliate Transactions. No Consolidated Entity is a party to any
transaction, contract or agreement with any Affiliate, except for Service
Agreements, lease agreements and other agreements among Borrower and its
Subsidiaries and those other agreements described in Schedule 4.28 hereof.
V. AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement (and thereafter
where expressly stated herein):
V.1 Payment of Obligations. Borrower shall pay all amounts owed under the
Obligations when due.
V.2 Maintenance of Existence and Business. Except for transactions among
Consolidated Entities permitted under this Agreement, each Consolidated
Entity shall maintain its fundamental existence, name, rights, and
franchises, and shall maintain its qualification and good standing in all
states in which such qualification is necessary, and shall continue to
operate in the same type of business as such Consolidated Entity engages in
as of the date hereof.
V.3 Financial Statements and Reports. Borrower shall furnish to Agent the
following, all of which must be in form and substance satisfactory to
Lender (the financial reports below and all other reports required of
Borrower under this Agreement shall be delivered in sufficient counterparts
that each Lender and Agent may have an original counterpart thereof):
V.3.1 Monthly Financial Reports. As soon as available, and in any event
by the thirtieth (30th) day following the end of a month, Borrower shall
deliver to Agent a balance sheet, income statement and statement of cash
flows of Borrower for and as of the end of the preceding month, all
prepared by Borrower on a consolidated basis and certified by Borrower's
president or chief financial officer to be complete and correct and to
present fairly, in accordance with GAAP (excluding year-end adjustments and
required footnote disclosures), the consolidated financial condition of
Borrower as of the date of such statements and the consolidated results of
its operations and its cash flow for such period. Notwithstanding the
foregoing, if as of May 31, 1997, Borrower has met the Financial
Projections since the date hereof, the requirements of this Section 5.3.1
will terminate and monthly financial statements shall no longer be
required.
V.3.2 Quarterly Financial Reports. As soon as available, and in any event
by the forty-fifth (45th) day of each fiscal quarter except the fourth
fiscal quarter, Borrower shall prepare and deliver to Agent a consolidated
balance sheet, income statement and statement of cash flows of Borrower for
and as of the end of the preceding fiscal quarter, certified by Borrower's
President or Chief Financial Officer to be complete and correct and to
present fairly, in accordance with GAAP (excluding year-end adjustments and
required footnote disclosures), the consolidated financial condition of
Borrower as of the date of such statements and the consolidated results of
its operations and its cash flow for such period. Supplemental to such
basic financial statements, Borrower shall deliver to the Agent
calculations of all financial ratios; the certification of Borrower's
President or Chief Financial Officer as to the absence of any Event of
Default or Unmatured Default; a Borrowing Base certificate; and by-Practice
financial summaries addressing Practice revenues, expenses and fees to
Consolidated Entities in form and substance acceptable to Agent.
V.3.3 Annual Financial Reports. As soon as available, and in any event
within ninety (90) days after the end of each fiscal year, Borrower shall
deliver to Agent the audited consolidated balance sheet of Borrower as of
the end of such year and the related audited consolidated statements of
income, retained earnings and cash flows for such year, together with
supporting schedules, all such statements prepared in accordance with GAAP
and accompanied by an unqualified audit report prepared by an independent
"big six" certified public accountant acceptable to Agent showing the
consolidated financial condition of Borrower at the close of such year and
the consolidated results of its operations, changes in its retained
earnings and its cash flows for such year. Supplemental to the audited
year-end financial statements, Borrower shall deliver to Agent calculations
of all financial ratios as determined based upon the audited financial
statements and the certification of Borrower's President or Chief Financial
Officer as to the absence of any Event of Default or Unmatured Default.
V.3.4 Accountant Reports. Promptly upon the receipt thereof, Borrower
shall deliver to Agent a copy of each other report (other than work papers)
submitted to Borrower or any Subsidiary by its accountants in connection
with any annual, interim or special audit made by them, but Borrower shall
be obligated to deliver such report only if (i) the report advises Borrower
of a material weakness in internal controls, or (ii) Agent has requested
the report in writing based upon Agent's good faith belief that, based upon
its review of Borrower's financial statements or other information relating
to the operations and condition of the Consolidated Entities, a copy of
such report is needed in order for Agent and/or Lenders to thoroughly
assess the financial condition of the Consolidated Entities and/or their
continued compliance with this Agreement.
V.3.5 Acquisition Certification. In connection with any draw, Borrower
shall submit a Borrowing Base certificate to confirm the sufficiency of the
Borrowing Base for the requested advance.
V.3.6 Other Information. Borrower shall provide Agent with such
additional information regarding the financial condition, properties,
operations and prospects of the Consolidated Entities and their
consolidated entities as Agent may reasonably require.
V.4 Additional Information. Borrower shall provide such other information
respecting the condition or operations, financial or otherwise, of the
Consolidated Entities as Agent may from time to time reasonably request.
V.5 Certain Additional Reporting Requirements.
V.5.1 Owner Mailings. Promptly upon the sending thereof, Borrower shall
deliver to Agent a copy of each statement, report or notice sent to its
shareholders.
V.5.2 SEC Filings. Promptly upon the filing thereof, should such filings
become applicable, Borrower shall deliver to Agent copies of all regular,
periodic and special reports that any Consolidated Entity files with the
United States Securities and Exchange Commission or any successor thereto,
or any national securities exchanges or the National Association of
Securities Dealers.
V.5.3 Change in Accounting Policies. Borrower shall promptly notify Agent
in writing upon any material change in accounting policies or financial
reporting practices on the part of any Consolidated Entity.
V.5.4 Notice to Agent Upon Perceived Breach. Borrower agrees to give
Lender prompt written notice of any action or inaction by or on behalf of
Lender in connection with this Agreement or the Obligations that Borrower
believes may be actionable against Lenders or Agent or a defense to payment
of any or all Obligations for any reason, including, but not limited to,
commission of a tort or violation of any contractual duty or duty implied
by law provided, however, that Borrower's failure to give such notice, if
such failure is unintentional and does not arise from Borrower's gross
negligence, shall not foreclosure any such action or defense to be asserted
by Borrower.
V.5.5 Changes in Constituent Documents. Borrower shall promptly notify
Agent in writing of any change in the corporate charter or bylaws of
Borrower or the fundamental documents of any Subsidiary following the
encumbrance of the stock thereof in favor of Agent to secure Lenders as
required under this Agreement, and shall provide Agent with a copy of such
change (Consolidated Entities are restricted in the adoption of such
amendments as provided elsewhere in the Loan Documents, and nothing
contained in this Section shall be deemed a waiver of such restrictions).
V.5.6 Notice of Litigation. Borrower shall give Agent prompt written
notice of any litigation, arbitration, tax audit, administrative proceeding
or investigation that may hereafter be instituted or threatened in writing
in which Borrower would be a party or which otherwise may affect any
Consolidated Entity or any of their business, operations or Properties,
except for (i) actions seeking only monetary damages in an amount of less
than the amount equal to one-half percent (1/2%) of Borrower's Consolidated
EBITDA for the most recent four (4) fiscal quarters for which Borrower has
submitted financial statements to Agent, as of the time of determination,
and (ii) matters arising from premises or vehicular liability seeking only
monetary damages and which are fully covered by insurance, subject only to
any applicable deductible.
V.5.7 Other Notices. Borrower shall promptly notify Agent in writing if
Borrower learns of the occurrence of (i) any event that constitutes an
Event of Default or an Unmatured Default, together with a detailed
statement of the steps being taken as a result thereof, or (ii) any
Material Adverse Change.
V.6 Taxes and Other Encumbrances. Each Consolidated Entity shall make due
and timely payment or deposit of all federal, state and local taxes,
assessments or contributions required of it by law, and execute and deliver
to Agent, on demand, appropriate certificates attesting to the payment or
deposit thereof; provided, however, that the Consolidated Entities shall
not be required to pay or discharge any such tax, assessment, charge or
claim for as long as it is being diligently contested in good faith by
proper proceedings and for which appropriate reserves are being maintained.
V.7 Payment of Liabilities. Each Consolidated Entity shall pay all of its
Liabilities as and when the same becomes due in accordance with its terms.
V.8 Compliance with Laws. Each Consolidated Entity shall observe and
comply with all Laws (including, but not limited to, Fraud and Abuse Laws),
and shall maintain all certificates, franchises, permits, licenses, and
authorizations necessary to the conduct of its business or the operation of
its Properties, except for such Laws, certificates, etc., which, if
violated or not obtained and full penalties were imposed for such
violation, could not cause a Material Adverse Effect. Each Consolidated
Entity shall further use its best efforts to assure the compliance by all
Providers with all applicable Laws, including, but not limited to, medical
licensure and Fraud and Abuse Laws, relating to their providing of
professional services, except for those which, if violated and full
penalties were imposed for such violation, could not cause a Material
Adverse Effect.
V.9 Maintenance of Property. All Consolidated Entities shall maintain
their Property (and any Property leased by or consigned or held under title
retention or conditional sales contracts) in good and workable condition at
all times, subject to ordinary wear and tear, normal discards and
replacements due to functional and useful-life obsolescence, and shall make
all repairs, replacements, additions, and improvements to their Property
reasonably necessary and proper to ensure that the business carried on in
connection with their Property may be conducted properly and efficiently at
all times.
V.10 Compliance with Contractual Obligations. Each Consolidated Entity
will perform all of its obligations in respect of all material contracts to
which it is a party and will use its best efforts to keep, and to take all
action to keep, such contracts in full force and effect and not allow any
such contract to lapse or be terminated or any rights to renew such to be
forfeited or canceled, if such lapse, etc. could have a Material Adverse
Effect; provided, however, that any such contract may lapse or be
terminated or such renewal rights may be forfeited or canceled if in the
reasonable business judgment of the Consolidated Entities it is in their
best interests to allow or cause such lapse, termination, forfeiture or
cancellation.
V.11 Further Assurances. The Consolidated Entities shall promptly cure any
defects in the creation, issuance, or delivery of the Loan Documents. The
Consolidated Entities at their expense will execute (or cause to be
executed) and deliver to Agent upon request all such other and further
documents, agreements, and instruments in compliance with or accomplishment
of the covenants and agreements applicable to them in the Loan Documents,
or to evidence further and to describe more fully any Collateral intended
as security for the Obligations, or to correct any omissions in the Loan
Documents, or to state more fully the Obligations and agreements set out in
any of the Loan Documents, or to perfect, protect, or preserve any
Encumbrances created pursuant to any of the Loan Documents, or to make any
recordings, to file any notices, or to obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith. Borrower
appoints Agent as Borrower's attorney-in-fact to execute any financing
statements or other instruments of perfection with respect to the
Collateral.
V.12 Security Interest; Setoff. In order to further secure the payment of
the Obligations, Borrower hereby grants to Agent and to each Lender a
security interest and right of setoff against all of Borrower's presently
owned or hereafter acquired monies, items, credits, deposits and
instruments (including certificates of deposit) presently or hereafter in
the possession of any Lender or Agent. By maintaining any such accounts or
other property with a Lender or Agent, Borrower acknowledges that Borrower
voluntarily subjects the property to the security interest arising
hereunder. Subject to the provisions in Article IX hereof, a Lender may
exercise its rights under this Section without prior notice (but with
prompt notice following the setoff) following an Event of Default.
Borrower agrees that neither Lenders nor Agent shall be liable for the
dishonor of any instrument after notice of setoff shall have been duly
given resulting from a Lender's exercise of its rights under this Section.
V.13 Insurance.
V.13.1 General Insurance Requirements. In addition to the other specific
requirements set forth in this Agreement and in other Loan Documents, the
Consolidated Entities shall maintain insurance on all insurable Properties
now or hereafter owned by them against such risks and to the extent
customary in their industry, and shall maintain or cause to be maintained
public liability and worker's compensation insurance to the extent
customary in the industry.
V.13.2 Practice-Related Insurance Requirements. The Consolidated Entities
shall maintain insurance for claims, however characterized, against them in
connection with the provision of medical services by Providers and/or
ancillary services provided by them at Practices covered by Service
Agreements, in an amount of at least Five Hundred Thousand and No/100
Dollars ($500,000.00) per occurrence and One Million and No/100 Dollars
($1,000,000.00) in the aggregate for Providers who are physicians, which
insurance shall name Lenders (or Agent on behalf of Lenders) as additional
insureds. The Consolidated Entities shall further cause each Provider to
maintain medical malpractice insurance of at least Five Hundred Thousand
and No/100 Dollars ($500,000.00) per occurrence and One Million and No/100
Dollars ($1,000,000.00) in the aggregate.
V.14 Accounts and Records. The Consolidated Entities shall maintain
current books of record and account, in which full, true, and correct
entries will be made of all transactions.
V.15 Official Records. The Consolidated Entities shall maintain current
corporate and official records, minute books and stock ledgers and other
records appropriate to their form of organization.
V.16 Banking Relationships. The Consolidated Entities shall maintain their
deposit accounts with Lenders or with other FDIC-insured depository
institutions.
V.17 Right of Inspection. The Consolidated Entities shall permit any
officer, employee, or agent of a Lender or Agent to visit and inspect
during ordinary business hours any of the their Property, to examine their
books of record and accounts and corporate records, to take copies and
extracts from such books of record and accounts, and to discuss the
affairs, finances, and accounts of the Consolidated Entities with their
respective officers, accountants, and auditors, all at such reasonable
times and as often as a Lender may reasonably desire and upon reasonable
advance notice absent an Event of Default. Without limiting Agent's right
to obtain equitable relief as to any other appropriate right in this
Agreement or in other Loan Documents, Borrower agrees that the rights in
this Section may be enforced by affirmative injunction and, to the extent
the right to review records may be denied, the right may be enforced by a
restraining order prohibiting the interference by Borrower with the
exercise of rights to review of the records pursuant to this Section.
Absent an Event of Default or Unmatured Default, all expenses of such
inspections, etc. shall be paid by Lenders, and in the presence thereof,
all expenses shall be paid by Borrower.
V.18 ERISA Information and Compliance. The Consolidated Entities shall
comply with ERISA and all other applicable laws governing any pension or
profit sharing plan or arrangement to which they are a party. The
Consolidated Entities shall (i) upon request, provide Agent with copies of
any annual report required to be filed pursuant to ERISA with respect to
any Plan or any other employee benefit plan; (ii) notify Agent upon the
occurrence of any ERISA Event or of any additional act or condition arising
in connection with any Plan which they believe might constitute grounds for
termination thereof by the PBGC or for the appointment of a trustee to
administer the Plan; and (iii) furnish to Agent, promptly upon request,
such additional information concerning any Plan or any other employee
benefit plan as Agent may request.
V.19 Indemnity; Expenses. Borrower agrees to indemnify, defend (with
counsel reasonably satisfactory to the indemnified party or parties) and
hold harmless Lenders and Agent against any loss, liability, claim or
expense, including reasonable attorneys' fees, that they may incur in
connection with the Loan Documents or the Obligations, except those losses,
etc. that may result from a Lender's or Agent's gross negligence or willful
misconduct. Without limiting the foregoing, upon demand by Agent, Borrower
will reimburse Lenders and/or Agent for the following reasonable expenses
if not paid by Borrower promptly after written demand by Agent:
V.19.1 Taxes. All taxes that Lenders or Agent may be required to pay
because of the Obligations or because of Lenders' or Agent's interest in
any property securing the payment of the Obligations, excepting taxes based
upon the net income of Lender or Agent.
V.19.2 Administration. All costs of the preparation of this Agreement and
any other related documents and the administration of the Obligations
(except for Lenders' and Agent's usual overhead incurred in the acceptance
and processing of payments, the routine review of financial statements,
certifications and reports, routine communications with Borrower, and other
ordinary activities that are not occasioned by an Unmatured Default, Event
of Default or by a request of Borrower to waive or vary the terms of this
Agreement).
V.19.3 Protection of Collateral. All costs of preserving, insuring,
preparing for sale (whether by improvement, repair or otherwise) or selling
any Collateral.
V.19.4 Costs of Collection. All court costs and other costs of collecting
any debt, overdraft or other obligation included in the Obligations.
V.19.5 Litigation. All reasonable costs arising from any litigation,
investigation, or administrative proceeding (whether or not Agent or a
Lender is a party thereto) that Agent or a Lender may incur as a result of
the Obligations or as a result of their association with any of the
Consolidated Entities, including, but not limited to, expenses incurred by
Agent or a Lender in connection with a case or proceeding involving any
Consolidated Entity under any chapter of the Bankruptcy Code or any
successor statute thereto.
V.19.6 Attorneys' Fees. Reasonable attorneys' fees incurred in connection
with any of the foregoing.
If a Lender or Agent pays any of the foregoing expenses, they shall become
a part of the Obligations and shall bear interest at the Maximum Lawful
Amount. This Section shall remain in full effect regardless of the full
payment of the Obligations, the purported termination of this Agreement,
the delivery of the executed original of this Agreement to Borrower, or the
content or accuracy of any representation made by Borrower to Lenders or
Agent; provided, however, Agent may terminate this Section by executing and
delivering to Borrower a written instrument of termination specifically
referring to this Section.
V.20 Assistance in Litigation. Borrower covenants to, upon request,
cooperatively participate in any proceeding in which Borrower is not an
adverse party to Lenders or Agent and which concerns Lenders' or Agent's
rights regarding the Obligations or any Collateral.
V.21 Name Changes. Borrower shall give Agent at least thirty (30) days
prior written notice before any Consolidated Entity changes its name or
begins doing business under any trade name.
V.22 Estoppel Letters. Borrower covenants to provide Agent, within ten
(10) days after request, an estoppel letter stating (i) the balance of the
Obligations, (ii) whether Borrower has any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the
Obligations. Such balance as presented for confirmation and the non-
existence of defenses shall be presumed if Borrower fails to respond to
such a request within the required period.
V.23 Environmental Matters.
V.23.1 Compliance With Environmental Laws. All Consolidated Entities will
(i) employ in connection with their operations, appropriate technology and
compliance procedures to maintain compliance with any applicable
Environmental Laws, the violation of which would reasonably be expected to
have a Material Adverse Effect, (ii) obtain and maintain any and all
materials permits or other permits required by applicable Environmental
Laws in connection with its operations, excepting only such permits, etc.
which could not by their absence cause a Material Adverse Effect, and
(iii) dispose of any and all Hazardous Substances only at facilities and
with carriers reasonably believed to possess valid permits under any
applicable state and local Environmental Laws. All Consolidated Entities
shall use their best efforts to obtain all certificates required by law to
be obtained by them from all contractors employed by them in connection
with the transport or disposal of any Hazardous Substances.
V.23.2 Remedial Work. If any investigation, site monitoring, containment,
clean-up, removal, restoration or other remedial work of any kind or nature
with respect to any Consolidated Entity's Properties is required to be
performed by them under any applicable local, state or federal law or
regulation, any judicial order, or by any governmental or non-governmental
entity or Person because of, or in connection with, the current or future
presence, suspected presence, release or suspected release of a Hazardous
Substance in or into the air, soil, groundwater, surface water or soil
vapor at, on, about, under, or within any of a Consolidated Entity's
Property (or any portion thereof), Borrower shall within 30 days after
written demand for performance thereof (or such shorter period of time as
may be required under applicable law, regulation, order or agreement),
commence and thereafter diligently prosecute to completion, all such
remedial work.
V.23.3 Indemnification of Lenders and Agent. Borrower agrees to
indemnify, defend (with counsel reasonably satisfactory to the indemnified
party or parties) and hold harmless Lenders and Agent against any loss,
liability claim or expense, including attorneys' fees, that Lender or Agent
may incur as a result of the violation or alleged violation of any
Environmental Law by a Consolidated Entity or with respect to any other
violation of Environmental Laws with respect to any Consolidated Entity's
Properties. This covenant shall survive the repayment of the Credit
Facilities.
V.24 Opinions of Counsel. Borrower agrees that Agent may from time to
time, but not more frequently than once per calendar year absent an
Unmatured Default or an Event of Default, request in writing the opinion of
in-house counsel and/or outside healthcare counsel to the Consolidated
Entities as to the absence, except as disclosed in the opinion, of such
counsel's knowledge of any actual, threatened or asserted violation of any
Fraud and Abuse Law on the part of any Consolidated Entity and/or the
Providers, and the sufficiency of documentation then in use for the
acquisition of Practices as complying with Fraud and Abuse Laws. Absent
the existence of an Unmatured Default or and Event of Default, such
opinions shall require no special diligence on the part of the opining
attorney(s), but only requiring a report of matters then known to such
attorneys, unless Agent specifically inquires about facts that Agent
reasonably believes may raise a Fraud and Abuse Law issue. Such opinions
shall be in form and substance acceptable to Agent, shall be delivered to
Agent at Borrower's expense within fifteen (15) days of the date of request
and shall address specifically any facts inquired of in Agent's request.
V.25 Additional Collateral Upon Certain Event. If Borrower's Total Funded
Debt to Consolidated EBITDA Ratio (as calculated in Section 7.3 hereof)
exceeds 2.75 for any two (2) consecutive fiscal quarters, the Consolidated
Entities and all Subsidiaries of Borrower shall, upon demand by Agent,
execute and deliver to Agent such additional documents as Agent may require
on behalf of Lenders to grant to Lenders, or to Agent for the benefit of
Lenders, as Agent may require, a perfected security interest, subject only
to Permitted Encumbrances, in all of the Consolidated Entities' then owned
and thereafter acquired real property, personal property and fixtures,
including, but not limited to, all such equipment, inventory, accounts,
general intangibles, instruments, documents, chattel paper and fixtures,
and all products and proceeds thereof (all as defined in the UCC),
including insurance proceeds. Additionally, Borrower shall use its best
efforts to cause to be executed and delivered to Borrower opinions of
Borrower's outside counsel in form and substance acceptable to Agent,
Lenders and their counsel addressing the sufficiency of the security
documentation as to attachment, perfection and priority of the security
interest granted therein and such other documents as Agent, Lenders or
their counsel may require to evidence the continued compliance of Borrower
with all requirements of this Agreement. All of Agent's usual diligence
items relating to the applicable types of property shall be conducted at
Borrower's expenses, including, but not limited to, environmental surveys,
boundary surveys and other real estate diligence procedures. All expenses
of recordation of lien instruments, title insurance, document preparation
and other transaction costs, including, but not limited to, the reasonable
fees and expenses of Lenders' and Agent's attorneys, shall be paid by
Borrower.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees that without the advance written consent of
Agent, until the Obligations are repaid in full:
VI.1 Debts, Guaranties, and Other Obligations. No Consolidated Entity
shall incur, create, assume, or in any manner become or be liable with
respect to any Liability, except the following:
VI.1.1 Obligations to Lenders. Any Obligations to Lenders under this
Agreement.
VI.1.2 Existing Liabilities. Liabilities, direct or contingent, of
Consolidated Entities existing on the date of this Agreement that are
reflected in Schedule 6.1.2 hereof.
VI.1.3 Endorsements. Endorsements of negotiable or similar instruments
for collection or deposit in the ordinary course of business.
VI.1.4 Trade Liabilities. Trade payables and accruals from time to time
incurred in the ordinary course of business.
VI.1.5 Taxes. Taxes, assessments, or other governmental charges that are
not delinquent or are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if Borrower has made the
reserve therefor required by GAAP.
VI.1.6 Seller Debt. Seller Debt, which must be unsecured.
VI.1.7 Purchase Money Debt. Purchase Money Debt, including Assumed Debt,
not to exceed (i) Six Million and No/100 Dollars ($6,000,000.00) in the
aggregate, including all Purchase Money Debt of all Consolidated Entities,
(ii) Three Million and No/100 Dollars ($3,000,000.00) in the aggregate,
excluding for this Section (ii) all Purchase Money Debt owed by individual
Practices that have total Purchase Money Debt of less than One Hundred
Thousand and No/100 Dollars ($100,000.00) per Practice, or (iii) One
Million and No/100 Dollars ($1,000,000.00) as to any single Practice,
absent the prior written approval of Agent as to this Section (iii).
VI.1.8 Accounting Accruals. Liabilities arising from reserves and
accruals required by GAAP that do not reflect liquidated and mature
obligations to third parties, including, but not limited to, current
deferred income taxes.
VI.1.9 Liabilities Among Consolidated Entities. Liabilities incurred to
other Consolidated Entities incurred in the ordinary course of business.
VI.2 Change of Management. Borrower shall not allow or suffer any change
of management effecting a material change in the duties or change in the
personnel presently staffing the positions of Chief Executive Officer,
President or Chief Financial Officer, as set forth in Schedule 6.2 hereto.
Notwithstanding the foregoing, should any of the named managers cease such
active participation in Borrower's management due to their death or
disability, Agent shall allow Borrower a period of sixty (60) days
thereafter in which a management succession plan may be presented to Agent
so that Agent may, in its discretion, elect to accept new management in
lieu of prior management, subject to such revisions of this Agreement as
Agent may require. Additionally, Lenders have been advised that a change
is pending regarding the office of Chief Financial Officer. Borrower shall
give Agent written notice of this change when a proposal is available, and
Agent shall allow Borrower a period of sixty (60) days thereafter so that
Agent may, in its discretion, elect to approve the proposed change in
management.
VI.3 Change of Ownership. Borrower shall not cause or suffer to exist a
change of ownership or suffer the issuance of new stock or other event that
would result in the ownership of more than 25% of the stock of Borrower by
any Person not presently a shareholder thereof, except as may result from
the sale or disposition of the Seafield Position.
VI.4 Distributions. No Consolidated Entity shall declare or pay any
dividend or other distribution or redeem any of its capital stock except
for dividend payments and other distributions from Subsidiaries to
Borrower.
VI.5 Encumbrances. No Consolidated Entity shall create, incur, assume, or
permit to exist any Encumbrance on any of its Property (now owned or
hereafter acquired) except for Permitted Encumbrances, and shall not
undertake a commitment of any kind in favor of any Person (other than
Lenders) (i) requiring that any or all of such Consolidated Entity's
Property be or remain unencumbered, or (ii) requiring that a Consolidated
Entity grant an Encumbrance (other than a Permitted Encumbrance) in favor
of any Person (other than Lenders) on a Consolidated Entity's Property
under any circumstances whatsoever. No Consolidated Entity shall sign or
file under the Uniform Commercial Code a financing statement that names
such Consolidated Entity as debtor or the equivalent or sign any security
agreement authorizing any secured party thereunder to file any such
financing statement, except to secure Permitted Encumbrances.
VI.6 Investments. No Consolidated Entity shall make investments
(including but not limited to acquisitions or purchases of the obligations
or stock of, or any other or additional interest) in any person, firm,
partnership, joint venture or corporation except: (a) those investments in
existence as of the Closing Date, (b) general obligations of, or
obligations unconditionally guaranteed as to principal and interest by, the
United States of America maturing within fifteen (15) months of the date of
purchase, (c) commercial paper having a rating of not less than "A2" or
"P2" from Moody's or S & P, respectively, (d) Permitted Acquisitions, (f)
certificates of deposit and bankers acceptances issued by a Lender or
another banking institution with a minimum net worth of Five Hundred
Million and No/100 Dollars ($500,000,000.00) and having a letter of credit
rating of not less than "A" from Moody's or S & P, respectively, and (g)
such other investments as Agent may approve, in its discretion.
VI.7 Sales and Leasebacks. No Consolidated Entity shall enter into any
arrangement, directly or indirectly, with any Person other than another
Consolidated Entity by which such Consolidated Entity shall sell or
transfer any of its Property, whether now owned or hereafter acquired, and
by which a Consolidated Entity shall then or thereafter rent or lease as
lessee such Property or any part thereof or other Property that it intends
to use for substantially the same purpose or purposes as the Property sold
or transferred.
VI.8 Change of Control. Borrower shall not suffer or permit the occurrence
of a Change of Control.
VI.9 Nature of Business. No Consolidated Entity shall suffer or permit any
material changes to be made in the character of its business as carried on
at the Closing Date, except for the accomplishment of Permitted
Acquisitions.
VI.10 Further Acquisitions, Mergers, Etc. Except for Permitted
Acquisitions and transactions involving only Consolidated Entities, no
Consolidated Entity shall enter into any agreement to merge, consolidate,
or otherwise reorganize or recapitalize, or sell, assign, lease, or
otherwise dispose of (whether in one transaction or in a series of transac-
tions) all or substantially all of their Property (whether now owned or
hereafter acquired).
VI.11 Advances. No Consolidated Entity shall extend any loans to any other
Persons, except for (i) loans to other Consolidated Entities in the
ordinary course of business and (ii) advances to Providers not to exceed
Five Hundred Thousand and No/100 Dollars ($500,000.00) per Practice and
Three Million and No/100 Dollars ($3,000,000.00) in the aggregate at any
one time.
VI.12 Disposition of Assets. No Consolidated Entity shall dispose of any
of its assets other than in the ordinary course of their present business
upon terms standard in its industry.
VI.13 Inconsistent Agreements. No Consolidated Entity shall enter into any
agreement containing any provision which would be violated or breached by
the performance by Borrower of the Obligations.
VI.14 Fictitious Names. Borrower shall not use any name other than the
name used in executing this Agreement or any assumed or fictitious name.
VI.15 Subsidiaries and Affiliates. No Consolidated Entity shall create or
acquire any direct or indirect Subsidiary or Affiliate or divest itself of
any material assets by transferring them to any existing Subsidiary or
Affiliate other than Permitted Subsidiaries; nor shall Borrower enter into
any partnership, joint venture, or similar arrangement, or otherwise make
any material change in its corporate structure, except that Borrower may
acquire and create Permitted Subsidiaries from time to time in the ordinary
course of business.
VI.16 Place of Business. Borrower shall not transfer its executive
offices, or maintain records with respect to accounts at any locations
other than at the address for notices specified herein and at the locations
of Practices affiliated with Borrower, except as Agent may approve, in its
reasonable discretion.
VI.17 Adverse Action With Respect to Plans. No Consolidated Entity shall
take any action to terminate any Plan which could reasonably result in a
material liability of a Consolidated Entity to any Person.
VI.18 Transactions With Affiliates. No Consolidated Entity shall enter
into any transaction with any Affiliate except in the ordinary course of
business and on fair and reasonable terms no less favorable to the
Consolidated Entity than it would obtain in a comparable arms length
transaction with a Person not an Affiliate.
VI.19 Constituent Document Amendments. No Consolidated Entity shall amend
its corporate charter or bylaws, except as necessary to accomplish
corporate transactions that do not require Lenders' or Agent's specific
approval or transactions for which such approval is necessary and has been
granted.
VI.20 Adverse Transactions. No Consolidated Entity shall enter into any
transaction that materially and adversely affects or, to the best of its
knowledge, is likely to materially and adversely affect the Collateral or
Borrower's ability to repay the Obligations.
VI.21 Margin Securities. No Consolidated Entity shall own, purchase or
acquire (or enter into any contract to purchase or acquire) any "margin
security" as defined by any regulation of the Federal Reserve Board as now
in effect or as the same may hereafter be in effect.
VI.22 Accounting ChangesError! Bookmark not defined.. Borrower shall not
change its fiscal year or make any other significant change in consolidated
or consolidating accounting treatment and reporting practices, except as
required or permitted by GAAP or the Securities and Exchange Commission.
Any change in fiscal year shall be subject to Agent's prior written
approval.
VI.23 Action Outside Ordinary Course. No Consolidated Entity shall take
any other action outside the ordinary course of their business.
VII. FINANCIAL COVENANTS
VII.1 Current Ratio. Borrower shall maintain a Consolidated Current Ratio
of not less than 2.00:1.00, tested as of the end of each fiscal quarter.
VII.2 Total Funded Debt to Capital. Borrower shall maintain a ratio of
Total Funded Debt divided by Consolidated Capital of no greater than
.50:1.00, tested as of the end of each fiscal quarter.
VII.3 Total Funded Debt to Consolidated EBITDA. Borrower shall maintain a
ratio of Total Funded Debt divided by Consolidated EBITDA, measured as of
the end of each fiscal quarter for the previous four consecutive fiscal
quarters, of no greater than 3.00:1.00.
VII.4 Fixed Charge Coverage. Borrower shall maintain a Fixed Charge
Coverage Ratio of at least 1.25:1.00 for the previous four consecutive
fiscal quarters through the fiscal quarter ending December 31, 1996, and of
at least 1.50:1.00 thereafter.
VII.5 Net Worth. Borrower shall maintain a Consolidated Net Worth as of
the end of each fiscal quarter in an amount at least equal to the sum of
Nineteen Million Eight Hundred Forty-Three Thousand and No/100
($19,843,000.00), plus any Net Equity Proceeds, plus eighty-five percent
(85%) of the amount of net income for the fiscal quarter ending June 30,
1996 and for each fiscal quarter thereafter, without adjustment for net
losses.
VII.6 Capital Expenditures. Lender approval shall be required for Borrower
to expend Capital Expenditures in excess of 115% of an annual budget to be
approved by Lender. The proposed budget for each year shall be delivered
to Lender no later than sixty (60) days after the end of the previous
fiscal year.
VIII. EVENTS OF DEFAULT
VIII.1 Events of Default. Any of the following events shall be considered
an Event of Default under this Agreement:
VIII.1.1 Payments. Borrower's failure to make payment of any amount of
the Obligations within five (5) days after the date due.
VIII.1.2 Representations and Warranties. Any representation or warranty
made by Borrower or any other party in any Loan Document having been
incorrect in any material respect as of the date thereof.
VIII.1.3 Negative Covenants. The failure of Borrower to comply with any
of the requirements of Article VI hereof; provided, however, as to any such
event that is both (i) the result of an act by a third party absent the
cooperation of any Consolidated Entity, and (ii) reasonably susceptible to
being cured, the event shall not constitute an Event of Default unless the
event remains uncured for a period of twenty (20) days following the
earlier of (i) Borrower's knowledge of the facts giving rise thereto or
(ii) Agent's written notice to Borrower given in accordance with the
provisions hereof.
VIII.1.4 Financial Covenants. The failure of Borrower to comply with any
of the requirements of Article VII hereof, unless, on or before the date
that is the earlier of (i) twenty (20) days after the date on which the
breach is timely reported to Agent, or (ii) if the financial statements
disclosing the breach were submitted to Agent later than required by this
Agreement, twenty (20) days after the date on which such financial
statements were due, Borrower provides Agent with additional financial
statements demonstrating that the breach has been cured, which statements
may be as of any other date after the reporting date for which the breach
occurred (provided that such interim statements prepared for this purpose
must be accompanied by the same certifications as quarterly financial
statements and shall not disclose any additional breach of a financial
covenant).
VIII.1.5 Reporting Requirements. The failure of Borrower or any other
party to timely perform any covenant in the Loan Documents requiring the
furnishing of notices, financial reports or other information to Lender
within twenty (20) days of when due; and provided, however, that during any
period of time that a report is delinquent, Agent may at its option
increase the Pricing Values to their highest levels permitted under this
Agreement.
VIII.1.6 Other Covenants. The failure of Borrower to observe or perform
any covenant contained in any Loan Document, which covenant is not subject
to any specific provision in this Article VIII; provided, however, as to
any such breach that is reasonably susceptible to being cured, the
occurrence of such breach shall not constitute an Event of Default
hereunder if such breach is fully cured within twenty (20) days after the
earlier of Borrower's knowledge of the facts giving rise thereto or Agent's
written notice thereof to Borrower given in accordance with the provisions
hereof.
VIII.1.7 Involuntary Bankruptcy or Receivership Proceedings. The
appointment of a receiver, custodian, liquidator, or trustee for any
Significant Consolidated Entity, or for any of its Property, by the order
or decree of any court or agency or supervisory authority having
jurisdiction; or a Significant Consolidated Entity's adjudication as being
bankrupt or insolvent; or the sequestering of any of the Property of any
Significant Consolidated Entity by court order or the filing of a petition
against a Significant Consolidated Entity under any state or federal
bankruptcy, reorganization, debt arrangement, insolvency, readjustment of
debt, dissolution, liquidation, or receivership law of any jurisdiction,
whether now or hereafter in effect, and in each case without the
acquiescence of a Significant Consolidated Entity, unless dismissed within
sixty (60) days.
VIII.1.8 Voluntary Petitions. Any Significant Consolidated Entity's
filing of a petition in voluntary bankruptcy or to seek relief under any
provision of any bankruptcy, reorganization, debt arrangement, insolvency,
receivership, readjustment of debt, dissolution, or liquidation law of any
jurisdiction, whether now or hereafter in effect, or its acquiescence in
the filing of any petition against it under any such law.
VIII.1.9 Discontinuance of Business. Any Significant Consolidated
Entity's discontinuance of its usual business or its dissolution, except
pursuant to transactions permitted under this Agreement.
VIII.1.10 Default on Other Liabilities. Any Significant Consolidated
Entity's failure to make any payment when due on any Liabilities in excess
of One Hundred Thousand and No/100 Dollars ($100,000.00).
VIII.1.11 Undischarged Judgments. The existence of a final judgment or
judgments for the payment of money in excess of One Hundred Thousand and
No/100 Dollars ($100,000.00) by any court or other Governmental Authority
against a Significant Consolidated Entity, which is not paid, discharged,
stayed, dismissed through appropriate appellate proceedings or bonded
within thirty (30) days after entry.
VIII.1.12 Insolvency. Any Significant Consolidated Entity's no longer
being Solvent.
VIII.1.13 Attachment. The issuance of an attachment or other process
against any Property of any Significant Consolidated Entity, unless removed
(by bond or otherwise) within twenty (20) days.
VIII.1.14 Insurance. Any Consolidated Entity's failure to maintain any
insurance required herein or in any other Loan Document.
VIII.1.15 Contest. Any Consolidated Entity's challenge or contest of the
validity or enforceability of this Agreement or any other Loan Document or
the validity, priority or perfection of any security interest created
hereunder or under any other Loan Document in any action, suit or
proceeding.
VIII.1.16 Fraud and Abuse Laws. Receipt by one or more Consolidated
Entities of a notice from a Governmental Authority that it (i) intends to
disallow requested reimbursements, demand adjustment or repayment of past
reimbursements in excess of one-half of one percent (1/2%) of the gross
revenues of Borrower for the previous four (4) fiscal quarters in the
aggregate respecting amounts submitted for reimbursement or collected by
Borrower or a Provider, or (ii) intends to impose civil money penalties or
to seek to exclude Borrower or a Provider from participation in the
Medicare or Medicaid programs due to a failure to comply with Fraud and
Abuse Laws, if the gross revenues to Borrower arising from Borrower or
Provider exceed one-half of one percent (1/2%) of the gross revenues of
Borrower for the previous four (4) fiscal quarters in the aggregate.
VIII.2 Remedies. Upon the happening of any Event of Default:
VIII.2.1 Default Rate. Agent may declare the Obligations to thereafter
bear interest at the Default Rate.
VIII.2.2 Acceleration. Agent may declare the entire principal amount of
all Obligations then outstanding, including interest accrued thereon, to be
immediately due and payable without presentment, demand, protest, notice of
protest, or dishonor or other notice of default of any kind, all of which
are hereby expressly waived.
VIII.2.3 Setoff. Any Lender may exercise its lien upon and right of
setoff against any monies, items, credits, deposits or instruments that
such Lender may have in its possession and which belong to Borrower or to
any other person or entity liable for the payment of any or all of the
Obligations.
VIII.2.4 Other Remedies. Lenders and Agent may exercise any right that
they may have under any other document evidencing or securing the
Obligations or otherwise available to Lenders or Agent at law or equity.
VIII.2.5 Attorney-in-Fact. Borrower hereby irrevocably appoints Agent as
Borrower's attorney-in-fact to take any action to facilitate Agent's
exercise of remedies hereunder.
IX. AGENTError! Bookmark not defined.
IX.1 Appointment of Agent. Lenders hereby appoint Agent to act as
specified in this Article IX. Agent's duties hereunder are administrative
and ministerial in nature, and Agent's capacity is that of an independent
contractor for Lenders. Agent is not a trustee or other fiduciary for
Lenders, and Agent has no duties whatsoever to Lenders except as expressly
set forth in this Agreement.
IX.2 Powers of Agent.
IX.2.1 Administration of Credit Facilities. Except as otherwise provided
in this Section 9.2, Agent shall have the exclusive power and authority to
(i) give all consents and approvals, issue waivers and amendments, enforce
the Loan Documents (including, but not limited to, the power to enforce the
Loan Documents in any relevant case under the Bankruptcy Code) and
otherwise take all actions permitted of Agent under this Agreement or any
other Loan Document, (ii) give all consents and approvals, issue waivers
and amendments, enforce the Loan Documents (including, but not limited to,
the power to enforce the Loan Documents in any relevant case under the
Bankruptcy Code) and otherwise take all actions permitted of Lenders under
this Agreement or any other Loan Document, excepting only those matters
that the Loan Documents specifically reserve[d] for the respective Lenders
severally (such as the computation of LIBOR charges unique to the
circumstances of a given Lender), (iii) receive all payments, notices and
other deliveries and communications to be given Lenders or Agent under this
Agreement or any other Loan Document, and (iv) to perform such actions as
are incidental to any of the foregoing.
IX.2.2 Matters Reserved to Required Lenders. Absent the prior approval of
the Required Lenders, Agent shall not waive or amend any financial covenant
set forth in Article VII hereof or approve any acquisition for which
approval is necessary under the definition of Permitted Acquisitions set
forth in Article I hereof.
IX.2.3 Matters Reserved to all Lenders. Absent the prior approval of all
Lenders, Agent shall not forgive any principal included in the Obligations;
waive or amend any interest rate applicable to the Obligations; waive or
amend the Maturity Date; waive or amend the amount of any Lender's
Commitment; release or subordinate any security interest securing the
Obligations (other than releases thereof in connection with transactions
for which the approval of Lenders and/or Agent is not required, such as the
release of pledged stock of a Subsidiary in connection with the merger of
that Subsidiary into another Subsidiary); waive an Event of Default arising
from non-payment of any principal or interest due on the Obligations;
accelerate the maturity of the Obligations; or amend the definitions of Pro
Rata Share or Required Lenders.
IX.3 Duties of Agent.
IX.3.1 Specific Duties of Agent; Standard of Care. Agent shall (i) remit
to each Lender, with reasonable promptness, the appropriate Pro Rata Share
of payments received or other amounts collected on account of the
Obligations, (ii) forward to Lenders, with reasonable promptness,
counterparts or copies of Borrowing Notices, financial reports and other
information that may be delivered to Agent by Borrower pursuant to the
requirements of the Loan Documents, (iii) notify Lenders of any Unmatured
Default or Event of Default known to Agent, in accordance with Section 9.7
below, and (iv) otherwise administer the Credit Facilities through the
exercise of such of the powers granted herein as Agent deems appropriate
from time to time. Agent shall have no liability to Lenders for any action
or inaction relating to this Agreement or the other Loan Documents, except
for actual losses caused by its gross negligence or reckless or willful
misconduct.
IX.3.2 Limitations on Agent's Duties. Agent shall not be obligated to
take any action hereunder or under any other Loan Document (i) if such
action would, in the opinion of Agent, be contrary to applicable law, this
Agreement or the other Loan Documents, (ii) if it shall not first be
specifically indemnified to its satisfaction against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action, (iii) if it would likely subject Agent to a tax in
any jurisdiction where it is not then subject to a tax, (iv) if it would
likely require Agent to qualify to do business in any jurisdiction where it
is not then so qualified, unless Agent receives security or indemnity
satisfactory to it against any tax or other liability in connection with
such qualification or resulting from the taking of such action in
connection therewith, or (v) if it would likely subject Agent to in
personam jurisdiction in any location where it is not then so subject.
IX.3.3 Agent's Right to Require Instructions in Performance of Duties. If
Agent, in its sole and absolute discretion, requests instructions from the
Required Lenders with respect to any act or action (including the failure
to act) in connection with this Agreement or any other Loan Document for
which the approval of the Required Lenders or all Lenders is not otherwise
required, Agent shall be entitled, at its option, to refrain from such
action, or to continue such inaction, unless and until Agent shall have
received such instructions, and Agent shall incur no liability by reason of
so acting or refraining from action. No Lender shall have any right of
action whatsoever against Agent as a result of Agent's acting or refraining
from acting hereunder or under any other Loan Document in accordance with
the instructions of the Required Lenders in such a case.
IX.3.4 Agent's Reliance on Others in Performance of Duties. Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, consent, certificate, telex,
teletype or facsimile message, order or other documentary, teletransmission
or telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person. Agent may
consult with legal counsel (including counsel for Borrower), accountants
and other experts selected by it with respect to all matters pertaining to
this Agreement and the other Loan Documents and its duties hereunder and
thereunder and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel
(including counsel for Borrower), accountants or experts.
IX.3.5 Sharing of Information. Except as otherwise expressly provided in
this Article IX, Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit
or other information concerning the business, prospects, operations,
properties, financial or other condition or creditworthiness of the
Consolidated Entities or any other Person that may come into its
possession, whether before the making of the initial Loans or at any time
or times thereafter. All notices to be given to Borrower by a Lender
hereunder shall be concurrently given to Agent and all other Lenders.
IX.4 Indemnification of Agent. To the extent Agent is not reimbursed by
or on behalf of Borrower, and without limiting the obligation of Borrower
to do so, Lenders will reimburse and indemnify Agent, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees and expenses)
or disbursements of any kind or nature whatsoever that may at any time
(including at any time following the indefeasible repayment in full of the
Loans) be imposed on, incurred by or asserted against Agent in any way
relating to or arising out of this Agreement or any other Loan Document or
the transactions contemplated thereby or any action taken or omitted by
Agent under or in connection with any of the foregoing, and in particular
will reimburse Agent for out-of-pocket expenses promptly upon demand by
Agent therefor; 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 finally
determined by a court of competent jurisdiction and not subject to any
appeal or pursuant to arbitration to have resulted from Agent's gross
negligence or reckless or willful misconduct. Agent may offset any amounts
due Agent by any Lender against obligations of Agent to that Lender.
IX.5 No Representations by Agent. Each Lender acknowledges that neither
Agent nor any of its officers, directors, employees, attorneys, accountants
or agents has made any representation or warranty to it regarding the
Consolidated Entities, the Credit Facilities, the Collateral or otherwise
relating to this Agreement. Agent shall not be responsible to any Lender
for any recitals, statements, information, representations or warranties
herein or in any other Loan Document or in any document, instrument,
certificate or other writing delivered in connection herewith or therewith
or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, priority or sufficiency of this Agreement or any other Loan
Document or the financial condition of the Consolidated Entities or any
other Person, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Loan Document, or the financial condition of
the Consolidated Entities or any other Person or the existence or possible
existence of any Unmatured Default or Event of Default.
IX.6 Independent Investigations by Lenders. Each Lender acknowledges
that, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it has deemed and may deem
appropriate, (i) it has made its own appraisal of and investigation into
the business, prospects, operations, properties, financial and other
condition and creditworthiness of the Consolidated Entities in connection
with its decision to enter into this Agreement and extend credit to
Borrower hereunder, and (ii) it will continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
hereunder.
IX.7 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Default or Event of Default,
other than any Unmatured Default or Event of Default arising out of the
failure to pay any principal, interest, fees or other amounts payable to
Agent for the account of the Lenders, unless Agent has received written
notice from Borrower or a Lender describing such Unmatured Default or Event
of Default and stating that such notice is a "notice of default." In the
event that Agent receives such a notice, Agent shall give notice thereof to
the Lenders as soon as reasonably practicable; provided, however, that if
any such notice has also been furnished to the Lenders, Agent shall have no
obligation to notify the Lenders with respect thereto. Each Lender shall
promptly give Agent such a notice upon its actual knowledge of an Unmatured
Default or an Event of Default; provided, however, that the failure of any
Lender to deliver such notice in the absence of gross negligence or
reckless or willful misconduct shall not affect its rights hereunder or
under the other Loan Documents.
IX.8 Funding of Loans Pursuant to Borrowing Notices. Promptly following
receipt of notice from Agent that a Borrowing Notice has been submitted,
and provided that all conditions to funding are believed to have been
satisfied, each Lender shall transfer to a designated account with Agent
that Lender's Pro Rata Share of the requested funding. The transfer of
funds shall occur within the time required for funding under this
Agreement. Should any Lender fail to timely fund its Pro Rata Share of a
requested Loan, Agent may, but shall be under no obligation whatsoever to,
advance to Borrower the defaulted Lender's Pro Rata Share of the requested
Loan. If such an advance is made, it shall be deemed an advance by Agent
for the account of the defaulting Lender and shall bear interest at the
rate applicable to the Loan funded by the advance, payable on demand.
IX.9 Agent in its Individual Capacity. With respect to its Commitments,
and the Loans made by it, Agent shall have the same rights and powers under
the Loan Documents as any other Lender or holder of a Note and may exercise
the same as though it were not performing the duties specified herein; and
the terms "Lenders," "Required Lenders," and any similar terms shall,
unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender. Agent may accept deposits from, lend
money to and generally engage in any kind of banking, trust, financial
advisory or other business with the Consolidated Entities or any of their
respective Affiliates as if it were not performing the servicing duties
specified herein, and may accept fees and other consideration from Borrower
for services in connection with this Agreement and otherwise without having
to disclose or account for the same to Lenders.
IX.10 Holders. Agent may deem and treat the payee of any Note as the
holder thereof and Lender hereunder for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof
purportedly executed by the payee, as the case may be, shall have been
filed with Agent. Any request, authority or consent of any Person that, at
the time of making such request or giving such authority or consent, is the
holder of any Note according to Agent's information, shall be conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as
the case may be, of such Note or of any Note or Notes issued in exchange
therefor.
IX.11 Successor Agent. Agent may resign at any time upon sixty (60) days'
prior written notice to Borrower and the Lenders. Agent may be removed
upon Agent's insolvency, liquidation or the appointment of a receiver for
Agent, by action of the Required Lenders, at any time upon sixty (60) days'
prior written notice to Borrower and Agent. Such resignation or removal,
as the case may be, shall take effect upon the appointment of a successor
Agent as provided herein. The Required Lenders will appoint from among the
Lenders a successor Agent. If no successor Agent shall have been appointed
within such sixty (60) day period, Agent may appoint, after consulting with
the Lenders and Borrower, a successor agent from among the Lenders, who
shall serve as Agent until such time, if any, as the Required Lenders shall
have appointed a successor Agent as provided hereinabove. Upon the written
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Agent's
resignation as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent.
IX.12 Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to the Obligations which results in
its receiving more than its Pro Rata Share of the aggregate payments with
respect to all of the Obligations, then (a) such Lender shall be deemed to
have simultaneously purchased from the other Lenders a share in the
Obligations so that the amount of the Obligations held by each of the
Lenders shall continue to equal their respective Pro Rata Shares, and (b)
such other adjustments shall be made from time to time as shall be
equitable to insure that the Lenders share such payments ratably. No
Lender shall exercise its banker's lien, set-off or other right to
accomplish such payment absent Agent's prior consent.
IX.13 Separate Liens on Collateral. Each Lender agrees with the other
Lenders that, with the exception of security interests in deposit accounts
and like property in the possession of a Lender as expressly provided for
in this Agreement, it will not take or permit to exist any Encumbrance in
its favor on any of the Collateral or other property of any of the
Consolidated Entities other than Encumbrances securing the Obligations due
to all Lenders pursuant to the Loan Documents.
IX.14 Payments Between Agent and Lenders. All payments by Agent to any
Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to
the receiving party's address specified for notices in this Agreement. If
any of the Lenders fail to pay when due any sum payable to Agent, then,
except as otherwise provided in Section 9.8 hereof, such sum shall bear
interest until paid at the interest rate per annum for overnight borrowing
by the payee from the Federal Reserve Bank for the period commencing on the
date such payment was due and ending on, but excluding, the date such
payment is made.
IX.15 Assignments and Participations. Absent the approval of the other
Lenders, no Lender shall assign its interest in the Credit Facilities
without first offering to sell such Lender's interest to the other Lenders
to be closed Pro Rata to the Lender(s) who may elect to purchase such
interest. Such offers to sell shall be made in writing, shall provide the
other Lenders ten (10) days to accept or reject, and shall allow an
additional ten (10) days to close. Lenders may sell participation
interests in their interests in the Credit Facilities as long as the terms
of such participations establish that no participant will be regarded as a
Lender under this Agreement.
IX.16 Bankruptcy Provisions. Should any of the Consolidated Entities
become a party to a case under the Bankruptcy Code, each Lender shall be
entitled to file its own claim, to the extent such a filing may be
necessary. Agent shall review each claim before being filed by a Lender to
assure that the claim is filed on a basis consistent with Agent's records
and Agent's legal positions taken pursuant to this Agreement. Should any
of the Consolidated Entities become a party to a reorganization proceeding
under the Bankruptcy Code, each Lender shall be recognized as the holder of
a separate claim for the purpose of the approval or rejection of a Plan
under 11 U.S.C. 1126, may freely vote such claim, and the provisions of
that Section shall control the other provisions of this Agreement that
otherwise require the consent of the Required Lenders or all Lenders in
certain circumstances. Agent shall continue to administer the Credit
Facilities on behalf of Lenders, as they may be amended by any adopted Plan
of Reorganization.
IX.17 Foreclosure of Collateral. In the event of a foreclosure of any
Collateral, Agent may issue a credit bid for the account of all Lenders, up
to the amount of the then outstanding Obligations. Any Property acquired
at such a foreclosure (or acquired by Agent through a conveyance in lieu of
foreclosure) shall be held and administered by Agent for the benefit of all
Lenders pursuant to the terms of this Article IX.
IX.18 Procedures for Notices and ApprovalsError! Bookmark not defined..
All notices given among Lenders and Agent with respect to this Agreement or
the other Loan Documents shall be given in the manner provided in this
Agreement. Additionally, should Agent request Lenders' approval of any
matter, each Lender shall respond in writing within five (5) Business Days
after the Business Day on which the request was received. If a Lender
fails to so respond, it shall be deemed to have approved the action
proposed by the Agent.
IX.19 Amendments to Article IX. No provision of this Article IX may be
amended or waived absent the prior written consent of all Lenders and
Agent. Borrower's approval shall not be required for the amendment or
waiver of any provision of this Article IX; provided, however, Borrower's
written consent shall be required for any amendment of this Article IX that
would eliminate the position of Agent.
X. GENERAL PROVISIONS
X.1 Notices. All communications relating to this Agreement or any of the
other Loan Documents shall be in writing and shall effective when be
delivered by mail, overnight courier, special courier, telecopier or
otherwise to the following addresses:
if to Borrower:
Response Oncology, Inc.
Attn: John A. Good
1775 Moriah Woods Blvd.
Memphis, Tennessee 38117
Telecopier: (901) 683-7277
With a Copy To:
Baker, Donelson, Bearman & Caldwell
Attn: Mary L. Aronov, Esq.
165 Madison Ave.
20th Floor
Memphis, Tennessee 38103
Telecopier: (901) 577-2303
If to NationsBank or Agent:
NationsBank of Tennessee, N.A.
Attn: Cathy M. Wind
1 NationsBank Plaza
Nashville, Tennessee 37239
Telecopier: (615) 749-4951
With a Copy To:
Boult, Cummings, Conners & Berry
Attn: John E. Murdock III, Esq.
414 Union Street, Suite 1600
Nashville, Tennessee 37219
Telecopier: (615) 252-2380
If to Union Planters:
Union Planters National Bank
Attn: Leonard McKinnon
6200 Poplar Avenue
Memphis, Tennessee 38119
Telecopier: (901) 383-6681
With a Copy To:
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Any party may change its address for receipt of notice by written direction
to the other parties hereto.
X.2 Renewal, Extension, or Rearrangement. All provisions of this Agreement
relating to Obligations shall apply with equal force and effect to each and
all promissory notes executed hereafter which in whole or in part represent
a renewal, extension for any period, increase, or rearrangement of any part
of the Obligations originally represented by any part of such other
Obligations.
X.3 Application of Payments. Amounts received with respect to the
Obligations shall be applied (i) first, to any expenses due Lenders or
Agent, (ii) second, to accrued and unpaid interest under any of the
Obligations, and (iii) third, to reduce the unpaid principal portion of the
Obligations, in such manner as determined by Agent.
X.4 Counterparts. This Agreement may be executed in counterparts with all
signatures or by counterpart signature pages, and it shall not be necessary
that the signatures of all parties be contained on any one counterpart.
Each counterpart shall be deemed an original, but all of them together
shall constitute one and the same instrument.
X.5 Negotiated Document. This Agreement and the other Loan Documents have
been negotiated by the parties with full benefit of counsel and should not
be construed against any party as author.
X.6 Consent to Jurisdiction; Exclusive Venue. Borrower hereby irrevocably
consents to the jurisdiction of the United States District Court for the
Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which
Lenders or Agent may be a party and which concerns this Agreement or the
Obligations. It is further agreed that venue for any such action shall lie
exclusively with courts sitting in Davidson County, Tennessee, unless
Lenders and Agent agree to the contrary in writing. This election applies
only for the limited judicial proceedings that may apply as set forth in
the provision of this Agreement electing binding arbitration for the
resolution of disputes and does not impair the effect of that provision in
any way.
X.7 Not Partners; No Third Party Beneficiaries. The relationship of
Lenders and Borrower is that of lenders and borrower only, and neither is a
fiduciary, partner or joint venturer of the other for any purpose. This
Agreement has been executed for the sole benefit of Lenders, and no third
party is authorized to rely upon Lenders' rights or duties hereunder.
X.8 No Reliance on Lenders' Analysis. Borrower acknowledges and
represents that, in connection with the Obligations, Borrower has not
relied upon any financial projection, budget, assessment or other analysis
by Lenders or Agent upon any representation by Lenders as to the risks,
benefits or prospects of Borrower's business activities or present or
future capital needs incidental thereto, all such considerations having
been examined fully and independently by Borrower.
X.9 No Marshaling of Assets. Lenders and Agent may proceed against
collateral securing the Obligations and against parties liable therefor in
such order as they may elect, and neither Borrower nor any surety or
guarantor for Borrower nor any creditor of Borrower shall be entitled to
require Lenders or Agent to marshal assets. The benefit of any rule of law
or equity to the contrary is hereby expressly waived.
X.10 Impairment of Collateral. Lenders or Agent may, in their sole
discretion, release any Collateral securing the Obligations or release any
party liable therefor. The defenses of impairment of collateral and
impairment of recourse and any requirement of diligence in collecting the
Obligations are hereby waived.
X.11 Business Days. If any payment date under the Obligations falls on a
day that is not a Business Day, or if the last day of any notice period
falls on such a day, the payment shall be due and the notice period shall
end on the next following Business Day.
X.12 Participations. Lenders may, from time to time, in their sole
discretion, and with concurrent notice to Borrower, sell participations in
any credit subject hereto to such other investors or financial institutions
as it may elect. Lenders and Agent may from time to time disclose to any
participant or prospective participant such information as they may have
regarding the financial condition, operations, and prospects of Borrower.
X.13 Standard of Care; Limitation of Damages. Lenders and Agent shall be
liable to Borrower only for matters arising from this Agreement or
otherwise related to the Obligations resulting from such Lender's or
Agent's gross negligence or reckless or willful misconduct, and liability
for all other matters is hereby waived. Lenders and Agent shall not in any
event be liable to Borrower for special or consequential damages arising
from this Agreement or otherwise related to the Obligations.
X.14 Incorporation of Schedules. All Schedules and Exhibits referred to in
this Agreement are incorporated herein by this reference.
X.15 Indulgence Not Waiver. Lenders' or Agent's indulgence in the
existence of a default hereunder or any other departure from the terms of
this Agreement shall not prejudice Lenders' or Agent's rights to declare a
default or otherwise demand strict compliance with this Agreement.
X.16 Cumulative Remedies. The remedies provided Lenders and Agent in this
Agreement are not exclusive of any other remedies that may be available to
Lenders and Agent under any other document or at law or equity.
X.17 Amendment and Waiver in Writing. No provision of this Agreement can
be amended or waived, except by a statement in writing signed by the party
or parties against whom enforcement of the amendment or waiver is sought.
Waivers and amendments may be executed by Agent on behalf of Lenders,
subject to the requirements of Article IX hereof requiring the consent of
some or all of Lenders under certain circumstances.
X.18 Assignment. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Borrower and Lenders,
except that Borrower shall not assign any rights or delegate any
obligations arising hereunder without the prior written consent of Lenders.
Any attempted assignment or delegation by Borrower without the required
prior consent shall be void.
X.19 Entire Agreement. This Agreement and the other written agreements
among Borrower, Lenders and Agent represent the entire agreement between
the parties concerning the subject matter hereof, and all oral discussions
and prior agreements are merged herein. Provided, if there is a conflict
between this Agreement and any other document executed contemporaneously
herewith with respect to the Obligations, the provision in this Agreement
shall control.
X.20 Severability. Should any provision of this Agreement be declared
invalid or unenforceable for any reason, the remaining provisions hereof
shall remain in full effect.
X.21 Time of Essence. Time is of the essence of this Agreement, and all
dates and time periods specified herein shall be strictly observed.
X.22 Applicable Law. The validity, construction and enforcement of this
Agreement and all other documents executed with respect to the Obligations
shall be determined according to the laws of Tennessee applicable to
contracts executed and performed entirely within that state.
X.23 Captions Not Controlling. Captions and headings have been included in
this Agreement for the convenience of the parties, and shall not be
construed as affecting the content of the respective Sections.
X.24 Arbitration. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to
this instrument, agreement or document or any related instruments,
agreements or documents, including any claim based on or arising from an
alleged tort, shall be determined by binding arbitration in accordance with
the Federal Arbitration Act (or if not applicable, the applicable state
law), the Rules of Practice and Procedure for the Arbitration of Commercial
Disputes of J.A.M.S./Endispute or any successor thereof ("J.A.M.S."), and
the "Special Rules" set forth below. In the event of any inconsistency,
the Special Rules shall control. Judgment upon any arbitration award may
be entered in any court having jurisdiction. Any party to this Agreement
may bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim to which this Agreement applies in
any court having jurisdiction over such action.
X.24.1 Special Rules. The arbitration shall be conducted in Nashville,
Tennessee and administered by J.A.M.S who will appoint an arbitrator; if
J.A.M.S. is unable or legally precluded from administering the arbitration,
then the American Arbitration Association will serve. All arbitration
hearings will be commenced within 90 days of the demand for arbitration;
further, the arbitrator shall only, upon a showing of cause, be permitted
to extend the commencement of such hearing for up to an additional 60 days.
X.24.2 Reservation of Rights. Nothing in this arbitration provision shall
be deemed to (i) limit the applicability of any otherwise applicable
statutes of limitation or repose and any waivers contained in this
arbitration provision; or (ii) be a waiver by any Lender of the protection
afforded to it by 12 U.S.C. Sec. 91 or any substantially equivalent state
law; or (iii) limit the right of any Lender (a) to exercise self help
remedies such as (but not limited to) setoff, or (b) to foreclose against
any real or personal property collateral, or (c) to obtain from a court
provisional or ancillary remedies such as (but not limited to) injunctive
relief, writ of possession or the appointment of a receiver. Lenders and
Agent may exercise such self help rights, foreclose upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this instrument,
agreement or document. Neither this exercise of self help remedies nor the
institution or maintenance of an action for foreclosure or provisional or
ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
X.25 Facsimile Signatures. This Agreement may be executed by facsimile
signatures, and shall be effective when Agent has received telecopy
transmissions of the signature pages executed by all parties hereto;
provided, however, that all parties shall deliver original executed
documents to Agent promptly following the execution hereof.
Executed as of the date first written above.
RESPONSE ONCOLOGY, INC.
By:
---------------------------
Title:
------------------------
NATIONSBANK OF TENNESSEE, N.A.
By:
---------------------------
Title:
------------------------
UNION PLANTERS NATIONAL BANK
By:
---------------------------
Title:
------------------------
EXHIBIT 1.2
Notice of Extension
[On letterhead of Borrower]
NationsBank of Tennessee, N.A., Agent
Attn: Cathy M. Wind
1 NationsBank Plaza
Nashville, Tennessee 37239
Re: Notice of Extension of Working Capital Loan Under Loan Agreement
Among NationsBank of Tennessee, N.A., Union Planters National Bank,
Response Oncology, Inc. and NationsBank of Tennessee, N.A., as Agent
Dated as of May 31, 1996 (the "Loan Agreement")
Ladies and Gentlemen:
Please accept this letter as our notice that Response Oncology, Inc. hereby
elects to extend the Maturity Date of the Working Capital Loan, as defined
in the Loan Agreement, until May 31, 1998. The required extension fee is
enclosed herewith. This election shall have the effect of making
applicable the optional May 31, 1998 Maturity Date in the Loan Agreement
and in the corresponding Working Capital Notes, as provided for therein.
Your acceptance of the enclosed fee does not waive any Unmatured Default,
Event of Default or other matter that may exist with respect to the Loan
Agreement.
Very truly yours,
RESPONSE ONCOLOGY, INC.
By:
---------------------
Title:
------------------
cc: Boult, Cummings, Conners & Berry
Attn: John E. Murdock III, Esq.
414 Union Street, Suite 1600
Nashville, Tennessee 37219
EXHIBIT 2.8.1(b)
BORROWING/CONVERSION NOTICE
TO: NationsBank of Tennessee, N.A., Agent
LENDERS: NationsBank of Tennessee, N.A. Date: ____, 199_
Union Planters National Bank
BORROWER: Response Oncology, Inc.
This notice is delivered under the Loan Agreement (as renewed, extended and
amended, the "Loan Agreement") dated as of May __, 1996, between Borrower
and Lender. Terms defined in the Loan Agreement have the same meanings
when used -- unless otherwise defined -- in this request.
Borrower requests a Loan under the Loan Agreement as follows:
The requested draw is from (select one): _____ Acquisition Loan _____
Working Capital Loan
Borrowing Date ___________, 199_
Amount of Borrowing $________________
Type of Borrowing _________________
For LIBOR Loans, the Interest Period __________ months
Select one:
____ The proceeds of the requested Loan shall be disbursed to Borrower as
provided in the Loan Agreement. The purpose of the requested Loan is
(select one for this Loan):
_____ New advance for a Permitted Acquisition
_____ New advance for capital expenditures other than Permitted
Acquisitions
_____ New advance for IMPACT Center development
_____ New advance for working capital
____ The proceeds of the requested LIBOR Loan shall be applied to the
payment of Borrower's existing Prime Rate Loan, this new Loan being a
conversion of a Prime Rate Loan to a LIBOR Loan
____ The proceeds of the requested LIBOR Loan shall be applied to the
payment of the following LIBOR Loan, subject to all requirements of the
Loan Agreement, this new Loan being a conversion of a LIBOR Loan to a
different LIBOR Loan:
Date:
Amount:
Interest Period:
____ The proceeds of the requested Prime Rate Loan shall be applied to the
payment of the following LIBOR Loan, subject to all requirements of the
Loan Agreement, this new Loan being a conversion of a LIBOR Loan to a Prime
Rate Loan:
Date:
Amount:
Interest Period:
Date:
Amount:
Interest Period:
Borrower certifies that on the date hereof and on the date of the
above Borrowing Date -- after giving effect to the requested Loan --
(a) all of the representations and warranties in the Loan Documents will be
true and correct in all material respects -- unless they speak to a
specific date or the facts on which they are based have been changed by
transactions contemplated or permitted by the Loan Agreement, (b) no Event
of Default or Unmatured Default will exist, and (c) all conditions to
Borrower's right to receive the requested Loan under the Loan Agreement
have been satisfied.
RESPONSE ONCOLOGY, INC., Borrower
By:
(Name)
(Title)
Same Banking Day for Prime Rate Loans, second following Banking Day for
LIBOR Loans
LIBOR or Prime Rate Loan.
1, 2, 3, 6 or 12 months.