Exhibit 10.1
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CREDIT AGREEMENT
among
US ONCOLOGY, INC.,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
UBS WARBURG LLC,
as Syndication Agent,
and
GE CAPITAL HEALTHCARE FINANCIAL SERVICES,
as Documentation Agent
Up to
$100,000,000 Senior Revolving Credit Facility
Co-Lead Arrangers and Co-Book Managers:
FIRST UNION SECURITIES, INC.
UBS WARBURG LLC
Dated as of February 1, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Defined Terms........................................................................................ 2
1.2 Accounting Terms..................................................................................... 24
1.3 Other Terms; Construction............................................................................ 25
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments; Commitment Increase..................................................................... 25
2.2 Borrowings........................................................................................... 26
2.3 Disbursements; Funding Reliance; Domicile of Loans................................................... 29
2.4 Notes................................................................................................ 30
2.5 Termination and Reduction of Commitments............................................................. 31
2.6 Mandatory Payments and Prepayments................................................................... 31
2.7 Voluntary Prepayments................................................................................ 33
2.8 Interest............................................................................................. 34
2.9 Fees................................................................................................. 35
2.10 Interest Periods..................................................................................... 36
2.11 Conversions and Continuations........................................................................ 37
2.12 Method of Payments; Computations..................................................................... 38
2.13 Recovery of Payments................................................................................. 39
2.14 Use of Proceeds...................................................................................... 40
2.15 Pro Rata Treatment................................................................................... 40
2.16 Increased Costs; Change in Circumstances; Illegality; etc............................................ 40
2.17 Taxes................................................................................................ 42
2.18 Compensation......................................................................................... 45
2.19 Substitution of Lender............................................................................... 45
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance............................................................................................. 46
3.2 Notices.............................................................................................. 47
3.3 Participations....................................................................................... 47
3.4 Reimbursement........................................................................................ 47
3.5 Payment by Revolving Loans........................................................................... 48
3.6 Payment to Lenders................................................................................... 48
3.7 Obligations Absolute................................................................................. 49
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3.8 Cash Collateral Account.............................................................................. 50
3.9 Effectiveness........................................................................................ 51
ARTICLE IV
CONDITIONS OF EFFECTIVENESS AND BORROWING
4.1 Conditions of Effectiveness and Initial Borrowing.................................................... 51
4.2 Conditions of All Borrowings......................................................................... 56
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization and Power............................................................................... 57
5.2 Authorization; Enforceability........................................................................ 57
5.3 No Violation......................................................................................... 57
5.4 Governmental and Third-Party Authorization; Permits.................................................. 58
5.5 Litigation........................................................................................... 58
5.6 Taxes................................................................................................ 58
5.7 Subsidiaries......................................................................................... 59
5.8 Full Disclosure...................................................................................... 59
5.9 Margin Regulations................................................................................... 59
5.10 No Material Adverse Change........................................................................... 59
5.11 Financial Matters.................................................................................... 59
5.12 Ownership of Properties.............................................................................. 61
5.13 ERISA................................................................................................ 61
5.14 Environmental Matters................................................................................ 61
5.15 Compliance with Laws................................................................................. 62
5.16 Regulated Industries................................................................................. 62
5.17 Insurance............................................................................................ 63
5.18 Material Contracts................................................................................... 63
5.19 Security Documents................................................................................... 63
5.20 Reimbursement from Third Party Payors................................................................ 63
5.21 Fraud and Abuse...................................................................................... 64
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements................................................................................. 64
6.2 Other Business and Financial Information............................................................. 65
6.3 Existence; Franchises; Maintenance of Properties..................................................... 68
6.4 Compliance with Laws................................................................................. 68
6.5 Payment of Obligations............................................................................... 68
6.6 Insurance............................................................................................ 69
6.7 Maintenance of Books and Records; Inspection......................................................... 69
6.8 Permitted Acquisitions............................................................................... 69
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6.9 Creation or Acquisition of Subsidiaries.............................................................. 71
6.10 Additional Security.................................................................................. 72
6.11 Further Assurances................................................................................... 72
ARTICLE VII
FINANCIAL COVENANTS
7.1 Leverage Ratio....................................................................................... 72
7.2 Adjusted Leverage Ratio.............................................................................. 73
7.3 Senior Leverage Ratio................................................................................ 73
7.4 Fixed Charge Coverage Ratio.......................................................................... 74
7.5 Capital Expenditures................................................................................. 74
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Merger; Consolidation................................................................................ 74
8.2 Indebtedness......................................................................................... 75
8.3 Liens................................................................................................ 76
8.4 Disposition of Assets................................................................................ 77
8.5 Investments.......................................................................................... 78
8.6 Restricted Payments.................................................................................. 80
8.7 Transactions with Affiliates......................................................................... 81
8.8 Lines of Business.................................................................................... 82
8.9 Certain Amendments................................................................................... 82
8.10 Limitation on Certain Restrictions................................................................... 82
8.11 No Other Negative Pledges............................................................................ 82
8.12 Fiscal Year.......................................................................................... 82
8.13 Accounting Changes................................................................................... 83
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default.................................................................................... 83
9.2 Remedies: Termination of Commitments, Acceleration, etc.............................................. 85
9.3 Remedies: Set-Off.................................................................................... 86
ARTICLE X
THE AGENT
10.1 Appointment.......................................................................................... 87
10.2 Nature of Duties..................................................................................... 87
10.3 Exculpatory Provisions............................................................................... 87
10.4 Reliance by Agent.................................................................................... 87
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10.5 Non-Reliance on Agent and Other Lenders.............................................................. 88
10.6 Notice of Default.................................................................................... 88
10.7 Indemnification...................................................................................... 89
10.8 The Agent in its Individual Capacity................................................................. 89
10.9 Successor Agent...................................................................................... 90
10.10 Collateral Matters................................................................................... 90
10.11 Issuing Lender and Swingline Lender.................................................................. 90
10.12 Syndication Agent, Documentation Agent............................................................... 90
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses.................................................................................... 91
11.2 Indemnification...................................................................................... 91
11.3 Governing Law; Consent to Jurisdiction............................................................... 92
11.4 Waiver of Jury Trial................................................................................. 93
11.5 Notices.............................................................................................. 93
11.6 Amendments, Waivers, etc............................................................................. 94
11.7 Assignments, Participations.......................................................................... 95
11.8 No Waiver............................................................................................ 97
11.9 Successors and Assigns............................................................................... 97
11.10 Survival............................................................................................. 98
11.11 Severability......................................................................................... 98
11.12 Construction......................................................................................... 98
11.13 Confidentiality...................................................................................... 98
11.14 Counterparts; Effectiveness.......................................................................... 99
11.15 Disclosure of Information............................................................................ 99
11.16 Entire Agreement..................................................................................... 99
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EXHIBITS
Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Swingline Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Swingline Borrowing
Exhibit B-3 Form of Notice of Conversion/Continuation
Exhibit B-4 Form of Letter of Credit Notice
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Pledge and Security Agreement
Exhibit F Form of Subsidiary Guaranty
Exhibit G Form of Financial Condition Certificate
Exhibit H Form of Intercompany Note
Exhibit I Form of Mortgage
SCHEDULES
Schedule 4.1 UCC Search Locations
Schedule 5.4 Consents and Approvals
Schedule 5.7 Subsidiaries
Schedule 5.12 Real Property
Schedule 5.17 Insurance
Schedule 8.2 Indebtedness
Schedule 8.3 Liens
Schedule 8.5 Investments
Schedule 8.7 Transactions with Affiliates
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 1st day of February, 2002 (this
"Agreement"), is made among US ONCOLOGY, INC., a Delaware corporation with its
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principal offices in Houston, Texas (the "Borrower"), the banks and financial
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institutions listed on the signature pages hereto or that become parties hereto
after the date hereof (collectively, the "Lenders"), FIRST UNION NATIONAL BANK
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("First Union"), as agent for the Lenders, UBS WARBURG LLC, as syndication
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agent, and GENERAL ELECTRIC CAPITAL CORPORATION (d/b/a GE Capital Healthcare
Financial Services), as documentation agent.
RECITALS
A. The Borrower has requested that the Lenders make available to the
Borrower a revolving credit facility in the aggregate principal amount of up to
$100,000,000. The Borrower will use the proceeds of this facility to refinance
certain existing indebtedness, to pay or reimburse certain fees and expenses in
connection herewith and therewith, and for working capital and general business
purposes, all as more fully described in Section 2.14.
B. The Lenders are willing to make available to the Borrower the credit
facility described herein subject to and on the terms and conditions set forth
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
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defined elsewhere herein, the following terms shall have the meanings set forth
below (such meanings to be equally applicable to the singular and plural forms
thereof):
"Account Designation Letter" shall mean a letter from the Borrower to the
Agent, duly completed and signed by an Authorized Officer and in form and
substance reasonably satisfactory to the Agent, listing any one or more accounts
to which the Borrower may from time to time request the Agent to forward the
proceeds of any Loans made hereunder.
"Acquisition" shall mean any transaction or series of related transactions,
consummated on or after the date hereof, by which the Borrower directly, or
indirectly through one or more
Subsidiaries, (i) acquires any going business, or all or substantially all of
the assets, of any Person, whether through purchase of assets, merger or
otherwise, or (ii) acquires securities or other ownership interests of any
Person having at least a majority of combined voting power of the then
outstanding securities or other ownership interests of such Person.
"Acquisition Amount" shall mean, with respect to any Acquisition, the sum
(without duplication) of (i) the amount of cash paid by the Borrower and its
Subsidiaries in connection with such Acquisition, (ii) the Fair Market Value of
all Capital Stock of the Borrower issued or given in connection with such
Acquisition, (iii) the amount (determined by using the face amount or the
principal amount payable at maturity, whichever is greater) of all Indebtedness
incurred, assumed or acquired by the Borrower and its Subsidiaries in connection
with such Acquisition, (iv) all additional purchase price amounts in connection
with such Acquisition in the form of earnouts and other contingent obligations
that should be recorded as a liability on the balance sheet of the Borrower and
its Subsidiaries or expensed, in either event in accordance with GAAP,
Regulation S-X under the Securities Act of 1933, as amended, or any other rule
or regulation of the Securities and Exchange Commission, (v) all amounts paid in
respect of covenants not to compete, (other than compensation paid under bona
fide consulting or employment contracts in connection with such Acquisition that
contain customary covenants not to compete), (vi) the amount of all transaction
fees and expenses (including, without limitation, legal, accounting and finders'
fees and expenses) incurred by the Borrower and its Subsidiaries in connection
with such Acquisition and (vii) the aggregate fair market value of all other
consideration given by the Borrower and its Subsidiaries in connection with such
Acquisition.
"Adjusted Base Rate" shall mean, at any time with respect to any Base Rate
Loan, a rate per annum equal to the Base Rate as in effect at such time plus the
Applicable Margin Percentage for Base Rate Loans as in effect at such time.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Margin Percentage for LIBOR Loans as in effect at such time.
"Adjusted Leverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) the sum of (A) Consolidated Funded Debt as of such
date plus (B) Consolidated Rent for the period of four consecutive fiscal
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quarters then ending multiplied by eight (8) to (ii) Consolidated EBITDAR for
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the period of four consecutive fiscal quarters then ending.
"Affiliate" shall mean, as to any Person, each other Person that directly,
or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person "control" shall mean (i) the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise, or
(ii) the beneficial ownership of securities or other ownership interests of such
Person having 10% or more of the combined voting power of the then outstanding
securities or other ownership interests of such Person ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors or other governing body of such Person.
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"Agent" shall mean First Union, in its capacity as Agent appointed under
Article X, and its successors and permitted assigns in such capacity.
"Agents" shall mean the Agent and, so long as UBS AG, Stamford Branch
remains a Lender, the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time.
"Applicable Margin Percentage" shall mean, at any time from and after the
Closing Date, the applicable percentage (a) to be added to the Base Rate
pursuant to Section 2.8 for purposes of determining the Adjusted Base Rate, (b)
to be added to the LIBOR Rate pursuant to Section 2.8 for purposes of
determining the Adjusted LIBOR Rate, and (c) to be used in calculating the
commitment fee payable pursuant to Section 2.9(a), in each case as determined
under the following matrix with reference to the Leverage Ratio:
Applicable Margin Applicable Margin Applicable Margin
Leverage Ratio Percentage for Percentage for Percentage for
-------------- Base Rate Loans LIBOR Loans Commitment Fee
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Greater than or equal to 3.0 to 1.0 2.00% 3.00% 0.50%
Greater than or equal to 2.5 to 1.0 but 1.75% 2.75% 0.50%
less than 3.0 to 1.0
Greater than or equal to 2.0 to 1.0 but 1.50% 2.50% 0.50%
less than 2.5 to 1.0
Greater than or equal to 1.5 to 1.0 but 1.25% 2.250% 0.50%
less than 2.0 to 1.0
Less than 1.5 to 1.0 1.00% 2.00% 0.50%
On each Adjustment Date (as hereinafter defined), the Applicable Margin
Percentage for all Loans and the commitment fee payable pursuant to Section
2.9(a) shall be adjusted effective as of such date (based upon the calculation
of the Leverage Ratio as of the last day of the fiscal period to which such
Adjustment Date relates) in accordance with the above matrix; provided, however,
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that, notwithstanding the foregoing or anything else herein to the contrary, if
at any time (x) the Borrower shall have failed to deliver the financial
statements and a Compliance Certificate as required by Section 6.1(a) or Section
6.1(b), as the case may be, and Section 6.2(a), (y) an Event of Default
described in Section 9.1(a) shall have occurred and be continuing or (z) any
other Event of Default shall have occurred and be continuing and the Required
Lenders shall have elected, then at all times from and including the date on
which such statements and Compliance Certificate are required to have been
delivered (or the date of occurrence of such Event of Default, as the case may
be) to the date on which the same shall have been delivered (or such Event of
Default cured or waived, as the case may be), each Applicable Margin Percentage
shall be determined in accordance with the above matrix as if the Leverage Ratio
were greater than or equal to 3.0 : 1.0 (notwithstanding the actual Leverage
Ratio). For purposes of this definition, "Adjustment Date" shall mean, with
respect to any fiscal period of the Borrower beginning with the fiscal year
ending December 31, 2001, the fifth (5th)
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day (or, if such day is not a Business Day, the next succeeding Business Day)
after delivery by the Borrower in accordance with Section 6.1(a) or Section
6.1(b), as the case may be, of (i) financial statements as of the end of and for
such fiscal period and (ii) a duly completed Compliance Certificate with respect
to such fiscal period. Until the first Adjustment Date, the Applicable Margin
Percentage will be (i) in the case of LIBOR Loans 2.25%, (ii) in the case of
Base Rate Loans 1.25% and (iii) in the case of the commitment fee 0.50%.
"Asset Disposition" shall mean any sale, conveyance, lease, assignment,
transfer or other disposition by the Borrower or any of its Subsidiaries to any
other Person (other than to the Borrower or to a Subsidiary Guarantor, including
by means of a merger or consolidation) whether in one transaction or in a series
of related transactions, of any of its assets, business units or other
properties (including any interests in property, whether tangible or intangible,
and including Capital Stock of Subsidiaries), excluding any disposition of
assets specified in clauses (i), (ii), (v) or (vii) of Section 8.4.
"Assignee" shall have the meaning given to such term in Section 11.7(a).
"Assignment and Acceptance" shall mean an Assignment and Acceptance entered
into between a Lender and an Assignee and accepted by the Agent and, to the
extent required by this Agreement, consented to by Borrower, in substantially
the form of Exhibit D.
"Authorized Officer" shall mean, with respect to any action specified
herein, any officer of the Borrower duly authorized by resolution of the board
of directors of the Borrower to take such action on its behalf, and whose
signature and incumbency shall have been certified to the Agent by the secretary
or an assistant secretary of the Borrower.
"Bankruptcy Code" shall mean 11 U.S.C.Sections. 101 et seq., as amended
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from time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime rate (which may not necessarily be its best lending
rate), as adjusted to conform to changes as of the opening of business on the
date of any such change in such prime rate, and (ii) the Federal Funds Rate plus
0.5% per annum, as adjusted to conform to changes as of the opening of business
on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest at
such time at the Adjusted Base Rate.
"Borrower Margin Stock" shall mean shares of capital stock of the Borrower
that are held by the Borrower or any of its Subsidiaries and that constitute
Margin Stock.
"Borrowing" shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to Section
2.11) on a single date of one or more Loans of a single Type (or a Swingline
Loan made by the Swingline Lender) and, in the case of LIBOR Loans, as to which
a single Interest Period is in effect.
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"Borrowing Date" shall mean, with respect to any Borrowing, the date upon
which such Borrowing is made.
"Business Day" shall mean (i) any day other than a Saturday or Sunday, a
legal holiday or a day on which commercial banks in Charlotte, North Carolina or
New York, New York are required by law to be closed and (ii) in respect of any
determination relevant to a LIBOR Loan, any such day that is also a day on which
tradings are conducted in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the aggregate amount
(whether paid in cash or accrued as a liability) that would, in accordance with
GAAP, be included on the consolidated statement of cash flows of the Borrower
and its Subsidiaries for such period as additions to equipment, fixed assets,
real property or improvements or other capital assets (including, without
limitation, capital lease obligations); provided, however, that Capital
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Expenditures shall not include any such expenditures (i) for replacements of and
substitutions for capital assets, to the extent made with the proceeds of
insurance as provided in Section 2.9(c) or the sale of property or assets no
longer used or useful in the ordinary course of the business as provided in
Section 8.4(ii) or(ii) made in connection with any exercise by the Borrower or
any Subsidiary Guarantor of purchase rights under the ELLF for property leased
thereunder.
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning given to such term in
Section 3.8.
"Cash Equivalents" shall mean (i) marketable obligations issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof, backed by the full faith and credit of the United
States of America and maturing within 180 days from the date of acquisition,
(ii) commercial paper issued by any Person organized under the laws of any state
of the United States of America, or the District of Columbia, maturing within
180 days from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Services or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc., (iii) demand and time deposits and certificates of deposit or
acceptances maturing within 180 days from the date of issuance and issued by any
financial institution that is a member of the Federal Reserve System, has
combined capital and surplus and undivided profits of at least $500,000,000, and
has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by Moody's
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
ten (10) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) investments in money
market or other mutual funds at least 95% of the assets of which are
continuously invested in securities of the type described in clause (i) through
(iv) above (and any
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such fund may hold individual securities of the type described in clauses (i)
and (ii) without limitation as to maturity, provided that the dollar weighted
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average maturity of each such class of securities in such fund is not greater
than 180 days).
"Casualty Event" shall mean, with respect to any property (including any
interest in property) of the Borrower or any of its Subsidiaries, any loss of,
damage to, or condemnation or other taking of, such property for which the
Borrower or such Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation.
"Closing Date" shall mean the date upon which all of the conditions set
forth in Section 4.1 have been satisfied or waived as required hereunder.
"Collateral" shall mean all the assets, property and interests in property
that shall from time to time be pledged or be purported to be pledged as direct
or indirect security for the Obligations pursuant to any one or more of the
Security Documents.
"Collateral Agent" shall have the meaning given to such term in the
Security Agreement.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of Exhibit C, together with a Covenant Compliance
Worksheet.
"Consolidated Current Assets" shall mean, as of any date of determination,
all assets of the Borrower and its Subsidiaries (other than cash and Cash
Equivalents) that would, in accordance with GAAP, be classified on a
consolidated balance sheet of the Borrower and its Subsidiaries as current
assets as of such date.
"Consolidated Current Liabilities" shall mean, as of any date of
determination, all liabilities (without duplication) of the Borrower and its
Subsidiaries that would, in accordance with GAAP, be classified on a
consolidated balance sheet of the Borrower and its Subsidiaries as current
liabilities as of such date; provided, however, that Consolidated Current
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Liabilities shall not include current maturities of any long-term Indebtedness.
"Consolidated EBITDA" shall mean, for any period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) the sum of Consolidated
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Interest Expense, federal, state, local and other income taxes, depreciation,
amortization, and, only to the extent expressly provided in the following two
sentences, extraordinary or nonrecurring losses and certain other cash and
noncash expenses or charges reducing income for such period, all to the extent
taken into account in the calculation of Consolidated Net Income for such
period, minus (iii) the sum of extraordinary or nonrecurring gains (including in
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connection with the sale or write-up of assets) and other noncash credits
increasing income for such period, all to the extent taken into account in the
calculation of Consolidated Net Income for such period. In calculating
Consolidated EBITDA, the following noncash charges may be included pursuant to
clause (ii) above: nonrecurring noncash charges arising from the write-off of
corporate non-core and under performing assets and the write-down or write-off
of certain other assets or non-cash charges in connection with the termination
of Management Services Agreement with physician practices and sales of related
assets, in an amount not to exceed (a) $300,000 for the fiscal quarter ending
March 31, 2001 and (b) $428,000,000 in aggregate for the fiscal quarter ending
December 31, 2001 and for the 2002, 2003 and 2004 fiscal years. In calculating
Consolidated EBITDA, the
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following cash expenses may be included pursuant to clause (ii) above:
nonrecurring cash expenses arising from the costs associated with employee and
corporate reorganization, including without limitation the closing of offices
and the elimination, relocation and consolidation of certain employment
positions, and other related costs, and cash reorganization and restructuring
costs in connection with the Restructuring, including the termination of
Management Services Agreements with physician practices and sales of related
assets, and the costs associated with offering the Subordinated Notes and the
repayment of existing debt, in an amount not to exceed (x) $5,600,000 for the
fiscal quarter ending March 31, 2001 and (b) $60,000,000, in aggregate for the
fiscal quarter ending December 31, 2001 and for the 2002, 2003 and 2004 fiscal
years.
"Consolidated EBITDAR" shall mean, for any period, the aggregate of (i)
Consolidated EBITDA for such period plus (ii) Consolidated Rent for such period.
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"Consolidated Fixed Charges" shall mean, for any period, the aggregate
(without duplication) of the following, all determined on a consolidated basis
for the Borrower and its Subsidiaries in accordance with GAAP for such period:
(a) Consolidated Interest Expense for such period, (b) the aggregate (without
duplication) of all scheduled payments of principal on Funded Debt required to
have been made by the Borrower and its Subsidiaries during such period (whether
or not such payments are actually made); provided that in any year that the ELLF
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matures the scheduled principal payment amount for the ELLF shall be deemed to
be the percentage of the total ELLF Indebtedness due at maturity as shown in the
following table, and (c) Consolidated Rent for such period.
If the maturity of the ELLF falls within any period below or within the three
consecutive fiscal quarters immediately following the end of such period, then
the percentage of the total ELLF Indebtedness due at maturity to be included in
Consolidated Fixed Charges for such period (and for the period of four
consecutive fiscal quarters ending with such period) shall be:
Period Percentage
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On or before June 30, 2003 10%
July 1, 2003 through
September 30, 2003 12.5%
October 1, 2003 through
December 31, 2003 15%
January 1, 2004 through
March 31, 2004 17.5%
Thereafter 20%
"Consolidated Funded Debt" shall mean, as of any date of determination, the
aggregate (without duplication) of all Funded Debt of the Borrower and its
Subsidiaries as of such date, determined on a consolidated basis in accordance
with GAAP. For purposes of determining Consolidated Funded Debt as of any date,
each Contingent Obligation of the Borrower and its
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Subsidiaries required to be included in such determination shall be valued at an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
of such date (established, if applicable, in accordance with GAAP).
"Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of (i) total interest expense of the Borrower and its
Subsidiaries for such period in respect of Funded Debt of the Borrower and its
Subsidiaries (including, without limitation, all such interest expense accrued
or capitalized during such period, whether or not actually paid during such
period), determined on a consolidated basis in accordance with GAAP, (ii) all
lease payments and other expense of the Borrower and its Subsidiaries for such
period in respect of the ELLF, determined on a consolidated basis in accordance
with GAAP, (iii) all net amounts payable under or in respect of Hedge
Agreements, to the extent paid or accrued by the Borrower and its Subsidiaries
during such period, and (iii) all commitment fees and other ongoing fees in
respect of Funded Debt paid, accrued or capitalized by the Borrower and its
Subsidiaries during such period.
"Consolidated Net Income" shall mean, for any period, net income (or loss)
for the Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date of determination, the
net worth of the Borrower and its Subsidiaries as of such date, determined on a
consolidated basis in accordance with GAAP but excluding any Disqualified
Capital Stock.
"Consolidated Rent" shall mean, for any period, all rental expense of the
Borrower and its Subsidiaries for such period in respect of any leases or
licenses of real or personal property, other than capital leases and the ELLF
(but only so long as all expenses in respect of the ELLF are included in the
determination of Consolidated Interest Expense), excluding obligations for
taxes, insurance, maintenance and similar costs which the lessee or licensee is
obligated to pay under the terms of such leases or licenses, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Working Capital" shall mean, as of any date of determination,
Consolidated Current Assets as of such date minus Consolidated Current
-----
Liabilities as of such date.
"Contingent Obligation" shall mean, with respect to any Person, any direct
or indirect liability of such Person with respect to any Indebtedness, liability
or other obligation (the "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of
9
such primary obligation or (d) otherwise to assure or hold harmless the owner of
any such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to the Borrower and its
--------- --------
Subsidiaries, the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (established, if applicable,
in accordance with GAAP.)
"Covenant Compliance Worksheet" shall mean a fully completed worksheet in
the form of Attachment A to Exhibit C.
"Credit Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Security Agreement, the Subsidiary Guaranty, the Mortgages, any
other Security Documents, the Intercompany Notes, and all other agreements,
instruments and fee letters now or hereafter executed and delivered to the Agent
or any Lender by or on behalf of the Borrower or any of its Subsidiaries with
respect to this Agreement and the transactions contemplated hereby, in each case
as amended, modified, supplemented or restated from time to time, but
specifically excluding any Hedge Agreement to which the Borrower and any Lender
or Affiliate of any Lender are parties.
"Debt Issuance" shall mean the issuance or sale by the Borrower or any of
its Subsidiaries of any debt securities (including any Disqualified Capital
Stock), whether in a public offering of such securities or otherwise, but
excluding the issuance of the Subordinated Notes.
"Default" shall mean any event or condition that, with the passage of time
or giving of notice, or both, would constitute an Event of Default.
"Disqualified Capital Stock" shall mean, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the holder thereof, or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (a) debt securities or (b) any Capital Stock referred to in (i)
or (ii) above, in each case under (i), (ii) or (iii) above at any time on or
prior to the first anniversary of the Maturity Date; provided, however, that
--------- --------
only the portion of Capital Stock that so matures or is mandatorily redeemable,
is so redeemable at the option of the holder thereof, or is so convertible or
exchangeable on or prior to such date shall be deemed to be Disqualified Capital
Stock.
"Dollars" or "$" shall mean dollars of the United States of America.
"ELLF" shall mean the End Loaded Lease Facility as embodied in the
Participation Agreement and the other Operative Agreements (as defined in the
Participation Agreement) as such Operative Agreements may be amended, modified
or supplemented from time to time,
10
provided that any material amendment, modification or supplement, including any
- --------
extension of the term thereof, is approved by the Required Lenders. If the ELLF
is materially amended, modified or supplemented without the consent of the
Required Lenders or if it is refinanced, replaced or restructured and, in either
case, such facility is secured exclusively by assets that were leased or
otherwise held by the owner-trustee pursuant to the ELLF before such change, and
is not secured by the Collateral securing the Obligations, then such facility
shall also be considered the ELLF for purposes of Sections 8.2(ii) and 8.3(iii).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or business,
whether or not incorporated) that would be deemed to be under "common control"
with, or a member of the same "controlled group" as, the Borrower or any of its
Subsidiaries, within the meaning of Sections 414(b) or (c) of the Internal
Revenue Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by the Borrower
or any ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA, (iii) the distribution
by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a
notice of intent to terminate any Plan or the taking of any action to terminate
any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the
imposition upon the Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, or the imposition or threatened imposition of any Lien upon any
assets of the Borrower or any ERISA Affiliate as a result of any alleged failure
to comply with the Internal Revenue Code or ERISA in respect of any Plan, (vii)
the engaging in or otherwise becoming liable for a nonexempt Prohibited
Transaction by the Borrower or any ERISA Affiliate, (viii) a violation of the
applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit
rule under Section 401(a) of the Internal Revenue Code by any fiduciary of any
Plan for which the Borrower or any of its ERISA Affiliates may reasonably be
expected to be directly or indirectly liable or (ix) the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Internal
Revenue Code or Section 307 of ERISA, would result in the loss of tax-exempt
status of the trust of which such Plan is a part if the Borrower or an ERISA
Affiliate fails to timely provide security to such Plan in accordance with the
provisions of such sections.
11
"Eligible Assignee" shall mean (i) a commercial bank organized under the
laws of the United States or any state thereof and having total assets in excess
of $500,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $500,000,000, provided
--------
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund that is
engaged in making, purchasing or otherwise investing in loans in the ordinary
course of its business and having total assets in excess of $500,000,000, (v)
any Affiliate of an existing Lender or (vi) any other Person approved by the
Required Lenders and, so long as no Default or Event of Default has occurred and
is continuing, the Borrower, which approval shall not be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of its business
and not in response to any third party action or request of any kind) or
proceedings relating in any way to any actual or alleged violation of or
liability under any Environmental Law or relating to any permit issued, or any
approval given, under any such Environmental Law (collectively, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to human health or
the environment.
"Environmental Laws" shall mean any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of
common law and orders of courts or Governmental Authorities, relating to the
protection of human health or occupational safety or the environment, now or
hereafter in effect and in each case as amended from time to time, including,
without limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances.
"Equity Issuance" shall mean the issuance, sale or other disposition by the
Borrower or any of its Subsidiaries of its Capital Stock, any rights, warrants
or options to purchase or acquire any shares of its Capital Stock or any other
security or instrument representing, convertible into or exchangeable for an
equity interest in the Borrower or any of its Subsidiaries; provided, however,
--------- --------
that the term Equity Issuance shall not include (i) the issuance or sale of
Capital Stock by any of the Subsidiaries of the Borrower to the Borrower or any
other Subsidiary, provided that such Capital Stock is pledged to the Agent
--------
pursuant to the Security Agreement, or (ii) any Capital Stock of the Borrower
issued or sold in connection with any Permitted Acquisition and constituting all
or a portion of the applicable purchase price, or (iii) an issuance of
Disqualified Capital Stock (which shall be regarded as a Debt Issuance).
12
"Event of Default" shall have the meaning given to such term in Section
9.1.
"Excess Cash Flow" shall mean, for any fiscal year of the Borrower, (a) the
sum of (i) Consolidated EBITDA for such fiscal year and (ii) an amount equal to
any decrease in Consolidated Working Capital from the first day to the last day
of such fiscal year, minus (b) the sum (without duplication) of (i) Consolidated
-----
Fixed Charges for such fiscal year to the extent paid in cash, (ii) optional
prepayments on the Revolving Loans made during such fiscal year that are
accompanied by a corresponding optional, permanent reduction in the Revolving
Credit Commitments, (iii) the aggregate cash portion of the Acquisition Amounts
for all Permitted Acquisitions made during such fiscal year, and (iv) an amount
equal to any increase in Consolidated Working Capital from the first day to the
last day of such fiscal year.
"Excess Proceeds" shall mean, at any time, the amount by which the
aggregate Net Cash Proceeds from asset dispositions by the Borrower and its
Subsidiaries permitted pursuant to Section 8.4 (or otherwise approved by the
Required Lenders) exceed the sum of (i) the lesser of (A) $75,000,000 and (B)
the aggregate Net Cash Proceeds received prior to the third anniversary of the
Closing Date from sales of assets to physician practice entities or to
physicians affiliated with physician practice entities in connection with the
termination or modification of the Management Services Agreements in effect on
the Closing Date with such physician practice entities, plus (ii) the aggregate
----
amount of Net Cash Proceeds from any disposition that are used to prepay or cash
collateralize any Indebtedness senior to the Subordinated Notes within 180 days
of the closing of such disposition, including all prepayments required to be
made pursuant to Section 2.6(e) (less the amount of such prepayments returned to
the Borrower pursuant to Section 2.6(i)), plus (iii) the aggregate amount of Net
----
Cash Proceeds from any disposition that are invested in assets other than
securities, as permitted under Section 8.5 or otherwise agreed by the Required
Lenders, within 180 days of the closing of such disposition, plus (iv) the
----
aggregate amount of repurchases under Section 8.6(b)(ii) that have been made
prior to such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.
"Fair Market Value" shall mean, with respect to any asset, the price (after
taking into account any liabilities relating to such asset) that would be
negotiated in an arm's-length transaction for cash between a willing seller and
a willing and able buyer, neither of which is under any compulsion to complete
the transaction; provided, however, for purposes of calculating the Fair Market
Value of assets sold in PPM Asset Dispositions, no value shall be assigned to
the Management Services Agreements being canceled and for purposes of
calculating the Fair Market Value of the consideration received in such sales,
no value shall be assigned to the newly executed services agreements.
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a
13
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from First Union, UBS AG, Stamford
Branch and their affiliates to the Borrower, dated September 28, 2001, as
amended, modified or supplemented from time to time.
"Financial Condition Certificate" shall mean a fully completed and duly
executed certificate, substantially in the form of Exhibit G, together with the
attachments thereto.
"Financial Officer" shall mean, with respect to the Borrower, the chief
financial officer, vice president - finance, principal accounting officer or
treasurer of the Borrower.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated EBITDAR for the period of four
consecutive fiscal quarters then ending to (ii) Consolidated Fixed Charges for
such period of four consecutive fiscal quarters.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness for
borrowed money of such Person. Funded Debt of the Borrower and its Subsidiaries
shall in all events include the Obligations and all Indebtedness (without
duplication) relating to the ELLF.
"GAAP" shall mean generally accepted accounting principles, as set forth in
the statements, opinions and pronouncements of the Accounting Principles Board,
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained, as in effect
from time to time (subject to the provisions of Section 1.2).
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hazardous Substances" shall mean any substances or materials (i) that are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
consist of underground or aboveground storage tanks, whether empty, filled or
partially filled with any substance of the type described above, or (vi) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas and,
in each case, are or become regulated under any Environmental Law by any
Governmental Authority.
14
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates, including any swap agreements (as defined in 11 U.S.C.
Section (101).
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness and obligations of such Person for borrowed
money or in respect of loans or advances of any kind, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services (other than
trade payables incurred and paid in the ordinary course of business), (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person as lessee under leases that are or are required to
be, in accordance with GAAP, recorded as capital leases, to the extent such
obligations are required to be so recorded, (vii) all obligations and
liabilities of such Person incurred in connection with any transaction or series
of transactions providing for the financing of assets through one or more
securitizations or in connection with, or pursuant to, any synthetic lease or
similar off-balance sheet financing (including the outstanding principal amount
of Loans and Holder Advances (as such terms are defined in the Participation
Agreement) under the ELLF), (viii) all Disqualified Capital Stock issued by such
Person, with the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any (for purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock that does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Disqualified Capital Stock as
if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Agreement, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the board of directors or other governing body
of the issuer of such Disqualified Capital Stock), (ix) the net termination
obligations of such Person under any Hedge Agreements, calculated as of any date
as if such agreement or arrangement were terminated as of such date, (x) all
Contingent Obligations of such Person and (xi) all indebtedness referred to in
clauses (i) through (x) above secured by any Lien on any property or asset owned
or held by such Person regardless of whether the indebtedness secured thereby
shall have been assumed by such Person or is nonrecourse to the credit of such
Person; provided that if a Contingent Obligation of the Borrower or any
Subsidiary is secured by a Lien on any property or asset of the Borrower or any
Subsidiary, but such Contingent Obligation is otherwise entirely without
recourse to or obligation of the Borrower or any Subsidiary, then the amount of
such Indebtedness shall be the lesser of (A) the total amount of such Contingent
Obligation and (B) the Fair Market Value of the property or asset of the
Borrower or any Subsidiary securing such Contingent Obligation.
"Intercompany Notes" shall mean, collectively, the intercompany notes made
by the Subsidiaries, in substantially the form of Exhibit H, as amended,
modified or supplemented from time to time.
15
"Interest Period" shall have the meaning given to such term in Section
2.10.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Issuing Lender" shall mean First Union in its capacity as issuer of the
Letters of Credit, and its successors in such capacity.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part of
the same Borrowing for any Interest Period, an interest rate per annum obtained
by dividing (i)(y) the rate of interest (rounded upward, if necessary, to the
nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or any
successor page) or (z) if no such rate is available, the rate of interest
determined by the Agent to be the rate or the arithmetic mean of rates (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) at which
Dollar deposits in immediately available funds are offered by First Union to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two (2) Business
Days prior to the first day of such Interest Period for a period substantially
equal to such Interest Period and in an amount substantially equal to the amount
of First Union's LIBOR Loan comprising part of such Borrowing, by (ii) the
amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for
such Interest Period.
"Lender" shall mean each financial institution signatory hereto and each
other financial institution that becomes a "Lender" hereunder pursuant to
Section 2.1(c) or Section 11.7, and their respective permitted successors and
assigns.
"Lending Office" shall mean, with respect to any Lender, the office of such
Lender designated as its "Lending Office" on its signature page hereto or in an
Assignment and Acceptance, or such other office as may be otherwise designated
in writing from time to time by such Lender to the Borrower and the Agent. A
Lender may designate separate Lending Offices as provided in the foregoing
sentence for the purposes of making or maintaining different Types of Loans,
and, with respect to LIBOR Loans, such office may be a domestic or foreign
branch or Affiliate of such Lender.
"Letter of Credit Exposure" shall mean, with respect to any Lender at any
time, such Lender's ratable share (based on the proportion that its Revolving
Credit Commitment bears to the aggregate Revolving Credit Commitments at such
time) of the sum of (i) the aggregate Stated Amount of all Letters of Credit
outstanding at such time and (ii) the aggregate amount of all Reimbursement
Obligations outstanding at such time (exclusive of Reimbursement Obligations
that are repaid with the proceeds of, and simultaneously with, the incurrence of
any Loans).
"Letter of Credit Notice" shall have the meaning given to such term in
Section 3.2.
"Letters of Credit" shall have the meaning given to such term in Section
3.1.
16
"Leverage Ratio" shall mean, as of the last day of any fiscal quarter, the
ratio of (i) Consolidated Funded Debt as of such date to (ii) Consolidated
EBITDA for the period of four consecutive fiscal quarters then ending.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, security
interest, lien (statutory or otherwise), preference, priority, charge or other
encumbrance of any nature, whether voluntary or involuntary, including, without
limitation, the interest of any vendor or lessor under any conditional sale
agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Limitation" shall mean a revocation, suspension, termination, impairment,
probation, limitation, non-renewal, forfeiture, declaration of ineligibility,
loss of status as a participating provider in a Third Party Payor Arrangement,
and the loss of any other rights.
"Loans" shall mean any or all of the Revolving Loans and the Swingline
Loans.
"Management Services Agreements" shall mean the management services
agreements of Borrower and its Subsidiaries, whether now existing or hereafter
acquired or arising, together with any and all extensions, modifications,
amendments, renewals, substitutions or replacements thereof.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, prospects, business, properties
or assets of the Borrower and its Subsidiaries, taken as a whole, provided that
--------
no previous or currently existing change (including the Restructuring but not
including other future, potential or contingent changes) described in either the
Borrower's Form 10-Q or 10-K as currently filed with the Securities Exchange
Commission for the fiscal quarter ending September 30, 2001 or any prior period
or the current offering memorandum for the Subordinated Notes shall be
considered a Material Adverse Change.
"Material Adverse Effect" shall mean a material adverse effect upon (i) the
condition (financial or otherwise), operations, prospects, business, properties
or assets of the Borrower and its Subsidiaries, taken as a whole, (ii) the
ability of the Borrower or any material Subsidiary to perform its obligations
under this Agreement or any of the other Credit Documents to which it is a party
or (iii) the legality, validity or enforceability of this Agreement or any of
the other Credit Documents or the rights and remedies of the Agent and the
Lenders hereunder and thereunder.
"Material Contract" shall mean each "material contract" within the meaning
of Item 601(b)(10) of Regulation S-K under the Exchange Act to which the
Borrower or any of its Subsidiaries is a party, by which any of them or their
respective properties is bound or to which any of them is subject.
"Maturity Date" shall mean February 1, 2007.
"Mortgages" shall mean each mortgage, assignment of rents, security
agreement and fixture filing, or deed of trust, assignment of rents and fixture
filing, or similar instrument
17
creating and evidencing a lien on real property and other property rights
incidental thereto (whether executed pursuant to Section 4.1(a)(iv) or pursuant
to Section 6.8 or 6.10), in substantially the form of Exhibit I hereto,
containing such schedules and including such exhibits as shall be necessary or
appropriate and made by the owner of the real property described therein for the
benefit of the Agent, as mortgagee (or beneficiary), assignee and secured party
for the benefit of the Lenders, as the same may at any time be further amended,
modified or supplemented in accordance with the terms thereof and hereof.
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
makes, is making or is obligated to make contributions or has made or been
obligated to make contributions.
"Net Cash Proceeds" shall mean (i) in the case of any Equity Issuance or
Debt Issuance, the aggregate cash payments received by the Borrower and its
Subsidiaries less reasonable and customary fees and expenses (including
underwriting discounts and commissions) incurred by the Borrower and its
Subsidiaries in connection therewith, (ii) in the case of any Casualty Event,
the aggregate cash proceeds of insurance, condemnation awards and other
compensation received by the Borrower and its Subsidiaries in respect of such
Casualty Event less (y) reasonable fees and expenses incurred by the Borrower
and its Subsidiaries in connection therewith and (z) contractually required
repayments of Indebtedness to the extent secured by Liens on or other beneficial
interest in the property subject to such Casualty Event and any income or
transfer taxes paid or reasonably estimated by the Borrower to be payable by the
Borrower and its Subsidiaries as a result of such Casualty Event, and (iii) in
the case of any Asset Disposition, the aggregate amount of all cash payments
received by the Borrower and its Subsidiaries in connection with such Asset
Disposition less (v) reasonable fees and expenses incurred by the Borrower and
its Subsidiaries in connection therewith, (including brokerage commissions and
fees and expenses of legal counsel, accountants and investment bankers), (w)
Indebtedness to the extent the amount thereof is secured by a Lien on or other
beneficial interest in the property that is the subject of such Asset
Disposition and the transferee of (or holder of the Lien on ) such Property
requires that such Indebtedness be repaid as a condition to such Asset
Disposition, (x) liabilities retained by the seller and relating directly to
such Assets, (y) the amount of any escrows, purchase price holdbacks or
customary purchase price adjustments or any reserve required in accordance with
the GAAP against liabilities related to such Asset Disposition and retained by
the Borrower or its Subsidiaries, (provided that such amounts are included as
Net Cash Proceeds as they are released or otherwise become available), and (z)
any income or transfer taxes paid or reasonably estimated by the Borrower to be
payable by the Borrower and its Subsidiaries as a result of such Asset
Disposition.
"Notes" shall mean any or all of the Revolving Notes and the Swingline
Note.
"Notice of Borrowing" shall have the meaning given to such term in Section
2.2(b).
"Notice of Conversion/Continuation" shall have the meaning given to such
term in Section 2.11(b).
"Notice of Swingline Borrowing" shall have the meaning given to such term
in Section 2.2(d).
18
"Obligations" shall mean all principal of and interest (including, to the
greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations, all fees, expenses, indemnities and other obligations
owing, due or payable at any time by the Borrower to the Agent, any Lender, the
Issuing Lender or any other Person entitled thereto, under this Agreement or any
of the other Credit Documents, and all payment and other obligations owing or
payable at any time by the Borrower to any Lender or any Affiliate of any Lender
under or in connection with any Hedge Agreement required or permitted by this
Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"PPM Asset Disposition" shall mean any sale of assets to physician practice
entities or to physicians affiliated with physician practice entities in
connection with the termination or modification of the Management Services
Agreements in effect on the Closing Date with such physician practice entities
with respect to which all of the following conditions are satisfied (i) no
Default or Event of Default shall have occurred and be continuing at the time of
the consummation of such disposition or would exist immediately after giving
effect thereto; (ii) the Borrower complies with Section 2.6(e) with respect to
the Net Cash Proceeds of such disposition, (iii) the seller receives
consideration at the time of such disposition at least equal to the lesser of
(A) the Fair Market Value of such assets or (B) the net book value of such
assets excluding any write downs or reductions in net book value after the date
hereof other than as a result of normal course depreciation and amortization or
casualty or destruction; and (iv) at least 75% of the total consideration
received in such disposition or series of related dispositions consists of cash
or Cash Equivalents. For purposes of this definition only, "cash" shall be
deemed to include the following:
(i) the amount (without duplication) of any Indebtedness of the
Borrower or such Subsidiary (other than subordinated physician notes) that
is expressly assumed by the transferee in such PPM Asset Disposition and
with respect to which the Borrower or such Subsidiary, as the case may be,
is released by the holder of such Indebtedness;
(ii) the amount of any obligations received from such transferee that
is to be paid to the Borrower or such Subsidiary in cash within 30 days;
(iii) the Fair Market Value of any tangible assets (excluding, without
limitation, securities) received by the Borrower or any Subsidiary to be
used by it in compliance with Section 8.8, and
(iv) with respect to the sale of assets to any physician practice in
connection with the termination of a Management Services Agreement in
effect on the Closing Date, (x) the face amount of any Indebtedness of the
Borrower cancelled or retired as consideration to the Borrower or a
Subsidiary in any such sale (subject to the limitations of Section 8.6(b))
and (y) Capital Stock of the Borrower with a Fair Market Value (determined
at the time of each applicable sale) not to exceed $15.0 million in the
aggregate.
"Participant" shall have the meaning given to such term in Section
11.7(d).
19
"Participation Agreement" shall mean the Amended and Restated Participation
Agreement, dated as of a the date hereof (together with any amendments,
modifications, replacements, substitutes and supplements thereto and any
renewals or extensions thereof, in whole or in part), among the Borrower, Wells
Fargo Northwest National Association, as owner trustee, and First Union National
Bank, as agent.
"Permitted Acquisition" shall mean (a) any Acquisition with respect to
which all of the following conditions are satisfied: (i) each business acquired
shall be within the permitted lines of business described in Section 8.8, (ii)
any Capital Stock given as consideration in connection therewith shall be
Capital Stock of the Borrower, (iii) in the case of an Acquisition involving the
acquisition of control of Capital Stock of any Person, immediately after giving
effect to such Acquisition such Person (or the surviving Person, if the
Acquisition is effected through a merger or consolidation) shall be the Borrower
or a Wholly Owned Subsidiary, and (iv) all of the conditions and requirements of
Sections 6.8 and 6.9 applicable to such Acquisition are satisfied; or (b) any
other Acquisition to which the Required Lenders (or the Agent on their behalf)
shall have given their prior written consent (which consent may be in their sole
discretion and may be given subject to such additional terms and conditions as
the Required Lenders shall establish) and with respect to which all of the
conditions and requirements set forth in this definition and in Section 6.8, and
in or pursuant to any such consent, have been satisfied or waived in writing by
the Required Lenders (or the Agent on their behalf).
"Permitted Joint Venture" shall mean any Acquisition or Investment by which
the Borrower or any Subsidiary Guarantor acquires at least 30% but not more than
80% of the Capital Stock of any Person that owns, leases, operates or services a
hospital or other healthcare facility, provided that concurrently with (and in
--------
any event within ten (10) Business Days after such Acquisition or Investment)
such Borrower or Subsidiary Guarantor, as applicable, will execute and deliver
to the Collateral Agent an amendment or supplement to the Security Agreement
pursuant to which all of the Capital Stock of such joint venture owned by the
Borrower or such Subsidiary Guarantor shall be pledged to the Agent, together
with the certificates evidencing such Capital Stock and undated stock powers
duly executed in blank.
"Permitted Liens" shall have the meaning given to such term in Section 8.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Plan" shall mean any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Borrower or any ERISA
Affiliate may have any liability.
"Pro Forma Balance Sheet" shall have the meaning given to such term in
Section 5.11(b).
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal
20
Revenue Code that is not exempt by reason of Section 4975(c)(2) or 4975(d) of
the Internal Revenue Code.
"Projections" shall have the meaning given to such term in Section 5.11(c).
"Refunded Swingline Loans" shall have the meaning given to such term in
Section 2.2(d).
"Register" shall have the meaning given to such term in Section 11.7(b).
"Regulations D, T, U and X" shall mean Regulations D, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reimbursement Approvals" shall mean, with respect to all Third Party Payor
Arrangements, any and all certifications, provider numbers, provider agreements,
participation agreements, accreditations and any other similar agreements with
or approvals by Governmental Authorities or other Persons.
"Reimbursement Obligation" shall have the meaning given to such term in
Section 3.4.
"Reportable Event" shall mean (i) any "reportable event" within the meaning
of Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of
ERISA has not been waived by the PBGC (including any failure to meet the minimum
funding standard of, or timely make any required installment under, Section 412
of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance
of any waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such "reportable event" subject to advance notice to the PBGC under
Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Lenders" shall mean, at any time, the Lenders holding outstanding
Loans and unutilized Revolving Credit Commitments (or, after the termination of
the Revolving Credit Commitments, outstanding Loans and Letter of Credit
Exposure) representing more than fifty percent (50%) of the aggregate at such
time of all outstanding Loans and unutilized Revolving Credit Commitments (or,
after the termination of the Revolving Credit Commitments, the aggregate at such
time of all outstanding Loans and Letter of Credit Exposure).
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal) in effect from time to time during
such Interest Period, as provided by the Federal Reserve Board, applied for
determining the reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable
21
to First Union under Regulation D with respect to "Eurocurrency liabilities"
within the meaning of Regulation D, or under any similar or successor regulation
with respect to Eurocurrency liabilities or Eurocurrency funding.
"Responsible Officer" shall mean, with respect to the Borrower, the
president, the chief executive officer, the chief financial officer, any
executive officer, or any other Financial Officer of the Borrower, and any other
officer or similar official thereof responsible for the administration of the
obligations of the Borrower in respect of this Agreement.
"Restructuring" shall mean, collectively, the series of transactions by the
Borrower and its Subsidiaries that includes the initial effectiveness of this
Agreement and Borrowings hereunder (whether on the Closing Date or thereafter),
the issuance of the Subordinated Debt, the repayment and satisfaction of the
Terminating Senior Indebtedness and the termination of certain Management
Services Agreements with the corresponding disposition of associated physician
practice assets.
"Revolving Credit Commitment" shall mean, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on its signature page
hereto under the caption "Revolving Credit Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register maintained by the Agent pursuant to
Section 11.7(b) as such Lender's "Revolving Credit Commitment," as such amount
may be reduced at or prior to such time pursuant to the terms hereof. The
aggregate amount of the Revolving Credit Commitment as of the date hereof is
$87,981,968.
"Revolving Credit Lender" shall mean a lender having a Revolving Credit
Commitment.
"Revolving Loans" shall have the meaning given to such term in Section
2.1(a).
"Revolving Notes" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit A-3, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Security Agreement" shall mean a pledge and security agreement made by the
Borrower and the Subsidiaries party thereto in favor of the Collateral Agent, in
substantially the form of Exhibit E, as amended, modified or supplemented from
time to time.
"Security Documents" shall mean the Security Agreement, the Mortgages and
all other pledge or security agreements, mortgages, deeds of trust, assignments
or other similar agreements or instruments executed and delivered by the
Borrower or any of its Subsidiaries pursuant to Section 6.9 or Section 6.10 or
otherwise to secure the Obligations under any of the Credit Documents, in each
case as amended, modified or supplemented from time to time.
"Senior Leverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) the sum as of such date of (A) the Obligations plus
----
(B) the Indebtedness (without duplication) relating to the ELLF plus (C) all
----
other Consolidated Funded Debt that is secured directly or indirectly by any
Lien upon or with respect to any part of the property or assets, whether now
owned or hereafter acquired, of the Borrower or any Subsidiary to (ii)
Consolidated EBITDA for the period of four consecutive quarters then ending.
22
"Stated Amount" shall mean, with respect to any Letter of Credit at any
time, the aggregate amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).
"Subordinated Indebtedness" shall mean the Subordinated Notes, the
subordinated physician notes identified in Schedule 8.2 and any other
Indebtedness of the Borrower or its Subsidiaries incurred in compliance with
this Agreement and expressly subordinated and made junior in right and time of
payment to the Obligations.
"Subordinated Notes" shall mean the Borrower's 9.625% senior subordinated
notes due February 1, 2012 in the principal face amount of $175,000,000 issued
substantially simultaneously with the initial effectiveness of this Agreement.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency), provided, that any Permitted Joint Venture that is in compliance
---------
with the limitation of Section 8.5(viii) shall not be considered a Subsidiary of
the Borrower or any Subsidiary Guarantor. When used without reference to a
parent entity, the term "Subsidiary" shall be deemed to refer to a Subsidiary of
the Borrower.
"Subsidiary Guarantor" shall mean any Subsidiary of the Borrower that is a
guarantor under the Subsidiary Guaranty and has granted to the Agent a Lien upon
and security interest in its personal property assets pursuant to the Security
Agreement.
"Subsidiary Guaranty" shall mean a guaranty agreement made by the
Subsidiary Guarantors in favor of the Agent and the Lenders, in substantially
the form of Exhibit F, as amended, modified or supplemented from time to time.
"Swingline Commitment" shall mean $5,000,000 or, if less, the aggregate
Revolving Credit Commitments at the time of determination, as such amount may be
reduced at or prior to such time pursuant to the terms hereof.
"Swingline Lender" shall mean First Union in its capacity as maker of
Swingline Loans, and its successors in such capacity.
"Swingline Loans" shall have the meaning given to such term in Section
2.1(b).
"Swingline Maturity Date" shall mean the date that is five (5) Business
Days prior to the Maturity Date.
"Swingline Note" shall mean the promissory note of the Borrower in
substantially the form of Exhibit A-3, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
23
"Syndication Agent" shall mean UBS Warburg LLC.
"Terminating Senior Indebtedness" shall mean all of the obligations of the
Borrower and its Subsidiaries pursuant to the (i) Fourth Amended and Restated
Loan Agreement, dated June 15, 1999 and as amended thereafter, and (ii) the
Borrower's 8.42% Senior Secured Notes Due 2006, initially issued on November 24,
1999 in the aggregate original principal amount of $100,000,000.
"Termination Date" shall mean the Maturity Date or such earlier date of
termination of the Revolving Credit Commitments pursuant to Section 2.5 or
Section 9.2.
"Third Party Payor Arrangements" shall mean any and all arrangements with
Medicare, Medicaid, CHAMPUS and any other Governmental Authority or quasi-public
agency, Blue Cross, Blue Shield, any managed care plans and organizations
including, without limitation, health maintenance organizations and preferred
provider organizations, private commercial insurance companies and any similar
third party arrangements, plans or programs for payment or reimbursement in
connection with health care services, products or supplies.
"Type" shall have the meaning given to such term in Section 2.2(a).
"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Internal Revenue Code for the applicable plan year.
"Unutilized Revolving Credit Commitment" shall mean, with respect to any
Lender at any time, such Lender's Revolving Credit Commitment at such time less
the sum of (i) the aggregate principal amount of all Revolving Loans made by
such Lender that are outstanding at such time and (ii) such Lender's Letter of
Credit Exposure at such time.
"Unutilized Swingline Commitment" shall mean, with respect to the Swingline
Lender at any time, the Swingline Commitment at such time less the aggregate
----
principal amount of all Swingline Loans that are outstanding at such time.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding Capital Stock of such Subsidiary is owned, directly
or indirectly, by such Person.
1.2 Accounting Terms. Except as specifically provided otherwise in this
----------------
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them in accordance with GAAP.
Notwithstanding anything to the contrary in this Agreement, for purposes of
calculation of the financial covenants set forth in Article VII, all accounting
determinations and computations hereunder shall be made in accordance with GAAP
as in effect as of the date of this Agreement applied on a basis consistent with
the application used in preparing the most recent financial statements of the
Borrower referred to in Section 5.11(a). In the event that any changes in GAAP
after such date are required to be applied to the Borrower and would affect the
computation of the financial covenants contained in Article VII, such changes
shall be followed only from and after the date this Agreement shall have been
amended to take into account any such changes.
24
1.3 Other Terms; Construction. Unless otherwise specified or unless the
-------------------------
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto. All references
herein to the Lenders or any of them shall be deemed to include the Issuing
Lender unless specifically provided otherwise or unless the context otherwise
requires.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments; Commitment Increase.
--------------------------------
(a) Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make and maintain loans (each, a "Revolving
Loan," and, collectively, the "Revolving Loans") to the Borrower, from time to
time on any Business Day during the period from and including the Closing Date
to but not including the Termination Date, in an aggregate principal amount at
any time outstanding not greater than the excess, if any, of its Revolving
Credit Commitment at such time over its Letter of Credit Exposure at such time,
provided that no Borrowing of Revolving Loans shall be made if, immediately
- --------
after giving effect thereto, the sum of (i) the aggregate principal amount of
Revolving Loans outstanding at such time, (ii) the aggregate Letter of Credit
Exposure of all Revolving Credit Lenders at such time and (iii) the aggregate
principal amount of Swingline Loans outstanding at such time (excluding the
aggregate amount of any Swingline Loans to be repaid with proceeds of Revolving
Loans made pursuant to such Borrowing) would exceed the aggregate Revolving
Credit Commitments at such time. Subject to and on the terms and conditions of
this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans.
(b) The Swingline Lender agrees, subject to and on the terms and conditions
of this Agreement, to make loans (each, a "Swingline Loan," and, collectively,
the "Swingline Loans") to the Borrower, from time to time on any Business Day
during the period from the Closing Date to but not including the Swingline
Maturity Date (or, if earlier, the Termination Date), in an aggregate principal
amount at any time outstanding not exceeding the Swingline Commitment. Swingline
Loans may be made even if the aggregate principal amount of Swingline Loans
outstanding at any time, when added to the aggregate principal amount of the
Revolving Loans made by the Swingline Lender in its capacity as a Revolving
Credit Lender outstanding at such time and its Letter of Credit Exposure at such
time, would exceed the Swingline Lender's own Revolving Credit Commitment at
such time; provided that no Borrowing of Swingline Loans shall be made if,
--------
immediately after giving effect thereto, the sum of (i) the aggregate principal
amount of Revolving Loans outstanding at such time, (ii) the aggregate Letter of
Credit Exposure of all Revolving Credit Lenders at such time and (iii) the
aggregate principal amount of Swingline Loans outstanding at such time would
exceed the aggregate Revolving Credit Commitments at such time. Subject to and
on the terms and conditions of this Agreement, the Borrower may borrow, repay
(including by means of a Borrowing of Revolving Loans pursuant to Section
2.2(f)) and reborrow Swingline Loans.
25
(c) Subject to the terms and conditions set forth herein, within the period
of 90 days immediately following the Closing Date and so long as no Event of
Default shall have occurred and be continuing, the Borrower, with the assistance
and approval (not to be unreasonably withheld) of the Agents, shall have the
right to invite financial institutions that would qualify as Eligible Assignees
to become additional Lenders under this Agreement such that the Revolving Credit
Commitments would be increased to an aggregate of up to $100,000,000. The
Revolving Credit Commitment of any such additional Lender (i) shall be not less
than $5,000,000 and integral multiples of $1,000,000 in excess thereof (or, if
less, in the remaining amount necessary to increase the aggregate Revolving
Credit Commitments to $100,000,000) and (ii) may consist of both an addition to
the aggregate Revolving Credit Commitments and an assignment or assignments of
portions of the Revolving Credit Commitments of other Lenders. Each such
increase in the aggregate Revolving Credit Commitments shall be subject to (x)
the receipt by the Agent of a joinder agreement of each new Lender (and, as
applicable, one or more Assignment and Acceptances with existing Lenders), (y)
the delivery of new or replacement Revolving Notes reflecting the additional
Revolving Credit Commitments (and any assignments of Revolving Credit
Commitments), and (z) such other documentation as the Agent may reasonably
request. If any Revolving Loans are outstanding at the time of any such
aggregate Revolving Credit Commitment increase, the Borrower shall request, and
the Lender or Lenders making the additional Revolving Credit Commitments shall
make, Revolving Loans in an amount sufficient to repay the Loans of the other
Lenders as necessary to give effect to the revised Revolving Credit Commitments
and revised Revolving Credit Commitment percentages of the Lenders. Such
repayments shall include payment by the Borrower of any break-funding amount
owing under Section 2.18. Nothing herein shall be deemed to require any Lender
to increase its Revolving Credit Commitment without such Lender's express
written consent given in its sole discretion.
2.2 Borrowings.
----------
(a) The Revolving Loans shall, at the option of the Borrower and subject to
the terms and conditions of this Agreement, be either Base Rate Loans or LIBOR
Loans (each, a "Type" of Loan), provided that (i) all Loans comprising the same
--------
Borrowing shall, unless otherwise specifically provided herein, be of the same
Type and (ii) no Borrowing of LIBOR Loans may be made at any time prior to the
third (3rd) Business Day after the Closing Date. Notwithstanding any other
provision hereof, no LIBOR Loans having an Interest Period with a duration
longer than one month may be borrowed at any time prior to the 90th day after
the Closing Date. The Swingline Loans shall be made and maintained as Base Rate
Loans at all times.
(b) In order to make a Borrowing (other than (x) Borrowings of Swingline
Loans, which shall be made pursuant to Section 2.2(d), (y) Borrowings for the
purpose of repaying Refunded Swingline Loans, which shall be made pursuant to
Section 2.2(d), and (z) Borrowings involving continuations or conversions of
outstanding Loans, which shall be made pursuant to Section 2.11), the Borrower
will give the Agent written notice not later than 12:00 noon (Charlotte, North
Carolina time) three (3) Business Days prior to each Borrowing to be comprised
of LIBOR Loans and not later than 12:00 noon (Charlotte, North Carolina time) on
the same Business Day as each Borrowing to be comprised of Base Rate Loans;
provided, however, that requests for the Borrowing of any Revolving Loans to be
- -------- --------
made on the Closing Date may, at the discretion of the Agent, be given later
than the times specified hereinabove.
26
Each such notice (each, a "Notice of Borrowing") shall be irrevocable, shall be
given in the form of Exhibit B-1 and shall specify (1) the aggregate principal
amount and initial Type of the Loans to be made pursuant to such Borrowing, (2)
in the case of a Borrowing of LIBOR Loans, the initial Interest Period to be
applicable thereto, and (3) the requested date of such Borrowing (the "Borrowing
Date"), which shall be a Business Day. Upon its receipt of a Notice of
Borrowing, the Agent will promptly notify each applicable Lender of the proposed
Borrowing. Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of each Borrowing comprised of Base
Rate Loans shall not be less than $1,000,000 or, if greater, an integral
multiple of $500,000 in excess thereof (or, in the case of a Borrowing of
Revolving Loans, if less, in the amount of the aggregate Unutilized
Revolving Credit Commitments), and the aggregate principal amount of each
Borrowing comprised of LIBOR Loans shall not be less than $3,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof;
(ii) if the Borrower shall have failed to designate the Type of Loans
comprising a Borrowing, the Borrower shall be deemed to have requested a
Borrowing comprised of Base Rate Loans; and
(iii) if the Borrower shall have failed to select the duration of the
Interest Period to be applicable to any Borrowing of LIBOR Loans, then the
Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
(c) Not later than 1:00 p.m. (Charlotte, North Carolina time) on the
requested Borrowing Date, each Lender will make available to the Agent at its
office referred to in Section 11.5 (or at such other location as the Agent may
designate) an amount, in Dollars and in immediately available funds, equal to
the amount of the Loan or Loans to be made by such Lender. To the extent the
Lenders have made such amounts available to the Agent as provided hereinabove,
the Agent will make the aggregate of such amounts available to the Borrower in
accordance with Section 2.3(a) and in like funds as received by the Agent.
(d) In order to make a Borrowing of a Swingline Loan, the Borrower will
give the Agent (and the Swingline Lender, if the Swingline Lender is not also
the Agent) written notice not later than 12:00 p.m. noon (Charlotte, North
Carolina time) on the day of such Borrowing (which shall be a Business Day).
Each such notice (each, a "Notice of Swingline Borrowing") shall be irrevocable,
shall be given in the form of Exhibit B-2 and shall specify (i) the principal
amount of the Swingline Loan to be made pursuant to such Borrowing (which shall
not be less than $1,000,000 and, if greater, shall be in an integral multiple of
$500,000 in excess thereof (or, if less, in the amount of the Unutilized
Swingline Commitment)) and (ii) the requested Borrowing Date, which shall be a
Business Day. Not later than 1:00 p.m. (Charlotte, North Carolina time) on the
requested Borrowing Date, the Swingline Lender will make available to the Agent
at its office referred to in Section 11.5 (or at such other location as the
Agent may designate) an amount, in Dollars and in immediately available funds,
equal to the amount of the requested Swingline Loan. To the extent the Swingline
Lender has made such amount available to the Agent as provided hereinabove, the
Agent will make such amount available to the Borrower in accordance with Section
2.3(a) and in like funds as received by the Agent. Notwithstanding the foregoing
or anything else herein to the contrary, at any time that a "Sweep
27
Plus" or similar cash management program is in effect between the Borrower and
First Union, as the Swingline Lender, each Borrowing and each voluntary
repayment of the Swingline Loans by the Borrower shall be made exclusively in
accordance with the procedures of such cash management program.
(e) With respect to any outstanding Swingline Loans, the Swingline Lender
may at any time (whether or not an Event of Default has occurred and is
continuing) in its sole and absolute discretion (and is hereby authorized and
empowered by the Borrower to), cause a Borrowing of Revolving Loans to be made
for the purpose of repaying such Swingline Loans by delivering to the Agent (if
the Agent is not also the Swingline Lender) and each other Revolving Credit
Lender (on behalf of, and with a copy to, the Borrower), not later than 11:00
a.m. (Charlotte, North Carolina time) one (1) Business Day prior to the proposed
Borrowing Date therefor, a notice (which shall be deemed to be a Notice of
Borrowing given by the Borrower) requesting the Revolving Credit Lenders to make
Revolving Loans (which shall be made initially as Base Rate Loans) on such
Borrowing Date in an aggregate amount equal to the amount of such Swingline
Loans (the "Refunded Swingline Loans") outstanding on the date such notice is
given that the Swingline Lender requests to be repaid. Not later than 1:00 p.m.
(Charlotte, North Carolina time) on the requested Borrowing Date, each Revolving
Credit Lender (other than the Swingline Lender) will make available to the Agent
at its office referred to in Section 11.5 (or at such other location as the
Agent may designate) an amount, in Dollars and in immediately available funds,
equal to the amount of the Revolving Loan to be made by such Lender. To the
extent the Revolving Credit Lenders have made such amounts available to the
Agent as provided hereinabove, the Agent will make the aggregate of such amounts
available to the Swingline Lender in like funds as received by the Agent, to be
applied in repayment of the Refunded Swingline Loans. Notwithstanding any
provision of this Agreement to the contrary, on the relevant Borrowing Date, the
Refunded Swingline Loans (including the Swingline Lender's ratable share
thereof, in its capacity as a Revolving Credit Lender) shall be deemed to be
repaid with the proceeds of the Revolving Loans made as provided above
(including a Revolving Loan deemed to have been made by the Swingline Lender),
and such Refunded Swingline Loans deemed so to be repaid shall no longer be
outstanding as Swingline Loans but shall be outstanding as Revolving Loans. If
any portion of any such amount repaid (or deemed to be repaid) to the Swingline
Lender shall be recovered by or on behalf of the Borrower from the Swingline
Lender in any bankruptcy, insolvency or similar proceeding or otherwise, the
loss of the amount so recovered shall be shared ratably among all the Revolving
Credit Lenders in the manner contemplated by Section 2.15.
(f) If, as a result of any bankruptcy, insolvency or similar proceeding
with respect to the Borrower, Revolving Loans are not made pursuant to Section
2.2(e) in an amount sufficient to repay any amounts owed to the Swingline Lender
in respect of any outstanding Swingline Loans, or if the Swingline Lender is
otherwise precluded for any reason from giving a notice on behalf of the
Borrower as provided for hereinabove, the Swingline Lender shall be deemed to
have sold without recourse, representation or warranty, and each Revolving
Credit Lender shall be deemed to have purchased and hereby agrees to purchase, a
participation in such outstanding Swingline Loans in an amount equal to its
ratable share (based on the proportion that its Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments at such time) of the unpaid
amount thereof together with accrued interest thereon. Upon one (1) Business
Day's prior notice from the Swingline Lender, each Revolving Credit Lender
(other
28
than the Swingline Lender) will make available to the Agent at its office
referred to in Section 11.5 (or at such other location as the Agent may
designate) an amount, in Dollars and in immediately available funds, equal to
its respective participation. To the extent the Revolving Credit Lenders have
made such amounts available to the Agent as provided hereinabove, the Agent will
make the aggregate of such amounts available to the Swingline Lender in like
funds as received by the Agent. In the event any such Revolving Credit Lender
fails to make available to the Agent the amount of such Lender's participation
as provided in this Section 2.2(f), the Swingline Lender shall be entitled to
recover such amount on demand from such Lender, together with interest thereon
for each day from the date such amount is required to be made available for the
account of the Swingline Lender until the date such amount is made available to
the Swingline Lender at the Federal Funds Rate for the first three (3) Business
Days and thereafter at the Adjusted Base Rate applicable to Revolving Loans.
Promptly following its receipt of any payment by or on behalf of the Borrower in
respect of a Swingline Loan, the Swingline Lender will pay to each Revolving
Credit Lender that has acquired a participation therein such Lender's ratable
share of such payment.
(g) Notwithstanding any provision of this Agreement to the contrary, the
obligation of each Revolving Credit Lender (other than the Swingline Lender) to
make Revolving Loans for the purpose of repaying any Refunded Swingline Loans
pursuant to Section 2.2(e) and each such Lender's obligation to purchase a
participation in any unpaid Swingline Loans pursuant to Section 2.2(f) shall be
absolute and unconditional and shall not be affected by any circumstance or
event whatsoever, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right that such Lender may have against the
Swingline Lender, the Agent, the Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of any Default or Event of
Default, (iii) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the Borrower or any
of its Subsidiaries, or (iv) any breach of this Agreement by any party hereto.
2.3 Disbursements; Funding Reliance; Domicile of Loans.
--------------------------------------------------
(a) The Borrower hereby authorizes the Agent to disburse the proceeds of
each Borrowing in accordance with the terms of any written instructions from any
of the Authorized Officers, provided that the Agent shall not be obligated under
--------
any circumstances to forward amounts to any account not listed in an Account
Designation Letter. The Borrower may at any time deliver to the Agent an Account
Designation Letter listing any additional accounts or deleting any accounts
listed in a previous Account Designation Letter.
(b) Unless the Agent has received, prior to 1:00 p.m. (Charlotte, North
Carolina time) on the relevant Borrowing Date, written notice from a Lender that
such Lender will not make available to the Agent such Lender's ratable portion,
if any, of the relevant Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent in immediately available funds on such
Borrowing Date in accordance with the applicable provisions of Section 2.2, and
the Agent may, in reliance upon such assumption, but shall not be obligated to,
make a corresponding amount available to the Borrower on such Borrowing Date. If
and to the extent that such Lender shall not have made such portion available to
the Agent, and the Agent shall have made such corresponding amount available to
the Borrower, such Lender, on the one hand, and the Borrower, on the other,
severally agree to pay to the Agent forthwith on demand
29
such corresponding amount, together with interest thereon for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Agent, (i) in the case of such Lender, at the Federal Funds Rate,
and (ii) in the case of the Borrower, at the rate of interest applicable at such
time to the Type of Loans comprising such Borrowing, as determined under the
provisions of Section 2.8. If such Lender shall repay to the Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. The failure of any Lender to make
any Loan required to be made by it as part of any Borrowing shall not relieve
any other Lender of its obligation, if any, hereunder to make its Loan as part
of such Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender as part of any
Borrowing.
(c) Each Lender may, at its option, make and maintain any Loan at, to or
for the account of any of its Lending Offices, provided that any exercise of
--------
such option shall not affect the obligation of the Borrower to repay such Loan
to or for the account of such Lender in accordance with the terms of this
Agreement.
2.4 Notes.
-----
(a) The Loans made by each Lender shall be evidenced (i) in the case of
Revolving Loans, by a Revolving Note appropriately completed in substantially
the form of Exhibit A-1, and (ii) in the case of the Swingline Loans, by a
Swingline Note appropriately completed in substantially the form of Exhibit A-2.
(b) Each Revolving Note issued to a Lender shall (i) be executed by the
Borrower, (ii) be payable to the order of such Lender, (iii) be dated as of the
Closing Date (or, in the case of a Revolving Note issued after the Closing Date,
dated the effective date of the applicable Assignment and Acceptance), (iv) be
in a stated principal amount equal to such Lender's Revolving Credit Commitment,
(v) bear interest in accordance with the provisions of Section 2.8, as the same
may be applicable from time to time to the Revolving Loans made by such Lender,
and (vi) be entitled to all of the benefits of this Agreement and the other
Credit Documents and subject to the provisions hereof and thereof.
(c) The Swingline Note shall (i) be executed by the Borrower, (ii) be
payable to the order of the Swingline Lender, (iii) be dated as of the Closing
Date, (iv) be in a stated principal amount equal to the Swingline Commitment,
(v) bear interest in accordance with the provisions of Section 2.8, as the same
may be applicable from time to time to the Swingline Loans, and (vi) be entitled
to all of the benefits of this Agreement and the other Credit Documents and
subject to the provisions hereof and thereof.
(d) Each Lender will record on its internal records the amount and Type of
each Loan made by it and each payment received by it in respect thereof and
will, in the event of any transfer of any of its Notes, either endorse on the
reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount and Type of the Loans evidenced
thereby as of the date of transfer or provide such information on a schedule to
the Assignment and Acceptance relating to such transfer; provided, however, that
--------- --------
the failure of any
30
Lender to make any such recordation or provide any such information, or any
error therein, shall not affect the Borrower's obligations under this Agreement
or the Notes.
2.5 Termination and Reduction of Commitments.
-----------------------------------------
(a) The Revolving Credit Commitments and Swingline Commitments shall be
terminated as follows:
(i) The Revolving Credit Commitments shall be automatically and
permanently terminated on the Termination Date; and
(ii) The Swingline Commitment shall be automatically and permanently
terminated on the Swingline Maturity Date.
(b) At any time and from time to time after the date hereof, upon not less
than five (5) Business Days' prior written notice to the Agent (and, in the case
of a termination or reduction of the Unutilized Swingline Commitment, the
Swingline Lender), the Borrower may terminate in whole or reduce in part the
aggregate Unutilized Revolving Credit Commitments or the Unutilized Swingline
Commitment, provided that any such partial reduction shall be in an aggregate
--------
amount of not less than $5,000,000 ($1,000,000 in the case of the Unutilized
Swingline Commitment) or, if greater, an integral multiple of $1,000,000 in
excess thereof ($500,000 in the case of the Unutilized Swingline Commitment).
The amount of any termination or reduction made under this Section 2.5(b) may
not thereafter be reinstated.
(c) Each reduction of the Revolving Credit Commitments pursuant to this
Section 2.5 shall be applied ratably among the Revolving Credit Lenders
according to their respective Revolving Credit Commitments. Notwithstanding any
provision of this Agreement to the contrary, any reduction of the Revolving
Credit Commitments pursuant to this Section 2.5 that has the effect of reducing
the aggregate Revolving Credit Commitments to an amount less than the amount of
the Swingline Commitment at such time shall result in an automatic corresponding
reduction of the Swingline Commitment to the amount of the aggregate Revolving
Credit Commitments (as so reduced), without any further action on the part of
the Borrower or the Swingline Lender.
2.6 Mandatory Payments and Prepayments.
-----------------------------------
(a) Except to the extent due or paid sooner pursuant to the provisions of
this Agreement, (i) the aggregate outstanding principal of the Revolving Loans
shall be due and payable in full on the Maturity Date, and (ii) the aggregate
outstanding principal of the Swingline Loans shall be due and payable in full on
the Swingline Maturity Date.
(b) In the event that, at any time, the sum of (i) the aggregate principal
amount of Revolving Loans outstanding at such time, (ii) the aggregate Letter of
Credit Exposure of all Lenders at such time and (iii) the aggregate principal
amount of Swingline Loans outstanding at such time (excluding the aggregate
amount of any Swingline Loans to be repaid with proceeds of Revolving Loans made
on the date of determination) shall exceed the aggregate Revolving Credit
Commitments at such time (after giving effect to any concurrent termination or
reduction thereof), the Borrower shall, within two (2) Business Days after such
time, prepay the
31
outstanding principal amount of the Swingline Loans and, to the extent of any
excess remaining after prepayment in full of outstanding Swingline Loans, the
outstanding principal amount of the Revolving Loans, in the amount of such
excess; provided that, to the extent such excess amount is greater than the
--------
aggregate principal amount of Swingline Loans and Revolving Loans outstanding
immediately prior to the application of such prepayment, the amount so prepaid
shall be retained by the Agent and held in the Cash Collateral Account as cover
for Letter of Credit Exposure, as more particularly described in Section 3.8,
and thereupon such cash shall be deemed to reduce the aggregate Letter of Credit
Exposure by an equivalent amount.
(c) Promptly upon (and in any event not later than two (2) Business Days
after) its receipt thereof, the Borrower will prepay the outstanding principal
amount of the Loans in an amount equal to 50% of the Net Cash Proceeds from any
Equity Issuance (but only to the extent such net cash proceeds exceed $2,000,000
in aggregate in any fiscal year) and 100% of the Net Cash Proceeds from any Debt
Issuance, and will deliver to the Agent, concurrently with such prepayment, a
certificate signed by a Financial Officer of the Borrower in form and substance
satisfactory to the Agent and setting forth the calculation of such Net Cash
Proceeds.
(d) Not later than one hundred-eighty (180) days after its receipt of any
proceeds of insurance, condemnation award or other compensation in respect of
any Casualty Event (or, if earlier, upon its determination not to repair or
replace any property subject to such Casualty Event), the Borrower will prepay
the outstanding principal amount of the Loans in an amount equal to 100% of the
Net Cash Proceeds from such Casualty Event (less any amounts theretofore applied
(or committed to be applied) to the repair or replacement of property subject to
such Casualty Event) and will deliver to the Agent, concurrently with such
prepayment, a certificate signed by a Financial Officer of the Borrower in form
and substance satisfactory to the Agent and setting forth the calculation of
such Net Cash Proceeds; provided, however, that, notwithstanding the foregoing,
--------- --------
(i) nothing in this Section 2.6(d) shall be deemed to limit or otherwise affect
any right of the Agent herein or in any of the other Credit Documents to receive
and hold such proceeds as loss payee and to disburse the same to the Borrower
upon the terms hereof or thereof, or any obligation of the Borrower or any of
its Subsidiaries herein or in any of the other Credit Documents to remit any
such proceeds to the Agent upon its receipt thereof, and (ii) any and all such
proceeds received or held by the Agent or the Borrower or any of its
Subsidiaries during the continuance of an Event of Default (regardless of any
proposed or actual use thereof for repair or replacement) shall be applied to
prepay the outstanding principal amount of the Loans.
(e) Promptly upon (and in any event not later than two (2) Business Days
after) its receipt thereof, the Borrower will prepay the outstanding principal
amount of the Loans in an amount equal to 100% of the Net Cash Proceeds from any
Asset Disposition and will deliver to the Agent, concurrently with such
prepayment, a certificate signed by a Financial Officer of the Borrower in form
and substance satisfactory to the Agent and setting forth the calculation of
such Net Cash Proceeds.
(f) Concurrently with the delivery of its annual financial statements after
the end of each fiscal year, beginning with the fiscal year ending December 31,
2002, and in any event not later than ninety (90) days after the last day of
each such fiscal year, the Borrower will prepay the outstanding principal amount
of the Loans in an amount equal to 50% of Excess Cash Flow,
32
if any, for such fiscal year; provided, however that so long as the Borrower's
--------- -------
Leverage Ratio is equal to or less than 1.5 to 1.0 as of the last day of such
fiscal year, no Excess Cash Flow prepayment shall be required under this Section
2.6(f) for such fiscal year. The Borrower will deliver to the Agent,
concurrently with each such prepayment (or by the date that a prepayment would
have been due), a certificate signed by a Financial Officer of the Borrower in
form and substance satisfactory to the Agent and setting forth the calculation
of such Excess Cash Flow or, as applicable, the Leverage Ratio.
(g) Each prepayment of the Loans made pursuant to Sections 2.6(c) through
2.6(f) shall be applied to reduce the outstanding principal amount of the
Revolving Loans (but without reduction of the Revolving Loan Commitments). If
excess funds remain after application of the prepayments in accordance with the
foregoing sentence, and no Default or Event of Default has occurred and is
continuing, then such excess funds shall be returned to or retained by the
Borrower. Each payment or prepayment pursuant to the provisions of this Section
2.6 shall be applied ratably among the Lenders holding the Loans being prepaid,
in proportion to the principal amount held by each. Revolving Loans prepaid
pursuant to this Sections 2.6(c) through 2.6(g) may be reborrowed, subject to
the terms and conditions of this Agreement.
(h) The Borrower shall deliver to the Agent and each Lender, to the extent
practicable, at least one (1) Business Days' prior written notice of any
prepayment pursuant to Sections 2.6(c) through 2.6(g).
(i) Each payment or prepayment of a LIBOR Loan made pursuant to the
provisions of this Section 2.6 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
Section 2.18 to be paid as a consequence thereof; provided, that for prepayments
---------
of LIBOR Loans required pursuant to Sections 2.6(c) through 2.6(f) on a date
other than the last day of the Interest Period with respect thereto, at the
Borrower's option, the amount of such prepayment (after application to any Base
Rate Loans) shall be deposited with the Agent as cash collateral for the LIBOR
Loans on terms reasonably satisfactory to the Agent and thereafter shall be
applied in the order of the Interest Periods next ending most closely to the
date such prepayment is required to be made and on the last day of each such
Interest Period. After such application, unless an Event of Default shall have
occurred and be continuing (in which case such interest shall be held as cash
collateral or applied by the Agent to any Obligations then due and payable), any
remaining interest earned on such cash collateral shall be paid to Borrower.
(j) Notwithstanding the foregoing, nothing in this Section 2.6 shall be
deemed to permit any Equity Issuance, Debt Issuance or Asset Disposition not
expressly permitted under Article VII or Article VIII.
2.7 Voluntary Prepayments.
----------------------
(a) At any time and from time to time, the Borrower shall have the right to
prepay the Loans, in whole or in part, without premium or penalty (except as
provided in clause (iii) below), upon written notice given to the Agent not
later than 12:00 noon (Charlotte, North Carolina time) three (3) Business Days
prior to each intended prepayment of LIBOR Loans and on the same Business Day of
each intended prepayment of Base Rate Loans (including Swingline Loans),
33
provided that (i) each partial prepayment shall be in an aggregate principal
amount of not less than $1,000,000 or, if greater, an integral multiple of
$1,000,000 in excess thereof for LIBOR Loans and $500,000 in excess thereof for
Base Rate Loans ($1,000,000 and $500,000, respectively, in the case of Swingline
Loans), (ii) no partial prepayment of LIBOR Loans made pursuant to any single
Borrowing shall reduce the aggregate outstanding principal amount of the
remaining LIBOR Loans under such Borrowing to less than $3,000,000 or to any
greater amount not an integral multiple of $1,000,000 in excess thereof, and
(iii) unless made together with all amounts required under Section 2.18 to be
paid as a consequence of such prepayment, a prepayment of a LIBOR Loan may be
made only on the last day of the Interest Period applicable thereto. Each such
notice shall specify the proposed date of such prepayment and the aggregate
principal amount and Type of the Loans to be prepaid (and, in the case of LIBOR
Loans, the Interest Period of the Borrowing pursuant to which made), and shall
be irrevocable and shall bind the Borrower to make such prepayment on the terms
specified therein. Revolving Loans and Swingline Loans prepaid pursuant to this
Section 2.7(a) may be reborrowed, subject to the terms and conditions of this
Agreement.
2.8 Interest.
--------
(a) The Borrower will pay interest in respect of the unpaid principal
amount of each Loan, from the date of Borrowing thereof until such principal
amount shall be paid in full, (i) at the Adjusted Base Rate as in effect from
time to time during such periods as such Loan is a Base Rate Loan, or (ii) at
the Adjusted LIBOR Rate as in effect from time to time during such periods as
such Loan is a LIBOR Loan.
(b) Upon the occurrence and during the continuance of any Event of Default
under Section 9.1(a), hereof and (at the election of the Required Lenders) upon
the occurrence and during the continuance of any other Event of Default, all
outstanding principal amounts of the Loans and, to the greatest extent permitted
by law, all interest accrued on the Loans and all other accrued and outstanding
fees and other amounts hereunder, shall bear interest at a rate per annum equal
to the interest rate applicable from time to time thereafter to such Loans
(whether the Adjusted Base Rate or the Adjusted LIBOR Rate) plus 2% (or, in the
case of fees and other amounts, at the Adjusted Base Rate plus 2%), and, in each
case, such default interest shall be payable on demand. To the greatest extent
permitted by law, interest shall continue to accrue after the filing by or
against the Borrower of any petition seeking any relief in bankruptcy or under
any law pertaining to insolvency or debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as follows:
(i) in respect of each Base Rate Loan (including any Base Rate Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears on the last Business Day of
each calendar quarter, beginning with the first such day to occur after the
Closing Date; provided, that in the event the Loans are repaid or prepaid
---------
in full and the Revolving Credit Commitments have been terminated, then
accrued interest in respect of all Base Rate Loans shall be payable
together with such repayment or prepayment on the date thereof;
34
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day of
the Interest Period applicable thereto (subject to the provisions of
Section 2.10(iv)) and (z) in addition, in the case of a LIBOR Loan with an
Interest Period having a duration of six months or longer, on each date on
which interest would have been payable under clause (y) above had
successive Interest Periods of three months' duration been applicable to
such LIBOR Loan; provided, that in the event all -------- LIBOR Loans made
pursuant to a single Borrowing are repaid or prepaid in full, then accrued
interest in respect of such LIBOR Loans shall be payable together with such
repayment or prepayment on the date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
(e) The Agent shall promptly notify the Borrower and the Lenders upon
determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
---------
however, that the failure of the Agent to provide the Borrower or the Lenders
- --------
with any such notice shall neither affect any obligations of the Borrower or the
Lenders hereunder nor result in any liability on the part of the Agent to the
Borrower or any Lender. Each such determination (including each determination of
the Reserve Requirement) shall, absent manifest error, be conclusive and binding
on all parties hereto.
2.9 Fees. The Borrower agrees to pay:
----
(a) To the Agent, for the account of each Revolving Credit Lender, a
commitment fee for each calendar quarter (or portion thereof) for the period
from the date of this Agreement to the Termination Date, at a per annum rate
equal to the Applicable Margin Percentage in effect for such fee from time to
time during such quarter on such Lender's ratable share (based on the proportion
that its Revolving Credit Commitment bears to the aggregate Revolving Credit
Commitments) of the average daily aggregate Unutilized Revolving Credit
Commitments,
35
payable in arrears (i) on the last Business Day of each calendar quarter,
beginning with the first such day to occur after the Closing Date, and (ii) on
the Termination Date;
(b) To the Agent, for the account of each Revolving Credit Lender, a letter
of credit fee for each calendar quarter (or portion thereof) in respect of all
Letters of Credit outstanding during such quarter, at a per annum rate equal to
the Applicable Margin Percentage in effect from time to time during such quarter
for Revolving Loans that are maintained as LIBOR Loans, on such Lender's ratable
share (based on the proportion that its Revolving Credit Commitment bears to the
aggregate Revolving Credit Commitments) of the daily average aggregate Stated
Amount of such Letters of Credit, payable in arrears (i) on the last Business
Day of each calendar quarter, beginning with the first such day to occur after
the Closing Date, and (ii) on the later of the Termination Date and the date of
termination of the last outstanding Letter of Credit;
(c) To the Issuing Lender for its own account, a facing fee for each
calendar quarter (or portion thereof) in respect of all Letters of Credit
outstanding during such quarter, at a per annum rate of 0.125% on the daily
average aggregate Stated Amount of such Letters of Credit (provided, however,
--------- --------
that, notwithstanding the foregoing, the annual amount of such fee with regard
to any single Letter of Credit shall not be less than $2,000), payable in
arrears (i) on the last Business Day of each calendar quarter, beginning with
the first such day to occur after the Closing Date, and (ii )on the later of the
Termination Date and the date of termination of the last outstanding Letter of
Credit;
(d) To the Issuing Lender, for its own account, such commissions, issuance
fees, transfer fees and other fees and charges incurred in connection with the
issuance and administration of each Letter of Credit as are customarily charged
from time to time by the Issuing Lender for the performance of such services in
connection with similar letters of credit, or as may be otherwise agreed to by
the Issuing Lender, but without duplication of amounts payable under Section
2.9(h); and
(e) To the Agent, for its own account, the annual administrative fee
described in the Fee Letter, on the terms, in the amount and at the times set
forth therein.
2.10 Interest Periods. Concurrently with the giving of a Notice of
----------------
Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
comprised of Base Rate Loans to be converted into, or LIBOR Loans to be
continued as, LIBOR Loans, the Borrower shall have the right to elect, pursuant
to such notice, the interest period (each, an "Interest Period") to be
applicable to such LIBOR Loans, which Interest Period shall, at the option of
the Borrower, be a one, two, three or six-month period; provided, however, that:
--------- --------
(i) all LIBOR Loans comprising a single Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall commence on
the date of the Borrowing of such LIBOR Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each successive
Interest Period applicable to such LIBOR Loan shall commence on the day on
which the next preceding Interest Period applicable thereto expires;
36
(iii) LIBOR Loans may not be outstanding under more than seven (7)
separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day falls in
another calendar month, in which case such Interest Period shall expire on
the next preceding Business Day;
(v) the Borrower may not select any Interest Period that begins prior
to the third (3rd) Business Day after the Closing Date or that expires
after the Maturity Date;
(vi) the Borrower may not select an Interest Period having a duration
longer than one month at any time prior to the 90th day after the Closing
Date;
(vii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month; and
(viii) the Borrower may not select any Interest Period (and
consequently, no LIBOR Loans shall be made) if a Default or Event of
Default shall have occurred and be continuing at the time of such Notice of
Borrowing or Notice of Conversion/Continuation with respect to any
Borrowing.
2.11 Conversions and Continuations.
-----------------------------
(a) The Borrower shall have the right, on any Business Day occurring on or
after the Closing Date, to elect (i) to convert all or a portion of the
outstanding principal amount of any Base Rate Loans into LIBOR Loans, or to
convert any LIBOR Loans the Interest Periods for which end on the same day into
Base Rate Loans, or (ii) upon the expiration of any Interest Period, to continue
all or a portion of the outstanding principal amount of any LIBOR Loans the
Interest Periods for which end on the same day for an additional Interest
Period, provided that (w) any such conversion of LIBOR Loans into Base Rate
--------
Loans shall involve an aggregate principal amount of not less than $1,000,000
or, if greater, an integral multiple of $500,000 in excess thereof; any such
conversion of Base Rate Loans into, or continuation of, LIBOR Loans shall
involve an aggregate principal amount of not less than $3,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof; and no partial
conversion of LIBOR Loans made pursuant to a single Borrowing shall reduce the
outstanding principal amount of such LIBOR Loans to less than $3,000,000 or to
any greater amount not an integral multiple of $1,000,000 in excess thereof, (x)
except as otherwise provided in Section 2.16(d), LIBOR Loans may be converted
into Base Rate Loans only on the last day of the Interest Period applicable
thereto (and, in any event, if a LIBOR Loan is converted into a Base Rate Loan
on any day other than the last day of the Interest Period applicable thereto,
the Borrower will pay, upon such conversion, all amounts required under Section
2.18 to be paid as a consequence thereof), (y) no such conversion or
continuation shall be permitted with regard to any Base Rate Loans that are
37
Swingline Loans, and (z) no conversion of Base Rate Loans into LIBOR Loans or
continuation of LIBOR Loans shall be permitted during the continuance of a
Default or Event of Default.
(b) The Borrower shall make each such election by giving the Agent written
notice not later than 12:00 p.m. noon (Charlotte, North Carolina time) three (3)
Business Days prior to the intended effective date of any conversion of Base
Rate Loans into, or continuation of, LIBOR Loans and on the same Business Day as
the intended effective date of any conversion of LIBOR Loans into Base Rate
Loans. Each such notice (each, a "Notice of Conversion/Continuation") shall be
irrevocable, shall be given in the form of Exhibit B-3 and shall specify (x) the
date of such conversion or continuation (which shall be a Business Day), (y) in
the case of a conversion into, or a continuation of, LIBOR Loans, the Interest
Period to be applicable thereto, and (z) the aggregate amount and Type of the
Loans being converted or continued. Upon the receipt of a Notice of
Conversion/Continuation, the Agent will promptly notify each Lender of the
proposed conversion or continuation. In the event that the Borrower shall fail
to deliver a Notice of Conversion/Continuation as provided herein with respect
to any outstanding LIBOR Loans, such LIBOR Loans shall automatically be
converted to Base Rate Loans upon the expiration of the then current Interest
Period applicable thereto (unless repaid pursuant to the terms hereof). In the
event the Borrower shall have failed to select in a Notice of
Conversion/Continuation the duration of the Interest Period to be applicable to
any conversion into, or continuation of, LIBOR Loans, then the Borrower shall be
deemed to have selected an Interest Period with a duration of one month.
2.12 Method of Payments; Computations.
--------------------------------
(a) All payments by the Borrower hereunder shall be made without setoff,
counterclaim or other defense, in Dollars and in immediately available funds to
the Agent, for the account of the Lenders entitled to such payment or the
Swingline Lender, as the case may be (except as otherwise expressly provided
herein as to payments required to be made directly to the Issuing Lender or the
Lenders) at its office referred to in Section 11.5 (or at such other location as
the Agent may designate) prior to 12:00 noon (Charlotte, North Carolina time) on
the date payment is due. Any payment made as required hereinabove, but after
12:00 noon (Charlotte, North Carolina time) shall be deemed to have been made on
the next succeeding Business Day. If any payment falls due on a day that is not
a Business Day, then such due date shall be extended to the next succeeding
Business Day (except that in the case of LIBOR Loans to which the provisions of
Section 2.10(iv) are applicable, such due date shall be the next preceding
Business Day), and such extension of time shall then be included in the
computation of payment of interest, fees or other applicable amounts.
(b) The Agent will distribute to the Lenders like amounts relating to
payments made to the Agent for the account of the Lenders as follows: (i) if the
payment is received by 12:00 noon (Charlotte, North Carolina time) in
immediately available funds, the Agent will make available to each relevant
Lender on the same date, by wire transfer of immediately available funds, such
Lender's ratable share of such payment (based on the percentage that the amount
of the relevant payment owing to such Lender bears to the total amount of such
payment owing to all of the relevant Lenders), and (ii) if such payment is
received after 12:00 noon (Charlotte, North Carolina time) or in other than
immediately available funds, the Agent will make available to each such Lender
its ratable share of such payment by wire transfer of immediately available
38
funds on the next succeeding Business Day (or in the case of uncollected funds,
as soon as practicable after collected). If the Agent shall not have made a
required distribution to the appropriate Lenders as required hereinabove after
receiving a payment for the account of such Lenders, the Agent will pay to each
such Lender, on demand, its ratable share of such payment with interest thereon
at the Federal Funds Rate for each day from the date such amount was required to
be disbursed by the Agent until the date repaid to such Lender. The Agent will
distribute to the Issuing Lender like amounts relating to payments made to the
Agent for the account of the Issuing Lender in the same manner, and subject to
the same terms and conditions, as set forth hereinabove with respect to
distributions of amounts to the Lenders.
(c) Unless the Agent shall have received written notice from the Borrower
prior to the date on which any payment is due to any Lender hereunder that such
payment will not be made in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date, and the Agent may, in
reliance on such assumption, but shall not be obligated to, cause to be
distributed to such Lender on such due date an amount equal to the amount then
due to such Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, and without limiting the obligation of the
Borrower to make such payment in accordance with the terms hereof, such Lender
shall repay to the Agent forthwith on demand such amount so distributed to such
Lender, together with interest thereon for each day from the date such amount is
so distributed to such Lender until the date repaid to the Agent, at the Federal
Funds Rate.
(d) All computations of interest and fees hereunder (including computations
of the Reserve Requirement) shall be made on the basis of a year consisting of
(i) in the case of interest on Base Rate Loans, 365/366 days, as the case may
be, or (ii) in all other instances, 360 days; and in each case under (i) and
(ii) above, with regard to the actual number of days (including the first day,
but excluding the last day) elapsed.
2.13 Recovery of Payments.
--------------------
(a) The Borrower agrees that to the extent the Borrower makes a payment or
payments to or for the account of the Agent, the Swingline Lender, any Lender or
the Issuing Lender, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, the Obligation intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been received.
(b) If any amounts distributed by the Agent to any Lender are subsequently
returned or repaid by the Agent to the Borrower or its representative or
successor in interest, whether by court order or by settlement approved by the
Lender in question, such Lender will, promptly upon receipt of notice thereof
from the Agent, pay the Agent such amount. If any such amounts are recovered by
the Agent from the Borrower or its representative or successor in interest, the
Agent will redistribute such amounts to the Lenders on the same basis as such
amounts were originally distributed.
39
2.14 Use of Proceeds. The proceeds of the Loans shall be used (i) first, to
---------------
repay the Terminating Senior Indebtedness in full, (ii) second, to pay or
reimburse reasonable transaction fees and expenses in connection with the
closing of the transactions contemplated hereby, and (iii) thereafter, for
working capital and general business purposes and in accordance with the terms
and provisions of this Agreement.
2.15 Pro Rata Treatment.
------------------
(a) Except in the case of Swingline Loans, all fundings, continuations and
conversions of Loans shall be made by the Lenders pro rata on the basis of their
respective Revolving Credit Commitments (in the case of the initial funding of
Loans pursuant to Section 2.2) or on the basis of their respective outstanding
Loans (in the case of continuations and conversions of Loans pursuant to Section
2.11, and additionally in all cases in the event the Revolving Credit
Commitments have expired or have been terminated), as the case may be from time
to time. All payments on account of principal of or interest on any Loans, fees
or any other Obligations owing to or for the account of any one or more Lenders
shall be apportioned ratably among such Lenders in proportion to the amounts of
such principal, interest, fees or other Obligations owed to them respectively.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise), other
than pursuant to Section 11.7, applicable to the payment of any of the
Obligations that exceeds its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of such Obligations due and payable to all Lenders at
such time) of payments on account of such Obligations then or therewith obtained
by all the Lenders to which such payments are required to have been made, such
Lender shall forthwith purchase from the other Lenders such participations in
such Obligations as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
---------
however, that if all or any portion of such excess payment is thereafter
- --------
recovered from such purchasing Lender, such purchase from each such other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to the provisions of this Section 2.15(b) may, to
the fullest extent permitted by law, exercise any and all rights of payment
(including, without limitation, setoff, banker's lien or counterclaim) with
respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 2.15(b) applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
Section 2.15(b) to share in the benefits of any recovery on such secured claim.
2.16 Increased Costs; Change in Circumstances; Illegality; etc.
----------------------------------------------------------
40
(a) If the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, in each case after the date hereof, or compliance by any Lender with
any guideline or request from any such Governmental Authority (whether or not
having the force of law) given or made after the date hereof, shall (i) subject
such Lender to any tax or other charge, or change the basis of taxation of
payments to such Lender, in respect of any of its LIBOR Loans or any other
amounts payable hereunder or its obligation to make, fund or maintain any LIBOR
Loans (other than any change in the rate or basis of tax on the overall net
income or profits of, or any branch or franchise tax applicable to, such Lender
or its applicable Lending Office), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement (but excluding any reserves to
the extent actually included within the Reserve Requirement in the calculation
of the LIBOR Rate) against assets of, deposits with or for the account of, or
credit extended by, such Lender or its applicable Lending Office, or (iii)
impose on such Lender or its applicable Lending Office any other condition, and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any LIBOR Loans or issuing or participating in Letters
of Credit or to reduce the amount of any sum received or receivable by such
Lender hereunder (including in respect of Letters of Credit), the Borrower will,
promptly upon written demand therefor by such Lender, (but in no event more than
15 days after delivery of such written demand), pay to such Lender such
additional amounts as shall compensate such Lender for such increase in costs or
reduction in return.
(b) If any Lender shall have reasonably determined that the introduction of
or any change in any applicable law, rule or regulation regarding capital
adequacy or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, in each
case after the date hereof, or compliance by such Lender with any guideline or
request from any such Governmental Authority (whether or not having the force of
law) given or made after the date hereof, has or would have the effect, as a
consequence of such Lender's Revolving Credit Commitment, Loans or issuance of
or participations in Letters of Credit hereunder, of reducing the rate of return
on the capital of such Lender or any Person controlling such Lender to a level
below that which such Lender or controlling Person could have achieved but for
such introduction, change or compliance (taking into account such Lender's or
controlling Person's policies with respect to capital adequacy), the Borrower
will, within fifteen (15) days of receipt of written demand therefor by such
Lender therefor, pay to such Lender such additional amounts as will compensate
such Lender or controlling Person for such reduction in return.
(c) If, on or prior to the first day of any Interest Period, (i) the Agent
shall have determined that adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate for such Interest Period or (ii) the
Agent shall have received written notice from the Required Lenders of their
determination that the rate of interest referred to in the definition of "LIBOR
Rate" upon the basis of which the Adjusted LIBOR Rate for LIBOR Loans for such
Interest Period is to be determined will not adequately and fairly reflect the
cost to such Lenders of making or maintaining LIBOR Loans during such Interest
Period, the Agent will forthwith so notify the Borrower and the Lenders in
writing. Upon such notice, (A) all then outstanding LIBOR Loans shall
automatically, on the expiration date of the respective Interest Periods
applicable thereto (unless then repaid in full), be converted into Base Rate
Loans, (B) the obligation of the Lenders to make, to convert Base Rate Loans
into, or to continue, LIBOR
41
Loans shall be suspended (including pursuant to the Borrowing to which such
Interest Period applies), and (C) any Notice of Borrowing or Notice of
Conversion/Continuation given at any time thereafter with respect to LIBOR Loans
shall be deemed to be a request for Base Rate Loans, in each case until the
Agent or the Required Lenders, as the case may be, shall have determined that
the circumstances giving rise to such suspension no longer exist (and the
Required Lenders, if making such determination, shall have so notified the
Agent), and the Agent shall have so notified the Borrower and the Lenders in
writing.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Lender shall have determined in
good faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law), has or would have the effect
of making it unlawful for such Lender to make or to continue to make or maintain
LIBOR Loans, such Lender will forthwith so notify the Agent and the Borrower in
writing. Upon such notice, (i) each of such Lender's then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Period applicable thereto (or, to the extent any such LIBOR Loan may not
lawfully be maintained as a LIBOR Loan until such expiration date, upon such
notice), be converted into a Base Rate Loan, (ii) the obligation of such Lender
to make, to convert Base Rate Loans into, or to continue, LIBOR Loans shall be
suspended (including pursuant to any Borrowing for which the Agent has received
a Notice of Borrowing but for which the Borrowing Date has not arrived), and
(iii) any Notice of Borrowing or Notice of Conversion/Continuation given at any
time thereafter with respect to LIBOR Loans shall, as to such Lender, be deemed
to be a request for a Base Rate Loan, in each case until such Lender shall have
determined that the circumstances giving rise to such suspension no longer exist
and shall have so notified the Agent, and the Agent shall have so notified the
Borrower in writing.
(e) Determinations by the Agent or any Lender for purposes of this Section
2.16 of any increased costs, reduction in return, market contingencies,
illegality or any other matter shall, absent manifest error, be conclusive,
provided that such determinations are made in good faith. No failure by the
- --------
Agent or any Lender at any time to demand payment of any amounts payable under
this Section 2.16 shall constitute a waiver of its right to demand payment of
any additional amounts arising at any subsequent time. Nothing in this Section
2.16 shall require or be construed to require the Borrower to pay any interest,
fees, costs or other amounts in excess of that permitted by applicable law.
(f) Each Lender agrees that, upon the occurrence of any event giving rise
to the operation of this Section with respect to such Lender, it will, if
requested by the Borrower and to the extent permitted by law, endeavor in good
faith to designate another available Lending Office for its LIBOR Loans, but
only if such designation would make it lawful for such Lender to continue to
make or maintain LIBOR Loans hereunder, provided that no Lender shall be
required to make any such designation that in its good faith determination,
would result in increased cost or economic, legal or regulatory disadvantage.
2.17 Taxes.
------
42
(a) Any and all payments by the Borrower hereunder or under any Note shall
be made, in accordance with the terms hereof and thereof, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on, or measured by, the overall net income (or branch or
franchise taxes imposed in lieu thereof) of the Agent or any Lender by reason of
any present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision thereof, other than such a connection arising solely from the Agent
or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or the Notes (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to the Agent or any Lender, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.17), the Agent or such Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower will make such deductions, (iii) the Borrower will pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower will deliver to the Agent
or such Lender, as the case may be, evidence of such payment.
(b) The Borrower will indemnify the Agent and each Lender for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.17) paid by the Agent or
such Lender, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date the Agent or such Lender, as the case may be,
makes written demand therefor.
(c) Each of the Agent and the Lenders agrees that if it subsequently
recovers, or receives a permanent net tax benefit with respect to, any amount of
Taxes (i) previously paid by it and as to which it has been indemnified by or on
behalf of the Borrower or (ii) previously deducted by the Borrower (including,
without limitation, any Taxes deducted from any additional sums payable under
Section 2.17(a)(i)), the Agent or such Lender, as the case may be, shall
reimburse the Borrower to the extent of the amount of any such recovery or
permanent net tax benefit (but only to the extent of indemnity payments made, or
additional amounts paid, by or on behalf of the Borrower under this Section 2.17
with respect to the Taxes giving rise to such recovery or tax benefit);
provided, however, that the Borrower, upon the request of the Agent or such
- -------- -------
Lender, agrees to repay to the Agent or such Lender, as the case may be, the
amount paid over to the Borrower (together with any penalties, interest or other
charges), in the event the Agent or such Lender is required to repay such amount
to the relevant taxing authority or other Governmental Authority. The
determination by the Agent or any Lender of the amount of any such recovery or
permanent net tax benefit shall be made in good faith and shall, in the absence
of manifest error, be conclusive and binding.
(d) If any Lender is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for federal income tax purposes (a "Non-U.S.
Lender") and is entitled to an exemption from or a reduction of United States
withholding tax pursuant to the Internal
43
Revenue Code, such Non-U.S. Lender will deliver to each of the Agent and the
Borrower, on or prior to the Closing Date (or, in the case of a Non-U.S. Lender
that becomes a party to this Agreement as a result of an assignment after the
Closing Date, on the effective date of such assignment), (i) in the case of a
Non-U.S. Lender that is a "bank" for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code, a properly completed Internal Revenue Service Form
W-8BEN, W-8ECI or W-8EXP, as applicable (or successor forms), certifying that
such Non-U.S. Lender is entitled to an exemption from or a reduction of
withholding or deduction for or on account of United States federal income taxes
in connection with payments under this Agreement or any of the Notes, together
with a properly completed Internal Revenue Service Form W-8 or W-9, as
applicable (or successor forms), and (ii) in the case of a Non-U.S. Lender that
is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue
Code, a certificate in form and substance reasonably satisfactory to the Agent
and the Borrower and to the effect that (x) such Non-U.S. Lender is not a "bank"
for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not
subject to regulatory or other legal requirements as a bank in any jurisdiction,
and has not been treated as a bank for purposes of any tax, securities law or
other filing or submission made to any governmental authority, any application
made to a rating agency or qualification for any exemption from any tax,
securities law or other legal requirements, (y) is not a ten (10) percent
shareholder for purposes of Section 881(c)(3)(B) of the Internal Revenue Code
and (z) is not a controlled foreign corporation receiving interest from a
related person for purposes of Section 881(c)(3)(C) of the Internal Revenue
Code, together with a properly completed Internal Revenue Service Form W-8 or
W-9, as applicable (or successor forms). Each such Non-U.S. Lender further
agrees to deliver to each of the Agent and the Borrower an additional copy of
each such relevant form on or before the date that such form expires or becomes
obsolete or after the occurrence of any event (including a change in its
applicable Lending Office) requiring a change in the most recent forms so
delivered by it, in each case certifying that such Non-U.S. Lender is entitled
to an exemption from or a reduction of withholding or deduction for or on
account of United States federal income taxes in connection with payments under
this Agreement or any of the Notes, unless an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required, which event renders
all such forms inapplicable or the exemption or reduction to which such forms
relate unavailable and such Non-U.S. Lender notifies the Agent and the Borrower
that it is not entitled to receive payments without or at a reduced rate of
deduction or withholding of United States federal income taxes. Each such
Non-U.S. Lender will promptly notify the Agent and the Borrower of any changes
in circumstances that would modify or render invalid any claimed exemption or
reduction.
(e) The Borrower shall not be required to indemnify any Non-U.S. Lender, or
to pay any additional amounts to any Non-U.S. Lender, in respect of United
States federal withholding tax to the extent that (i) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions of Section 2.17(d), (ii) any of the
representations or certifications made by a Non-U.S. Lender pursuant to Section
2.17(d) are incorrect at the time a payment hereunder is made, other than by
reason of any change in treaty, law or regulation having effect after the date
such representations or certifications were made, or (iii) the obligations to
withhold amounts with respect to United States federal withholding tax existed
on the date such Non-U.S. Lender became a party to this Agreement; provided,
--------
however, that this clause (iii) shall not apply to the extent that (y) the
- -------
indemnity payments or additional amounts any Lender would be entitled to receive
(without regard to this
44
clause (iii)) do not exceed the indemnity payment or additional amounts that the
person making the assignment, participation or transfer to such Lender would
have been entitled to receive in the absence of such assignment, participation
or transfer, or (z) such assignment, participation or transfer was requested by
the Borrower.
(f) Nothing in this Section 2.17 shall be deemed to require any Lender to
disclose any confidential information concerning its tax affairs.
2.18 Compensation. The Borrower will compensate each Lender upon written
------------
demand (which demand shall set forth the basis for requesting such compensation
and shall be copied to the Agent) for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund or maintain LIBOR Loans) that such Lender may incur or
sustain (i) if for any reason (other than a default by such Lender or the Agent
or, with respect to any Borrowing, a change in law described in Section 2.16 or
any Taxes payable as described in Section 2.17, in each such case arising during
the three (3) Business Days after a Notice of Borrowing and of which the
Borrower did not have knowledge at the time the Borrower submitted such Notice
of Borrowing, provided further that the Lenders shall not be required to extend
such Borrowing as a LIBOR Loan if such extension would create undue hardship for
such Lender) a Borrowing or continuation of, or conversion into, a LIBOR Loan
does not occur on a date specified therefor in a Notice of Borrowing or Notice
of Conversion/ Continuation, (ii) if any repayment, prepayment or conversion of
any LIBOR Loan occurs (other than a conversion of a LIBOR Loan pursuant to
Sections 2.16(c) and 2.16(d) on a date other than the last day of an Interest
Period applicable thereto (including as a consequence of acceleration of the
maturity of the Loans pursuant to Section 9.2), (iii) if any prepayment of any
LIBOR Loan is not made on any date specified in a notice of prepayment given by
the Borrower or (iv) as a consequence of any other failure by the Borrower to
make any payments with respect to any LIBOR Loan when due hereunder. Calculation
of all amounts payable to a Lender under this Section 2.18 shall be made as
though such Lender had actually funded its relevant LIBOR Loan through the
purchase of a Eurodollar deposit bearing interest at the LIBOR Rate in an amount
equal to the amount of such LIBOR Loan, having a maturity comparable to the
relevant Interest Period; provided, however, that each Lender may fund its LIBOR
-------- -------
Loans in any manner it sees fit and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this Section 2.18.
Determinations made in good faith by any Lender for purposes of this Section
2.18 of any such losses, expenses or liabilities shall, absent manifest error,
be conclusive.
2.19 Substitution of Lender. In the event that any Lender shall have
----------------------
delivered a notice or certificate pursuant to Section 2.16 or the Borrower shall
be required to pay additional amounts to any Lender under Section 2.17, the
Borrower shall have the right, at its own expense, upon notice to such Lender
and the Agent, to require such Lender to transfer and assign without recourse
(in accordance with and subject to the provisions set forth in Section 11.7) all
its interests, rights and obligations under this Agreement to another Eligible
Assignee which shall assume such obligations, provided, that, (i) no such
assignment shall conflict with any law, rule, regulation or order of any
Governmental Authority and (ii) the Borrower shall pay or cause to be paid to
the affected Lender in immediately available funds on the date of such
assignment the entire amount of principal of and interest accrued to the date of
payment on the Loans made by it hereunder and all other amounts accrued for its
account or owed to it hereunder; provided,
45
further, that, if prior to any such assignment the circumstances or event that
resulted in such Lender's notice or certificate under Section 2.16 or demand for
additional amounts under Section 2.17, as the case may be, shall cease to exist
or become inapplicable for any reason or if such Lender shall waive its rights
in respect of such circumstances or event under Section 2.16 or 2.17, as the
case may be, then such Lender shall not thereafter be required to make any such
assignment hereunder.
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance. Subject to and upon the terms and conditions herein set
--------
forth, so long as no Default or Event of Default has occurred and is continuing,
the Issuing Lender will, at any time and from time to time on and after the
Closing Date and prior to the earlier of (i) the seventh day prior to the
Maturity Date and (ii) the Termination Date, and upon request by the Borrower in
accordance with the provisions of Section 3.2, issue for the account of the
Borrower one or more irrevocable standby letters of credit denominated in
Dollars and in a form customarily used or otherwise approved by the Issuing
Lender (together with all amendments, modifications and supplements thereto,
substitutions therefor and renewals and restatements thereof, collectively, the
"Letters of Credit"). The Stated Amount of each Letter of Credit shall not be
less than $100,000 and there shall not be more than seven (7) Letters of Credit
outstanding at one time. Notwithstanding the foregoing:
(a) No Letter of Credit shall be issued the Stated Amount upon issuance of
which (i) when added to the aggregate Letter of Credit Exposure of the Lenders
at such time, would exceed $5,000,000 or (ii) when added to the sum of (x) the
aggregate Letter of Credit Exposure of all Lenders at such time, (y) the
aggregate principal amount of all Revolving Loans then outstanding and (z) the
aggregate principal amount of all Swingline Loans then outstanding, would exceed
the aggregate Revolving Credit Commitments at such time;
(b) No Letter of Credit shall be issued that by its terms expires later
than the seventh day prior to the Maturity Date or, in any event, more than one
(1) year after its date of issuance; provided, however, that a Letter of Credit
-------- -------
may, if requested by the Borrower, provide by its terms, and on terms acceptable
to the Issuing Lender, for renewal for successive periods of one year or less
(but not beyond the seventh day prior to the Maturity Date), unless and until
the Issuing Lender shall have delivered a notice of nonrenewal to the
beneficiary of such Letter of Credit; and
(c) The Issuing Lender shall be under no obligation to issue any Letter of
Credit if, at the time of such proposed issuance, (i) any order, judgment or
decree of any Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Lender or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall
46
impose upon the Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing Lender is
not otherwise compensated) not in effect on the Closing Date, or any
unreimbursed loss, cost or expense that was not applicable, or in effect as of
the Closing Date and that the Issuing Lender in good faith deems material to it,
or (ii) the Issuing Lender shall have actual knowledge, or shall have received
notice from any Lender, prior to the issuance of such Letter of Credit that one
or more of the conditions specified in Sections 4.1 (if applicable) or 4.2 are
not then satisfied (or have not been waived in writing as required herein) or
that the issuance of such Letter of Credit would violate the provisions of
subsection (a) above.
3.2 Notices. Whenever the Borrower desires the issuance of a Letter of
-------
Credit, the Borrower will give the Issuing Lender written notice with a copy to
the Agent not later than 11:00 a.m., Charlotte time, three (3) Business Days (or
such shorter period as is acceptable to the Issuing Lender in any given case)
prior to the requested date of issuance thereof. Each such notice (each, a
"Letter of Credit Notice") shall be irrevocable, shall be given in the form of
Exhibit B-4 and shall specify (i) the requested date of issuance, which shall be
a Business Day, (ii) the requested Stated Amount and expiry date of the Letter
of Credit, and (iii) the name and address of the requested beneficiary or
beneficiaries of the Letter of Credit. The Borrower will also complete any
application procedures and documents required by the Issuing Lender in
connection with the issuance of any Letter of Credit, provided, however, that
the terms of this Agreement shall govern in the event that there is any
inconsistency between the terms of such application and any of the terms and
conditions hereof. Upon its issuance of any Letter of Credit, the Issuing Lender
will promptly notify the Agent of such issuance, and the Agent will give prompt
notice thereof to each Lender.
3.3 Participations. Immediately upon the issuance of any Letter of Credit,
--------------
the Issuing Lender shall be deemed to have sold and transferred to each Lender,
and each Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Lender, without recourse or warranty, an
undivided interest and participation, pro rata (based on the percentage of the
aggregate Revolving Credit Commitments represented by such Lender's Revolving
Credit Commitment), in such Letter of Credit, each drawing made thereunder and
the obligations of the Borrower under this Agreement with respect thereto and
any security therefor or guaranty pertaining thereto; provided, however, that
-------- -------
the fee relating to Letters of Credit described in Section 2.9(c) shall be
payable directly to the Issuing Lender as provided therein, and the Lenders
shall have no right to receive any portion thereof. Upon any change in the
Revolving Credit Commitments of any of the Lenders pursuant to Section 11.7(a),
with respect to all outstanding Letters of Credit and Reimbursement Obligations
there shall be an automatic adjustment to the participations pursuant to this
Section to reflect the new pro rata shares of the assigning Lender and the
Assignee.
3.4 Reimbursement. The Borrower hereby agrees to reimburse the Issuing
-------------
Lender by making payment to the Agent, for the account of the Issuing Lender, in
immediately available funds, for any payment made by the Issuing Lender under
any Letter of Credit (each such amount so paid until reimbursed, together with
interest thereon payable as provided hereinbelow, a "Reimbursement Obligation")
------------------------
immediately after, and in any event within one (1) Business Day after its
receipt of notice of, such payment (provided that any such Reimbursement
--------
Obligation shall be deemed timely satisfied (but nevertheless subject to the
payment of interest thereon as
47
provided hereinbelow) if satisfied pursuant to a Borrowing of Revolving Loans
made on or prior to the next Business Day following the date of the Borrower's
receipt of notice of such payment), together with interest on the amount so paid
by the Issuing Lender, to the extent not reimbursed prior to 1:00 p.m.,
Charlotte time, on the date of such payment or disbursement, for the period from
the date of the respective payment to the date the Reimbursement Obligation
created thereby is satisfied, at the Adjusted Base Rate applicable to Revolving
Loans as in effect from time to time during such period, such interest also to
be payable on demand. The Issuing Lender will provide the Agent and the Borrower
with prompt notice of any payment or disbursement made under any Letter of
Credit, although the failure to give, or any delay in giving, any such notice
shall not release, diminish or otherwise affect the Borrower's obligations under
this Section or any other provision of this Agreement. The Agent will promptly
pay to the Issuing Lender any such amounts received by it under this Section.
3.5 Payment by Revolving Loans. In the event that the Issuing Lender makes
--------------------------
any payment under any Letter of Credit and the Borrower shall not have timely
satisfied in full its Reimbursement Obligation to the Issuing Lender pursuant to
Section 3.4, and to the extent that any amounts then held in the Cash Collateral
Account established pursuant to Section 3.8 shall be insufficient to satisfy
such Reimbursement Obligation in full, the Issuing Lender will promptly notify
the Agent, and the Agent will promptly notify each Lender, of such failure. If
the Agent gives such notice prior to 11:00 a.m., Charlotte time, on any Business
Day, each Lender will make available to the Agent, for the account of the
Issuing Lender, its pro rata share (based on the percentage of the aggregate
Revolving Credit Commitments represented by such Lender's Revolving Credit
Commitment) of the amount of such payment on such Business Day in immediately
available funds. If the Agent gives such notice after 11:00 a.m., Charlotte
time, on any Business Day, each such Lender shall make its pro rata share of
such amount available to the Agent on the next succeeding Business Day. If and
to the extent any Lender shall not have so made its pro rata share of the amount
of such payment available to the Agent, such Lender agrees to pay to the Agent,
for the account of the Issuing Lender, forthwith on demand such amount, together
with interest thereon at the Federal Funds Rate for each day from such date
until the date such amount is paid to the Agent. The failure of any Lender to
make available to the Agent its pro rata share of any payment under any Letter
of Credit shall not relieve any other Lender of its obligation hereunder to make
available to the Agent its pro rata share of any payment under any Letter of
Credit on the date required, as specified above, but no Lender shall be
responsible for the failure of any other Lender to make available to the Agent
such other Lender's pro rata share of any such payment. Each such payment by a
Lender under this Section of its pro rata share of an amount paid by the Issuing
Lender shall constitute a Revolving Loan by such Lender (the Borrower being
deemed to have given a timely Notice of Borrowing therefor) and shall be treated
as such for all purposes of this Agreement; provided that for purposes of
--------
determining the aggregate Unutilized Revolving Credit Commitments immediately
prior to giving effect to the application of the proceeds of such Revolving
Loans, the Reimbursement Obligation being satisfied thereby shall be deemed not
to be outstanding at such time.
3.6 Payment to Lenders. Whenever the Issuing Lender receives a payment in
------------------
respect of a Reimbursement Obligation as to which the Agent has received, for
the account of the Issuing Lender, any payments from the Lenders pursuant to
Section 3.5, the Issuing Lender will promptly pay to the Agent, and the Agent
will promptly pay to each Lender that has paid its pro
48
rata share thereof, in immediately available funds, an amount equal to such
Lender's ratable share (based on the proportionate amount funded by such Lender
to the aggregate amount funded by all Lenders) of such Reimbursement Obligation.
3.7 Obligations Absolute. The Reimbursement Obligations of the Borrower,
--------------------
and the obligations of the Lenders under Section 3.5 to make payments to the
Agent, for the account of the Issuing Lender, with respect to Letters of Credit,
shall be irrevocable, shall remain in effect until the Issuing Lender shall have
no further obligations to make any payments or disbursements under any
circumstances with respect to any Letter of Credit, and, except to the extent
resulting from any fraud, gross negligence or willful misconduct on the part of
the Issuing Lender, shall be absolute and unconditional, shall not be subject to
counterclaim, setoff or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances; provided, that the making of such reimbursement
payments shall not affect the rights of the Borrower or the Lenders to seek
damages or other remedies arising from any breach of the Issuing Lender's
standard of care as set forth in the final paragraph of this Section 3.7:
(a) Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to any Letter of
Credit;
(b) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of Credit or any
other amendment, modification or waiver of or any consent to departure from any
Letter of Credit or any documents or instruments relating thereto, in each case
whether or not the Borrower has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right that the
Borrower may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Issuing Lender, any Lender or other
Person, whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated hereby or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in any
such Letter of Credit);
(d) Any draft, certificate or any other document presented under the Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
(provided that such draft, certificate or other document appears on its face to
--------
comply with the terms of such Letter of Credit), any errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
telecopier or otherwise, or any errors in translation or in interpretation of
technical terms;
(e) Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (provided that any draft,
--------
certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof), any nonapplication or
misapplication by the beneficiary or any transferee of the
49
proceeds of such drawing or any other act or omission of such beneficiary or
transferee in connection with such Letter of Credit;
(f) The exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
fraud, gross negligence or willful misconduct, shall be binding upon the
Borrower and each Lender and shall not create or result in any liability of the
Issuing Lender to the Borrower or any Lender. It is expressly understood and
agreed that, for purposes of determining whether a wrongful payment under a
Letter of Credit resulted from the Issuing Lender's gross negligence or willful
misconduct, (i) the Issuing Lender's acceptance of documents that appear on
their face to comply with the terms of such Letter of Credit, without
responsibility for further investigation, regardless of any notice or
information to the contrary, (ii) the Issuing Lender's exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including the amount of any draft presented under such Letter
of Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any respect (so long as such
document appears on its face to comply with the terms of such Letter of Credit),
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and (iii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute gross negligence or willful misconduct of the Issuing Lender.
3.8 Cash Collateral Account. At any time and from time to time (i) after
-----------------------
the occurrence and during the continuance of an Event of Default, the Agent, at
the direction or with the consent of the Required Lenders, may require the
Borrower to deliver to the Agent such additional amount of cash as is equal to
the aggregate Stated Amount of all Letters of Credit at any time outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder) and (ii) in the event of a
prepayment under Section 2.6(b), the Agent will retain such amount as may then
be required to be retained, such amount to be held by the Agent in a cash
collateral account (the "Cash Collateral Account"). The Borrower hereby grants
to the Agent, for the benefit of the Issuing Lender and the Lenders, a Lien upon
and security interest in the Cash Collateral Account and all amounts held
therein from time to time as security for Letter of Credit Exposure, and for
application to the Borrower's Reimbursement Obligations as and when the same
shall arise. The Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest on the
investment of such amounts in Cash Equivalents, which investments shall be made
at the direction of the Borrower (unless a Default or Event of Default shall
have
50
occurred and be continuing, in which case the determination as to investments
shall be made at the option and in the discretion of the Agent), amounts in the
Cash Collateral Account shall not bear interest. Interest and profits, if any,
on such investments shall accumulate in such account. In the event of a drawing,
and subsequent payment by the Issuing Lender, under any Letter of Credit at any
time during which any amounts are held in the Cash Collateral Account, the Agent
will deliver to the Issuing Lender an amount equal to the Reimbursement
Obligation created as a result of such payment (or, if the amounts so held are
less than such Reimbursement Obligation, all of such amounts) to reimburse the
Issuing Lender therefor. Any amounts remaining in the Cash Collateral Account
after the expiration of all Letters of Credit and reimbursement in full of the
Issuing Lender for all of its obligations thereunder shall be held by the Agent,
for the benefit of the Borrower, to be applied against the Obligations in such
order and manner as the Agent may direct. If the Borrower is required to provide
cash collateral pursuant to Section 2.6(b), such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower on demand, provided that
--------
after giving effect to such return (i) the sum of (x) the aggregate principal
amount of all Revolving Loans outstanding at such time, (y) the aggregate
principal amount of all Swingline Loans outstanding at such time and (z) the
aggregate Letter of Credit Exposure of all Lenders at such time would not exceed
the aggregate Revolving Credit Commitments at such time and (ii) no Default or
Event of Default shall have occurred and be continuing at such time. If the
Borrower is required to provide cash collateral as a result of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within two (2) Business Days after all Events of Default have
been cured or waived.
3.9 Effectiveness. Notwithstanding any termination of the Revolving Credit
-------------
Commitments or repayment of the Loans, or both, the obligations of the Borrower
under this Article shall remain in full force and effect until the Issuing
Lender and the Lenders shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit.
ARTICLE IV
CONDITIONS OF EFFECTIVENESS AND BORROWING
4.1 Conditions of Effectiveness and Initial Borrowing. The effectiveness of
-------------------------------------------------
this Agreement on the Closing Date and the obligation of each Lender to make
Loans in connection with the initial Borrowing hereunder (whether or not on the
Closing Date) and the obligation of the Issuing Lender to issue the Initial
Letter of Credit hereunder (whether or not on the Closing Date), is subject to
the satisfaction of the following conditions precedent on the Closing Date:
(a) The Agent shall have received the following, each dated as of the
Closing Date (unless otherwise specified) and, except for the Notes and any
certificates or instruments required to be delivered under the Security
Agreement, in sufficient copies for each Lender:
(i) a Revolving Note for each Lender that is a party hereto as of the
Closing Date, in the amount of such Lender's Revolving Credit Commitment;
and a Swingline Note for the Swingline Lender, in the amount of the
Swingline Commitment, in each case
51
duly completed in accordance with the relevant provisions of Section 2.4
and executed by the Borrower;
(ii) the Subsidiary Guaranty, duly completed and executed by each
Subsidiary of the Borrower, and an Intercompany Note, duly completed and
executed by each Subsidiary of the Borrower;
(iii) the Security Agreement, duly completed and executed by the
Borrower and each Subsidiary of the Borrower, together with any
certificates evidencing the Capital Stock being pledged thereunder as of
the Closing Date and undated assignments separate from certificate for any
such certificate, duly executed in blank, and any promissory notes being
pledged thereunder, duly endorsed in blank;
(iv) the Mortgages, each duly executed by the Borrower or Subsidiary
owning such mortgaged property (provided that the Lenders agree that the
--------
satisfaction of this condition may be delayed to a date not more than sixty
(60) days following the Closing Date and the Borrower covenants and agrees
to satisfy this condition within such period);
(v) an intercreditor agreement, duly executed by the Lenders, Holders
and Agent (as such terms are defined in the Participation Agreement) under
the ELLF and the Borrower and each Subsidiary Guarantor and in form and
substance reasonably satisfactory to the Agents and the Lenders; and
(vi) the favorable opinion of Andrews & Kurth, special counsel to the
Borrower, addressed to the Agent and the Lenders and in form and substance
reasonably satisfactory to the Agents and the Lenders.
(b) The Agent shall have received a certificate, signed by the president,
the chief executive officer or the chief financial officer of the Borrower, in
form and substance satisfactory to the Agent, certifying that (i) all
representations and warranties of the Borrower contained in this Agreement and
the other Credit Documents are true and correct as of the Closing Date, both
immediately before and after giving effect to the consummation of the
transactions contemplated hereby and the application of the proceeds thereof,
(ii) no Default or Event of Default has occurred and is continuing, both
immediately before and after giving effect to the consummation of the
transactions contemplated hereby and the application of the proceeds thereof,
(iii) both immediately before and after giving effect to the consummation of the
transactions contemplated hereby and the application of the proceeds thereof, no
Material Adverse Change has occurred since December 31, 2000, and there exists
no event, condition or state of facts that could reasonably be expected to
result in a Material Adverse Change, and (iv) all conditions to Closing and the
initial extensions of credit hereunder (whether or not they occur on the Closing
Date) set forth in this Section have been satisfied or waived as required
hereunder.
(c) The Agent shall have received a certificate, signed by the chief
financial officer of the Borrower, in form and substance reasonably satisfactory
to the Agents, certifying that each of the Borrower and its Subsidiaries, after
giving effect to the consummation of the transactions contemplated hereby, (i)
has capital sufficient to carry on its businesses as conducted and as
52
proposed to be conducted, (ii) has assets with a fair saleable value, determined
on a going concern basis, (y) not less than the amount required to pay the
probable liability on its existing debts as they become absolute and matured and
(z) greater than the total amount of its liabilities (including identified
contingent liabilities, valued at the amount that can reasonably be expected to
become absolute and matured), and (iii) does not intend to, and does not
reasonably believe that it will, incur debts or liabilities beyond its ability
to pay such debts and liabilities as they mature.
(d) The Agent shall have received a certificate, signed by the president,
the chief executive officer or the chief financial officer of the Borrower, in
form and substance reasonably satisfactory to the Agents, certifying that the
Borrower (i) has issued, or is issuing substantially simultaneously with the
initial effectiveness of this Agreement, its Subordinated Notes in the principal
face amount of not less than $175,000,000 and (ii) substantially simultaneously
with the initial effectiveness of this Agreement, has amended, restated and
continued the ELLF.
(e) The Agent shall have received a certificate of the secretary or an
assistant secretary (or comparable officer or manager) of each of the Borrower
and its Subsidiaries, in form and substance satisfactory to the Agent,
certifying (i) that attached thereto is a true and complete copy of the articles
or certificate of incorporation (or comparable formative documents) and all
amendments thereto of the Borrower or such Subsidiary, as the case may be,
certified as of a recent date by the Secretary of State (or comparable
Governmental Authority) of its jurisdiction of organization, and that the same
has not been amended since the date of such certification, (ii) that attached
thereto is a true and complete copy of the bylaws (or comparable operating
agreement, partnership agreement or other documents) of the Borrower or such
Subsidiary, as the case may be, as then in effect and as in effect at all times
from the date on which the resolutions referred to in clause (iii) below were
adopted to and including the date of such certificate, and (iii) that attached
thereto is a true and complete copy of resolutions adopted by the board of
directors (or comparable governing body or entity) of the Borrower or such
Subsidiary, as the case may be, authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is a
party, and as to the incumbency and genuineness of the signature of each officer
of the Borrower or such Subsidiary, as the case may be, executing this Agreement
or any of such other Credit Documents, and attaching all such copies of the
documents described above.
(f) The Agent shall have received (i) a certificate as of a recent date of
the good standing of each of the Borrower and its Subsidiaries under the laws of
its jurisdiction of organization, from the Secretary of State (or comparable
Governmental Authority) of such jurisdiction and (ii) a certificate as of a
recent date of the qualification of each of the Borrower and its Subsidiaries to
conduct business as a foreign business entity in each jurisdiction where it is
so qualified as of the Closing Date, from the Secretary of State (or comparable
Governmental Authority) of such jurisdiction.
(g) All legal matters, documentation, and corporate or other proceedings
incident to the transactions contemplated hereby (including as related to the
Subordinated Notes and the ELLF) shall be satisfactory in form and substance to
the Agents; and all documentation (including the form of term sheet for PPM
Asset Dispositions and related material agreements) and all legal, regulatory,
tax, accounting, corporate structure and other matters relating to the
53
Restructuring (to the extent finalized, completed or otherwise known as of the
Closing Date) shall be satisfactory in form and substance to the Agents;
(h) All material approvals, permits and consents of any Governmental
Authorities or other Persons required in connection with the execution and
delivery of this Agreement and the other Credit Documents and the consummation
of the transactions contemplated hereby and thereby shall have been obtained,
without the imposition of conditions that are not acceptable to the Agents, and
all related filings, if any, shall have been made, and all such approvals,
permits, consents and filings shall be in full force and effect and the Agents
shall have received such copies thereof as they shall have requested; all
applicable waiting periods shall have expired without any adverse action being
taken by any Governmental Authority having jurisdiction; and no action,
proceeding, investigation, regulation or legislation shall have been instituted,
threatened or proposed before, and no order, injunction or decree shall have
been entered by, any court or other Governmental Authority, in each case to
enjoin, restrain or prohibit, to obtain substantial damages in respect of, or
that is otherwise related to or arises out of, this Agreement, any of the other
Credit Documents or the consummation of the transactions contemplated hereby or
thereby, or that, in the opinion of the Agents, could reasonably be expected to
have a Material Adverse Effect.
(i) The Agent shall have received certified reports from an independent
search service reasonably satisfactory to it listing any judgment or tax lien
filing or Uniform Commercial Code financing statement that (i) names the
Borrower as debtor in any of the jurisdictions listed beneath its name on
Schedule 4.1 or (ii) names any Subsidiary Guarantor as debtor in any of the
jurisdictions listed beneath its name on Schedule 4.1, and the results thereof
shall be satisfactory to the Agent.
(j) The Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registrations and other actions
(including, without limitation, the filing of duly completed and executed (A)
Mortgages and (B) UCC-1 financing statements in each jurisdiction listed on
Annex A to the Security Agreement) necessary or, in the reasonable opinion of
the Agent, desirable to perfect the Liens created by the Security Documents
shall have been completed, or arrangements reasonably satisfactory to the Agent
for the completion thereof shall have been made (provided that the Lenders agree
--------
that the satisfaction of this condition with respect to the Mortgages and any
UCC-1 fixture filings may be delayed to a date not more than sixty (60) days
following the Closing Date and the Borrower covenants and agrees to satisfy this
condition within such period).
(k) The Agent shall have received with respect to each parcel of real
property that is subject to a Mortgage, in form and substance satisfactory to
the Agent, (i) copies of existing environmental reports and such new or
additional environmental reports as may reasonably be requested by the Agent,
(ii) a policy or policies of title insurance insuring the Mortgages as valid
first liens on the mortgaged properties, free of liens (other than Permitted
Liens) or other exceptions to title not approved and accepted by the Agents,
(iii) flood zone certifications and, as required, certificates of flood
insurance, and (iv) other customary closing documents as are reasonably
requested by the Agent(provided that the Lenders agree that the satisfaction of
--------
this condition may be delayed to a date not more than sixty (60) days following
the Closing Date and the Borrower covenants and agrees to satisfy this condition
within such period).
54
(l) Since December 31, 2000, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not have occurred any Material Adverse Change or any event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Change.
(m) The Borrower shall have paid (i) to First Union Securities, Inc. and
UBS Warburg LLC, the unpaid balance of the fees described in paragraph (2) of
the Fee Letter, (ii) to the Agent, for the benefit of each Lender, the Fee
described in paragraph (1) of the Fee Letter, (iii) to the Agent, the initial
payment of the annual administrative fee described in paragraph (3) of the Fee
Letter, and (iv) all other fees and expenses of the Agent and the Lenders
required hereunder or under any other Credit Document to be paid on or prior to
the Closing Date (including fees and expenses of counsel) in connection with
this Agreement and the transactions contemplated hereby.
(n) The Agent shall have received (A) a Financial Condition Certificate,
together with the Pro Forma Balance Sheet and the Projections as described in
Sections 5.11(b) and 5.11(c), all of which shall be in form and substance
reasonably satisfactory to the Agent and (B) a certificate, signed by the chief
financial officer of the Borrower, in form and substance reasonably satisfactory
to the Agents, certifying that Consolidated EBITDA for the 12-month period
ending (i) November 30, 2001 is not less than $151,250,000, and (ii) December
31, 2001 is reasonably expected to be not less than $165,000,000.
(o) The Agent shall have received a Covenant Compliance Worksheet, duly
completed and certified by the chief financial officer of the Borrower and in
form and substance satisfactory to the Agent, demonstrating the Borrower's
compliance with the financial covenants set forth in Sections 7.1 through 7.5,
determined on an annualized basis for the 11-month period ending November 30,
2001 after giving pro forma effect to the consummation of the transactions
contemplated hereby and the application of the proceeds thereof and then ending.
(p) The Agent shall have received evidence satisfactory to it that, (w) all
principal, interest and other amounts outstanding with respect to the
Terminating Senior Indebtedness shall be repaid and satisfied in full, (x) all
commitments to extend credit under the agreements and instruments relating
thereto shall be terminated, (y) any Liens securing any Terminating Senior
Indebtedness shall be released and any related filings terminated of record (or
arrangements satisfactory to the Agent made therefor), and (z) any letters of
credit outstanding with respect to the Terminating Senior Indebtedness shall
have been terminated or canceled.
(q) The Agent shall have received evidence in form and substance reasonably
satisfactory to it that all of the requirements of Section 6.6 and those
provisions of the Security Agreement relating to the maintenance of insurance
have been satisfied, including receipt of certificates of insurance evidencing
the insurance coverages described on Schedule 5.17 and all other or additional
coverages required under the Security Agreement and naming the Agent as loss
payee or additional insured, as its interests may appear.
(r) The Agent shall have received an Account Designation Letter, together
with written instructions from an Authorized Officer, including wire transfer
information, directing the payment of the proceeds of the initial Loans to be
made hereunder.
55
(s) The Agent and each Lender shall have received such other documents,
certificates, opinions and instruments in connection with the transactions
contemplated hereby as it shall have reasonably requested.
4.2 Conditions of All Borrowings. The obligation of each Lender to make any
----------------------------
Loans hereunder, (but excluding Revolving Loans made for the purpose of repaying
Refunded Swingline Loans pursuant to Section 2.2), and the obligation of the
Issuing Lender to issue any Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance:
(a) The Agent shall have received a Notice of Borrowing in accordance with
Section 2.2(b), or (together with the Swingline Lender) a Notice of Swingline
Borrowing in accordance with Section 2.2(d), or (together with the Issuing
Lender) a Letter of Credit Notice in accordance with Section 3.2, as applicable;
(b) Each of the representations and warranties contained in Article V and
in the other Credit Documents shall be true and correct in all material respects
on and as of such Borrowing Date or date of issuance with the same effect as if
made on and as of such date, both immediately before and after giving effect to
the Loans to be made or Letter of Credit to be issued on such date (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty shall
be true and correct as of such date);
(c) No Default or Event of Default shall have occurred and be continuing on
such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit to be issued on such date; and
(d) With respect to Borrowings of Loans other than Swingline Loans, the
aggregate amount of cash and Cash Equivalents held by the Borrower and its
Subsidiaries shall not have exceeded $10,000,000 for the period of five (5)
consecutive Business Days ending on the Business Day immediately prior to such
Borrowing; provided that the Borrower may make a Borrowing under such
--------
circumstances if it certifies in the applicable Notice of Borrowing that
substantially all of such cash and Cash Equivalents and the proceeds of such
Borrowing will be disbursed to third parties for permitted business purposes
within five (5) Business Days following such Borrowing.
Each giving of a Notice of Borrowing, a Notice of Swingline Borrowing or a
Letter of Credit Notice, and the consummation of each Borrowing (including each
Swingline Borrowing under the procedures of a cash management program as
described in Section 2.2(d)) or issuance of a Letter of Credit, shall be deemed
to constitute a representation by the Borrower that the statements contained in
subsections (b) and (c) above are true, both as of the date of such notice or
request and as of the relevant Borrowing Date or date of issuance. Each
Borrowing of a Loan other than a Swingline Loan shall be deemed to constitute a
representation by the Borrower that the statements contained in subsection (d)
above are true as of the relevant Borrowing Date.
56
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to extend the credit contemplated hereby, the Borrower
represents and warrants to the Agent and the Lenders as follows:
5.1 Organization and Power. Each of the Borrower and its Subsidiaries (i)
----------------------
is a corporation, duly organized, validly existing and in good standing or
limited liability company or limited partnership duly organized and validly
existing under the laws of the jurisdiction of its organization, (ii) has the
full organizational power and authority to execute, deliver and perform the
Credit Documents to which it is or will be a party, to own and hold its property
and to engage in its business as presently conducted, and (iii) is duly
qualified to do business as a foreign business entity and is in good standing in
each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse
Effect.
5.2 Authorization; Enforceability. Each of the Borrower and its
-----------------------------
Subsidiaries has taken, or on the Closing Date will have taken, all necessary
organizational action to execute, deliver and perform each of the Credit
Documents to which it is or will be a party, and has, or on the Closing Date (or
any later date of execution and delivery) will have, validly executed and
delivered each of the Credit Documents to which it is a party. This Agreement
constitutes, and each of the other Credit Documents upon execution and delivery
will constitute, the legal, valid and binding obligation of each of the Borrower
and its Subsidiaries that is a party hereto or thereto, enforceable against each
such party in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, by general equitable principles or by
principles of good faith and fair dealing.
5.3 No Violation. The execution, delivery and performance by each of the
------------
Borrower and its Subsidiaries of this Agreement and each of the other Credit
Documents to which it is or will be a party, and compliance by it with the terms
hereof and thereof, do not and will not (i) violate any provision of its
articles or certificate of incorporation or bylaws (or comparable organizational
documents) or contravene any other Requirement of Law applicable to it, (ii)
conflict with, result in a breach of or constitute (with notice, lapse of time
or both) a default under any material indenture, agreement or other instrument
to which it is a party, by which it or any of its properties is bound or to
which it is subject, (iii) result in a material Limitation on any governmental
approval, license, permits and authorizations applicable to the business,
operations or properties of Borrower or any of its Subsidiaries or adversely
affect the ability of Borrower or any of its Subsidiaries to participate in any
Third Party Payor Arrangements, or (iv) except for the Liens granted in favor of
the Agent pursuant to the Security Documents and the Permitted Liens, result in
or require the creation or imposition of any Lien upon any of its properties or
assets. No Subsidiary is a party to any agreement or instrument or otherwise
subject to any encumbrance that restricts or limits its ability to make dividend
payments or other distributions in respect of its Capital Stock, to repay
Indebtedness owed to the Borrower or any other Subsidiary, to make loans or
advances to the Borrower or any other Subsidiary, or to transfer any
57
of its assets or properties to the Borrower or any other Subsidiary, in each
case other than such restrictions or encumbrances existing under or by reason of
the Credit Documents or applicable Requirements of Law.
5.4 Governmental and Third-Party Authorization; Permits.
---------------------------------------------------
(a) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by each of the Borrower and its Subsidiaries
of this Agreement or any of the other Credit Documents to which it is or will be
a party or the legality, validity or enforceability hereof or thereof, other
than (i) filings of Mortgages, Uniform Commercial Code financing statements and
other instruments and actions necessary to perfect the Liens created by the
Security Documents, (ii) consents, authorizations and filings that have been
made or obtained and that are in full force and effect, which consents,
authorizations and filings are listed on Schedule 5.4, and (iii) consents and
filings the failure to obtain or make which would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) Each of the Borrower and its Subsidiaries has, and is in good standing
with respect to, all governmental approvals, licenses, permits, authorizations
and all Reimbursement Approvals necessary to conduct its business as presently
conducted and to own or lease and operate its properties, except for those the
failure to obtain which would not individually or in the aggregate, have a
Material Adverse Effect. There is no pending or, to the knowledge of the
Borrower, threatened Limitation of any such governmental approval, license,
permit, authorization or Reimbursement Approval of the Borrower or any of its
Subsidiaries, except for such Limitations as would not individually or in
aggregate, have a Material Adverse Effect. No Medicare or Medicaid
certifications are required for operation of the business of the Borrower or any
of its Subsidiaries, and neither the Borrower nor any Subsidiary is required to
have entered into any Medicare or Medicaid provider agreement for the operation
of its business.
5.5 Litigation. There are no actions, suits, proceedings or, to the
----------
knowledge of Borrower, investigations pending or, to the knowledge of the
Borrower, threatened, at law, in equity or in arbitration, before any court,
other Governmental Authority or other Person, (i) against or affecting the
Borrower, any of its Subsidiaries or any of their respective properties that
would, be reasonably likely to have a Material Adverse Effect, or (ii) with
respect to this Agreement or any of the other Credit Documents.
5.6 Taxes. Each of the Borrower and its Subsidiaries has timely filed all
-----
material federal, state and local tax returns and reports required to be filed
by it and has paid all taxes, assessments, fees and other charges levied upon it
or upon its properties that are shown thereon as due and payable, other than
those that are being contested in good faith and by proper proceedings and for
which adequate reserves have been established in accordance with GAAP. Such
returns, as amended (if applicable), accurately reflect in all material respects
all liability for taxes of the Borrower and its Subsidiaries for the periods
covered thereby. There is no ongoing audit or examination or, to the knowledge
of the Borrower, other investigation by any Governmental Authority of the tax
liability of the Borrower or any of its Subsidiaries, and there is no unresolved
claim by any Governmental Authority concerning the tax liability of the
58
Borrower or any of its Subsidiaries for any period for which tax returns have
been or were required to have been filed, other than claims for which adequate
reserves have been established in accordance with GAAP. Neither the Borrower nor
any of its Subsidiaries has waived or extended or has been requested to waive or
extend the statute of limitations relating to the payment of any taxes.
5.7 Subsidiaries. Schedule 5.7 sets forth a list, as of the Closing Date,
------------
of all of the Subsidiaries of the Borrower and, as to each such Subsidiary, the
percentage ownership (direct and indirect) of the Borrower in each class of its
capital stock and each direct owner thereof. Except for the shares of capital
stock expressly indicated on Schedule 5.7, there are no shares of capital stock,
warrants, rights, options or other equity securities, or other Capital Stock of
any Subsidiary of the Borrower outstanding or reserved for any purpose. All
outstanding shares of capital stock of each Subsidiary of the Borrower are duly
and validly issued, fully paid and nonassessable. The Borrower or a Subsidiary
is the sole legal, record and beneficial owner of, and has good and valid title
to, all such capital stock, free and clear of all Liens other than the Liens
created pursuant to the Security Agreement.
5.8 Full Disclosure. All factual information heretofore or
---------------
contemporaneously furnished to the Agent or any Lender in writing by or on
behalf of the Borrower or any of its Subsidiaries for purposes of or in
connection with this Agreement and the transactions contemplated hereby is, and
all other such factual information hereafter furnished to the Agent or any
Lender in writing by or on behalf of the Borrower or any of its Subsidiaries
will be, true and accurate in all material respects on the date as of which such
information is dated or certified (or, if such information has been amended or
supplemented, on the date as of which any such amendment or supplement is dated
or certified) and not made incomplete by omitting to state a material fact
necessary to make the statements contained therein, in light of the
circumstances under which such information was provided, not misleading or, in
the case of projections, estimates and/or forecasts, is or will be prepared in
good faith by the Borrower's senior management and represent or will represent a
reasonable estimate of the future performance and financial condition of the
Borrower, based on assumptions (including as to business conditions) believed to
be reasonable at the time and subject to the uncertainties and approximations
inherent in any projections.
5.9 Margin Regulations. Neither the Borrower nor any of its Subsidiaries is
------------------
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. No
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit for such purpose or for any other purpose
that would violate or be inconsistent with Regulations T, U or X or any
provision of the Exchange Act.
5.10 No Material Adverse Change. There has been no Material Adverse Change
--------------------------
since December 31, 2000, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Change.
5.11 Financial Matters.
-----------------
59
(a) The Borrower has heretofore furnished to the Agent copies of (i) the
audited consolidated balance sheets of the Borrower and its Subsidiaries as of
December 31, 2000, 1999 and 1998, and the related statements of income, cash
flows and stockholders' equity for the fiscal years then ended, together with
the opinion of PricewaterhouseCoopers, LLP thereon, and (ii) the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as of November
30, 2001, and the related statements of income, cash flows and stockholders'
equity for the 11-month period then ended. Such financial statements have been
prepared in accordance with GAAP (subject, with respect to the unaudited
financial statements, to the absence of notes required by GAAP and to normal
year-end adjustments) and present fairly the financial condition of the Borrower
and its Subsidiaries on a consolidated basis as of the respective dates thereof
and the consolidated results of operations of the Borrower and its Subsidiaries
for the respective periods then ended. Except as reflected in the most recent
financial statements referred to above and the notes thereto, there are no
material liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of the type required to be disclosed by GAAP. Consolidated EBITDA
for the 11-month period ended November 30, 2001 is not less than $151,250,000.
(b) The unaudited pro forma balance sheet of the Borrower as of November
30, 2001, a copy of which has heretofore been delivered to the Agent, gives pro
forma effect to the issuance of the Subordinated Notes, the initial extensions
of credit made under this Agreement, and the payment of transaction fees and
expenses related to the foregoing, all as if such events had occurred on such
date (the "Pro Forma Balance Sheet"). The Pro Forma Balance Sheet has been
prepared in accordance with GAAP (subject to the absence of footnotes required
by GAAP and subject to normal year-end adjustments) and, subject to stated
assumptions made in good faith and having a reasonable basis set forth therein,
presents fairly the financial condition of the Borrower on an unaudited pro
forma basis as of the date set forth therein after giving effect to the
consummation of the transactions described above.
(c) The Borrower has prepared, and has heretofore furnished to the Agent a
copy of, the projected balance sheets and statements of income and cash flows of
the Borrower on an annual basis from the fiscal year ending December 31, 2001
through the fiscal year ending December 31, 2007, in each case giving effect to
the issuance of the Subordinated Notes, the initial extensions of credit made
under this Agreement, the payment of transaction fees and expenses related to
the foregoing, and the Restructuring (the "Projections"). In the opinion of
management of the Borrower, the assumptions used in the preparation of the
Projections were fair, complete and reasonable when made and continue to be
fair, complete and reasonable as of the date hereof. The Projections have been
prepared in good faith by the senior management of the Borrower, and represent a
reasonable estimate of the future performance and financial condition of the
Borrower, based on assumptions (including as to business conditions) believed to
be reasonable at the time and subject to the uncertainties and approximations
inherent in any projections.
(d) Each of the Borrower and its Subsidiaries, after giving effect to the
consummation of the transactions contemplated hereby, (i) has capital sufficient
to carry on its businesses as conducted and as proposed to be conducted, (ii)
has assets with a fair saleable value, determined on a going concern basis, (y)
not less than the amount required to pay the probable liability on its existing
debts as they become absolute and matured and (z) greater than the total amount
of its liabilities (including identified contingent liabilities, valued at the
amount that can reasonably be
60
expected to become absolute and matured), and (iii) does not intend to, and does
not reasonably believe that it will, incur debts or liabilities beyond its
ability to pay such debts and liabilities as they mature.
5.12 Ownership of Properties.
-----------------------
(a) Each of the Borrower and its Subsidiaries (i) has good and marketable
title to all real property owned by it, (ii) holds interests as lessee under
valid leases in full force and effect with respect to all material leased real
and personal property used in connection with its business, (iii) possesses or
has rights to use licenses, patents, copyrights, trademarks, service marks,
trade names and other assets sufficient to enable it to continue to conduct its
business substantially as heretofore conducted and without any material conflict
with the rights of others, and (iv) has good title to all of its other
properties and assets reflected in the most recent financial statements referred
to in Section 5.11(a) (except as sold or otherwise disposed of since the date
thereof in the ordinary course of business), in each case under (i), (ii), (iii)
and (iv) above free and clear of all Liens other than Permitted Liens.
(b) Schedule 5.12 lists, as of the Closing Date, all owned real property
interests of the Borrower and its Subsidiaries, indicating in each case the
identity of the owner, the address of the property, the nature of use of the
premises and whether such interest is or shall be subject to a Mortgage.
5.13 ERISA.
-----
(a) Each of the Borrower and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA, and each Plan is and
has been administered in compliance in all material respects with all applicable
Requirements of Law, including, without limitation, the applicable provisions of
ERISA and the Internal Revenue Code. No ERISA Event (i) has occurred within the
five-year period ending immediately prior to the Closing Date, (ii) has occurred
and is continuing, or (iii) to the knowledge of the Borrower, is reasonably
expected to occur with respect to any Plan. No Plan has any Unfunded Pension
Liability as of the most recent annual valuation date applicable thereto, and
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
(b) Neither the Borrower nor any ERISA Affiliate has had a complete or
partial withdrawal from any Multiemployer Plan, and to the knowledge of the
Borrower neither the Borrower nor any ERISA Affiliate would become subject to
any liability under ERISA that would have a Material Adverse Effect if the
Borrower or any ERISA Affiliate were to withdraw completely from all
Multiemployer Plans as of the most recent valuation date. To the knowledge of
the Borrower, no Multiemployer Plan is in "reorganization" or is "insolvent"
within the meaning of such terms under ERISA.
5.14 Environmental Matters.
---------------------
(a) No Hazardous Substances are or have been generated, used, located,
released, treated, disposed of or stored by the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person
(including any predecessor in interest) or otherwise, in, on or under any
portion of any real property, leased or owned, of the Borrower or any of its
61
Subsidiaries, except in material compliance with all applicable Environmental
Laws, and no portion of any such real property or, to the knowledge of the
Borrower, any other real property at any time leased, owned or operated by the
Borrower or any of its Subsidiaries, has been contaminated by any Hazardous
Substance; and no portion of any real property, leased or owned, of the Borrower
or any of its Subsidiaries has been or is presently the subject of an
environmental audit, assessment or remedial action.
(b) No portion of any real property, leased or owned, of the Borrower or
any of its Subsidiaries has been used by the Borrower or any of its Subsidiaries
or, to the knowledge of the Borrower, by any other Person, as or for a mine, a
landfill, a dump or other disposal facility, a gasoline service station, or
(other than for petroleum substances stored in the ordinary course of business)
a petroleum products storage facility; no portion of such real property or any
other real property at any time leased, owned or operated by the Borrower or any
of its Subsidiaries has, pursuant to any Environmental Law, been placed on the
"National Priorities List" or "CERCLIS List" (or any similar federal, state or
local list) of sites subject to possible environmental problems; and there are
not and have never been any underground storage tanks situated on any real
property, leased or owned, of the Borrower or any of its Subsidiaries.
(c) All activities and operations of the Borrower and its Subsidiaries are
in compliance with the requirements of all applicable Environmental Laws, except
to the extent the failure so to comply, individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect. Each of the Borrower
and its Subsidiaries has obtained all licenses and permits under Environmental
Laws necessary to its respective operations; all such licenses and permits are
being maintained in good standing; and each of the Borrower and its Subsidiaries
is in compliance with all terms and conditions of such licenses and permits,
except for such licenses and permits the failure to obtain, maintain or comply
with which would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Borrower nor any of its Subsidiaries is involved in any
suit, action or proceeding, or has received any notice, complaint or other
request for information from any Governmental Authority or other Person, with
respect to any actual or alleged Environmental Claims that, would, individually
or in the aggregate, have a Material Adverse Effect; and, to the knowledge of
the Borrower, there are no threatened actions, suits, proceedings or
investigations with respect to any such Environmental Claims, nor any basis
therefor.
5.15 Compliance with Laws. Each of the Borrower and its Subsidiaries has
--------------------
timely filed all material reports, documents and other materials required to be
filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and operation of its properties, except for such
Requirements of Law the failure to comply with which, individually or in the
aggregate, would not have a Material Adverse Effect.
5.16 Regulated Industries. Neither the Borrower nor any of its Subsidiaries
--------------------
is (i) an "investment company," a company "controlled" by an "investment
company," or an "investment advisor," within the meaning of the Investment
Company Act of 1940, as amended, or (ii) a "holding company," a "subsidiary
company" of a "holding company," or an "affiliate" of a
62
"holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.17 Insurance. Schedule 5.17 sets forth a true and complete summary of all
---------
insurance policies or arrangements carried or maintained by the Borrower and its
Subsidiaries as of the Closing Date, indicating in each case the insurer, policy
number, expiration, amount and type of coverage and deductibles. The assets,
properties and business of the Borrower and its Subsidiaries are insured against
such hazards and liabilities, under such coverages and in such amounts, as are
customarily maintained by prudent companies similarly situated and under
policies issued by insurers of recognized responsibility.
5.18 Material Contracts. As of the Closing Date, (i) each Material Contract
------------------
has been disclosed in the Borrower's Exchange Act filings in accordance with the
requirements of the Exchange Act; (ii) each Material Contract is in full force
and effect and is enforceable by the Borrower or the Subsidiary that is a party
thereto in accordance with its terms, and (iii) neither the Borrower nor any of
its Subsidiaries (nor, to the knowledge of the Borrower, any other party
thereto) is in breach of or default under any Material Contract in any material
respect or has given notice of termination or cancellation of any Material
Contract.
5.19 Security Documents. The provisions of each of the Security Documents
------------------
(whether executed and delivered prior to or on the Closing Date or thereafter)
are and will be effective to create in favor of the Agent, for its benefit and
the benefit of the Lenders, a valid and enforceable security interest in and
Lien upon all right, title and interest of each of the Borrower and its
Subsidiaries that is a party thereto in and to the Collateral purported to be
pledged by it thereunder and described therein, and upon (i) the initial
extension of credit hereunder, (ii) the recording of the Mortgages and payment
of all required recording fees and mortgage taxes, (iii) the filing of
appropriately completed Uniform Commercial Code financing statements and
continuations thereof in the jurisdictions specified therein, (iv) the filing of
appropriately completed short-form assignments in the U.S. Patent and Trademark
Office and the U.S. Copyright Office, and (v) the possession by the Agent of any
certificates evidencing the securities pledged thereby, such security interest
and Lien shall constitute a fully perfected and first priority security interest
in and Lien upon such right, title and interest of the Borrower or such
Subsidiary, as applicable, in and to such Collateral, to the extent that such
security interest and Lien can be perfected by such filings, actions and
possession, subject only to Permitted Liens.
5.20 Reimbursement from Third Party Payors. The accounts receivable of the
-------------------------------------
Borrower and its Subsidiaries have been and will continue to be adjusted to
reflect reimbursement policies under all applicable Requirements of Law and
other Third Party Payor Arrangements to which the Borrower or such Subsidiary
(or the physician practices for which the Borrower or such Subsidiary bills and
collects) is subject, and do not exceed in any material respect amounts the
Borrower or such Subsidiary (or the physician practices for which the Borrower
or such Subsidiary bills and collects) is entitled to receive under any
capitation arrangement, fee schedule, discount formula, cost-based reimbursement
or other adjustment or limitation to usual charges. All physician practices
billings by the Borrower and each Subsidiary pursuant to physician practices'
Third Party Payor Arrangements have been made in compliance with all applicable
Requirements of Law, except where failure to comply would not, individually
63
or in the aggregate, be reasonably likely to have a Material Adverse Effect; and
there has been no intentional or material overbilling or overcollection pursuant
to any Third Party Payor Arrangements, other than as created by routine
adjustments and disallowances made in the ordinary course of business by the
payors with respect to such billings.
5.21 Fraud and Abuse. Neither the Borrower nor any Subsidiary, nor any of
---------------
its partners, members, stockholders (other than the stockholders of the
Borrower), officers or directors, acting on behalf of the Borrower or any
Subsidiary, have engaged on behalf of Borrower or any Subsidiary in any
activities that are prohibited under 42 U.S.C. Section 1320a-7b, 42 U.S.C.
Section 1395nn, or the regulations promulgated thereunder, or related
Requirements of Law, or under any similar state law or regulation, or that are
prohibited by rules of professional conduct, including, without limitation, the
following: (i) knowingly and willfully making or causing to be made a false
statement or misrepresentation of a material fact in any application for any
benefit or payment; (ii) knowingly and willfully making or causing to be made
any false statement or misrepresentation of a material fact for use in
determining rights to any benefit or payment; (iii) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to secure such benefit or payment fraudulently; (iv)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
or in kind, or offering to pay or receive such remuneration (a) in return for
referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare, Medicaid or any other government or private third party payor,
or (b) in return for purchasing, leasing or ordering or arranging for or
recommending purchasing, leasing or ordering any good, facility, service, or
item for which payment may be made in whole or in part by Medicare, Medicaid or
any other government or private third party payor; (v) making any prohibited
referral for designated health services, or presenting or causing to be
presented a claim or bill to any individual, third party payor or other entity
for designated health services furnished pursuant to a prohibited referral.
Neither the Borrower nor any Subsidiary shall be considered to be in breach of
this Section 5.21 so long as (A) it shall have taken such actions (including
implementation of appropriate internal controls) as may be reasonably necessary
to avoid such prohibited actions and (B) such prohibited actions as have
occurred, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Revolving Credit Commitments, the termination or expiration of all Letters of
Credit (unless fully cash collateralized) and the payment in full of all
principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
6.1 Financial Statements. The Borrower will deliver to each Lender:
--------------------
64
(a) Within forty-five (45) days after the end of each of the first three
fiscal quarters of each fiscal year, beginning with the fiscal quarter ending
March 31, 2002, unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and unaudited consolidated
statements of income, cash flows and stockholders' equity for the Borrower and
its Subsidiaries for the fiscal quarter then ended and for that portion of the
fiscal year then ended, in each case setting forth comparative consolidated
figures as of the end of and for the corresponding period in the preceding
fiscal year, all in reasonable detail and prepared in accordance with GAAP
(subject to the absence of notes required by GAAP and subject to normal year-end
adjustments) applied on a basis consistent with that of the preceding quarter or
containing disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such quarter; and
(b) Within ninety (90) days after the end of each fiscal year, beginning
with the fiscal year ending December 31, 2001, (i) an audited consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal
year and audited consolidated statements of income, cash flows and stockholders'
equity for the Borrower and its Subsidiaries for the fiscal year then ended,
including the notes thereto, in each case setting forth comparative figures as
of the end of and for the preceding fiscal year, all in reasonable detail and
certified by the independent certified public accounting firm regularly retained
by the Borrower or another independent certified public accounting firm of
recognized national standing reasonably acceptable to the Required Lenders,
together with (y) a report thereon by such accountants that is not qualified as
to going concern or scope of audit and to the effect that such financial
statements present fairly the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as of the dates and for the
periods indicated in accordance with GAAP applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such year, and (z) a report by such
accountants to the effect that, based on and in connection with their
examination of the financial statements of the Borrower and its Subsidiaries,
they obtained no knowledge of the occurrence or existence of any Default or
Event of Default relating to accounting or financial reporting matters, or a
statement specifying the nature and period of existence of any such Default or
Event of Default disclosed by their audit; provided, however, that such
-------- -------
accountants shall not be liable by reason of the failure to obtain knowledge of
any Default or Event of Default that would not be disclosed or revealed in the
course of their audit examination, and (ii) an unaudited consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and
unaudited consolidating statements of income for the Borrower and its
Subsidiaries for the fiscal year then ended, all in reasonable detail.
6.2 Other Business and Financial Information. The Borrower will deliver to
----------------------------------------
each Lender:
(a) Concurrently with each delivery of the financial statements described
in Section 6.1,
(i) a Compliance Certificate with respect to the period covered by the
financial statements then being delivered, executed by a Financial Officer
of the Borrower, together with a Covenant Compliance Worksheet reflecting
the computation of
65
the financial covenants set forth in Sections 7.1 through 7.5 as of the
last day of the period covered by such financial statements;
(ii) a report with respect to the period covered by the financial
statements then being delivered, executed by a Financial Officer of the
Borrower and in form and substance satisfactory to the Agents, detailing
each (A) new Management Services Agreement, (B) conversion of a Management
Services Agreement from the "net revenue model" to the "earnings model" or
other material change to a Management Services Agreement, and (C)
termination of a Management Services Agreement, including whether such
termination was in connection with a PPM Asset Disposition and whether the
affiliated physicians or physician practice group entered into an agreement
under the Borrower's "service line model";
(b) Concurrently with each delivery of the financial statements described
in Section 6.1(b), and in any event not later than ninety (90) days after the
last day of each fiscal year, beginning with the fiscal year ending December 31,
2002 a certificate executed by a Financial Officer of the Borrower in form and
substance satisfactory to the Agent and setting forth the calculation of Excess
Cash Flow for such fiscal year;
(c) As soon as available and in any event within thirty (30) days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
2002, a consolidated operating budget for the Borrower and its Subsidiaries for
the then-current fiscal year (prepared on a quarterly basis), consisting of a
consolidated balance sheet and consolidated statements of income and cash flows,
together with a certificate of a Financial Officer of the Borrower to the effect
that such budgets have been prepared in good faith and are reasonable estimates
of the financial position and results of operations of the Borrower and its
Subsidiaries for the period covered thereby; and as soon as available from time
to time thereafter, any modifications or revisions to or restatements of such
budget;
(d) Promptly after review by the Borrower's board of directors, copies of
any "management letter" submitted to the Borrower or any of its Subsidiaries by
its certified public accountants in connection with each annual, interim or
special audit, and promptly upon completion thereof, any response reports from
the Borrower or any such Subsidiary in respect thereof;
(e) Promptly upon the sending, filing or receipt thereof, copies of (i) all
financial statements, reports, notices and proxy statements that the Borrower or
any of its Subsidiaries shall send or make available generally to its
shareholders, (ii) all regular, periodic and special reports, registration
statements and prospectuses (other than on Form S-8) that the Borrower or any of
its Subsidiaries shall render to or file with the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any national
securities exchange, and (iii) all press releases made available generally by
the Borrower or any of its Subsidiaries to the public concerning material
developments in the business of the Borrower and its Subsidiaries, taken as a
whole;
66
(f) Promptly upon (and in any event within five (5) Business Days after)
any Responsible Officer of the Borrower obtaining knowledge thereof, written
notice of any of the following:
(i) the occurrence of any Default or Event of Default, together with a
written statement of a Responsible Officer of the Borrower specifying the
nature of such Default or Event of Default, the period of existence thereof
and, to the extent then determined, the action that the Borrower has taken
and proposes to take with respect thereto;
(ii) the institution or threatened institution of any action, suit,
investigation or proceeding against or, to the Borrower's knowledge,
affecting the Borrower or any of its Subsidiaries, including any such
investigation or proceeding by any Governmental Authority (other than
routine periodic inquiries, investigations or reviews), that would, be
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect, and any material development in any litigation or other
proceeding previously reported pursuant to Section 5.5 or this subsection;
(iii) the receipt by the Borrower or any of its Subsidiaries from any
Governmental Authority of (y) any notice asserting any failure by the
Borrower or any of its Subsidiaries to be in compliance with applicable
Requirements of Law or that threatens the taking of any action against the
Borrower or such Subsidiary or sets forth other circumstances that would be
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect, or (z) any notice of any actual or threatened Limitation or
revocation of, failure to renew, or imposition of any restraining order,
escrow or impoundment of funds in connection with, any license, permit,
accreditation, authorization or Reimbursement Approval of the Borrower or
any of its Subsidiaries, where such action would be reasonably likely to
have a Material Adverse Effect;
(iv) the occurrence of any ERISA Event, together with (x) a written
statement of a Responsible Officer of the Borrower specifying the details
of such ERISA Event and the action that the Borrower has taken and proposes
to take with respect thereto, (y) a copy of any notice, if available, with
respect to such ERISA Event that may be required to be filed with the PBGC
and (z) a copy of any notice, if available, delivered by the PBGC to the
Borrower or such ERISA Affiliate with respect to such ERISA Event;
(v) the occurrence of any material default under, or any proposed or
threatened termination or cancellation of, any Material Contract or other
material contract or agreement to which the Borrower or any of its
Subsidiaries is a party, the termination or cancellation of which would be
reasonably likely to have a Material Adverse Effect;
(vi) the occurrence of any of the following: (x) the assertion of any
Environmental Claim against or affecting the Borrower, any of its
Subsidiaries or any of their respective real property, leased or owned; (y)
the receipt by the Borrower or any of its Subsidiaries of notice of any
alleged violation of or noncompliance with any Environmental Laws; or (z)
the taking of any remedial action by the Borrower, any of its Subsidiaries
or any other Person in response to the actual or alleged generation,
storage, release, disposal or discharge of any Hazardous Substances on, to,
upon or from any real
67
property leased or owned by the Borrower or any of its Subsidiaries; but in
each case under clauses (x), (y) and (z) above, only to the extent the same
would be reasonably likely to have a Material Adverse Effect;
(vii) the receipt by any Borrower or any of it Subsidiaries of (x) any
notice of loss of Joint Commission on Accreditation of Healthcare
Organizations accreditation, loss of participation under any material
reimbursement program or loss of applicable health care licenses at any
facility owned or leased or managed by the Borrower or any of its
Subsidiaries; and (y) any other material deficiency notice, compliance
order or adverse report issued by any Governmental Authority or
accreditation commission having jurisdiction over licensing, accreditation
or operation of any such facility or by any Governmental Authority or
private insurance company pursuant to a provider agreement, which, if not
promptly complied with or cured, could result in the suspension or
forfeiture of any license, certification, or accreditation necessary for
any such facility to carry on its business as then conducted or the
suspension or termination of any Third Party Payor Arrangement available to
the facility; and
(viii) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written
statement of a Responsible Officer of the Borrower setting forth the nature
and period of existence thereof and the action that the Borrower has taken
and proposes to take with respect thereto; and
(g) As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of the
Borrower or any of its Subsidiaries (including any Plan and any information
required to be filed under ERISA) as the Agent or any Lender may from time to
time reasonably request.
6.3 Existence; Franchises; Maintenance of Properties. The Borrower will,
------------------------------------------------
and will cause each of its Subsidiaries to, (i) maintain and preserve in full
force and effect its legal existence, except as expressly permitted otherwise by
Section 8.1, (ii) obtain, maintain and preserve in full force and effect all
other rights, franchises, licenses, permits, certifications, approvals, and
authorizations required by Governmental Authorities and necessary to the
ownership, occupation or use of its properties or the conduct of its business,
except to the extent the failure to do so would not be reasonably likely to have
a Material Adverse Effect, and (iii) keep all material properties in good
working order and condition (normal wear and tear excepted) and from time to
time make all necessary repairs to and renewals and replacements of such
properties, except to the extent that any of such properties are obsolete or are
being replaced.
6.4 Compliance with Laws. The Borrower shall, and shall cause each of its
--------------------
Subsidiaries to comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure so to comply would not be
reasonably likely to have a Material Adverse Effect.
6.5 Payment of Obligations. The Borrower will, and will cause each of its
----------------------
Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to
68
have a Material Adverse Effect, and (ii) pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it, upon its income
or profits or upon any of its properties, prior to the date on which penalties
would attach thereto, and all lawful claims that, if unpaid, might become a Lien
upon any of the properties of the Borrower or any of its Subsidiaries; provided,
--------
however, that neither the Borrower nor any of its Subsidiaries shall be required
- -------
to pay any such tax, assessment, charge, levy or claim that is being contested
in good faith and by proper proceedings and as to which the Borrower or such
Subsidiary is maintaining adequate reserves with respect thereto in accordance
with GAAP.
6.6 Insurance. The Borrower will, and will cause each of its Subsidiaries
---------
to, maintain with financially sound and reputable insurance companies insurance
with respect to its assets, properties and business, against such hazards and
liabilities, of such types and in such amounts, as is customarily maintained by
companies in the same or similar businesses similarly situated, and maintain
such other or additional insurance on such terms and subject to such conditions
as may be required under any Security Document.
6.7 Maintenance of Books and Records; Inspection. The Borrower will, and
--------------------------------------------
will cause each of its Subsidiaries to, (i) maintain adequate books, accounts
and records, in which full, true and correct entries shall be made of all
financial transactions in relation to its business and properties, and prepare
all financial statements required under this Agreement, in each case in
accordance with GAAP (except as otherwise provided herein) and in compliance
with the requirements of any Governmental Authority having jurisdiction over it,
and (ii) upon written request, permit employees or agents of the Agent or any
Lender to visit and inspect its properties and examine or audit its books,
records, working papers and accounts and make copies and memoranda of them, and
to discuss its affairs, finances and accounts with its officers and employees
and, upon notice to the Borrower, (and, if requested by Borrower, in the
presence of the Borrower), the independent public accountants of the Borrower
and its Subsidiaries (and by this provision the Borrower authorizes such
accountants to discuss the finances and affairs of the Borrower and its
Subsidiaries), all at such times and from time to time, upon reasonable notice
and during business hours, as may be reasonably requested.
6.8 Permitted Acquisitions.
----------------------
(a) Subject to the provisions of subsection (b) below and the requirements
contained in the definition of Permitted Acquisition, and subject to the other
terms and conditions of this Agreement, the Borrower may from time to time on or
after the Closing Date effect Permitted Acquisitions, provided that, with
--------
respect to each Permitted Acquisition:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of the consummation of such Permitted Acquisition or
would exist immediately after giving effect thereto;
(ii) to the extent payable in cash, the Acquisition Amount with
respect thereto (y) shall not exceed $5,000,000, and (z) together with the
aggregate of the Acquisition Amounts (to the extent paid or payable in
cash) for all other Permitted Acquisitions consummated during any fiscal
year, shall not exceed $15,000,000; and
69
(iii) the Acquisition Amount with respect thereto (regardless of the
form of consideration) (y) shall not exceed $10,000,000, and (z) together
with the aggregate of the Acquisition Amounts (regardless of the form of
consideration) for all other Permitted Acquisitions consummated during any
fiscal year, shall not exceed $20,000,000.
(b) Not less than ten (10) Business Days prior to the consummation of any
Permitted Acquisition with respect to which the Acquisition Amount exceeds
$4,000,000, the Borrower shall have delivered to the Agent and each Lender the
following:
(i) a reasonably detailed description of the material terms of such
Permitted Acquisition (including, without limitation, the purchase price
and method and structure of payment) and of each Person or business that is
the subject of such Permitted Acquisition (each, a "Target");
(ii) historical financial statements of the Target (or, if there are
two or more Targets that are the subject of such Permitted Acquisition and
that are part of the same consolidated group, consolidated historical
financial statements for all such Targets) for the two (2) most recent
fiscal years available and, if available, for any interim periods since the
most recent fiscal year-end;
(iii) consolidated projected income statements of the Borrower and its
Subsidiaries (giving effect to such Permitted Acquisition and the
consolidation with the Borrower of each relevant Target) for the three-year
period following the consummation of such Permitted Acquisition, in
reasonable detail, together with any appropriate statement of assumptions
and pro forma adjustments; provided that this clause (iii) shall apply only
--------
with respect to Acquisitions having an Acquisition Amount in excess of
$6,000,000; and
(iv) a certificate, in form and substance reasonably satisfactory to
the Agent, executed by a Financial Officer of the Borrower setting forth
the Acquisition Amount (or if such amount cannot be determined, an estimate
of the Acquisition Amount based on the knowledge of such Financial Officer)
and further to the effect that, to the best of such individual's knowledge,
(x) the consummation of such Permitted Acquisition will not result in a
violation of any provision of this Section, and after giving effect to such
Permitted Acquisition and any Borrowings made in connection therewith, the
Borrower will be in compliance with the financial covenants contained in
Sections 7.1 through 7.5, such compliance determined with regard to
calculations made on a pro forma basis in accordance with GAAP (as
--- -----
applicable) as if each Target had been consolidated with the Borrower for
those periods applicable to such covenants (such calculations to be
attached to the certificate), (y) the Borrower believes in good faith that
it will continue to comply with such financial covenants for a period of
one year following the date of the consummation of such Permitted
Acquisition, and (z) after giving effect to such Permitted Acquisition and
any Borrowings in connection therewith, the Borrower believes in good faith
that it will have sufficient availability under the Revolving Credit
Commitments to meet its ongoing working capital requirements.
70
(c) As soon as reasonably practicable after the consummation of any
Permitted Acquisition, the Borrower will deliver to the Agent (and to each other
Lender as requested) a copy of the fully executed acquisition agreement
(including schedules and exhibits thereto) and other material documents and
closing papers delivered in connection therewith.
(d) The consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by the Borrower that (except as shall have been
approved in writing by the Required Lenders) all conditions thereto set forth in
this Section and in the description furnished under clause (i) of subsection (b)
above have been satisfied, that the same is permitted in accordance with the
terms of this Agreement, and that the matters certified to by the Financial
Officer of the Borrower in the certificate referred to in clause (iv) of
subsection (b) above are, to the best of such individual's knowledge, true and
correct in all material respects as of the date such certificate is given, which
representation and warranty shall be deemed to be a representation and warranty
as of the date thereof for all purposes hereunder, including, without
limitation, for purposes of Sections 4.2 and 9.1.
6.9 Creation or Acquisition of Subsidiaries. Subject to the provisions of
---------------------------------------
Section 8.5, the Borrower may from time to time create or acquire new Wholly
Owned Subsidiaries in connection with Permitted Acquisitions or otherwise, and
the Wholly Owned Subsidiaries of the Borrower may create or acquire new Wholly
Owned Subsidiaries, provided that:
--------
(a) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or direct or indirect acquisition by the Borrower
thereof, each such new Subsidiary (a) having assets with a gross value
(determined in accordance with GAAP) in excess of $110,000 or (b) having
commenced the conduct of active business, will execute and deliver to the Agent
(i) a joinder to the Subsidiary Guaranty, pursuant to which such new Subsidiary
shall become a party thereto and shall guarantee the payment of the Obligations
of the Borrower under this Agreement and the other Credit Documents, and (ii) a
joinder to the Security Agreement, pursuant to which such new Subsidiary shall
become a party thereto and shall grant to the Agent a first priority Lien upon
and security interest in its accounts receivable, inventory, equipment, general
intangibles and other personal property as Collateral for its obligations under
the Subsidiary Guaranty, subject only to Permitted Liens; provided that if any
--------
new Subsidiary initially does not meet the criteria of clauses (a) or (b) of
this subsection, such Subsidiary shall comply with the provisions hereof within
ten (10) Business Days after it first meets either of such criteria;
(b) Concurrently with a Subsidiary delivering a joinder to the Subsidiary
Guaranty as required by Section 6.9(a), the Borrower or parent Subsidiary, as
applicable, will execute and deliver to the Agent an amendment or supplement to
the Security Agreement pursuant to which all of the Capital Stock of such new
Subsidiary owned by the Borrower or such parent Subsidiary shall be pledged to
the Agent, together with the certificates evidencing such Capital Stock and
undated stock powers duly executed in blank;
(c) As promptly as reasonably possible, the Borrower and its Subsidiaries
will deliver any such other documents, certificates and opinions (including
opinions of local counsel in the jurisdiction of organization of each such new
Subsidiary), in form and substance reasonably satisfactory to the Agent, as the
Agent may reasonably request in connection therewith and will
71
take such other action as the Agent may reasonably request to create in favor of
the Agent a perfected security interest in the Collateral being pledged pursuant
to the documents described above.
6.10 Additional Security. The Borrower will, and will cause each of its
-------------------
Subsidiaries to, grant to the Agent from time to time security interests,
mortgages and other Liens in and upon such assets and properties of the Borrower
or such Subsidiary as are not covered by the Security Documents executed and
delivered on the Closing Date or pursuant to Section 6.9 and as may be
reasonably requested from time to time by the Required Lenders (including,
without limitation, Liens on assets acquired by the Borrower or a Subsidiary in
connection with any Permitted Acquisition); provided that the Borrower and its
--------
Subsidiaries shall promptly grant to the Agent (without the need for any request
by the Required Lenders of the Agent) security interests, mortgages and other
applicable Liens in and upon all real and personal property at any time acquired
out of the ELLF (without the need for any request by the Required Lenders or the
Agent) except to the extent such assets are used to secure purchase money
financing permitted pursuant to Section 8.3(vi) or another credit facility that
would be defined as the ELLF. Such security interests, mortgages and Liens shall
be granted pursuant to documentation in form and substance reasonably
satisfactory to the Agent and shall constitute valid and perfected security
interests and Liens, subject to no Liens other than Permitted Liens. Without
limitation of the foregoing, (i) in connection with the grant of any mortgage or
deed of trust with respect to any interest in real property, the Borrower will,
and will cause each applicable Subsidiary to, at the Borrower's expense,
prepare, obtain and deliver to the Agent any environmental assessments,
appraisals, surveys, title insurance and other matters or documents as the Agent
may reasonably request or as may be required under applicable banking laws and
regulations.
6.11 Further Assurances. The Borrower will, and will cause each of its
------------------
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Agent or the Required
Lenders to perfect and maintain the validity and priority of the Liens granted
pursuant to the Security Documents and to effect, confirm or further assure or
protect and preserve the interests, rights and remedies of the Agent and the
Lenders under this Agreement and the other Credit Documents.
ARTICLE VII
FINANCIAL COVENANTS
The Borrower covenants and agrees that, until the termination of the
Revolving Credit Commitments, the termination or expiration of all Letters of
Credit (unless fully cash collateralized) and the payment in full of all
principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
7.1 Leverage Ratio. The Borrower will not permit the Leverage Ratio as of
--------------
the last day of any fiscal quarter during the periods set forth below to be
greater than the ratio set forth below opposite such period:
72
Maximum
Date Leverage Ratio
- ---- --------------
December 31, 2001 through
June 30, 2004 3.25 : 1.0
July 1, 2004 through
December 31, 2004 3.00 : 1.00
Thereafter 2.75 : 1.0
7.2 Adjusted Leverage Ratio. The Borrower will not permit the Adjusted
-----------------------
Leverage Ratio as of the last day of any fiscal quarter during the periods set
forth below to be greater than the ratio set forth below opposite such period:
Maximum Adjusted
Date Leverage Ratio
- ---- --------------
December 31, 2001 through
June 30, 2004 5.00 : 1.0
July 1, 2004 through
December 31, 2004 4.75 : 1.0
January 1, 2005 through
December 31, 2005 4.50 : 1.0
Thereafter 4.25 : 1.0
7.3 Senior Leverage Ratio. The Borrower will not permit the Senior Leverage
---------------------
Ratio as of the last day of any fiscal quarter during the periods set forth
below to be greater than the ratio set forth below opposite such period:
Maximum Senior
Date Leverage Ratio
- ---- --------------
December 31, 2001 through
December 31, 2003 2.00 : 1.0
January 1, 2004 through
December 31, 2005 1.75 : 1.0
Thereafter 1.50 : 1.0
73
7.4 Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
---------------------------
Charge Coverage Ratio as of the last day of any fiscal quarter during the
periods set forth below to be less than the ratio set forth below opposite such
period:
Fixed Charge
Date Coverage Ratio
- ---- --------------
December 31, 2001 through
December 31, 2003 1.50 : 1.0
January 1, 2004 through 1.75 : 1.0
December 31, 2004
January 1, 2005 through 2.00 : 1.0
December 31, 2005
Thereafter 2.25 : 1.0
7.5 Capital Expenditures. The Borrower will not permit Capital Expenditures
--------------------
during any period of four consecutive fiscal quarters (a "Reference Period")
ending on the last day of any fiscal quarter during the periods set forth below
to be greater than the amount set forth below opposite such period:
Maximum Amount of
Period Capital Expenditures
- ------ --------------------
January 1, 2002 through
December 31, 2003 $105,000,000
Each fiscal year thereafter $115,000,000
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Revolving Credit Commitments, the termination or expiration of all Letters of
Credit (unless fully cash collateralized) and the payment in full of all
principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
8.1 Merger; Consolidation. The Borrower will not, and will not permit or
---------------------
cause any of its Subsidiaries to, liquidate, wind up or dissolve, or enter into
any consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that:
-------- -------
(i) the Borrower may merge or consolidate with another Person so long
as (x) the Borrower is the surviving entity, (y) unless such other Person
is a Wholly Owned Subsidiary immediately prior to giving effect thereto,
such merger or consolidation shall
74
constitute a Permitted Acquisition and the applicable conditions and
requirements of Sections 6.8 and 6.9 shall be satisfied, and (z)
immediately after giving effect thereto, no Default or Event of Default
would exist; and
(ii) any Subsidiary may merge or consolidate with another Person so
long as (x) the surviving entity is the Borrower or a Subsidiary Guarantor,
(y) unless such other Person is a Wholly Owned Subsidiary immediately prior
to giving effect thereto, such merger or consolidation shall constitute a
Permitted Acquisition and the applicable conditions and requirements of
Sections 6.8 and 6.9 shall be satisfied, and (z) immediately after giving
effect thereto, no Default or Event of Default would exist.
8.2 Indebtedness. The Borrower will not, and will not permit or cause any
------------
of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:
(i) Indebtedness incurred under this Agreement, the Notes and the
Subsidiary Guaranty;
(ii) Indebtedness existing on the Closing Date or entered into
contemporaneously herewith and described in Schedule 8.2 (including all
guaranties related thereto), as amended, modified or supplemented from time
to time in conformity with Section 8.9 (or, with respect to the ELLF, as
modified or replaced in conformity with the definition thereof);
(iii) accrued expenses (including salaries, accrued vacation and other
compensation), current trade or other accounts payable and other current
liabilities arising in the ordinary course of business and not incurred
through the borrowing of money, provided that the same shall be paid when
--------
due except to the extent being contested in good faith and by appropriate
proceedings;
(iv) loans and advances by the Borrower or any Subsidiary Guarantors
to any other Subsidiary Guarantor or by any Subsidiary Guarantor to the
Borrower, provided that any such loan or advance is subordinated in right
--------
of payment to the Obligations and is evidenced by a promissory note, in
form and substance satisfactory to the Agent, pledged to the Agent pursuant
to the Security Documents;
(v) Indebtedness of the Borrower under Hedge Agreements entered into
in the ordinary course of business and not for speculative purposes;
(vi) (A) purchase money Indebtedness of the Borrower and its
Subsidiaries incurred solely to finance the payment of all or part of the
purchase price of any equipment, real property or other fixed assets
acquired in the ordinary course of business, including Indebtedness in
respect of capital lease obligations, and any renewals, refinancings or
replacements thereof (subject to the limitations on the principal amount
thereof set forth in this clause (vi)), and (B) other Indebtedness not
exceeding $5,000,000 in aggregate amount outstanding at any time and
secured by Liens described in Section 8.3(xii); provided that all such
Indebtedness shall not exceed $50,000,000 in aggregate principal amount
outstanding at any time;
75
(vii) other unsecured Indebtedness not exceeding $25,000,000 in
aggregate principal amount outstanding at any time;
(viii) Indebtedness secured by liens permitted under clauses (v) of
Section 8.3 that is incurred in the ordinary course of business and that
does not constitute obligations for borrowed money;
(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft, or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
-------- -------
that such Indebtedness is extinguished within five Business Day of
incurrence;
(x) Indebtedness arising in connection with endorsement of instruments
for deposit in the ordinary course of business; and
(xi) Indebtedness under any of the foregoing clauses in the form of a
guaranty.
8.3 Liens. The Borrower will not, and will not permit or cause any of its
-----
Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer
to exist, any Lien upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or file or permit the filing of, or
permit to remain in effect, any financing statement or other similar notice of
any Lien with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any state or under any similar recording or notice
statute, or agree to do any of the foregoing, other than the following
(collectively, "Permitted Liens"):
(i) Liens created under the Security Documents;
(ii) Liens in existence on the Closing Date and set forth on Schedule
8.3;
(iii) Liens created under the ELLF;
(iv) Liens imposed by law, such as Liens of carriers, warehousemen,
mechanics, materialmen, suppliers, repairmen and landlords, and other
similar Liens incurred in the ordinary course of business for sums not
constituting borrowed money that are not overdue for a period of more than
thirty (30) days or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with GAAP (if so required);
(v) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under Section
9.1(j)) incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure the performance
of bids, tenders, statutory obligations, surety and appeal bonds, leases,
contracts, progress payments or completion or performance and
return-of-money bonds and other similar obligations (other than obligations
for the payment of borrowed money) entered into in the ordinary course of
business;
76
(vi) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without any
penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with GAAP (if so required);
(vii) Liens securing the purchase money Indebtedness permitted under
clause (vi) of Section 8.2, provided that any such Lien (a) shall attach to
--------
such property concurrently with or within ten (10) days, with respect to
personal property, or one hundred eighty (180) days, with respect to real
property, after the acquisition thereof by the Borrower or such Subsidiary,
(b) shall not exceed the lesser of (y) the fair market value of such
property or (z) the cost thereof to the Borrower or such Subsidiary and (c)
shall not encumber any other property of the Borrower or any of its
Subsidiaries;
(viii) any attachment or judgment Lien not constituting an Event of
Default under Section 9.1(h) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(ix) Liens arising from the filing, for notice purposes only, of
financing statements in respect of true leases;
(x) Liens on Borrower Margin Stock, to the extent the fair market
value thereof exceeds 25% of the fair market value of the assets of the
Borrower and its Subsidiaries (including Borrower Margin Stock);
(xi) with respect to any real property occupied by the Borrower or any
of its Subsidiaries, all easements, rights of way, zoning restrictions,
licenses and similar charges, restrictions, encumbrances or irregularities
or immaterial imperfections of title that are customary or that do not
materially impair the use of such property for its intended purposes and
all leases and subleases that do not materially interfere with the ordinary
course of business by the Borrower or any Subsidiary;
(xii) other Liens securing obligations of the Borrower and its
Subsidiaries not exceeding $5,000,000 in aggregate amount outstanding at
any time;
(xiii) rights of first refusal and, to the extent such disposition
would be permitted pursuant to Section 8.4, options to purchase any asset
of the Borrower or any Subsidiary, in each case, if not granted in
connection with the incurrence of Indebtedness or as credit support for
Indebtedness, and
(xiv) customary set-off rights against deposit accounts established in
the ordinary course of business.
8.4 Disposition of Assets. The Borrower will not, and will not permit or
---------------------
cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any Capital Stock of any Subsidiary), or enter into any arrangement with any
Person providing for the lease by the Borrower or any Subsidiary as lessee of
any asset that has been
77
sold or transferred by the Borrower or such Subsidiary to such Person, or agree
to do any of the foregoing, except for:
(i) sales of inventory and licenses or leases of intellectual property
and other assets, in each case in the ordinary course of business;
(ii) the sale or exchange of damaged, worn-out or used equipment or
equipment no longer used or useful in the ordinary course of business to
the extent (y) the proceeds of such sale are applied towards, or such
equipment is exchanged for, replacement equipment or (z) such equipment is
no longer necessary for the operations of the Borrower or its applicable
Subsidiary in the ordinary course of business;
(iii) PPM Asset Dispositions; provided that the Net Cash Proceeds from
--------
PPM Asset Dispositions shall be applied to prepay the Loans in accordance
with, and to the extent required under, the provisions of Section 2.6;
(iv) the sale or other disposition by the Borrower and its
Subsidiaries of any Borrower Margin Stock to the extent the fair market
value thereof exceeds 25% of the fair market value of the assets of the
Borrower and its Subsidiaries (including Borrower Margin Stock), provided
--------
that fair value is received in exchange therefor;
(v) the sale, lease or other disposition of assets by Borrower or a
Subsidiary of the Borrower to the Borrower or to a Subsidiary Guarantor if,
immediately after giving effect thereto, no Default or Event of Default
would exist;
(vi) dispositions and other transactions made in compliance with the
terms of the ELLF of property (y) financed with the proceeds of the ELLF or
(z) conveyed to the Trust (as defined in the Participation Agreement) by
the Borrower or any Subsidiary;
(vii) transfers of cash or Cash Equivalents for purposes permitted
under this Agreement;
(viii) other transfers of Assets expressly permitted under this
Agreement; and
(ix) the sale or disposition of assets outside the ordinary course of
business for fair value and for cash, provided that (w) the Net Cash
--------
Proceeds from such sales or dispositions do not exceed $10,000,000 in the
aggregate for the Borrower and its Subsidiaries, (x) such Net Cash Proceeds
are delivered to the Agent promptly after receipt thereof for application
in prepayment of the Loans in accordance with, and to the extent required
under, the provisions of Section 2.6, (y) in no event shall the Borrower or
any of its Subsidiaries sell or otherwise dispose of any of the Capital
Stock of any Subsidiary, and (z) immediately after giving effect thereto,
no Default or Event of Default would exist.
8.5 Investments. The Borrower will not, and will not permit or cause any of
-----------
its Subsidiaries to, directly or indirectly, purchase, own, invest in or
otherwise acquire any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
78
investment in cash or by delivery of property in, any other Person, or purchase
or otherwise acquire (whether in one or a series of related transactions) any
portion of the assets, business or properties of another Person (including
pursuant to an Acquisition), or create or acquire any Subsidiary, or become a
partner or joint venturer in any partnership or joint venture (collectively,
"Investments"), or make a commitment or otherwise agree ----------- to do any of
the foregoing, other than:
(i) cash and Cash Equivalents; provided, however that at any time
-------- -------
Loans in excess of $10,000,000 are outstanding, the aggregate amount of
cash and Cash Equivalents held by the Borrower and its Subsidiaries shall
not exceed $20,000,000 for any period of five (5) consecutive Business
Days;
(ii) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment or licenses or leases of
intellectual property and other assets, in each case in the ordinary course
of business;
(iii) Investments consisting of loans and advances to employees for
reasonable travel, relocation and business expenses in the ordinary course
of business, extensions of trade credit in the ordinary course of business,
and prepaid expenses incurred in the ordinary course of business;
(iv) without duplication, Investments consisting of intercompany
Indebtedness permitted under clause (iv) of Section 8.2;
(v) Investments existing on the Closing Date or made pursuant to
legally binding written agreements in existence on such date and described
in Schedule 8.5;
(vi) Investments of the Borrower under Hedge Agreements entered into
in the ordinary course of business and not for speculative purposes;
(vii) Investments consisting of the making of capital contributions or
the purchase of Capital Stock (a) by the Borrower or any Subsidiary in any
other Wholly Owned Subsidiary that is (or immediately after giving effect
to such Investment will be) a Subsidiary Guarantor, provided that the
--------
Borrower complies with the provisions of Section 6.9, and (b) by any
Subsidiary in the Borrower;
(viii) Permitted Joint Ventures in an aggregate amount, as valued at
the time each such Investment is made (and including all commitments for
future capital contributions or other further Investments), not exceeding
$20,000,000 for all such Investments from and after the Closing Date;
(ix) other Investments (including Permitted Acquisitions) in an
aggregate amount, as valued at the time each such Investment is made, not
exceeding $20,000,000 for all such Investments in any fiscal year;
provided, that (x) all such Investments shall be considered to be Capital
--------
Expenditures of the Borrower or its Subsidiaries and (y) loans to employees
to purchase Capital Stock of the Borrower shall not exceed $10,000,000 in
aggregate from and after the Closing Date;
(x) Investments in the Borrower by any Subsidiary;
79
(xi) Investments received pursuant to any disposition permitted
pursuant to Section 8.4;
(xii) Investments received as consideration for the settlement of any
litigation, arbitration or dispute in parties or full satisfaction of such
claim or dispute;
(xiii) lease, utility and other similar deposits in the ordinary
course of business; and
(xiv) stock, obligations or securities received in settlement of debts
credited in the ordinary course of business and owing to the Borrower or
any Subsidiary or in satisfaction of judgments.
8.6 Restricted Payments.
-------------------
(a) The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, declare or make any dividend payment,
or make any other distribution of cash, property or assets, in respect of any of
its Capital Stock or any warrants, rights or options to acquire its Capital
Stock, or purchase, redeem, retire or otherwise acquire for value any shares of
its Capital Stock or any warrants, rights or options to acquire its Capital
Stock, or set aside funds for any of the foregoing, except that:
(i) the Borrower may declare and make dividend payments or other
distributions payable solely in its common stock;
(ii) each Wholly Owned Subsidiary of the Borrower may declare and make
dividend payments or other distributions to the Borrower or another Wholly
Owned Subsidiary of the Borrower, to the extent not prohibited under
applicable Requirements of Law; and
(iii) the Borrower, (A) may make market repurchases of shares of its
outstanding common stock and (B) may repurchase or otherwise take delivery
of shares of its outstanding common stock as consideration to the Borrower
or a Subsidiary in connection with any PPM Asset Disposition, provided, in
--------
each case, that (x) no Default or Event of Default shall have occurred and
be continuing or would occur after giving effect thereto, (y) the Leverage
Ratio (as of the last day of the latest fiscal quarter included in a
Compliance Certificate) will not be greater than 2.5 to 1.0 after giving
pro forma effect thereto and (z) the aggregate Fair Market Value of such
repurchases or deliveries shall not at any time exceed $50,000,000,
provided, further that the Agents, by written notice to the Borrower at any
-------- -------
time, may suspend the Borrower's ability to make any or all such
repurchases under clause (A) if the Agents reasonably determine that there
has occurred a change in the Medicare or Medicaid statutes, state statutes,
case laws, regulations or general instructions, or the interpretation or
enforcement of any of the foregoing, the adoption of new federal or state
legislation, or a change in any third party reimbursement system, any of
which are reasonably likely to materially and adversely affect the business
or revenues of the Borrower and its Subsidiaries, taken as a whole.
80
(b) The Borrower will not, and will not permit or cause any of its
Subsidiaries to, make (or give any notice in respect of) any voluntary or
optional payment or prepayment of principal on any Subordinated Indebtedness, or
directly or indirectly make any redemption (including pursuant to any change of
control provision), retirement, defeasance or other acquisition for value of any
Subordinated Indebtedness, or make any deposit or otherwise set aside funds for
any of the foregoing purposes, provided, however, that so long as no Default or
-------- -------
Event of Default shall have occurred and be continuing or would occur after
giving effect thereto, (i) Subordinated Indebtedness consisting of subordinated
physician notes of the Borrower in an aggregate principal amount not to exceed
$55,000,000 may be cancelled or retired as consideration to the Borrower or a
Subsidiary in connection with any PPM Asset Disposition or the conversion of any
Management Services Agreement from the "net revenue model" to the "earnings
model" and (ii) the Borrower may, to the extent required by (and pursuant to the
terms of) the Subordinated Notes and any other Subordinated Indebtedness that is
pari passu with the Subordinated Notes (the "Pari Passu Subdebt"), repurchase
------------------
Subordinated Notes and Pari Passu Subdebt for cash at a price equal to 100% of
the principal amount of such repurchased Subordinated Indebtedness, plus accrued
and unpaid interest thereon, provided that, with respect to repurchases under
--------
this clause (ii), (x) the Borrower shall give the Agent written notice of each
repurchase not less than ten (10) Business Days prior to such repurchase, (y)
the amount of any repurchase may not exceed the amount of Excess Proceeds on the
date of such repurchase and (z) no repurchase may be made unless (A) all Loans
shall have been prepaid and all Letter of Credit Exposure and all Revolving
Credit Commitments shall have been cash collateralized to the reasonable
satisfaction of the Agent and (B) all obligations (whether or not then-matured)
of the Borrower and its Subsidiaries under the ELLF shall have been paid and
satisfied or cash collateralized to the reasonable satisfaction of the Agent (as
defined in the Participation Agreement).
8.7 Transactions with Affiliates. The Borrower will not, and will not
----------------------------
permit or cause any of its Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of the Borrower or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate of the Borrower or such Subsidiary;
provided, however, that nothing contained in this Section shall prohibit:
- -------- -------
(i) transactions described on Schedule 8.7 or otherwise expressly
permitted under this Agreement;
(ii) transactions among or between (a) Borrower and one or more
Subsidiaries of Borrower or (b) among the Subsidiaries of Borrower, in each
case except as otherwise prohibited under this Agreement;
(iii) the payment by the Borrower of reasonable and customary
compensation to members of its board of directors, officers and employees;
(iv) the provision of legal and accounting services to their officers,
directors and employees in the ordinary course of business and consistent
with past practice; and
81
(v) indemnification to their officers, directors and employees to the
extent permitted by applicable law.
8.8 Lines of Business. The Borrower will not, and will not permit or cause
-----------------
any of its Subsidiaries to, engage in any business other than the businesses
engaged in by the Borrower and its Subsidiaries on the date hereof and
businesses and activities reasonably related thereto or that constitute
reasonable extensions thereof, including as described in the offering memorandum
for the Subordinated Notes.
8.9 Certain Amendments. The Borrower will not, and will not permit or cause
------------------
any of its Subsidiaries to, (i) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any agreement or instrument
evidencing or governing any Subordinated Indebtedness, the effect of which would
be to (a) increase the principal amount due thereunder, (b) shorten or
accelerate the time of payment of any amount due thereunder, (c) increase the
applicable interest rate or amount of any fees or costs due thereunder, (d)
amend any of the subordination provisions thereunder (including any of the
definitions relating thereto), (e) make any covenant therein more restrictive or
add any new covenant, or (f) otherwise materially and adversely affect the
Lenders, or breach or otherwise violate any of the subordination provisions
applicable thereto, including, without limitation, restrictions against payment
of principal and interest thereon, or (ii) amend, modify or change any provision
of its articles or certificate of incorporation or bylaws (or comparable
organizational documents), or the terms of any class or series of its Capital
Stock, other than in a manner that would not reasonably be expected to adversely
affect the Lenders.
8.10 Limitation on Certain Restrictions. The Borrower will not, and will
----------------------------------
not permit or cause any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the ability of the Borrower and its Subsidiaries to perform
and comply with their respective obligations under the Credit Documents or (ii)
the ability of any Subsidiary of the Borrower to make any dividend payments or
other distributions in respect of its Capital Stock, to repay Indebtedness owed
to the Borrower or any other Subsidiary, to make loans or advances to the
Borrower or any other Subsidiary, or to transfer any of its assets or properties
to the Borrower or any other Subsidiary, in each case other than such
restrictions or encumbrances existing under or by reason of the Credit Documents
or applicable Requirements of Law.
8.11 No Other Negative Pledges. The Borrower will not, and will not permit
-------------------------
or cause any of its Subsidiaries to, directly or indirectly, enter into or
suffer to exist any agreement or restriction that prohibits or conditions the
creation, incurrence or assumption of any Lien upon or with respect to any part
of its property or assets, whether now owned or hereafter acquired, or agree to
do any of the foregoing, other than as set forth in (i) this Agreement and the
Security Documents, (ii) any agreement or instrument creating a Permitted Lien
(but only to the extent such agreement or restriction applies to the assets
subject to such Permitted Lien), and (iii) operating leases of real or personal
property entered into by the Borrower or any of its Subsidiaries as lessee in
the ordinary course of business.
8.12 Fiscal Year. The Borrower will not, and will not permit or cause any
-----------
of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31.
82
8.13 Accounting Changes. The Borrower will not, and will not permit or
------------------
cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be required by GAAP.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any one or more of the following
-----------------
events shall constitute an "Event of Default":
(a) The Borrower shall fail to pay any principal of or interest on any
Loan, any Reimbursement Obligation, any fee or any other Obligation (other than
any Obligation under a Hedge Agreement) when due or, except with respect to any
payment of principal, within three (3) days of when due;
(b) The Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in any of Sections 2.14, 6.1, 6.2,
6.3(i), 6.8, or 6.9 or in Article VII or Article VIII;
(c) The Borrower or any of its Subsidiaries shall fail to observe, perform
or comply with any condition, covenant or agreement contained in this Agreement
or any of the other Credit Documents other than those enumerated in subsections
(a) and (b) above, and such failure (i) is deemed by the terms of the relevant
Credit Document to constitute an Event of Default without any lapse or time or
notice or (ii) shall continue unremedied for any grace period specifically
applicable thereto or, if no such grace period is applicable, for a period of
thirty (30) days after the earlier of (y) the date on which a Responsible
Officer of the Borrower acquires knowledge thereof and (z) the date on which
written notice thereof is delivered by the Agent or any Lender to the Borrower;
or any default shall occur under any Hedge Agreement to which the Borrower and
any Lender or Affiliate of any Lender are parties and shall continue unremedied
for any grace period specifically applicable thereto;
(d) Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries in this Agreement, any of the other
Credit Documents or in any certificate or notice furnished in connection
herewith or therewith or in connection with the transactions contemplated hereby
or thereby shall prove to have been false or misleading in any material respect
as of the time made, deemed made or furnished;
(e) The Borrower or any of its Subsidiaries shall (i) fail to pay when due
(whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) (y) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement,
but including all obligations under the Subordinated Notes and the ELLF) having
an aggregate principal amount of at least $5,000,000 or (z) any termination or
other payment (after giving effect to any allowable set offs against the other
party thereto) under any Hedge Agreement covering a notional amount of
Indebtedness of at least $5,000,000 or (ii) fail to observe, perform or comply
with any condition, covenant or agreement contained in any agreement or
instrument evidencing or relating to any such Indebtedness, or any other event
83
shall occur or condition exist in respect thereof, and the effect of such
failure, event or condition is to cause, or permit the holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to cause (with the
giving of notice, lapse of time, or both), such Indebtedness to become due, or
to be prepaid, redeemed, purchased or defeased, prior to its stated maturity
(other than prepayments or redemptions expressly permitted hereunder);
(f) The Borrower or any of its Subsidiaries shall (i) file a voluntary
petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any other
relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
petition or case of the type described in subsection (g) below, (iii) apply for
or consent to the appointment of or taking possession by a custodian, trustee,
receiver or similar official for or of itself or all or a substantial part of
its properties or assets, (iv) fail generally, or admit in writing its
inability, to pay its debts generally as they become due, (v) make a general
assignment for the benefit of creditors or (vi) take any corporate action to
authorize or approve any of the foregoing;
(g) Any involuntary petition or case shall be filed or commenced against
the Borrower or any of its Subsidiaries seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the appointment
of a custodian, trustee, receiver or similar official for it or all or a
substantial part of its properties or any other relief under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding;
(h) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing) in excess of
$5,000,000 shall be entered or filed against the Borrower or any of its
Subsidiaries or any of their respective properties and the same shall not be
dismissed, stayed or discharged for a period of thirty (30) days (or such longer
period of automatic stay of execution as may be provided under applicable law)
or in any event later than five days prior to the date of any proposed sale
thereunder;
(i) Any Security Document to which the Borrower or any of its Subsidiaries
is now or hereafter a party shall for any reason cease to be in full force and
effect or cease to be effective to give the Agent a valid and perfected security
interest in and Lien upon any material part of the Collateral purported to be
covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or is due
to any act or failure to act on the part of the Agent or any Lender; or the
Borrower or any such Subsidiary shall assert any of the foregoing; or any
Subsidiary of the Borrower or any Person acting on behalf of any such Subsidiary
shall deny or disaffirm such Subsidiary's obligations under the Subsidiary
Guaranty;
(j) Any ERISA Event or any other event or condition shall occur or exist
with respect to any Plan or Multiemployer Plan and, as a result thereof,
together with all other ERISA Events
84
and other events or conditions then existing, the Borrower and its ERISA
Affiliates have incurred or would be reasonably likely to incur liability to any
one or more Plans or Multiemployer Plans or to the PBGC (or to any combination
thereof) in excess of $5,000,000;
(k) Any one or more licenses, permits, accreditations, authorizations or
Reimbursement Approvals (to the extent applicable) of the Borrower or any of its
Subsidiaries shall be suspended, limited or terminated or shall not be renewed,
any Limitation shall occur, or any other action shall be taken, by any
Governmental Authority in response to any alleged failure by the Borrower or any
of its Subsidiaries to be in compliance with applicable Requirements of Law
(including, without limitation, applicable laws and regulations relating to
healthcare providers), and such Limitation or other action, individually or in
the aggregate, would be reasonably likely to have a Material Adverse Effect;
(l) Any one or more Environmental Claims shall have been asserted against
the Borrower or any of its Subsidiaries (or a reasonable basis shall exist
therefor); the Borrower and its Subsidiaries have incurred or would be
reasonably likely to incur liability as a result thereof; and such liability,
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect;
(m) Any agreement or contract to which the Borrower or any of its
Subsidiaries is a party shall be terminated or shall, for any other reason, fail
to be in full force and effect and enforceable in accordance with its terms, and
such event or condition, together with all other such events or conditions, if
any, has or would be reasonably likely to have a Material Adverse Effect;
(n) There shall occur any uninsured damage to, or loss, theft or
destruction of, any Collateral or other properties of the Borrower and its
Subsidiaries or any labor dispute, act of God or other casualty that has or
would be reasonably likely to have a Material Adverse Effect; or
(o) Any of the following shall occur: (i) any Person or group of Persons
acting in concert as a partnership or other group shall, as a result of a tender
or exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the "beneficial owner" (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of securities
of the Borrower representing 33% or more of the combined voting power of the
then outstanding securities of the Borrower ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors; or (ii) the Board of Directors of the Borrower shall cease to
consist of a majority of the individuals who constituted the Board of Directors
as of the date hereof or who shall have become a member thereof subsequent to
the date hereof after having been nominated, or otherwise approved in writing,
by at least a majority of individuals who constituted the Board of Directors of
the Borrower as of the date hereof (or their replacements approved as herein
required).
9.2 Remedies: Termination of Commitments, Acceleration, etc. Upon and at
-------------------------------------------------------
any time after the occurrence and during the continuance of any Event of
Default, the Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:
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(a) Declare the Revolving Credit Commitments, the Swingline Commitment, and
the Issuing Lender's obligation to issue Letters of Credit, to be terminated,
whereupon the same shall terminate (provided that, upon the occurrence of an
--------
Event of Default pursuant to Section 9.1(f) or Section 9.1(g), the Revolving
Credit Commitments, the Swingline Commitment and the Issuing Lender's obligation
to issue Letters of Credit shall automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts accrued and unpaid under this Agreement, the Notes
and the other Credit Documents (but excluding any amounts owing under any Hedge
Agreement), shall become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower (provided that, upon the occurrence of an Event of Default pursuant to
Section 9.1(f) or Section 9.1(g), all of the outstanding principal amount of the
Loans and all other amounts described in this subsection (b) shall automatically
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice or legal process of any kind, all of
which are hereby knowingly and expressly waived by the Borrower);
(c) Direct the Borrower to deposit (and the Borrower hereby agrees,
forthwith upon receipt of notice of such direction from the Agent, to deposit)
with the Agent from time to time such additional amount of cash as is equal to
the aggregate Stated Amount of all Letters of Credit then outstanding (whether
or not any beneficiary under any Letter of Credit shall have drawn or be
entitled at such time to draw thereunder), such amount to be held by the Agent
in the Cash Collateral Account as security for the Letter of Credit Exposure as
described in Section 3.8; and
(d) Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law.
9.3 Remedies: Set-Off. In addition to all other rights and remedies
-----------------
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender may, and each is hereby authorized by the Borrower, at any
such time and from time to time, to the fullest extent permitted by applicable
law, without presentment, demand, protest or other notice of any kind, all of
which are hereby knowingly and expressly waived by the Borrower, to set off and
to apply any and all deposits (general or special, time or demand, provisional
or final) and any other property at any time held (including at any branches or
agencies, wherever located), and any other indebtedness at any time owing, by
such Lender to or for the credit or the account of the Borrower against any or
all of the Obligations to such Lender now or hereafter existing, whether or not
such Obligations may be contingent or unmatured, the Borrower hereby granting to
each Lender a continuing security interest in and Lien upon all such deposits
and other property as security for such Obligations. Each Lender agrees promptly
to notify the Borrower and the Agent after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
- -------- -------
validity of such set-off and application.
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ARTICLE X
THE AGENT
10.1 Appointment. Each Lender hereby irrevocably appoints and authorizes
-----------
First Union to act as Agent hereunder and under the other Credit Documents and
to take such actions as agent on its behalf hereunder and under the other Credit
Documents, and to exercise such powers and to perform such duties, as are
specifically delegated to the Agent by the terms hereof or thereof, together
with such other powers and duties as are reasonably incidental thereto.
10.2 Nature of Duties. The Agent shall have no duties or responsibilities
----------------
other than those expressly set forth in this Agreement and the other Credit
Documents. The Agent shall not have, by reason of this Agreement or any other
Credit Document, a fiduciary relationship in respect of any Lender; and nothing
in this Agreement or any other Credit Document, express or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations or
liabilities in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care. The
Agent shall be entitled to consult with legal counsel, independent public
accountants and other experts selected by it with respect to all matters
pertaining to this Agreement and the other Credit Documents and its duties
hereunder and thereunder and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts. The Lenders hereby acknowledge that the Agent shall not
be under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders).
10.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
----------------------
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action taken or omitted to be taken by it or such Person under or
in connection with the Credit Documents, except for its or such Person's own
gross negligence or willful misconduct, (ii) responsible in any manner to any
Lender for any recitals, statements, information, representations or warranties
herein or in any other Credit Document or in any document, instrument,
certificate, report or other writing delivered in connection herewith or
therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document, or
for the financial condition of the Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries.
10.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
-----------------
fully protected in relying, upon any notice, statement, consent or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person
87
or Persons. The Agent may deem and treat each Lender as the owner of its
interest hereunder for all purposes hereof unless and until a written notice of
the assignment, negotiation or transfer thereof shall have been given to the
Agent in accordance with the provisions of this Agreement. The Agent shall be
entitled to refrain from taking or omitting to take any action in connection
with this Agreement or any other Credit Document (i) if such action or omission
would, in the reasonable opinion of the Agent, violate any applicable law or any
provision of this Agreement or any other Credit Document or (ii) unless and
until it shall have received such advice or concurrence of the Required Lenders
(or, where a higher percentage of the Lenders is expressly required hereunder,
such Lenders) as it deems appropriate or it shall first have been indemnified to
its satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Agent as a result of the
Agent's acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders (or, where
a higher percentage of the Lenders is expressly required hereunder, such
Lenders), and such instructions and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders (including all subsequent
Lenders).
10.5 Non-Reliance on Agent and Other Lenders. Each Lender expressly
---------------------------------------
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representation
or warranty to it and that no act by the Agent or any such Person hereafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that (i) it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) it will, independently and without reliance upon
the Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action hereunder and under the
other Credit Documents and to make such investigation as it deems necessary to
inform itself as to the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries.
Except as expressly provided in this Agreement and the other Credit Documents,
the 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 Borrower, its Subsidiaries or any other
Person that may at any time come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.6 Notice of Default. The Agent shall not be deemed to have knowledge or
-----------------
notice of the occurrence of any Default or Event of Default unless the Agent
shall have received written notice from the Borrower or a Lender referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent will give notice thereof to the Lenders as soon as
reasonably
88
practicable; provided, however, that if any such notice has also been furnished
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to the Lenders, the Agent shall have no obligation to notify the Lenders with
respect thereto. The Agent shall (subject to Sections 10.4 and 11.6) take such
action with respect to such Default or Event of Default as shall reasonably be
directed by the Required Lenders; provided that, unless and until the Agent
--------
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all of the Lenders.
10.7 Indemnification. To the extent the Agent is not reimbursed by or on
---------------
behalf of the Borrower, and without limiting the obligation of the Borrower to
do so, the Lenders agree (i) to indemnify the Agent and its officers, directors,
employees, agents, attorneys-in-fact and Affiliates, ratably in proportion to
their respective percentages as used in determining the Required Lenders as of
the date of determination, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including,
without limitation, at any time following the repayment in full of the Loans and
the termination of the Revolving Credit Commitments) be imposed on, incurred by
or asserted against the Agent in any way relating to or arising out of this
Agreement or any other Credit Document or any documents contemplated by or
referred to herein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing, and (ii) to reimburse the Agent upon demand, ratably in proportion to
their respective percentages as used in determining the Required Lenders as of
the date of determination, for any expenses incurred by the Agent in connection
with the preparation, negotiation, execution, delivery, administration,
amendment, modification, waiver or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Credit Documents
(including, without limitation, reasonable attorneys' fees and expenses and
compensation of agents and employees paid for services rendered on behalf of the
Lenders); 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 to the extent resulting from the gross
negligence or willful misconduct of the party to be indemnified.
10.8 The Agent in its Individual Capacity. With respect to its Revolving
------------------------------------
Credit Commitment and Swingline Commitment, the Loans made by it, the Letters of
Credit issued or participated in by it and the Note or Notes issued to it, the
Agent in its individual capacity and not as Agent shall have the same rights and
powers under the Credit Documents as any other Lender and may exercise the same
as though it were not performing the agency duties specified herein; and the
terms "Lenders," "Required Lenders," "holders of Notes" and any similar terms
shall, unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits from, lend
money to, make investments in, and generally engage in any kind of banking,
trust, financial advisory or other business with the Borrower, any of its
Subsidiaries or any of their respective Affiliates as if the Agent were not
performing the agency duties specified herein, and may accept fees and other
consideration from any of them for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.
89
10.9 Successor Agent. The Agent may resign at any time by giving ten (10)
---------------
days' prior written notice to the Borrower and the Lenders. Upon any such notice
of resignation, the Required Lenders will, with the prior written consent of the
Borrower (which consent shall not be unreasonably withheld), appoint from among
the Lenders a successor to the Agent (provided that the Borrower's consent shall
--------
not be required in the event a Default or Event of Default shall have occurred
and be continuing). If no successor to the Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within such
ten-day period, then the retiring Agent may, on behalf of the Lenders and after
consulting with the Lenders and the Borrower, appoint a successor Agent from
among the Lenders. Upon the acceptance of any appointment as Agent 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 Credit 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. If no
successor to the Agent has accepted appointment as Agent by the thirtieth (30th)
day following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective, and the Lenders shall
thereafter perform all of the duties of the Agent hereunder and under the other
Credit Documents until such time, if any, as the Required Lenders appoint a
successor Agent as provided for hereinabove.
10.10 Collateral Matters.
------------------
(a) The Agent is hereby authorized on behalf of the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time (but without any obligation) to take any action with respect to the
Collateral and the Security Documents that may be necessary to perfect and
maintain perfected the Liens upon the Collateral granted pursuant to the
Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Revolving Credit Commitments, termination
or expiration of all outstanding Letters of Credit and payment in full of all of
the Obligations and all obligations under the ELLF, (ii) constituting property
sold or to be sold or disposed of as part of or in connection with any
disposition expressly permitted hereunder or under any other Credit Document or
to which the Required Lenders have consented or (iii) otherwise pursuant to and
in accordance with the provisions of any applicable Credit Document, provided
--------
that the foregoing shall be subject to the terms of the Security Agreement and
the Mortgages and any intercreditor agreement relating thereto. Upon request by
the Agent at any time, the Lenders will confirm in writing the Agent's authority
to release Collateral pursuant to this subsection (b).
10.11 Issuing Lender and Swingline Lender. The provisions of this Article
-----------------------------------
(other than Section 10.9 and 10.10) shall apply to the Issuing Lender and the
Swingline Lender mutatis mutandis to the same extent as such provisions apply to
------- --------
the Agent.
10.12 Syndication Agent, Documentation Agent. Notwithstanding any other
--------------------------------------
provision of this Agreement or any of the other Credit Documents, the
Syndication Agent and the Documentation Agent are named as such for recognition
purposes only, and in their capacities as
90
such shall have no powers, rights, duties, responsibilities or liabilities with
respect to this Agreement and the other Credit Documents and the transactions
contemplated hereby and thereby.
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses. The Borrower agrees (i) whether or not the
-----------------
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Agent (including,
without limitation, the reasonable fees and expenses of counsel to the Agent but
excluding salaries of the Agent's regularly employed personnel and overhead
incurred or paid by the Agent) in connection with (w) the Agent's due diligence
investigation in connection with, and the preparation, negotiation, execution,
delivery and syndication of, this Agreement and the other Credit Documents, and
any amendment, modification or waiver hereof or thereof or consent with respect
hereto or thereto, (x) the administration, monitoring and review of the Loans
and the Collateral (including, without limitation, out-of-pocket expenses for
travel, meals, long-distance telephone calls, wire transfers, facsimile
transmissions and copying and during the continuance of any Default or Event of
Default with respect to the engagement of appraisers, consultants, auditors or
similar Persons by the Agent to render opinions concerning the Borrower's
financial condition and the value of the Collateral), (y) any attempt to
inspect, verify, protect, collect, sell, liquidate or otherwise dispose of any
Collateral and (z) the creation, perfection and maintenance of the perfection of
the Agent's Liens upon the Collateral, including, without limitation, Lien
search, filing and recording fees, (ii) to pay upon demand all reasonable
out-of-pocket costs and expenses of the Agent and each Lender (including,
without limitation, reasonable attorneys' fees and expenses but excluding
salaries of the Agent's regularly employed personnel and overhead incurred or
paid by the Agent) in connection with (y) any refinancing or restructuring of
the credit arrangement provided under this Agreement, whether in the nature of a
"work-out," in any insolvency or bankruptcy proceeding or otherwise and whether
or not consummated, and (z) the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or any of the other
Credit Documents, whether in any action, suit or proceeding (including any
bankruptcy or insolvency proceeding) or otherwise, and (iii) to pay and hold the
Agent and each Lender harmless from and against all liability for any
intangibles, documentary, stamp or other similar taxes, fees and excises, if
any, including any interest and penalties, and any finder's or brokerage fees,
commissions and expenses (other than any fees, commissions or expenses of
finders or brokers engaged by the Agent or any Lender), that may be payable in
connection with the transactions contemplated by this Agreement and the other
Credit Documents.
11.2 Indemnification. The Borrower agrees, whether or not the transactions
---------------
contemplated by this Agreement shall be consummated, to indemnify and hold the
Agent and each Lender and each of their respective directors, officers,
employees, agents and Affiliates (each, an "Indemnified Person") harmless from
and against any and all claims, losses, damages, obligations, liabilities,
penalties, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses, but excluding salaries of the Agent's regularly
employed personnel
91
and overhead incurred or paid by the Agent) of any kind or nature whatsoever,
whether direct, indirect or consequential (collectively, "Indemnified Costs"),
that may at any time be imposed on, incurred by or asserted against any such
Indemnified Person as a result of, arising from or in any way relating to the
preparation, execution, performance or enforcement of this Agreement or any of
the other Credit Documents, any of the transactions contemplated herein or
therein or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loans or Letters of Credit
(including, without limitation, in connection with the actual or alleged
generation, presence, discharge or release of any Hazardous Substances on, into
or from, or the transportation of Hazardous Substances to or from, any real
property at any time owned or leased by the Borrower or any of its Subsidiaries,
any other Environmental Claims or any violation of or liability under any
Environmental Law), or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, related to any of
the foregoing, and in any case whether or not such Indemnified Person is a party
to any such action, proceeding or suit or a subject of any such inquiry or
investigation; provided, however, that no Indemnified Person shall have the
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right to be indemnified hereunder for any Indemnified Costs to the extent
determined by a final and nonappealable judgment of a court of competent
jurisdiction or pursuant to arbitration as set forth herein to have resulted
from the gross negligence or willful misconduct of such Indemnified Person. All
of the foregoing Indemnified Costs of any Indemnified Person shall be paid or
reimbursed by the Borrower, as and when incurred and upon demand.
11.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND, UNLESS
--------------------------------------
OTHERWISE EXPRESSLY PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
PROVIDED THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED AND
- --------
ENFORCED IN ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY
PRACTICES OF THE INTERNATIONAL CHAMBER OF COMMERCE AS IN EFFECT FROM TIME TO
TIME (THE "ISP"), AND, AS TO MATTERS NOT GOVERNED BY THE ISP, THE LAWS OF THE
STATE OF NORTH CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS
THEREOF). THE BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY
STATE COURT WITHIN EITHER OF NEW YORK COUNTY, NEW YORK OR MECKLENBURG COUNTY,
NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE SOUTHERN DISTRICT OF THE
STATE OF NEW YORK OR THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY
PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS, OR ANY PROCEEDING TO WHICH THE AGENT OR ANY LENDER OR THE BORROWER IS
A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE AGENT OR ANY LENDER OR THE BORROWER. THE BORROWER IRREVOCABLY
AGREES
92
TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED
OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE
BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE
--------------------
CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER CONSENTS THAT ALL SERVICE OF
PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT ITS ADDRESS
SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE
UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY
ACTION OR PROCEEDING AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
11.4 Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY AND
--------------------
UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY
CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO ANY CREDIT DOCUMENT OR THE
TRANSACTIONS RELATED THERETO.
11.5 Notices. All notices and other communications provided for hereunder
-------
or in connection herewith or with any other Credit Document shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, telecopied, cabled or delivered to the party
to be notified at the following addresses:
(a) if to the Borrower, to US Oncology, Inc., 16826 Northchase Drive, Suite
1300, Houston, Texas 77060: Attention: Bruce Broussard, Telecopy No. (832)
601-6603;
(b) if to the Agent, to First Union National Bank, Charlotte Plaza
Building, CP-23, 201 South College Street, Charlotte, North Carolina 28288-0680,
Attention: Syndication Agency Services, Telecopy No. (704) 383-0288; and
(c) if to any Lender, to it at the address set forth on its signature page
hereto (or if to any Lender not a party hereto as of the date hereof, at the
address set forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered by overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier or delivered to the cable
93
company, respectively, or (iii) if delivered by hand, upon delivery; provided
--------
that notices and communications to the Agent shall not be effective until
received by the Agent.
11.6 Amendments, Waivers, etc. No amendment, modification, waiver or
------------------------
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Required Lenders (or by the Agent at the
direction or with the consent of the Required Lenders), and then the same shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, modification, waiver,
-------- -------
discharge, termination or consent shall:
(a) unless agreed to by each Lender holding Obligations directly affected
thereby, (i) reduce or forgive the principal amount of any Loan, reduce the rate
of or forgive any interest thereon, or reduce or forgive any fees or other
monetary Obligations (other than fees payable to the Agent for its own account),
or (ii) extend the Maturity Date or any other scheduled date for the payment of
any principal of any Loan (including any scheduled date for the mandatory
reduction or termination of any Revolving Credit Commitments), any interest on
any Loan (other than additional interest payable under Section 2.8(b) at the
election of the Required Lenders, as provided therein), any fees (other than
fees payable to the Agent for its own account) or any other monetary Obligations
or extend the expiry date of any Letter of Credit beyond the seventh day prior
to the Maturity Date;
(b) unless agreed to by all of the Lenders, (i) increase or extend any
Revolving Credit Commitment of any Lender (it being understood that a waiver of
any Event of Default, if agreed to by the requisite Lenders hereunder, shall not
constitute such an increase), (ii) change the percentage of the aggregate
Revolving Credit Commitments or of the aggregate unpaid principal amount of the
Loans, or the number or percentage of Lenders, that shall be required for the
Lenders or any of them to take or approve, or direct the Agent to take, any
action hereunder (including as set forth in the definition of "Required
Lenders"), (iii) except as may be otherwise specifically provided in this
Agreement or in any other Credit Document, release all or substantially all of
the Collateral or release any material Subsidiary Guarantor from its obligations
under the Subsidiary Guaranty, or (iv) change any provision of Section 2.15 or
this Section 11.6;
(c) unless agreed to by the Issuing Lender, the Swingline Lender or the
Agent in addition to the Lenders required as provided hereinabove to take such
action, affect the respective rights or obligations of the Issuing Lender, the
Swingline Lender or the Agent, as applicable, hereunder or under any of the
other Credit Documents; and provided further that the Fee Letter may be amended
or modified, and any rights thereunder waived, in a writing signed by the
parties thereto; and
(d) unless agreed to by Lenders holding outstanding Loans and unutilized
Revolving Credit Commitments (or, after the termination of the Revolving Credit
Commitments, outstanding Loans and Letter of Credit Exposure) representing more
than two-thirds (66.6%) of the aggregate at such time of all outstanding Loans
and unutilized Revolving Credit Commitments (or, after the termination of the
Revolving Credit Commitments, the aggregate at such time of all outstanding
Loans and Letter of Credit Exposure), except as may be otherwise
94
specifically provided in this Agreement or in any other Credit Document, release
a majority (but less than all or substantially all) of the Collateral (to be
determined based on the Fair Market Value of the Collateral on or near the time
of any such proposed release).
Notwithstanding the foregoing provisions of this Section 11.6, the Agents may
grant reasonable extensions of the period for the satisfaction of any of the
conditions in Sections 4.1(a)(iv), 4.1(j), and 4.1(k) with respect to the real
estate Collateral, provided that (x) the Agents determine that reasonable
--------
progress has been made towards the satisfaction of such conditions and that
reasonably satisfactory arrangements have been made for the completion thereof
and (y) any such extensions may not extend beyond the 180th day following the
Closing Date.
11.7 Assignments, Participations.
---------------------------
(a) Each Lender may assign to one or more other Eligible Assignees (each,
an "Assignee") all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitments, the outstanding Loans made by it, the Note or Notes held by
it and its participations in Letters of Credit); provided, however, that (i) any
-------- -------
such assignment (other than an assignment to a Lender or an Affiliate of a
Lender) shall not be made without the prior written consent of the Agent and the
Borrower (to be evidenced by its counterexecution of the relevant Assignment and
Acceptance), which consent shall not be unreasonably withheld (provided that the
--------
Borrower's consent shall not be required in the event a Default or Event of
Default shall have occurred and be continuing), (ii) each such assignment shall
be of a uniform, and not varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement, (iii) except in the case of an
assignment to a Lender or an Affiliate of a Lender, no such assignment shall be
in an aggregate principal amount (determined as of the date of the Assignment
and Acceptance with respect to such assignment) less than (y) in the case of
Revolving Credit Commitments, $2,500,000, determined by combining the amount of
the assigning Lender's outstanding Revolving Loans, Letter of Credit Exposure
and Unutilized Revolving Credit Commitment being assigned pursuant to such
assignment (or, if less, the entire Revolving Credit Commitment of the assigning
Lender), provided that in the Agent's discretion such amount may be reduced for
--------
assignments made in connection with additions to the aggregate Revolving Credit
Commitments as provided for in Section 2.1(c), or (z) in the case of Swingline
Loans, the entire Swingline Commitment and the full amount of the outstanding
Swingline Loans, and (iv) the parties to each such assignment will execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment, and will pay a nonrefundable processing fee of $3,500 to the Agent
for its own account. Upon such execution, delivery, acceptance and recording of
the Assignment and Acceptance, from and after the effective date specified
therein, which effective date shall be at least five Business Days after the
execution thereof (unless the Agent shall otherwise agree), (A) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of the assigning Lender
hereunder with respect thereto and (B) the assigning Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, from and after such assignment relinquish its rights
(other than rights under the provisions of this Agreement and the other Credit
Documents relating to indemnification or payment of fees, costs and expenses, to
the extent such rights relate to the time prior to the
95
effective date of such Assignment and Acceptance) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto). The terms and provisions of each Assignment and Acceptance shall,
upon the effectiveness thereof, be incorporated into and made a part of this
Agreement, and the covenants, agreements and obligations of each Lender set
forth therein shall be deemed made to and for the benefit of the Agent and the
other parties hereto as if set forth at length herein.
(b) The Agent will maintain at its address for notices referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower and each Lender at
any reasonable time and from time to time upon reasonable prior notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an Assignee and, if required, counterexecuted by the
Borrower, together with the Note or Notes subject to such assignment and the
processing fee referred to in subsection (a) above, the Agent will (i) accept
such Assignment and Acceptance, (ii) on the effective date thereof, record the
information contained therein in the Register and (iii) give notice thereof to
the Borrower and the Lenders. Within five (5) Business Days after its receipt of
such notice, the Borrower, at its own expense, will execute and deliver to the
Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to the
order of the Assignee (and, if the assigning Lender has retained any portion of
its rights and obligations hereunder, to the order of the assigning Lender),
prepared in accordance with the applicable provisions of Section 2.4 as
necessary to reflect, after giving effect to the assignment, the Revolving
Credit Commitments of the Assignee and (to the extent of any retained interests)
the assigning Lender, dated the date of the replaced Note or Notes and otherwise
in substantially the form of Exhibits A-1 and A-2, as applicable. The Agent will
return canceled Notes to the Borrower.
(d) Each Lender may, without the consent of the Borrower, the Agent or any
other Lender, sell to one or more other Persons (each, a "Participant")
participations in all or any portion of its rights and obligations under this
Agreement (including, without limitation, a portion of its Revolving Credit
Commitments, the outstanding Loans made by it, the Note or Notes held by it and
its participations in Letters of Credit); provided, however, that (i) such
-------- -------
Lender's obligations under this Agreement shall remain unchanged and such Lender
shall remain solely responsible for the performance of such obligations, (ii)
the Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
hereunder or under any other Credit Document (except as to actions, to the
extent such actions affect the rights of such Participant, that would (x) reduce
or forgive the principal amount of any Loan, reduce the rate of or forgive any
interest thereon, or reduce or forgive any fees or other Obligations, (y) extend
the Maturity
96
Date or any other date fixed for the payment of any principal of or interest on
any Loan, any fees or any other Obligations, or (z) increase or extend the
Revolving Credit Commitment of any Lender, it being understood that a waiver of
any Default or Event of Default, if agreed to by the requisite Lenders
hereunder, shall not constitute such an increase), and (iii) no Participant
shall have any rights under this Agreement or any of the other Credit Documents,
each Participant's rights against the granting Lender in respect of any
participation to be those set forth in the participation agreement, and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not granted such participation. Notwithstanding the foregoing, each
Participant shall have the rights of a Lender for purposes of Sections 2.16(a),
2.16(b), 2.17, 2.18 and 9.3, and shall be entitled to the benefits thereto, to
the extent that the Lender granting such participation would be entitled to such
benefits if the participation had not been made, provided that no Participant
--------
shall be entitled to receive any greater amount pursuant to any of such Sections
than the Lender granting such participation would have been entitled to receive
in respect of the amount of the participation made by such Lender to such
Participant had such participation not been made.
(e) Nothing in this Agreement shall be construed to prohibit any Lender
from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
-------- -------
release a Lender from any of its obligations hereunder.
(f) Any Lender or Participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the Assignee or Participant or proposed Assignee or Participant any
information relating to the Borrower and its Subsidiaries furnished to it by or
on behalf of any other party hereto, provided that such Assignee or Participant
--------
or proposed Assignee or Participant agrees in writing for the express benefit of
the Borrower to keep such information confidential to the same extent required
of the Lenders under Section 11.13.
11.8 No Waiver. The rights and remedies of the Agent and the Lenders
---------
expressly set forth in this Agreement and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. No course of dealing between any of
the Borrower and the Agent or the Lenders or their agents or employees shall be
effective to amend, modify or discharge any provision of this Agreement or any
other Credit Document or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Agent or any Lender to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
11.9 Successors and Assigns. This Agreement shall be binding upon, inure to
----------------------
the benefit of and be enforceable by the respective successors and permitted
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors
97
and permitted assigns; provided, however, that (i) the Borrower shall not sell,
-------- -------
assign or transfer any of its rights, interests, duties or obligations under
this Agreement without the prior written consent of all of the Lenders and (ii)
any Assignees and Participants shall have such rights and obligations with
respect to this Agreement and the other Credit Documents as are provided for
under and pursuant to the provisions of Section 11.7.
11.10 Survival. All representations, warranties and agreements made by or
--------
on behalf of the Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, including, without limitation, the provisions of Sections 2.16(a),
2.16(b), 2.17, 2.18, 10.7, 11.1 and 11.2, shall survive the payment in full of
all Loans and Letters of Credit, the termination of the Revolving Credit
Commitments and all Letters of Credit, and any termination of this Agreement or
any of the other Credit Documents.
11.11 Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
11.12 Construction. The headings of the various articles, sections and
------------
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
11.13 Confidentiality. Each Lender agrees to keep confidential pursuant to
---------------
its customary procedures for handling confidential information of a similar
nature and in accordance with safe and sound banking practices, all nonpublic
information provided to it by or on behalf of the Borrower or any of its
Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
- -------- -------
directors, employees and agents and to its auditors, counsel and other
professional advisors, that have a reasonable need for access thereto, (ii) at
the demand or request of any bank regulatory authority, court or other
Governmental Authority having or asserting jurisdiction over such Lender, as may
be required pursuant to subpoena or other legal process, or otherwise in order
to comply with any applicable Requirement of Law, (iii) in connection with any
proceeding to enforce its rights hereunder, under any other Credit Document or
under any Hedge Agreement or in any other litigation or proceeding in connection
with the Credit Documents or any Hedge Agreement, (iv) to the Agent or any other
Lender, (v) to the extent the same has become publicly available other than as a
result of a breach of this Agreement and (vi) pursuant to and in accordance with
the provisions of Section 11.7(f).
98
11.14 Counterparts; Effectiveness. This Agreement may be executed in any
---------------------------
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Agent and the Borrower of written or
telephonic notification of such execution and authorization of delivery thereof.
11.15 Disclosure of Information. The Borrower agrees and consents to the
-------------------------
Agent's disclosure of information relating to this transaction to Gold Sheets
-----------
and other similar bank trade publications. Such information will consist of deal
terms and other information customarily found in such publications.
11.16 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
----------------
EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE AGREEMENT
AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER
HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT LETTER FROM
FIRST UNION, FIRST UNION SECURITIES, INC., UBS AG, STAMFORD BRANCH AND UBS
WARBURG LLC TO THE BORROWER DATED SEPTEMBER 28, 2001, BUT SPECIFICALLY EXCLUDING
THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR
OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
99
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
US ONCOLOGY, INC.
By:
--------------------------------
Title:
--------------------------------
(signatures continued)
100
FIRST UNION NATIONAL BANK, as Agent and as a
Lender
Revolving Credit By:
Commitment: --------------------------------------
$19,246,056
Title:
--------------------------------------
Instructions for wire transfers to the Agent:
First Union National Bank
ABA Routing No. 053000219
Charlotte, North Carolina
Account Number:
---------------
Account Name: US Oncology, Inc.
Attention: Syndication Agency Services
Address for notices as a Lender:
First Union National Bank
301 South College Street
5th Floor, NC-0760
Charlotte, North Carolina 28288-0760
Attention: Joyce Barry
Telephone: (704) 374-4151
Telecopy: (704) 374-4793
Lending Office:
First Union National Bank
Charlotte Plaza Building, CP-23
201 South College Street
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Telephone: (704) 383-3721
Telecopy: (704) 383-0288
(signatures continued)
101
UBS WARBURG LLC, as Syndication Agent
By:
--------------------------------------
Title:
--------------------------------------
UBS AG, Stamford Branch, as a Lender
Revolving Credit By:
Commitment: --------------------------------------
$19,246,056 Title:
--------------------------------------
Address for notices:
Banking Products Services, 6th Floor
677 Washington Blvd.
Stamford, CT 06901
Attention: Luke Goldsworthy
Telephone: (203) 719-0481
Telecopy: (203) 719-4176
Lending Office:
Banking Products Services, 6th Floor
677 Washington Blvd.
Stamford, CT 06901
Attention: Luke Goldsworthy
Telephone: (203) 719-0481
Telecopy: (203) 719-4176
(signatures continued)
102
GENERAL ELECTRIC CAPITAL CORPORATION, as
Documentation Agent and as a Lender
Revolving Credit By:
Commitment: --------------------------------------
$19,246,056 Title:
--------------------------------------
Address for notices:
GE Capital Healthcare Financial Services
20225 Watertower Boulevard
Suite 300
Brookfield, WI 53045
Attention: Richard S. Berger
Telephone: (262) 798-4500
Telecopy: (262) 798-4530
Lending Office:
GE Capital Healthcare Financial Services
20225 Watertower Boulevard
Suite 300
Brookfield, WI 53045
Attention: Christopher Lau
Telephone: (262) 798-4489
Telecopy: (262) 798-4530
(signature continued)
103
BANKERS TRUST COMPANY, as a Lender
Revolving Credit By:
Commitment: --------------------------------------
$16,496,619 Title:
--------------------------------------
Address for notices:
31 West 52nd Street
Mail Stop NYC01-0705
New York, NY 10019
Attention: Diane Rolfe
Telephone: (646) 324-2194
Telecopy: (646) 324-7456
Lending Office:
31 West 52nd Street
Mail Stop NYC01-0705
New York, NY 10019
Attention: Diane Rolfe
Telephone: (646) 324-2194
Telecopy: (646) 324-7456
(signatures continued)
104
JPMORGAN CHASE BANK, as a Lender
Revolving Credit By:
Commitment: --------------------------------------
$13,747,183 Title:
--------------------------------------
Address for notices:
717 Travis, 8th Floor South
Houston, TX 77002
Attention: Jerry L. Boyd
Telephone: (713) 216-0401
Telecopy: (713) 216-0409
Lending Office:
717 Travis, 8th Floor South
Houston, TX 77002
Attention: Tiffany Collett
Telephone: (713) 216-0404
Telecopy: (713) 216-0409
105
EXHIBIT A-1
-----------
Borrower's Taxpayer Identification No.
-------
FORM OF
REVOLVING NOTE
$ February , 2002
----------- --
Charlotte, North Carolina
FOR VALUE RECEIVED, US ONCOLOGY, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of
--------
(the "Lender"), at the offices of First Union
- ------------------------------ ------
National Bank (the "Administrative Agent") located at Charlotte Plaza Building,
--------------------
CP-23, 201 South College Street, Charlotte, North Carolina (or at such other
place or places as the Administrative Agent may designate), at the times and in
the manner provided in the Credit Agreement, dated as of February , 2002 (as
--
amended, modified or supplemented from time to time, the "Credit Agreement"),
----------------
among the Borrower, the Lenders from time to time parties thereto, First Union
National Bank, as Administrative Agent, UBS Warburg, LLC, as Syndication Agent,
and General Electric Capital Corporation, as Documentation Agent, the principal
sum of DOLLARS ($ ), or such lesser amount as may
---------------- -----------
constitute the unpaid principal amount of the Revolving Loans made by the
Lender, under the terms and conditions of this promissory note (this "Revolving
---------
Note") and the Credit Agreement. The defined terms in the Credit Agreement are
- ----
used herein with the same meaning. The Borrower also unconditionally promises to
pay interest at such offices on the aggregate unpaid principal amount of this
Revolving Note at the rates applicable thereto from time to time as provided in
the Credit Agreement.
This Revolving Note is one of a series of Revolving Notes referred to in
the Credit Agreement and is issued to evidence the Revolving Loans made by the
Lender pursuant to the Credit Agreement. All of the terms, conditions and
covenants of the Credit Agreement are expressly made a part of this Revolving
Note by reference in the same manner and with the same effect as if set forth
herein at length, and any holder of this Revolving Note is entitled to the
benefits of and remedies provided in the Credit Agreement and the other Credit
Documents. Reference is made to the Credit Agreement for provisions relating to
the interest rate, maturity, payment, prepayment and acceleration of this
Revolving Note.
In the event of an acceleration of the maturity of this Revolving Note on
the terms set forth in the Credit Agreement, this Revolving Note shall become
immediately due and payable, to the extent permitted by law, without
presentation, demand, protest or notice of any kind by the Borrower, all of
which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all reasonable costs
of collection, including reasonable attorneys' fees to the extent and on the
terms set forth in the Credit Agreement.
This Revolving Note has been guaranteed by certain Subsidiaries of the
Borrower (the "Subsidiary Guarantors") pursuant to a Subsidiary Guaranty dated
---------------------
as of February , 2002. This Revolving Note is secured by a Pledge and Security
--
Agreement dated as of February , 2002, among the Borrower, the Subsidiary
--
Guarantors and the Administrative Agent.
This Revolving Note shall be governed by and construed in accordance with
the internal laws and judicial decisions of the State of North Carolina. To the
extent permitted by law, the Borrower hereby submits to the nonexclusive
jurisdiction and venue of the federal and state courts located in Mecklenburg
County, North Carolina, although the Lender shall not be limited to bringing an
action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
US ONCOLOGY, INC.
By:
-----------------------------
Name:
----------------------
Title:
----------------------
2
EXHIBIT A-2
-----------
Borrower's Taxpayer Identification No.
------
FORM OF
SWINGLINE NOTE
$ February , 2002
----------------- --
Charlotte, North Carolina
FOR VALUE RECEIVED, US ONCOLOGY, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK
--------
(the "Swingline Lender"), at the offices of First Union National Bank (the
----------------
"Administrative Agent") located at Charlotte Plaza Building, CP-23, 201 South
--------------------
College Street, Charlotte, North Carolina (or at such other place or places as
the Administrative Agent may designate), at the times and in the manner provided
in the Credit Agreement, dated as of February , 2002 (as amended, modified or
--
supplemented from time to time, the "Credit Agreement"), among the Borrower, the
----------------
Lenders from time to time parties thereto, First Union National Bank, as
Administrative Agent, UBS Warburg, LLC, as Syndication Agent, and General
Electric Capital Corporation, as Documentation Agent, the principal sum of the
principal sum of DOLLARS ($ ),or such lesser amount
---------------- -----------
as may constitute the unpaid principal amount of the Swingline Loans made by the
Swingline Lender, under the terms and conditions of this promissory note (this
"Swingline Note") and the Credit Agreement. The defined terms in the Credit
--------------
Agreement are used herein with the same meaning. The Borrower also
unconditionally promises to pay interest at such offices on the aggregate unpaid
principal amount of this Swingline Note at the rates applicable thereto from
time to time as provided in the Credit Agreement.
This Swingline Note is issued to evidence the Swingline Loans made by the
Swingline Lender pursuant to the Credit Agreement. All of the terms, conditions
and covenants of the Credit Agreement are expressly made a part of this
Swingline Note by reference in the same manner and with the same effect as if
set forth herein at length, and any holder of this Swingline Note is entitled to
the benefits of and remedies provided in the Credit Agreement and the other
Credit Documents. Reference is made to the Credit Agreement for provisions
relating to the interest rate, maturity, payment, prepayment and acceleration of
this Swingline Note.
In the event of an acceleration of the maturity of this Swingline Note on
the terms set forth in the Credit Agreement, this Swingline Note shall become
immediately due and payable, to the extent permitted by law, without
presentation, demand, protest or notice of any kind by the Borrower, all of
which are hereby waived by the Borrower.
In the event this Swingline Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all reasonable costs
of collection, including reasonable attorneys' fees to the extent and on the
terms set forth in the Credit Agreement.
This Swingline Note has been guaranteed by certain Subsidiaries of the
Borrower (the "Subsidiary Guarantors") pursuant to a Subsidiary Guaranty dated
---------------------
as of February , 2002. This Swingline Note is secured by a Pledge and Security
--
Agreement dated as of February , 2002, among the Borrower, the Subsidiary
--
Guarantors and the Administrative Agent.
This Swingline Note shall be governed by and construed in accordance with
the internal laws and judicial decisions of the State of North Carolina. To the
extent permitted by law, the Borrower hereby submits to the nonexclusive
jurisdiction and venue of the federal and state courts located in Mecklenburg
County, North Carolina, although the Swingline Lender shall not be limited to
bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Swingline Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
US ONCOLOGY, INC.
By:
-----------------------------
Name:
----------------------
Title:
----------------------
2
EXHIBIT B-1
-----------
FORM OF
NOTICE OF BORROWING
[Date]
First Union National Bank, as Administrative Agent
Charlotte Plaza Building, 23rd Floor
201 South College Street, CP-23
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, US Oncology, Inc. (the "Borrower"), refers to the Credit
--------
Agreement, dated as of February , 2002, among the Borrower, certain banks and
--
other financial institutions from time to time parties thereto (the "Lenders"),
-------
you, as Administrative Agent for the Lenders, UBS Warburg, LLC, as Syndication
Agent, and General Electric Capital Corporation, as Documentation Agent (as
amended, modified or supplemented from time to time, the "Credit Agreement," the
----------------
terms defined therein being used herein as therein defined), and, pursuant to
Section 2.2(b) of the Credit Agreement, hereby gives you, as Administrative
Agent, irrevocable notice that the Borrower requests a Borrowing of Revolving
Loans under the Credit Agreement, and to that end sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as required by
------------------
Section 2.2(b) of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$ ./1/
---------------
(ii) The Loans comprising the Proposed Borrowing shall be initially
made as [Base Rate Loans] [LIBOR Loans]./2/
(iii) [The initial Interest Period for the LIBOR Loans comprising the
Proposed Borrowing shall be [one/two/three/six months].]/3/
- ----------
/1/ Amount of Proposed Borrowing must comply with Section 2.2(b) of the
Credit Agreement.
/2/ Select the applicable Type of Loans.
/3/ Include this clause in the case of a Proposed Borrowing comprised of
LIBOR Loans, and select the applicable Interest Period.
(iv) The Proposed Borrowing is requested to be made on
---------------
(the "Borrowing Date")./4/
--------------
The Borrower hereby certifies that the following statements are true on and
as of the date hereof and will be true on and as of the Borrowing Date:
A. Each of the representations and warranties contained in Article V
of the Credit Agreement and in the other Credit Documents is and will be
true and correct in all material respects on and as of each such date, with
the same effect as if made on and as of each such date, both immediately
before and after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true
and correct as of such date);
B. No Default or Event of Default has occurred and is continuing or
would result from the Proposed Borrowing or from the application of the
proceeds therefrom; and
C. After giving effect to the Proposed Borrowing, the sum of (i) the
aggregate principal amount of Revolving Loans outstanding, (ii) the
aggregate Letter of Credit Exposure of all Lenders, and (iii) the aggregate
principal amount of Swingline Loans outstanding, will not exceed the
aggregate Revolving Credit Commitments.
Very truly yours,
US ONCOLOGY, INC.
By:
----------------------------------
Name:
-------------------------
Title:
-------------------------
- ----------
/4/ Shall be a Business Day and, if the Notice is delivered by 11:00 a.m.
(Charlotte, North Carolina time), may be the same day as the date hereof (in the
case of Base Rate Loans) or at least three Business Days after the date hereof
(in the case of LIBOR Loans).
2
EXHIBIT B-2
-----------
FORM OF
NOTICE OF SWINGLINE BORROWING
[Date]
First Union National Bank, as Administrative Agent
Charlotte Plaza Building, 23rd Floor
201 South College Street, CP-23
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
First Union National Bank, as Swingline Lender
Charlotte Plaza Building, 6th Floor
201 South College Street, CP-06
Charlotte, North Carolina 28288-0735
Attention:
--------------------
Ladies and Gentlemen:
The undersigned, US Oncology, Inc. (the "Borrower"), refers to the Credit
--------
Agreement, dated as of February , 2002, among the Borrower, certain banks and
--
other financial institutions from time to time parties thereto (the "Lenders"),
--------
you, as Administrative Agent for the Lenders, UBS Warburg, LLC, as Syndication
Agent, and General Electric Capital Corporation, as Documentation Agent (as
amended, modified or supplemented from time to time, the "Credit Agreement," the
----------------
terms defined therein being used herein as therein defined), and, pursuant to
Section 2.2(d) of the Credit Agreement, hereby gives you, as Administrative
Agent and as Swingline Lender, irrevocable notice that the Borrower requests a
Borrowing of a Swingline Loan under the Credit Agreement, and to that end sets
forth below the information relating to such Borrowing (the "Proposed
--------
Borrowing") as required by Section 2.2(d) of the Credit Agreement:
- ---------
(i) The principal amount of the Proposed Borrowing is $ ./1/
-----------
(ii) The Proposed Borrowing is requested to be made on
(the "Borrowing Date")./2/
--------------- --------------
- ----------
/1/ Amount of Proposed Borrowing must comply with Section 2.2(d) of the
Credit Agreement.
/2/ Shall be a Business Day and, if the Notice is delivered by 12:00 p.m.
noon (Charlotte, North Carolina time), may be the same day as the date hereof.
The Borrower hereby certifies that the following statements are true on and
as of the date hereof and will be true on and as of the Borrowing Date:
A. Each of the representations and warranties contained in Article V
of the Credit Agreement and in the other Credit Documents is and will be
true and correct in all material respects on and as of each such date, with
the same effect as if made on and as of each such date, both immediately
before and after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true
and correct as of such date);
B. No Default or Event of Default has occurred and is continuing or
would result from the Proposed Borrowing or from the application of the
proceeds therefrom; and
C. After giving effect to the Proposed Borrowing, the sum of (i) the
aggregate principal amount of Revolving Loans outstanding, (ii) the
aggregate Letter of Credit Exposure of all Lenders, and (iii) the aggregate
principal amount of Swingline Loans outstanding, will not exceed the
aggregate Revolving Credit Commitments.
Very truly yours,
US ONCOLOGY, INC.
By:
----------------------------------
Name:
-------------------------
Title:
-------------------------
2
EXHIBIT B-3
-----------
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank, as Administrative Agent
Charlotte Plaza Building, 23rd Floor
201 South College Street, CP-23
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, US Oncology, Inc. (the "Borrower"), refers to the Credit
--------
Agreement, dated as of February , 2002, among the Borrower, certain banks and
--
other financial institutions from time to time parties thereto (the "Lenders"),
-------
you, as Administrative Agent for the Lenders, UBS Warburg, LLC, as Syndication
Agent, and General Electric Capital Corporation, as Documentation Agent (as
amended, modified or supplemented from time to time, the "Credit Agreement," the
----------------
terms defined therein being used herein as therein defined), and, pursuant to
Section 2.11(b) of the Credit Agreement, hereby gives you, as Administrative
Agent, irrevocable notice that the Borrower requests a [conversion]
[continuation]1 of Loans under the Credit Agreement, and to that end sets forth
below the information relating to such [conversion] [continuation] (the
"Proposed [Conversion] [Continuation]") as required by Section 2.11(b) of the
------------------------------------
Credit Agreement:
(i) The Proposed [Conversion] [Continuation] is requested to be made
on ./2/
---------------
(ii) The Proposed [Conversion] [Continuation] involves $ /3/
-----------
in aggregate principal amount of Revolving Loans made pursuant to a
Borrowing on ,/4/ which Loans are presently maintained as
----------------
[Base Rate] [LIBOR]
- ----------
/1/ Insert "conversion" or "continuation" throughout the notice, as
applicable.
/2/ Shall be the same Business Day (in the case of any conversion of LIBOR
Loans into Base Rate Loans) or at least three Business Days after the date
hereof (in the case of any conversion of Base Rate Loans into, or continuation
of, LIBOR Loans), and additionally, in the case of any conversion of LIBOR Loans
into Base Rate Loans, or continuation of LIBOR Loans, shall be the last day of
the Interest Period applicable to such LIBOR Loans.
/3/ Amount of Proposed Conversion or Continuation must comply with Section
2.11(b) of the Credit Agreement.
/4/ Insert the applicable Borrowing Date for the Loans being converted or
continued.
Loans and are proposed hereby to be [converted into Base Rate Loans]
[converted into LIBOR Loans] [continued as LIBOR Loans]./5/
(iii) [The initial Interest Period for the Loans being [converted
into] [continued as] LIBOR Loans pursuant to the Proposed [Conversion]
[Continuation] shall be [one/two/three/six months].]/6/
The Borrower hereby certifies that the following statement is true both on
and as of the date hereof and on and as of the effective date of the Proposed
[Conversion] [Continuation]: no Default or Event of Default has or will have
occurred and is continuing or would result from the Proposed [Conversion]
[Continuation].
Very truly yours,
US ONCOLOGY, INC.
By:
----------------------------------
Name:
-------------------------
Title:
-------------------------
- ----------
/5/ Complete with the applicable bracketed language.
/6/ Include this clause in the case of a Proposed Conversion or
Continuation involving a conversion of Base Rate Loans into, or continuation of,
LIBOR Loans, and select the applicable Interest Period.
2
EXHIBIT B-4
-----------
FORM OF
LETTER OF CREDIT NOTICE
[Date]
First Union National Bank, as Administrative Agent
Charlotte Plaza Building, 23rd Floor
201 South College Street, CP-23
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
First Union National Bank, as Swingline Lender
Charlotte Plaza Building, 6th Floor
201 South College Street, CP-06
Charlotte, North Carolina 28288-0735
Attention:
--------------------
Ladies and Gentlemen:
The undersigned, US Oncology, Inc. (the "Borrower"), refers to the Credit
--------
Agreement, dated as of February , 2002, among the Borrower, certain banks and
--
other financial institutions from time to time parties thereto (the "Lenders"),
-------
you, as Administrative Agent for the Lenders, UBS Warburg, LLC, as Syndication
Agent, and General Electric Capital Corporation, as Documentation Agent for the
Lenders (as amended, modified or supplemented from time to time, the "Credit
------
Agreement," the terms defined therein being used herein as therein defined),
- ---------
and, pursuant to Section 3.2 of the Credit Agreement, hereby gives you, as
Issuing Lender, irrevocable notice that the Borrower requests the issuance of a
Letter of Credit for its account under the Credit Agreement, and to that end
sets forth below the information relating to such Letter of Credit (the
"Requested Letter of Credit") as required by Section 3.2 of the Credit
--------------------------
Agreement:
(i) The Business Day on which the Requested Letter of Credit is
requested to be issued is ./1/
---------------
(ii) The Stated Amount of the Requested Letter of Credit is
$ .
------------
(iii) The expiry date of the Requested Letter of Credit is
.
--------------
- ----------
/1/ Shall be at least three Business Days (or such shorter period as is
acceptable to the Issuing Lender in any given case) after the date hereof.
(iv) The name and address of the beneficiary of the Requested Letter
of Credit is
----------------------------------------------------------.
The undersigned agrees to complete all application procedures and documents
required by you in connection with the Requested Letter of Credit.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the date of issuance of the Requested Letter
of Credit:
A. Each of the representations and warranties contained in
Article V of the Credit Agreement and in the other Credit Documents is
and will be true and correct in all material respects on and as of
each such date, with the same effect as if made on and as of each such
date, both immediately before and after giving effect to the issuance
of the Requested Letter of Credit (except to the extent any such
representation or warranty is expressly stated to have been made as of
a specific date, in which case such representation or warranty shall
be true and correct as of such date);
B. No Default or Event of Default has occurred and is continuing
or would result from the issuance of the Requested Letter of Credit;
and
C. After giving effect to the issuance of the Requested Letter of
Credit, the sum of (i) the aggregate principal amount of Revolving
Loans outstanding, (ii) the aggregate Letter of Credit Exposure of all
Lenders, and (iii) the aggregate principal amount of Swingline Loans
outstanding, will not exceed the aggregate Revolving Credit
Commitments.
Very truly yours,
US ONCOLOGY, INC.
By:
----------------------------------
Name:
-------------------------
Title:
-------------------------
2
EXHIBIT C
---------
FORM OF
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is given pursuant to Section 6.2(a)(i) of the Credit
Agreement, dated as of February , 2002, among the undersigned as Borrower,
-----
the banks and other financial institutions party thereto from time to time (the
"Lenders"), and First Union National Bank, as Administrative Agent for the
-------
Lenders and as the Issuing Lender (as amended, modified or supplemented from
time to time, the "Credit Agreement"). Capitalized terms used but not defined
----------------
herein shall have the meanings given to them in the Credit Agreement.
The undersigned hereby certifies on behalf of the Borrower that:
1. He is the duly elected [Chief Executive Officer] [Vice
President-Finance] [Chief Financial Officer] [Principal Accounting Officer]
[Treasurer] of the Borrower.
2. Enclosed with this Certificate are copies of the financial statements of
the Borrower and its Subsidiaries as of , and for the [fiscal
-------------
quarter] [year] then ended, required to be delivered under Section [6.1(a)]
[6.1(b)]] of the Credit Agreement. Such financial statements fairly present in
all material respects the financial condition of the Borrower and its
Subsidiaries on a consolidated basis as of the date indicated and the results of
operations of the Borrower and its Subsidiaries on a consolidated basis for the
period covered thereby.
3. The undersigned officer has reviewed the terms of the Credit Agreement
and has made, or caused to be made under the supervision of the undersigned
officer, a review in reasonable detail of the transactions and condition of the
Borrower and its Subsidiaries during the accounting period covered by such
financial statements.
4. The examination described in paragraph (3) above did not disclose the
existence or occurrence of any Default or Event of Default (which has not been
previously disclosed to the Agent) at the end of the accounting period covered
by such financial statements [, except as set forth below].
5. The undersigned officer has no actual knowledge of the existence or
occurrence of any Default or Event of Default (which has not been previously
disclosed to the Agent) during or at the end of the accounting period covered by
such financial statements or as of the date of this Certificate [, except as set
forth below].
[Describe here or in a separate attachment any exceptions to paragraph (4)
or (5) above by listing, in reasonable detail, the nature of the Default or
Event of Default, the period during which it has existed and the action that the
Borrower has taken or proposes to take with respect thereto.]
6. Attached to this Certificate as Attachment A is a Covenant Compliance
------------
Worksheet reflecting the computation of the financial covenants set forth in
Article VII of the
Credit Agreement as of the last day of the period covered by the financial
statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the day of , .
------- ----------- -----
U.S. ONCOLOGY, INC.
[signature of CEO, CFO, Vice President-Finance,
--------------------------------------------------
Principal Accounting Officer, Treasurer]
----------------------------------------
Name:
-------------------------------
Title:
-------------------------------
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
- --------------------------------------------------------------------------------
Leverage Ratio
(Section 7.1 of the Credit Agreement):
- --------------------------------------------------------------------------------
(1) Consolidated Funded Debt as of the last day of the
fiscal quarter $
------------
(2) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter $
------------
(3) Leverage Ratio (Line 1 divided by Line 2)
------------
(4) Maximum Leverage Ratio as of the date of
determination (per Section 7.1 of the Credit
Agreement)
------------
- --------------------------------------------------------------------------------
i
- --------------------------------------------------------------------------------
Adjusted Leverage Ratio
(Section 7.2 of the Credit Agreement):
- --------------------------------------------------------------------------------
(1) Consolidated Funded Debt as of the last day of the
fiscal quarter $
----------------
(2) Consolidated Rent for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter $
----------------
Consolidated Rent multiplied by eight $
----------------
(3) Consolidated EBITDAR for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter
(4) Adjusted Leverage Ratio (Sum of Lines 1 and 2,
divided by Line 3)
----------------
(5) Maximum Adjusted Leverage Ratio as of the date of
determination (per Section 7.2 of the Credit
Agreement)
----------------
- --------------------------------------------------------------------------------
ii
- --------------------------------------------------------------------------------
Senior Leverage Ratio
(Section 7.3 of the Credit Agreement):
- --------------------------------------------------------------------------------
(1) Obligations as of the last day of the fiscal
quarter $
----------------
(2) Indebtedness relating to the ELLF as of the last
day of the fiscal quarter $
----------------
(3) Other Consolidated Funded Debt secured directly or
indirectly by any Lien as of the last day of the
fiscal quarter $
----------------
(4) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter $
----------------
(5) Senior Leverage Ratio (Sum of Lines 1 through 3,
divided by Line 4)
----------------
(4) Maximum Senior Leverage Ratio as of the date of
determination (per Section 7.3 of the Credit
Agreement)
----------------
- --------------------------------------------------------------------------------
iii
- --------------------------------------------------------------------------------
Fixed Charge Coverage Ratio
(Section 7.4 of the Credit Agreement):
- --------------------------------------------------------------------------------
(1) Consolidated EBITDAR for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter $
----------------
(2) Consolidated Fixed Charges for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter $
----------------
(3) Fixed Charge Coverage Ratio (Line 1 divided by
Line 2)
----------------
(4) Minimum Fixed Charge Coverage Ratio as of the date
of determination (per Section 7.4 of the Credit
Agreement)
----------------
- --------------------------------------------------------------------------------
iv
- --------------------------------------------------------------------------------
Capital Expenditures
(Section 7.5 of the Credit Agreement):
- --------------------------------------------------------------------------------
(1) Capital Expenditures for the period of four
consecutive fiscal quarters ending as of the last
day of the fiscal quarter $
----------------
(a) Amount of Investments described in Section
8.5(ix) of the Credit Agreement for the
period of four consecutive fiscal quarters
ending as of the last day of the fiscal
quarter $
----------------
(2) Maximum amount of Capital Expenditures as of the
date of determination (per Section 7.5 of the
Credit Agreement)
----------------
- --------------------------------------------------------------------------------
v
EXHIBIT D
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is made
-------------------------
this day of , , by and between
----- ------------ ---- -------------------------
(the "Assignor") and (the "Assignee"). Reference is
-------- ------------------------ --------
made to the Credit Agreement, dated as of February , 2002 (as amended,
---------------- --
modified or supplemented from time to time, the "Credit Agreement"), among US
------ ---------
Oncology, Inc. (the "Borrower"), certain banks and other financial institutions
--------
from time to time parties thereto (the "Lenders"), First Union National Bank, as
-------
Administrative Agent for the Lenders (the "Administrative Agent"), UBS Warburg,
--------------------
LLC, as Syndication Agent, and General Electric Capital Corporation, as
Documentation Agent. Unless otherwise defined herein, capitalized terms used
herein without definition shall have the meanings given to them in the Credit
Agreement.
The Assignor and the Assignee hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions hereof,
-------------------------
the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor and,
except as expressly provided herein, without representation or warranty by the
Assignor, the interest or interests as of the Effective Date (as hereinafter
defined) in and to all of the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents (in its capacity as a Lender
thereunder) with respect to each Class of Loans represented by the percentage
interest or interests specified with regard to such Class under the heading
"Assigned Share" in Item 4 of Annex I (each such assigned interest, an "Assigned
--------
Share"), including, without limitation, in the case of its Revolving Loans, the
- -----
relevant Assigned Share of all rights and obligations of the Assignor with
respect to its Revolving Credit Commitment, Letter of Credit Exposure, Revolving
Note and Revolving Loans.
2. The Assignor. The Assignor (i) represents and warrants that it is the
------------
legal and beneficial owner of each interest being assigned by it hereunder, that
each such interest is free and clear of any adverse claim, and that as of the
date hereof the amount of its Commitments and outstanding Loans of each Class
with regard to which an interest is being assigned hereunder (and Letter of
Credit Exposure, if applicable) is as set forth in Item 4 of Annex I, (ii)
except as set forth in clause (i) above, makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any other
Credit Document or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, any other Credit Document or any other
instrument or document furnished pursuant thereto, and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries or the
performance or observance by the Borrower or any of its Subsidiaries of any of
their
respective obligations under the Credit Agreement, any other Credit Document or
any other instrument or document furnished pursuant thereto.
3. The Assignee. The Assignee (i) represents and warrants that it is
------------
legally authorized to enter into this Assignment and Acceptance, (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements most recently required to have been delivered under Section
6.1 of the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance, (iii) agrees that it will, independently and
without reliance upon the Agents, the Assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement, (iv) confirms that it is an Eligible Assignee, (v)
appoints and authorizes the Administrative Agent to take such actions as agent
on its behalf under the Credit Agreement and the other Credit Documents, and to
exercise such powers and to perform such duties, as are specifically delegated
to the Administrative Agent by the terms thereof, together with such other
powers and duties as are reasonably incidental thereto, and (vi) agrees that it
will perform in accordance with their respective terms all of the obligations
that by the terms of the Credit Agreement are required to be performed by it as
a Lender. [To the extent legally entitled to do so, the Assignee will deliver to
the Administrative Agent, as and when required to be delivered under the Credit
Agreement, duly completed and executed originals of the applicable tax
withholding forms described in Section 2.17(d) of the Credit Agreement]./1/
4. Effective Date. Following the execution of this Assignment and
--------------
Acceptance by the Assignor and the Assignee, an executed original hereof,
together with all attachments hereto, shall be delivered to each of the
Administrative Agent and the Borrower (and also to the Administrative Agent, the
processing fee referred to in Section 11.7(a) of the Credit Agreement). The
effective date of this Assignment and Acceptance (the "Effective Date") shall be
--------------
the earlier of (i) the date of acceptance hereof by the Administrative Agent and
the Borrower or (ii) the date, if any, designated as the Effective Date in Item
5 of Annex I (which date shall be not less than five (5) Business Days after the
date of execution hereof by the Assignor and the Assignee). As of the Effective
Date, (y) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, shall have the rights and
obligations of a Lender thereunder and under the other Credit Documents, and (z)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights (other than rights under the provisions of the Credit
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, to the extent such rights relate to the time prior
to the Effective Date) and be released from its obligations under the Credit
Agreement and the other Credit Documents.
5. Payments; Settlement. On or prior to the Effective Date, in
--------------------
consideration of the sale and assignment provided for herein and as a condition
to the effectiveness of this Assignment and Acceptance, the Assignee will pay to
the Assignor an amount (to be confirmed between the Assignor and the Assignee)
that represents the Assigned Share of the principal
- ----------
/1/ Insert if the Assignee is organized under the laws of a jurisdiction
outside the United States.
2
amount of the Loans of each relevant Class made by the Assignor and outstanding
on the Effective Date (together, if and to the extent the Assignor and the
Assignee so elect, with the Assigned Share of any related accrued but unpaid
interest, fees and other amounts). From and after the Effective Date, the
Administrative Agent will make all payments required to be made by it under the
Credit Agreement in respect of each interest assigned hereunder (including,
without limitation, all payments of principal, interest and fees in respect of
the Assigned Share of the Assignor's Commitments and Loans assigned hereunder)
directly to the Assignee. The Assignor and the Assignee shall be responsible for
making between themselves all appropriate adjustments in payments due under the
Credit Agreement in respect of the period prior to the Effective Date. All
payments required to be made hereunder or in connection herewith shall be made
in Dollars by wire transfer of immediately available funds to the appropriate
party at its address for payments designated in Annex I.
6. Governing Law. This Assignment and Acceptance shall be governed by, and
-------------
construed in accordance with, the internal laws of the State of North Carolina
(without regard to the conflicts of laws principles thereof).
7. Entire Agreement. This Assignment and Acceptance, together with the
----------------
Credit Agreement and the other Credit Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.
8. Successors and Assigns. This Assignment and Acceptance shall be binding
----------------------
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
9. Counterparts. This Assignment and Acceptance may be executed in any
------------
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
3
IN WITNESS WHEREOF, the parties have caused this Assignment and Acceptance
to be executed by their duly authorized officers as of the date first above
written.
ASSIGNOR:
--------
[NAME OF ASSIGNOR]
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
ASSIGNEE:
--------
[NAME OF ASSIGNEE]
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACCEPTED THIS DAY OF , :
------- -------------- -----
FIRST UNION NATIONAL BANK, as Administrative Agent,
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
CONSENTED AND AGREED TO AS OF THE DATE OF ACCEPTANCE BY THE ADMINISTRATIVE
AGENT:
US ONCOLOGY, INC.
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
4
ANNEX I
-------
1. Borrower: US ONCOLOGY, INC.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of February , 2002, among US Oncology, Inc.,
--
certain Lenders from time to time parties thereto, First Union National
Bank, as Administrative Agent, UBS Warburg, LLC, as Syndication Agent, and
General Electric Capital Corporation, as Documentation Agent.
3. Date of Assignment and Acceptance: , 200 .
---------------- --
4. Amounts:
Amount of Aggregate
Aggregate Assigned Assigned for Assignor
for Assignor Share/2/ Share (after assignment)
------------ -------- ----- ------------------
(a) Revolving Credit
Commitment $ % $ $
----------- ------- -------- -----------------
(b) Revolving Loans/3/ $ % $ $
----------- ------- -------- -----------------
(c) Letter of Credit Exposure $ % $ $
----------- ------- -------- -----------------
5. Effective Date: , 200 ./4/
------------------- --
- ----------
/2/ Percentage taken to up to ten decimal places, if necessary.
/3/ Insert amounts outstanding as of the date of the Assignment and Acceptance.
/4/ Shall be a date not less than five Business Days after the date of the
Assignment and Acceptance.
6. Addresses for Payments:
Assignor:
---------------------------------
---------------------------------
---------------------------------
Attention:
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Telephone:
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Telecopy:
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Reference:
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Assignee:
---------------------------------
---------------------------------
---------------------------------
Attention:
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Telephone:
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Telecopy:
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Reference:
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7. Addresses for Notices:
Assignor:
---------------------------------
---------------------------------
---------------------------------
Attention:
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Telephone:
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Telecopy:
--------------------
Reference:
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Assignee:
---------------------------------
---------------------------------
---------------------------------
Attention:
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Telephone:
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Telecopy:
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Reference:
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8. Lending Office of Assignee:
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Attention:
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Telephone:
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Telecopy:
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2
EXHIBIT E
---------
FORM OF
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of the 1st day of February,
2002 (this "Agreement"), is made by US ONCOLOGY, INC., a Delaware corporation
---------
(the "Borrower"), and by each of the undersigned Subsidiaries of the Borrower
--------
and each other Subsidiary that, after the date hereof, executes an instrument of
accession hereto substantially in the form of Exhibit D (a "Pledgor Accession";
-----------------
the undersigned Subsidiaries and such other Subsidiaries, collectively, the
"Guarantor Pledgors," and together with the Borrower, the "Pledgors"), in favor
------------------ --------
of FIRST UNION NATIONAL BANK, as collateral agent (in such capacity, the
"Collateral Agent"), for the benefit of the Secured Parties (as hereinafter
----------------
defined). Capitalized terms used herein without definition shall have the
meanings given to them in the Credit Agreement referred to below.
RECITALS
A. The Borrower, the Lenders, and the Agent are parties to a Credit
Agreement, dated as of February 1, 2002 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), providing for the availability of
----------------
certain credit facilities to the Borrower upon the terms and subject to the
conditions set forth therein.
B. As a condition to the extension of credit to the Borrower under the
Credit Agreement, each of the Guarantor Pledgors that is a party to this
Agreement as of the date hereof has entered into a Subsidiary Guaranty, dated as
of the date hereof (as amended, modified or supplemented from time to time, the
"Subsidiary Guaranty"), pursuant to which each such Guarantor Pledgor has
-------------------
guaranteed to the Guaranteed Parties (as defined in the Subsidiary Guaranty) the
payment in full of the Guaranteed Obligations (as defined in the Subsidiary
Guaranty). Additionally, certain other Subsidiaries of the Borrower may from
time to time after the date hereof enter into the Subsidiary Guaranty, pursuant
to which such Subsidiaries will guarantee to the Secured Parties the payment in
full of the Obligations of the Borrower under the Credit Agreement and the other
Credit Documents.
C. It is a further condition to the extension of credit to the Borrower
under the Credit Agreement that the Pledgors shall have agreed, by executing and
delivering this Agreement, to secure the payment in full of their respective
obligations under the Credit Agreement, the Subsidiary Guaranty and the other
Credit Documents. The Secured Parties are relying on this Agreement in their
decision to extend credit to the Borrower under the Credit Agreement (and any
Hedge Agreements), and would not enter into the Credit Agreement (or any Hedge
Agreements) without the execution and delivery of this Agreement by the
Pledgors.
D. AOR Synthetic Real Estate, Inc. (the "ELLF Lessee"), the Borrower, the
-----------
Guarantor Pledgors, Wells Fargo Bank Northwest, National Association, not
individually, except as expressly stated therein, but solely as the Owner
Trustee (as defined in Appendix A to the
----------
Participation Agreement, as defined herein), the Holders (as defined in Appendix
--------
A to the Participation Agreement, as defined herein), the Lenders (as defined in
- -
Appendix A to the Participation Agreement, as defined herein), and First Union
- ----------
National Bank, as agent, are parties to an Amended and Restated Participation
Agreement, dated as of February 1, 2002 (as amended, modified or supplemented
from time to time, the "Participation Agreement") which, together with the other
-----------------------
Operative Agreements (as defined in Appendix A to the Participation Agreement),
----------
provide for the availability of certain end loaded lease financing facilities
(the "ELLF") to the ELLF Lessee upon the terms and subject to the conditions set
----
forth therein.
E. As a condition to the extension of the ELLF to the ELLF Lessee under the
Operative Agreements, each of the Borrower and the Guarantor Pledgors that is a
party to this Agreement as of the date hereof has entered into an Amended and
Restated Credit Agreement, dated as of the date hereof (as amended, modified or
supplemented from time to time, the "ELLF Credit Agreement"), pursuant to which
---------------------
(i) the Borrower and each such Guarantor Pledgor has guaranteed to the Tranche A
Lenders (as defined in the Participation Agreement) the payment in full of the
Tranche A Obligations (as defined in the Participation Agreement) and (ii) the
Borrower has guaranteed to the Financing Parties (as defined in the
Participation Agreement) the payment in full of the Company Obligations (as
defined in the Participation Agreement). Additionally, certain other
Subsidiaries of the Borrower may from time to time after the date hereof enter
into the ELLF Credit Agreement pursuant to which such Subsidiaries will
guarantee to the Tranche A Lenders the payment in full of the Tranche A
Obligations.
F. It is a further condition to the extension of the ELLF to the ELLF
Lessee under the Operative Agreements that the Pledgors shall have agreed, by
executing and delivering this Agreement, to secure the payment in full of their
respective obligations under the Operative Agreements. The Secured Parties are
relying on this Agreement in their decision to extend credit to the Borrower
under the ELLF facilities, and would not enter into the ELLF Credit Agreement
and other Operative Agreements without the execution and delivery of this
Agreement by the Pledgors.
G. The Pledgors will obtain benefits as a result of the extensions of
credit to the Borrower and the ELLF Lessee as described above, which benefits
are hereby acknowledged, and, accordingly, desire to execute and deliver this
Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby agrees as follows:
2
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
-------------
defined elsewhere herein, the following terms shall have the meanings set forth
below:
"Accounts" shall mean, collectively, all of each Pledgor's accounts, as
--------
defined in the Uniform Commercial Code, including without limitation all of such
Pledgor's accounts receivable (including without limitation any Medicare,
Medicaid and other similar accounts receivable payable by Governmental
Authorities), all health-care-insurance receivables, all rights to payment for
goods sold or leased or to be sold or to be leased (including all rights to
returned or repossessed goods) or for services rendered at any time or for
services to be rendered (including all rights to payment under Management
Services Agreements and Third Party Payor Arrangements, and any rights to
stoppage in transit, repossession and reclamation and other rights of an unpaid
vendor or secured party), all rights under or evidenced by book debts, notes,
bills, drafts or acceptances, all Instruments evidencing or relating to any of
the foregoing, and all rights under security agreements, guarantees, indemnities
and other instruments and contracts securing or otherwise relating to any of the
foregoing and constituting secondary obligations, in each case whether now owned
or existing or hereafter acquired or arising.
"Collateral" shall have the meaning given to such term in Section 2.1.
----------
"Collateral Accounts" shall have the meaning given to such term in Section
-------------------
6.3.
"Concentration Account" shall have the meaning given to such term in
---------------------
Section 4.14.
"Concentration Agreement" shall have the meaning given to such term in
-----------------------
Section 4.14.
"Contracts" shall mean, collectively, all rights of each Pledgor under all
---------
leases, contracts and agreements to which such Pledgor is now or hereafter a
party, including without limitation all rights, privileges and powers under
Management Services Agreements, Third Party Payor Arrangements, Ownership
Agreements and Licenses, together with any and all extensions, modifications,
amendments and renewals of such leases, contracts and agreements and all rights
of such Pledgor to receive moneys due or to become due thereunder or pursuant
thereto and to amend, modify, terminate or exercise rights under such leases,
contracts and agreements, but excluding rights under (but not excluding Proceeds
of) any lease, contract or agreement (including without limitation any License)
that by the terms thereof, or under applicable law, cannot be assigned or a
security interest granted therein in the manner contemplated by this Agreement
unless consent from the relevant party or parties has been obtained and under
the terms of which lease, contract or agreement any such assignment or grant of
a security interest therein in the absence of such consent would, or could
reasonably be expected to, result in the termination thereof, but only to the
extent that (x) such rights are subject to such contractual or legal restriction
and (y) such restriction is not ineffective pursuant to the Uniform Commercial
Code of any relevant jurisdiction or any other applicable law (including the
Bankruptcy Code) or principles of equity.
3
"Copyright Collateral" shall mean, collectively, all Copyrights and
--------------------
Copyright Licenses to which any Pledgor is or hereafter becomes a party and all
other General Intangibles embodying, incorporating, evidencing or otherwise
relating or pertaining to any Copyright or Copyright License, in each case
whether now owned or existing or hereafter acquired or arising, but excluding
leases, contracts and agreements (including without limitation Licenses) to the
extent excluded from Contracts under the definition of such term herein.
"Copyright License" shall mean any agreement now or hereafter in effect
-----------------
granting any right to any third party under any Copyright now or hereafter owned
by any Pledgor or which any Pledgor otherwise has the right to license, or
granting any right to any Pledgor under any property of the type described in
the definition of Copyright herein now or hereafter owned by any third party,
and all rights of any Pledgor under any such agreement.
"Copyrights" shall mean, collectively, all of each Pledgor's copyrights,
----------
copyright registrations and applications for copyright registration, whether
under the laws of the United States or any other country or jurisdiction,
including all recordings, supplemental registrations and derivative or
collective work registrations, and all renewals and extensions thereof, in each
case whether now owned or existing or hereafter acquired or arising.
"Default" shall mean any event, act or condition which with notice or lapse
-------
of time, or both, would constitute an Event of Default.
"Deposit Accounts" shall mean, collectively, all of each Pledgor's deposit
----------------
accounts maintained with the Collateral Agent, the Agent or any other bank or
depository institution, whether now owned or existing or hereafter acquired or
arising and including without limitation all Concentration Accounts and any
Collateral Accounts, together with all funds held from time to time therein and
all certificates and instruments from time to time representing or evidencing
such accounts.
"Domain Name" shall mean the combination of words and abbreviations that
-----------
represents a uniquely identifiable internet protocol address of a World Wide Web
internet location.
"Equipment" shall mean, collectively, all of each Pledgor's equipment, as
---------
defined in the Uniform Commercial Code, including without limitation all
machinery, equipment, computer equipment and software, parts, supplies,
appliances, fittings and furniture and fixtures, in each case of every kind and
nature, wherever located and whether or not affixed to any real property, and
all Mobile Goods, and all accessions, accessories, additions, attachments,
improvements, modifications and upgrades to, replacements of and substitutions
for the foregoing, in each case whether now owned or existing or hereafter
acquired.
"Event of Default" shall mean either of an "Event of Default" as defined in
----------------
Section 9.1 of the Credit Agreement or an "Event of Default" as defined in
Appendix A to the Participation Agreement.
"General Intangibles" shall mean, collectively, all of each Pledgor's
-------------------
general intangibles, as defined in the Uniform Commercial Code, including
without limitation all Contracts, all Copyright Collateral, all Patent
Collateral, all Trademark Collateral, all inventions, designs, trade secrets,
trade processes, confidential or proprietary technical or business information,
know-how,
4
registrations, to include with out limitation, domain name registrations,
licenses, permits and franchises, all rights under or evidenced by choses in
action, causes of action or Instruments, all indebtedness, obligations and other
amounts at any time owing to such Pledgor from any Person and all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness, obligations or other amounts (including without limitation all
Intercompany Obligations), all judgments, tax refund claims, claims against
carriers and shippers, claims under liens and insurance policies, all rights
under security agreements, guarantees, indemnities and other instruments and
contracts securing or otherwise relating to any of the foregoing, all invoices,
customer lists, books and records, ledger and account cards, computer tapes,
disks, software, printouts and other corporate or business records relating to
the foregoing, and all other intangible personal property of every kind and
nature, and all accessions, additions, improvements, modifications and upgrades
to, replacements of and substitutions for the foregoing, in each case whether
now owned or existing or hereafter acquired or arising, but excluding Accounts
and excluding leases, contracts and agreements (including without limitation
Licenses) to the extent excluded from Contracts under the definition of such
term herein.
"Governmental Accounts" shall have the meaning given to such term in
---------------------
Section 4.14.
"Instruments" shall mean, collectively, all instruments, tangible chattel
-----------
paper and documents, each as defined in the Uniform Commercial Code, of each
Pledgor, whether now owned or existing or hereafter acquired, including those
evidencing, representing, securing, arising from or otherwise relating to any
Accounts, Intercompany Obligations or other Collateral, including without
limitation any promissory notes, drafts, bills of exchange, documents of title
and receipts.
"Intercompany Obligations" shall mean, collectively, all indebtedness,
------------------------
obligations and other amounts at any time owing to such Pledgor from any of its
Subsidiaries or other Pledgors, all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness, obligations or
other amounts, and all instruments or documents (each as defined in the Uniform
Commercial Code) evidencing or representing any such indebtedness, obligations
or other amounts (including, without limitation, any promissory notes) together
with all amendments, modifications and supplements thereto, restatements,
extensions and renewals thereof, and substitutions therefor, in each case
whether now owned or existing or hereafter acquired or arising.
"Intercreditor Agreement" shall mean an intercreditor agreement between
-----------------------
each of the Secured Parties and the Collateral Agent, initially dated as of the
date hereof, as amended, modified or supplemented from time to time.
"Inventory" shall mean, collectively, all of each Pledgor's inventory, as
---------
defined in the Uniform Commercial Code, including without limitation all goods
manufactured, acquired or held for sale or lease, all raw materials, component
materials, work-in-process and finished goods, all supplies, goods and other
items and materials used or consumed in the manufacture, production, packaging,
shipping, selling, leasing or furnishing of such inventory or otherwise in the
operation of the business of such Pledgor, together with all goods in which such
Pledgor now
5
or at any time hereafter has any interest or right of any kind, and all goods
that have been returned to or repossessed by or on behalf of such Pledgor, in
each case whether or not the same is in transit or in the constructive, actual
or exclusive occupancy or possession of such Pledgor or is held by such Pledgor
or by others for the account of such Pledgor, and in each case whether now owned
or existing or hereafter acquired or arising.
"Investment Property" shall mean, collectively, all of each Pledgor's
-------------------
investment property, as defined in the Uniform Commercial Code, including,
without limitation, all certificated securities, uncertificated securities,
security entitlements, securities accounts, commodity contracts and commodity
accounts (as such terms are defined in the Uniform Commercial Code) of or held
by such Pledgor, together with all rights to receive interest, income,
dividends, distributions, returns of capital and other amounts (whether in cash,
securities, property, or a combination thereof), and all additional stock,
warrants, options, securities, interests and other property, from time to time
paid or payable or distributed or distributable in respect of any of the
foregoing; and all other rights, powers, privileges, interests, claims and other
property in any manner arising out of or relating to any of the foregoing, of
whatever kind or character; together with all certificates, instruments and
entries upon the books of financial intermediaries at any time evidencing any of
the foregoing, in each case whether now owned or existing or hereafter acquired
or arising.
"License" shall mean any Copyright License, Patent License or Trademark
-------
License.
"Mobile Goods" shall mean, collectively, all of each Pledgor's motor
------------
vehicles, tractors, trailers, aircraft, rolling stock and other like property,
whether or not the title thereto is governed by a certificate of title or
ownership, in each case whether now owned or existing or hereafter acquired.
"Ownership Agreements" shall have the meaning given to such term within the
--------------------
definition of "Pledged Interests."
"Partner Obligations" shall have the meaning given to such term in Section
-------------------
6.6.
"Patent Collateral" shall mean, collectively, all Patents and all Patent
-----------------
Licenses to which any Pledgor is or hereafter becomes a party and all other
General Intangibles embodying, incorporating, evidencing or otherwise relating
or pertaining to any Patent or Patent License, in each case whether now owned or
existing or hereafter acquired or arising, but excluding leases, contracts and
agreements (including without limitation Licenses) to the extent excluded from
Contracts under the definition of such term herein.
"Patent License" shall mean any agreement of each Pledgor now or hereafter
--------------
in effect granting to any third party any right to make, use or sell any
invention on which a Patent, now or hereafter owned by such Pledgor or which
such Pledgor otherwise has the right to license, is in existence, or granting to
such Pledgor any right to make, use or sell any invention on which property of
the type described in the definition of Patent herein, now or hereafter owned by
any third party, is in existence, and all rights of such Pledgor under any such
agreement.
"Patents" shall mean, collectively, all of each Pledgor's letters patent,
-------
whether under the laws of the United States or any other country or
jurisdiction, all recordings and registrations
6
thereof and applications therefor, including without limitation the inventions
described therein, all reissues, continuations, divisions, renewals, extensions,
continuations-in-part thereof, in each case whether now owned or existing or
hereafter acquired or arising.
"Pledge Amendment" shall have the meaning given to such term in Section
----------------
5.1(b).
"Pledged Interests" shall mean, collectively, to the extent owned or held
-----------------
by each Pledgor, all of the issued and outstanding shares, interests or other
equivalents of capital stock of each Person that is a direct Subsidiary of such
Pledgor as of the date hereof or that becomes a direct Subsidiary of such
Pledgor at any time after the date hereof, at any time now or hereafter owned by
such Pledgor, whether voting or non-voting and whether common or preferred; all
partnership, joint venture, limited liability company or other equity interests
in each Person not a corporation that is a direct Subsidiary of such Pledgor as
of the date hereof or that becomes a direct Subsidiary of such Pledgor at any
time after the date hereof, at any time now or hereafter owned by such Pledgor;
all options, warrants and other rights to acquire, and all securities
convertible into, any of the foregoing; all rights to receive interest, income,
dividends, distributions, returns of capital and other amounts (whether in cash,
securities, property, or a combination thereof), and all additional stock,
warrants, options, securities, interests and other property, from time to time
paid or payable or distributed or distributable in respect of any of the
foregoing (but subject to the provisions of Section 5.3), including, without
limitation, all rights of such Pledgor to receive amounts due and to become due
under or in respect of any partnership agreement, joint venture agreement,
limited liability company operating agreement, stockholders agreement or other
agreement creating, governing or evidencing any such capital stock or equity
interests and to which any Pledgor is now or hereafter becomes a party, as any
such agreement may be amended, modified, supplemented, restated or replaced from
time to time (collectively, "Ownership Agreements"); all rights of access to the
--------------------
books and records of any such Subsidiary; and all other rights, powers,
privileges, interests, claims and other property in any manner arising out of or
relating to any of the foregoing, of whatever kind or character (including any
tangible or intangible property or interests therein), and whether provided by
contract or granted or available under applicable law in connection therewith,
including, without limitation, such Pledgor's right to vote and to manage and
administer the business of any such Subsidiary pursuant to any applicable
Ownership Agreement; together with all certificates, instruments and entries
upon the books of financial intermediaries at any time evidencing any of the
foregoing, in each case whether now owned or existing or hereafter acquired or
arising.
"Proceeds" shall have the meaning given to such term in Section 2.1.
--------
"Required Secured Parties" shall mean, at any time, the Secured Parties
------------------------
holding outstanding Loans, unutilized Revolving Credit Commitments (or, after
the termination of the Revolving Credit Commitments, outstanding Loans and
Letter of Credit Exposure) and Tranche A Loans, Tranche B Loans and Holder
Advances (as such terms are defined in Appendix A to the Participation
Agreement) representing more than fifty percent (50%) of the aggregate at such
time of all outstanding Loans, unutilized Revolving Credit Commitments (or,
after the termination of the Revolving Credit Commitments, the aggregate at such
time of all outstanding Loans and Letter of Credit Exposure) and Tranche A
Loans, Tranche B Loans and Holder Advances.
7
"Secured Obligations" shall have the meaning given to such term in Section
-------------------
2.2.
"Secured Parties" shall mean, collectively, (i) the Lenders (including the
---------------
Issuing Lender and the Swingline Lender in their capacity as such, and including
any Lender (or an Affiliate of any Lender) in its capacity as a counterparty to
any Hedge Agreement with the Borrower which is required or permitted under the
Credit Agreement) and the Agent, (ii) the Tranche A Lenders and the other
Financing Parties, as each such term is defined in Appendix A to the
----------
Participation Agreement, and (iii) the Collateral Agent.
"Securities Act" shall have the meaning given to such term in Section 6.5.
--------------
"Specified Contracts" shall have the meaning given to such term in Section
-------------------
3.8.
"Termination Requirements" shall have the meaning given to such term in
------------------------
Section 8.3(ix).
"Trademark Collateral" shall mean, collectively, all Trademarks and
--------------------
Trademark Licenses to which each Pledgor is or hereafter becomes a party and all
other General Intangibles embodying, incorporating, evidencing or otherwise
relating or pertaining to any Trademark or Trademark License, in each case
whether now owned or existing or hereafter acquired or arising, but excluding
leases, contracts and agreements (including without limitation Licenses) to the
extent excluded from Contracts under the definition of such term herein.
"Trademark License" shall mean any agreement of each Pledgor now or
-----------------
hereafter in effect granting any right to any third party under any Trademark
now or hereafter owned by such Pledgor or which such Pledgor otherwise has the
right to license, or granting any right to such Pledgor under any property of
the type described in the definition of Trademark herein now or hereafter owned
by any third party, and all rights of any Pledgor under any such agreement.
"Trademarks" shall mean, collectively, all of each Pledgor's trademarks,
----------
service marks, trade names, corporate and company names, business names, logos,
trade dress, trade styles, other source or business identifiers, designs and
general intangibles of a similar nature, whether under the laws of the United
States or any other country or jurisdiction, all recordings and registrations
thereof and applications therefor, all renewals and extensions thereof, all
rights corresponding thereto, and all goodwill associated therewith or
symbolized thereby, in each case whether now owned or existing or hereafter
acquired or arising.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as the
-----------------------
same may be in effect from time to time in the State of North Carolina; provided
--------
that if, by reason of applicable law, the validity or perfection of any security
interest in any Collateral granted under this Agreement is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than North
Carolina, then as to the validity or perfection, as the case may be, of such
security interest, "Uniform Commercial Code" shall mean the Uniform Commercial
-----------------------
Code as in effect from time to time in such other jurisdiction.
1.2 Other Terms. All terms in this Agreement that are not capitalized shall
-----------
have the meanings provided by the Uniform Commercial Code to the extent the same
are used or defined therein.
8
ARTICLE II
CREATION OF SECURITY INTEREST
2.1 Pledge and Grant of Security Interest. Each Pledgor hereby pledges,
-------------------------------------
assigns and delivers to the Collateral Agent, for the ratable benefit of the
Secured Parties, and grants to the Collateral Agent, for the ratable benefit of
the Secured Parties, a Lien upon and security interest in, all of such Pledgor's
right, title and interest in and to the following, in each case whether now
owned or existing or hereafter acquired or arising (collectively, the
"Collateral"):
----------
(i) all Accounts;
(ii) all Contracts (including, without limitation, Management Services
Agreements);
(iii) all Deposit Accounts;
(iv) all Equipment;
(v) all Pledged Interests;
(vi) all Intercompany Obligations;
(vii) all General Intangibles;
(viii) all Inventory;
(ix) all Instruments;
(x) all Investment Property;
(xi) to the extent not covered or not specifically excluded by clauses
(i) through (x) above, all of such Pledgor's other personal property,
whether now owned or existing or hereafter arising or acquired, including
without limitation all letter of credit rights; and
(xii) any and all proceeds, as defined in the Uniform Commercial Code,
products, rents and profits of or from any and all of the foregoing and, to
the extent not otherwise included in the foregoing, (w) all payments under
any insurance (whether or not the Collateral Agent is the loss payee
thereunder), indemnity, warranty or guaranty with respect to any of the
foregoing Collateral, (x) all payments in connection with any requisition,
condemnation, seizure or forfeiture with respect to any of the foregoing
Collateral, (y) all claims and rights to recover for any past, present or
future infringement or dilution of or injury to any Copyright Collateral,
Patent Collateral or Trademark Collateral, and (z) all other amounts from
time to time paid or payable under or with respect to any of the foregoing
Collateral (collectively, "Proceeds"). For purposes of this Agreement, the
--------
term "Proceeds" includes whatever is receivable or received when
9
Collateral or Proceeds are sold, exchanged, collected or otherwise disposed
of, whether voluntarily or involuntarily.
2.2 Security for Secured Obligations. Each of the Pledgors agrees that the
--------------------------------
Collateral pledged, assigned or delivered by such Pledgor hereunder shall secure
the full and prompt payment, at any time and from time to time as and when due
(whether at the stated maturity, by acceleration or otherwise), of all
liabilities and obligations of such Pledgor, whether now existing or hereafter
incurred, created or arising and whether direct or indirect, absolute or
contingent, due or to become due, under, arising out of or in connection with
this Agreement, the Credit Agreement, the Subsidiary Guaranty, any of the other
Credit Documents to which it is or hereafter becomes a party, any Hedge
Agreement required or permitted under the Credit Agreement and to which the
Borrower and any Lender or Affiliate of any Lender are parties, or the ELLF
Credit Agreement or any of the other Operative Agreements, including without
limitation (i) in the case of the Borrower, all Obligations, including without
limitation all principal of and interest on the Loans, all fees, expenses,
indemnities and other amounts payable by the Borrower under the Credit Agreement
or any other Credit Document (including interest accruing after the filing of a
petition or commencement of a case by or with respect to the Borrower seeking
relief under any applicable federal and state laws pertaining to bankruptcy,
reorganization, arrangement, moratorium, readjustment of debts, dissolution,
liquidation or other debtor relief, specifically including without limitation
the Bankruptcy Code and any fraudulent transfer and fraudulent conveyance laws,
whether or not the claim for such interest is allowed in such proceeding), and
all obligations of the Borrower to any Lender or Affiliate of any Lender under
any Hedge Agreement required or permitted under the Credit Agreement and to
which the Borrower and such Lender or Affiliate thereof are parties (including
any such Hedge Agreement with a party that subsequently ceases to be a Lender,
which Hedge Agreement is entered into prior to the date such party ceases to be
a Lender), (ii) in the case of any Guarantor Pledgor, all of its liabilities and
obligations as a Guarantor (as defined in the Subsidiary Guaranty) in respect of
the Guaranteed Obligations, (iii) in the case of the Borrower or any Guarantor
Pledgor, all of its liabilities and obligations as a Tranche A Guarantor (as
defined in Appendix A to the Participation Agreement) in respect of the Tranche
A Obligations, (iv) in the case of the Borrower, all of its liabilities and
obligations in respect of the Company Obligations and (v) in the case of the
ELLF Lessee, all of its liabilities and obligations under the ELLF Lease; and in
each case under clauses (i) through (v) above, (A) all such liabilities and
obligations that, but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, would become due, and (B) all fees, costs and
expenses payable by such Pledgor under Section 8.1 (the liabilities and
obligations of the Pledgors described in this Section 2.2, collectively, the
"Secured Obligations").
-------------------
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Pledgor represents and warrants as follows:
3.1 Ownership of Collateral. Each Pledgor owns, or has valid rights as a
-----------------------
lessee or licensee with respect to, all Collateral purported to be pledged by it
hereunder, free and clear of
10
any Liens except for the Liens granted hereunder and except for other Permitted
Liens. No security agreement, financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
government or public office, and no Pledgor has filed or consented to the filing
of any such statement or notice, except (i) Uniform Commercial Code financing
statements naming the Collateral Agent as secured party, (ii) security
instruments filed in the U.S. Copyright Office or the U.S. Patent and Trademark
Office naming the Collateral Agent as secured party and (iii) as may be
otherwise permitted by the Credit Agreement.
3.2 Security Interests; Filings. This Agreement, together with (i) the
---------------------------
filing of duly completed and executed Uniform Commercial Code financing
statements (A) naming each Pledgor as debtor, (B) naming the Collateral Agent as
secured party, and (C) describing the Collateral, in the jurisdictions set forth
with respect to such Pledgor on Annex B hereto, (ii) the filing of duly
completed and executed grants of security interest in the forms set forth as
Exhibits B and C with the U.S. Copyright Office or the U.S. Patent and Trademark
Office, as appropriate, with regard to federally registered Copyright
Collateral, Patent Collateral, and Trademark Collateral of each Pledgor, as the
case may be, (iii) the registration of transfer thereof to the Collateral Agent
on the issuer's books or the execution by the issuer of a control agreement
satisfying the requirements of Section 8-106 (or its successor provision) of the
Uniform Commercial Code with regard to uncertificated Investments, (iv) the
notation of the Collateral Agent's security interest on the applicable
certificates of title or ownership with regard to Mobile Goods covered by a
certificate of title or ownership, and (v) the delivery to the Collateral Agent
of all stock certificates and certificated Instruments included in the
Collateral, together with undated stock powers duly executed in blank (and
assuming continued possession thereof by the Collateral Agent and that the
Collateral Agent has acquired its security interest and taken possession of such
stock certificates and Instruments without notice of any adverse interests),
creates, and at all times shall constitute, a valid and perfected security
interest in and Lien upon the Collateral in favor of the Collateral Agent, for
the benefit of the Secured Parties, to the extent a security interest therein
can be perfected by such filings, actions or possession, as applicable, superior
and prior to the rights of all other Persons therein (except for Permitted
Liens), and no other or additional filings, registrations, recordings or actions
are or shall be necessary or appropriate in order to maintain the perfection and
priority of such Lien and security interest, other than actions required with
respect to Collateral of the types excluded from Article 9 of the Uniform
Commercial Code or from the filing requirements under such Article 9 by reason
of Section 9-109, 9-309 or 9-310 of the Uniform Commercial Code and other than
continuation statements required under the Uniform Commercial Code (it being
specifically noted that the Collateral Agent may at its option, but shall not be
required to, require that any bank or other depository institution at which a
Deposit Account is maintained enter into a written control agreement or take
such other action as may be necessary to perfect the security interest of the
Collateral Agent in such Deposit Account and the funds therein).
3.3 Locations. Annex C lists, as to each Pledgor, (i) its exact legal name,
---------
(ii) the jurisdiction of its incorporation or organization, its federal tax
identification number, and (if applicable) its organizational identification
number, (iii) the addresses of its chief executive office and each other place
of business, (iv) the address of each location of all original invoices,
ledgers, chattel paper, Instruments and other records or information evidencing
or relating to the Collateral of such Pledgor, and (v) the address of each
location at which any Equipment or Inventory (other than Mobile Goods and goods
in transit) owned by such Pledgor is kept or
11
maintained, in each instance except for any new locations established in
accordance with the provisions of Section 4.2. Except as may be otherwise noted
therein, all locations identified in Annex C are owned or leased by the
applicable Pledgor. No Pledgor presently conducts business under any prior or
other corporate or company name or under any trade or fictitious names, except
as indicated beneath its name on Annex C, and no Pledgor has entered into any
contract or granted any Lien within the past five years under any name other
than its legal corporate name or a trade or fictitious name indicated on Annex
C.
3.4 Authorization; Consent. No authorization, consent or approval of, or
----------------------
declaration or filing with, any Governmental Authority (including without
limitation any notice filing with state tax or revenue authorities required to
be made by account creditors in order to enforce any Accounts in such state) is
required for the valid execution, delivery and performance by any Pledgor of
this Agreement, the grant by it of the Lien and security interest in favor of
the Collateral Agent provided for herein, or the exercise by the Collateral
Agent of its rights and remedies hereunder, except for (i) the filings described
in Section 3.2, (ii) in the case of Accounts owing from any federal governmental
agency or authority (other than pursuant to the federal Medicare and Medicaid
programs), the filing by the Collateral Agent of a notice of assignment in
accordance with the federal Assignment of Claims Act of 1940, as amended, (iii)
in the case of Medicare and Medicaid Accounts, compliance with the applicable
provisions of the federal Social Security Act (and, in the case of Medicaid
Accounts, any analogous provisions of applicable state law) to the extent a Lien
or security interest is permitted therein, and (iv) in the case of Pledged
Interests, such filings and approvals as may be required in connection with a
disposition of any such Collateral by laws affecting the offering and sale of
securities generally.
3.5 No Restrictions. Except for the provisions of the federal Medicare and
---------------
Medicaid statutes and the regulations thereunder restricting assignment of
Medicare and Medicaid Accounts (but not proceeds thereof ) and the federal
Anti-Assignment Act and Anti-Claims Act, as amended, there are no statutory or
regulatory restrictions, prohibitions or limitations on any Pledgor's ability to
grant to the Collateral Agent a Lien upon and security interest in the
Collateral pursuant to this Agreement, or (except for the provisions of the
federal Medicare and Medicaid statutes and the regulations thereunder
restricting assignment of Medicare and Medicaid Accounts (but not proceeds
thereof) and the federal Anti-Assignment Act and Anti-Claims Act, as amended) on
the exercise by the Collateral Agent of its rights and remedies hereunder
(including any foreclosure upon or collection of the Collateral), and (except as
permitted under this Agreement, the Credit Agreement or the Operative
Agreements) there are no contractual restrictions on any Pledgor's ability so to
grant such Lien and security interest.
3.6 Accounts. Each Account is, or at the time it arises will be: (i) with
--------
respect to accounts receivable, a bona fide, valid and legally enforceable
indebtedness of the account debtor according to its terms, arising out of or in
connection with the sale, lease or performance of goods or services by the
Pledgors or any of them, (ii) subject to no offsets, discounts, counterclaims,
contra accounts or any other defense of any kind and character, other than
warranties and discounts given by the Pledgors in the ordinary course of
business and warranties provided by applicable law, (iii) to the extent listed
on any schedule of Accounts at any time furnished to the Collateral Agent, a
true and correct statement of the amount actually and unconditionally owing
thereunder, maturing as stated in such schedule and in the invoice
12
covering the transaction creating such Account, and (iv) not evidenced by any
tangible chattel paper or other Instrument; or if so, any such tangible chattel
paper or other Instrument (other than invoices and related correspondence and
supporting documentation) shall promptly be duly endorsed to the order of the
Collateral Agent and delivered to the Collateral Agent to be held as Collateral
hereunder. To the knowledge of each Pledgor, there are no facts, events or
occurrences that would materially impair the validity or enforcement of the
Accounts, taken as a whole.
3.7 Pledged Interests. As of the date hereof, (i) the Pledged Interests
-----------------
required to be pledged hereunder by each Pledgor consist of the number and type
of shares of capital stock (in the case of issuers that are corporations) or the
percentage and type of other Pledged Interests (in the case of issuers other
than corporations) as described beneath such Pledgor's name in Part I of Annex A
and (ii) Part II of Annex A contains a true and complete listing with respect to
each Pledgor of all Intercompany Obligations evidenced by a promissory note or
other instrument and held by such Pledgor. All of the Pledged Interests have
been duly and validly issued and are fully paid and nonassessable (or, in the
case of partnership, limited liability company or similar Pledged Interests, not
subject to any capital call or other additional capital requirement) and not
subject to any preemptive rights, warrants, options or similar rights or
restrictions in favor of third parties or any contractual (except as set forth
in Section 3.4) or other restrictions upon transfer. As to each issuer thereof,
the Pledged Interests pledged hereunder constitute 100% of the outstanding
capital stock of or other equity interests in such issuer, except as set forth
in Part I of Annex A.
3.8 Specified Contracts. As to (i) each Ownership Agreement, (ii) each
-------------------
"material contract" (within the meaning of Item 601(b)(10) of Regulation S-K
under the Exchange Act) to which the Borrower hereafter is a party, by which it
or its respective properties hereafter is bound or to which it hereafter is
subjected, and (iii) each Management Services Agreement (the foregoing,
collectively, "Specified Contracts"), (w) such Pledgor is not in default in any
-------------------
material respect under any material Specified Contract (individually or in the
aggregate), and to the knowledge of such Pledgor, none of the other parties to
such Specified Contract is in default in any material respect thereunder (except
as shall have been disclosed to the Collateral Agent), (x) such Specified
Contract is, or at the time of execution will be, the legal, valid and binding
obligation of the Pledgor, enforceable against such party in accordance with the
respective terms thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, (y) the performance by such Pledgor of its obligations under such
Specified Contract in accordance with its terms will not contravene any
Requirement of Law or any contractual restriction binding on or affecting such
Pledgor or any of its properties, and will not result in or require the creation
of any Lien upon or with respect to any of its properties (except for Permitted
Liens), and (z) to the extent requested by the Collateral Agent, such Pledgor
has (or promptly upon such request will have) furnished the Collateral Agent
with a correct and complete copy of each Specified Contract to which it is a
party as then in effect.
3.9 Intellectual Property. Annexes D, E, F and G correctly set forth all
---------------------
registered Copyrights, Patents, Trademarks and Domain Names owned by any Pledgor
as of the date hereof and used or proposed to be used in its business. Each such
Pledgor owns or possesses the valid right to use all Copyrights, Patents,
Trademarks and Domain Names; all registrations therefor have been validly issued
under applicable law and are in full force and effect; all applicable
13
maintenance fees, affidavits and other filings or payments are current and shall
remain current throughout the duration of this Agreement; with respect to any
such material Copyrights, Patents, Trademarks and Domain Names, no claim has
been made in writing or, to the knowledge of such Pledgor, orally, that any of
such Copyrights, Patents, Trademarks and Domain Names is invalid or
unenforceable or violates or infringes the rights of any other Person, and there
is no such violation or infringement in existence; and to the knowledge of such
Pledgor, no other Person is presently infringing upon the rights of such Pledgor
with regard to any of such material Copyrights, Patents, Trademarks and Domain
Names.
3.10 Documents of Title. No bill of lading, warehouse receipt or other
------------------
document or instrument of title is outstanding with respect to any Collateral
other than Mobile Goods and Inventory in transit in the ordinary course of
business to a location set forth on Annex C or to a customer of a Pledgor.
ARTICLE IV
COVENANTS
4.1 Use and Disposition of Collateral. So long as no Event of Default shall
---------------------------------
have occurred and be continuing, each Pledgor may, in any lawful manner not
inconsistent with the provisions of this Agreement, the other Credit Documents
and the Operative Agreements, use, control and manage the Collateral in the
operation of its businesses, and receive and use the income, revenue and profits
arising therefrom and the Proceeds thereof, in the same manner and with the same
effect as if this Agreement had not been made; provided, however, that no
-------- -------
Pledgor will sell or otherwise dispose of, grant any option with respect to, or
mortgage, pledge, grant any Lien with respect to or otherwise encumber any of
the Collateral or any interest therein, except for the security interest created
in favor of the Collateral Agent hereunder and except as may be otherwise
expressly permitted in accordance with the terms of this Agreement, the Credit
Agreement and the Operative Agreements (including any applicable provisions
therein regarding delivery of proceeds of sale or disposition to the Collateral
Agent).
4.2 Change of Name, Locations, etc. No Pledgor will (i) change its name,
------------------------------
identity or corporate structure (other than the creation of new subsidiaries as
permitted under the Credit Agreement), (ii) change its chief executive office
from the location thereof listed on Annex C, (iii) change the jurisdiction of
its incorporation or organization from the jurisdiction listed on Annex C
(whether by merger or otherwise), or (iv) remove any Collateral (other than
Mobile Goods and goods in transit), or any books, records or other information
relating to Collateral, from the applicable location thereof listed on Annex C,
or keep or maintain any Collateral at a location not listed on Annex C, unless
in each case such Pledgor has (A) given 20 days' prior written notice to the
Collateral Agent of its intention to do so, together with information regarding
any such new location and such other information in connection with such
proposed action as the Collateral Agent may request, and (B) delivered to the
Collateral Agent 10 days prior to any such change or removal such documents,
instruments and financing statements as may be reasonably required by the
Collateral Agent, all in form and substance reasonably satisfactory to the
Collateral Agent, paid all necessary filing and recording fees and taxes, and
taken all other actions reasonably requested by the Collateral Agent (including,
at the request of
14
the Collateral Agent, delivery of opinions of counsel reasonably satisfactory to
the Collateral Agent to the effect that all such actions have been taken), in
order to perfect and maintain the Lien upon and security interest in the
Collateral provided for herein in accordance with the provisions of Section 3.2.
4.3 Records; Inspection.
-------------------
(a) Each Pledgor will keep and maintain at its own cost and expense
satisfactory and complete records of the Accounts and all other Collateral,
including without limitation records of all payments received, all credits
granted thereon, all merchandise returned and all other documentation relating
thereto, and will furnish to the Collateral Agent from time to time such
statements, schedules and reports (including without limitation accounts
receivable aging schedules) with regard to the Collateral as the Collateral
Agent may reasonably request.
(b) Each Pledgor shall, from time to time at such times during normal
business hours as may be reasonably requested and upon reasonable notice, (i)
make available to the Collateral Agent for inspection and review at such
Pledgor's offices copies of all invoices and other documents and information
relating to the Collateral (including, without limitation, itemized schedules of
all collections of Accounts, showing the name of each account debtor, the amount
of each payment and such other information as the Collateral Agent shall
reasonably request), and (ii) permit the Collateral Agent or its representatives
to visit its offices or the premises upon which any Collateral may be located,
inspect its books and records and make copies and memoranda thereof, inspect the
Collateral, discuss its finances and affairs with its officers, employees and
(in the presence of the Pledgor's officers if Pledgor so requests) independent
accountants and take any other actions reasonably requested by the Collateral
Agent and necessary for the protection of the interests of the Secured Parties
in the Collateral. At the request of the Collateral Agent, each Pledgor will
legend, in form and manner reasonably satisfactory to the Collateral Agent, the
books, records and materials evidencing or relating to the Collateral with an
appropriate reference to the fact that the Collateral has been assigned to the
Collateral Agent and that the Collateral Agent has a security interest therein.
The Collateral Agent shall have the right to make test verifications of Accounts
in any reasonable manner and through any reasonable medium, and each Pledgor
agrees to furnish all such reasonable assistance and information as the
Collateral Agent may require in connection therewith.
4.4 Accounts. Unless notified otherwise by the Collateral Agent upon the
--------
occurrence and during the continuance of any Event of Default in accordance with
the terms hereof, each Pledgor shall endeavor to collect its Accounts and all
amounts owing to it thereunder in the ordinary course of its business consistent
with past practice or its reasonable business judgment and shall apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balances thereof, and in connection therewith shall, at the request of the
Collateral Agent during the continuation of any Event of Default, take such
action as the Collateral Agent may deem necessary or advisable (within
applicable laws) to enforce such collection. No Pledgor shall, except to the
extent done in the ordinary course of its business consistent with past practice
or in accordance with reasonable business judgment and provided that no Event of
Default shall have occurred and be continuing, (i) grant any extension of the
time for payment of any Account, (ii) compromise or settle any Account for less
than the full amount thereof, (iii) release, in whole or in part, any Person or
property liable for the payment of any Account, or
15
(iv) allow any credit or discount on any Account. Subject to all applicable
Requirements of Law with respect to the confidentiality of medical records, each
Pledgor shall promptly inform the Collateral Agent of any disputes with any
account debtor or obligor and of any claimed offset and counterclaim that may be
asserted with respect thereto involving, in each case, any material amount,
where such Pledgor reasonably believes that the likelihood of payment by such
account debtor is materially impaired, indicating in detail the reason for the
dispute, all claims relating thereto and the amount in controversy.
4.5 Delivery of Certain Collateral. All certificates or Instruments
------------------------------
representing or evidencing any Accounts, Intercompany Obligations, Investment
Property or other Collateral shall be delivered promptly to the Collateral Agent
pursuant hereto to be held as Collateral hereunder, shall be in form suitable
for transfer by delivery and shall be delivered together with undated stock
powers duly executed in blank, appropriate endorsements or other necessary
instruments of registration, transfer or assignment, duly executed and in form
and substance satisfactory to the Collateral Agent, and in each case together
with such other instruments or documents as the Collateral Agent may reasonably
request.
4.6 Equipment. Each Pledgor will, in accordance with reasonable business
---------
practice, maintain all Equipment used by it in its business (other than obsolete
Equipment or Equipment no longer used or useful in its business) in good repair,
working order and condition (normal wear and tear excepted) and make all
necessary repairs and replacements thereof so that the value and operating
efficiency thereof shall at all times be maintained and preserved.
4.7 Inventory. Each Pledgor will, in accordance with reasonable business
---------
practice, maintain all Inventory held by it or on its behalf in good saleable or
useable condition. Unless notified otherwise by the Collateral Agent in
accordance with the terms hereof, each Pledgor may, in any lawful manner not
inconsistent with the provisions of this Agreement and the other Credit
Documents, process, use and, in the ordinary course of business and except as
prohibited under the Credit Agreement, sell its Inventory.
4.8 Contracts. Each Pledgor will, at its expense, at all times perform and
---------
comply with, in all material respects, all terms and provisions (unless waived)
of each Specified Contract to which it is or hereafter becomes a party required
to be performed or complied with by it (including without limitation the payment
of all rent due and payable under each lease) and enforce the terms and
provisions thereof in accordance with its terms to the extent consistent with
sound business practices, and will not waive, amend or modify any provision
thereof in any manner other than in the ordinary course of business of such
Pledgor in accordance with past practice or for a valid economic reason
benefiting such Pledgor. Each Pledgor will deliver copies of each Specified
Contract to which it is a party and each material amendment or modification
thereof to the Collateral Agent promptly upon the execution and delivery
thereof. With regard to all leases, contracts and agreements that are excluded
from the definition of the term "Contracts," each Pledgor covenants and agrees
to exercise all of its material rights and remedies under such leases,
agreements and contracts to which it is a party in a commercially reasonable
manner to the extent consistent with sound business practices. Except as
permitted by the Credit Agreement, each Pledgor will use its commercially
reasonable efforts not to enter into any Specified Contract (including leases
and Licenses) that by its terms prohibits the assignment of such Pledgor's
rights and interest thereunder in the manner contemplated by this
16
Agreement. Each Pledgor further covenants and agrees to use its commercially
reasonable efforts to obtain any required consent to the collateral assignment
of and grant of security interest in any Specified Contract (including personal
property leases and Licenses), in form and substance reasonably satisfactory to
the Collateral Agent, upon the request of the Collateral Agent, and will deliver
copies thereof to the Collateral Agent promptly upon execution and delivery
thereof. Each Pledgor further covenants and agrees to use its commercially
reasonable efforts to obtain any required consent to the collateral assignment
of any Material Contract, in form and substance reasonably satisfactory to the
Collateral Agent, upon the reasonable request of the Collateral Agent, and will
deliver copies thereof to the Collateral Agent promptly upon execution and
delivery thereof.
4.9 Taxes. Each Pledgor will pay and discharge (i) all taxes, assessments
-----
and governmental charges or levies imposed upon it, upon its income or profits
or upon any of its properties, prior to the date on which penalties would attach
thereto, and (ii) all lawful claims that, if unpaid, might become a Lien upon
any of its properties; provided, however, that no Pledgor shall be required to
-------- -------
pay any such tax, assessment, charge, levy or claim that is being contested in
good faith and by proper proceedings and as to which such Pledgor has maintained
adequate reserves with respect thereto in accordance with GAAP unless and until
any tax lien notice has become effective with respect thereto or until any Lien
resulting therefrom attaches to its properties and becomes enforceable against
its other creditors.
4.10 Insurance.
---------
(a) Each Pledgor will maintain and pay for, or cause to be maintained and
paid for, insurance covering commercial general liability, property and
casualty, business interruption and such other risks, and in such amounts and
with such financially sound and reputable insurance companies, as are usually
and customarily carried by companies of similar size engaged in similar
businesses (and in any event, insuring all Inventory and Equipment against such
losses and risks), and will deliver certificates of such insurance to the
Collateral Agent with standard loss payable endorsements naming the Collateral
Agent as loss payee (on property and casualty policies) and additional insured
(on liability policies) as its interests may appear. Each such policy of
insurance shall contain a clause requiring the insurer to give not less than 30
days' prior written notice to the Collateral Agent before any cancellation of
the policies for any reason whatsoever and shall provide that any loss shall be
payable in accordance with the terms thereof notwithstanding any act of any
Pledgor that might result in the forfeiture of such insurance.
(b) Each Pledgor will direct all insurers under policies of property and
casualty insurance on the Collateral to pay all proceeds payable thereunder
directly to the Collateral Agent (and the receipt of such proceeds by the
Collateral Agent shall be deemed as received by the Borrower for purposes of
Section 2.6(d) of the Credit Agreement). The Collateral Agent shall hold all
such proceeds in excess of $3,000,000 for the account of the Pledgors, except
that upon the occurrence and during the continuance of any Default or Event of
Default the Collateral Agent shall hold all of such proceeds. So long as no
Event of Default has occurred and is continuing, and subject to any applicable
provision of the Credit Agreement requiring the prepayment of the Loans with the
proceeds of such insurance, the Collateral Agent shall, at the Borrower's
request, disburse such proceeds as payment for the purpose of replacing or
repairing destroyed or damaged assets, as and when required to be paid and upon
presentation of evidence
17
satisfactory to the Collateral Agent of such required payments and such other
documents as the Collateral Agent may reasonably request. As and to the extent
required by the Credit Agreement, but subject to the terms of the Intercreditor
Agreement and in any event upon and during the continuance of an Event of
Default, the Collateral Agent shall apply such proceeds in the manner provided
for in Section 6.2 hereof. Each Pledgor hereby irrevocably makes, constitutes
and appoints the Collateral Agent at all times during the continuance of an
Event of Default, its true and lawful attorney (and agent-in-fact) for the
purpose of making, settling and adjusting claims under such policies of
insurance, endorsing its name on any check, draft, instrument or other item or
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect to such policies of insurance.
(c) If any Pledgor fails to obtain and maintain any of the policies of
insurance required to be maintained hereunder or to pay any premium in whole or
in part, the Collateral Agent may, without waiving or releasing any obligation
or Default, at the Pledgors' expense, but without any obligation to do so,
procure such policies or pay such premiums. All sums so disbursed by the
Collateral Agent, including attorneys' fees, court costs, expenses and other
charges related thereto, shall be payable by the Pledgors to the Collateral
Agent on demand and shall be additional Secured Obligations hereunder, secured
by the Collateral.
(d) Each Pledgor will deliver to the Collateral Agent, promptly as
rendered, true copies of all material claims and reports made in any reporting
forms to insurance companies. Not less than 30 days prior to the expiration date
of the insurance policies required to be maintained by such Pledgor hereunder,
such Pledgor will deliver to the Collateral Agent one or more certificates of
insurance evidencing renewal of the insurance coverage required hereunder plus
such other evidence of payment of premiums therefor as the Collateral Agent may
reasonably request. Upon the reasonable request of the Collateral Agent from
time to time, each Pledgor will deliver to the Collateral Agent evidence that
the insurance required to be maintained pursuant to this Section 4.10 is in
effect.
4.11 Intellectual Property.
---------------------
(a) The Borrower will, at its own expense, execute and deliver on the
Closing Date, fully completed grants of security interests in the forms of
Exhibits B and C, as applicable, in the U.S. Copyright Office or the U.S. Patent
and Trademark Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section. 1060
or 17 U.S.C. Section. 205, as applicable, with regard to any Copyright
Collateral, Patent Collateral or Trademark Collateral, and the Registrant Name
Change Agreement, in the form of Annex A to Exhibit E with regard to any Domain
Name, as the case may be, described in Annex D, E, F and G hereto. In the event
that after the date hereof any Pledgor shall acquire any registered Copyright,
Patent, Trademark or Domain Name or effect any registration of any Copyright,
Patent, Trademark or Domain Name, or file any application for registration
thereof, whether within the United States or any other country or jurisdiction,
such Pledgor shall promptly furnish written notice thereof to the Collateral
Agent together with information sufficient to permit the Collateral Agent, upon
its receipt of such notice, to (and each Pledgor hereby authorizes the
Collateral Agent to) modify this Agreement, as appropriate, by amending Annexes
D, E, F or G hereto or to add additional exhibits hereto to include any such
Copyright, Patent, Trademark or Domain Name that becomes part of the Collateral
under this Agreement, and such Pledgor shall additionally, at its own expense,
execute and deliver with regard to
18
United States Patents, Trademarks, Copyrights and Domain Names, fully completed
grants of security interest in the forms of Exhibits B, C and E, as applicable,
together in all instances with any other agreements, instruments and documents
that the Collateral Agent may reasonably request from time to time to further
effect and confirm the assignment and grant of security interest created by this
Agreement in such Copyrights, Patents, Trademarks and Domain Names, and each
Pledgor hereby appoints the Collateral Agent its attorney-in-fact to execute,
deliver and record any and all such agreements, instruments and documents for
the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed and such power, being coupled with an interest, shall be irrevocable
for so long as this Agreement shall be in effect with respect to such Pledgor.
(b) Each Pledgor (either itself or through its licensees or its
sublicensees) will, for each Trademark used in the conduct of its business, use
its commercially reasonable efforts to (i) maintain such Trademark in full force
and effect, free from any claim of abandonment or invalidity for non-use, (ii)
maintain the quality of products and services offered under such Trademark,
(iii) display such Trademark with notice of federal registration to the extent
required by applicable law (iv) take all necessary and appropriate steps to
police and defend such Trademark and prevent or arrest infringement, dilution or
other harm to such Trademark to the extent consistent with Pledgor's reasonable
business judgment and (v) not knowingly use or knowingly permit the use of such
Trademark in violation of any third-party rights.
(c) Each Pledgor (either itself or through its licensees or sublicensees)
will consistent with its reasonable business judgment refrain from committing
any act, or omitting any act, whereby any Patent used in the conduct of such
Pledgor's business may become invalidated or dedicated to the public, and shall
continue to mark any products covered by a Patent with the relevant patent
number as required by applicable patent laws.
(d) Each Pledgor (either itself or through its licensees or sublicensees)
will consistent with its reasonable business judgment, for each work covered by
a Copyright, continue to publish, reproduce, display, adopt and distribute the
work with appropriate copyright notice as required under applicable copyright
laws.
(e) Each Pledgor shall notify the Collateral Agent immediately if it knows
or has reason to know that any material Patent, Trademark or Copyright used in
the conduct of its business may become abandoned or dedicated to the public, or
of any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the U.S. Patent and
Trademark Office, U.S. Copyright Office or any court) regarding such Pledgor's
ownership of any material Patent, Trademark or Copyright, its right to register
the same, or to keep and maintain the same.
(f) Each Pledgor will take all necessary or advisable steps in any
proceeding before the U.S. Patent and Trademark Office, U.S. Copyright Office or
any office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, to maintain and pursue each
application relating to any material Patents, Trademarks or Copyrights useful
for its business or otherwise of material commercial value (and to obtain the
relevant grant or registration) and to maintain each registration of any
material Patents, Trademarks and Copyrights useful for its business or otherwise
of material commercial value,
19
including the filing of applications for renewal, affidavits of use, affidavits
of incontestability and maintenance fees, and, if consistent with its reasonable
business judgment, to initiate opposition, interference and cancellation
proceedings against third parties.
(g) In the event that any Collateral consisting of a material Patent,
Trademark or Copyright useful in the conduct of any Pledgor's business or
otherwise of material commercial value is believed infringed, misappropriated or
diluted by a third party, such Pledgor shall notify the Collateral Agent
promptly after it learns thereof and shall, if consistent with its reasonable
business judgment, promptly sue for infringement, misappropriation or dilution
and to recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the circumstances
to protect such Collateral.
(h) Each Pledgor shall use its commercial reasonable efforts to obtain all
requisite consents or approvals from the licensor of each License included
within the Copyright Collateral, Patent Collateral or Trademark Collateral to
effect the collateral assignment of all of such Pledgor's right, title and
interest thereunder to the Collateral Agent or its designee.
4.12 Mobile Goods. Upon the request of the Collateral Agent at any time,
------------
while an Event of Default shall have occurred and be continuing, each Pledgor
will deliver to the Collateral Agent originals of the certificates of title or
ownership for all Mobile Goods owned by it, together (in the case of motor
vehicles) with the manufacturer's statement of origin with the Collateral Agent
listed as lienholder and odometer statements and together in all other cases
with appropriate instruments or certificates of transfer and delivery, duly
completed and executed, and will take such other action as the Collateral Agent
may reasonably deem necessary to perfect the security interest created by this
Agreement in all such Mobile Goods.
4.13 Collateral in Possession of Third Party. Without limiting the
---------------------------------------
generality of any other provision of this Agreement, each Pledgor agrees that it
shall not permit any Collateral to be in the possession of any bailee,
warehouseman, agent, processor or other third party at any time unless such
bailee or other Person shall have been notified of the security interest created
by this Agreement (or, if required under applicable law in order to perfect the
Collateral Agent's security interest in such Collateral, such bailee or other
Person shall have acknowledged to the Collateral Agent in writing that it is
holding such Collateral for the benefit of the Collateral Agent and subject to
such security interest and to the instructions of the Collateral Agent) and such
Pledgor shall have exercised its commercially reasonable efforts to obtain from
such bailee or other Person, at such Pledgor's sole cost and expense, the
written acknowledgement described above (if not already required by applicable
law to perfect the Collateral Agent's security interest), such agreement to be
in form and substance reasonably satisfactory to the Collateral Agent.
4.14 Deposit and Collection Procedures Upon an Event of Default. If an
----------------------------------------------------------
Event of Default shall have occurred and be continuing for a period of 30
consecutive days, each Pledgor will execute all such documents and agreements
and take all such actions as are necessary to ensure that all proceeds of
Accounts (including Medicare, Medicaid and other similar Accounts payable by
Governmental Authorities ("Governmental Accounts")), remitted to it or any of
---------------------
its Subsidiaries or affiliated physician practices are deposited, promptly upon
such Person's receipt thereof, directly into a deposit account controlled and
directed by the Borrower or any of its
20
Subsidiaries or such other Person (including any applicable provider as may be
required with respect to Governmental Accounts), and that the balances in each
such deposit account not maintained by any Pledgor are transferred daily into a
deposit account maintained by or for the benefit of a Pledgor or into a
Concentration Account (as defined below). The balances in each such deposit
account of a Pledgor shall be transferred daily to a cash concentration account
maintained with the Collateral Agent or with another bank or depository
institution that has, together with the such Pledgor, executed and delivered to
the Collateral Agent a duly completed agreement, in form and substance
reasonably satisfactory to the Collateral Agent, that among other things
acknowledges the security interest of the Collateral Agent in all funds, monies,
securities and instruments deposited in such account and pursuant to which such
bank or depository institution agrees to transfer such funds, monies, securities
and instruments to the Collateral Agent promptly upon demand at any time after
the occurrence and during the continuance of an Event of Default (each such
account, a "Concentration Account," and each such agreement, a "Concentration
--------------------- -------------
Agreement") for application to the Secured Obligations then due and payable in
- ---------
accordance with Section 6.2. The applicable Pledgor will provide each bank or
depository institution at which any Deposit Account is maintained from time to
time with such transfer instructions and other information as such bank or
depository institution may require in order to permit the Pledgor to comply with
the provisions of this Section. All costs and expenses incurred in connection
with the establishment and maintenance of such Deposit Accounts and
Concentration Accounts and the transfers of funds therefrom and thereto as
described in this Section shall be for the account of the Pledgor. Except as
expressly provided in this Section 4.14, no proceeds of Accounts will be
deposited in, or at any time transferred to, a Deposit Account other than a
Concentration Account or a Deposit Account the balances in which are transferred
not less frequently than daily to a Concentration Account. The Pledgors shall
not cause or permit any funds or other property not constituting proceeds of
Collateral to be deposited into any Deposit Account containing proceeds of
Collateral. The Pledgors shall have the right to collect, withdraw and direct
the disposition of funds on deposit in the Concentration Accounts in a manner
not inconsistent with the provisions of this Agreement or any of the other Loan
Documents; provided, however, that during the continuance of an Event of Default
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and after notice thereof from the Collateral Agent to the Borrower, the
Collateral Agent shall have exclusive dominion and control over all
Concentration Accounts, with the powers and rights granted herein and in the
applicable Concentration Agreements with respect thereto, and the Pledgors shall
not have any right without the consent of the Collateral Agent to collect,
withdraw or direct the disposition of funds on deposit in the Concentration
Accounts or to take any action to effect the same. Any failure by the Pledgors
to observe, perform or comply with any provision of this Section shall
constitute an Event of Default under the Loan Agreement. Notwithstanding the
foregoing, any part or all of the requirements of this Section may be waived at
any time or times by the Required Secured Parties.
4.15 Control Agreements. Upon the request of the Collateral Agent, each
------------------
Pledgor will, at its own cost and expense, cooperate with the Collateral Agent
in obtaining a control agreement, in form and substance reasonably satisfactory
to the Collateral Agent, and in taking such other actions as may be reasonably
requested by the Collateral Agent from time to time with respect to any
Investment Property or other Collateral in which a security interest may be
perfected by (or can be perfected only by) control under the Uniform Commercial
Code.
21
4.16 Protection of Security Interest. Each Pledgor agrees that it will, at
-------------------------------
its own cost and expense, take any and all actions reasonably necessary to
warrant and defend the right, title and interest of the Secured Parties in and
to the Collateral against the claims and demands of all other Persons.
ARTICLE V
CERTAIN PROVISIONS RELATING TO
PLEDGED INTERESTS AND INTERCOMPANY OBLIGATIONS
5.1 Ownership; After-Acquired Pledged Interests.
-------------------------------------------
(a) Except to the extent otherwise expressly permitted by or pursuant to
the Credit Agreement and the Operative Agreements, each Pledgor will cause the
Pledged Interests in each issuer pledged hereunder to constitute at all times
100% of the capital stock or other Pledged Interests in each issuer such that
the issuer shall be a Wholly Owned Subsidiary of the Borrower, and unless the
Collateral Agent shall have given its prior written consent, no Pledgor will
cause or permit any such issuer to issue or sell any new capital stock, any
warrants, options or rights to acquire the same, or other Pledged Interests of
any nature to any Person other than such Pledgor, or cause, permit or consent to
the admission of any other Person as stockholder, partner or member of any such
issuer.
(b) If any Pledgor shall, at any time and from time to time after the date
hereof, acquire any additional capital stock or other Pledged Interests in any
Person of the types described in the definition of the term "Pledged Interests,"
or any promissory notes or other instruments evidencing indebtedness or other
obligations of the types described in the definition of "Intercompany
Obligations," the same shall be automatically deemed to be Pledged Interests or
Intercompany Obligations hereunder, respectively, and to be pledged to the
Collateral Agent pursuant to Section 2.1, and such Pledgor will forthwith pledge
and deposit the same with the Collateral Agent and deliver to the Collateral
Agent any certificates or instruments therefor, together with the endorsement of
such Pledgor (in the case of any promissory notes or other Instruments), undated
stock powers (in the case of Pledged Interests evidenced by certificates) or
other necessary instruments of transfer or assignment, duly executed in blank
and in form and substance reasonably satisfactory to the Collateral Agent,
together with such other certificates and instruments as the Collateral Agent
may reasonably request (including Uniform Commercial Code financing statements
or appropriate amendments thereto), and will promptly thereafter deliver to the
Collateral Agent a fully completed and duly executed amendment to this Agreement
in the form of Exhibit A (each, a "Pledge Amendment") in respect thereof. Each
----------------
Pledgor hereby authorizes the Collateral Agent to attach each such Pledge
Amendment to this Agreement, and agrees that all such Collateral listed on any
Pledge Amendment shall for all purposes be deemed Collateral hereunder and shall
be subject to the provisions hereof; provided that the failure of any Pledgor to
--------
execute and deliver any Pledge Amendment with respect to any such additional
Collateral as required hereinabove shall not impair the security interest of the
Collateral Agent in such Collateral or otherwise adversely affect the rights and
remedies of the Collateral Agent hereunder with respect thereto.
22
(c) If any Pledged Interests (whether now owned or hereafter acquired)
included in the Collateral are "uncertificated securities" within the meaning of
the Uniform Commercial Code or are otherwise not evidenced by any certificate or
instrument, each applicable Pledgor will promptly notify the Collateral Agent
thereof and will promptly take and cause to be taken, and will (if the issuer of
such uncertificated securities is a Person other than a Subsidiary of the
Borrower) use its commercially reasonable efforts to cause the issuer to take,
all actions required under Articles 8 and 9 of the Uniform Commercial Code and
any other applicable law, to enable the Collateral Agent to acquire "control" of
such uncertificated securities (within the meaning of such term under Section
8-106 (or its successor provision) of the Uniform Commercial Code) and as may be
otherwise necessary or reasonably deemed appropriate by the Collateral Agent to
perfect the security interest of the Collateral Agent therein.
5.2 Voting Rights. So long as no Event of Default shall have occurred and
-------------
be continuing each Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to its Pledged Interests (subject to its
obligations under Section 5.1), and for that purpose the Collateral Agent will
execute and deliver or cause to be executed and delivered to each applicable
Pledgor all such proxies and other instruments as such Pledgor may reasonably
request in writing to enable the Pledgor to exercise such voting and other
consensual rights; provided, however, that to the extent permitted by applicable
-------- -------
law Pledgor will not cast any vote, give any consent, waiver or ratification, or
take or fail to take any action, in any manner that would, or could reasonably
be expected to, violate or be inconsistent with any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Operative
Agreement, or have the effect of materially impairing the position or interests
of the Collateral Agent or any other Secured Party (except to the extent
permitted under any Credit Document).
5.3 Dividends and Other Distributions. So long as no Event of Default shall
---------------------------------
have occurred and be continuing (or would occur as a result thereof), and except
as provided otherwise herein, all interest, income, dividends, distributions and
other amounts payable in cash in respect of the Pledged Interests may be paid to
and retained by the Pledgors; provided, however, that all such interest, income,
-------- -------
dividends, distributions and other amounts shall, at all times after the
occurrence and during the continuance of an Event of Default, be paid to the
Collateral Agent and retained by it as part of the Collateral (except to the
extent applied upon receipt to the repayment of the Secured Obligations then due
and payable). The Collateral Agent shall also be entitled at all times (whether
or not during the continuance of an Event of Default) to receive directly, and
to retain as part of the Collateral, (i) all interest, income, dividends,
distributions or other amounts paid or payable in cash or other property in
respect of any Pledged Interests in connection with the dissolution,
liquidation, recapitalization or reclassification of the capital of the
applicable issuer to the extent representing an extraordinary, liquidating or
other distribution in return of capital that is not permitted under the Credit
Agreement, (ii) all additional Pledged Interests or other securities or property
(other than cash) paid or payable or distributed or distributable in respect of
any Pledged Interests in connection with any noncash dividend, distribution,
return of capital, spin-off, stock split, split-up, reclassification,
combination of shares or interests or similar rearrangement, and (iii) without
affecting any restrictions against such actions contained in the Credit
Agreement or any Operative Agreement , all additional Pledged Interests or other
securities or property (including cash) paid or payable or distributed or
distributable in respect of any Pledged Interests in connection with any
consolidation, merger, exchange of securities, liquidation or other
reorganization except those
23
paid, payable, distributed or distributable pursuant to any such transaction
permitted by the Credit Agreement. All interest, income, dividends,
distributions or other amounts that are received by any Pledgor in violation of
the provisions of this Section 5.3 shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other property or funds of such
Pledgor and shall be forthwith delivered to the Collateral Agent as Collateral
in the same form as so received (with any necessary endorsements) for
application to reduce the Secured Obligation then due and payable.
ARTICLE VI
REMEDIES
6.1 Remedies. If an Event of Default shall have occurred and be continuing,
--------
the Collateral Agent shall be entitled to exercise in respect of the Collateral
all of its rights, powers and remedies provided for herein, by law, in equity or
otherwise, including all rights and remedies of a secured party under the
Uniform Commercial Code, and shall be entitled in particular, but without
limitation of the foregoing, to exercise the following rights, which each
Pledgor agrees to be commercially reasonable:
(a) To notify any or all account debtors or obligors under any Accounts,
Contracts or other Collateral of the security interest in favor of the
Collateral Agent created hereby and to direct all such Persons to make payments
of all amounts due thereon or thereunder directly to the Collateral Agent or to
an account designated by the Collateral Agent; and in such instance and from and
after such notice, all amounts and Proceeds (including wire transfers, checks
and other instruments) received by any Pledgor in respect of any Accounts,
Contracts or other Collateral shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from the other funds of such
Pledgor and shall be forthwith deposited into such account or paid over or
delivered to the Collateral Agent in the same form as so received (with any
necessary endorsements or assignments), to be held as Collateral and applied to
the Secured Obligations then due and payable as provided herein; and by this
provision, each Pledgor irrevocably authorizes and directs each Person who is or
shall be a party to or liable for the performance of any Contract, upon receipt
of notice from the Collateral Agent to the effect that an Event of Default has
occurred and is continuing, to attorn to or otherwise recognize the Collateral
Agent as owner under such Contract and to pay, observe and otherwise perform the
obligations under such Contract to or for the Collateral Agent or the Collateral
Agent's designee as though the Collateral Agent or such designee were such
Pledgor named therein, and to do so until otherwise notified by the Collateral
Agent;
(b) To take possession of, receive, endorse, assign and deliver, in its own
name or in the name of any Pledgor, all checks, notes, drafts and other
instruments relating to any Collateral, including receiving, opening and
properly disposing of all mail addressed to any Pledgor concerning Accounts and
other Collateral and to notify the appropriate postal authority to change the
mailing or delivery address of such mail; to verify with account debtors or
other contract parties the validity, amount or any other matter relating to any
Accounts or other Collateral, in its own name or in the name of any Pledgor; to
accelerate any indebtedness or other obligation constituting Collateral that may
be accelerated in accordance with its terms; to take or
24
bring all actions and suits deemed necessary or appropriate to effect
collections and to enforce payment of any Accounts or other Collateral; to
settle, compromise or release in whole or in part any amounts owing on Accounts
or other Collateral; and to extend the time of payment of any and all Accounts
or other amounts owing under any Collateral and to make allowances and
adjustments with respect thereto, all in the same manner and to the same extent
as any Pledgor might have done;
(c) To notify any or all depository institutions with which any Deposit
Accounts are maintained to remit and transfer all monies, securities and other
property on deposit in such Deposit Accounts or deposited or received for
deposit thereafter to the Collateral Agent, for deposit in a Collateral Account
or such other accounts as may be designated by the Collateral Agent, for
application to the Secured Obligations then due and payable as provided herein;
(d) To transfer to or register in its name or the name of any of its agents
or nominees all or any part of the Collateral, with or without disclosing that
such Collateral is subject to the security interest created hereunder;
(e) To require any Pledgor to, and each Pledgor hereby agrees that it will
at its expense and upon request of the Collateral Agent forthwith, assemble all
or any part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place designated by the Collateral Agent;
(f) To enter upon the premises of any Pledgor and take possession of all or
any part of the Collateral, with or without judicial process; to use the
materials, services, books and records of any Pledgor for the purpose of
liquidating or collecting the Collateral, whether by foreclosure, auction or
otherwise; and to remove the same to the premises of the Collateral Agent or any
designated agent for such time as the Collateral Agent may desire, in order to
effectively collect or liquidate the Collateral;
(g) To exercise (i) all voting, consensual and other rights and powers
pertaining to the Pledged Interests (whether or not transferred into the name of
the Collateral Agent), at any meeting of shareholders, partners, members or
otherwise, and (ii) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to the Pledged Interests as
if it were the absolute owner thereof (including without limitation the right to
exchange at its discretion any and all of the Pledged Interests upon the merger,
consolidation, reorganization, reclassification, combination of shares or
interests, similar rearrangement or other similar fundamental change in the
structure of the applicable issuer, or upon the exercise by any Pledgor or the
Collateral Agent of any right, privilege or option pertaining to such Pledged
Interests), and in connection therewith, the right to deposit and deliver any
and all of the Pledged Interests with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Collateral Agent may determine, and give all consents, waivers and ratifications
in respect of the Pledged Interests, but the Collateral Agent shall have no duty
to exercise any such right, privilege or option or give any such consent, waiver
or ratification and shall not be responsible for any failure to do so or delay
in so doing; and for the foregoing purposes each Pledgor will promptly execute
and deliver or cause to be executed and delivered to the Collateral Agent, upon
request, all such proxies and other instruments as the Collateral Agent may
request to enable the Collateral Agent to exercise such rights and powers;
25
AND IN FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITATION THEREOF, EACH PLEDGOR
HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS THE TRUE AND
LAWFUL PROXY AND ATTORNEY-IN-FACT OF SUCH PLEDGOR, WITH FULL POWER OF
SUBSTITUTION IN THE PREMISES, TO EXERCISE ALL SUCH VOTING, CONSENSUAL AND OTHER
RIGHTS AND POWERS TO WHICH ANY HOLDER OF ANY INVESTMENTS WOULD BE ENTITLED BY
VIRTUE OF HOLDING THE SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING COUPLED
WITH AN INTEREST, IS IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS THIS
AGREEMENT SHALL BE IN EFFECT;
(h) To sell, resell, assign and deliver, in its sole discretion, all or any
of the Collateral, in one or more parcels, on any securities exchange on which
any Pledged Interests may be listed, at public or private sale, at any of the
Collateral Agent's offices or elsewhere, for cash, upon credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as the Collateral Agent may deem satisfactory. If any of the Collateral is
sold by the Collateral Agent upon credit or for future delivery, the Collateral
Agent shall not be liable for the failure of the purchaser to purchase or pay
for the same and, in the event of any such failure, the Collateral Agent may
resell such Collateral. In no event shall any Pledgor be credited with any part
of the Proceeds of sale of any Collateral until and to the extent cash payment
in respect thereof has actually been received by the Collateral Agent. Each
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right of whatsoever kind, including any equity or right of
redemption of any Pledgor, and to the extent permitted by law each Pledgor
hereby expressly waives all rights of redemption, stay or appraisal, and all
rights to require the Collateral Agent to marshal any assets in favor of such
Pledgor or any other party or against or in payment of any or all of the Secured
Obligations, that it has or may have under any rule of law or statute now
existing or hereafter adopted. To the extent permitted by law no demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law, as referred to below), all of which are hereby expressly waived
by each Pledgor, shall be required in connection with any sale or other
disposition of any part of the Collateral. If any notice of a proposed sale or
other disposition of any part of the Collateral shall be required under
applicable law, the Collateral Agent shall give the applicable Pledgor at least
10 days' prior notice of the time and place of any public sale and of the time
after which any private sale or other disposition is to be made, which notice
each Pledgor agrees is commercially reasonable. The Collateral Agent shall not
be obligated to make any sale of Collateral if it shall determine not to do so,
regardless of the fact that notice of sale may have been given. The Collateral
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. Upon each public sale and, to
the extent permitted by applicable law, upon each private sale, the Collateral
Agent may purchase all or any of the Collateral being sold, free from any
equity, right of redemption or other claim or demand, and may make payment
therefor by endorsement and application (without recourse) of the Secured
Obligations in lieu of cash as a credit on account of the purchase price for
such Collateral;
(i) To transfer or register in its name or in the names of any of its
agents or nominees, all or any part of the Domain Names, with or without
disclosing that such Collateral is subject to the security interest created
hereunder, by using the Registrant Name Change
26
Agreement, attached as Schedule A to the Grant of Security Interest in Domain
Name Registration previously delivered by the applicable Pledgor to the
Collateral Agent pursuant to Section 4.11; and
(j) To accelerate any Intercompany Obligation that may be accelerated in
accordance with its terms, and take or bring all actions and suits deemed
necessary or appropriate to effect the collection thereof, all in the same
manner and to the same extent as any Pledgor might have done.
6.2 Application of Proceeds. After the occurrence and during the
-----------------------
continuation of an Event of Default:
(a) All Proceeds collected by the Collateral Agent upon any sale, other
disposition of or realization upon any of the Collateral, together with all
other moneys received by the Collateral Agent hereunder, shall be applied as
follows:
(i) first, to the payment of all costs and expenses of such sale,
disposition or other realization, including the costs and expenses of the
Collateral Agent and the fees and expenses of its agents and counsel, all
amounts advanced by the Collateral Agent for the account of any Pledgor,
and all other amounts payable to the Collateral Agent under Section 8.1;
(ii) second, after payment in full of the amounts specified in clause
(i) above, to the ratable payment of all other Secured Obligations then due
and payable owing to the Secured Parties, together with the cash
collateralization of any Letter of Credit Exposure pursuant to Section 3.8
of the Credit Agreement (such payments to be made in accordance with the
Intercreditor Agreement); and
(iii) third, after payment in full of the amounts specified in clauses
(i) and (ii) above, and following the termination of this Agreement, to the
Pledgors or any other Person lawfully entitled to receive such surplus.
(b) For purposes of applying amounts in accordance with this Section 6.2,
the Collateral Agent shall be entitled to rely upon any Secured Party that has
entered into a Hedge Agreement with the Borrower for a determination (which such
Secured Party agrees to provide or cause to be provided upon request of the
Collateral Agent) of the outstanding Secured Obligations owed to such Secured
Party under any such Hedge Agreement. Unless it has actual knowledge (including
by way of written notice from any such Secured Party) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no Hedge
Agreements or Secured Obligations in respect thereof are in existence between
any Secured Party and the Borrower. If any Lender that is a party to a Hedge
Agreement with the Borrower (the obligations of the Borrower under which are
Secured Obligations) ceases to be a Lender, such former Lender shall
nevertheless continue to be a Secured Party hereunder with respect to the
Secured Obligations under such Hedge Agreement.
(c) Each Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of the sums
referred to in Section 6.2(a)(i) and (ii). Upon
27
any sale of any Collateral hereunder by the Collateral Agent (whether by virtue
of the power of sale herein granted, pursuant to judicial proceeding, or
otherwise), the receipt of the Collateral Agent or the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
6.3 Collateral Accounts. Upon the occurrence and during the continuance of
-------------------
an Event of Default, the Collateral Agent shall have the right to cause to be
established and maintained, at its principal office or such other location or
locations as it may establish from time to time in its discretion, one or more
accounts (collectively, "Collateral Accounts") for the collection of cash
-------------------
Proceeds of the Collateral. Such Proceeds, when deposited, shall continue to
constitute Collateral for the Secured Obligations and shall not constitute
payment thereof until applied as herein provided. The Collateral Agent shall
have sole dominion and control over all funds deposited in any Collateral
Account, and such funds may be withdrawn therefrom only by the Collateral Agent.
Upon the occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the right to (and, if directed by the Required
Secured Parties shall) apply amounts held in the Collateral Accounts in payment
of the Secured Obligations in the manner provided for in Section 6.2.
6.4 Grant of License. Each Pledgor hereby grants to the Collateral Agent an
----------------
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Pledgor) to use, license or sublicense any Patent
Collateral, Trademark Collateral or Copyright Collateral now owned or licensed
or hereafter acquired or licensed by such Pledgor, wherever the same may be
located throughout the world, for such term or terms, on such conditions and in
such manner as the Collateral Agent shall determine, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, and including in
such license access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license or sublicense by the
Collateral Agent shall be exercised at the option of the Collateral Agent and
only upon the occurrence and during the continuation of an Event of Default;
provided that any license, sublicense or other transaction entered into by the
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Collateral Agent in accordance herewith shall be binding upon each applicable
Pledgor notwithstanding any subsequent cure of an Event of Default.
6.5 Private Sales. Each Pledgor recognizes that, by reason of certain
-------------
prohibitions contained in the Securities Act and applicable state securities
laws as in effect from time to time, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Interests conducted
without registration or qualification under the Securities Act and state
securities laws, to limit purchasers to any one or more Persons who will
represent and agree, among other things, to acquire such Pledged Interests for
their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sales may be
made in such manner and under such circumstances as the Collateral Agent may
deem necessary or advisable in its discretion, including at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including without limitation a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
28
been made in a commercially reasonable manner and agrees that the Collateral
Agent shall have no obligation to conduct any public sales and no obligation to
delay the sale of any Pledged Interests for the period of time necessary to
permit its registration for public sale under the Securities Act and applicable
state securities laws, and shall not have any responsibility or liability as a
result of its election so not to conduct any such public sales or delay the sale
of any Pledged Interests, notwithstanding the possibility that a substantially
higher price might be realized if the sale were deferred until after such
registration. Each Pledgor hereby waives any claims against the Collateral Agent
or any other Secured Party arising by reason of the fact that the price at which
any Pledged Interests may have been sold at any private sale was less than the
price that might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations, even if the Collateral Agent
accepts the first offer received and does not offer such Pledged Interests to
more than one offeree.
6.6 The Pledgors Remain Liable. Notwithstanding anything herein to the
--------------------------
contrary, (i) each Pledgor shall remain liable under all Contracts to which it
is a party included within the Collateral (including without limitation all
Ownership Agreements) to perform all of its obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Collateral Agent of any of its rights or remedies hereunder shall not release
any Pledgor from any of its obligations under any of such Contracts, and (iii)
except as specifically provided for hereinbelow, neither the Collateral Agent
nor any Lender shall have any obligation or liability by reason of this
Agreement under any of such Contracts, nor shall the Collateral Agent or any
Lender be obligated to perform any of the obligations or duties of any Pledgor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder. This Agreement shall not in any way be deemed to obligate
the Collateral Agent, any other Secured Party or any purchaser at a foreclosure
sale under this Agreement to assume any of a Pledgor's obligations, duties or
liabilities under any Ownership Agreement, including without limitation any
Pledgor's obligations, if any, to manage the business and affairs of the
applicable partnership, joint venture, limited liability company or other issuer
(collectively, the "Partner Obligations"), unless the Collateral Agent or such
-------------------
other Secured Party or purchaser otherwise agrees in writing to assume any or
all of such Partner Obligations. In the event of foreclosure by the Collateral
Agent hereunder, then except as provided in the preceding sentence, each
applicable Pledgor shall remain bound and obligated to perform its Partner
Obligations and neither the Collateral Agent nor any other Secured Party shall
be deemed to have assumed any Partner Obligations. In the event the Collateral
Agent, any other Secured Party or any purchaser at a foreclosure sale elects to
become a substitute partner or member in place of a Pledgor, the party making
such election shall adopt in writing such Ownership Agreement and agree to be
bound by the terms and provisions thereof; and subject to the execution of such
written agreement, each Pledgor hereby irrevocably consents in advance to the
admission of the Collateral Agent, any other Secured Party or any such purchaser
as a substitute partner or member to the extent of the Pledged Interests
acquired pursuant to such sale, and agrees to execute any documents or
instruments and take any other action as may be necessary or as may be requested
in connection therewith. The powers, rights and remedies conferred on the
Collateral Agent hereunder are solely to protect its interest and privilege in
such Contracts, as Collateral, and shall not impose any duty upon it to exercise
any such powers, rights or remedies.
6.7 Waivers. Each Pledgor, to the greatest extent not prohibited by
-------
applicable law, hereby (i) agrees that it will not invoke, claim or assert the
benefit of any rule of law or statute
29
now or hereafter in effect (including without limitation any right to prior
notice or judicial hearing in connection with the Collateral Agent's possession,
custody or disposition of any Collateral or any appraisal, valuation, stay,
extension, moratorium or redemption law), or take or omit to take any other
action, that would or could reasonably be expected to have the effect of
delaying, impeding or preventing the exercise of any rights and remedies in
respect of the Collateral, the absolute sale of any of the Collateral or the
possession thereof by any purchaser at any sale thereof, and to the extent
permitted by law waives the benefit of all such laws and further agrees that it
will not hinder, delay or impede the execution of any power granted hereunder to
the Collateral Agent, but that it will permit the execution of every such power
as though no such laws were in effect, (ii) waives all rights that it has or may
have under any rule of law or statute now existing or hereafter adopted to
require the Collateral Agent to marshal any Collateral or other assets in favor
of such Pledgor or any other party or against or in payment of any or all of the
Secured Obligations then due and payable, and (iii) to the extent permitted by
law waives all rights that it has or may have under any rule of law or statute
now existing or hereafter adopted to demand, presentment, protest, advertisement
or notice of any kind (except notices expressly provided for herein).
ARTICLE VII
THE COLLATERAL AGENT
7.1 The Collateral Agent; Standard of Care. The Collateral Agent will hold
--------------------------------------
all items of the Collateral at any time received under this Agreement in
accordance with the provisions hereof. The obligations of the Collateral Agent
as holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement and the Intercreditor
Agreement, are only those expressly set forth in this Agreement and the other
Intercreditor Agreement. The Collateral Agent shall act hereunder at the
direction, or with the consent, of the Required Secured Parties on the terms and
conditions set forth in the Intercreditor Agreement. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest, on behalf of the
Secured Parties, in the Collateral, and shall not impose any duty upon it to
exercise any such powers. Except for treatment of the Collateral in its
possession in a manner substantially equivalent to that which the Collateral
Agent, in its individual capacity, accords its own property of a similar nature,
and the accounting for moneys actually received by it hereunder and the
Collateral Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to the Collateral. Neither the Collateral Agent nor any other Secured
Party shall be liable to any Pledgor (i) for any loss or damage sustained by
such Pledgor, or (ii) for any loss, damage, depreciation or other diminution in
the value of any of the Collateral that may occur as a result of or in
connection with or that is in any way related to any exercise by the Collateral
Agent or any other Secured Party of any right or remedy under this Agreement,
any failure to demand, collect or realize upon any of the Collateral or any
delay in doing so, or any other act or failure to act on the part of the
Collateral Agent or any other Secured Party, except to the extent that the same
is caused by its own gross negligence or willful misconduct or fraud.
30
7.2 Further Assurances; Attorney-in-Fact.
------------------------------------
(a) Each Pledgor agrees that it will join with the Collateral Agent to
execute and, at its own expense, file and refile under the Uniform Commercial
Code such financing statements, continuation statements and other documents and
instruments in such offices as the Collateral Agent may deem necessary or
appropriate, and wherever required or permitted by law, in order to perfect and
preserve the Collateral Agent's security interest in the Collateral, and hereby
authorizes the Collateral Agent to file financing statements and amendments
thereto relating to all or any part of the Collateral in accordance with this
Agreement without the signature of such Pledgor where permitted by law, and
agrees to do such further acts and things (including without limitation making
any notice filings with state tax or revenue authorities required to be made by
account creditors in order to enforce any Accounts in such state) and to execute
and deliver to the Collateral Agent such additional conveyances, assignments,
agreements and instruments as the Collateral Agent may reasonably require or
deem advisable to perfect, establish, confirm and maintain the security interest
and Lien provided for herein, to carry out the purposes of this Agreement or to
further assure and confirm unto the Collateral Agent its rights, powers and
remedies hereunder.
(b) Each Pledgor hereby irrevocably appoints the Collateral Agent its
lawful attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor, the Collateral Agent or otherwise, and
with full power of substitution in the premises (which power of attorney, being
coupled with an interest, is irrevocable for so long as this Agreement shall be
in effect), from time to time in the Collateral Agent's discretion after the
occurrence and during the continuance of an Event of Default (except for the
actions described in clause (i)(A) below which may be taken by the Collateral
Agent without regard to whether an Event of Default has occurred) to take any
action and to execute any instruments that the Collateral Agent may deem
necessary or advisable to accomplish the purpose of this Agreement, including,
without limitation:
(i) (A) to sign the name of such Pledgor on any financing statement,
continuation statement, notice or other similar document that, in the
Collateral Agent's opinion, should be made or filed in order to perfect or
continue perfected the security interest granted under this Agreement and
(B) to sign the name of such Pledgor on any title or ownership applications
for filing with applicable state agencies to enable any motor vehicles now
or hereafter owned by the Company to be retitled and the Collateral Agent
listed as lienholder thereon;
(ii) to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, drafts, instruments,
chattel paper and other orders for the payment of money made payable to
such Pledgor representing any interest, income, dividend, distribution or
other amount payable in respect of any of the Collateral and to give full
discharge for the same;
31
(iv) to obtain, maintain and adjust any property or casualty insurance
required to be maintained by such Pledgor under Section 4.10 and direct the
payment of proceeds thereof to the Collateral Agent;
(v) to pay or discharge taxes, Liens or other encumbrances levied or
placed on or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by
the Collateral Agent in its sole discretion, any such payments made by the
Collateral Agent to become Secured Obligations of the Pledgors to the
Collateral Agent, due and payable immediately upon demand;
(vi) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or advisable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Collateral Agent with respect to any of the Collateral; and
(vii) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with any and all of the Collateral as fully
and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes, and to do from time to time, at the
Collateral Agent's option and the Pledgors' expense, all other acts and
things deemed necessary by the Collateral Agent to protect, preserve or
realize upon the Collateral and to more completely carry out the purposes
of this Agreement.
(c) If any Pledgor fails to perform any covenant or agreement contained in
this Agreement after written request to do so by the Collateral Agent, the
Collateral Agent may itself perform, or cause the performance of, such covenant
or agreement and may take any other action that it deems necessary and
appropriate for the maintenance and preservation of the Collateral or its
security interest therein, and the expenses so incurred in connection therewith
shall be payable by the Pledgors under Section 8.1.
7.3 Incorporation of Credit Agreement Provisions. The provisions of
--------------------------------------------
Sections 10.2, 10.3, 10.4, 10.6, 10.7, 10.8, and 10.9 of the Credit Agreement
(as amended from time to time) are incorporated herein and shall apply with
respect to the Collateral Agent in the same manner and with the same effect as
they apply or would apply with respect to the Agent (as defined in the Credit
Agreement) if it was acting as the Collateral Agent.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnity and Expenses. The Pledgors agree jointly and severally:
----------------------
(a) To indemnify and hold harmless the Collateral Agent, each other Secured
Party and each of their respective directors, officers, employees, agents and
affiliates from and against any and all claims, damages, demands, losses,
obligations, judgments and liabilities (including without limitation attorneys'
fees and expenses) in any way arising out of or in connection with this
Agreement and the transactions contemplated hereby, except to the extent the
same shall
32
arise as a result of the gross negligence or willful misconduct of the party
seeking to be indemnified; and
(b) To pay and reimburse the Collateral Agent upon demand for all costs and
expenses (including without limitation attorneys' fees and expenses) that the
Collateral Agent may incur in connection with (i) the custody, use or
preservation of, or the sale of, collection from or other realization upon, any
of the Collateral, including the expenses of re-taking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the Collateral,
(ii) the exercise or enforcement of any rights or remedies granted hereunder
(including without limitation under Article VI), or otherwise available to it
(whether at law, in equity or otherwise), or (iii) the failure by any Pledgor to
perform or observe any of the provisions hereof. The provisions of this Section
8.1 shall survive the occurrence of the Termination Requirements (as hereinafter
defined).
8.2 No Waiver. The rights and remedies of the Secured Parties expressly set
---------
forth in this Agreement, the other Credit Documents and the Operative Agreement
are cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of any Secured Party in exercising any right, power or privilege shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. To the extent permitted by law no
course of dealing between the Pledgors and the Secured Parties or their agents
or employees shall be effective to amend, modify or discharge any provision of
this Agreement, any other Credit Document or any Operative Agreement or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon any Pledgor in any case shall entitle such Pledgor or any other Pledgor to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of any Secured Party to exercise any right or
remedy or take any other or further action in any circumstances without notice
or demand.
8.3 Pledgors' Obligations Absolute. Each Pledgor agrees that its
------------------------------
obligations hereunder, and the security interest granted to and all rights,
remedies and powers of the Collateral Agent hereunder, are irrevocable, absolute
and unconditional and shall not be discharged, limited or otherwise affected by
reason of any of the following, whether or not such Pledgor has knowledge
thereof:
(i) any change in the time, manner or place of payment of, or in any
other term of, any Secured Obligations, or any amendment, modification or
supplement to, restatement of, or consent to any rescission or waiver of or
departure from, any provisions of the Credit Agreement, any Subsidiary
Guaranty, any other Credit Document, any Operative Agreement or any
agreement or instrument delivered pursuant to any of the foregoing;
(ii) the invalidity or unenforceability of any Secured Obligations or
any provisions of the Credit Agreement, the Subsidiary Guaranty, any other
Credit Document, any Operative Agreement or any agreement or instrument
delivered pursuant to any of the foregoing;
33
(iii) the addition or release of any other Pledgors hereunder or the
taking, acceptance or release of any Secured Obligations of any other
Person or additional Collateral or other security therefor;
(iv) any sale, exchange, release, substitution, compromise,
nonperfection or other action or inaction in respect of any Collateral or
other direct or indirect security for any Secured Obligations, or any
discharge, modification, settlement, compromise or other action or inaction
in respect of any Secured Obligations of any other Person;
(v) any agreement not to pursue or enforce or any failure to pursue or
enforce (whether voluntarily or involuntarily as a result of operation of
law, court order or otherwise) any right or remedy in respect of any
Secured Obligations or any Collateral or other security therefor, or any
failure to create, protect, perfect, secure, insure, continue or maintain
any Liens in any such Collateral or other security;
(vi) the exercise of any right or remedy available under the Credit
Documents, any Operative Agreement, at law, in equity or otherwise in
respect of any Collateral or other security for any Secured Obligations, in
any order and by any manner thereby permitted, including without limitation
foreclosure on any such Collateral or other security by any manner of sale
thereby permitted, whether or not every aspect of such sale is commercially
reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in the
corporate structure or existence of the Borrower, any other Pledgor or any
other Person directly or indirectly liable for any Secured Obligations;
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Secured Obligations or any other
obligations of the Borrower or any other Person directly or indirectly
liable for any Secured Obligations, regardless of what Secured Obligations
may remain unpaid after any such application; or
(ix) any other circumstance that might otherwise constitute a legal or
equitable discharge of, or a defense, set-off or counterclaim available to,
the Borrower, any Pledgor or a surety or guarantor generally, other than
the occurrence of all of the following: (x) the payment in full of the
Secured Obligations (other than contingent liabilities that, by their
nature, may accrue after principal of and interest on the Loans have been
repaid in full), (y) the termination of the Commitments and the termination
or expiration of all Letters of Credit under the Credit Agreement, and (z)
the termination of, and settlement of all obligations of the Borrower
under, each Hedge Agreement to which the Borrower and any Lender or
Affiliate of any Lender are parties (the events in clauses (x), (y) and (z)
above, collectively, the "Termination Requirements").
------------------------
8.4 Enforcement. By its acceptance of the benefits of this Agreement, each
-----------
Secured Party agrees that this Agreement may be enforced only by the Collateral
Agent, acting upon the instructions or with the consent pursuant to the
Intercreditor Agreement, and that no Secured
34
Party shall have any right individually to enforce or seek to enforce this
Agreement or to realize upon any Collateral or other security given to secure
the payment and performance of the Secured Obligations.
8.5 Amendments, Waivers, etc. No amendment, modification, waiver, discharge
------------------------
or termination of, or consent to any departure by any Pledgor from, any
provision of this Agreement, shall be effective unless in a writing signed by
the Collateral Agent and the Required Secured Parties or as otherwise may be
required under the provisions of the Intercreditor Agreement to concur in the
action then being taken, and then the same shall be effective only in the
specific instance and for the specific purpose for which given.
8.6 Continuing Security Interest; Term; Successors and Assigns; Assignment;
-----------------------------------------------------------------------
Termination and Release; Survival. This Agreement shall create a continuing
- ---------------------------------
security interest in the Collateral and shall secure the payment and performance
of all of the Secured Obligations as the same may arise and be outstanding at
any time and from time to time from and after the date hereof, and shall (i)
remain in full force and effect until the occurrence of the Termination
Requirements, (ii) be binding upon and enforceable against each Pledgor and its
successors and assigns (provided, however, that no Pledgor may sell, assign or
-------- -------
transfer any of its rights, interests, duties or obligations hereunder without
the prior written consent of the Lenders) and (iii) inure to the benefit of and
be enforceable (subject to the limitations of this Agreement) by each Secured
Party and its successors and assigns. Upon any sale or other disposition by any
Pledgor of any Collateral in a transaction expressly permitted hereunder or
under or pursuant to the Credit Agreement or any other applicable Credit
Document, the Operative Agreements, the Lien and security interest created by
this Agreement in and upon such Collateral shall be automatically released, and
upon the satisfaction of all of the Termination Requirements, this Agreement and
the Lien and security interest created hereby shall terminate; and in connection
with any such release or termination, the Collateral Agent, at the request and
expense of the applicable Pledgor, will execute and deliver to such Pledgor such
documents and instruments evidencing such release or termination as such Pledgor
may reasonably request and will assign, transfer and deliver to such Pledgor,
without recourse and without representation or warranty, such of the Collateral
as may then be in the possession of the Collateral Agent (or, in the case of any
partial release of Collateral, such of the Collateral so being released as may
be in its possession). All representations, warranties, covenants and agreements
herein shall survive the execution and delivery of this Agreement and any Pledge
Amendment or Pledgor Accession.
8.7 Additional Pledgors. Each Pledgor recognizes that the provisions of the
-------------------
Credit Agreement and the Operative Agreements require Persons that become
Subsidiaries of the Borrower, and that are not already parties hereto, to
execute and deliver a Pledgor Accession, whereupon each such Person shall become
a Pledgor hereunder with the same force and effect as if originally a Pledgor
hereunder on the date hereof, and agrees that its obligations hereunder shall
not be discharged, limited or otherwise affected by reason of the same, or by
reason of the Collateral Agent's actions in effecting the same or in releasing
any other Pledgor hereunder, in each case without the necessity of giving notice
to or obtaining the consent of such Pledgor or any other Pledgor.
35
8.8 Notices. All notices and other communications provided for hereunder
-------
shall be given to the parties in the manner and subject to the other notice
provisions set forth in the Credit Agreement, the Participation Agreement and
the Subsidiary Guaranty.
8.9 Governing Law; Waiver of Jury Trial. This Agreement and the rights and
-----------------------------------
obligations of the parties hereunder shall be governed by and construed and
enforced in accordance with the laws of the State of New York. Each of the
parties hereto irrevocably and unconditionally, to the fullest extent allowed by
applicable law, waives any right to trial by jury in any legal action or
proceeding arising under this Agreement or in any way connected with or related
or incidental to the dealings of the parties hereto with respect to this
Agreement or the transactions related hereto.
8.10 Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
8.11 Construction. The headings of the various sections and subsections of
------------
this Agreement have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
8.12 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
36
IN WITNESS WHEREOF, the Pledgors have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first above written.
US ONCOLOGY, INC.
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
[SUBSIDIARY GUARANTORS]
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN:
FIRST UNION NATIONAL BANK, as
Collateral Agent
By:
---------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
S-1
Annex A to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2002
------------
--------------------------------------------
I. PLEDGED INTERESTS
Percentage of
Outstanding
Type of Certificate No. of Shares Interests
Name of Issuer Interests Number (if applicable) in Issuer
- ----------------------- -------------- --------------- ------------------- ---------------
II. INTERCOMPANY OBLIGATIONS
Original Principal
------------------
Pledgor/Lender Borrower Date Amount
- -------------- -------- ---- ------
Annex B to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2001
------------
--------------------------------------------
FILING LOCATIONS
US ONCOLOGY, INC.
Secretary of State of
----------------
Register of Deeds, County of
--------------
[NAME OF SUBSIDIARY]
------------------
Secretary of State of
----------------
Register of Deeds, County of
--------------
[Repeat for each Subsidiary]
Annex C to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2001
------------
--------------------------------------------
LEGAL NAME, JURISDICTION OF ORGANIZATION, CERTAIN LOCATIONS
US ONCOLOGY, INC.
1. Exact legal name:
----------------------------
2. Federal tax ID no.:
-------------------
3. Organizational ID no.: [Not applicable]
----------------
4. Jurisdiction of its incorporation or organization:
-------------------
5. Chief executive office:
----------------------------------
----------------------------------
----------------------------------
6. Records relating to Collateral:
----------------------------------
----------------------------------
----------------------------------
7. Equipment or Inventory:
----------------------------------
----------------------------------
----------------------------------
8. Other places of business:
----------------------------------
----------------------------------
----------------------------------
9. Trade/fictitious or prior corporate names (last five years):
----------------------------------
[Repeat for each Subsidiary.]
Annex D to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2001
------------
--------------------------------------------
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Filing Date
- -------------- --------------------- ------------ -----------------
Annex E to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2001
------------
--------------------------------------------
PATENTS AND PATENT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Inventor Filing Date
- --------- ------------------ --------- ---------- ---------------
Annex F to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology
, 2001
------------
--------------------------------------------
TRADEMARKS AND TRADEMARK APPLICATIONS
Application or Issue or
Pledgor Mark Registration No. Country Filing Date
- ----------- -------- -------------------- ----------- -----------------
Annex G to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2001
------------
--------------------------------------------
DOMAIN NAME REGISTRATIONS
Pledgor Domain Name Filing Date
- ------------- ----------------- ----------------
Exhibit A to Pledge and Security Agreement
First Union National Bank, as Agent
U.S. Oncology, Inc.
, 2002
------------
--------------------------------------------
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT, dated as of , , is delivered by
--------------- -----
[NAME OF PLEDGOR] (the "Pledgor") pursuant to Section 5.1 of the Security
-------
Agreement referred to hereinbelow. The Pledgor hereby agrees that this Pledge
Amendment may be attached to the Pledge and Security Agreement, dated as of
February 1, 2002, made by the Pledgor and certain other pledgors named therein
in favor of First Union National Bank, as Collateral Agent (as amended, modified
or supplemented from time to time, the "Security Agreement," capitalized terms
------------------
defined therein being used herein as therein defined), and that the Pledged
Interests and Intercompany Obligations listed on Schedule A to this Pledge
Amendment shall be deemed to be part of the Pledged Interests and Intercompany
Obligations within the meaning of the Security Agreement and shall become part
of the Collateral and shall secure all of the Secured Obligations as provided in
the Security Agreement. This Pledge Amendment and its attachments are hereby
incorporated into the Security Agreement and made a part thereof.
[NAME OF PLEDGOR]
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Pledge Amendment
Schedule A
I. PLEDGED INTERESTS
Percentage of
Outstanding
Type of Certificate No. of Shares Interests
Name of Issuer Interests Number (if applicable) in Issuer
- ------------------ ------------- -------------- ------------------- ---------------
II. INTERCOMPANY OBLIGATIONS
Original Principal
------------------
Pledgor/Lender Borrower Date Amount
- -------------- -------- ---- ------
2
Exhibit B to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology, Inc.
, 2001
------------
--------------------------------------------
GRANT OF SECURITY INTEREST
IN COPYRIGHTS
WHEREAS, [NAME OF PLEDGOR] (the "Pledgor") is the owner of the copyrights
-------
listed on Schedule A attached hereto, which copyrights are registered or have
pending registrations in the United States Copyright Office as set forth on
Schedule A attached hereto (all such copyrights, registrations and applications,
collectively, the "Copyrights"); and
----------
WHEREAS, the Pledgor has entered into a Pledge and Security Agreement (as
amended, modified, restated or supplemented from time to time, the "Security
--------
Agreement"), dated as of February 1, 2002, in which the Pledgor has agreed with
- ---------
First Union National Bank, as Collateral Agent (the "Collateral Agent"), with
----------------
offices at One First Union Center, 301 South College Street, Charlotte, North
Carolina 28288-1139, to execute this Grant of Security Interest;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Secured Obligations (as defined in the Security Agreement),
the Pledgor does hereby grant to the Collateral Agent a security interest in all
of its right, title and interest in and to the Copyrights, and the use thereof,
together with all proceeds and products thereof and the goodwill of the
businesses symbolized by the Copyrights. This Grant of Security Interest has
been given in conjunction with the security interest granted to the Collateral
Agent under the Security Agreement, and the provisions of this Grant of Security
Interest are without prejudice to and in addition to the provisions of the
Security Agreement, which are incorporated herein by this reference.
[NAME OF PLEDGOR]
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
State of
---------------------
County of
-------------------
Before me appeared , the person who signed this
-----------------------
instrument, who acknowledged that he/she signed it as a free act on his/her own
behalf or on behalf of the identified corporation or other juristic entity with
authority to do so.
This day of , 2002.
------ --------------------
- ---------------------------------
Notary Public
(Seal)
My Commission Expires:
--------------------
2
Copyright Grant of Security Interest
Schedule A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Filing Date
- -------------- --------------------- ------------ -----------------
3
Exhibit C to Pledge and Security Agreement
First Union National Bank, as Agent
US Oncology
, 2001
------------
--------------------------------------------
GRANT OF SECURITY INTEREST
IN PATENTS AND TRADEMARKS
WHEREAS, [NAME OF PLEDGOR] (the "Pledgor") is the owner of the trademarks
-------
and service marks listed on Schedule A attached hereto, which marks are
registered or have pending registrations in the United States Patent and
Trademark Office as set forth on Schedule A attached hereto (all such
trademarks, service marks, registrations and applications, collectively, the
"Trademarks") and is the owner of the patents listed on Schedule A attached
----------
hereto, which patents are registered or have pending applications in the United
States Patent and Trademark Office as set forth on Schedule A attached hereto
(all such patents, registrations and applications, collectively, the "Patents");
-------
and
WHEREAS, the Pledgor has entered into a Pledge and Security Agreement (as
amended, modified, restated or supplemented from time to time, the "Security
--------
Agreement"), dated as of February 1, 2002, in which the Pledgor has agreed with
- ---------
First Union National Bank, as Collateral Agent (the "Collateral Agent"), with
----------------
offices at One First Union Center, 301 South College Street, Charlotte, North
Carolina 28288-1139, to execute this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Secured Obligations (as defined in the Security Agreement),
the Pledgor does hereby grant to the Collateral Agent a security interest in all
of its right, title and interest in and to the Trademarks and the Patents, and
the use thereof, together with all proceeds and products thereof and the
goodwill of the businesses symbolized by the Trademarks and the Patents. This
Grant of Security Interest has been given in conjunction with the security
interest granted to the Collateral Agent under the Security Agreement, and the
provisions of this Grant of Security Interest are without prejudice to and in
addition to the provisions of the Security Agreement, which are incorporated
herein by this reference.
[NAME OF PLEDGOR]
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
State of
---------------------
County of
-------------------
Before me appeared , the person who signed this
-----------------------
instrument, who acknowledged that he/she signed it as a free act on his/her own
behalf or on behalf of the identified corporation or other juristic entity with
authority to do so.
This day of , 2002.
------ --------------------
- ---------------------------------
Notary Public
(Seal)
My Commission Expires:
--------------------
2
Patent and Trademark Grant of Security Interest
Schedule A
TRADEMARKS AND TRADEMARK APPLICATIONS
Application or Issue or
Pledgor Mark Registration No. Country Filing Date
- ----------- -------- -------------------- ----------- -----------------
PATENTS AND PATENT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Inventor Filing Date
- --------- ------------------ --------- ---------- ---------------
3
Exhibit D to Pledge and Security Agreement
First Union National Bank, as Agent
U.S. Oncology, Inc.
, 2002
------------
--------------------------------------------
FORM OF
PLEDGE AND SECURITY ACCESSION
THIS PLEDGE AND SECURITY ACCESSION (this "Accession"), dated as of
---------
, , is executed and delivered by , a
- ------------- ---- ------------------------
corporation (the "Company"), in favor of First Union National
- -------------- -------
Bank, in its capacity as collateral agent (in such capacity, the "Collateral
----------
Agent") under the Security Agreement referred to hereinbelow. Capitalized terms
- -----
used herein without definition shall have the meanings given to them in the
Security Agreement.
Reference is made to the Credit Agreement, dated as of February 1, 2002, by
and between US ONCOLOGY, INC. (the "Borrower"), the Lenders party thereto, and
--------
the First Union National Bank, as the administrative agent (as amended, modified
or supplemented from time to time, the "Credit Agreement"). In connection with
----------------
and as a condition to the initial and continued extensions of credit under the
Credit Agreement, the Borrower and certain of its Subsidiaries have executed and
delivered (i) a Subsidiary Guaranty, dated as of February 1, 2002 (as amended,
modified or supplemented from time to time, the "Subsidiary Guaranty"), pursuant
-------------------
to which such Subsidiaries have guaranteed the payment in full of the
obligations of the Borrower under the Credit Agreement and the other Credit
Documents (as defined in the Credit Agreement), and (ii) a Pledge and Security
Agreement, dated as of February 1, 2002 (as amended, modified or supplemented
from time to time, the "Security Agreement"), pursuant to which they have
------------------
granted in favor of the Collateral Agent a security interest in and Lien upon
the Collateral described therein as security for their Secured Obligations (as
defined in the Security Agreement).
Further reference is made to an Amended and Restated Participation
Agreement, dated as of February 1, 2002 (as amended, modified or supplemented
from time to time, the "Participation Agreement"), by and between the Borrower,
----------------------
AOR Synthetic Real Estate, Inc. (the "ELLF Lessee"), the Guarantor Pledgors (as
-----------
defined in the Security Agreement), Wells Fargo Bank Northwest, National
Association, as the Owner Trustee (as defined in the Participation Agreement),
the Holders (as defined in the Participation Agreement), the Lenders (as defined
in the Participation Agreement) and the Collateral Agent, which, together with
the other Operative Agreements (as defined in the Participation Agreement),
provide for the availability of certain end loaded lease financing facilities
(the "ELLF") to the ELLF Lessee upon the terms and subject to the conditions set
----
forth therein. In connection with and as a condition to the extension of the
ELLF to the ELLF Lessee under the Operative Agreements, each of the Borrower and
the Guarantor Pledgors that is a party to the Security Agreement has entered
into an Amended and Restated Credit Agreement, dated as of February 1, 2002 (as
amended, modified or supplemented from time to time, the "ELLF Credit
-----------
Agreement"), pursuant to which (i) the Borrower and each such Guarantor Pledgor
- ---------
has guaranteed to the Tranche A Lenders (as defined in the Participation
Agreement) the payment in full of the Tranche A Obligations (as defined in the
Participation Agreement) and (ii) the Borrower has guaranteed to the Financing
Parties (as defined in the Participation Agreement) the payment in full of the
Company Obligations (as
defined in the Participation Agreement). In connection with and as a further
condition to the extension of the ELLF to the ELLF Lessee under the Operative
Agreements, the Pledgors (as defined in the Security Agreement) have agreed by
execution and delivery of the Security Agreement to secure the payment in full
of their respective Secured Obligations.
The Borrower has agreed under the Credit Agreement to cause each of its
future Subsidiaries to become a party to the Subsidiary Guaranty as a guarantor
thereunder and to the Security Agreement as a Pledgor thereunder. The Company is
a direct or indirect subsidiary of the Borrower and, as required by the Credit
Agreement and the Operative Agreements, has become a guarantor under the
Subsidiary Guaranty as of the date hereof. The Company will obtain benefits as a
result of the continued extension of credit to the Borrower under the Credit
Agreement and the Operative Agreements, which benefits are hereby acknowledged,
and, accordingly, desire to execute and deliver this Accession. Therefore, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and to induce the
Lenders to continue to extend credit to the Borrower under the Credit Agreement
and the Financing Parties to extend credit in favor of the Credit Parties under
the ELLF, the Company hereby agrees as follows:
1. The Company hereby joins in and agrees to be bound by each and all of
the provisions of the Security Agreement as a Pledgor thereunder. In furtherance
(and without limitation) of the foregoing, pursuant to Section 2.1 of the
Security Agreement, and as security for all of the Secured Obligations, the
Company hereby pledges, assigns and delivers to the Collateral Agent, for the
ratable benefit of the Secured Parties, and grants to the Collateral Agent, for
the ratable benefit of the Secured Parties, a Lien upon and security interest
in, all of its right, title and interest in and to the Collateral as set forth
in Section 2.1 of the Security Agreement, all on the terms and subject to the
conditions set forth in the Security Agreement.
2. The Company hereby represents and warrants that (i) Schedule 1 hereto
sets forth all information required to be listed on Annexes A, B, C, D, E and F
to the Security Agreement in order to make each representation and warranty
contained in Sections 3.1 and 3.2 of the Security Agreement true and correct
with respect to the Company as of the date hereof and after giving effect to
this Accession and (ii) after giving effect to this Accession and to the
incorporation into such Annexes, as applicable, of the information set forth in
Schedule 1, each representation and warranty contained in Article III of the
Security Agreement is true and correct with respect to the Company as of the
date hereof, as if such representations and warranties were set forth at length
herein.
3. This Accession shall be a Credit Document (within the meaning of such
term under the Credit Agreement and the Operative Agreement (within the meaning
of such term under the Participation Agreement), shall be binding upon and
enforceable against the Company and its successors and assigns, and shall inure
to the benefit of and be enforceable by each Secured Party and its successors
and assigns. This Accession and its attachments are hereby incorporated into the
Security Agreement and made a part thereof.
IN WITNESS WHEREOF, the Company has caused this Accession to be executed
under seal by its duly authorized officer as of the date first above written.
2
[NAME OF COMPANY]
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
3
Pledgor Accession
Schedule 1
Information to be added to Annex B of the Security Agreement:
FILING LOCATIONS
Secretary of State of
------------------
Register of Deeds, County of
-------------
Information to be added to Annex C of the Security Agreement:
LEGAL NAME, JURISDICTION OF ORGANIZATION, CERTAIN LOCATIONS
1. Exact legal name:
----------------------------
2. Federal tax ID no:
-------------------
3. Organizational ID no.: [Not applicable]
----------------
4. Jurisdiction of its incorporation or organization:
--------------------
5. Chief executive office:
----------------------------------
----------------------------------
----------------------------------
6. Records relating to Collateral:
----------------------------------
----------------------------------
----------------------------------
7. Equipment or Inventory:
----------------------------------
----------------------------------
----------------------------------
8. Other places of business:
----------------------------------
----------------------------------
4
----------------------------------
9. Trade/fictitious or prior corporate names (last five years):
----------------------------------
----------------------------------
Information to be added to [Annexes A/D/E/F] of the Security Agreement:
[complete as applicable]
5
GRANT OF SECURITY INTEREST IN DOMAIN NAME REGISTRATIONS
WHEREAS, [NAME OF PLEDGOR] (the "Pledgor") has entered into various domain
-------
name registration agreements with Network Solutions, Inc., providing for the
registration and use of certain domain names, and for each such domain name
subject to a domain name registration agreement has executed a Registrant Name
Change Agreement in the form of Exhibit A attached hereto (all such domain name
registrations agreements, collectively, the "Domain Names"); and
------------
WHEREAS, the Pledgor has entered into a Pledge and Security Agreement (as
amended, modified, restated or supplemented from time to time, the "Security
--------
Agreement"), dated as of February 1, 2002, in which the Pledgor has agreed with
- ---------
First Union National Bank, as collateral agent (the "Collateral Agent"), with
----------------
offices at One First Union Center, 301 South College Street, Charlotte, North
Carolina 28288-1139, to execute this Grant of Security Interest;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Secured Obligations (as defined in the Security Agreement),
the Pledgor does hereby assign and grant to the Collateral Agent a security
interest in all of its right, title and interest in and to the Domain Names, and
the use thereof, together with all proceeds and products thereof and the
goodwill of the businesses symbolized by the Domain Names. This Grant has been
given in conjunction with the assignment and security interest granted to the
Collateral Agent under the Security Agreement, and the provisions of this Grant
are without prejudice to and in addition to the provisions of the Security
Agreement, which are incorporated herein by this reference.
[NAME OF PLEDGOR]
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Domain Name Grant of Security Interest
Exhibit A
[Attach Registrant Name Change Agreement]
2
EXHIBIT F
---------
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY, dated as of the 1st day of February, 2002 (this
"Guaranty"), is made by each of the undersigned Subsidiaries of US ONCOLOGY,
--------
INC., a Delaware corporation (the "Borrower"), and each other Subsidiary of the
--------
Borrower that, after the date hereof, executes an instrument of accession hereto
substantially in the form of Exhibit A (a "Guarantor Accession"; the undersigned
--------- -------------------
and such other Subsidiaries of the Borrower, collectively, the "Guarantors"), in
----------
favor of the Guaranteed Parties (as hereinafter defined). Capitalized terms used
herein without definition shall have the meanings given to them in the Credit
Agreement referred to below.
RECITALS
A. The Borrower, certain banks and other financial institutions
(collectively, the "Lenders"), and First Union National Bank, as administrative
-------
agent for the Lenders (in such capacity, the "Agent"), are parties to a Credit
-----
Agreement, dated as of February 1, 2002 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), providing for the availability of
---------------
certain credit facilities to the Borrower upon the terms and conditions set
forth therein.
B. It is a condition to the extension of credit to the Borrower under the
Credit Agreement that each Guarantor shall have agreed, by executing and
delivering this Guaranty, to guarantee to the Guaranteed Parties the payment in
full of the Guaranteed Obligations (as hereinafter defined). The Guaranteed
Parties are relying on this Guaranty in their decision to extend credit to the
Borrower under the Credit Agreement, and would not enter into the Credit
Agreement without this Guaranty.
C. The Borrower and the Guarantors are engaged in related businesses and
undertake certain activities and operations on an integrated basis. As part of
such integrated operations, the Borrower, among other things, will advance to
the Guarantors from time to time certain proceeds of the Loans made to the
Borrower by the Lenders under the Credit Agreement. Each Guarantor will
therefore obtain benefits as a result of the extension of credit to the Borrower
under the Credit Agreement, which benefits are hereby acknowledged, and,
accordingly, desires to execute and deliver this Guaranty.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Guaranteed Parties to enter into the Credit
Agreement and to induce the Lenders to extend credit to the Borrower thereunder,
each Guarantor hereby agrees as follows:
1. Guaranty.
--------
(a) Each Guarantor hereby irrevocably, absolutely and unconditionally, and
jointly and severally:
(i) guarantees (a) to the Lenders (including the Issuing Lender and
the Swingline Lender in their capacities as such) and the Agent (together
with any Lender (or any Affiliate of any Lender to the extent contemplated
by clause (b) below) in the capacity described in clause (b) below,
collectively, the "Guaranteed Parties") the full and prompt payment, at any
------------------
time and from time to time as and when due (whether at the stated maturity,
by acceleration or otherwise), of all Obligations of the Borrower under the
Credit Agreement and the other Credit Documents, including, without
limitation, all principal of and interest on the Loans, all Reimbursement
Obligations in respect of Letters of Credit, all fees, expenses,
indemnities and other amounts payable by the Borrower under the Credit
Agreement or any other Credit Document (including interest accruing after
the filing of a petition or commencement of a case by or with respect to
the Borrower seeking relief under any Insolvency Laws (as hereinafter
defined), whether or not the claim for such interest is allowed in such
proceeding), and all Obligations that, but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, would become
due, and (b) to each applicable Lender or Affiliate of any Lender in its
capacity as a counterparty to any Hedge Agreement with the Borrower
required or permitted under the Credit Agreement, all obligations of the
Borrower under such Hedge Agreement (including any such Hedge Agreement
with a party that subsequently ceases to be a Lender, which Hedge Agreement
is entered into prior to the date such party ceases to be a Lender), in
each case under (a) and (b) whether now existing or hereafter created or
arising and whether direct or indirect, absolute or contingent, due or to
become due (all liabilities and obligations described in this clause (i),
collectively, the "Guaranteed Obligations"); and
----------------------
(ii) agrees to pay or reimburse upon demand all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses, but excluding salaries of any Guaranteed Party's regularly
employed personnel and overhead incurred or paid by any Guaranteed Party)
incurred or paid by (y) any Guaranteed Party in connection with any suit,
action or proceeding to enforce or protect any rights of the Guaranteed
Parties hereunder and (z) the Agent in connection with any amendment,
modification or waiver hereof or consent pursuant hereto, and to indemnify
and hold each Guaranteed Party and its directors, officers, employees,
agents and Affiliates harmless from and against any and all claims, losses,
damages, obligations, liabilities, penalties, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) of
any kind or nature whatsoever, whether direct, indirect or consequential,
that may at any time be imposed on, incurred by or asserted against any
such indemnified party as a result of, arising from or in any way relating
to this Guaranty or the collection or enforcement of the Guaranteed
Obligations; provided, however, that no indemnified party shall have
-------- -------
the right to be indemnified hereunder for any such claims, losses, costs
and expenses to the extent determined by a final and nonappealable judgment
of a court of competent jurisdiction or pursuant to arbitration as set
forth herein to have resulted from the gross negligence or willful
misconduct of such indemnified party (all liabilities
2
and obligations described in this clause (ii), collectively, the "Other
-----
Obligations"; and the Other Obligations, together with the Guaranteed
-----------
Obligations, the "Total Obligations").
-----------------
(b) Notwithstanding the provisions of subsection (a) above and
notwithstanding any other provisions contained herein or in any other Credit
Document:
(i) no provision of this Guaranty shall require or permit the
collection from any Guarantor of interest in excess of the maximum rate or
amount that such Guarantor may be required or permitted to pay pursuant to
applicable law; and
(ii) the liability of each Guarantor under this Guaranty as of any
date shall be limited to a maximum aggregate amount (the "Maximum
-------
Guaranteed Amount") equal to the greatest amount that would not render such
-----------------
Guarantor's obligations under this Guaranty subject to avoidance, discharge
or reduction as of such date as a fraudulent transfer or conveyance under
applicable federal and state laws pertaining to bankruptcy, reorganization,
arrangement, moratorium, readjustment of debts, dissolution, liquidation or
other debtor relief, specifically including, without limitation, the
Bankruptcy Code and any fraudulent transfer and fraudulent conveyance laws
(collectively, "Insolvency Laws"), in each instance after giving effect to
---------------
all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under applicable Insolvency Laws (specifically excluding, however,
any liabilities of such Guarantor in respect of intercompany indebtedness
to the Borrower or any of its Affiliates to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by
such Guarantor hereunder, and after giving effect as assets to the value
(as determined under applicable Insolvency Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of
such Guarantor pursuant to (y) applicable law or (z) any agreement
(including this Guaranty) providing for an equitable allocation among such
Guarantor and other Affiliates of the Borrower of obligations arising under
guaranties by such parties).
(c) The Guarantors desire to allocate among themselves, in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made hereunder on any date by a
Guarantor (a "Funding Guarantor") that exceeds its Fair Share (as hereinafter
-----------------
defined) as of such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Guarantors in the amount of such other
Guarantor's Fair Share Shortfall (as hereinafter defined) as of such date, with
the result that all such contributions will cause each Guarantor's Aggregate
Payments (as hereinafter defined) to equal its Fair Share as of such date. "Fair
----
Share" means, with respect to a Guarantor as of any date of determination, an
- -----
amount equal to (i) the ratio of (x) the Adjusted Maximum Guaranteed Amount (as
hereinafter defined) with respect to such Guarantor to (y) the aggregate of the
Adjusted Maximum Guaranteed Amounts with respect to all Guarantors, multiplied
by (ii) the aggregate amount paid or distributed on or before such date by all
Funding Guarantors hereunder in respect of the obligations guaranteed. "Fair
----
Share Shortfall" means, with respect to a Guarantor as of any date of
- ---------------
determination, the excess, if any, of the Fair Share of such Guarantor over the
Aggregate Payments of such Guarantor. "Adjusted Maximum Guaranteed Amount"
----------------------------------
means, with respect to a Guarantor as of any date of determination, the Maximum
Guaranteed Amount of such Guarantor, determined in accordance with the
provisions of subsection (b) above; provided
--------
3
that, solely for purposes of calculating the "Adjusted Maximum Guaranteed
---------------------------
Amount" with respect to any Guarantor for purposes of this subsection (c), any
- ------
assets or liabilities arising by virtue of any rights to subrogation,
reimbursement or indemnity or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Guarantor.
"Aggregate Payments" means, with respect to a Guarantor as of any date of
------------------
determination, the aggregate amount of all payments and distributions made on or
before such date by such Guarantor in respect of this Guaranty (including,
without limitation, in respect of this subsection (c)). The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. Each
Funding Guarantor's right of contribution under this subsection (c) shall be
subject to the provisions of Section 4. The allocation among Guarantors of their
obligations as set forth in this subsection (c) shall not be construed in any
way to limit the liability of any Guarantor hereunder to the Guaranteed Parties.
(d) The guaranty of each Guarantor set forth in this Section is a guaranty
of payment as a primary obligor, and not a guaranty of collection. Each
Guarantor hereby acknowledges and agrees that the Guaranteed Obligations, at any
time and from time to time, may exceed the Maximum Guaranteed Amount of such
Guarantor and may exceed the aggregate of the Maximum Guaranteed Amounts of all
Guarantors, in each case without discharging, limiting or otherwise affecting
the obligations of any Guarantor hereunder, except as specifically provided
otherwise in this Section, or the rights, powers and remedies of any Guaranteed
Party hereunder or under any other Credit Document.
2. Guaranty Absolute. Each Guarantor agrees that its obligations hereunder
-----------------
are irrevocable, absolute and unconditional, are independent of the Guaranteed
Obligations and any Collateral or other security therefor or other guaranty or
liability in respect thereof, whether given by such Guarantor or any other
Person, and shall not be discharged, limited or otherwise affected by reason of
any of the following, whether or not such Guarantor has notice or knowledge
thereof:
(i) any change in the time, manner or place of payment of, or in any
other term of, any Guaranteed Obligations or any guaranty or other
liability in respect thereof, or any amendment, modification or supplement
to, restatement of, or consent to any rescission or waiver of or departure
from, any provisions of the Credit Agreement, any other Credit Document or
any agreement or instrument delivered pursuant to any of the foregoing;
(ii) the invalidity or unenforceability of any Guaranteed Obligations,
any guaranty or other liability in respect thereof or any provisions of the
Credit Agreement, any other Credit Document or any agreement or instrument
delivered pursuant to any of the foregoing;
(iii) the addition or release of Guarantors hereunder or the taking,
acceptance or release of other guarantees of any Guaranteed Obligations or
additional Collateral or other security for any Guaranteed Obligations or
for any guaranty or other liability in respect thereof;
4
(iv) any discharge, modification, settlement, compromise or other
action in respect of any Guaranteed Obligations or any guaranty or other
liability in respect thereof, including any acceptance or refusal of any
offer or performance with respect to the same or the subordination of the
same to the payment of any other obligations;
(v) any agreement not to pursue or enforce or any failure to pursue or
enforce (whether voluntarily or involuntarily as a result of operation of
law, court order or otherwise) any right or remedy in respect of any
Guaranteed Obligations, any guaranty or other liability in respect thereof
or any Collateral or other security for any of the foregoing; any sale,
exchange, release, substitution, compromise or other action in respect of
any such Collateral or other security; or any failure to create, protect,
perfect, secure, insure, continue or maintain any Liens in any such
Collateral or other security;
(vi) the exercise of any right or remedy available under the Credit
Documents, at law, in equity or otherwise in respect of any Collateral or
other security for any Guaranteed Obligations or for any guaranty or other
liability in respect thereof, in any order and by any manner thereby
permitted, including, without limitation, foreclosure on any such
Collateral or other security by any manner of sale thereby permitted,
whether or not every aspect of such sale is commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in the
corporate structure or existence of the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations;
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Guaranteed Obligations or any other
obligations of the Borrower or any other Person directly or indirectly
liable for any Guaranteed Obligations, regardless of what Guaranteed
Obligations may remain unpaid after any such application; or
(ix) any other circumstance that might otherwise constitute a legal or
equitable discharge of, or a defense, set-off or counterclaim available to,
the Borrower, any Guarantor or a surety or guarantor generally, other than
the occurrence of all of the following: (x) the payment in full of the
Total Obligations, (y) the termination of the Commitments and the
termination or expiration of all Letters of Credit under the Credit
Agreement, and (z) the termination of, and settlement of all obligations of
the Borrower under, each Hedge Agreement to which the Borrower and any
Lender or Affiliate of any Lender are parties (the events in clauses (x),
(y) and (z) above, collectively, the "Termination Requirements").
------------------------
3. Certain Waivers. Each Guarantor hereby knowingly, voluntarily and
---------------
expressly waives:
(i) presentment, demand for payment, demand for performance, protest
and notice of any other kind, including, without limitation, notice of
nonpayment or other nonperformance (including notice of default under any
Credit Document with respect to
5
any Guaranteed Obligations), protest, dishonor, acceptance hereof,
extension of additional credit to the Borrower and of any of the matters
referred to in Section 2 and of any rights to consent thereto;
(ii) any right to require the Guaranteed Parties or any of them, as a
condition of payment or performance by such Guarantor hereunder, to proceed
against, or to exhaust or have resort to any Collateral or other security
from or any deposit balance or other credit in favor of, the Borrower, any
other Guarantor or any other Person directly or indirectly liable for any
Guaranteed Obligations, or to pursue any other remedy or enforce any other
right; and any other defense based on an election of remedies with respect
to any Collateral or other security for any Guaranteed Obligations of for
any guaranty or other liability in respect thereof, notwithstanding that
any such election (including any failure to pursue or enforce any rights or
remedies) may impair or extinguish any right of indemnification,
contribution, reimbursement or subrogation or other right or remedy of any
Guarantor against the Borrower, any other Guarantor or any other Person
directly or indirectly liable for any Guaranteed Obligations or any such
Collateral or other security; and, without limiting the generality of the
foregoing, each Guarantor hereby specifically waives the benefits of
Sections 26-7 through 26-9, inclusive, of the General Statutes of North
Carolina, as amended from time to time, and any similar statute or law of
any other jurisdiction, as the same may be amended from time to time;
(iii) any right or defense based on or arising by reason of any right
or defense (other than satisfaction of the Termination Requirements) of the
Borrower or any other Person, including, without limitation, any defense
based on or arising from a lack of authority or other disability of the
Borrower or any other Person, the invalidity or unenforceability of any
Guaranteed Obligations, any Collateral or other security therefor or any
Credit Document or other agreement or instrument delivered pursuant
thereto, or the cessation of the liability of the Borrower for any reason
other than the satisfaction of the Termination Requirements;
(iv) any defense based on any Guaranteed Party's acts or omissions in
the administration of the Guaranteed Obligations, any guaranty or other
liability in respect thereof or any Collateral or other security for any of
the foregoing, and promptness, diligence or any requirement that any
Guaranteed Party create, protect, perfect, secure, insure, continue or
maintain any Liens in any such Collateral or other security;
(v) any right to assert against any Guaranteed Party, as a defense,
counterclaim, crossclaim or set-off, any defense, counterclaim, claim,
right of recoupment or set-off that it may at any time have against any
Guaranteed Party (including, without limitation, failure of consideration,
statute of limitations, payment, accord and satisfaction and usury), other
than compulsory counterclaims; and
(vi) any defense based on or afforded by any applicable law that
limits the liability of or exonerates guarantors or sureties or that may in
any other way conflict with the terms of this Guaranty.
6
4. No Subrogation. Each Guarantor hereby agrees that, until satisfaction of
--------------
the Termination Requirements, it will not exercise or seek to exercise any claim
or right that it may have against the Borrower or any other Guarantor at any
time as a result of any payment made under or in connection with this Guaranty
or the performance or enforcement hereof, including any right of subrogation to
the rights of any of the Guaranteed Parties against the Borrower or any other
Guarantor, any right of indemnity, contribution or reimbursement against the
Borrower or any other Guarantor (including rights of contribution as set forth
in Section 1(c)), any right to enforce any remedies of any Guaranteed Party
against the Borrower or any other Guarantor, or any benefit of, or any right to
participate in, any Collateral or other security held by any Guaranteed Party to
secure payment of the Guaranteed Obligations, in each case whether such claims
or rights arise by contract, statute (including without limitation the
Bankruptcy Code), common law or otherwise. Each Guarantor further agrees that
all indebtedness and other obligations, whether now or hereafter existing, of
the Borrower or any other Subsidiary of the Borrower to such Guarantor,
including, without limitation, any such indebtedness in any proceeding under the
Bankruptcy Code and any intercompany receivables, together with any interest
thereon, shall be, and hereby are, subordinated and made junior in right of
payment to the Total Obligations. Each Guarantor further agrees that if any
amount shall be paid to or any distribution received by any Guarantor (i) on
account of any such indebtedness at any time after the occurrence and during the
continuance of an Event of Default, or (ii) on account of any such rights of
subrogation, indemnity, contribution or reimbursement at any time prior to the
satisfaction of the Termination Requirements, such amount or distribution shall
be deemed to have been received and to be held in trust for the benefit of the
Guaranteed Parties, and shall forthwith be delivered to the Agent in the form
received (with any necessary endorsements in the case of written instruments),
to be applied against the Guaranteed Obligations, whether or not matured, in
accordance with the terms of the applicable Credit Documents and without in any
way discharging, limiting or otherwise affecting the liability of such Guarantor
under any other provision of this Guaranty. Additionally, in the event the
Borrower or any Subsidiary of the Borrower becomes a "debtor" within the meaning
of the Bankruptcy Code, the Agent shall be entitled, at its option, on behalf of
the Guaranteed Parties and as attorney-in-fact for each Guarantor, and is hereby
authorized and appointed by each Guarantor, to file proofs of claim on behalf of
each relevant Guarantor and vote the rights of each such Guarantor in any plan
of reorganization, and to demand, sue for, collect and receive every payment and
distribution on any indebtedness of the Borrower or such Subsidiary to any
Guarantor in any such proceeding, each Guarantor hereby assigning to the Agent
all of its rights in respect of any such claim, including the right to receive
payments and distributions in respect thereof.
5. Representations and Warranties. Each Guarantor hereby represents and
------------------------------
warrants to the Guaranteed Parties as follows:
(a) Such Guarantor is a corporation, partnership or other entity duly
organized, validly existing and, to the extent applicable, in good standing
under the laws of the jurisdiction of its incorporation or organization and has
the full power and authority to execute, deliver and perform this Guaranty and
the other Credit Documents to which it is or will be a party, to own and hold
its property and to engage in its business as presently conducted.
(b) Such Guarantor has taken all necessary corporate or partnership action
to execute, deliver and perform this Guaranty and each of the other Credit
Documents to which it is or will
7
be a party, and has, or on any later date of execution and delivery will have,
validly executed and delivered each of the Credit Documents to which it is or
will be a party. This Guaranty constitutes, and each of such other Credit
Documents upon execution and delivery will constitute, the legal, valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general equitable principles.
(c) The execution, delivery and performance by such Guarantor of this
Guaranty and the other Credit Documents to which it is a party, and compliance
by it with the terms hereof and thereof, do not and will not (i) violate any
provision of its articles or certificate of incorporation or bylaws, (ii)
contravene any Requirement of Law applicable to it, (iii) conflict with, result
in a breach of or constitute (with notice, lapse of time or both) a default
under any indenture, loan agreement, mortgage, deed of trust, lease or other
agreement or instrument to which it is a party, by which it or any of its
properties is bound or to which it is subject, or (iv) result in or require the
creation or imposition of any Lien upon any of its properties, other than Liens
created pursuant to the Credit Documents.
(d) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority is or will be required
as a condition to or otherwise in connection with the due execution, delivery
and performance by such Guarantor of this Guaranty and the other Credit
Documents to which it is a party or the legality, validity or enforceability
hereof or thereof, other than (i) filings of Mortgages, Uniform Commercial Code
financing statements and other instruments and actions necessary to perfect the
Liens created by the Security Documents, (ii) consents, authorizations and
filings that have been made or obtained and that are in full force and effect,
which consents, authorizations and filings are listed on Schedule 5.4, and (iii)
consents and filings the failure to obtain or make which would not, individually
or in the aggregate, have a Material Adverse Effect..
(e) Except as may be disclosed in Schedule 5.5 to the Credit Agreement,
there are no actions, investigations, suits or proceedings pending or, to the
knowledge of such Guarantor, threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, (i) against or
affecting such Guarantor or any of its properties that would, if adversely
determined, be reasonably likely to have a Material Adverse Effect or (ii) with
respect to this Guaranty or any of the other Credit Documents to which such
Guarantor is a party.
(f) Such Guarantor has been provided with a true and complete copy of the
executed Credit Agreement, as in effect as of the date it became a party hereto,
and its principal officers are familiar with the contents thereof, particularly
insofar as the contents thereof relate or apply to such Guarantor.
6. Financial Condition of Borrower. Each Guarantor represents that it has
-------------------------------
knowledge of the Borrower's financial condition and affairs and that it has
adequate means to obtain from the Borrower on an ongoing basis information
relating thereto and to the Borrower's ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect with respect to such
Guarantor. Each Guarantor agrees that the Guaranteed Parties shall have no
obligation to investigate the
8
financial condition or affairs of the Borrower for the benefit of any Guarantor
nor to advise any Guarantor of any fact respecting, or any change in, the
financial condition or affairs of the Borrower that might become known to any
Guaranteed Party at any time, whether or not such Guaranteed Party knows or
believes or has reason to know or believe that any such fact or change is
unknown to any Guarantor, or might (or does) materially increase the risk of any
Guarantor as guarantor, or might (or would) affect the willingness of any
Guarantor to continue as a guarantor of the Guaranteed Obligations.
7. Payments; Application; Set-Off.
------------------------------
(a) Each Guarantor agrees that, upon the failure of the Borrower to pay any
Guaranteed Obligations when and as the same shall become due (whether at the
stated maturity, by acceleration or otherwise), and without limitation of any
other right or remedy that any Guaranteed Party may have at law, in equity or
otherwise against such Guarantor, such Guarantor will, subject to the provisions
of Section 1(b), forthwith pay or cause to be paid to the Agent, for the benefit
of the Guaranteed Parties, an amount equal to the amount of the Guaranteed
Obligations then due and owing as aforesaid.
(b) All payments made by each Guarantor hereunder will be made in Dollars
to the Agent, without set-off, counterclaim or other defense and, in accordance
with Section 2.17 of the Credit Agreement, free and clear of and without
deduction for any Taxes, each Guarantor hereby agreeing to comply with and be
bound by the provisions of Section 2.17 of the Credit Agreement in respect of
all payments made by it hereunder and the provisions of which Section are hereby
incorporated into and made a part of this Guaranty by this reference as if set
forth herein at length.
(c) All payments made hereunder shall be applied upon receipt as follows:
(i) first, to the payment of all Other Obligations owing to the Agent;
(ii) second, after payment in full of the amounts specified in clause
(i) above, to the ratable payment of all other Total Obligations owing to
the Guaranteed Parties; and
(iii) third, after payment in full of the amounts specified in clauses
(i) and (ii) above, and following the termination of this Guaranty, to the
Guarantors or any other Person lawfully entitled to receive such surplus.
(d) For purposes of applying amounts in accordance with this Section, the
Agent shall be entitled to rely upon any Guaranteed Party that has entered into
a Hedge Agreement with the Borrower for a determination (which such Guaranteed
Party agrees to provide or cause to be provided upon request of the Agent) of
the outstanding Guaranteed Obligations owed to such Guaranteed Party under any
such Hedge Agreement. Unless it has actual knowledge (including by way of
written notice from any such Guaranteed Party) to the contrary, the Agent, in
acting hereunder, shall be entitled to assume that no Hedge Agreements or
Guaranteed Obligations in respect thereof are in existence between any
Guaranteed Party and the Borrower. If any Lender that is a party to a Hedge
Agreement with the Borrower (the obligations of the Borrower under which are
Guaranteed Obligations) ceases to be a Lender, such former Lender shall
nevertheless
9
continue to be a Guaranteed Party hereunder with respect to the Guaranteed
Obligations under such Hedge Agreement.
(e) The Guarantors shall remain jointly and severally liable to the extent
of any deficiency between the amount of all payments made hereunder and the
aggregate amount of the sums referred to in clauses (i) and (ii) of subsection
(c) above.
(f) In addition to all other rights and remedies available under the Credit
Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by each Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by each Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of such Guarantor against
any or all of the obligations of such Guarantor to such Guaranteed Party
hereunder now or hereafter existing, whether or not such obligations may be
contingent or unmatured, each Guarantor hereby granting to each Guaranteed Party
a continuing security interest in and Lien upon all such deposits and other
property as security for such obligations. Each Guaranteed Party agrees to
notify any affected Guarantor promptly after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
- -------- -------
validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO
GUARANTEED PARTY SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF,
BANKER'S LIEN OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY
GUARANTOR HELD BY SUCH GUARANTEED PARTY, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE REQUIRED LENDERS, AND ANY GUARANTEED PARTY VIOLATING THIS PROVISION SHALL
INDEMNIFY THE OTHER GUARANTEED PARTIES FROM ANY AND ALL COSTS, EXPENSES,
LIABILITIES AND DAMAGES RESULTING THEREFROM. The contractual restriction on the
exercise of setoff rights provided in the foregoing sentence is solely for the
benefit of the Guaranteed Parties and may not be enforced by the Borrower or any
Guarantor.
8. No Waiver. The rights and remedies of the Guaranteed Parties expressly
---------
set forth in this Guaranty and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Guaranteed
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between any of the Guarantors and the
Guaranteed Parties or their agents or employees shall be effective to amend,
modify or discharge any provision of this Guaranty or any other Credit Document
or to constitute a waiver of any Default or Event of Default. No notice to or
demand upon any Guarantor in any case shall entitle such Guarantor or any other
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of any Guaranteed Party to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
10
9. Enforcement. The Guaranteed Parties agree that, except as provided in
-----------
Section 7(f), this Guaranty may be enforced only by the Agent, acting upon the
instructions or with the consent of the Required Lenders as provided for in the
Credit Agreement, and that no Guaranteed Party shall have any right individually
to enforce or seek to enforce this Guaranty or to realize upon any Collateral or
other security given to secure the payment and performance of the Guarantors'
obligations hereunder. The obligations of each Guarantor hereunder are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against each Guarantor whether or not action is brought against the
Borrower or any other Guarantor and whether or not the Borrower or any other
Guarantor is joined in any such action. Each Guarantor agrees that to the extent
all or part of any payment of the Guaranteed Obligations made by any Person is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid by or on behalf of any Guaranteed Party to a trustee,
receiver or any other party under any Insolvency Laws (the amount of any such
payment, a "Reclaimed Amount"), then, to the extent of such Reclaimed Amount,
----------------
this Guaranty shall continue in full force and effect or be revived and
reinstated, as the case may be, as to the Guaranteed Obligations intended to be
satisfied as if such payment had not been received; and each Guarantor
acknowledges that the term "Guaranteed Obligations" includes all Reclaimed
----------------------
Amounts that may arise from time to time.
10. Amendments, Waivers, etc. No amendment, modification, waiver, discharge
------------------------
or termination of, or consent to any departure by any Guarantor from, any
provision of this Guaranty, shall be effective unless in a writing signed by the
Agent and such of the Lenders as may be required under the provisions of the
Credit Agreement to concur in the action then being taken, and then the same
shall be effective only in the specific instance and for the specific purpose
for which given.
11. Addition, Release of Guarantors. Each Guarantor recognizes that the
-------------------------------
provisions of the Credit Agreement require Persons that become Subsidiaries of
the Borrower and that are not already parties hereto to become Guarantors
hereunder by executing a Guarantor Accession, and agrees that its obligations
hereunder shall not be discharged, limited or otherwise affected by reason of
the same, or by reason of the Agent's actions in effecting the same or in
releasing any Guarantor hereunder, in each case without the necessity of giving
notice to or obtaining the consent of any other Guarantor.
12. Continuing Guaranty; Term; Successors and Assigns; Assignment;
--------------------------------------------------------------
Survival. This Guaranty is a continuing guaranty and covers all of the
- -------
Guaranteed Obligations as the same may arise and be outstanding at any time and
from time to time from and after the date hereof, and shall (i) remain in full
force and effect until satisfaction of all of the Termination Requirements
(provided that the provisions of clause (ii) of Section 1(a) shall survive any
--------
termination of this Guaranty), (ii) be binding upon and enforceable against each
Guarantor and its successors and assigns (provided, however, that no Guarantor
-------- -------
may sell, assign or transfer any of its rights, interests, duties or obligations
hereunder without the prior written consent of the Lenders) and (iii) inure to
the benefit of and be enforceable by each Guaranteed Party and its successors
and assigns. Without limiting the generality of clause (iii) above, any
Guaranteed Party may, in accordance with the provisions of the Credit Agreement,
assign all or a portion of the Guaranteed Obligations held by it (including by
the sale of participations), whereupon each Person that becomes the holder of
any such Guaranteed Obligations shall (except as may be otherwise
11
agreed between such Guaranteed Party and such Person) have and may exercise all
of the rights and benefits in respect thereof granted to such Guaranteed Party
under this Guaranty or otherwise. Each Guarantor hereby irrevocably waives
notice of and consents in advance to the assignment as provided above from time
to time by any Guaranteed Party of all or any portion of the Guaranteed
Obligations held by it and of the corresponding rights and interests of such
Guaranteed Party hereunder in connection therewith. All representations,
warranties, covenants and agreements herein shall survive the execution and
delivery of this Guaranty and any Guarantor Accession.
13. Governing Law; Consent to Jurisdiction; Appointment of Borrower as
------------------------------------------------------------------
Representative, Process Agent, Attorney-in-Fact.
- -----------------------------------------------
(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY
RECEIVED, EACH GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT
WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN
THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING
INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT
OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OF THE OTHER CREDIT DOCUMENTS, OR
ANY PROCEEDING TO WHICH ANY GUARANTEED PARTY OR SUCH GUARANTOR IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY GUARANTEED PARTY OR SUCH GUARANTOR. EACH GUARANTOR IRREVOCABLY
AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT
RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY
HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO
--------------------
THE CONDUCT OF ANY SUCH PROCEEDING.
(b) EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES AND APPOINTS THE BORROWER
AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE ON ITS BEHALF ALL SERVICE OF
PROCESS IN ANY ACTION OR PROCEEDING AND ANY OTHER NOTICE OR COMMUNICATION
HEREUNDER, CONSENTS THAT ALL SERVICE OF PROCESS UPON IT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL DIRECTED TO THE BORROWER AT ITS ADDRESS FOR NOTICES
SET FORTH IN THE CREDIT AGREEMENT (AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) BUSINESS DAYS
AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY
ADDRESSED), AND AGREES THAT SERVICE SO MADE SHALL BE EFFECTIVE AND BINDING UPON
SUCH GUARANTOR IN EVERY RESPECT AND THAT ANY OTHER NOTICE OR COMMUNICATION GIVEN
TO THE BORROWER AT THE ADDRESS AND IN THE MANNER SPECIFIED HEREIN SHALL BE
EFFECTIVE NOTICE TO SUCH GUARANTOR. FURTHER, EACH GUARANTOR DOES HEREBY
IRREVOCABLY
12
MAKE, CONSTITUTE AND APPOINT THE BORROWER AS ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT, WITH FULL AUTHORITY IN ITS PLACE AND STEAD AND IN ITS NAME,
THE BORROWER'S NAME OR OTHERWISE, AND WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES, FROM TIME TO TIME IN THE BORROWER'S DISCRETION TO AGREE ON BEHALF OF,
AND SIGN THE NAME OF, SUCH GUARANTOR TO ANY AMENDMENT, MODIFICATION OR
SUPPLEMENT TO, RESTATEMENT OF, OR WAIVER OR CONSENT IN CONNECTION WITH, THIS
GUARANTY, ANY OTHER CREDIT DOCUMENT OR ANY DOCUMENT OR INSTRUMENT PURSUANT
HERETO OR THERETO, AND TO TAKE ANY OTHER ACTION AND DO ALL OTHER THINGS ON
BEHALF OF SUCH GUARANTOR THAT THE BORROWER MAY DEEM NECESSARY OR ADVISABLE TO
CARRY OUT AND ACCOMPLISH THE PURPOSES OF THIS GUARANTY AND THE OTHER CREDIT
DOCUMENTS. THE BORROWER WILL NOT BE LIABLE FOR ANY ACT OR OMISSION NOR FOR ANY
ERROR OF JUDGMENT OR MISTAKE OF FACT UNLESS THE SAME SHALL OCCUR AS A RESULT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BORROWER. THIS POWER, BEING
COUPLED WITH AN INTEREST, IS IRREVOCABLE BY ANY GUARANTOR FOR SO LONG AS THIS
GUARANTY SHALL BE IN EFFECT WITH RESPECT TO SUCH GUARANTOR. BY ITS SIGNATURE
HERETO, THE BORROWER CONSENTS TO ITS APPOINTMENT AS PROVIDED FOR HEREIN AND
AGREES PROMPTLY TO DISTRIBUTE ALL PROCESS, NOTICES AND OTHER COMMUNICATIONS TO
EACH GUARANTOR.
(c) NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY GUARANTEED PARTY
TO BRING ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR IN THE COURTS OF ANY
OTHER JURISDICTION.
14. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY AND
--------------------
UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS
GUARANTY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO WITH RESPECT TO THIS GUARANTY.
15. Notices. All notices and other communications provided for hereunder
-------
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered (a) if to any Guarantor, in care of the Borrower and at the Borrower's
address for notices set forth in the Credit Agreement and (b) if to any
Guaranteed Party, at its address for notices set forth in the Credit Agreement;
or to such other address as any of the Persons listed above may designate for
itself by like notice to the other Persons listed above; and in each case, with
copies to such other Persons as may be specified under the provisions of the
Credit Agreement. All such notices and communications shall be deemed to have
been given (i) if mailed as provided above by any method other than overnight
delivery service, on the third Business Day after deposit in the mails, (ii) if
mailed by overnight delivery service, telegraphed, telexed, telecopied or
cabled, when delivered for overnight delivery, delivered to the telegraph
company, confirmed by telex answerback, transmitted by telecopier or delivered
to the cable company, respectively, or (iii) if delivered by
13
hand, upon delivery; provided that notices and communications to the Agent shall
--------
not be effective until received by the Agent.
16. Severability. To the extent any provision of this Guaranty is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.
17. Construction. The headings of the various sections and subsections of
------------
this Guaranty have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
18. Counterparts; Effectiveness. This Guaranty may be executed in any
---------------------------
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Guaranty shall
become effective, as to any Guarantor, upon the execution and delivery by such
Guarantor of a counterpart hereof or a Guarantor Accession.
14
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
by its duly authorized officers as of the date first above written.
US ONCOLOGY CORPORATE, INC.
AORIP, INC.
AOR REAL ESTATE, INC.
AOR SYNTHETIC REAL ESTATE, INC.
AORT HOLDING COMPANY, INC.
AOR MANAGEMENT COMPANY OF
ALABAMA, INC.
AOR MANAGEMENT COMPANY OF
ARIZONA, INC.
AOR MANAGEMENT COMPANY OF
FLORIDA, INC.
AOR MANAGEMENT COMPANY OF
CENTRAL FLORIDA, INC.
AOR MANAGEMENT COMPANY OF
INDIANA, INC.
AOR HOLDING COMPANY OF
INDIANA, INC.
AOR MANAGEMENT COMPANY OF
MISSOURI, INC.
AOR MANAGEMENT COMPANY OF
NEVADA, INC.
AOR MANAGEMENT COMPANY OF
NEW YORK, INC.
AOR MANAGEMENT COMPANY OF
NORTH CAROLINA, INC.
AOR MANAGEMENT COMPANY OF
OHIO, INC.
AOR MANAGEMENT COMPANY OF
OKLAHOMA, INC.
AOR MANAGEMENT COMPANY OF
OREGON, INC.
AOR MANAGEMENT COMPANY OF
PENNSYLVANIA, INC.
AOR MANAGEMENT COMPANY OF
SOUTH CAROLINA, INC.
AOR MANAGEMENT COMPANY OF
TEXAS, INC.
AOR MANAGEMENT COMPANY OF
VIRGINIA, INC.
GREENVILLE RADIATION CARE, INC.
RMCC CANCER CENTER, INC.
US Oncology Subsidiary Guaranty Signature Page
S-1
PHYSICIAN RELIANCE NETWORK, INC.
US ONCOLOGY RESEARCH, INC.
TOPS PHARMACY SERVICES, INC.
PRN PHYSICIAN RELIANCE, LLC
PHYSICIAN RELIANCE HOLDINGS, LLC
AOR OF TEXAS MANAGEMENT LIMITED
PARTNERSHIP
By: AOR Management Company of
Texas, Inc., General Partner
AOR OF INDIANA MANAGEMENT
PARTNERSHIP
By: AOR Management Company of
Indiana, Inc., General Partner,and
By: AOR Holding Company of
Indiana, Inc., General Partner
PHYSICIAN RELIANCE, L.P.
By: PRN Physician Reliance, LLC,
General Partner and
By: Physician Reliance Holdings, LLC,
Limited Partner
By:
--------------------------------------
Bruce D. Broussard, Manager of
Physician Reliance Holdings, LLC and
PRN Physician Reliance, LLC and
Vice President of each other entity
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Agent
By:
----------------------------------
Title:
----------------------------------
US Oncology Subsidiary Guaranty Signature Page
S-2
The Borrower hereby joins in this Guaranty for purposes of evidencing its
consent to, and agreement to perform, the provisions of Section 13(b).
US ONCOLOGY, INC.
By:
-------------------------------
Title:
-------------------------------
US Oncology Subsidiary Guaranty Signature Page
S-3
EXHIBIT A
---------
GUARANTOR ACCESSION
THIS GUARANTOR ACCESSION (this "Accession"), dated as of ,
--------- -------------
, is executed and delivered by [NAME OF NEW GUARANTOR], a
- ---- --------------
corporation (the "Company"), pursuant to the Subsidiary Guaranty referred to
-------
hereinbelow.
Reference is made to the Credit Agreement, dated as of February 1, 2002,
among US Oncology, Inc. (the "Borrower"), the Lenders party thereto, and the
--------
Agent (as amended, modified or supplemented from time to time, the "Credit
------
Agreement"). In connection with and as a condition to the initial and continued
- ---------
extensions of credit under the Credit Agreement, the Borrower and certain of its
subsidiaries have executed and delivered a Subsidiary Guaranty, dated as of
February 1, 2002 (as amended, modified or supplemented from time to time, the
"Subsidiary Guaranty"), pursuant to which such subsidiaries have guaranteed the
-------------------
payment in full of the obligations of the Borrower under the Credit Agreement
and the other Credit Documents (as defined in the Credit Agreement). Capitalized
terms used herein without definition shall have the meanings given to them in
the Subsidiary Guaranty.
The Borrower has agreed under the Credit Agreement to cause each of its
future subsidiaries to become a party to the Subsidiary Guaranty as a guarantor
thereunder. The Company is a subsidiary of the Borrower. The Company will obtain
benefits as a result of the continued extension of credit to the Borrower under
the Credit Agreement, which benefits are hereby acknowledged, and, accordingly,
desire to execute and deliver this Accession. Therefore, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and to induce the Lenders to continue to
extend credit to the Borrower under the Credit Agreement, the Company hereby
agrees as follows:
1. The Company hereby joins in and agrees to be bound by each and all of
the provisions of the Subsidiary Guaranty as a Guarantor thereunder. In
furtherance (and without limitation) of the foregoing, pursuant to Section 1 of
the Subsidiary Guaranty, the Company hereby irrevocably, absolutely and
unconditionally, and jointly and severally with each other Guarantor, guarantees
to the Guaranteed Parties the full and prompt payment, at any time and from time
to time as and when due (whether at the stated maturity, by acceleration or
otherwise), of all of the Guaranteed Obligations, and agrees to pay or reimburse
upon demand all Other Obligations, all on the terms and subject to the
conditions set forth in the Subsidiary Guaranty.
2. The Company hereby represents and warrants that after giving effect to
this Accession, each representation and warranty contained in Section 5 of the
Subsidiary Guaranty is true and correct with respect to the Company as of the
date hereof, as if such representations and warranties were set forth at length
herein.
3. This Accession shall be a Credit Document (within the meaning of such
term under the Credit Agreement), shall be binding upon and enforceable against
the Company and its successors and assigns, and shall inure to the benefit of
and be enforceable by each Guaranteed
Party and its successors and assigns. This Accession and its attachments are
hereby incorporated into the Subsidiary Guaranty and made a part thereof.
IN WITNESS WHEREOF, the Company has caused this Accession to be executed
under seal by its duly authorized officer as of the date first above written.
[NAME OF COMPANY]
By:
--------------------------------
Title:
--------------------------------
2
EXHIBIT G
---------
FORM OF
FINANCIAL CONDITION CERTIFICATE
THIS FINANCIAL CONDITION CERTIFICATE is delivered pursuant to Section
4.1(n) of the Credit Agreement, dated as of February , 2002, among the
----
undersigned as Borrower, the banks and other financial institutions party
thereto from time to time (the "Lenders"), and First Union National Bank, as
-------
Administrative Agent for the Lenders and as the Issuing Lender (as amended,
modified or supplemented from time to time, the "Credit Agreement"). Capitalized
----------------
terms used herein without definition shall have the meanings given to such terms
in the Credit Agreement.
The undersigned hereby certifies for and on behalf of the Borrower as
follows:
1. Capacity. The undersigned is, and at all pertinent times mentioned
--------
herein has been, the duly qualified and acting [Vice President-Finance] of the
Borrower, and in such capacity has responsibility for the management of the
Borrower's financial affairs and for the preparation of the Borrower's financial
statements. The undersigned has, together with other officers of the Borrower,
acted on behalf of the Borrower in connection with the negotiation and
consummation of the Credit Agreement and the consummation of the transactions
contemplated thereby.
2. Procedures. For purposes of this Certificate, the undersigned has, as of
----------
or prior to the date hereof, undertaken the following activities in connection
herewith:
2.1 The undersigned has carefully reviewed the following:
(a) the contents of this Certificate;
(b) the Credit Agreement (including the exhibits and schedules
thereto);
(c) the amendments to the End Loaded Lease Facility effected on the
date hereof;
(d) the audited consolidated and unaudited consolidating balance
sheets of the Borrower and its Subsidiaries as of December 31, 2000, 1999
and 1998, and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of the Borrower and its
Subsidiaries for the fiscal years then ended, each certified by
PricewaterhouseCoopers, LLC; and
(e) the unaudited consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of December 31, 2001, and the related
consolidated and consolidating statements of income, stockholders' equity
and cash flows of the Borrower and its Subsidiaries for the twelve-month
period then ended.
2.2 Additionally, in preparation for the consummation of the transactions
contemplated by the Credit Agreement and the End Loaded Loan Facility (the
"Transactions") the undersigned has prepared or supervised the preparation of
------------
and has reviewed an unaudited consolidated balance sheet of the Borrower as of
December 31, 2001, a copy of which balance sheet is attached hereto as Annex A.
-------
The undersigned also has prepared or supervised the preparation of and has
reviewed projected balance sheets and statements of income and cash flows of the
Borrower (i) on a quarterly basis for the eight-quarter period beginning with
the quarter ending December 31, 2001 and (ii) on an annual basis from the fiscal
year ending December 31, 2002 through the fiscal year ending December 31, 2007,
in each case giving effect to the issuance of the Subordinated Notes, the
initial extensions of credit made under the Credit Agreement, the payment of
transaction fees and expenses related to the foregoing, and the Restructuring
(the "Projections").
-----------
2.3 The undersigned, together with the other officers and personnel of the
Borrower who were involved in the preparation of the Projections, have relied on
historical financial and other information and upon information with respect to
sales, costs and other data obtained in discussions with executive officers of
the Borrower and other officers and supervisory personnel directly responsible
for the various operations involved. The undersigned has reexamined the
Projections as of the date hereof, and has considered the continuing
reasonableness of the assumptions set forth therein and the effect thereon of
any changes since the date of preparation thereof on the financial condition set
forth and the results projected therein.
2.4 The undersigned has made inquiries of certain other officers and
personnel of the Borrower with responsibility for financial and accounting
matters regarding (i) whether the unaudited financial statements described in
paragraph 2.1(d) above are in conformity with GAAP applied on a basis consistent
with that of the audited financial statements described in paragraph 2.1(c)
above (subject to the absence of footnotes required by GAAP and subject to
normal year-end adjustments), and whether notes omitted from such unaudited
financial statements would have disclosed any new information that would be
necessary to make the statements contained therein not misleading, and (ii)
whether such persons were aware of any events or conditions that, as of the date
hereof, would cause the statements made in paragraph 3 below to be untrue.
2.5 With respect to any contingent liabilities of the Borrower on a pro
forma basis after giving effect to the Transactions, the undersigned:
(a) has inquired of certain officers and other personnel of the
Borrower who have responsibility for the legal, financial and accounting
affairs of the Borrower, as to the existence and estimated amounts of all
contingent liabilities known to them;
(b) has confirmed with senior accounting officers of the Borrower
that, to the best of such officers' knowledge, (i) all appropriate items
have been included in contingent liabilities made known to the undersigned
in the course of the inquiry of the undersigned in connection herewith, and
(ii) the amounts relating thereto were the maximum estimated amounts of
liability reasonably likely to result therefrom as of the date hereof, and
(c) confirms that, to the best of his knowledge, all material
contingent liabilities that may arise from any pending litigation, asserted
claims and assessments, guarantees, uninsured risks, and other relevant
contingencies and circumstances have been considered in making the
certification set forth herein, and with respect to each such contingent
liability the maximum estimated amount of liability with respect thereto
was used in making such certification.
2.6 The undersigned has conferred with counsel to the Borrower for the
purpose of discussing the meaning of the contents of this Certificate.
3. Certifications. Based on the foregoing, the undersigned hereby certifies
--------------
as follows:
3.1 The Projections give effect to the consummation of the initial
extensions of credit made under the Credit Agreement, the extensions of credit
outstanding under the End Loaded Lease Facility, the payment of transaction fees
and expenses incident to the foregoing, and the consummation of all of the other
Transactions. In the opinion of the undersigned, the assumptions used in the
preparation of the Projections were fair, complete and reasonable when made and
continue to be fair, complete and reasonable as of the date hereof. The
Projections have been prepared in good faith by the executive and financial
personnel of the Borrower, are complete and represent a reasonable estimate of
the future performance and financial condition of the Borrower and its
Subsidiaries, subject to the uncertainties and approximations inherent in any
projections.
3.2 After giving effect to the Transactions, all material accounts and
other liabilities of the Borrower and its Subsidiaries are current and not past
due.
3.3 Neither the Borrower nor any Subsidiary is insolvent now, and the
incurrence by the Borrower and each Subsidiary of its liabilities and
obligations pursuant to the Credit Agreement and the other Loan Documents and
the consummation of the other Transactions will not render it insolvent. The
undersigned understands that, in this context, (i) "insolvent" means that the
present fair saleable value of assets is less than the amount that will be
required to be paid on or in respect of the existing debts as such debts mature,
(ii) "fair value" of assets means the aggregate amount that could be realized
within a reasonable time, either through collection or sale of such assets at
the regular market value as an ongoing business, conceiving of the latter as the
amount that could be obtained for the property in question within such period by
a capable and diligent seller from an interested buyer who is willing to
purchase under ordinary selling conditions, and (iii) "debts" includes any legal
liability, whether matured or unmatured, liquidated or unliquidated, absolute,
fixed or contingent, including any guaranty or other contingent obligation. A
valuation of the Borrower and its Subsidiaries, on the basis thereof and with
reasonable allowance for error, would reflect the net worth of the Borrower and
its Subsidiaries (on a consolidated basis) in the aggregate (excess of fair
value of assets over liabilities) as not less than [$ ].
-------------
3.4 The undersigned reasonably believes that, by the incurrence of its
liabilities and obligations pursuant to the Credit Agreement and the other Loan
Documents and the consummation of the other Transactions, neither the Borrower
nor any Subsidiary will incur debts beyond its ability to pay as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debts). The foregoing conclusion is based in part on the
Projections, which demonstrate that the cash flow of the Borrower and its
Subsidiaries, after taking into account all anticipated uses of cash of each
such Person, will at all times be sufficient to pay all amounts on or in respect
of Indebtedness of each such Person when such amounts are required to be paid
(including without limitation scheduled payments pursuant to the Credit
Agreement). The undersigned has concluded that the realization of current assets
in the ordinary course of business should be sufficient to pay recurring current
debt, short-term debt and long-term debt as such debts mature, that the cash
flow (including earnings plus non-cash charges to earnings) should be sufficient
to provide cash necessary to repay loans made under the Credit Agreement and
other long-term indebtedness as such debt matures, and that the Borrower should
have sufficient availability under the Credit Agreement to satisfy its working
capital and short-term liquidity requirements.
3.5 After giving effect to the consummation of the Transactions, the assets
of the Borrower and each Subsidiary do not constitute "unreasonably small
capital" (within the meaning of Section 548(a) of the Bankruptcy Code, 11 U.S.C.
Section 548(a)) for such Person to carry on its business as now conducted and as
proposed to be conducted, taking into account the particular capital
requirements of the business conducted and to be conducted by it and the
availability of capital in respect thereof (with reference to, without
limitation, the Projections and the Borrower's available credit capacity).
3.6 Neither the Borrower nor any Subsidiary has executed the Credit
Agreement or any other documents mentioned therein, or made any transfer or
incurred any obligations thereunder, with intent to hinder, delay or defraud
either present or future creditors of such Person.
3.7 The statements made herein by the undersigned are based upon the
personal knowledge of the undersigned, or upon reports and other information
given to the undersigned by supervisory personnel of the Borrower having
responsibility for the reports and information given, and who in the opinion of
the undersigned are reliable and entitled to be relied upon. The statements made
herein are made in good faith and, to the best of the knowledge and belief of
the undersigned, and are reasonable in all material respects.
3.8 The undersigned understands that the Lenders have performed their own
review and analysis of the financial condition of the Borrower, but that the
Lenders are relying on the foregoing statements in connection with the extension
of credit to the Borrower pursuant to the Credit Agreement.
Executed this day of February, 2002.
---
---------------------------
[Name]
[Vice President-Finance]
FINANCIAL CONDITION CERTIFICATE
ANNEX A
U.S. ONCOLOGY, INC.
December 31, 2001 Balance Sheet
[To be attached]
EXHIBIT H
---------
FORM OF
INTERCOMPANY NOTE
$ , 200
-------------- ----------- -
FOR VALUE RECEIVED, the undersigned, , a
----------------------------------
corporation ("Maker"), hereby promises to pay to the order of
- ------------- -----
[NAME OF BORROWER./NAME OF PARENT SUBSIDIARY], a corporation
---------
("Lender"), at [address of chief executive - office], or such other address as
------
Lender may designate, the principal amount of $ , or, if less, the
-----------
aggregate unpaid principal amount of each loan or advance made by Lender to
Maker, at any time upon demand by Lender, in lawful money of the United States
of America in immediately available funds, together with interest from the date
hereof on the principal amount hereof from time to time outstanding, in like
funds, at a rate per annum equal to the rate applicable at such time to Base
Rate Loans pursuant to Section 2.8 of the Credit Agreement referred to below.
This Note may be prepaid in whole or in part at any time without premium or
penalty. Amounts prepaid on this Note may be reborrowed. Terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Credit Agreement, dated as of February , 2002 (as amended, modified or
--
supplemented from time to time, the "Credit Agreement"), among US Oncology,
----------------
Inc., as Borrower thereunder, the financial institutions party thereto as
lenders, First Union National Bank, as Administrative Agent, UBS Warburg, LLC,
as Syndication Agent, and General Electric Capital Corporation, as Documentation
Agent.
Maker promises to pay interest, on demand, on any overdue principal and, to
the extent permitted by law, overdue interest from their respective due dates at
the rate per annum applicable pursuant to the preceding paragraph, plus 2.00%.
Maker and any and all sureties, guarantors and endorsers of this Note and
all other parties now or hereafter liable hereon severally waive grace,
presentment for payment, protest, notice of any kind (including notice of
dishonor, notice of protest, notice of intention to accelerate and notice of
acceleration) and diligence in collecting and bringing suit against any party
hereto, and each agrees (i) to all extensions and partial payments, with or
without notice, before or after maturity, (ii) to any substitution, exchange or
release of any security now or hereafter given for this Note, (iii) to the
release of any party primarily or secondarily liable hereon and (iv) that it
will not be necessary for Lender, or any of its successors or assigns, in order
to enforce payment of this Note, to first institute or exhaust their remedies
against Maker or any other party liable therefor or against any security for
this Note. The nonexercise by the holder of any of its rights hereunder in any
particular instance shall not constitute a waiver thereof in that or any
subsequent instance.
The outstanding principal balance of the loans and advances evidenced by
this Note shall automatically become immediately due and payable, without
presentment, demand, request or
any other notice of any kind, all of which are expressly waived by Maker, upon
the acceleration of the principal amount of the loans and other obligations then
outstanding under the Credit Agreement in accordance with the provisions of
Article IX thereof.
This Note shall be construed in accordance with and governed by the
internal laws of the State of North Carolina. In the event this Note is not paid
when due at any stated or accelerated maturity, Maker agrees to pay, in addition
to the principal of and interest on this Note, all costs of collection,
including reasonable attorneys' fees.
IN WITNESS WHEREOF, Maker has caused this Note to be executed under seal by
its duly authorized corporate officer as of the date first above written.
[NAME OF MAKER]
By:
----------------------------
Name:
-------------------
Title:
-------------------
ACCEPTED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN:
[NAME OF BORROWER/NAME OF PARENT SUBSIDIARY]
By:
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
2
ASSIGNMENT
FOR VALUE RECEIVED, [NAME OF LENDER] hereby assigns and transfers to
the Intercompany Note dated as of ,
- ------------------------------ -----------
200 made by [NAME OF MAKER].
-
Dated:
----------------------
[NAME OF LENDER]
By:
------------------------------
Name:
---------------------
Title:
---------------------
3
EXHIBIT I
---------
DEED OF TRUST, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS
(Collateral is or includes fixtures)
Dated as of February 1, 2002
from
US ONCOLOGY, INC.,
Grantor
-------
to
--------------------------------,
Trustee
-------
in favor of
FIRST UNION NATIONAL BANK,
as Administrative Agent
under the Credit Agreement,
Beneficiary
-----------
Prepared by and when recorded,
return to:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTOR
Section 1.1 Title....................................................................... 7
Section 1.2 Credit Agreement; Future Advances........................................... 7
Section 1.3 Payment of Taxes, Liens and Charges......................................... 8
Section 1.4 Payment of Closing Costs.................................................... 9
Section 1.5 Alterations and Waste; Plans; Use........................................... 9
Section 1.6 Insurance................................................................... 10
Section 1.7 Casualty; Restoration of Casualty Damage.................................... 11
Section 1.8 Condemnation/Eminent Domain................................................. 11
Section 1.9 Assignment of Leases and Rents.............................................. 12
Section 1.10 Restrictions on Transfers and Encumbrances.................................. 14
Section 1.11 Security Agreement.......................................................... 14
Section 1.12 Filing and Recording........................................................ 14
Section 1.13 Further Assurances.......................................................... 15
Section 1.14 Additions to Trust Property................................................. 15
Section 1.15 No Claims Against the Trustee or the Beneficiary............................ 15
Section 1.16 Environmental............................................................... 16
ARTICLE II
DEFAULTS AND REMEDIES
Section 2.1 Events of Default........................................................... 18
Section 2.2 Demand for Payment.......................................................... 18
Section 2.3 Rights to Take Possession, Operate and Apply Revenues....................... 19
Section 2.4 Right to Cure the Grantor's Failure to Perform.............................. 20
Section 2.5 Right to a Receiver......................................................... 20
Section 2.6 Foreclosure and Sale........................................................ 21
Section 2.7 Other Remedies.............................................................. 22
Section 2.8 Application of Sale of Proceeds and Rents................................... 22
Section 2.9 The Grantor as Tenant Holding Over.......................................... 23
Section 2.10 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws...... 23
Section 2.11 Discontinuance of Proceedings............................................... 24
Section 2.12 Suits to Protect the Trust Property......................................... 24
Section 2.13 Filing Proofs of Claim...................................................... 24
Section 2.14 Possession by the Beneficiary............................................... 24
Section 2.15 Waiver...................................................................... 24
i
Section 2.16 Remedies Cumulative......................................................... 25
ARTICLE III
MISCELLANEOUS
Section 3.1 Partial Invalidity.......................................................... 26
Section 3.2 Notices..................................................................... 26
Section 3.3 Successors and Assigns...................................................... 26
Section 3.4 Counterparts................................................................ 26
Section 3.5 Satisfaction and Cancellation............................................... 26
Section 3.6 Definitions................................................................. 27
Section 3.7 Other Credit Documents...................................................... 27
Section 3.8 The Trustee's Powers and Liabilities........................................ 28
Section 3.9 Subrogation................................................................. 29
Section 3.10 Beneficiary and Lender Powers............................................... 29
Section 3.11 Enforceability of Mortgage.................................................. 29
Section 3.12 Amendments.................................................................. 29
Section 3.13 Applicable Law.............................................................. 30
ii
DEED OF TRUST, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS
THIS DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF
LEASES AND RENTS, dated as of February , 2002 (this "Mortgage"), is made by US
-- --------
ONCOLOGY, INC., a Delaware corporation, having an office at
(the "Grantor"), to , a
- -------------------------------- ------- -----------------------
corporation (the "Trustee"), in favor of FIRST UNION
- ----------------------- -------
NATIONAL BANK, as Collateral Agent under the Security Agreement (as defined
below) for the benefit of the Secured Parties (as defined in the Security
Agreement), having an office at Charlotte Plaza Building, CP-23, 201 South
College Street, Charlotte, North Carolina 28288-0680, Attention of Syndication
Agency Services (in such capacity, together with its successors, substitutes and
assigns, the "Beneficiary"). All capitalized terms not defined in this Mortgage
-----------
shall have the meanings given to them in the Credit Agreement.
RECITALS:
A. Reference is hereby made, for all purposes, to that certain Credit
Agreement, dated as of February , 2002, by and between the Grantor, as
----
Borrower, the Lenders named therein and from time to time party thereto, and the
Beneficiary, as the Collateral Agent (as amended, modified or supplemented from
time to time, the "Credit Agreement"). In connection with and as a condition to
----------------
the initial and continued extensions of credit under the Credit Agreement, the
Grantor and certain of its Subsidiaries have executed and delivered (i) a
Subsidiary Guaranty, dated as of February , 2002 (as amended, modified or
----
supplemented from time to time, the "Subsidiary Guaranty"), pursuant to which
-------------------
each such Subsidiary has guaranteed the payment in full of the obligations of
the Grantor under the Credit Agreement and the other Credit Documents (as
defined in the Credit Agreement), and (ii) a Pledge and Security Agreement,
dated as of February , 2002 (as amended, modified or supplemented from time
----
to time, the "Security Agreement"), pursuant to which they have granted in favor
------------------
of the Beneficiary a security interest in and Lien upon the Collateral described
therein as security for their obligations under the Credit Agreement, the
Subsidiary Guaranty and the other Credit Documents.
B. Further reference is hereby made, for all purposes, to that certain
Amended and Restated Participation Agreement, dated as of February , 2002
----
(as amended, modified or supplemented from time to time, the "Participation
-------------
Agreement"), by and between the Grantor, as Borrower, AOR Synthetic Real Estate,
- ---------
Inc. (the "ELLF Lessee"), the Guarantor Pledgors (as defined in the Security
-----------
Agreement), Wells Fargo Bank Northwest, National Association, as the Owner
Trustee (as defined in the Participation Agreement), the Holders (as defined in
Appendix A to the Participation Agreement), the Lenders (as defined in Appendix
- ---------- --------
A to the Participation Agreement) and the Beneficiary, which, together with the
- -
other Operative Agreements (as defined in Appendix A to the Participation
----------
Agreement), provide for the availability of certain end loaded lease financing
facilities (the "ELLF") to the ELLF Lessee upon the terms and subject to the
----
conditions set forth therein. In connection with and as a condition to the
extension of the ELLF to the ELLF Lessee under the Operative Agreements, each of
the Borrower and the
Guarantor Pledgors that is a party to the Security Agreement has entered into an
Amended and Restated Credit Agreement, dated as of February , 2002 (as
----
amended, modified or supplemented from time to time, the "ELLF Credit
-----------
Agreement"), pursuant to which (i) the Borrower and each such Guarantor Pledgor
- ---------
has guaranteed to the Tranche A Lenders (as defined in Appendix A to the
----------
Participation Agreement) the payment in full of the Tranche A Obligations (as
defined in Appendix A to the Participation Agreement) and (ii) the Borrower has
----------
guaranteed to the Financing Parties (as defined in Appendix A to the
----------
Participation Agreement) the payment in full of the Company Obligations (as
defined in Appendix A to the Participation Agreement). Additionally, certain
----------
other Subsidiaries of the Borrower may from time to time after the date hereof
enter into the ELLF Credit Agreement pursuant to which such Subsidiaries will
guarantee to the Tranche A Lenders the payment in full of the Tranche A
Obligations. In connection with and as a further condition to the extension of
the ELLF to the ELLF Lessee under the Operative Agreements, the Pledgors (as
defined in the Security Agreement) have agreed by execution and delivery of the
Security Agreement to secure the payment in full of their respective obligations
under the ELLF Credit Agreement.
C. The obligations of the Lenders to extend credit to the Grantor under the
Credit Agreement and to extend the ELLF to the ELLF Lessee under the Operative
Agreements, are conditioned upon, among other things, the execution and delivery
by the Grantor of this Mortgage to secure the due and punctual payment and
performance of (a) all liabilities and obligations of each Pledgor and Guarantor
Pledgor, whether now existing or hereafter incurred, created or arising and
whether direct or indirect, absolute or contingent, due or to become due, under,
arising out of or in connection with this Agreement, the Credit Agreement, the
Subsidiary Guaranty, any of the other Credit Documents to which it is or
hereafter becomes a party, the ELLF Credit Agreement or any of the other
Operative Agreements, (b) all fees, expenses, indemnities and expense
reimbursement obligations of the Grantor under the Credit Agreement, any other
Credit Document, the Operative Agreements and this Mortgage, (c) all other
obligations, covenants and agreements, monetary or otherwise, of the Grantor or
any of its Subsidiaries under any Credit Document to which it is a party, in
each case, whether now owing or hereafter existing, (d) all taxes and insurance
premiums relating to the Trust Property (as defined herein), (e) all
disbursements made by the Beneficiary for the payment of taxes, common area
charges or insurance premiums, all fees, expenses or advances in connection with
or relating to the Trust Property, and interest on such disbursements and other
amounts not timely paid in accordance with the terms of the Credit Agreement,
this Mortgage, the other Credit Documents or the Operative Agreements, (f) all
sums with respect to the foregoing that would become due but for the operation
of the automatic stay under Section 362(a) of Title 11 of the United States Code
(the "Bankruptcy Code"), including, without limitation, interest, fees and other
---------------
charges that, but for the filing of a petition in bankruptcy with respect to the
Grantor would accrue on the foregoing whether or not a claim is alleged against
the Grantor for such sums in any such bankruptcy proceeding, (g) all obligations
of the Grantor to any Lender or any Affiliate of any Lender under any Hedge
Agreement entered into with such Lender or Affiliate thereof as required or
permitted under the Credit Agreement (including any such Hedge Agreement with a
party that subsequently ceases to be a Lender, which Hedge Agreement is entered
into prior to the date such party ceases to be a Lender), and (h) all renewals,
extensions, amendments, modifications and changes and supplements of, or
substitution or replacements for, all or any part of the foregoing (the
obligations referred to in clauses (a) through (h) inclusive, shall hereinafter
collectively be called the "Obligations").
-----------
2
GRANTING CLAUSES
----------------
NOW, THEREFORE, in consideration of the foregoing and in order to secure
the due and punctual payment and performance of the Obligations, the Grantor
hereby grants, bargains, sells, transfers, sets over, assigns and conveys as
security, grants a security interest in, hypothecates, mortgages, pledges and
sets over unto the Trustee, IN TRUST FOREVER, with power of sale and with deed
of trust covenants, all the following described property whether now owned or
held or hereafter acquired (collectively, the "Trust Property"):
--------------
(1) the parcel or parcels of land located in County,
--------------
as more particularly described on Exhibit A hereto (the
------------ ---------
"Land"), together with all rights appurtenant thereto, including without
----
limitation, all strips and gores within or adjoining the Land, all estate,
right, title, interest, claim or demand of the Grantor in the streets,
roads, sidewalks, alleys and ways adjacent thereto (whether or not vacated
and whether public or private and whether open or proposed), all easements
over adjoining land granted by any easement agreements, covenants or
restrictive agreements, all of the tenements, hereditaments, easements,
reciprocal easement agreements, rights pursuant to any trackage agreement,
rights to the use of common drive entries, rights-of-way and other rights,
privileges and appurtenances thereunto belonging or in any way pertaining
thereto, all reversions, remainders, dower and right of dower, curtesy and
right of curtesy, all of the air space and right to use air space above
such property, all transferable development rights arising therefrom or
transferred thereto, all water and water rights and water rights
applications (whether riparian, appropriative or otherwise, and whether or
not appurtenant), all pumps, pumping plants, pipes, flumes and ditches
thereunto appertaining, all rights and ditches for irrigation, all utility
rights, sewer rights, and shares of stock evidencing the same, all oil, gas
and other minerals and mineral substances in, on or under the Land or
produced, saved or severed from the Land, all mineral, mining, gravel, oil,
gas, hydrocarbon rights and other rights to produce or share in the
production of anything related to such property, all drainage, crop,
timber, agricultural, and horticultural rights with respect to such
property, and all other appurtenances appurtenant to such property,
including without limitation, any now or hereafter belonging or in any way
appertaining thereto, and all claims or demands of the Grantor, either at
law or in equity, in possession or expectancy, now or hereafter acquired,
of, in or to the same (the Land and all of the foregoing being sometimes
referred to herein collectively as the "Premises");
--------
(2) all of the Grantor's right, title and interest in and to all
buildings, improvements, fixtures and other structures or improvements of
any kind now or hereafter erected or located upon the Land, including, but
not limited to, all building materials, water, sanitary and storm sewers,
drainage, electricity, steam, gas, telephone and other utility facilities,
parking areas, roads, driveways, walks and other site improvements; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof, owned or to be owned by the Grantor or in which the
Grantor has or shall acquire an interest, to the extent of the Grantor's
interest therein, now or hereafter erected or located upon the Land
(collectively, the "Improvements");
------------
3
(3) all of the Grantor's right, title and interest in and to the
following (collectively, the "Personal Property"):
-----------------
(a) All personal property and fixtures of every kind and nature
whatsoever which are now or hereafter located on, attached to,
incorporated in (regardless of where located) or affixed to the
Premises or the Improvements or used or useful in connection with the
ownership, construction, maintenance, repair, reconstruction,
alteration, addition, improvement, operation, mining, use or occupancy
of the Premises or the Improvements, including, without limitation,
all goods, inventory, construction materials, equipment, tools,
furniture, furnishings, fittings, fixtures, supplies, computers and
computer programs, carpeting, draperies, blinds, window treatments,
racking and shelving systems, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating plants, and/or systems
and equipment, elevators, appliances, stoves, ranges, refrigerators,
vacuum, window washing and other cleaning and building service
systems, call systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, cables, antennae, pipes, ducts,
conduits, machinery, apparatus, motors, dynamos, engines, compressors,
boilers, stokers, furnaces, pumps, tanks, appliances, garbage systems
and pest control systems and all of the Grantor's present and future
"goods," "equipment" and "fixtures" (as such terms are defined in the
Uniform Commercial Code in effect in the State where the Premises are
located) and other personal property, including without limitation any
such personal property and fixtures which are leased, and all repairs,
attachments, betterments, renewals, replacements, substitutions and
accessions thereof and thereto; and
(b) all general intangibles now owned or hereafter acquired by
the Grantor and relating to the design, development, operation,
management and use of the Premises or the Improvements, including, but
not limited to, all contract rights, trademarks, trade names, logos
and other rights relating to the name and style under which the
Premises and the Improvements are operated;
(4) all approvals, authorizations, building permits, certificates of
occupancy, zoning variances, use permits, certifications, entitlements,
exemptions, franchises, licenses, orders, variances, plat plan approvals,
environmental approvals, air pollution authorities to construct and permits
to operate, sewer and waste discharge permits, national pollutant discharge
elimination system permits, water permits, zoning and land use entitlements
and all other permits, whether now existing or hereafter issued to or
obtained by or on behalf of the Grantor, that relate to or concern in any
way the Premises or the Improvements and are given or issued by any
governmental or quasi-governmental authority, whether now existing or
hereafter created (as the same may be amended, modified, renewed or
extended from time to time, and including all substitutions and
replacements therefor), all rights under and pursuant to all construction,
service, engineering, consulting, management, access, supply, leasing,
architectural and other similar contracts relating in any way to the
design, construction, management, operation, occupancy and/or use of the
Premises and Improvements, all rights under all purchase agreements, sales
agreements, option contracts, land contracts and contracts for the sale
4
of oil, gas and other minerals or any of them, that relate to or concern in
any way the Premises or the Improvements, all abstracts of title,
architectural, engineering or construction drawings, plans, specifications,
operating manuals, computer programs, computer data, maps, surveys, soil
tests, feasibility studies, appraisals, environmental studies, engineering
reports and similar materials relating to any portion of or all of the
Premises and Improvements, and all payment and performance bonds or
warranties or guarantees relating to the Premises or the Improvements, all
to the extent assignable (collectively, the "Permits, Plans and
------------------
Contracts");
---------
(5) the Grantor's interest in and rights under all leases or licenses
(under which the Grantor is landlord or licensor) and subleases (under
which the Grantor is sublandlord), concession, franchise, management,
mineral or other agreements relating to the use or occupancy of the
Premises or the Improvements or any part thereof for any purpose, or the
extraction or taking of any gas, oil, water or other minerals from the
Premises, whether now or hereafter existing or entered into (including any
use or occupancy arrangements created pursuant to Section 365(d) of the
Bankruptcy Code or otherwise in connection with the commencement or
continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings, or any assignment for the
benefit of creditors, in respect of any tenant or occupant of any portion
of the Premises or the Improvements), and all guaranties thereof and all
amendments, modifications, supplements, extensions or renewals thereof
(collectively, the "Leases"), and all rents, issues, profits, revenues,
------
charges, fees, receipts, royalties, accounts receivable, cash or security
deposits and other deposits (subject to the prior right of the tenants
making such deposits) and income, and other benefits now or hereafter
derived from any portion of the Premises or the Improvements or the use or
occupancy thereof (including any payments received pursuant to Section
502(b) of the Bankruptcy Code or otherwise in connection with the
commencement or continuance of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar proceedings, or any
assignment for the benefit of creditors, in respect of any tenant or other
occupants of any portion of the Premises or the Improvements and all claims
as a creditor in connection with any of the foregoing) and all payments of
a similar nature, now or hereafter, including during any period of
redemption, derived from the Premises or the Improvements or any other
portion of the Trust Property and all proceeds from the cancellation,
surrender, sale or other disposition of the Leases (collectively, the
"Rents");
-----
(6) all refunds or rebates of real and personal property taxes or
charges in lieu of taxes, heretofore or now or hereafter assessed or levied
against all or any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts,
including interest thereon, and the right to receive the same, whether such
refunds or rebates relate to fiscal periods before or during the term of
this Mortgage;
(7) all insurance policies and the proceeds thereof, now or hereafter
in effect with respect to all or any of the Premises, the Improvements, the
Personal Property, the Leases, the Rents and the Permits, Plans and
Contracts, including, without limitation, any and all title insurance
proceeds, and all unearned premiums and premium refunds, accrued, accruing
or to accrue under such insurance policies, and all awards made for any
5
taking of or damage to all or any of the Premises, the Improvements, the
Personal Property, the Leases, the Rents and the Permits, Plans and
Contracts, by eminent domain, or by any purchase in lieu thereof, and all
awards resulting from a change of grade of streets or for severance
damages, and all other proceeds of the conversion, voluntary or
involuntary, of all or any of the Premises, Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts, into
cash or other liquidated claims, and all judgments, damages, awards,
settlements and compensation (including interest thereon) heretofore or
hereafter made to the present and all subsequent owners of the Premises,
Improvements, the Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts, or any part thereof for any injury to or decrease in
the value thereof for any reason;
(8) All of Grantor's right, title and interest in and to the
following:
(a) all right, in the name and on behalf of the Grantor, to
appear in and defend any action or proceeding brought with respect to
all or any of the Premises, Improvements, the Personal Property, the
Leases, the Rents and the Permits, Plans and Contracts, and to
commence any action or proceeding to protect the interest of the
Grantor in all or any of the Premises, Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts;
(b) all right and power to encumber further all or any of the
Premises, Improvements, the Personal Property, the Leases, the Rents
and the Permits, Plans and Contracts, or any part thereof;
(c) all rights, titles, interests, estates or other claims, both
in law and in equity, which the Grantor now has or may hereafter
acquire in any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents or the Permits, Plans and Contracts,
or in and to any greater estate in all or any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts; and
(d) all property hereafter acquired or constructed by the Grantor
of the type described above which shall forthwith, upon acquisition or
construction thereof by the Grantor and without any act or deed by any
party, become subject to the lien and security interest of this
Mortgage as if such property were now owned by the Grantor and were
specifically described in this Mortgage and were specifically conveyed
or encumbered hereby.
(9) All accessions, additions or attachments to, and proceeds or
products of, any of the foregoing.
TO HAVE AND TO HOLD the Trust Property and the rights and privileges hereby
granted and conveyed or intended to be, unto the Trustee, its successors and
assigns for the uses and purposes herein set forth, for the benefit and security
of the Beneficiary, subject only to the Permitted Encumbrances (as hereinafter
defined) and to satisfaction and cancellation as provided in Section 3.5 hereof,
IN TRUST, upon the terms and conditions set forth herein.
6
ARTICLE I
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTOR
The Grantor agrees, covenants, represents and warrants as follows:
Section 1.1 Title.
-----
(a) The Grantor has good, marketable, indefeasible, fee title to the
Land and Improvements. The Grantor has good and marketable title to or
valid leasehold interests in, all of the other Trust Property. This
Mortgage is and will remain a valid and enforceable first lien on the Trust
Property subject to no Liens other than the exceptions and encumbrances set
forth in Exhibit B attached hereto (collectively, the "Permitted
--------- ---------
Encumbrances"). The Permitted Encumbrances are all "Permitted Liens" within
------------
the meaning of such term under the Credit Agreement.
(b) Except as set forth on Exhibit C attached hereto, there are no
---------
material Leases, track agreements, easement agreements, access agreements,
management contracts, or other material contracts or agreements relating to
the use, operation or management of the Trust Property or affecting a
material portion of the Trust Property (collectively, the "Material
--------
Agreements"). Each Material Agreement is in full force and effect, and,
----------
except as set forth on Exhibit C attached hereto, the Grantor has not
---------
given, nor has it received, any notice of default with respect to any
material obligation under any Material Agreement. No Material Agreement is
subject to any Lien, other than this Mortgage and the Permitted
Encumbrances.
(c) The Grantor has good and lawful right and full power and authority
to encumber or grant a security interest in the Trust Property. The Grantor
will forever warrant and defend its title to the Trust Property, the rights
of the Beneficiary therein under this Mortgage and the validity and
priority of the lien of this Mortgage thereon against the claims of all
persons and parties except those having rights under the Permitted
Encumbrances to the extent of those rights.
(d) This Mortgage, when duly recorded in the appropriate public
records and when financing statements are duly filed in the appropriate
public records, will create a valid, perfected and enforceable lien upon
and security interest in all the Trust Property and there will be no
defenses or offsets to this Mortgage or to any of the Obligations secured
hereby for so long as any portion of the Obligation is outstanding.
Section 1.2 Credit Agreement; Future Advances.
---------------------------------
(a) This Mortgage is given pursuant to the Credit Agreement and
Participation Agreement. Each and every term and provision of the Credit
Agreement and the ELLF Credit Agreement (except for the governing law
provisions thereof), including the rights, remedies, obligations,
covenants, conditions, agreements, indemnities, representations and
warranties of the parties thereto shall be considered as if a part of this
Mortgage. This Mortgage secures all present and future indebtedness of the
Grantor in respect of loan disbursements made by the Lenders under the
Notes, and all other Obligations from
7
time to time owing to the Secured Parties under the Credit Agreement, the
other Credit Documents and the Operative Agreements. The amount of the
present indebtedness secured hereby is $ and the maximum
--------------
principal amount which may be secured hereby at any one time is
$ .
--------------
(b) If any remedy or right of the Trustee or the Beneficiary pursuant
hereto is acted upon by the Trustee or the Beneficiary or if any actions or
proceedings (including any bankruptcy, insolvency or reorganization
proceedings) are commenced in which the Trustee or the Beneficiary is made
a party and is obliged to defend or uphold or enforce this Mortgage or the
rights of the Trustee or the Beneficiary hereunder or the terms of any
Lease, or if a condemnation proceeding is instituted affecting the Trust
Property, the Grantor will pay all sums, including reasonable attorneys'
fees and disbursements, actually incurred (not as imposed by statute) by
the Trustee or the Beneficiary related to the exercise of any remedy or
right of the Trustee or the Beneficiary pursuant hereto or for the expense
of any such action or proceeding together with all statutory or other
costs, disbursements and allowances, interest thereon from the date of
demand for payment thereof at the rate specified in Section 2.8(b) of the
Credit Agreement (the "Default Interest Rate"), and such sums and the
---------------------
interest thereon shall, to the extent permissible by law, be a lien on the
Trust Property prior to any right, title to, interest in or claim upon the
Trust Property attaching or accruing subsequent to the recording of this
Mortgage and shall be secured by this Mortgage to the extent permitted by
applicable law.
(c) Any payment of amounts due under this Mortgage not made on or
before the due date for such payments shall accrue interest daily without
notice from the due date until paid at the Default Interest Rate, and such
interest at the Default Interest Rate shall be immediately due upon demand
by the Trustee or the Beneficiary.
Section 1.3 Payment of Taxes, Liens and Charges.
-----------------------------------
(a) Except as may be permitted by Section 6.5 of the Credit Agreement
or Section 8.3(o) of the Participation Agreement, the Grantor will pay and
discharge from time to time prior to the time when the same shall become
delinquent, and before any interest or penalty accrues thereon or attaches
thereto, all taxes of every kind and nature, all general and special
assessments, levies, permits, inspection and license fees, all water and
sewer rents, all vault charges, and all other public charges, and all
service charges, common area charges, private maintenance charges, utility
charges and all other private charges, whether of a like or different
nature, imposed upon or assessed against the Trust Property or any part
thereof or upon the Rents from the Trust Property or arising in respect of
the occupancy, use or possession thereof.
(b) In the event of the passage of any state, federal, municipal or
other governmental law, order, rule or regulation subsequent to the date
hereof (i) deducting from the value of real property for the purpose of
taxation any lien or encumbrance thereon or in any manner changing or
modifying the laws now in force governing the taxation of this Mortgage or
debts secured by mortgages or deeds of trust (other than laws governing
income, franchise and similar taxes generally) or the manner of collecting
taxes thereon and (ii) imposing a tax to be paid by the Beneficiary or the
Trustee, either
8
directly or indirectly, on this Mortgage or any of the Credit Documents or
to require an amount of taxes to be withheld or deducted therefrom, the
Grantor will promptly notify the Beneficiary of such event. In such event
the Grantor shall (i) agree to enter into such further instruments as may
be reasonably necessary or desirable to obligate the Grantor to make any
applicable additional payments, and (ii) the Grantor shall make all such
additional payments.
(c) At any time that an Event of Default (as defined in Section 2.1
herein) shall occur hereunder, or if required by any law applicable to the
Grantor or to the Beneficiary, the Beneficiary shall have the right to
direct the Grantor to make an initial deposit on account of real estate
taxes and assessments, insurance premiums and common area charges, levied
against or payable in respect of the Trust Property in advance and
thereafter semi-annually, each such deposit to be equal to one-half of any
such annual charges reasonably estimated by the Beneficiary in order to
accumulate with the Beneficiary sufficient funds to pay such taxes,
assessments, insurance premiums and charges.
Section 1.4 Payment of Closing Costs. The Grantor shall pay all reasonable
------------------------
costs in connection with, relating to or arising out of the preparation,
execution and recording of this Mortgage, including title company premiums and
charges, inspection costs, survey costs, recording fees and taxes, attorneys',
engineers', appraisers' and consultants' fees and disbursements and all other
similar expenses of every kind.
Section 1.5 Alterations and Waste; Plans; Use.
---------------------------------
(a) No Improvements will be materially altered or demolished or
removed in whole or in part by the Grantor. The Grantor will maintain and
keep the Trust Property in good condition and repair and will not commit
any waste on the Trust Property or make any alteration to, or change in the
use of, the Trust Property that will diminish the utility thereof for the
operation of the business conducted thereon or materially increase the risk
of fire or other hazard and in no event shall any such alteration or change
be contrary to the terms of any insurance policy required to be kept
pursuant to Section 1.6 hereof.
(b) To the extent the same exist on the date hereof or are obtained in
connection with future permitted alterations, the Grantor shall maintain a
complete set of final plans, specifications, blueprints and drawings for
the Improvements either at the Trust Property or in a particular office at
the headquarters of the Grantor to which the Beneficiary shall have access
upon reasonable advance notice.
(c) The Grantor shall cause the Premises and the Improvements to be
used in material compliance with all existing and future laws, codes,
ordinances, rules, regulations, orders and decrees of governmental
authorities and courts, having jurisdiction over the Trust Property or the
Grantor and the requirements of all Permits. The Grantor shall promptly
notify the Beneficiary of any proposed zoning reclassification, variance,
conditional or special use permit, subdivision plat or annexation affecting
the Land. The Grantor shall at all times comply with its obligations
9
under all recorded restrictions, conditions, easements and covenants
("Restrictive Covenants") encumbering the Land and shall duly enforce its
----------- ---------
rights under all Restrictive Covenants encumbering other property for the
benefit of the Land and/or the Improvements. If the Grantor receives any
notice (whether oral or written) that any Restrictive Covenant has been
violated, which violation could in any material way affect title to the
Land or the Grantor's existing or intended use of the Land or the
Improvements or result in material liens, fines, penalties or encumbrances
being imposed on the Land or Improvements, the Grantor shall promptly
notify the Beneficiary and take such steps as the Beneficiary may
reasonably require to correct such violation.
Section 1.6 Insurance. The Grantor will keep the Trust Property insured
---------
against such risks, and in the manner, required by Section 6.6 of the Credit
Agreement and Section 5.3 of the Participation Agreement. Without limiting the
generality of the Credit Agreement, Grantor shall, at its sole expense, obtain
and maintain in full force and effect during the existence of this Mortgage, the
following insurance coverages at limits not less than those specified herein:
(a) Worker's Compensation Insurance providing statutory limits of
liability and Employers' Liability Insurance with a limit of liability not
less than the underlying limit required by the Umbrella Excess Liability
Policy, as described in subsection (c) below. The Umbrella Excess Liability
Policy shall be in addition to the required underlying limits.
(b) Commercial General Liability Insurance for Bodily Injury and
Property Damage with coverages extended and endorsements to the policy as
stated below with a limit of liability not less than the underlying limit
required by the Umbrella Excess Liability Policy, as described in
subsection (c) below. The Umbrella Excess Liability Policy shall be in
addition to the required underlying limits. The coverages to be included in
this policy are: (i) Operations - Premises Liability, (ii) Independent
Contractors Liability, (iii) Contractual Liability covering the Grantor's
obligations as set forth herein, in the Credit Agreement and other Credit
Documents, (iv) Personal Injury Liability extending to claims arising from
employees of Grantor and (v) Products and completed operations hazards.
(c) Excess Umbrella Liability Insurance coverage with a limit of
liability of not less than $10,000,000 per occurrence.
(d) Property insurance with coverage extended to the hazards described
below on the Premises, Improvements and Personal Property in an amount not
less than full replacement cost thereof. These policies shall provide that
no deduction will be made for depreciation and shall contain no
co-insurance penalty. The coverage shall be extended to the following: (i)
Fire, extended (including vandalism and malicious mischief) and all risk
coverage, (ii) Windstorm, hurricane and hail damage, (iii) Theft loss, (iv)
Flood and (v) Business Interruptions.
The policies of insurance obtained to satisfy the requirements of subsections
(a) through (d) above shall be occurrence policies and not "claims made"
policies. Certificates evidencing the amounts and effective dates of the
coverages required by this Section shall be delivered to the
10
Beneficiary upon request. Copies of the insurance policies shall be available
for inspection and copying by the Beneficiary and its agents at the Grantor's
corporate headquarters during reasonable business hours. All policies shall be
taken out with insurers that are reasonably acceptable to the Beneficiary and in
a form reasonably satisfactory to the Beneficiary and shall provide that the
Beneficiary is an additional insured, as its interests may appear for the
policies described in subsections (a) through (c) above, and a mortgagee and/or
loss payee under each of the policies described in subsection (d) above. All
liability policies shall contain a waiver of subrogation against the
Beneficiary. The Grantor shall use its best efforts to require that all policies
shall provide for a thirty (30) day advance written notice to the Beneficiary of
any renewal, cancellation or material change in the insurance policies; provided
--------
that, in all events such policies shall provide for a minimum of ten (10) days
- ----
advance written notice to the Beneficiary of any renewal, cancellation or
material change in the insurance policies. For purposes of the foregoing
sentence, the Grantor's use of "best efforts" shall include, but is not limited
to, changing current or existing insurance carriers irrespective of whether
premiums are increased on account thereof. All such insurance required by this
Mortgage shall be provided by insurance companies licensed to do business in the
state where the Premises are located and shall have a Best's rating of A or
better, as shown in Best's Key Rating Guide, Property-Casualty, at the time of
issuance (or reissuance). The Grantor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by the
Grantor; provided, however, that (A) any such policy shall specify, or the
-------- -------
Grantor shall furnish to the Beneficiary a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Trust Property and any
sublimits in such blanket policy applicable to the Premises and the other Trust
Property, (B) each such blanket policy shall include an endorsement providing
that, in the event of a loss resulting from an insured peril, insurance proceeds
shall be allocated to the Trust Property in an amount equal to the coverages
required to be maintained by the Grantor as provided above and (C) the
protection afforded under any such blanket policy shall be no less than that
which would have been afforded under a separate policy or policies relating only
to the Trust Property.
Section 1.7 Casualty; Restoration of Casualty Damage. The Grantor shall
----------------------------------------
give the Beneficiary prompt written notice of any material fire or other
material casualty to all or any portion of the Trust Property (a "Casualty").
--------
For purposes hereof, a "material" fire or other casualty shall mean any such
event that disrupts operations at the Trust Property for more than two (2)
consecutive days. In the event any Casualty triggers, or when taken together
with other events would trigger, a mandatory prepayment under either of Section
2.6 of the Credit Agreement or Section 2.6 of the ELLF Credit Agreement, then
payments made by the insurer with respect to that Casualty will be made directly
in its entirety to the Beneficiary and the proceeds relating to such Casualty
shall be held or applied by the Beneficiary in accordance with, as applicable,
Section 2.6(c) of the Credit Agreement or Section 2.6(b) of the ELLF Credit
Agreement. Otherwise, proceeds received by the Beneficiary from any Casualty
shall be paid to Grantor within five (5) Business Days after request.
Section 1.8 Condemnation/Eminent Domain. The Grantor shall notify the
---------------------------
Beneficiary promptly upon obtaining knowledge of any pending or threatened
condemnation or taking of all or any portion of the Trust Property (a
"Condemnation"). In the event any Condemnation triggers, or when taken together
------------
with other events would trigger, a mandatory prepayment under
11
either of Section 2.6 of the Credit Agreement or Section 2.6 of the ELLF Credit
Agreement, then payment of all proceeds from that Condemnation shall be made
directly in its entirety to the Beneficiary and shall be held or applied by the
Beneficiary in accordance with, as applicable, Section 2.6(c) of the Credit
Agreement or Section 2.6(b) of the ELLF Credit Agreement. Otherwise, proceeds
received by the Beneficiary from any Condemnation shall be paid to Grantor
within five (5) Business Days after request.
Section 1.9 Assignment of Leases and Rents.
------------------------------
(a) The Grantor hereby irrevocably and absolutely grants, transfers
and assigns to the Beneficiary all of its right, title and interest in and
to all Leases, together with any and all extensions and renewals thereof
for purposes of securing and discharging the performance by the Grantor of
the Obligations. The Grantor has not assigned or executed any assignment
of, and will not assign or execute any assignment of, any Lease or its
respective Rents to anyone other than to the Trustee for the benefit of the
Beneficiary.
(b) Without the Beneficiary's prior written consent, the Grantor will
not (i) modify, amend, terminate or consent to the cancellation or
surrender of any Lease if such modification, amendment, termination or
consent would, in the reasonable judgment of the Beneficiary, be adverse in
any material respect to the Secured Parties, the value of the Trust
Property or the liens and security interests created by this Mortgage or
(ii) consent to an assignment of any tenant's interest in any Lease or to a
subletting thereof covering a material portion of the Trust Property,
except, in each case, as may be permitted by this Mortgage or the Credit
Agreement.
(c) Subject to Section 1.9(d) below, the Grantor has assigned and
transferred to the Beneficiary all of the Grantor's right, title and
interest in and to the Rents now or hereafter arising, it being intended
that this assignment establish, subject to Section 1.9(d) below, an
absolute transfer and assignment of all Rents and all Leases to the
Beneficiary and not merely to grant a security interest therein. The
Grantor shall have the license and right, subject to automatic revocation
as provided in Section 1.9(d) below, to operate and rent, lease or let all
or any portion of the Trust Property and to collect, but not more than one
month prior to accrual, all of the Rents. As provided in Section 1.9(d)
below, the license granted by this Section 1.9(c) is subject to automatic
revocation and thereafter the Beneficiary may, in the Grantor's name and
stead (with or without first taking possession of any of the Trust Property
personally or by receiver as provided herein) operate the Trust Property
and rent, lease or let, all or any portion of any of the Trust Property to
any party or parties at such rental and upon such terms as the Beneficiary
shall, in its sole discretion, determine, and may collect and have the
benefit of all of such Rents arising from or accruing at any time
thereafter or that may thereafter become due.
(d) As long as no Event of Default has occurred and is continuing, the
license granted under Section 1.9(c) above shall be effective and the
Beneficiary shall not exercise any of its rights under Section 1.9(c)
above, and the Grantor shall receive and collect the Rents accruing under
any Lease pursuant to the revocable license granted therein; but upon the
occurrence of any Event of Default, the license granted under
12
Section 1.9(c) above shall be deemed to be automatically revoked and shall
terminate automatically without notice and the Beneficiary shall be
entitled to all of the Rents without the necessity of the Beneficiary's
taking any action whatsoever, and the Rents shall thereupon be deemed to be
cash collateral for all purposes, including without limitation for purposes
of Section 363 of the Bankruptcy Code. Upon the occurrence and during the
continuance of any Event of Default, the Beneficiary may receive and
collect all Rents and enter upon the Premises and Improvements through its
officers, agents, employees or attorneys for such purpose and for the
operation and maintenance thereof. Upon the occurrence and during the
continuance of any Event of Default, the Grantor hereby irrevocably
authorizes and directs each tenant, if any, and each successor, if any, to
the interest of any tenant under any Lease, respectively, to rely upon any
notice of a claimed Event of Default sent by the Beneficiary to any such
tenant or any of such tenant's successors in interest, and thereafter to
pay Rents to the Beneficiary without any obligation or right to inquire as
to whether an Event of Default actually exists and even if notice to the
contrary is received from the Grantor, who shall have no right or claim
against any such tenant or successor in interest for any such Rents so paid
to the Beneficiary. Each tenant or any of such tenant's successors in
interest from whom the Beneficiary or any officer, agent, attorney or
employee of the Beneficiary shall have collected any Rents, shall be
authorized to pay Rents to the Grantor only after such tenant or any of
such tenant's successors in interest shall have received written notice
from the Beneficiary that the Event of Default is no longer continuing,
which notice the Beneficiary shall be obligated to give if the Beneficiary
determines in its reasonable discretion that such Event of Default is no
longer continuing (or if ordered by a court or arbitrator with
jurisdiction), unless and until a further notice of an Event of Default is
given by the Beneficiary to such tenant or any of such tenant's successors
in interest.
(e) The Beneficiary will not become a mortgagee in possession so long
as it does not enter and take actual possession of the Trust Property. In
addition, the Beneficiary shall not be responsible or liable for performing
any of the obligations of the landlord under any Lease, for any waste by
any tenants, or others, for any dangerous or defective conditions of any of
the Trust Property, for negligence in the management, upkeep, repair or
control of any of the Trust Property or any other act or omission by any
other Person.
(f) The Grantor shall furnish to the Beneficiary, within 30 days after
a request by the Beneficiary to do so, a written statement containing the
names of all tenants, subtenants and concessionaires of the Premises or
Improvements, the terms of any Lease, the space occupied and the rentals or
license fees payable thereunder.
(g) If an Event of Default occurs, and if there is any applicable law
requiring the Beneficiary or the Trustee to take actual or constructive
possession of the Premises (or some action equivalent thereto, such as
securing the appointment of a receiver) in order for the Beneficiary or the
Trustee to "perfect" or "activate" its rights and remedies as set forth
herein, the Grantor hereby waives the benefits of any such laws to the
maximum extent allowable.
13
Section 1.10 Restrictions on Transfers and Encumbrances. Except as
------------------------------------------
permitted hereby, by the Credit Agreement, by the Security Agreement, by any
other applicable Credit Document or by any applicable Operative Agreement, the
Grantor shall not directly or indirectly sell, convey, alienate, assign, lease,
sublease, license, mortgage, pledge, encumber or otherwise transfer, create,
consent to or suffer the creation of any lien, charges or any form of
encumbrance upon any interest in or any part of the Trust Property, or be
divested of its title to the Trust Property or any interest therein in any
manner or way, whether voluntarily or involuntarily (other than resulting from a
taking), or engage in any common, cooperative, joint, timesharing or other
congregate ownership of all or part thereof; provided, however, that the Grantor
-------- -------
may in the ordinary course of business, within reasonable commercial standards
and upon obtaining the prior written consent of the Beneficiary (which consent
shall not be unreasonably withheld or delayed), enter into easement agreements
that relate to and/or benefit the operation of the Trust Property or that do not
materially or adversely affect the use and operation of the same (including
customary utility easements that service the Trust Property).
Section 1.11 Security Agreement. This Mortgage is both a mortgage and grant
------------------
of real property and a grant of a security interest in personal property, and
shall constitute and serve as a "Security Agreement" within the meaning of the
Uniform Commercial Code as adopted in the State wherein the Premises are located
(the "UCC"). The Grantor hereby grants unto the Beneficiary a security interest
---
in and to all the Trust Property described in this Mortgage that is not real
property, and simultaneously with the recording of this Mortgage, the Grantor
has filed or will file UCC financing statements, and will file continuation
statements prior to the lapse thereof, at the appropriate offices in the state
in which the Premises are located to perfect the security interest granted by
this Mortgage in all the Trust Property that is not real property. The Grantor
hereby appoints the Beneficiary as its true and lawful attorney-in-fact and
agent, for the Grantor and in its name, place and stead, in any and all
capacities, to execute any document and to file the same in the appropriate
offices (to the extent it may lawfully do so), and to perform each and every act
and thing requisite and necessary to be done to perfect the security interest
hereby granted. The Beneficiary shall have all rights with respect to the part
of the Trust Property that is the subject of a security interest afforded by the
UCC in addition to, but not in limitation of, the other rights afforded the
Trustee and the Beneficiary hereunder. The Grantor agrees, to the extent
permitted by law, that: (i) all of the goods described within the definition of
the word "Personal Property" are or are to become fixtures on the Land; (ii)
this Mortgage upon recording or registration in the real estate records of the
proper office shall constitute a financing statement filed as a "fixture filing"
within the meaning of Sections 9-313 and 9-402 of the UCC; (iii) the Grantor is
the record owner of the Premises; and (iv) the addresses of the Grantor and the
Beneficiary are as set forth on the first page of this Mortgage. Additionally,
this Mortgage shall constitute a financing statement covering fixtures and/or
minerals or the like (including oil and gas) and/or accounts resulting from the
sale thereof at the wellhead or minehead and, as such, shall be filed for record
in the real estate records of each county in which the Land, or any part
thereof, is located.
Section 1.12 Filing and Recording. The Grantor will cause this Mortgage,
--------------------
any other security instrument creating a security interest in or evidencing the
lien hereof upon the Trust Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and to
protect fully the liens and security interests of the Trustee and the
Beneficiary
14
hereby granted in and upon the Trust Property. The Grantor will pay all filing,
registration or recording fees, and all expenses incidental to the execution and
acknowledgment of this Mortgage, any deed of trust supplemental hereto, any
security instrument with respect to the Trust Property, and any instrument of
further assurance and all federal, state, county and municipal recording,
documentary or intangible taxes and other taxes, duties, imposts, assessments
and charges arising out of or in connection with the execution, delivery and
recording of this Mortgage, any deed of trust supplemental hereto, any security
instrument with respect to the Trust Property or any instrument of further
assurance.
Section 1.13 Further Assurances. Upon demand by the Beneficiary, the
------------------
Grantor will, at the sole cost of the Grantor and without expense to the Trustee
or the Beneficiary, do, execute, acknowledge and deliver all such further acts,
deeds, conveyances, deeds of trust, assignments, notices of assignment,
transfers and assurances as the Beneficiary shall from time to time reasonably
require for the better assuring, conveying, assigning, transferring and
confirming unto the Beneficiary and the Trustee the property and rights hereby
conveyed or assigned or intended now or hereafter so to be, or which the Grantor
may be or may hereafter become bound to convey or assign to the Trustee or the
Beneficiary, or for carrying out the intention or facilitating the performance
of the terms of this Mortgage, or for filing, registering or recording this
Mortgage, and on demand, the Grantor will also execute and deliver and hereby
appoints the Beneficiary as its true and lawful attorney-in-fact and agent for
the Grantor and in its name, place and stead, in any and all capacities, to
execute and file to the extent it may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments reasonably
required by the Beneficiary to evidence or perfect the liens and security
interests hereby granted and to perform each and every act and thing requisite
and necessary to be done to accomplish the same.
Section 1.14 Additions to Trust Property. All right, title and interest of
---------------------------
the Grantor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Trust Property hereafter acquired by or released to the Grantor or constructed,
assembled or placed by the Grantor upon the Premises or the Improvements, and
all conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case without any further deed of trust,
conveyance, assignment or other act by the Grantor, shall become subject to the
liens and security interests of this Mortgage as fully and completely and with
the same effect as though now owned by the Grantor and specifically described in
the grant of the Trust Property above, but at any and all times the Grantor will
execute and deliver to the Beneficiary any and all such further assurances,
deeds of trust, conveyances or assignments thereof as the Beneficiary may
reasonably require for the purpose of expressly and specifically subjecting the
same to the liens and security interests of this Mortgage.
Section 1.15 No Claims Against the Trustee or the Beneficiary. Nothing
------------------------------------------------
contained in this Mortgage shall constitute any consent or request by the
Trustee or the Beneficiary, express or implied, for the performance of any labor
or services or the furnishing of any materials or other property in respect of
the Trust Property or any part thereof, nor as giving the Grantor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against the Trustee or the Beneficiary in
respect thereof.
15
Section 1.16 Environmental.
-------------
(a) Notwithstanding such definitions in the Credit Agreement or the
ELLF Credit Agreement, as used in this Mortgage, the term "Hazardous
Materials" shall mean and include those elements, materials, compounds,
mixtures or substances, including, but not limited to, asbestos,
polychlorinated biphenyls, petroleum, crude oil or any fraction or product
thereof, which are contained in the list of hazardous substances adopted by
the United States Environmental Protection Agency (the "EPA") or the list
---
of toxic pollutants designated by Congress or the EPA or which are defined
as hazardous, toxic, pollutant, infectious, flammable or radioactive by any
other federal, state, or local statute, law, ordinance, code, rule,
regulation, order, or decree regulating, relating to, or imposing liability
or standards of conduct concerning, any waste, substance, element,
compound, mixture or material, as now or at any time hereafter in effect
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.Sections 9601
et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801
-- ---
et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
-- ---
Sections 6901 et seq., the Superfund Amendments and Reauthorization Act, 42
-- ---
U.S.C. Sections 9601 et seq., the Toxic Substances Control Act, 15 U.S.C.
-- ---
Sections 2601 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
-- ---
the Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the
Occupational Safety and Health Act, 29 U.S.C. Sections 651-678, or
rules and regulations of the EPA or any other state or federal department,
board or agency, or any other agency or governmental board or entity having
jurisdiction over any of the Trust Property (collectively, the
"Environmental Laws").
------------------
(b) The Grantor represents, warrants and agrees that the Grantor has
not used, will not use and, to the best of the Grantor's knowledge, no
prior owner or current or prior tenant, subtenant, or other occupant of all
or any part of the Trust Property has used or is using, Hazardous Materials
on, from, to, under, within or affecting the Trust Property that (i) would
require any Remedial Work (as hereinafter defined in subsection (d) of this
Section 1.16), or (ii) poses a material threat to Persons or the
environment.
(c) The Grantor represents, warrants and agrees that (i) it will not
hereafter permit or suffer any generation, treatment, use, storage,
transportation, manufacture, refinement, handling, production, removal,
remediation, disposal, presence or migration (herein referred to as a
"Release") of Hazardous Materials on the Trust Property in material
-------
violation of any applicable Environmental Laws, (ii) it has not received
any notice from any Person or entity, public or private, claiming a
violation of any Environmental Law or requiring Remedial Work (as
hereinafter defined) with regard to the Trust Property and (iii) it has not
received any notice of a Release of any Hazardous Materials on the soil,
surface water, and ground water of, on or under the Trust Property in
violation of any applicable Environmental Laws.
(d) In the event that any governmental entity requires any
investigation, site monitoring, containment, clean-up, removal, restoration
or other remedial work of any kind or nature (collectively, the "Remedial
--------
Work") because of, or in connection with, the current or future presence,
----
suspected presence, Release or threatened Release of a
16
Hazardous Material in or about the air, soil, ground water, surface water
or soil vapor at, on, about, under or within the Trust Property (or any
portion thereof), the Grantor shall, within thirty (30) days after written
demand for performance thereof (or such shorter period of time as may be
required under any applicable law, regulation, order or agreement),
commence and thereafter diligently prosecute to completion all such
Remedial Work unless the Grantor is contesting its obligation to perform
such Remedial Work in good faith and through appropriate proceedings. All
costs and expenses of such Remedial Work shall be paid by the Grantor. In
the event the Grantor shall fail to timely prosecute to completion such
Remedial Work, or to contest its obligation to do so, the Beneficiary may,
but shall not be required to, cause such Remedial Work to be performed,
consistent with sound commercial practices designed to protect the liens
and security interests hereby created, and all costs and expenses thereof,
or incurred in connection therewith, shall become part of the Obligations.
(e) The Grantor shall provide the Beneficiary with prompt written
notice of (i) any Release or threatened Release of any Hazardous Materials
upon, under or from the Trust Property that results in or is reasonably
likely to result in a material liability; (ii) the Grantor's receipt of any
notice from any federal, state, municipal or other governmental agency or
authority relating or pertaining to any Hazardous Materials located or
Released in, on, upon, under, near or emanating from the Trust Property;
and (iii) any governmental agency or authority incurring any cost or
expense in connection with the assessment, containment, remediation or
removal of any Hazardous Materials located or Released in, on, upon, under,
near or emanating from the Trust Property, and shall promptly comply with
its obligations under applicable law with respect thereto. For purposes of
the foregoing, a "material liability" shall be defined as a loss, claim,
cost, expense, charge, lien, fine, penalty or other disadvantage to the
Grantor that exceeds $50,000. Upon posting security satisfactory to the
Beneficiary, the Grantor may diligently pursue protest procedures as
permitted by applicable law.
(f) The Grantor hereby agrees to protect, indemnify, defend, and hold
harmless the Beneficiary and all other Indemnified Persons and their
respective heirs, legal representatives, successors and assigns from and
against any and all loss, damage, cost, charge, lien, debt, fine, penalty,
injunctive relief, claim, demand, expense, suit, order, judgment,
adjudication, liability, diminution of property value or injury to person,
property or natural resources, including, but not limited to, court costs,
reasonable attorneys' fees and reasonable consultant fees (all of the
foregoing shall hereinafter be referred to collectively as a "Claim")
-----
arising out of, attributable to, relating to, which may accrue out of, or
which may result from (i) a violation or alleged violation of any
Environmental Laws in connection with the Trust Property by any Person or
entity or other source whether related or unrelated to the Grantor or (ii)
the actual, threatened or alleged Release of Hazardous Materials (whether
intentional or unintentional, direct or indirect, foreseeable or
unforeseeable) to, from, on, within, in, under, near or affecting the Trust
Property by any Person or entity or other source, whether related or
unrelated to the Grantor. The foregoing indemnity shall survive the
cancellation or satisfaction of this Mortgage, the satisfaction of the
Obligations, the foreclosure or conveyance in lieu of foreclosure of all or
any part of the Trust Property, or the exercise by the Trustee or the
Beneficiary of any of the remedies available under this Mortgage, any of
the other Credit
17
Documents or any of the Operative Agreements. Notwithstanding the
foregoing, the obligation to indemnify any Indemnified Person under this
Section 1.16 shall not apply in respect of any loss, claim, damage or
liability to the extent that a court of competent jurisdiction shall have
determined by final and nonappealable judgment that such loss, claim,
damage or liability resulted from (A) such Indemnified Person's willful
misconduct or gross negligence or (B) a Hazardous Substance introduced to
the Trust Property by any Indemnified Person after the Beneficiary takes
possession of the Trust Property, whether by foreclosure or otherwise.
(g) The Grantor agrees that the Beneficiary or any agent or
representative acting on behalf of the Beneficiary may (but shall not be
obligated to) enter upon the Premises and the Improvements at any time,
after the occurrence of an Event of Default, to conduct such inspections
and tests, at the Grantor's sole cost and expense, as may be desired by the
Beneficiary to determine compliance with Environmental Laws. In the event
any such inspections or tests reveal facts or circumstances that are
required to be reported to governmental authorities under applicable laws,
then the Grantor agrees to report those facts and circumstances in
accordance with applicable laws.
ARTICLE II
DEFAULTS AND REMEDIES
Section 2.1 Events of Default. It shall be an Event of Default under this
-----------------
Mortgage if (i) the Grantor fails to comply with, or otherwise defaults in, any
of the terms and provisions of this Mortgage, and such failure or default shall
continue unremedied for a period of thirty (30) days (or for any other grace
period that, under the terms of this Mortgage, is specifically applicable
thereto) after delivery of notice thereof from the Agent or any Lender to the
Grantor, or (ii) any Event of Default (as defined in the Security Agreement)
shall have occurred and be continuing.
Section 2.2 Demand for Payment. Upon the occurrence of any Event of
------------------
Default, in addition to any other rights and remedies the Beneficiary may have
pursuant to the Credit Agreement, the other Credit Documents or the Operative
Agreements, or as provided at law or in equity, and without limitation, the
Obligations and all other amounts payable with respect to the Loans, the Letters
of Credit, the Credit Agreement, this Mortgage, the other Credit Documents or
the Operative Agreements shall become due and payable as provided in the Credit
Agreement or any of the Operative Agreements. The Grantor shall pay to the
Beneficiary upon demand all such amounts and such further amounts as shall be
reasonably incurred (without regard to statutory presumption) to cover the costs
and expenses of collection, including reasonable attorneys' fees, disbursements
and expenses incurred by the Trustee or the Beneficiary. The Grantor hereby
waives notice of presentment, demand, protest, acceleration and notice of
acceleration. In case the Grantor shall fail forthwith to pay such amounts or
any amounts due under the Credit Agreement, any provision of this Mortgage, any
of the other Credit Documents or any of the Operative Agreements upon the
Beneficiary's demand, the Trustee or the Beneficiary, in addition to any other
rights or remedies provided herein or at law or equity, shall be entitled and
empowered to institute an action or proceedings at law or in equity as advised
by
18
counsel for the collection of the sums so due and unpaid, to prosecute any such
action or proceedings to judgment or final decree, to enforce any such judgment
or final decree against the Grantor and to collect, in any manner provided by
law, all moneys adjudged or decreed to be payable.
Section 2.3 Rights to Take Possession, Operate and Apply Revenues.
-----------------------------------------------------
(a) If an Event of Default shall occur and be continuing, the Grantor
shall, upon demand of the Beneficiary, forthwith surrender to the
Beneficiary actual possession of the Trust Property and, if and to the
extent permitted by applicable law, the Beneficiary itself, or by such
officers or agents as it may appoint, may then enter and take possession of
all the Trust Property with or without the appointment of a receiver or an
application therefor, exclude the Grantor and its agents and employees
wholly therefrom, and have access to the books, papers and accounts of the
Grantor.
(b) If the Grantor shall for any reason fail to surrender or deliver
the Trust Property or any part thereof after such demand by the
Beneficiary, the Beneficiary may obtain a judgment or decree conferring
upon the Beneficiary the right to immediate possession or requiring the
Grantor to deliver immediate possession of the Trust Property to the
Beneficiary, to the entry of which judgment or decree the Grantor hereby
specifically consents. The Grantor will pay to the Beneficiary, upon
demand, all reasonable expenses of obtaining such judgment or decree,
including compensation to the Beneficiary's attorneys (for reasonable fees
actually incurred (not as imposed by statute)) and agents with interest
thereon at the Default Interest Rate; and all such expenses and
compensation shall, until paid, be secured by this Mortgage.
(c) If an Event of Default shall occur and be continuing, the
Beneficiary may hold, store, use, operate, manage and control the Trust
Property, conduct the business thereof and, from time to time, (i) make all
necessary, proper and reasonable maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon,
(ii) purchase or otherwise acquire additional fixtures, personalty and
other property, (iii) insure or keep the Trust Property insured, (iv)
manage and operate the Trust Property and exercise all the rights and
powers of the Grantor to the same extent as the Grantor could in its own
name or otherwise with respect to the same or (v) enter into any and all
agreements with respect to the exercise by others of any of the powers
herein granted to the Beneficiary, all as may from time to time be directed
or determined by the Beneficiary to be in its best interest and the Grantor
hereby appoints the Beneficiary as its true and lawful attorney-in-fact and
agent, for the Grantor and in its name, place and stead, in any and all
capacities, to perform any of the foregoing acts. Regardless of whether or
not the Beneficiary has entered or taken possession, the Beneficiary may
collect and receive all the Rents, issues, profits and revenues from the
Trust Property, including those past due as well as those accruing
thereafter, and, after deducting (i) all expenses of taking, holding,
managing and operating the Trust Property (including compensation for the
services of all persons employed for such purposes), (ii) the costs of all
such maintenance, repairs, renewals, replacements, additions , betterments,
improvements, purchases and acquisitions, (iii) the costs of insurance,
(iv) such taxes, assessments and other similar charges as the Beneficiary
may at its option pay, (v) other
19
proper charges upon the Trust Property or any part thereof and (vi) the
compensation, expenses and disbursements of the attorneys and agents of the
Beneficiary, the Beneficiary shall apply the remainder of the moneys and
proceeds so received first to the Beneficiary, for the ratable account of
the Secured Parties, for the payment in full and satisfaction of the
Obligations (such payments to be made in accordance with the Intercreditor
Agreement (as defined herein)), and second, if there is any surplus, to the
Grantor, subject to the entitlement of others thereto under applicable law.
For purposes of this Mortgage, "Intercreditor Agreement" shall mean an
intercreditor agreement between each of the Secured Parties and the
Collateral Agent, initially dated as of the date of the Security Agreement,
as amended, modified or supplemented from time to time.
(d) Whenever, before any sale of the Trust Property under Section 2.6
hereof, all Obligations that are then due shall have been paid and all
Events of Default fully cured, the Beneficiary will surrender possession of
the Trust Property back to the Grantor, its successors or assigns. The same
right of taking possession shall, however, arise again if any subsequent
Event of Default shall occur and be continuing.
Section 2.4 Right to Cure the Grantor's Failure to Perform. Prior to the
----------------------------------------------
occurrence of an Event of Default and upon five business days' notice to the
Grantor (except in the case of an emergency), or after the occurrence of an
Event of Default, at any time and without notice, should the Grantor fail in the
payment, performance or observance of any term, covenant or condition required
by this Mortgage, the Credit Agreement, any other Credit Document or the
Operative Agreements (with respect to the Trust Property), the Beneficiary may
pay, perform or observe the same, and all payments made or costs or expenses
incurred by the Beneficiary in connection therewith shall be secured hereby and
shall be, without demand, immediately repaid by the Grantor to the Beneficiary
with interest thereon at the Default Interest Rate. The Beneficiary shall make
the determination as to the necessity for any such actions and of the amounts to
be paid. Subject to the notice provisions of the first sentence of this Section
2.4, the Beneficiary is hereby empowered to enter and to authorize others to
enter upon the Premises or the Improvements or any part thereof for the purpose
of performing or observing any such defaulted term, covenant or condition
without having any obligation to so perform or observe and without thereby
becoming liable to the Grantor, to any Person in possession holding under the
Grantor or to any other Person.
Section 2.5 Right to a Receiver. If an Event of Default shall occur and be
-------------------
continuing, the Beneficiary, upon application to a court of competent
jurisdiction, shall be entitled as a matter of right to the appointment of a
receiver to take possession of and to operate the Trust Property and to collect
and apply the Rents. The Grantor hereby consents to such appointment and
acknowledges and agrees that the Beneficiary shall be entitled to such
appointment without notice and without regard for the adequacy of security for
the Obligations or the solvency of the Grantor or any party liable for the
Obligations. The receiver shall have all of the rights and powers permitted
under the laws of the state wherein the Trust Property is located. The Grantor
will pay to the Beneficiary upon demand all expenses, including receiver's fees,
attorneys' fees and disbursements that are actually incurred (not as imposed by
statute), costs and agent's compensation incurred pursuant to the provisions of
this Section 2.5; and all such expenses shall
20
be secured by this Mortgage and shall be, without demand, immediately repaid by
the Grantor to the Beneficiary with interest thereon at the Default Interest
Rate.
Section 2.6 Foreclosure and Sale.
--------------------
(a) If an Event of Default shall occur and be continuing, the
Beneficiary may elect to sell or to cause and direct the Trustee to sell
the Trust Property or any part of the Trust Property by exercise of the
power of foreclosure or of sale granted to the Beneficiary by applicable
law, this Mortgage, the Security Agreement, any other applicable Credit
Document or any applicable Operative Agreement. In such case, the Trustee
or the Beneficiary may commence a civil action to foreclose this Mortgage,
or the Trustee may proceed and sell the Trust Property, in accordance with
applicable law, to satisfy any Obligation. The Trustee, or an officer
appointed by a judgment of foreclosure to sell the Trust Property, may sell
all or such parts of the Trust Property as may be chosen by the Trustee or
the Beneficiary at the time and place of sale fixed by it in a notice of
sale, either as a whole or in separate lots, parcels or items as the
Trustee or the Beneficiary shall deem expedient, and in such order as it
may determine, at public auction to the highest bidder. The Trustee or the
Beneficiary or an officer appointed by a judgment of foreclosure to sell
the Trust Property may postpone any foreclosure or other sale of all or any
portion of the Trust Property by public announcement at such time and place
of sale, and from time to time as permitted by applicable law thereafter
may postpone such sale by public announcement or subsequently noticed sale.
Except as otherwise required by applicable law, without further notice, the
Trustee or the Beneficiary or an officer appointed to sell the Trust
Property may make such sale at the time fixed by the last postponement, or
may, in its discretion, give a new notice of sale. Any person, including
the Grantor or the Beneficiary or any designee or affiliate thereof, may
purchase any portion of the Trust Property at such sale.
(b) The Trust Property may be sold subject to unpaid taxes and the
Permitted Encumbrances, and after deducting all the costs, fees and
expenses of the Trustee or the Beneficiary, including, without limitation,
costs of evidence of title in connection with the sale, the Trustee or the
Beneficiary or an officer that makes any sale shall apply the proceeds of
sale in the manner set forth in Section 2.8 hereof.
(c) Any foreclosure or other sale of less than the whole of the Trust
Property or any defective or irregular sale made hereunder shall not
exhaust the power of foreclosure or of sale provided for herein; and
subsequent sales may be made hereunder until the Obligations have been
satisfied, or the entirety of the Trust Property has been sold.
(d) If an Event of Default shall occur and be continuing, the
Beneficiary may, instead of, or in addition to, exercising the rights
described in Section 2.6(a) above and either with or without entry or
taking possession as herein permitted, proceed by a suit or suits in law or
in equity or by any other appropriate proceeding or remedy (i) to
specifically enforce payment of some or all of the terms of the Credit
Documents or the performance of any term, covenant, condition or agreement
of this Mortgage or any other
21
right or (ii) to pursue any other remedy available to it, at law or in
equity, all as the Beneficiary shall determine most effectual for such
purposes.
Section 2.7 Other Remedies.
--------------
(a) In case an Event of Default shall occur and be continuing, the
Beneficiary may also exercise, to the extent not prohibited by applicable
law, any or all of the remedies available to a secured party under the UCC,
including, to the extent not prohibited by applicable law, the following:
(i) In the case of personal property, to exercise those rights
and remedies under the Security Agreement.
(ii) To make such payments and do such acts as the Beneficiary
may deem necessary to protect its security interest in the Personal
Property including paying, purchasing, contesting or compromising any
encumbrance, charge or lien that is prior or superior to the security
interest granted hereunder, and, in exercising any such powers or
authority, paying all expenses incurred in connection therewith.
(iii) To enter upon any or all of the Premises or Improvements to
exercise the Beneficiary's rights hereunder.
(b) In connection with a sale of the Trust Property and the
application of the proceeds of sale as provided in Section 2.8 of this
Mortgage, the Beneficiary shall be entitled to enforce payment of and to
receive up to the principal amount of the Obligations, plus all other
charges, payments and costs due under this Mortgage, and to recover a
deficiency judgment for any portion of the aggregate principal amount of
the Obligations remaining unpaid, with interest.
Section 2.8 Application of Sale of Proceeds and Rents. After any
-----------------------------------------
foreclosure sale of all or any of the Trust Property, the Trustee or the
Beneficiary shall receive the proceeds of sale, no purchaser shall be required
to see to the application of the proceeds, and the Trustee or the Beneficiary
shall apply the proceeds of the sale together with any Rents that may have been
collected and any other sums that then may be held by the Trustee or the
Beneficiary under this Mortgage as follows:
First, to the payment of the costs and expenses of such sale,
-----
including, without limitation, reasonable compensation to the Trustee and
to the Beneficiary (based on actual fees and expenses incurred), the
Beneficiary's attorneys (based on actual fees and expenses incurred, not as
imposed by statute) and agents, and of any judicial proceedings wherein the
same may be made, and of all expenses, liabilities and advances made or
incurred by the Beneficiary under this Mortgage, together with interest at
the Default Interest Rate on all advances made by the Beneficiary,
including all taxes or assessments (except any taxes, assessments or other
charges subject to which the Trust Property shall have been sold) and the
cost of removing any encumbrance (except any Permitted Encumbrance subject
to which the Trust Property was sold);
22
Second, to the Beneficiary for the ratable payment in full and
------
satisfaction of the Obligations owing to the Secured Parties (such payments
to be made in accordance with any intercreditor agreement among the Secured
Parties as may be in effect from time to time); and
Third, to the person or persons entitled thereto under applicable law
-----
or as a court of competent jurisdiction may otherwise direct.
Except as required by applicable law, the Beneficiary shall have absolute
discretion as to the time of application of any such proceeds, moneys or
balances in accordance with this Mortgage. Upon any sale of the Trust Property
by the Trustee or the Beneficiary (including pursuant to a power of sale granted
by statute or under a judicial proceeding), the receipt of the Trustee or the
Beneficiary or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Trust Property so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Trustee or the Beneficiary or such officer or be
answerable in any way for the misapplication thereof.
For purposes of applying amounts in accordance with this Section, the
Beneficiary shall be entitled to rely upon any Secured Party that has (or whose
Affiliate has) entered into a Hedge Agreement with the Grantor for a
determination (which such Secured Party agrees to provide or cause to be
provided upon request of the Agent) of the outstanding Obligations owed to such
Secured Party or Affiliate thereof under any such Hedge Agreement. Unless it has
actual knowledge (including by way of written notice from any such Secured
Party) to the contrary, the Beneficiary, in acting hereunder, shall be entitled
to assume that no Hedge Agreements or Obligations in respect thereof are in
existence between any Secured Party or Affiliate thereof and the Grantor. If any
Secured Party that is a party to a Hedge Agreement with the Grantor (the
obligations of the Grantor under which are Obligations) ceases to be a Secured
Party, such former Secured Party shall nevertheless continue to be secured by
the Trust Property hereunder with respect to the Obligations under such Hedge
Agreement.
Section 2.9 The Grantor as Tenant Holding Over. If the Grantor remains in
----------------------------------
possession of any of the Trust Property after any foreclosure sale by the
Trustee or the Beneficiary, at the Beneficiary's election the Grantor shall be
deemed a tenant holding over and shall forthwith surrender possession to the
purchaser or purchasers at such sale or be summarily dispossessed or evicted
according to provisions of law applicable to tenants holding over.
Section 2.10 Waiver of Appraisement, Valuation, Stay, Extension and
------------------------------------------------------
Redemption Laws.
- ---------------
(a) The Grantor will not object to any sale of the Trust Property
pursuant hereto, and for itself and all who may claim under it, the Grantor
waives, to the extent that it lawfully may, all right to have the Trust
Property marshaled or to have the Trust Property sold as separate estates,
parcels, tracts or units in the event of any foreclosure of this Mortgage.
(b) To the full extent permitted by the law of the state wherein the
Trust Property is located or other applicable law, neither the Grantor nor
anyone claiming
23
through or under it shall or will set up, claim or seek to take advantage
of any appraisement, valuation, stay, extension, homestead-exemption or
redemption laws now or hereafter in force in order to prevent or hinder the
enforcement or foreclosure of this Mortgage, the absolute sale of the Trust
Property or the final and absolute putting of the purchasers into
possession thereof immediately after any sale; and the Grantor, for itself
and all who may at any time claim through or under it, hereby waives to the
full extent that it may lawfully do so, the benefit of all such laws and
any and all right to have the assets covered by the security interest
created hereby marshaled upon any foreclosure of this Mortgage.
Section 2.11 Discontinuance of Proceedings. In case the Trustee or the
-----------------------------
Beneficiary shall proceed to enforce any right, power or remedy under this
Mortgage by foreclosure, entry or otherwise, and such proceedings shall be
discontinued or abandoned for any reason, or shall be determined adversely to
the Trustee or the Beneficiary, then and in every such case the Grantor, the
Trustee and the Beneficiary shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of the Trustee and the
Beneficiary shall continue as if no such proceeding had been taken.
Section 2.12 Suits to Protect the Trust Property. The Trustee and/or the
-----------------------------------
Beneficiary shall have power (a) to institute and maintain suits and proceedings
to prevent any impairment of the Trust Property by any acts which may be
unlawful or in violation of this Mortgage, (b) to preserve or protect its
interest in the Trust Property and in the Rents arising therefrom and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of or compliance with such enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of or
compliance with such enactment, rule or order would impair the security or be
prejudicial to the interest of the Trustee or the Beneficiary hereunder.
Section 2.13 Filing Proofs of Claim. In case of any receivership,
----------------------
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting the Grantor, the Beneficiary shall, to the extent
permitted by applicable law, be entitled to file such proofs of claim and other
documents as may be necessary or advisable in order to have the claims of the
Beneficiary allowed in such proceedings for the Obligations secured by this
Mortgage at the date of the institution of such proceedings and for any interest
accrued, late charges and additional interest or other amounts due or that may
become due and payable hereunder after such date.
Section 2.14 Possession by the Beneficiary. Notwithstanding the appointment
-----------------------------
of any receiver, liquidator or trustee of the Grantor, any of its property or
the Trust Property, the Beneficiary shall be entitled, to the extent not
prohibited by applicable law, to remain in possession and control of all parts
of the Trust Property now or hereafter granted under this Mortgage in accordance
with the terms hereof and applicable law.
Section 2.15 Waiver.
------
(a) No delay or failure by the Trustee or the Beneficiary to exercise
any right, power or remedy accruing upon any breach or Event of Default
shall exhaust or impair
24
any such right, power or remedy or be construed to be a waiver of any such
breach or Event of Default or acquiescence therein; and every right, power
and remedy given by this Mortgage to the Trustee or the Beneficiary may be
exercised from time to time and as often as may be deemed expedient by the
Trustee or the Beneficiary. No consent or waiver by the Beneficiary or the
Trustee to or of any breach or default by the Grantor in the performance of
the Obligations shall be deemed or construed to be a consent or waiver to
or of any other breach or Event of Default in the performance of the same
or any other Obligations by the Grantor hereunder. No failure on the part
of the Beneficiary or the Trustee to complain of any act or failure to act
or to declare an Event of Default, irrespective of how long such failure
continues, shall constitute a waiver by the Beneficiary or the Trustee of
its rights hereunder or impair any rights, powers or remedies consequent on
any future Event of Default by the Grantor.
(b) Even if the Beneficiary or the Trustee (i) grants some forbearance
or an extension of time for the payment of any sums secured hereby, (ii)
takes other or additional security for the payment of any sums secured
hereby, (iii) waives or does not exercise some right granted herein or
under the Credit Agreement, any of the other Credit Documents or any of the
Operative Agreements, (iv) releases a part of the Trust Property from this
Mortgage, (v) agrees to change some of the terms, covenants, conditions or
agreements of the Credit Agreement, any of the Credit Documents or the
Operative Agreement, (vi) consents to the filing of a map, plat or replat
affecting the Premises, (vii) consents to the granting of an easement or
other right affecting the Premises or (viii) makes or consents to an
agreement subordinating the Beneficiary's lien on the Trust Property
hereunder; no such act or omission shall preclude the Beneficiary or the
Trustee from exercising any other right, power or privilege herein granted
or intended to be granted in the event of any breach or Event of Default
then made or of any subsequent default; nor, except as otherwise expressly
provided in an instrument executed by the Trustee and the Beneficiary,
shall this Mortgage be altered thereby. In the event of the sale or
transfer by operation of law or otherwise of all or part of the Trust
Property, the Beneficiary is hereby authorized and empowered to deal with
any vendee or transferee with reference to the Trust Property secured
hereby, or with reference to any of the terms, covenants, conditions or
agreements hereof, as fully and to the same extent as it might deal with
the original parties hereto and without in any way releasing or discharging
any liabilities, obligations or undertakings.
Section 2.16 Remedies Cumulative. No right, power or remedy conferred upon
-------------------
or reserved to the Trustee or the Beneficiary by this Mortgage is intended to be
exclusive of any other right, power or remedy, and each and every such right,
power and remedy shall be cumulative and concurrent and in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or
in equity or by statute.
25
ARTICLE III
MISCELLANEOUS
Section 3.1 Partial Invalidity. If any provision hereof, of the Credit
------------------
Agreement, of any of the other Credit Documents or of any of the Operative
Agreements is invalid or unenforceable in any jurisdiction or under any
circumstances, the other provisions hereof, of the Credit Agreement, of those
Credit Documents or of those Operative Agreements shall remain in full force and
effect in such jurisdiction and the remaining provisions hereof will be
liberally construed in favor of the Beneficiary in order to carry out the
provisions hereof, of the Credit Agreement, of such other Credit Documents and
of such Operative Agreements. The invalidity of any provision of this Mortgage
in any jurisdiction or under any circumstances will not affect the validity or
enforceability of any such provision in any other jurisdiction or under any
other circumstances. If any lien, encumbrance or security interest evidenced or
created by this Mortgage is invalid or unenforceable, in whole or in part, as to
any part of the Obligations, or is invalid or unenforceable, in whole or in
part, as to any part of the Trust Property, such portion, if any, of the
Obligations as is not secured by all of the Trust Property hereunder shall be
paid prior to the payment of the portion of the Obligations and shall, unless
prohibited by applicable laws or unless Beneficiary, in its sole and absolute
discretion, otherwise elects, be deemed to have been first paid on and applied
to payment in full of the unsecured or partially secured portion of the
Obligations, and the remainder to the secured portion of the Obligations.
Section 3.2 Notices. All communications and notices hereunder shall be in
-------
writing and given as provided in the Credit Agreement.
Section 3.3 Successors and Assigns. All of the grants, covenants, terms,
----------------------
provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to the benefit of the successors
and permitted assigns of the Grantor and the successors and assigns of the
Beneficiary.
Section 3.4 Counterparts. This Mortgage may be executed in any number of
------------
counterparts and all such counterparts shall together constitute but one and the
same instrument.
Section 3.5 Satisfaction and Cancellation.
-----------------------------
(a) The conveyance to the Trustee of the Trust Property as security
and for the benefit of the Beneficiary created and consummated by this
Mortgage shall be null and void when all the Obligations have been
indefeasibly paid in full in accordance with the terms of the Credit
Agreement, the Credit Documents and the Operative Agreements, the
Commitments have been terminated and all Letters of Credit have expired or
been terminated, and all obligations of the Grantor under any Hedge
Agreement with any Lender or any Affiliate of any Lender, which Hedge
Agreement is required or permitted under the Credit Agreement, have been
settled and such Hedge Agreement has been terminated.
(b) In connection with any termination or release pursuant to
subsection (a) above to the extent applicable, this Mortgage shall be
marked "satisfied" by the Beneficiary and/or the Trustee, and this Mortgage
may be canceled of record at the
26
request and at the expense of the Grantor. The Beneficiary and the Trustee
shall execute any documents reasonably requested by the Grantor to
accomplish the foregoing or to accomplish any release contemplated by
subsection (a) or (b) of this Section 3.5, and the Grantor will pay all
costs and expenses, including attorneys' fees and disbursements actually
incurred (not as imposed by statute), incurred by the Beneficiary or the
Trustee in connection with the preparation and execution of such documents.
Section 3.6 Definitions. As used in this Mortgage, the singular shall
-----------
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including but not
limited to"; (b) "provisions" shall mean provisions, terms, covenants and/or
conditions"; (c) "lien" shall mean "lien, charge, encumbrance, security
interest, mortgage or deed of trust"; (d) "obligation" shall mean obligation,
duty, covenant and/or condition"; and (e) "any of the Trust Property" shall mean
"the Trust Property or any part thereof or interest therein." Any act that the
Trustee or the Beneficiary is permitted to perform hereunder may be performed at
any time and from time to time by the Trustee or the Beneficiary or any person
or entity designated by the Trustee or the Beneficiary. Any act which is
prohibited to the Grantor hereunder is also prohibited to all lessees of any of
the Trust Property. Each appointment of the Trustee or the Beneficiary as
attorney-in-fact for the Grantor under the Mortgage is irrevocable, with power
of substitution and coupled with an interest. Subject to the applicable
provisions hereof, the Beneficiary has the right to refuse to grant its consent,
approval or acceptance or to indicate its satisfaction, in its sole discretion,
whenever such consent, approval, acceptance or satisfaction is required
hereunder.
Section 3.7 The Credit Agreement, Other Credit Documents and the Operative
--------------------------------------------------------------
Agreements. The Grantor acknowledges that in addition to this Mortgage, the
- ----------
Credit Agreement, other Credit Documents and the Operative Agreements secure the
Obligations. The Grantor agrees that the lien of this Mortgage shall be absolute
and unconditional and shall not in any manner be affected or impaired by any
acts or omissions whatsoever of the Trustee or the Beneficiary and, without
limiting the generality of the foregoing, the lien hereof shall not be impaired
by any acceptance by the Trustee or the Beneficiary of any security for or
guarantees of any of the Obligations hereby secured, or by any failure, neglect
or omission on the part of the Trustee or the Beneficiary to realize upon or
protect any Obligation hereby secured or any collateral security therefor
including the Credit Agreement, the other Credit Documents and the Operative
Agreements. The lien hereof shall not in any manner be impaired or affected by
any release (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any of the Obligations secured or of any of the
collateral security therefor, including the Credit Agreement, the other Credit
Documents or of any guarantee thereof, and the Operative Agreements, and the
Trustee or the Beneficiary may at its discretion foreclose, exercise any power
of sale, or exercise any other remedy available to it under the Credit
Agreement, any or all of the other Credit Documents or any or all of the
Operative Agreements without first exercising or enforcing any of its rights and
remedies hereunder. Such exercise of the Trustee's or the Beneficiary's rights
and remedies under the Credit Agreement, any or all of the other Credit
Documents or any of all of the Operative Agreements shall not in any manner
impair the Obligations hereby secured or the lien of this Mortgage and any
exercise of the rights or remedies of the Trustee or the Beneficiary hereunder
shall not impair the lien of the Credit Agreement, any of the other Credit
Documents, any of the Operative Agreements or any of the Trustee's or the
Beneficiary's rights and remedies
27
thereunder. The undersigned specifically consents and agrees that the Trustee or
the Beneficiary may exercise its rights and remedies hereunder, under the Credit
Agreement, under the other Credit Documents and under the Operative Agreements
separately or concurrently and in any order that it may deem appropriate, and
the undersigned waives any rights of subrogation. In the event of a conflict
between the terms and provisions of this Mortgage, the Credit Agreement, the
Operative Agreements and the Intercreditor Agreement, the documents shall be
read together and construed, to the fullest, extent possible, to be in concert
with each other. In the event of a conflict that cannot be so resolved, the
terms and provisions of, first, the Intercreditor Agreement and, second, this
Mortgage shall control and govern.
Section 3.8 The Trustee's Powers and Liabilities.
------------------------------------
(a) The Trustee, by acceptance hereof, covenants faithfully to perform
and fulfill the trusts herein created, being liable, however, only for its
gross negligence or willful misconduct. All authorities, powers and
discretions given in this Mortgage to the Trustee and/or the Beneficiary
may be exercised by either, without the other, with the same effect as if
exercised jointly.
(b) The Trustee may resign at any time upon giving 30 days' notice in
writing to the Grantor and to the Beneficiary.
(c) The Beneficiary may remove the Trustee at any time or from time to
time and select a successor trustee. In the event of the death, removal,
resignation, refusal to act, inability to act or absence of the Trustee
from the state in which the premises are located, or in its sole discretion
for any reason whatsoever, the Beneficiary may, upon notice to the Grantor
and without specifying the reason therefor and without applying to any
court, select and appoint a successor trustee, and all powers, rights,
duties and authority of the former Trustee, as aforesaid, shall thereupon
become vested in such successor. Such substitute trustee shall not be
required to give bond for the faithful performance of his duties unless
required by the Beneficiary. Such substitute trustee shall be appointed by
written instrument duly recorded in the county where the Land is located.
The Grantor hereby ratifies and confirms any and all acts that the herein
named Trustee, or his successor or successors in this trust, shall do
lawfully by virtue hereof. The Grantor hereby agrees, on behalf of itself
and its heirs, executors, administrators and assigns, that the recitals
contained in any deed or deeds executed in due form by any Trustee or
substitute trustee, acting under the provisions of this instrument, shall
be prima facie evidence of the facts recited, and that it shall not be
necessary to prove in any court, otherwise than by such recitals, the
existence of the facts essential to authorize the execution and delivery of
such deed or deeds and the passing of title thereby.
(d) The Trustee shall not be required to see that this Mortgage is
recorded, nor be liable for its validity or its priority as a first deed of
trust, or otherwise, nor shall the Trustee be answerable or responsible for
performance or observance of the covenants and agreements imposed upon the
Grantor or the Beneficiary by this Mortgage or any other agreement. The
Trustee, as well as the Beneficiary, shall have authority in their
respective discretion to employ agents and attorneys in the execution of
this trust and to protect the interest of the Beneficiary hereunder, and to
the extent permitted by applicable
28
law they shall be compensated and all expenses relating to the employment
of such agents and/or attorneys, including expenses of litigation, shall be
paid out of the proceeds of the sale of the Trust Property conveyed hereby
should a sale be had, but if no such sale be had, all sums so paid out
shall be recoverable to the extent permitted by applicable law by all
remedies at law or in equity.
(e) At any time, or from time to time, without liability therefor and,
with 10 days' prior written notice to the Grantor, upon written request of
the Beneficiary and without affecting the effect of this Mortgage upon the
remainder of the Trust Property, the Trustee may (i) reconvey any part of
the Trust Property, (ii) consent in writing to the making of any map or
plat thereof, so long as the Grantor has consented thereto, (iii) join in
granting any easement thereon, so long as the Grantor has consented thereto
or (iv) join in any extension agreement or any agreement subordinating the
lien or charge hereof.
Section 3.9 Subrogation. This Mortgage is made with full substitution and
-----------
subrogation of the Beneficiary in and to all covenants and warranties by others
heretofore given or made in respect of the Trust Property or any part thereof.
To the extent that proceeds of the Notes are used to pay any outstanding lien,
charge or prior encumbrance against the Trust Property, such proceeds have been
or will be advanced by the Beneficiary at the Grantor's request and the
Beneficiary shall be subrogated to any and all rights and liens held by any
owner or holder of such outstanding liens, charges and prior encumbrances,
irrespective of whether those liens, charges or encumbrances are released.
Section 3.10 Beneficiary and Lender Powers. Without affecting the liability
-----------------------------
of any other Person liable for the payment of any obligations herein mentioned
and without affecting the lien or charge of this Mortgage upon any portion of
the Trust Property not then or theretofore released as security for the full
amount of all unpaid Obligations, from time to time, regardless of consideration
and without notice to or consent by the holder of any subordinate lien,
encumbrance, right, title or interest in or to the Trust Property, the
Beneficiary and/or the Secured Parties, or any of them, may (a) release any
persons liable for or on any Obligation, (b) extend the maturity or alter any of
the terms of any Obligation, (c) modify the interest rate payable on the
principal balance of the Obligations, (d) grant other indulgences, (e) release
or reconvey, or cause to be released or reconveyed at any time at the
Beneficiary's option any parcel, portion or all of the Trust Property, (f) take
or release any other or additional security for any obligations herein mentioned
or (g) make compositions or other arrangements with debtors in relation thereto.
Section 3.11 Enforceability of Mortgage. This Mortgage is deemed to be and
--------------------------
may be enforced from time to time as an assignment, chattel mortgage, contract,
deed of trust, deed to secure debt, financing statement, real estate mortgage or
security agreement, and from time to time as any one or more thereof, as is
appropriate under applicable laws. A carbon, photographic or other reproduction
of this Mortgage or any financing statement in connection herewith shall be
sufficient as a financing statement for any and all purposes.
Section 3.12 Amendments. No amendment, modification or waiver of any
----------
provision of this Mortgage and no consent to any departure by the Grantor
therefrom shall in any event be
29
effective unless the same shall be in writing and shall be executed and
delivered in accordance with the Intercreditor Agreement, and then such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 3.13 Applicable Law. THIS MORTGAGE SHALL BE GOVERNED BY AND
--------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE WHERE THE PREMISES
ARE LOCATED.
30
IN WITNESS WHEREOF, this Mortgage has been duly authorized and has been
executed and delivered, under seal, to the Trustee and the Beneficiary by the
Grantor on the date first above written.
ATTEST US ONCOLOGY, INC.
By:
- --------------------------- -----------------------------
Secretary Name:
- -------------- -----------------------------
Title:
-----------------------------
[Corporate Seal]
Attachments:
- ------------
Exhibit A - The Land
- ---------
Exhibit B - The Permitted Encumbrances
- ---------
Exhibit C - The Material Agreements
- ---------
31
STATE OF
---------------------
COUNTY OF
--------------------
I, , a Notary Public of the aforesaid
----------------------------------
County and State, do hereby certify that
personally appeared before me
- --------------------------------------------------
this day and acknowledged that (s)he is the of
--------------------------------
US ONCOLOGY, INC., a Delaware corporation, and that by authority duly given and
as an act of the corporation, the foregoing instrument was signed in its name by
its President, and attested by herself/himself as
and sealed with its common
- -----------------------------------------------
corporate seal.
Witness my hand and notarial seal this day of February, 2002.
------
[STAMP/SEAL]
--------------------------------------
Notary Public
My Commission Expires:
- --------------------------
32
EXHIBIT A
---------
Legal Description
[To be attached]
EXHIBIT B
---------
Permitted Encumbrances
[To be attached]
EXHIBIT C
---------
Material Agreements
[To be attached]