AMENDED AND RESTATED CREDIT AGREEMENT
by and among
SHERIDAN HEALTHCARE, INC.,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH),
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
March 12, 1997
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 12, 1997
(the "Agreement"), is made by and among SHERIDAN HEALTHCARE, INC., a Delaware
corporation having its principal place of business in Hollywood, Florida (the
"Borrower"), NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking
association organized and existing under the laws of the United States, in its
capacity as a Lender ("NationsBank"), and each other financial institution
executing and delivering a signature page hereto and each other financial
institution which may hereafter execute and deliver an instrument of assignment
with respect to this Agreement pursuant to Section 12.1 (hereinafter such
financial institutions may be referred to individually as a "Lender" or
collectively as the "Lenders"), and NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a
national banking association organized and existing under the laws of the United
States, in its capacity as agent for the Lenders (in such capacity, and together
with any successor agent appointed in accordance with the terms of Section 11.9,
the "Agent");
W I T N E S S E T H:
--------------------
WHEREAS, the Borrower and NationsBank have heretofore entered into a
Revolving Credit Agreement dated November 1, 1995 (the "Prior Agreement")
pursuant to which NationsBank has agreed to make a revolving credit facility of
up to $45,000,000 to the Borrower, which facility has been guaranteed by certain
subsidiaries and affiliates (the "Guarantors") of the Borrower by Guaranty
Agreements (the "Guarantys"), and the Borrower and the Guarantors have secured
their obligations pursuant to (i) a Security Agreement dated November 1, 1995
(the "Security Agreement") by which the Borrower and the Guarantors have granted
to NationsBank a security interest in property described therein; and
WHEREAS, the Borrower has requested that the Lenders amend and restate
the Prior Agreement in its entirety in order to provide for a revolving credit
facility of up to $35,000,000, the proceeds of which are to be used for general
corporate purposes including working capital, capital expenditures, permitted
acquisitions, and refinancing certain indebtedness and which shall include a
letter of credit facility of up to $2,000,000 for the issuance of standby
letters of credit; and
WHEREAS, the Lenders are willing to make such revolving credit and
letter of credit facilities available to the Borrower upon the terms and
conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
ARTICLE I
Definitions and Terms
1.1. Amendment and Restatement. The Borrower, the Agent, and the Lender
hereby agree that upon the effectiveness of this Agreement, the terms and
provisions of the Prior Agreement shall be and hereby are amended and restated
in their entirety by the terms and conditions of this Agreement and the terms
and provisions of the Prior Agreement, except as otherwise provided herein,
shall be superseded by this Agreement.
This Agreement is given as a substitution of, and not as a payment of,
the obligations of Borrower under the Prior Agreement and is not intended to
constitute a novation of the Prior Agreement. Except as otherwise selected by
the Borrower by delivery of a Borrowing Notice prior to the Closing Date in
accordance with the terms hereof, upon the effectiveness of this Agreement all
amounts outstanding and owing by Borrower under the Prior Agreement as of the
Closing Date, as determined by the Lender, shall constitute Advances hereunder
accruing interest with respect to Base Loans under the Prior Agreement, at the
Base Rate hereunder. All of the indebtedness, liabilities and obligations owing
by the Borrower under the Prior Agreement shall continue to be secured by the
"Collateral" as defined in the Prior Agreement and Borrower acknowledges and
agrees that the "Collateral" as defined in the Prior Agreement remains subject
to a security interest in favor of NationsBank in its capacity as Agent
hereunder for the ratable benefit of the Lenders and to secure the liabilities
of Borrower re-evidenced by this Agreement and the other Loan Documents.
1.2. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest
at the time it becomes exercisable by the holder thereof), whether by
purchase of such equity interest or upon exercise of an option or warrant
for, or conversion of securities into, such equity interest, or (ii) assets
of another Person which constitute all or substantially all of the assets
of such Person or of a line or lines of business conducted by such Person.
"Advance" means a borrowing under the Revolving Credit Facility
consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under
common control with the Borrower; or (ii) which beneficially owns or holds
5% or more of any class of the outstanding voting stock (or in the case of
a Person which is not a corporation, 5% or more of the equity interest) of
the Borrower; or 5% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 5% or more of the
equity interest) of which is beneficially owned or held by the Borrower.
The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting stock, by contract or
otherwise.
"Applicable Commitment Percentage" means, with respect to each Lender
at any time, a fraction, the numerator of which shall be such Lender's
Revolving Credit Commitment and the denominator of which shall be the Total
Revolving
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Credit Commitment, which Applicable Commitment Percentage for each
Lender as of the Closing Date is as set forth in Exhibit A; provided that
the Applicable Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in
accordance with Section 12.1.
"Applicable Margin" means for each Eurodollar Rate Loan that percent
per annum set forth below, which shall be based upon the Consolidated
Leverage Ratio for the Four-Quarter Period most recently ended as specified
below:
------ --------------------------------------- ----------------------------
Tier Consolidated Leverage Ratio Eurodollar Applicable Margin
------ --------------------------------------- ----------------------------
I Less than 1.50 to 1.00 1.125%
------ --------------------------------------- ----------------------------
II Equal to or greater than 1.50 to 1.00 1.375%
and less than 2.00 to 1.00
------ --------------------------------------- ----------------------------
III Equal to or greater than 2.00 1.625%
to 1.00 and less than 2.50 to 1.00
------ --------------------------------------- ----------------------------
IV Equal to or greater than 2.50 to 1.00 1.875%
and equal to or less than 3.00 to 1.00
------ --------------------------------------- ----------------------------
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in the
Applicable Margin following each Determination Date shall be determined
based upon the computations set forth in the certificate furnished to the
Agent pursuant to Section 8.1(a)(ii) and Section 8.1(b)(ii), subject to
review and confirmation of such computations by the Agent, and shall be
effective commencing on the first Business Day next following the date such
certificate is received (or, if earlier, the date such certificate was
required to be delivered) until the first Business Day following the date
on which a new certificate is delivered or is required to be delivered,
whichever shall first occur; provided however, if the Borrower shall fail
to deliver any such certificate within the time period required by Section
8.1, then the Applicable Margin shall be Tier IV until the appropriate
certificate is so delivered. From the Closing Date to the first Business
Day next following the date the first certificate is received, the
Applicable Margin shall be 1.625%.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of Credit.
"Assignment and Acceptance" shall mean an Assignment and Acceptance in
the form of Exhibit B (with blanks appropriately filled in) delivered to
the Agent in connection with an assignment of a Lender's interest under
this Agreement pursuant to Section 12.1.
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"Authorized Representative" means any of the Chairman of the Board,
the President, the Chief Financial Officer, the Vice President-Finance, or
the General Counsel of the Borrower or, any other Person expressly
designated by the Board of Directors of the Borrower (or the appropriate
committee thereof) as an Authorized Representative of the Borrower, as set
forth from time to time in a certificate in the form of Exhibit C.
"Base Rate" means the per annum rate of interest equal to the greater
of (i) the Prime Rate or (ii) the Federal Funds Effective Rate plus
one-half of one percent (1/2%). Any change in the Base Rate resulting from
a change in the Prime Rate or the Federal Funds Effective Rate shall become
effective as of 12:01 A.M. of the Business Day on which each such change
occurs. The Base Rate is a reference rate used by the Agent in determining
interest rates on certain loans and is not intended to be the lowest rate
of interest charged on any extension of credit to any debtor.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made to satisfy
Reimbursement Obligations arising from a drawing under a Letter of Credit.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body).
"Borrower's Account" means a demand deposit account number 3603892011
or any successor account with the Agent, which may be maintained at one or
more offices of the Agent or an agent of the Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) with respect to any Base Rate Loan, any day
which is not a Saturday, Sunday or a day on which banks in the States of
New York and North Carolina are authorized or obligated by law, executive
order or governmental decree to be closed and, (ii) with respect to any
Eurodollar Rate Loan, any day which is a Business Day, as described above,
and on which the relevant international financial markets are open for the
transaction of business contemplated by this Agreement in London, England,
New York, New York and Charlotte, North Carolina.
"Capital Expenditures" means, with respect to the Borrower and the
Guarantors, for any period the sum of (without duplication) (i) all
expenditures (whether paid in cash or accrued as liabilities) bythe
Borrower or any Guarantor during such period for items that would be
classified as "property, plant or equipment" or comparable items on the
consolidated balance sheet of the Borrower and the Guarantors, including
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without limitation all transactional costs incurred in connection with such
expenditures provided the same have been capitalized, excluding, however,
the amount of any Capital Expenditures paid for with proceeds of casualty
insurance as evidenced in writing and submitted to the Agent together with
any compliance certificate delivered pursuant to Section 8.1(a) or (b), and
excluding all expenditures which are included in the Cost of Acquisition
with respect to an Acquisition, and (ii) with respect to any Capital Lease
entered into by the Borrower or a Guarantor during such period, the present
value of the lease payments due under such Capital Lease over the term of
such Capital Lease applying a discount rate equal to the interest rate
provided in such lease (or in the absence of a stated interest rate, that
rate used in the preparation of the financial statements described in
Section 8.1(a)), all the foregoing in accordance with GAAP applied on a
Consistent Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board and
any successor thereof.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) other than existing shareholders at
the Closing Date either (A) becomes the "beneficial owner" (as defined
in Rule 13d-3 of the Exchange Act ), directly or indirectly, of Voting
Stock of the Borrower (or securities convertible into or exchangeable
for such Voting Stock) representing thirty-five percent (35%) or more
of the combined voting power of all Voting Stock of the Borrower (on a
fully diluted basis) or (B) otherwise acquires the ability, directly
or indirectly, to elect a majority of the board of directors of the
Borrower; or
(ii) if TA Associates shall at anytime cease to own, directly or
indirectly, at least fifteen percent (15%) of the combined voting
power of all Voting Stock of the Borrower;or
(iii) during any period of up to 12 consecutive months,
commencing on the Closing Date, individuals who at the beginning of
such 12-month period were directors of the Borrower shall cease for
any reason (other than the death, disability or retirement of an
officer of the Borrower that is serving as a director at such time so
long as another officer of the Borrower replaces such Person as a
director) to constitute a majority of the board of directors of the
Borrower; or
(iv) any Person or two or more Persons who are stockholders other
than existing stockholders as of the Closing Date, either directly or
indirectly, acting in concert shall have acquired, after the Closing
Date, by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence on the management or policies of the Borrower.
5
"Closing Date" means the date as of which this Agreement is executed by
the Borrower, the Lenders and the Agent and on which the conditions set forth
in Section 6.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Collateral" means, collectively, all property of the Borrower, any
Guarantor or any other Person in which the Agent or any Lender is granted a
Lien as security for all or any portion of the Obligations under any Security
Instrument.
"Consistent Basis" in reference to the application of GAAP means the
accounting principles observed in the period referred to are comparable in
all material respects to those applied in the preparation of the audited
financial statements of the Borrower referred to in Section 7.6(a).
"Consolidated EBITDA" means, with respect to the Borrower and the
Guarantors for any Four-Quarter Period ending on the date for which the
computation thereof is being made, the sum of, without duplication, (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) taxes on
income, (iv) amortization, (v) depreciation, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis, and (vi) certain
one-time charges of $17,360,000 incurred in the fourth quarter of 1996;
provided, however, that with respect to an Acquisition that is accounted for
as a"purchase", for the first four Four-Quarter Periods ending after the date
of such Acquisition, the computation of Consolidated EBITDA shall include the
actual historical results of operations of the Person or assets so acquired,
which amounts shall be determined on a historical pro forma basis as if such
Acquisition had been consummated as a "pooling of interests" plus certain
demonstrable cash flow adjustments approved by the Agent.
"Consolidated Fixed Charge Ratio" means, with respect to the Borrower
and the Guarantors for any Four-Quarter Period ending on the date for which
the computation thereof is being made, the ratio of (i) Consolidated EBITDA
for such period plus Consolidated Lease Payments for such period less
(without duplication) Capital Expenditures for such period, to (ii)
Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to the Borrower and the
Guarantors for any Four-Quarter Period ending on the date for which the
computation thereof is being made, the sum of, without duplication, (i)
Consolidated Interest Expense, (ii) current maturities of Consolidated
Indebtedness as of the end of such Four-Quarter Period (but excluding any
amounts outstanding under the Revolving Credit Facility and any insurance
premium financing plan that fully amortizes within one year) (iii)
Consolidated Lease Payments for such period and (iv) all dividends paid to
shareholders of the Borrower, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
6
"Consolidated Indebtedness" means all Indebtedness for Money Borrowed
and all Deferred Excess Compensation of the Borrower and the Guarantors, all
determined on a consolidated basis.
"Consolidated Interest Expense" means, with respect to any period ending
on the date for which the computation thereof is being made, the gross
interest expense of the Borrower and the Guarantors, including without
limitation (i) the current amortized portion of debt discounts to the extent
included in gross interest expense, (ii) the current amortized portion of all
fees (including fees payable in respect of any Swap Agreement) payable in
connection with the incurrence of Indebtedness to the extent included in
gross interest expense and (iii) the portion of any payments made in
connection with Capital Leases allocable to interest expense, all determined
on a consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Lease Payments" means, with respect to any period ending
on the date for which computation thereof is being made, the gross amount of
all lease or rental payments, whether or not characterized as rent, of the
Borrower and the Guarantors, excluding payments in respect of Capital Leases
constituting Indebtedness, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Leverage Ratio" means, for any date for which the
computation thereof is being made, the ratio of (i) Consolidated Indebtedness
(determined as at such date) to (ii) Consolidated EBITDA (for the
Four-Quarter Period ending on (or most recently ended prior to) such date).
"Consolidated Net Income" means, for any period ending on the date for
which computation thereof is being made, the gross revenues from operations
of the Borrower and the Guarantors (including payments received by the
Borrower and the Guarantors of (i) interest income, and (ii) dividends and
distributions made in the ordinary course of their businesses by Persons in
which investment is permitted pursuant to this Agreement and not related to
an extraordinary event), less all operating and non-operating expenses of the
Borrower and the Guarantors including taxes on income, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent Basis; but
excluding (for all purposes other than compliance with Section 9.1(a)) hereof
as income: (i) net gains on the sale, conversion or other disposition of
capital assets, (ii) net gains on the acquisition, retirement, sale or other
disposition of capital stock and other securities of the Borrower or the
Guarantors, (iii) net gains on the collection of proceeds of life insurance
policies, (iv) any write-up of any asset, and (v) any other net gain or
credit of an extraordinary nature as determined in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Net Worth" means, as of any date for which the amount
thereof is to be determined, the consolidated stockholder's equity of the
Borrower and the Guarantors as determined in accordance with GAAP minus
(without duplication of deductions in respect of items already deducted in
arriving at consolidated stockholder's equity) (i) all reserves (other than
contingency reserves not allocated to any particular purpose), including
without limitation reserves for depreciation, depletion, amortization,
obsolescence, deferred income taxes, insurance and inventory valuation and
(ii) any treasury stock all as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
7
"Consolidated Total Assets" means, as of any date for which the amount
thereof is to be determined, the net book value of all assets of the Borrower
and the Guarantors as determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Contingent Obligation" of any Person means all contingent liabilities
required (or which, upon the creation or incurring thereof, would be
required) to be included in the financial statements (including footnotes) of
such Person in accordance with GAAP applied on a Consistent Basis, including
Statement No. 5 of the Financial Accounting Standards Board, all Rate Hedging
Obligations and Letters of Credit and any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or other
obligation of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including obligations of such Person however
incurred:
(1) to purchase such Indebtedness or other obligation or any property
or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the purchase or
payment of such Indebtedness or other obligation, or (ii) to
maintain a minimum working capital, net worth or other balance
sheet condition or any income statement condition of the primary
obligor;
(3) to grant or convey any lien, security interest, pledge, charge or
other encumbrance on any property or assets of such Person to
secure payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other property or
services primarily for the purpose of assuring the owner or
holder of such Indebtedness or obligation of the ability of the
primary obligor to make payment of such Indebtedness or other
obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect
thereof.
Such liabilities shall be computed at the amount which, in light of all
the facts and circumstances existing at the time, represent in the reasonable
judgment of the Agent the present value of the amount which can reasonably be
expected to become an actual or matured liability. The Borrower shall furnish
to the Agent the calculation of such Contingent Obligations and such
information as it shall reasonably deem necessary in order to calculate such
present value.
8
"Contract Provider" means any Person or any employee, agent or
subcontractor of such Person who provides professional health care services
under or pursuant to any contract with the Borrower or any Guarantor.
"Cost of Acquisition" means, with respect to any Acquisition, as at the
date of entering into any agreement therefor, the sum of the following
(without duplication): (i) the value of the capital stock, warrants or
options to acquire capital stock of the Borrower or any Guarantor to be
transferred in connection therewith, (ii) the amount of any cash and fair
market value of other property (excluding property described in clause (i)
and the unpaid principal amount of any debt instrument) given as
consideration, (iii) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any Indebtedness
incurred, assumed or acquired by the Borrower or any Guarantor in connection
with such Acquisition, (iv) all additional purchase price amounts in the form
of earnouts and other contingent obligations that should be recorded on the
financial statements of the Borrower and the Guarantors in accordance with
GAAP, (v) all amounts paid in respect of covenants not to compete, consulting
agreements that should be recorded as a liability on the financial statements
of the Borrower and the Guarantors in accordance with GAAP, and other
affiliated contracts in connection with such Acquisition, (vi) the aggregate
fair market value of all other consideration given by the Borrower or any
Guarantor in connection with such Acquisition, and (vii) out of pocket
transaction costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such transaction, and other similar
transaction costs so incurred.
"Credit Party" means, collectively, the Borrower, each Guarantor and
each other Person providing Collateral pursuant to any Security Instrument.
"Default" means any event or condition which, with the giving or receipt
of notice or lapse of time or both, would constitute an Event of Default
hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate Loan,
until the end of the Interest Period applicable thereto, a rate of two
percent (2%) above the Eurodollar Rate applicable to such Loan, and
thereafter at a rate of interest per annum which shall be two percent (2%)
above the Base Rate, (ii) with respect to Base Rate Loans, at a rate of
interest per annum which shall be two percent (2%) above the Base Rate and
(iii) in any case, the maximum rate permitted by applicable law, if lower.
"Deferred Excess Compensation" means the present value of those amounts
payable to a Person pursuant to an employement contract with the Borrower or
a Guarantor in excess of reasonable compensation for services which present
value is reflected on the balance sheet of the Borrower or such Guarantor as
a liability.
9
"Dollars" and the symbol "$" means dollars constituting legal tender for
the payment of public and private debts in the United States of America.
"Eligible Securities" means the following obligations and any other
obligations previously approved in writing by the Agent:
(a) Government Securities;
(b) obligations of any corporation organized under the laws of
any state of the United States of America or under the laws of any
other nation, payable in the United States of America, expressed to
mature not later than 180 days following the date of issuance thereof
and rated in an investment grade rating category by S&P and Moody's;
(c) interest bearing demand or time deposits issued by any Lender
or certificates of deposit maturing within one year from the date of
issuance thereof and issued by a bank or trust company organized under
the laws of the United States or of any state thereof having capital
surplus and undivided profits aggregating at least $400,000,000 and
being rated "A-3" or better by S&P or "A" or better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in obligations described
in paragraphs (a) through (f) above, the shares of which mutual funds
are at all times rated "AAA" by S&P;
(h) tax-exempt or taxable adjustable rate preferred stock issued
by a Person having a rating of its long term unsecured debt of "A" or
better by S&P or "A-3" or better by Moody's; and
(i) asset-backed remarketed certificates of participation
representing a fractional undivided interest in the assets of a trust,
which certificates are rated at least "A-1" by S&P and "P-1" by
Moody's.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of the
Borrower or any of its ERISA Affiliates or is assumed bythe Borrower or any
of its ERISA Affiliates in connection with any Acquisition or (ii) has at any
time been maintained for the employees of the Borrower or any current or
former ERISA Affiliate.
10
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, as amended,
the Clean Air Act, as amended, the Clean Water Act, as amended, any other
"Superfund" or "Superlien" law or any other federal, or applicable state or
local statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any Person or trade
or business which is a member of a group which is under common control with
the Borrower, who together with the Borrower, is treated as a single employer
within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated according
to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
---------------------------
Rate 1-Eurodollar Reserve Percentage Margin
"Eurodollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D or any successor regulation, as the maximum reserve requirement
(including any basic, supplemental, emergency, special, or marginal reserves)
applicable with respect to Eurocurrency liabilities as that term is defined
in Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of Eurodollar Rate Loans is
determined), whether or not the Agent or any Lender has any Eurocurrency
liabilities subject to such requirements, without benefits of credits or
proration, exceptions or offsets that may be available from time to time to
the Agent or any Lender. The Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" means any of the occurrences set forth as such in
Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Facility Guaranty" means the Amended and Restated Guaranty and
Suretyship Agreement among the Guarantors and the Agent for the benefit of
11
the Lenders, delivered as of the Closing Date and such other Guaranty and
Suretyship Agreements otherwise pursuant to Section 8.20, as the same may be
amended, modified or supplemented.
"Facility Termination Date" means the date on which the Revolving Credit
Termination Date shall have occurred, no Letters of Credit shall remain
outstanding and the Borrower shall have fully, finally and irrevocably paid
and satisfied all Obligations.
"Federal Funds Effective Rate" means, for any day, the rate per annum
(rounded upward to the nearest 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Effective Rate for such day shall be such rate on such
transactions on the next preceding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds
Effective Rate for such day shall be the average rate quoted to the Agent on
such day on such transaction as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the Borrower and
the Guarantors commencing on January 1 of each calendar year and ending on
December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law, ordinance,
code, rule, regulation, order or decree of any foreign nation or any
province, state, territory, protectorate or other political subdivision
thereof regulating, relating to, or imposing liability or standards of
conduct concerning, any Employee Benefit Plan.
"Four-Quarter Period" means a period of four full consecutive fiscal
quarters of the Borrower and the Guarantors, taken together as one accounting
period.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set
forth in pronouncements of the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances as
of the date of a report.
"Government Securities" means direct obligations of, or obligations the
timely payment of principal and interest on which are fully and
unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state, municipal,
national or other governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
12
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"Guarantors" means, at any date, the Subsidiaries, Partnerships and
professional corporations or associations whose financial results are
included in the consolidated financial statements of the Borrower.
"Hazardous Material" means and includes any hazardous, toxic or
dangerous waste, substance or material, the generation, handling, storage,
disposal, treatment or emission of which is subject to any Environmental Law.
"HCFA" means the United States Health Care Financing Administration and
any successor thereto.
"Indebtedness" means with respect to any Person, without duplication,
all Indebtedness for Money Borrowed, all indebtedness of such Person for the
acquisition of property, all indebtedness secured by any Lien on the property
of such Person whether or not such indebtedness is assumed, all Letter of
Credit Outstandings, all liability of such Person by way of endorsements
(other than for collection or deposit in the ordinary course of business),
and all Contingent Obligations; but excluding all accounts payable and
accrued expenses in the ordinary course of business so long as payment
therefor is due within one year; provided that in no event shall the term
Indebtedness include surplus and retained earnings, lease obligations (other
than pursuant to Capital Leases), reserves for deferred income taxes and
investment credits, other deferred credits or reserves, or deferred
compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed, including
without limitation all Capital Leases, all insurance premium financing and
the deferred purchase price of any property or asset, evidenced by a
promissory note, bond, debenture or similar written obligation for the
payment of money (including conditional sales or similar title retention
agreements), other than trade payables incurred in the ordinary course of
business.
"Interbank Offered Rate" means, with respect to any Eurodollar Rate Loan
for the Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If or any reason such rate is not available, the term
"Interbank Offered Rate" shall mean, with respect to any Eurodollar Rate Loan
for the Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period;
13
"Interest Period" means, for each Eurodollar Rate Loan, a period
commencing on the date such Eurodollar Rate Loan is made or converted and
ending, at the Borrower's option, on the date one, two, three, or six months
thereafter as notified to the Agent by the Authorized Representative three
(3) Business Days prior to the beginning of such Interest Period; provided,
that,
(i) if the Authorized Representative fails to notify the
Agent of the length of an Interest Period three (3) Business Days
prior to the first day of such Interest Period, the Loan for
which such Interest Period was to be determined shall be deemed
to be a Base Rate Loan as of the first day thereof;
(ii)if an Interest Period for a Eurodollar Rate Loan would
end on a day which is not a Business Day, such Interest Period
shall be extended to the next Business Day (unless such extension
would cause the applicable Interest Period to end in the
succeeding calendar month, in which case such Interest Period
shall end on the next preceding Business Day);
(iii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month;
(iv) no Interest Period shall extend past the Stated
Termination Date; and
(v) there shall not be more than five (5) Interest Periods
in effect on any day.
"Interest Rate Selection Notice" means the written notice delivered by
an Authorized Representative in connection with the election of a subsequent
Interest Period for any Eurodollar Rate Loan or the conversion of any
Eurodollar Rate Loan into a Base Rate Loan or the conversion of any Base Rate
Loan into a Eurodollar Rate Loan, in the form of Exhibit E.
"Issuing Bank" means initially NationsBank and thereafter any Lender
which is successor to NationsBank as issuer of Letters of Credit under
Article III.
"LCAccount Agreement" means the LC Account Agreement dated as of the
date hereof between the Borrower and the Agent, as amended, modified or
supplemented from time to time.
"Lending Office" means, as to each Lender, the Lending Office of such
Lender designated on the signature pages hereof or in an Assignment and
Acceptance or such other office of such Lender (or of an affiliate of such
14
Lender) as such Lender may from time to time specify to the Authorized
Representative and the Agent as the office by which its Loans are to be made
and maintained.
"Letter of Credit" means a standby letter of credit issued by the
Issuing Bank for the account of the Borrower in favor of a Person advancing
credit or securing an obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to acquire Participations in respect of Letters of
Credit and Reimbursement Obligations up to an aggregate amount at any one
time outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Letter of Credit Commitment as the same may be increased or
decreased from time to time pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in Article III
hereof providing for the issuance by the Issuing Bank for the account of the
Borrower of Letters of Credit in an aggregate stated amount at any time
outstanding not exceeding the Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of determination,
the aggregate amount remaining undrawn under all Letters of Credit plus
Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or
a lease, consignment or bailment for security purposes. For the purposes of
this Agreement, the Borrower and any Guarantor shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, financing lease, or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for
security purposes.
"Loan" or "Loans" means any borrowing pursuant to an Advance under the
Revolving Credit Facility.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, the Swap Agreements, and
all other instruments and documents heretofore or hereafter executed or
delivered to or in favor of any Lender or the Agent in connection with the
Loans made and transactions contemplated under this Agreement, as the same
may be amended, supplemented or replaced from the time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, properties, operations or condition, financial or otherwise, of the
Borrower or any of the Guarantors, taken as a whole, (ii) the ability of any
Credit Party to pay or perform its respective obligations, liabilities and
indebtedness under the Loan Documents as such payment or performance becomes
due in accordance with the terms thereof, or (iii) the rights, powers and
remedies of the Agent or any Lender under any Loan Document or the validity,
legality or enforceability thereof (including for purposes of clauses (ii)
and (iii) the imposition of burdensome conditions thereon).
15
"Material Subsidiary" means any direct or indirect Subsidiary of the
Borrower which (i) has total assets equal to or greater than 5% of
Consolidated Total Assets (calculated as of the end of the most recent fiscal
period with respect to which the Agent shall have received financial
statements required to be delivered pursuant to Sections 8.1(a) or (b) (or if
prior to delivery of any financial statements pursuant to such Sections, then
calculated with respect to the Fiscal Year end financial statements
referenced in Section 7.6) (the "Required Financial Information")) or (ii)
has net income equal to or greater than 5% of Consolidated Net Income
(calculated for the most recent period for which the Agent has received the
Required Financial Information).
"Material Partnership" means (i) any general or limited partnership in
which the Borrower or a Guarantor is a General Partner, or (ii) any general
or limited partnership in which the Borrower or a Guarantor is a Limited
Partner and (A) has total assets equal to or greater than 5% of Consolidated
Total Assets (calculated as of the most recent fiscal period with respect to
which the Agent shall have received the Required Information or (B) has net
income equal to or greater than 5% of Consolidated Net Income (calculated for
the most recent period for which the Agent has received the Required
Financial Information).
"Medicaid Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that health care operations are in
compliance with all the conditions of participation set forth in the Medicaid
Regulations.
"Medicaid Provider Agreement" means an agreement entered into between a
state agency or other such entity administering the Medicaid program and a
health care operation under which the health care operation agrees to provide
services for Medicaid patients in accordance with the terms of the agreement
and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the
Social Security Act and any statutes succeeding thereto; (ii) all applicable
provisions of all federal rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (i) above and all federal administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
16
described in clause (i) above; (iii) all state statutes and plans for medical
assistance enacted in connection with the statutes and provisions described
in clauses (i) and (ii) above; and (iv) all applicable provisions of all
rules, regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in
clause (iii) above and all state administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law
promulgated pursuant to or in connection with the statutes described in
clause (ii) above, in each case as may be amended, supplemented or otherwise
modified from time to time.
"Medicare Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that the health care operation is in
compliance with all the conditions of participation set forth in the Medicare
Regulations.
"Medicare Provider Agreement" means an agreement entered into between a
state agency or other such entity administering the Medicare program and a
health care operation under which the health care operation agrees to provide
services for Medicare patients in accordance with the terms of the agreement
and Medicare Regulations.
"Medicare Regulations" means, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established
by Title XVIII of the Social Security Act and any statutes succeeding
thereto; together with all applicable provisions of all rules, regulations,
manuals and orders and administrative, reimbursement and other guidelines
having the force of law of all Governmental Authorities (including without
limitation, Health and Human Services ("HHS"), HCFA, the Office of the
Inspector General for HHS, or any person succeeding to the functions of any
of the foregoing) promulgated pursuant to or in connection with any of the
foregoing having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making,
or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) Fiscal Years.
"Municipal Obligations" means general obligations issued by, and
supported by the full taxing authority of, any state of the United States of
America or of any municipal corporation or other public body organized under
the laws of any such state which are rated in the highest investment rating
category by both S&P and Moody's.
"Net Proceeds" from the issuance of equity or Indebtedness means cash
payments received therefrom as and when received, net of all legal,
accounting, banking, underwriting, title and recording fees and expenses,
commissions, discounts and other issuance expenses incurred in connection
therewith and all taxes required to be paid or accrued as a consequence of
such transaction.
17
"Notes" means, collectively, the promissory notes of the Borrower
evidencing Revolving Loans executed and delivered to the Lenders as provided
in Section 2.5 substantially in the form of Exhibit F.
"Obligations" means the obligations, liabilities and Indebtedness of the
Borrower with respect to (i) the principal and interest on the Loans as
evidenced by the Notes, (ii) the Reimbursement Obligations and otherwise in
respect of the Letters of Credit, (iii) all liabilities of Borrower to any
Lender which arise under a Swap Agreement, and (iv) the payment and
performance of all other obligations, liabilities and Indebtedness of the
Borrower to the Lenders or the Agent hereunder, under any one or more of the
other Loan Documents or with respect to the Loans.
"Participation" means, with respect to any Lender (other than the
Issuing Bank) and a Letter of Credit, the extension of credit represented by
the participation of such Lender hereunder in the liability of the Issuing
Bank in respect of a Letter of Credit issued by the Issuing Bank in
accordance with the terms hereof.
"Partnership" means any general or limited partnership (as defined by
the Florida Uniform Partnership Act) in which the Borrower or a Guarantor is
a partner.
"Partnership Interests" shall have the meaning therefor provided in the
Pledge Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code and
which (i) is maintained for employees of the Borrower or any of its ERISA
Affiliates or is assumed by the Borrower or any of its ERISA Affiliates in
connection with any Acquisition or (ii) has at any time been maintained for
the employees of the Borrower or any current or former ERISA Affiliate.
"Person" means an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, association, joint
venture or a government or agency or political subdivision thereof.
"Pledge Agreement" means, collectively (or individually as the context
may indicate), (i) that certain Amended and Restated Securities Pledge
Agreement dated as of the date hereof by and among the Borrower, certain
Guarantors and the Agent for the benefit of the Agent and the Lenders, and
(ii) any additional Pledge Agreement delivered to the Agent pursuant to
Section 8.20 as hereafter amended, supplemented or replaced from time to
time.
"Pledged Partnership Interests" has the meaning given to such term in
the Pledge Agreement.
18
"Pledged Securities" has the meaning given to such term in the Pledge
Agreement.
"Pledged Stock" has the meaning given to such term in the Pledge
Agreement.
"Pre-Refunded Municipal Obligations" means obligations of any state of
the United States of America or of any municipal corporation or other public
body organized under the laws of any such state which are rated, based on the
escrow, in the highest investment rating category by both S&P and Moody's and
which have been irrevocably called for redemption and advance refunded
through the deposit in escrow of Government Securities or other debt
securities which are (i) not callable at the option of the issuer thereof
prior to maturity, (ii) irrevocably pledged solely to the payment of all
principal and interest on such obligations as the same becomes due and (iii)
in a principal amount and bear such rate or rates of interest as shall be
sufficient to pay in full all principal of, interest, and premium, if any, on
such obligations as the same becomes due as verified by a nationally
recognized firm of certified public accountants.
"Prime Rate" means the rate of interest per annum announced publicly by
the Agent as its prime rate from time to time. The Prime Rate is not
necessarily the best or the lowest rate of interest offered by the Agent.
"Principal Office" means the office of the Agent at NationsBank,
National Association (South), Independence Center, 15th Floor, NC1 001-15-04,
Charlotte, North Carolina 28255, Attention: Agency Services, or such other
office and address as the Agent may from time to time designate.
"Rate Hedging Obligations" means any and all obligations of the Borrower
or any Guarantor, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts, warrants and those commonly known as
interest rate "swap" agreements; and (ii) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the foregoing.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Regulatory Change" means any change effective after the Closing Date in
United States federal or state laws or regulations (including Regulation D
and capital adequacy regulations) or foreign laws or regulations or the
adoption or making after such date of any interpretations, directives or
19
requests applying to a class of banks, which includes any of the Lenders,
under any United States federal or state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof
or compliance by any Lender with any request or directive regarding capital
adequacy, including those relating to "highly leveraged transactions,"
whether or not having the force of law, and whether or not failure to comply
therewith would be unlawful and whether or not published or proposed prior to
the date hereof.
"Reimbursement Obligation" shall mean at any time, the obligation of the
Borrower with respect to any Letter of Credit to reimburse the Issuing Bank
and the Lenders to the extent of their respective Participations (including
by the receipt by the Issuing Bank of proceeds of Loans pursuant to Section
3.2) for amounts theretofore paid by the Issuing Bank pursuant to a drawing
under such Letter of Credit.
"Repurchase Agreement" means a repurchase agreement entered into with
any financial institution whose debt obligations or commercial paper are
rated "A" by either of S&P or Moody's or "A-1" by S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating at least (i) if there shall
be two (2) or less Lenders, 100% of the aggregate Credit Exposures of all
Lenders on such date, (ii) if there shall be three (3) Lenders, 66-2/3%, and
(iii) if there shall be more than three (3) Lenders, 51%, of the aggregate
Credit Exposures of all the Lenders on such date. For purposes of the
preceding sentence, the amount of the "Credit Exposure" of each Lender shall
be equal to the aggregate principal amount of the Loans owing to such Lender
plus the aggregate unutilized amounts of such Lender's Revolving Credit
Commitment plus the amount of such Lender's Applicable Commitment Percentage
of Letter of Credit Outstandings; provided that, if any Lender shall have
failed to pay to the Issuing Bank its Applicable Commitment Percentage of any
drawing under any Letter of Credit resulting in an outstanding Reimbursement
Obligation, such Lender's Credit Exposure attributable to Letters of Credit
and Reimbursement Obligations shall be deemed to be held by the Issuing Bank
for purposes of this definition.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
Borrower or any of the Guarantors (other than those payable or distributable
solely to the Borrower or another Guarantor) now or hereafter outstanding,
except a dividend payable solely in shares of a class of stock to the holders
of that class; (b) any redemption, conversion, exchange, retirement or
similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of Borrower or any of the Guarantors
(other than those payable or distributable solely to the Borrower or another
Guarantor) now or hereafter outstanding; (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock of Borrower or any Guarantor now or
hereafter outstanding; and (d) any issuance and sale of capital stock of any
Guarantor (or any option, warrant or right to acquire such stock) other than
to the Borrower or another Guarantor.
20
"Revolving Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to make Loans to the Borrower up to an aggregate
principal amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in Article II
hereof providing for Loans to the Borrower by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of determination,
the aggregate principal amount of all Loans then outstanding and all interest
accrued thereon.
"Revolving Credit Termination Date" means (i) the Stated Termination
Date or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 10.1 upon the occurrence of an Event of Default, or (iii)
such date as the Borrower may voluntarily and permanently terminate the
Revolving Credit Facility by payment in full of all Revolving Credit
Outstandings and Letter of Credit Outstandings and cancellation of all
Letters of Credit.
"Revolving Loan" means any borrowing pursuant to an Advance under the
Revolving Credit Facility in accordance with Article II.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill.
"Security Agreement" means, collectively (or individually as the context
may indicate), (i) the Amended and Restated Security Agreement dated as of
the date hereof by the Borrower and the Guarantors to the Agent, and (ii) any
additional Security Agreement delivered to the Agent pursuant to Section 8.20
as hereafter modified, amended or supplemented from time to time.
"Security Instruments" means, collectively, the Pledge Agreement, the
Security Agreement, and all other agreements, instruments and other
documents, whether now existing or hereafter in effect, pursuant to which the
Borrower or any Guarantor shall grant or convey to the Agent or the Lenders a
Lien in property as security for all or any portion of the Obligations, as
any of them may be amended, modified or supplemented from time to time.
"Single Employer Plan" means any employee pension benefit plan covered
by Title IV of ERISA in respect of which the Borrower or any Guarantor is an
"employer" as described in Section 4001(b) of ERISA and which is not a
Multiemployer Plan.
21
"Solvent" means, when used with respect to any Person, that at the time
of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to pay its
debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means March 11, 2000.
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding voting stock or more than 50% of all equity interests
is owned directly or indirectly by the Borrower and/or by one or more of the
Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the Borrower and
any Lender with respect to Indebtedness evidenced by any or all of the Notes,
on terms mutually acceptable to Borrower and such Person and approved by each
of the Lenders, which agreements create Rate Hedging Obligations.
"Termination Event" means: (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder (unless the notice
requirement has been waived by applicable regulation); or (ii) the withdrawal
of the Borrower or any ERISA Affiliate from a Pension Plan during a plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA or was deemed such under Section 4068(f) of ERISA; or (iii) the
termination of a Pension Plan, the filing of a notice of intent to terminate
a Pension Plan or the treatment of a Pension Plan amendment as a termination
under Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or condition
which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; or (vi) the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan; or (vii) the imposition of a Lien
pursuant to Section 412 of the Code or Section 302 of ERISA; or (viii) any
event or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or Section 4245 of ERISA, respectively;
or (ix) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the
PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$2,000,000.
22
"Total Revolving Credit Commitment" means a principal amount equal to
$35,000,000, as reduced from time to time in accordance with Section 2.7.
-----------
"Voting Stock" means shares of capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
1.3. Rules of Interpretation.
------------------------
(a) All accounting terms not specifically defined herein shall have the
meanings assigned to such terms and shall be interpreted in accordance with
GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise defined
herein, except to the extent that the Uniform Commercial Code of another
jurisdiction is controlling, in which case such terms shall have the meaning
given in the Uniform Commercial Code of the applicable jurisdiction.
(c) The headings, subheadings and table of contents used herein or in
any other Loan Document are solely for convenience of reference and shall not
constitute a part of any such document or affect the meaning, construction or
effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses, annexes,
appendices, exhibits and schedules in or to this Agreement.
(e) All definitions set forth herein or in any other Loan Document shall
apply to the singular as well as the plural form of such defined term, and
all references to the masculine gender shall include reference to the
feminine or neuter gender, and vice versa, as the context may require.
(f) When used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like import
shall, unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article, section,
subsection, paragraph or clause thereof.
(g) References to "including" means including without limiting the
generality of any description preceding such term, and for purposes hereof
the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters, to
matters similar to those specifically mentioned.
23
(h) All dates and times of day specified herein shall refer to such
dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule ofconstruction that
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents and
all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or any other Person by
reference to the title of such officer shall be deemed to refer to each other
officer of such Person, however titled, exercising the same or substantially
similar functions.
(k) All references to any agreement or document as amended, modified or
supplemented, or words of similar effect, shall mean such document or
agreement, as the case may be, as amended, modified or supplemented from time
to time only as and to the extent permitted therein and in the Loan
Documents.
ARTICLE II
The Revolving Credit Facility
-----------------------------
2.1. Revolving Loans.
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(a) Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Advances to the Borrower under the
Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total
borrowing requested by the Borrower on any day determined by such Lender's
Applicable Commitment Percentage up to but not exceeding the Revolving Credit
Commitment of such Lender, provided, however, that the Lenders will not be
required and shall have no obligation to make any such Advance (i) so long as
a Default or an Event of Default has occurred and is continuing or (ii) if
the Agent has accelerated the maturity of any of the Notes as a result of an
Event of Default; provided further, however, that immediately after giving
effect to each such Advance, the principal amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings shall not exceed the Total
Revolving Credit Commitment. Within such limits, the Borrower may borrow,
repay and reborrow under the Revolving Credit Facility on a Business Day from
the Closing Date until, but (as to borrowings and reborrowings) not
including, the Revolving Credit Termination Date; provided, however, that (y)
no Revolving Loan that is a Eurodollar Rate Loan shall be made which has an
Interest Period that extends beyond the Stated Termination Date and (z) each
Revolving Loan that is a Eurodollar Rate Loan may, subject to the provisions
of Section 2.8, be repaid only on the last day of the Interest Period with
respect thereto unless such payment is accompanied by the additional payment,
if any, required by Section 5.4.
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(b) Amounts. Except as otherwise permitted by the Lenders from time to
time, the aggregate unpaid principal amount of the Revolving Credit
Outstandings plus Letter of Credit Outstandings shall not exceed at any time
the Total Revolving Credit Commitment, and, in the event there shall be
outstanding any such excess, the Borrower shall immediately make such
payments and prepayments as shall be necessary to comply with this
restriction. Each Revolving Loan hereunder, other than Base Rate Refunding
Loans, and each conversion under Section 2.8, shall be in an amount of at
least (i) $500,000, and, if greater than $500,000, an integral multiple of
$500,000 in the case of Eurodollar Rate Loans, and (ii) $100,000, and if
greater than $100,000, an integral multiple of $100,000 in the case of Base
Rate Loans.
(c) Advances. (i) An Authorized Representative shall give the Agent (1)
at least three (3) Business Days' irrevocable written notice by telefacsimile
transmission of a Borrowing Notice or Interest Rate Selection Notice (as
applicable) with appropriate insertions, effective upon receipt, of each
Revolving Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the conversion of a borrowing hereunder
from Base Rate Loans to Eurodollar Rate Loans) prior to 11:00 A.M. and (2)
irrevocable written notice by telefacsimile transmission of a Borrowing
Notice or Interest Rate Selection Notice (as applicable) with appropriate
insertions, effective upon receipt, of each Revolving Loan (other than Base
Rate Refunding Loans to the extent the same are effected without notice
pursuant to Section 2.1(c)(iv)) that is a Base Rate Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Eurodollar Rate Loans to Base Rate Loans) prior to 11:00 A.M.
on the day of such proposed Revolving Loan. Each such notice shall specify
the amount of the borrowing, the type of Revolving Loan (Base Rate or
Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan, the
Interest Period to be used in the computation of interest. Notice of receipt
of such Borrowing Notice or Interest Rate Selection Notice, as the case may
be, together with the amount of each Lender's portion of an Advance requested
thereunder, shall be provided by the Agent to each Lender by telefacsimile
transmission with reasonable promptness, but (provided the Agent shall have
received such notice by 11:00 A.M.) not later than 1:00 P.M. on the same day
as the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject
to the conditions of this Agreement, make the amount of the Advance or
Advances to be made by it on such day available by wire transfer to the Agent
in the amount of its pro rata share, determined according to such Lender's
Applicable Commitment Percentage of the Revolving Loan or Revolving Loans to
be made on such day. Such wire transfer shall be directed to the Agent at the
Principal Office and shall be in the form of Dollars constituting immediately
available funds. The amount so received by the Agent shall, subject to the
terms and conditions of this Agreement, be made available to the Borrower by
delivery of the proceeds thereof to the Borrower's Account or otherwise as
shall be directed in the applicable Borrowing Notice by the Authorized
Representative and reasonably acceptable to the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to convert the Revolving
Loans in accordance with Section 2.8. Eurodollar Rate Loans and Base Rate
Loans may be outstanding at the same time, provided, however, there shall not
be outstanding at any one time Eurodollar Rate Loans having more than five
(5) different Interest Periods. If the Agent does not receive a Borrowing
25
Notice or an Interest Rate Selection Notice giving notice of election of the
duration of an Interest Period or of conversion of any Loan to or
continuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
Section 2.1(c) or 2.8, the Borrower shall be deemed to have elected to
convert such Loans to (or continue such Loan as) a Base Rate Loan until the
Borrower notifies the Agent in accordance with Section 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Stated Termination Date, and the Borrower shall not immediately fully
reimburse the Issuing Bank in respect of such drawing, (A) provided that the
conditions to making a Revolving Loan as herein provided shall then be
satisfied, the Reimbursement Obligation arising from such drawing shall be
paid to the Issuing Bank by the Agent without the requirement of notice to or
from the Borrower from immediately available funds which shall be advanced as
a Base Rate Refunding Loan by each Lender under the Revolving Credit Facility
in an amount equal to such Lender's Applicable Commitment Percentage of such
Reimbursement Obligation, and (B) if the conditions to making a Revolving
Loan as herein provided shall not then be satisfied, each of the Lenders
shall fund by payment to the Agent (for the benefit of the Issuing Bank) in
immediately available funds the purchase from the Issuing Bank of their
respective Participations in the related Reimbursement Obligation based on
their respective Applicable Commitment Percentages of the Total Letter of
Credit Commitment. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof and the Borrower shall not immediately
reimburse the Issuing Bank in respect thereof, then notice of such drawing or
payment shall be provided promptly by the Issuing Bank to the Agent and the
Agent shall provide notice to each Lender by telephone or telefacsimile
transmission. If notice to the Lenders of a drawing under any Letter of
Credit is given by the Agent at or before 12:00 noon on any Business Day,
each Lender shall, pursuant to the conditions specified in this Section
2.1(c)(iv), either make a Base Rate Refunding Loan or fund the purchase of
its Participation in the amount of such Lender's Applicable Commitment
Percentage of such drawing or payment and shall pay such amount to the Agent
for the account of the Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 2:30 P.M. on the same Business Day. If
notice to the Lenders of a drawing under a Letter of Credit is given by the
Agent after 12:00 noon on any Business Day, each Lender shall, pursuant to
the conditions specified in this Section 2.1(c)(iv), either make a Base Rate
Refunding Loan or fund the purchase of its Participation in the amount of
such Lender's Applicable Commitment Percentage of such drawing or payment and
shall pay such amount to the Agent for the account of the Issuing Bank at the
Principal Office in Dollars and in immediately available funds before 12:00
noon on the next following Business Day. Any such Base Rate Refunding Loan
shall be advanced as, and shall continue as, a Base Rate Loan unless and
until the Borrower converts such Base Rate Loan in accordance with the terms
of Section 2.8.
2.2. Payment of Interest. (a) The Borrower shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Revolving Loan made by such Lender for the period commencing
on the date of such Revolving Loan until such Revolving Loan shall be due at
the then applicable Base Rate for Base Rate Loans or applicable Eurodollar
Rate for Eurodollar Rate Loans, as designated by the Authorized
Representative pursuant to Section 2.1; provided, however, that if any amount
shall not be paid when due (at maturity, by acceleration or otherwise), all
amounts outstanding hereunder shall bear interest thereafter at the Default
Rate. 26
(b) Interest on each Revolving Loan shall be computed on the basis of a
year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing March 31, 1997 for each Base Rate Loan, (ii) on the last day of
the applicable Interest Period for each Eurodollar Rate Loan, and (iii) upon
payment in full of the principal amount of such Revolving Loan.
2.3. Payment of Principal . The principal amount of each Revolving Loan
shall be due and payable to the Agent for the benefit of each Lender in full
on the Revolving Credit Termination Date, or earlier as specifically provided
herein. The principal amount of any Base Rate Loan may be prepaid in whole or
in part at any time. The principal amount of any Eurodollar Rate Loan may be
prepaid only at the end of the applicable Interest Period unless the Borrower
shall pay to the Agent for the account of the Lenders the additional amount,
if any, required under Section 5.4. All prepayments of Revolving Loans made
by the Borrower shall be in the amount of (i) $500,000 or such greater amount
which is an integral multiple of $100,000 in the case of Eurodollar Rate
Loans, (ii) $100,000 or such greater amount which is an integral multiple of
$100,000 in the case of Base Rate Loans, or (iii) the amount equal to all
Revolving Credit Outstandings or such other amount as necessary to comply
with Section 2.1(b) or Section 2.8.
2.4. Non-Conforming Payments. (a) Each payment of principal (including
any prepayment) and payment of interest and fees, and any other amount
required to be paid to the Lenders with respect to the Revolving Loans, shall
be made to the Agent at the Principal Office, for the account of each Lender,
in Dollars and in immediately available funds before 12:30 P.M. on the date
such payment is due. The Agent may, but shall not be obligated to, debit the
amount of any such payment which is not made by such time to any ordinary
deposit account, if any, of the Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately
available funds and prior to 12:30 P.M. to be a non-conforming payment. Any
such payment shall not be deemed to be received by the Agent until the later
of (i) the time such funds become available funds and (ii) the next Business
Day. Any non-conforming payment may constitute or become a Default or Event
of Default. Interest shall continue to accrue on any principal as to which a
non-conforming payment is made until the later of (x) the date such funds
become available funds or (y) the next Business Day at the Default Rate from
the date such amount was due and payable.
(c) In the event that any payment hereunder or under the Notes becomes
due and payable on a day other than a Business Day, then such due date shall
be extended to the next succeeding Business Day unless provided otherwise
under clause (ii) of the definition of "Interest Period"; provided that
interest shall continue to accrue during the period of any such extension and
provided further, that in no event shall any such due date be extended beyond
the Revolving Credit Termination Date.
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2.5. Notes. Revolving Loans made by each Lender shall be evidenced by
the Note payable to the order of such Lender in the respective amount of its
Applicable Commitment Percentage of the Revolving Credit Commitment, which
Note shall be dated the Closing Date or a later date pursuant to an
Assignment and Acceptance and shall be duly completed, executed and delivered
by the Borrower.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Revolving Loans
and the fees described in Section 2.10 shall be made to the Agent for the
account of the Lenders pro rata based on their Applicable Commitment
Percentages, (b) all payments to be made by the Borrower for the account of
each of the Lenders on account of principal, interest and fees, shall be made
without diminution, setoff, recoupment or counterclaim, and (c) the Agent
will promptly distribute to the Lenders in immediately available funds
payments received in fully collected, immediately available funds from the
Borrower.
2.7. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than five (5) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business
Day of receipt of such notice, telefacsimile notice, or telephonic notice
(confirmed in writing), of such reduction. Each such reduction shall be in
the aggregate amount of $1,000,000 or such greater amount which is in an
integral multiple of $500,000, or the entire remaining Total Revolving Credit
Commitment, and shall permanently reduce the Total Revolving Credit
Commitment. Each reduction of the Total Revolving Credit Commitment shall be
accompanied by payment of the Revolving Loans to the extent that the
principal amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid. No such reduction shall result in the payment of any
Eurodollar Rate Loan other than on the last day of the Interest Period of
such Eurodollar Rate Loan unless such prepayment is accompanied by amounts
due, if any, under Section 5.4.
2.8. Conversions and Elections of Subsequent Interest Periods . Provided
that no Default or Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in Article V, the Borrower
may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 11:00 A.M. on any
Business Day, convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate Loans;
and
28
(b) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 11:00 A.M. three (3)
Business Days' prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all or a portion of
Eurodollar Rate Loans to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and conversion pursuant to this Section 2.8 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the
definition of "Interest Period" herein and in Sections 2.1, 2.3 and Article
V. The Agent shall give written notice to each Lender of such notice of
election or conversion prior to 3:00 P.M. on the day such notice of election
or conversion is received. All such continuations or conversions of Loans
shall be effected pro rata based on the Applicable Commitment Percentages of
the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total Revolving
Credit Commitment which shall be available to the Borrower as Advances shall
be reduced by the aggregate amount of Outstanding Letters of Credit.
2.10. Fee . For the period beginning on the Closing Date and ending on
the Revolving Credit Termination Date, the Borrower agrees to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to 0.375% per annum multiplied by
the average daily amount by which the Total Revolving Credit Commitment
exceeds the sum of (i) Revolving Credit Outstandings plus (ii) Letter of
Credit Outstandings. Such fees shall be due in arrears on the last Business
Day of each March, June, September and December commencing March 31, 1997 to
and on the Revolving Credit Termination Date. Notwithstanding the foregoing,
so long as any Lender fails to make available any portion of its Revolving
Credit Commitment when requested, such Lender shall not be entitled to
receive payment of its pro rata share of such fee until such Lender shall
make available such portion. Such fee shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed.
2.11. Deficiency Advances . No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to
make any Loan or fund its purchase of any Participation hereunder nor shall
the Revolving Credit Commitment of any Lender hereunder be increased as a
result of such default of any other Lender. Without limiting the generality
of the foregoing, in the event any Lender shall fail to advance funds to the
Borrower as herein provided, the Agent may in its discretion, but shall not
be obligated to, advance under the Revolving Note in its favor as a Lender
29
all or any portion of such amount or amounts (each, a "deficiency advance")
and shall thereafter be entitled to payments of principal of and interest on
such deficiency advance in the same manner and at the same interest rate or
rates to which such other Lender would have been entitled had it made such
advance under its Revolving Note; provided that, upon payment to the Agent
from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from
the most recent date or dates interest was paid to the Agent by the Borrower
on each Revolving Loan comprising the deficiency advance at the interest rate
per annum for overnight borrowing by the Agent from the Federal Reserve Bank,
then such payment shall be credited against the applicable Revolving Note of
the Agent in full payment of such deficiency advance and the Borrower shall
be deemed to have borrowed the amount of such deficiency advance from such
other Lender as of the most recent date or dates, as the case may be, upon
which any payments of interest were made by the Borrower thereon.
2.12. Use of Proceeds . The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for general
working capital needs and other corporate purposes, including the making of
Acquisitions and Capital Expenditures permitted hereunder.
ARTICLE III
Letters of Credit
3.1. Letters of Credit . The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower to issue from
time to time for the account of the Borrower Letters of Credit upon delivery
to the Issuing Bank of an Application and Agreement for Letter of Credit
relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Letter of Credit Outstandings shall not exceed the
Total Letter of Credit Commitment and (ii) no Letter of Credit shall be
issued if, after giving effect thereto, Letter of Credit Outstandings plus
Revolving Credit Outstandings shall exceed the Total Revolving Credit
Commitment. No Letter of Credit shall have an expiry date (including all
rights of the Borrower or any beneficiary named in such Letter of Credit to
require renewal) or payment date occurring later than the earlier to occur of
one year after the date of its issuance or the fifth Business Day prior to
the Stated Termination Date.
3.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts
required to pay all drafts drawn or purporting to be drawn under the Letters
of Credit and all reasonable expenses incurred by the Issuing Bank in
connection with the Letters of Credit, and in any event and without demand to
place in possession of the Issuing Bank (which shall include Advances under
the Revolving Credit Facility if permitted by Section 2.1) sufficient funds
to pay all debts and liabilities arising under any Letter of Credit. The
Issuing Bank agrees to give the Borrower prompt notice of any request for a
draw under a Letter of Credit. The Issuing Bank may charge any account the
Borrower may have with it for any and all amounts the Issuing Bank pays under
30
a Letter of Credit, plus charges and reasonable expenses as from time to time
agreed to by the Issuing Bank and the Borrower; provided that to the extent
permitted by Section 2.1(c)(iv), amounts shall be paid pursuant to Advances
under the Revolving Credit Facility. The Borrower agrees to pay the Issuing
Bank interest on any Reimbursement Obligations not paid when due hereunder at
the Base Rate plus two percent (2.0%), or the maximum rate permitted by
applicable law, if lower, such rate to be calculated on the basis of a year
of 360 days for actual days elapsed.
(b) In accordance with the provisions of Section 2.1(c), the
Issuing Bank shall notify the Agent of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.
(c) Each Lender (other than the Issuing Bank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of
the Issuing Bank in respect of each Letter of Credit in an amount equal to
such Lender's Applicable Commitment Percentage of such liability, and to the
extent that the Borrower is obligated to pay the Issuing Bank under Section
3.2(a), each Lender (other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, and shall be unconditionally
obligated to pay to the Issuing Bank as hereinafter described, its Applicable
Commitment Percentage of the liability of the Issuing Bank under such Letter
of Credit.
(i) Each Lender (including the Issuing Bank in its capacity as
a Lender) shall, subject to the terms and conditions of Article II, pay to
the Agent for the account of theIssuing Bank at the Principal Office in
Dollars and in immediately available funds, an amount equal to its Applicable
Commitment Percentage of any drawing under a Letter of Credit, such funds to
be provided in the manner described in Section 2.1(c)(iv).
(ii) Simultaneously with the making of each payment by a
Lender to the Issuing Bank pursuant to Section 2.1(c)(iv)(B), such Lender
shall, automatically and without any further action on the part of the
Issuing Bank or such Lender, acquire a Participation in an amount equal to
such payment (excluding the portion thereof constituting interest accrued
prior to the date the Lender made its payment) in the related Reimbursement
Obligation of the Borrower. The Reimbursement Obligations of the Borrower
shall be immediately due and payable whether by Advances made in accordance
with Section 2.1(c)(iv) or otherwise.
(iii) Each Lender's obligation to make payment to the Agent
for the account of the Issuing Bank pursuant to Section 2.1(c)(iv) and this
Section 3.2(c), and the right of the Issuing Bank to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and shall be made without any offset, abatement, withholding or
reduction whatsoever. If any Lender is obligated to pay but does not pay
amounts to the Agent for the account of the Issuing Bank in full upon such
request as required by Section 2.1(c)(iv) or this Section 3.2(c), such Lender
shall, on demand, pay to the Agent for the account of the Issuing Bank
interest on the unpaid amount for each day during the period commencing on
the date of notice given to such Lender pursuant to Section 2.1(c) until such
Lender pays such amount to the Agent for the account of the Issuing Bank in
full at the interest rate per annum for overnight borrowing by the Agent from
the Federal Reserve Bank.
31
(iv) In the event the Lenders have purchased Participations in
any Reimbursement Obligation as set forth in clause (ii) above, then at any
time payment (in fully collected, immediately available funds) of such
Reimbursement Obligation, in whole or in part, is received by Issuing Bank
from the Borrower, Issuing Bank shall promptly pay to each Lender an amount
equal to its Applicable Commitment Percentage of such payment from the
Borrower.
(d) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Agent a notice describing the aggregate
undrawn amount of all Letters of Credit at the end of such quarter. Upon the
request of any Lender from time to time, the Issuing Bank shall deliver to
the Agent, and the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each Letter of Credit
outstanding.
(e) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article VI, be
subject to the conditions that such Letter of Credit be in such form and
contain such terms as shall be reasonably satisfactory to the Issuing Bank
consistent with the then current practices and procedures of the Issuing Bank
with respect to similar letters of credit, and the Borrower shall have
executed and delivered such other instruments and agreements relating to such
Letters of Credit as the Issuing Bank shall have reasonably requested
consistent with such practices and procedures and shall not be in conflict
with any of the express terms herein contained. All Letters of Credit shall
be issued pursuant to and subject to the Uniform Customs and Practice for
Documentary Credits, 1993 revision, International Chamber of Commerce
Publication No. 500 (the "UCP") and all subsequent amendments and revisions
thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of
Credit, any drafts or other documents otherwise in order which may be signed
or issued by an administrator, executor, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver,
attorney in fact or other legal representative of a party who is authorized
under such Letter of Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of Section
12.9, the Borrower hereby agrees to indemnify and hold harmless the Issuing
Bank, each other Lender and the Agent from and against any and all claims and
damages, losses, liabilities, reasonable costs and expenses which the Issuing
Bank, such other Lender or the Agent may incur (or which may be claimed
against the Issuing Bank, such other Lender or the Agent) by any Person by
reason of or in connection with the issuance or transfer of or payment or
failure to pay under any Letter of Credit; provided that the Borrower shall
not be required to indemnify the Issuing Bank, any other Lender or the Agent
for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, (i) caused by the willful misconduct or gross
negligence of the party to be indemnified or (ii) caused by the failure of
the Issuing Bank to pay under any Letter of Credit after the presentation to
it of a request for payment strictly complying with the terms and conditions
of such Letter of Credit, unless such payment is prohibited by any law,
regulation, court order or decree. The indemnification and hold harmless
provisions of this Section 3.2(g) shall survive repayment of the Obligations,
32
occurrence of the Revolving Credit Termination Date, and expiration or
termination of this Agreement.
(h) Without limiting Borrower's rights as set forth in Section
3.2(g), the obligation of the Borrower to immediately reimburse the Issuing
Bank for drawings made under Letters of Credit and the Issuing Bank's right
to receive such payment shall be absolute, unconditional and irrevocable, and
that such obligations of the Borrower shall be performed strictly in
accordance with the terms of this Agreement and such Letters of Credit and
the related Applications and Agreement for any Letter of Credit, under all
circumstances whatsoever, including the following circumstances:
(i) 48.any lack of validity or enforceability of the Letter of
Credit, the obligation supported by the Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related LC
Documents");
(ii) any amendment or waiver of or any consent to or departure
from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense (other than
the defense of payment in accordance with the terms of this Agreement) or
other rights which the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Lenders or any other Person, whether in connection
with the Loan Documents, the Related LC Documents or any unrelated
transaction;
(iv) any breach of contract or other dispute between the
Borrower and any beneficiary or any transferee of a Letter of Credit (or
any persons or entities for whom such beneficiary or any such transferee
may be acting), the Agent, the Lenders or any other Person;
(v) any draft, statement 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 whatsoever;
(vi) any delay, extension of time, renewal, compromise or
other indulgence or modification granted or agreed to by the Agent, with
or without notice to or approval by the Borrower in respect of any of
Borrower's Obligations under this Agreement; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
3.3. Letter of Credit Facility Fees . The Borrower shall pay to the
Agent, (i) for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn
on each outstanding Letter of Credit at a rate equal to the Applicable
Margin, and (ii) for the Issuing Bank, 0.125% based on the aggregate amount
33
available to be drawn on each outstanding Letter of Credit. Such fees shall
be due with respect to each Letter of Credit quarterly in arrears on the last
day of each March, June, September and December, the first such payment to be
made on the first such date occurring after the date of issuance of a Letter
of Credit. The fees described in this Section 3.3 shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed.
3.4. Administrative Fees . The Borrower shall pay to the Issuing Bank
such administrative fee and other fees, if any, in connection with the
Letters of Credit in such amounts and at such times as the Issuing Bank and
the Borrower shall agree from time to time.
ARTICLE IV
Security
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4.1. Security . As security for the full and timely payment and
performance of all Obligations, the Credit Parties shall on or before the
Closing Date do or cause to be done all things necessary in the reasonable
opinion of the Agent and its counsel to grant to the Agent for the benefit of
the Lenders a duly perfected first priority security interest in all
Collateral subject to no prior Lien or other encumbrance or restriction on
transfer (other than restrictions on transfer imposed by applicable
securities laws).
4.2. Further Assurances . At the request of the Agent, the Borrower will
or will cause the Guarantors or other Credit Party, as the case may be to
execute, by its duly authorized officers, alone or with the Agent, any
certificate, instrument, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other action
(and pay all actual out of pocket costs) which the Agent reasonably deems
necessary from time to time to create, continue or preserve the liens and
security interests in Collateral (and the perfection and priority thereof) of
the Agent contemplated hereby and by the other Loan Documents.
4.3. Information Regarding Collateral . The Borrower represents,
warrants and covenants that (i) the chief executive office of the Borrower
and each other Person providing Collateral pursuant to a Security Instrument
(each, a "Grantor") at the Closing Date is located at the address or
addresses specified on Schedule 4.3, and (ii) Schedule 4.3 contains a true
and complete list of (a) the name and address of each Grantor and of each
other Person that has effected any merger or consolidation with a Grantor or
contributed or transferred to a Grantor any property constituting Collateral
at any time since January 1, 1992 (excluding Persons making sales in the
ordinary course of their businesses to a Grantor of property constituting
inventory in the hands of such seller), (b) each location of the chief
executive office of each Grantor at any time since January 1, 1992, (c) each
location in which goods constituting Collateral are or have been located
since January 1, 1992 (together with the name of each owner of the property
located at such address if not the applicable Grantor, and a summary
description of the relationship between the applicable Grantor and such
Person), and (d) each trade style used by any Grantor since January 1, 1992
and the purposes for which it was used. Borrower shall not change, and shall
not permit any other Grantor to change, the location of its chief executive
office or any location specified in clause (c) of the immediately preceding
sentence, or use or permit any other Grantor to use, any additional trade
34
style, except upon giving not less than thirty (30) days' prior written
notice to the Agent and taking or causing to be taken all such action at
Borrower's or such other Grantor's expense as may be reasonably requested by
the Agent to perfect or maintain the perfection of the Lien of the Agent in
Collateral.
4.4. Security Instruments . On or before the Closing Date the Borrower
shall execute and deliver to the Agent, and shall cause each of the
Guarantors to execute and deliver to the Agent, each of the Security
Instruments to which it is a party, together with such other instruments and
documents, including financing statements and amendments to financing
statements, as the Agent may reasonably request.
ARTICLE V
Yield Protection and Illegality
-------------------------------
5.1. Additional Costs . (a) In the event of any Regulatory Change the
Borrower shall promptly pay to the Agent for the account of a Lender from
time to time, without duplication, such amounts as such Lender may reasonably
determine to be necessary to compensate it for any costs (other than normal
overhead expenses) incurred by such Lender which it determines are
attributable to its making or maintaining any Loan or its obligation to make
any Loans, or the issuance or maintenance by the Issuing Bank of or any other
Lender's Participation in any Letter of Credit issued hereunder, or any
reduction in any amount receivable by such Lender under this Agreement or the
Notes in respect of any of such Loans or the Letters of Credit, including
reductions in the rate of return on a Lender's capital (such increases in
costs and reductions in amounts receivable and returns being herein called
"Additional Costs"), resulting from such Regulatory Change which: (i) changes
the basis of taxation of any amounts payable to such Lender under this
Agreement or the Notes in respect of any of such Loans or the Letters of
Credit (other than taxes imposed on or measured by the income, revenues or
assets); or (ii) imposes or modifies any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender (other than any such
reserve, deposit or requirement reflected in the Prime Rate, Federal Funds
Effective Rate or the Interbank Offered Rate, in each case computed in
accordance with the respective definitions of such terms set forth in Section
1.1); or (iii) has or would have the effect of reducing the rate of return on
capital of any such Lender to a level below that which the Lender could have
achieved but for such Regulatory Change (taking into consideration such
Lender's policies with respect to capital adequacy); or (iv) imposes any
other condition adversely affecting the Agent or the Lenders under this
Agreement, the Notes or the issuance or maintenance of, or any Lender's
Participation in, the Letters of Credit (or any of such extensions of credit
or liabilities). Each Lender will notify the Authorized Representative and
the Agent of any event occurring after the Closing Date which would entitle
it to compensation pursuant to this Section 6.1(a) as promptly as practicable
after it obtains knowledge thereof and determines to request such
compensation.
(b) Without limiting the effect of the foregoing provisions of
this Section 5.1, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of the Lender which includes deposits by reference to which the
35
interest rate on Eurodollar Rate Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of any Lender
which includes Eurodollar Rate Loans or (ii) becomes subject to restrictions
on the amount of such a category of liabilities or assets which it may hold,
then, if the Lender so elects by notice to the other Lenders, the obligation
hereunder of such Lender to make, and to convert Base Rate Loans into,
Eurodollar Rate Loans that are the subject of such restrictions shall be
suspended until the date such Regulatory Change ceases to be in effect and
the Borrower shall, on the last day(s) of the then current Interest Period(s)
for outstanding Eurodollar Rate Loans convert such Eurodollar Rate Loans into
Base Rate Loans; provided, however, that the suspension of such obligation
and the conversion of any Eurodollar Rate Loans into Base Rate Loans shall
apply only to any Lender who is affected by such restrictions and who has
provided such notice to the other Lenders, and the obligation of the other
Lenders to make, and to convert Base Rate Loans into, Eurodollar Rate Loans
shall not be affected by such restrictions. In the event that the obligation
of some, but not all, of the Lenders to make, or to convert Base Rate Loans
into, Eurodollar Rate Loans is suspended, then any request by the Borrower
during the pendency of such suspension for a Eurodollar Rate Loan shall be
deemed a request for such Eurodollar Rate Loan from the Lender(s) not subject
to such suspension and for a Base Rate Loan from the Lender(s) who are
subject to such suspension, in each case in the respective amounts based on
the Lenders' respective Applicable Commitment Percentages. Notwithstanding
anything contained in this Agreement to the contrary, the Borrower shall have
no obligations under this Section 5.1 unless any Lender seeking payment of
Additional Costs shall have required similar payments from its other
similarly situated customers.
(c) Determinations by any Lender for purposes of this Section 5.1
of the effect of any Regulatory Change on its costs of making or maintaining,
or being committed to make Loans, or by NationsBank as issuer of any Letter
of Credit of the effect of any Regulatory Change on its costs in connection
with the issuance or maintenance of, or any other Lender's Participation in,
any Letter of Credit issued hereunder, or the effect of any Regulatory Change
on amounts receivable by any Lender in respect of Loans or Letters of Credit,
and of the additional amounts required to compensate the Lender in respect of
any Additional Costs, shall be made taking into account such Lender's
policies, or the policies of the parent corporation of such Lender, as to the
allocation of capital, costs and other items and shall be conclusive absent
manifest error. The Lender requesting such compensation shall furnish to the
Authorized Representative and the Agent within one hundred eighty (180) days
of the incurrence of any Additional Costs for which compensation is sought an
explanation of the Regulatory Change and calculations, in reasonable detail,
setting forth such Lender's determination of any such Additional Costs.
5.2. Suspension of Loans . Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate
for any Eurodollar Rate Loan for any Interest Period, the Agent determines
(which determination made on a reasonable basis shall be conclusive absent
manifest error) that:
(a) quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in Section 1.1 are not
being provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for such Eurodollar Rate Loan
as provided in this Agreement; or
36
(b) the relevant rates of interest referred to in the definition
of "Interbank Offered Rate" in Section 1.1 upon the basis of which the
Eurodollar Rate for such Interest Period is to be determined do not
adequately reflect the cost to the Lenders of making or maintaining such
Eurodollar Rate Loan for such Interest Period;
then the Agent shall give the Authorized Representative prompt notice
thereof, and so long as such condition remains in effect, the Lenders shall
be under no obligation to make Eurodollar Rate Loans that are subject to
such condition, or to convert Base Rate Loans into Eurodollar Rate Loans,
and the Borrower shall on the last day(s) of the then current Interest
Period(s) for outstanding Eurodollar Rate Loans, as applicable, convert
such Eurodollar Rate Loans into another Eurodollar Rate Loan if such
Eurodollar Rate Loan is not subject to the same or similar condition, or
Base Rate Loans, if available hereunder. The Agent shall give the
Authorized Representative notice describing in reasonable detail any event
or condition described in this Section 5.2 promptly following the
determination by the Agent that the availability of Eurodollar Rate Loans
is, or is to be, suspended as a result thereof. The Agent shall give the
Authorized Representative notice when such event or condition described in
this Section 5.2 no longer remains in effect.
5.3. Illegality . Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender to honor its obligation
to make or maintain Eurodollar Rate Loans hereunder, then such Lender shall
promptly notify the Borrower thereof (with a copy to the Agent) and such
Lender's obligation to make or continue Eurodollar Rate Loans, or to convert
Base Rate Loans into Eurodollar Rate Loans, shall be suspended until such
time as such Lender may again make and maintain Eurodollar Rate Loans, and
such Lender's outstanding Eurodollar Rate Loans shall be converted into Base
Rate Loans in accordance with Section 2.8 or earlier if required by
applicable law. The conversion of any Eurodollar Rate Loans into Base Rate
Loans shall apply only to any Lender who is affected by such restrictions and
who has provided the notice described above, and the obligation of the other
Lenders to make, and to convert Base Rate Loans into, Eurodollar Rate Loans
shall not be affected by such restrictions. In the event that the obligation
of some, but not all, of the Lenders to make, or to convert Base Rate Loans
into, Eurodollar Rate Loans is so suspended, then any request by the Borrower
during the pendency of such suspension for a Eurodollar Rate Loan shall be
deemed a request for such Eurodollar Rate Loan from the Lender(s) not subject
to such suspension and for a Base Rate Loan from the Lender(s) who are
subject to such suspension, in each case in the respective amounts based on
the Lenders' respective Applicable Commitment Percentages.
5.4. Compensation . The Borrower shall promptly pay to each Lender, upon
the request of such Lender, such amount or amounts as shall be sufficient (in
the reasonable determination of Lender) to compensate it for any loss, cost
or expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Rate
Loan on a date other than the last day of the Interest Period for such
Eurodollar Rate Loan, including without limitation any conversion required
pursuant to Sections 5.1, 5.2 or 5.3; or
37
(b) any failure by the Borrower to borrow or convert a Eurodollar
Rate Loan on the date for such borrowing or conversion specified in the
relevant Borrowing Notice or Interest Rate Selection Notice under Article
II hereof;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on
the principal amount so paid, prepaid or converted or not borrowed for the
period from the date of such payment, prepayment or conversion or failure
to borrow or convert to the last day of the then current Interest Period
for such Loan (or, in the case of a failure to borrow or convert, the
Interest Period for such Loan which would have commenced on the date
scheduled for such borrowing or conversion) at the applicable rate of
interest for such Eurodollar Rate Loan provided for herein over (ii) the
Interbank Offered Rate (as reasonably determined by the Agent) for Dollar
deposits of amounts comparable to such principal amount and maturities
comparable to such period. A determination of a Lender as to the amounts
payable pursuant to this Section 5.4 shall be conclusive, provided that
such determinations are made on a reasonable basis. The Lender requesting
compensation under this Section 5.4 shall promptly furnish to the
Authorized Representative and the Agent calculations in reasonable detail
setting forth such Lender's determination of the amount of such
compensation.
5.5. Alternate Loan and Lender . In the event any Lender suspends the
making of any Eurodollar Rate Loan pursuant to this Article V (herein a
"Restricted Lender"), the Restricted Lender's Commitment Percentage of any
Eurodollar Rate Loan shall bear interest at the Base Rate or the Eurodollar
Rate for which the suspension does not apply, as selected by Borrower, until
the Restricted Lender once again makes available the applicable Eurodollar
Rate Loan. Notwithstanding the provisions of Section 3.2(b), interest shall
be payable to the Restricted Lender at the time and manner as paid to those
Lenders making available Eurodollar Rate Loans.
5.6. Taxes . (a) All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future excise,
stamp or other taxes, fees, duties, levies, imposts, charges, deductions,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding (i) franchise taxes, (ii) any taxes (other than
withholding taxes) that would not be imposed but for a connection between a
Lender or the Agent and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of such Lender or the
Agent pursuant to or in respect of this Agreement or any other Loan
Document), (iii) any taxes imposed on or measured by any Lender's assets, net
income, receipts or branch profits, and (iv) any taxes arising after the
Closing Date solely as a result of or attributable to a Lender changing its
designated lending office after the date such Lender becomes a party hereto
(such non-excluded items being collectively called "Taxes"). In the event
that any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will
(x) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
38
(y) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(z) pay to the Agent for the account of each Lender such
additional amount or amounts as is necessary to ensure that the net amount
actually received by each Lender will equal the full amount such Lender
would have received had no such withholding or deduction been required.
(b) Prior to the date that any Lender or participant organized under the
laws of a jurisdiction outside the United States becomes a party hereto, such
Person shall deliver to the Borrower and the Agent such certificates,
documents or other evidence, as required by the Code or Treasury Regulations
issued pursuant thereto, properly completed, currently effective and duly
executed by such Lender or participant establishing that payments to it
hereunder and under the Notes are (i) not subject to United States Federal
backup withholding tax and (ii) not subject to United States Federal
withholding tax under the Code because such payment is either effectively
connected with the conduct by such Lender or participant of a trade or
business in the United States or totally exempt from United States Federal
withholding tax by reason of the application of the provisions of a treaty to
which the United States is a party or such Lender is otherwise exempt.
(c) If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lender, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of
any such failure. For purposes of this Section 5.6, a distribution hereunder
by the Agent or any Lender to or for the account of any Lender shall be
deemed a payment by or on behalf of the Borrower.
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
--------------------------------------------------------
6.1. Conditions of Initial Advance . The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility, and of the
Issuing Bank to issue any Letter of Credit, is subject to the conditions
precedent that:
(a) the Agent shall have completed all due diligence with respect
to the Borrower and the Guarantors and shall have received on the Closing
Date, in form and substance satisfactory to the Agent and Lenders, the
following:
(i) executed originals of each of this Agreement, the Notes,
the initial Facility Guaranties, the Security Instruments, the LC
Account Agreement and the other Loan Documents, together with all
schedules and exhibits thereto; and
(ii) the favorable written opinion or opinions with respect to
the Loan Documents and the transactions contemplated thereby of special
counsel to the Credit Parties dated the Closing Date, addressed to the
39
Agent and the Lenders and satisfactory to Smith Helms Mulliss & Moore,
L.L.P., special counsel to the Agent, substantially in the form of
Exhibit G; and
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee thereof) of
each Credit Party certified by its secretary or assistant secretary as
of the Closing Date, approving and adopting the Loan Documents to be
executed by such Person, and authorizing the execution and delivery
thereof; and
(iv) specimen signatures of officers of each Credit Party
executing the Loan Documents on behalf of such Credit Party, certified
by the secretary or assistant secretary of such Credit Party; and
(v) the charter documents of each Credit Party certified as of
a recent date by the Secretary of State of its state of organization;
and
(vi) the bylaws of each Credit Party certified as of the
Closing Date as true and correct by its secretary or assistant
secretary; and
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of formation of
each Credit Party as to the due existence and good standing of each
Credit Party; and
(viii) appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to conduct
business under assumed name, issued in respect of each Credit Party as
of a recent date by the Secretary of State or comparable official of
each jurisdiction in which the failure to be qualified to do business
or authorized so to conduct business could have a Material Adverse
Effect; and
(ix) a copy of the partnership agreement and certificate of
limited partnership of each Guarantor that is a Partnership together
with all necessary consents, certified as to its correctness by the
General Partner of such partnership; and
(x) notice of appointment of the initial Authorized
Representative(s); and
(xi) certificate of an Authorized Representative dated the
Closing Date demonstrating compliance with the financial covenants
contained in Sections 9.1(a) through 9.1(c), the receivables covenant
contained in Section 9.3, the indebtedness covenant contained in
Section 9.5, and the Deferred Excess Compensation covenant contained in
Section 9.18 as of December 31, 1996, substantially in the form of
Exhibit H; and
40
(xii) evidence of all insurance required by the Loan
Documents; and
(xiii) an initial Borrowing Notice, if any, and, if elected by
the Borrower, Interest Rate Selection Notice; and
(xiv) evidence of the filing of Uniform Commercial Code
financing statements reflecting the filing in all places required by
applicable law to perfect the Liens of the Agent under the Security
Instruments as a first priority Lien as to items of Collateral in which
a security interest may be perfected by the filing of financing
statements, and such other documents and/or evidence of other actions
as may be necessary under applicable law to perfect the Liens of the
Agent under the Security Instruments as a first priority Lien in and to
such other Collateral as the Agent may require, including without
limitation:
(A)the delivery by the Borrower of all stock certificates
evidencing Pledged Stock and certificates, if any,
evidencing ownership of Pledged Partnership Interests,
accompanied in each case by duly executed stock powers (or
other appropriate transfer documents) in blank affixed
thereto; and
(B)the delivery by the Borrower of certificates of the
Registrar of each partnership Subsidiary and each
partnership Guarantor evidencing the due registration on the
registration books of such partnership of the Lien in favor
of the Agent conferred under the Security Instruments; and
(xv) evidence that all fees payable by the Borrower on the
Closing Date to the Agent and the Lenders have been paid in full; and
(xvi) Uniform Commercial Code search results showing only
those Liens as are acceptable to the Lenders; and
(xvii) the consolidated financial statements of the Borrower
and the Guarantors for the fiscal year 1995 and the nine month period
ended September 30, 1996, including balance sheets, statements of
operations, stockholders' equity, and cash flow statements, audited (in
the case of the fiscal year 1995 financial statements) by independent
public accountants of national standing and prepared in accordance with
GAAP and on a Consistent Basis; and
(xviii) a schedule of the current ownership of the Borrower;
and
(xix) such other documents, instruments, certificates and
opinions as the Agent or any Lender may reasonably request on or prior
to the Closing Date in connection with the consummation of the
transactions contemplated hereby; and
41
(xx) an accounts receivable aging report in form and detail as
is satisfactory to the Agent as of December 31, 1996; and
(xxi) a draft of the Borrower's audited financial statements
for the fiscal year ended December 31, 1996, as more fully described in
Section 8.1(a)(i); and
(b) In the good faith and reasonable judgment of the Agent and the
Lenders:
(i) Except as set forth on Schedule 6.1, there shall not have
occurred a material adverse change since September 30, 1996 in the
business, assets, operations, condition (financial or otherwise) or
prospects of the Borrower and the Guarantors, or in the facts and
information regarding such entities (including litigation) as
represented to date; and
(ii) the absence of any action, suit, investigation or
proceeding pending or threatened in any court or before any arbitrator
or governmental authority that purports to affect the Borrower or the
Guarantors (other than existing litigation which shall be disclosed to,
and in their discretion shall be acceptable to, the Agent and the
Lenders), or any transaction contemplated hereby, or that could have a
material adverse effect on the Borrower or the Guarantors or any
transaction contemplated hereby or on the ability of the Borrower and
the Guarantors to perform their obligations under the documents to be
executed in connection with the Revolving Credit Facility; and
(iii) the Borrower, the Guarantors and any other Credit Party
shall have received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the occurrence
of any default under, conflict with or violation of (A) any applicable
law, rule, regulation, order or decree of any Governmental Authority or
arbitral authority or (B) any agreement, document or instrument to
which any of the Borrower or any Guarantor is a party or by which any
of them or their properties is bound; and
(iv) the Borrower and the Guarantors shall be in compliance
with all existing financial obligations;
(v) the absence of any disruption or material adverse change
in market for syndicated bank credit facilities similar in nature to
the Revolving Credit Facility or a material disruption of, or a
material adverse change in, financial, banking, or capital market
conditions, in each case as determined by NationsBank in its sole
discretion based on reasonable judgment; and
(vi) the Borrower and the Guarantors shall be in compliance
with all terms and conditions set forth in the Prior Agreement.
42
6.2. Conditions of Revolving Loans and Letter of Credit . The
obligations of the Lenders to make any Revolving Loans, and the Issuing Bank
to issue Letters of Credit, hereunder on or subsequent to the Closing Date
are subject to the satisfaction of the following conditions:
(a) the Agent shall have received a Borrowing Notice if required
by Article II; and
(b) the representations and warranties of the Borrower and the
Guarantors set forth in Article VII and in each of the other Loan
Documents shall be true and correct in all material respects on and as of
the date of such Advance or Letter of Credit issuance or renewal, with the
same effect as though such representations and warranties had been made on
and as of such date, except: (i) to the extent that such representations
and warranties expressly relate to an earlier date, and (ii) that the
financial statements referred to in Section 7.6(a) shall be deemed to be
those financial statements most recently delivered to the Agent and the
Lenders pursuant to Section 8.1 from the date financial statements are
delivered to the Agent and the Lenders in accordance with such Section,
and (iii) with respect to transactions permitted hereunder; and
(c) in the case of the issuance of a Letter of Credit, the
Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request; and
(d) at the time of (and after giving effect to) each Advance or
the issuance of a Letter of Credit, no Default or Event of Default
specified in Article X shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Revolving Loan, the aggregate principal balance of all
outstanding Revolving Loans for each Lender shall not exceed such
Lender's Revolving Credit Commitment;
(ii) a Letter of Credit or renewal thereof, the aggregate
principal balance of all outstanding Participations in Letters of
Credit and Reimbursement Obligations (or in the case ofthe
Issuing Bank, its remaining interest after deduction of all
Participations in Letters of Credit and Reimbursement Obligations
of other Lenders) for each Lender and in the aggregate shall not
exceed, respectively, (X) such Lender's Letter of Credit
Commitment or (Y) the Total Letter of Credit Commitment; and
(iii) a Revolving Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus Revolving
Credit Outstandings shall not exceed the Total Revolving Credit
Commitment.
43
ARTICLE VII
Representations and Warranties
------------------------------
The Borrower represents and warrants with respect to itself and to the
Guarantors (which representations and warranties shall survive the delivery
of the documents mentioned herein and the making of Loans), that:
7.1. Organization and Authority.
(a) The Borrower and each Guarantor is a corporation or partnership
duly organized and validly existing under the laws of the jurisdiction
of its formation;
(b) The Borrower and each Guarantor (x) has the requisite power and
authority to own its properties and assets and to carry on its business
as now being conducted and as contemplated in the Loan Documents, and
(y) is qualified to do business in every jurisdiction in which failure
to so qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute, deliver
and perform this Agreement and the Notes, and to borrow hereunder, and
to execute, deliver and perform each of the other Loan Documents to
which it is a party;
(d) Each Guarantor has the power and authority to execute, deliver
and perform the Facility Guaranty and each of the other Loan Documents
to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to
which the Borrower or any other Credit Party is a party will be the
legal, valid and binding obligation or agreement, as the case may be, of
the Borrower or such Credit Party, enforceable against the Borrower or
such Credit Party in accordance with its terms, subject to the effect of
any applicable bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
7.2 Loan Documents . The execution, delivery and performance by the
Borrower and each other Credit Party of each of the Loan Documents to which
it is a party:
(a) have been duly authorized by all requisite corporate action
(including any required shareholder approval) of the Borrower and each
other Credit Party required for the lawful execution, delivery and
performance thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on the Borrower or any Guarantor or its properties, or (iii) the
charter documents or bylaws of the Borrower or any other Credit Party;
44
(c) does not and will not be in conflict with, result in a breach
of or constitute an event of default, or an event which, with notice or
lapse of time or both, would constitute an event of default, under any
contract, indenture, agreement or other instrument or document to which
Borrower or any Guarantor is a party, or by which the properties or
assets of Borrower or any Guarantor are bound; and
(d) does not and will not result in the creation or imposition of
any Lien upon any of the properties or assets of Borrower or any
Guarantor except any Liens in favor of the Agent and the Lenders created
by the Security Instruments;
7.3. Solvency . The Borrower and each other Credit Party is Solvent
after giving effect to the transactions contemplated by the Loan Documents;
7.4. Guarantors and Stockholders. The Borrower has no Guarantors other
than those Persons listed in Schedule 7.4 and additional Subsidiaries or
Guarantors created or acquired after the Closing Date in compliance with
Section 8.20; Schedule 7.4 states as of the date hereof the organizational
form of each entity, the authorized and issued capitalization of each
Guarantor listed thereon, the number of shares or other equity interests of
each class of capital stock or interest issued and outstanding of each such
Guarantor and the number and/or percentage of outstanding shares or other
equity interest (including options, warrants and other rights to acquire any
interest) of each such class of capital stock or other equity interest owned
by Borrower or officers of the Borrower; the outstanding shares or other
equity interests of each such Guarantor have been duly authorized and validly
issued and are fully paid and nonassessable; and Borrower and each such
Guarantor owns beneficially and of record all the shares and other interests
it is listed as owning in Schedule 7.4, free and clear of any Lien;
7.5. Ownership Interests . Borrower owns no interest in any Person other
than the Persons listed in Schedule 7.4, equity investments in Persons not
constituting Subsidiaries or Guarantors permitted under Section 9.7 and
additional Subsidiaries or Guarantors created or acquired after the Closing
Date in compliance with Section 8.20;
7.6. Financial Condition .
(a) The Borrower has heretofore furnished to each Lender an audited
consolidated balance sheet of the Borrower and the Guarantors as at
December 31, 1995 and the notes thereto and the related consolidated
statements of operation, stockholders' equity and cash flows for the
Fiscal Year then ended as examined and certified by Arthur Andersen LLP,
and unaudited consolidated interim financial statements of the Borrower
and the Guarantors consisting of a consolidated balance sheet and
related consolidated statements of operation, stockholders' equity and
cash flows, for and as of the end of the nine month period ended
September 30, 1996. Except as set forth therein, such financial
statements (including the notes thereto) present fairly the financial
condition of the Borrower and the Guarantors as of the end of such
Fiscal Year and nine month period and results of their operations and
the changes in its stockholders' equity for the Fiscal Year and interim
period then ended, all in conformity with GAAP applied on a Consistent
45
Basis, subject however, in the case of unaudited interim statements to
year end audit adjustments; and
(b) Except as set forth on Schedule 6.1, since September 30, 1996
there has been no material adverse change in the condition, financial or
otherwise, of the Borrower or any of the Guarantors or in the
businesses, properties, performance, prospects or operations of the
Borrower or the Guarantors, nor have such businesses or properties been
materially adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workers, flood,
embargo or act of God; and
(c) except as set forth in the financial statements referred to in
Section 7.6(a) or in Schedule 9.5 or permitted by Section 9.5, neither
Borrower nor any Guarantor has incurred, other than in the ordinary
course of business, any material Indebtedness, Contingent Obligation or
other commitment or liability which remains outstanding or unsatisfied;
7.7. Title to Properties . The Borrower and each of the Guarantors has
good and marketable title to all its real properties and good title to all of
its material personal properties, subject to no transfer restrictions or
Liens of any kind, except for the transfer restrictions and Liens described
in Schedule 7.7 and Liens permitted by Section 9.4;
7.8. Taxes . Except as set forth in Schedule 7.8, the Borrower and each
of the Guarantors has filed or caused to be filed all federal, state and
local tax returns which are required to be filed by it and, except for taxes
and assessments being contested in good faith by appropriate proceedings
diligently conducted and against which reserves reflected in the financial
statements described in Section 7.6(a) and satisfactory to the Borrower's
independent certified public accountants have been established, have paid or
caused to be paid all taxes as shown on said returns or on any assessment
received by it, to the extent that such taxes have become due;
7.9. Other Agreements . Neither the Borrower nor any Guarantor is:
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in (i) any
Medicaid Provider Agreement, Medicare Provider Agreement or other
agreement or instrument to which the Borrower or any Guarantor is a
party, which default has resulted in, or if not remedied within any
applicable grace period could result in, the revocation, termination,
cancellation or suspension of Medicaid Certification or Medicare
Certification of Borrower or any Guarantor or (ii) any other agreement
or instrument to which the Borrower or any Guarantor is a party, which
default has, or if not remedied within any applicable grace period could
reasonably be likely to have, a Material Adverse Effect;
46
7.10. Litigation . Except as set forth in Schedule 7.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to
the knowledge of the Borrower, threatened by or against the Borrower, any
Guarantor or any Contract Provider, or affecting the Borrower or any
Guarantor or any Contract Provider or any properties or rights of the
Borrower or any Guarantor or any Contract Provider, which could reasonably be
expected (i) to result in the revocation, termination, cancellation or
suspension of Medicaid Certification or Medicare Certification of such
Person, or (ii) to have a Material Adverse Effect;
7.11. Margin Stock . The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein.
None of such proceeds will be used, directly or indirectly, for the purpose
of purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation
U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor
any agent acting in its behalf has taken or will take any action which might
cause this Agreement or any of the documents or instruments delivered
pursuant hereto to violate any regulation of the Board or to violate the
Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect on the
date hereof;
7.12. Investment Company . Neither the Borrower nor any Guarantor is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (15 U.S.C. ss.
80a-1, et seq.). The application of the proceeds of the Loans and repayment
thereof by the Borrower and the performance by the Borrower and the other
Credit Parties of the transactions contemplated by the Loan Documents will
not violate any provision of said Act, or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder, in each case as
in effect on the date hereof;
7.13. Patents, Etc. The Borrower and each other Credit Party owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names,
trade name rights, trade secrets and copyrights necessary to or used in the
conduct of its businesses as now conducted and as contemplated by the Loan
Documents, without known conflict with any patent, license, franchise,
trademark, trade secret, trade name, copyright, other proprietary right of
any other Person;
7.14. No Untrue Statement . Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on
behalf of the Borrower or any Guarantor in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to
the Agent in connection with the negotiation or preparation of the Loan
Documents contains any misrepresentation or untrue statement of material fact
or omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such warranty, representation
or statement contained therein not misleading;
47
7.15. No Consents, Etc. Except for certain service and payor contracts
which may require the parties' consent to assignment thereto which consent
has not been required and which assignment pursuant to Security Instruments
shall not be required to the extent prohibited by such contract, neither the
respective businesses or properties of the Borrower or any Guarantor, nor any
relationship between the Borrower or any Guarantor and any other Person, nor
any circumstance in connection with the execution, delivery and performance
of the Loan Documents and the transactions contemplated thereby, is such as
to require a consent, approval or authorization of, or filing, registration
or qualification with, any Governmental Authority or any other Person on the
part of the Borrower or any Guarantor as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated
by the Loan Documents, which, if not obtained or effected, would be
reasonably likely to have a Material Adverse Effect, or if so, such consent,
approval, authorization, filing, registration or qualification has been duly
obtained or effected, as the case may be;
7.16. Employee Benefit Plans .
(a) The Borrower and each ERISA Affiliate is in compliance with all
applicable provisions of ERISA and the regulations and published
interpretations thereunder and in compliance with all Foreign Benefit
Laws with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section
401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each
trust related to such plan has been determined to be exempt under
Section 501(a) of the Code. No material liability has been incurred by
the Borrower or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i) engaged in
a nonexempt prohibited transaction described in Section 4975 of the Code
or Section 406 of ERISA affecting any of the Employee Benefit Plans or
the trusts created thereunder which could subject any such Employee
Benefit Plan or trust to a material tax or penalty on prohibited
transactions imposed under Internal Revenue Code Section 4975 or ERISA,
(ii) incurred any accumulated funding deficiency with respect to any
Employee Benefit Plan, whether or not waived, or any other liability to
the PBGC which remains outstanding other than the payment of premiums
and there are no premium payments which are due and unpaid, (iii) failed
to make a required contribution or payment to a Multiemployer Plan, or
(iv) failed to make a required installment or other required payment
under Section 412 of the Code, Section 302 of ERISA or the terms of such
Employee Benefit Plan;
(c) No Termination Event has occurred or is reasonably expected to
occur with respect to any Pension Plan or Multiemployer Plan, and
neither the Borrower nor any ERISA Affiliate has incurred any unpaid
withdrawal liability with respect to any Multiemployer Plan;
48
(d) The present value of all vested accrued benefits under each
Employee Benefit Plan which is subject to Title IV of ERISA, did not, as
of the most recent valuation date for each such plan, exceed the then
current value of the assets of such Employee Benefit Plan allocable to
such benefits;
(e) To the best of the Borrower's knowledge, each Employee Benefit
Plan subject to Title IV of ERISA, maintained by the Borrower or any
ERISA Affiliate, has been administered in accordance with its terms in
all material respects and is in compliance in all material respects with
all applicable requirements of ERISA and other applicable laws,
regulations and rules;
(f) The consummation of the Loans and the issuance of the Letters
of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or investigation
exists or, to the best knowledge of the Borrower after due inquiry, is
threatened concerning or involving any Employee Benefit Plan;
7.17. No Default . As of the date hereof, there does not exist any
Default or Event of Default hereunder;
7.18. Hazardous Materials . The Borrower and each Guarantor is in
compliance with all applicable Environmental Laws in all material respects.
Neither the Borrower nor any Guarantor has been notified of any action, suit,
proceeding or investigation which, and neither the Borrower nor any Guarantor
is aware of any facts which, (i) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any Guarantor
with any Environmental Laws, (ii) which seeks, or could reasonably be
expected to form the basis of a meritorious proceeding, to suspend, revoke or
terminate any license, permit or approval necessary for the generation,
handling, storage, treatment or disposal of any Hazardous Material, or (iii)
seeks to cause, or could reasonably be expected to form the basis of a
meritorious proceeding to cause, any property of the Borrower or any
Guarantor to be subject to any restrictions on ownership, use, occupancy or
transferability under any Environmental Law;
7.19. Employment Matters . (a) None of the employees of the Borrower or
any Guarantor is subject to any collective bargaining agreement and there are
no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to
the best knowledge of the Borrower, threatened against the Borrower or any
Guarantor or between the Borrower or any Guarantor and any of its employees,
other than employee grievances arising in the ordinary course of business
which could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and
49
(b) Except to the extent a failure to maintain compliance would not have
a Material Adverse Effect, the Borrower and each Guarantor is in compliance
in all respects with all applicable laws, rules and regulations pertaining to
labor or employment matters, including without limitation those pertaining to
wages, hours, occupational safety and taxation and there is neither pending
or threatened any litigation, administrative proceeding nor, to the knowledge
of the Borrower, any investigation, in respect of such matters which, if
decided adversely, could reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect; and
7.20. RICO . Neither the Borrower nor any Guarantor is engaged in or has
engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or
other similar laws.
7.21. Reimbursement from Third Party Payors . The accounts receivable of
the Borrower and each Guarantor have been and will continue to be adjusted to
reflect the reimbursement policies (both those most recently published in
writing as well as those not in writing which have been verbally
communicated)of third party payors such as Medicare, Medicaid, Blue
Cross/Blue Shield, private insurance companies, health maintenance
organizations, preferred provider organizations, alternative delivery
systems, managed care systems, government contracting agencies and other
third party payors. In particular, accounts receivable relating to such third
party payors do not and shall not exceed amounts any obligee is entitled to
receive under any capitation arrangement, fee schedule, discount formula,
cost-based reimbursement or other adjustment or limitation to its usual
charges.
7.22. Fraud and Abuse . Neither the Borrower nor any Guarantor nor, to
the knowledge of Borrower's officers, any of its stockholders, officers or
directors, or any Contract Provider, have engaged in any activities which are
prohibited under federal Medicare and Medicaid statutes, 42 U.S.C.
ss.1320a-7b, or the regulations promulgated pursuant to such statutes or
related state or local statutes or regulations, or which are prohibited by
binding rules or professional conduct, including but not limited to the
following: (i) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any applications for any
benefit or payment; (ii) knowingly and willfully making or causing to be made
any false statement or representation 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 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 other applicable third party payors, or (b)
in return for purchasing, leasing or ordering or arranging for or
recommending the purchasing, leasing or ordering of any good, facility,
service, or item for which payment may be made in whole or in part by
Medicare, Medicaid or other applicable third party payors.
50
7.23. Licensing and Accreditation . Each of the Borrower and the
Guarantors and, to the knowledge of Borrower's officers, each Contract
Provider, has, to the extent applicable: (i) obtained (or been duly assigned)
all required certificates of need or determinations of need as required by
the relevant state Governmental Authority for the acquisition, construction,
expansion of, investment in or operation of its businesses as currently
operated; (ii) obtained and maintains in good standing all required licenses;
(iii) to the extent prudent and customary in the industry in which it is
engaged, obtained and maintains accreditation from all generally recognized
accrediting agencies; (iv) obtained and maintains Medicaid Certification and
Medicare Certification; and (v) entered into and maintains in good standing
its Medicare Provider Agreement and its Medicaid Provider Agreement. To the
knowledge of Borrower's officers, each Contract Provider is duly licensed
(where license is required) by each state or state agency or commission, or
any other Governmental Authority having jurisdiction over the provisions of
such services by such Person in the locations in which the Borrower or such
Guarantor conduct business, required to enable such Person to provide the
professional services provided by such Person and otherwise as is necessary
to enable the Borrower or such Guarantor to operate as currently operated and
as presently contemplated to be operated. To the knowledge of Borrower's
officers, all such required licenses are in full force and effect on the date
hereof and have not been revoked or suspended or otherwise limited.
ARTICLE VIII
Affirmative Covenants
---------------------
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will
cause each Guarantor to:
8.1. Financial Reports, Etc.
(a) As soon as practical and in any event within 90 days after the
end of each Fiscal Year of the Borrower, deliver or cause to be
delivered to the Agent and each Lender (i) consolidated and
consolidating balance sheets of the Borrower and the Guarantors as at
the end of such Fiscal Year, and the notes thereto, and the related
consolidated and consolidating statements of operations, stockholders'
equity and cash flows, and the respective notes thereto, for such Fiscal
Year, setting forth (other than for consolidating statements)
comparative financial statements for the preceding Fiscal Year, all
prepared in accordance with GAAP applied on a Consistent Basis and
containing, with respect to the consolidated financial statements,
opinions of Arthur Andersen LLP, or other such independent certified
public accountants selected by the Borrower and approved by the Agent,
which are unqualified as to the scope of the audit performed and as to
the "going concern" status of the Borrower and without any exception not
acceptable to the Lenders, and (ii) a certificate of an Authorized
Representative demonstrating compliance with Sections 9.1(a) through
9.1(c), 9.3, 9.5, and 9.18 which certificate shall be in the form of
Exhibit H;
(b) as soon as practical and in any event within 45 days after the
end of each fiscal quarter (except the last fiscal quarter of the Fiscal
Year), deliver to the Agent and each Lender (i) consolidated and
51
consolidating balance sheets of the Borrower and the Guarantors as at
the end of such fiscal quarter, and the related consolidated and
consolidating statements of operations, stockholders' equity and cash
flows for such fiscal quarter and for the period from the beginning of
the then current Fiscal Year through the end of such reporting period,
and accompanied by a certificate of an Authorized Representative to the
effect that such financial statements present fairly the financial
position of the Borrower and the Guarantors as of the end of such fiscal
period and the results of their operations and the changes in their
financial position for such fiscal period, in conformity with the
standards set forth in Section 7.6(a) with respect to interim financial
statements, and (ii) a certificate of an Authorized Representative
containing computations for such quarter comparable to that required
pursuant to Section 8.1(a)(ii);
(c) together with each delivery of the financial statements
required by Section 8.1(a)(i), deliver to the Agent and each Lender a
letter from the Borrower's accountants specified in Section 8.1(a)(i)
stating that in performing the audit necessary to render an opinion on
the financial statements delivered under Section 8.1(a)(i), they
obtained no knowledge of any Default or Event of Default by the Borrower
in the fulfillment of the terms and provisions of this Agreement insofar
as they relate to financial matters (which at the date of such statement
remains uncured); or if the accountants have obtained knowledge of such
Default or Event of Default, a statement specifying the nature and
period of existence thereof;
(d) promptly upon their becoming available to the Borrower, the
Borrower shall deliver to the Agent and each Lender a copy of (i) all
regular or special reports or effective registration statements which
Borrower or any Guarantor shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii)
any proxy statement distributed by the Borrower or any Guarantor to its
shareholders, bondholders or the financial community in general, (iii)
any management letter or other report submitted to the Borrower orany
Guarantor by independent accountants in connection with any annual,
interim or special audit of the Borrower or any Guarantor; and (iv) all
material reports and other statements (other than routine reports and
other statements prepared in the ordinary course of business that would
not result in adverse action) that the Borrower or any Guarantor may
render to or file with any Governmental Authority, including without
limitation HCFA; and
(e) as soon as practicable and in any event within 45 days
following the end of each fiscal quarter of the Borrower, deliver to the
Agent and each Lender an accounts receivable aging report in form and
detail substantially similar to that furnished to the Agent prior to the
Closing Date and and which sets forth any exceptions to Section 10.(e)
of the Security Agreement;
(f) together with each delivery of the financial statements
required by Section 8.1(a)(i), deliver to the Agent and each Lender a
capital budget for the following twelve month period, together with
financial projections for the Borrower and the Guarantors, on a
consolidated basis, with respect to each fiscal year through the Stated
Termination Date, or budgets or related items as the Agent may
reasonably request including, without limitation, a breakdown of revenue
and direct expenses for each hospital-based contract and for each
practice; and
52
(g) together with each delivery of the financial statements
received by Section 8.1(a) and (b) deliver to the Agent a then-current
listing of each Guarantor, indicating if such Guarantor is a Material
Subsidiary or a Material Partnership;
(h) promptly, from time to time, deliver or cause to be delivered
to the Agent and each Lender such other information regarding Borrower's
and any Guarantor's operations, business affairs and financial condition
as the Agent or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy
of any such financial or other information delivered hereunder to the
Lenders (or any affiliate of any Lender) or to the Agent, to any
Governmental Authority having jurisdiction over the Agent or any of the
Lenders pursuant to any written request therefor or in the ordinary
course of examination of loan files, or to any other Person who shall
acquire or consider the assignment of, or acquisition of any
participation interest in, any Obligation permitted by this Agreement;
8.2. Maintain Properties . Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens
all trademarks, trade names, patents, copyrights, trade secrets, know-how,
and other intellectual property and proprietary information (or adequate
licenses thereto), in each case as are reasonably necessary to conduct its
business as currently or hereafter conducted or as contemplated hereby, all
in accordance with customary and prudent business practices;
8.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 9.8, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material
rights and franchises, and maintain its license or qualification to do
business as a foreign corporation and good standing in each jurisdiction in
which its ownership or lease of property or the nature of its business makes
such license or qualification necessary and the failure to do so would have a
Material Adverse Effect;
8.4. Regulations and Taxes . Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent
and any other obligation which, if unpaid, would become a Lien against any of
its properties except liabilities being contested in good faith by
appropriate proceedings diligently conducted and against which adequate
reserves acceptable to the Borrower's independent certified public
accountants have been established unless and until any Lien resulting
therefrom attaches to any of its property and becomes enforceable against its
creditors;
8.5. Insurance . (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or
damage by fire and other hazards to the extent and in the manner as are
customarily insured against by similar businesses owning such properties
similarly situated, (b) maintain general public liability insurance at all
times with responsible insurance carriers against liability on account of
damage to persons and property, and (c) maintain insurance under all
53
applicable workers' compensation laws (or in the alternative, maintain
required reserves if self-insured for workers' compensation purposes) such
policies of insurance to have such limits, deductibles, exclusions,
co-insurance and other provisions providing no less coverages than that
specified in Schedule 8.5, such insurance policies to be in form reasonably
satisfactory to the Agent. Each of the policies of insurance described in
this Section 8.5 shall provide that the insurer shall give the Agent not less
than thirty (30) days' prior written notice before any such policy shall be
terminated, lapse or be altered in any manner. Each insurance policy provided
to the Agent by the Borrower shall be written by an insurer having no less
than "A-X1" Best's Rating according to the most current edition of Best's Key
Rating Guide;
8.6. True Books . Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by
GAAP with respect to doubtful accounts and all taxes, assessments, charges,
levies and claims and with respect to its business in general, and include
such reserves in interim as well as year-end financial statements;
8.7. Right of Inspection . Permit any Person designated by any Lender or
the Agent to visit and inspect any of the properties, corporate books and
financial reports of the Borrower or any Guarantor and to discuss its
affairs, finances and accounts with its principal officers and independent
certified public accountants, all at reasonable times, at reasonable
intervals, with reasonable prior notice, and without unreasonable
interference with the conduct of business operations;
8.8. Observe all Laws . Conform to and duly observe, and cause all
Contract Providers to conform to and duly observe, in all material respects
all laws, rules and regulations and all other valid requirements of any
regulatory authority with respect to the conduct of its business, including
without limitation Titles XVIII and XIX of the Social Security Act, Medicare
Regulations, Medicaid Regulations, and all laws, rules and regulations of
Governmental Authorities pertaining to the licensing of professional and
other health care providers; notwithstanding the foregoing, if a Contract
Provider fails to comply with this Section 8.8 and neither the Borrower nor
Guarantors are liable therefor, such violation of this Section 8.8 by such
Contract Provider shall not be a Default or Event of Default hereunder.
8.9. Governmental Licenses . Obtain and maintain, and cause all Contract
Providers during periods when performing services for the Borrower or a
Guarantor to obtain and maintain, all licenses, permits, certifications and
approvals of all applicable Governmental Authorities as are required for the
conduct of its business as currently conducted and herein contemplated,
including without limitation professional licenses, Medicaid Certifications
and Medicare Certifications and the failure to do so would have a Material
Adverse Effect;
8.10. Covenants Extending to Other Persons . Cause each of the
Guarantors to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 8.2 through 8.9, and 8.18
inclusive;
8.11. Knowledge of Default . Upon any officer of the Borrower obtaining
knowledge of any Default or Event of Default hereunder or under any other
obligation of the Borrower or any Guarantor to any Lender, or any event,
54
development or occurrence which could reasonably be expected to have a
Material Adverse Effect, cause such officer or an Authorized Representative
to promptly notify the Agent of the nature thereof, the period of existence
thereof, and what action the Borrower or such Guarantor proposes to take with
respect thereto;
8.12. Suits or Other Proceedings . Upon any officer of the Borrower
obtaining knowledge of any actual or threatened litigation or other
proceedings being instituted (i) against the Borrower or any Guarantor, or
any attachment, levy, execution or other process being instituted against any
assets of the Borrower or any Guarantor or other Credit Party, in an
aggregate amount greater than $200,000 not otherwise covered by insurance, or
(ii) against the Borrower, any Guarantor or any Contract Provider to suspend,
revoke or terminate any Medicaid Provider Agreement, Medicaid Certification,
Medicare Provider Agreement, Medicare Certification or other federal or state
health care payor program, promptly deliver to the Agent written notice
thereof stating the nature and status of such litigation, dispute,
proceeding, levy, execution or other process;
8.13. Notice of Discharge of Hazardous Material or Environmental
Complaint . Promptly provide to the Agent true, accurate and complete copies
of any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Guarantor relating to any (a) violation or
alleged violation by the Borrower or any Guarantor of any applicable
Environmental Law, (b) release or threatened release by the Borrower or any
Guarantor, or at any facility or property owned or leased or operated by the
Borrower or any Guarantor, of any Hazardous Material, except where occurring
legally, or (c) liability or alleged liability of the Borrower or any
Guarantor for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials; provided that so long as there is no
suspension of operations, such notice is required only when the aggregate
cost of compliance or remedy exceeds $100,000 in the aggregate.
8.14. Environmental Compliance . If the Borrower or any Guarantor shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Guarantor has violated any Environmental
Law or is liable for the costs of cleaning up, removing, remediating or
responding to a release of Hazardous Materials, the Borrower shall, within
the time period permitted by the applicable Environmental Law or the
Governmental Authority responsible for enforcing such Environmental Law,
remove or remedy, or cause the applicable Guarantor to remove or remedy, such
violation or release or satisfy such liability unless and only during the
period that theapplicability of the Environmental Law, the fact of such
violation or liability or what is required to remove or remedy such violation
is being contested by the Borrower or the applicable Guarantor by appropriate
proceedings diligently conducted and all reserves with respect thereto as may
be required under Generally Accepted Accounting Principles, if any, have been
made, and no Lien in connection therewith shall have attached to any property
of the Borrower or the applicable Guarantor which shall have become
enforceable against creditors of such Person;
8.15. Indemnification . Without limiting the generality of Section 12.9,
the Borrower hereby agrees to indemnify and hold the Agent and the Lenders,
and their respective officers, directors, employees and agents, harmless from
and against any and all claims, losses, penalties, liabilities, damages and
expenses (including assessment and cleanup costs and reasonable attorneys'
55
fees and disbursements) arising directly or indirectly from, out of or by
reason of (a) the violation of any Environmental Law by the Borrower or any
Guarantor or with respect to any property owned, operated or leased by the
Borrower or any Guarantor or (b) the handling, storage, treatment, emission
or disposal of any Hazardous Materials by or on behalf of the Borrower or any
Guarantor or on or with respect to property owned or leased or operated by
the Borrower or any Guarantor. Notwithstanding the foregoing, this Section
8.15 shall not apply to violations caused by the Agent when the Collateral is
in the possession and control of the Agent. The provisions of this Section
8.15 shall survive the Facility Termination Date and expiration or
termination of this Agreement;
8.16. Assurances . At the Borrower's cost and expense, upon request of
the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such
further acts that may be reasonably necessary or advisable in the reasonable
opinion of the Agent to carry out more effectively the provisions and
purposes of this Agreement, the Security Instruments and the other Loan
Documents;
8.17. Employee Benefit Plans .
(a) With reasonable promptness, and in any event within thirty (30)
days thereof, give notice to the Agent of (a) the establishment of any
new Pension Plan (which notice shall include a copy of such plan), (b)
the commencement of contributions to any Employee Benefit Plan to which
the Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing
Employee Benefit Plan, (d) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or
sent by the Borrower or any ERISA Affiliate with respect to such request
and (e) the failure of the Borrower or any ERISA Affiliate to make a
required installment or payment under Section 302 of ERISA or Section
412 of the Code by the due date; and
(b) Promptly and in any event within fifteen (15) days of becoming
aware of the occurrence or forthcoming occurrence of any (a) Termination
Event or (b) nonexempt "prohibited transaction," as such term is defined
in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Agent a
notice specifying the nature thereof, what action the Borrower or any
ERISA Affiliate has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
thereto; and
(c) With reasonable promptness but in any event within fifteen (15)
days for purposes of clauses (a), (b) and (c), deliver to the Agent
copies of (a) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan
under Section 401(a) of the Code, (b) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any
Pension Plan or to have a trustee appointed to administer any Pension
Plan, (c) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by the Borrower or any ERISA Affiliate with the
56
Internal Revenue Service with respect to each Pension Plan and (d) all
notices received by the Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA. The Borrower
will notify the Agent in writing within five (5) Business Days of the
Borrower or any ERISA Affiliate obtaining knowledge or reason to know
that the Borrower or any ERISA Affiliate has filed or intends to file a
notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;
8.18. Continued Operations . Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted;
8.19. Patents, Etc. Maintain at all times the right to use, under valid
license agreements or otherwise, all material patents, licenses, franchises,
trademarks, trademark rights, trade names, trade name rights, trade secrets
and copyrights necessary to or used in the conduct of its businesses as now
conducted and as contemplated by the Loan Documents, without known conflict
with any patent, license, franchise, trademark, trade secret, trade name,
copyright, or other proprietary right of any other Person;
8.20. New Guarantors . Simultaneously with the acquisition or creation
of any Guarantor, cause to be delivered to the Agent for the benefit of the
Lenders each of the following:
(i) a Facility Guaranty executed by such Guarantor substantially in
the form of Exhibit I;
(ii) a Security Agreement of such Guarantor substantially in the
form of Exhibit J, together with such Uniform Commercial Code financing
statements on Form UCC-1 or otherwise duly executed by such Guarantor as
"Debtor" and naming the Agent for the benefit of the Lenders as "Secured
Party", in form, substance and number sufficient in the reasonable
opinion of the Agent and its special counsel to be filed in all Uniform
Commercial Code filing offices in all jurisdictions in which filing is
necessary or advisable to perfect in favor of the Agent for the benefit
of the Lenders the Lien on Collateral conferred under such Security
Instrument to the extent such Lien may be perfected by Uniform
Commercial Code filing;
(iii) if such Guarantor is a corporation or is a partnership that
has issued certificates evidencing ownership of Partnership Interests,
(A) the Pledged Stock or, if applicable, certificates of ownership of
such Partnership Interests, together with duly executed stock powers or
powers of assignment in blank affixed thereto, and (B) if such
Collateral shall be owned by a Guarantor who has not then executed and
delivered to the Agent a Security Instrument from the owner of such
Collateral granting a Lien to the Agent in such Collateral, a Security
Agreement or a Pledge Agreement (as appropriate) substantially similar
in form and content to that executed and delivered by the Borrower as of
the Closing Date, with appropriate revisions as to the identity of the
pledgor and securing the obligations of such pledgor under its Facility
Guaranty;
(iv) if such Guarantor is a partnership not described in clause
(iii) immediately above, (A) the certificate of the Registrar of such
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partnership with respect to the registration of the Lien on Partnership
Interests, which certificate shall be in the form of Exhibit K and (B)
if such Collateral shall be owned by a Guarantor who has not then
executed and delivered to the Agent a Security Instrument from the owner
of such Collateral granting a Lien to the Agent in such Collateral, a
Pledge Agreement substantially similar in form and content to that
executed and delivered by the Borrower as of the Closing Date, with
appropriate revisions as to the identity of the pledgor and securing the
obligations of such pledgor under its Facility Guaranty;
(v) a supplement to the appropriate schedule attached to the
appropriate Security Instruments listing the additional Collateral,
certified as true, correct and complete by the Authorized Representative
(provided that the failure to deliver such supplement shall not impair
the rights conferred under the Security Instruments in after acquired
Collateral);
(vi) if the Guarantor is a Material Subsidiary or a Material
Partnership, an opinion of counsel to the Guarantor dated as of the date
of delivery of the Facility Guaranty and other Loan Documents provided
for in this Section 8.20 and addressed to the Agent and the Lenders, in
form and substance reasonably acceptable to the Agent (which opinion may
include assumptions and qualifications of similar effect to those
contained in the opinions of counsel delivered pursuant to Section
6.1(a)(ii)), to the effect that:
(A) such Guarantor is duly organized, validly existing and in
good standing in the jurisdiction of its formation, has the
requisite power and authority to own its properties and conduct its
business as then owned and then conducted and proposed to be
conducted, and is duly qualified to transact business and is in good
standing as a foreign corporation or partnership in each other
jurisdiction in which the character of the properties owned or
leased, or the business carried on by it, requires such
qualification and the failure to be so qualified would reasonably be
likely to result in a Material Adverse Effect;
(B) the execution, delivery and performance of the Facility
Guaranty and other Loan Documents described in this Section 8.20 to
which such Guarantor is a signatory have been duly authorized by all
requisite corporate or partnership action (including any required
shareholder or partner approval), each of such agreements has been
duly executed and delivered and constitutes the valid and binding
agreement of such Guarantor, enforceable against such Guarantor in
accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar
law affecting the enforceability of creditors' rights generally and
to the effect of general principles of equity (whether considered in
a proceeding at law or in equity); and
(C) the Uniform Commercial Code financing statements on Form
UCC-1 delivered to the Agent by the Guarantor in connection with the
delivery of the Security Instruments of such Guarantor have been
duly executed by the Guarantor and are in form, substance and number
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sufficient for filing in all Uniform Commercial Code filing offices
in all jurisdictions in which filing is necessary to perfect in
favor of the Agent for the benefit of the Lenders the Lien on
Collateral conferred under such Security Instruments to the extent
such Lien may be perfected by Uniform Commercial Code filing;
(vii) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Guarantor, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board
of Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable law, of
the shareholders) of such Guarantor authorizing the actions and the
execution and delivery of documents described in this Section 8.20.
ARTICLE IX
Negative Covenants
------------------
Until the Obligations have been paid and satisfied in full, no Letters
of Credit remain outstanding and this Agreement has been terminated in
accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Borrower will not, nor will it permit any Guarantor
to:
9.1. Financial Covenants .
(a) Consolidated Net Worth. Permit Consolidated Net Worth to be
less than (i) $32,500,000 at the Closing Date and through March 30,
1997, and (ii) as at the last day of each succeeding fiscal quarter of
the Borrower and until (but excluding) the last day of the next
following fiscal quarter of the Borrower, the sum of (A) the amount of
Consolidated Net Worth required to be maintained pursuant to this
Section 9.1(a) as at the end of the immediately preceding fiscal
quarter, plus (B) 75% of Consolidated Net Income (with no reduction for
net losses during any period) for the fiscal quarter of the Borrower
ending on such day (including within "Consolidated Net Income" certain
items otherwise excluded, as provided for in the definition of
"Consolidated Net Income"), plus (c)100% of the aggregate amount of all
increases in the stated capital and additional paid-in capital accounts
of the Borrower resulting from the issuance of equity securities or
other capital investments.
(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as of the end of any Four-Quarter Period to be greater than 3.00
to 1.00.
(c) Consolidated Fixed Charge Ratio. Permit the Consolidated Fixed
Charge Ratio as of the end of any Four-Quarter Period to be less than
1.50 to 1.00.
9.2. Acquisitions . Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, unless:
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(a) the Person to be (or whose assets are to be) acquired does not
oppose such Acquisition and the line or lines of business of the Person
to be acquired are substantially the same as one or more line or lines
of business conducted by the Borrower and the Guarantors, and
(b) no Default or Event of Default shall have occurred and be
continuing either immediately prior to or immediately after giving
effect to such Acquisition and the Borrower shall have furnished to the
Agent (A) pro forma historical financial statements as of the end of the
most recently completed Fiscal Year of the Borrower and most recent
interim fiscal quarter, if applicable, giving effect to such Acquisition
and (B) a certificate in the form of Exhibit H prepared on a historical
pro forma basis giving effect to such Acquisition, which certificate
shall demonstrate that no Default or Event of Default would exist
immediately after giving effect thereto,
(c) the Person acquired shall be a Guarantor, or be merged into the
Borrower or a Guarantor, immediately upon consummation of the
Acquisition (or if assets are being acquired, the acquiror shall be the
Borrower or a Guarantor), and
(d) if the Cost of Acquisition shall (A) exceed $3,000,000 in cash,
or (B) exceed $5,000,000 in the aggregate, or (C) cause the aggregate
Cost of Acquisitions incurred in any Fiscal Year to exceed $15,000,000,
the Required Lenders shall consent to such Acquisition in their
discretion;
9.3. Receivables . Permit the aggregate amount of net accounts
receivable which are included as an asset on the consolidated balance sheet
of the Borrower and the Guarantors which remain unpaid 180 or more days from
the date of invoice at any time to exceed 9% of total accounts receivable of
the Borrower and the Guarantors.
9.4. Liens . Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets
now owned or hereafter acquired by the Borrower or any Guarantor, other than
(a) Liens created under the Security Instruments in favor of the
Agent and the Lenders, and otherwise existing as of the date hereof and
as set forth in Schedule 7.7;
(b) Liens imposed by law for taxes, assessments or charges of any
Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP and which Liens
are not yet enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than 90
days from the date of creation thereof for amounts not yet due or which
are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP and
which Liens are not yet enforceable against other creditors;
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(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower or
any Subsidiary and which do not materially detract from the value of the
property to which they attach or materially impair the use thereof to
the Borrower or any Guarantor;
(f) purchase money Liens to secure Indebtedness permitted under
Section 9.5(f) and incurred to purchase fixed assets, provided such
Indebtedness represents not less than 75% of the purchase price of such
assets as of the date of purchase thereof and no property other than the
assets so purchased secures such Indebtedness; and
(g) Liens arising in connection with Capital Leases permitted under
Section 9.5(g); provided that no such Lien shall extend to any
Collateral or to any other property other than the assets subject to
such Capital Leases;
9.5. Indebtedness . Incur, create, assume or permit to exist any
Indebtedness of the Borrower, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth in
Schedule 9.5; provided, none of the instruments and agreements
evidencing or governing such Indebtedness shall be amended, modified or
supplemented after the Closing Date to change any terms of
subordination, repayment or rights of conversion, put, exchange or other
rights from such terms and rights as in effect on the Closing Date;
(b) Indebtedness owing to the Agent or any Lender in connection
with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) additional unsecured Indebtedness for Money Borrowed and not
otherwise covered by clauses (a) through (c) above; provided that the
61
aggregate outstanding principal amount of all such other Indebtedness
permitted under this clause (d) and Sections 9.5(e), (f), (g), and (h)
shall in no event exceed $4,500,000 in the aggregate at any time;
(e) Indebtedness arising from Rate Hedging Obligations permitted
under Section 9.15; provided that the aggregate outstanding
risk-adjusted principal amount as determined by the Agent of all such
Rate Hedging Obligations and of all Indebtedness permitted under this
clause (e) and Sections 9.5(d), (f), (g), and (h) shall in no event
exceed $4,500,000 in the aggregate at any time;
(f) purchase money Indebtedness described in Section 9.4(f);
provided that the aggregate outstanding principal amount of all such
purchase money Indebtedness permitted under this clause (f) and of all
Indebtedness permitted under Sections 9.5(d), (e), (g), and (h) shall in
no event exceed $4,500,000 in the aggregate at any time;
(g) Indebtedness for Money Borrowed arising from Capital Leases
described in Section 9.4(g); provided that the aggregate outstanding
principal amount of such Indebtedness for Money Borrowed arising from
Capital Leases permitted under this clause (g) and of all Indebtedness
permitted under Sections 9.5(d), (e), (f), and (h) shall in no event
exceed $4,500,000 in the aggregate at any time;
(h) Indebtedness for Money Borrowed arising from insurance premium
financing plans that fully amortize within one year; provided that the
aggregate outstanding principal amount of such Indebtedness for Money
Borrowed arising from such insurance premium financing plans permitted
under this clause (h) and of all Indebtedness permitted under Sections
9.5(d), (e), (f), and (g) shall in no event exceed $4,500,000 in the
aggregate at any time; and provided further that the insurance premium
financing plan with Transamerica Insurance Finance Corporation listed on
Schedule 9.5 and permitted under Section 9.5(a) shall be included in and
aggregated under (but not in addition to) Indebtedness for Money
Borrowed arising from insurance premium financing plans permitted under
this clause (h);
(i) Deferred Excess Compensation permitted in Section 9.18.
9.6. Transfer of Assets . Sell, lease, transfer or otherwise dispose of
any assets of Borrower or any Guarantor in excess of $250,000 other than (a)
dispositions of inventory in the ordinary course of business, (b)
dispositions of property that is substantially worn, damaged, obsolete or, in
the judgment of the Borrower, no longer best used or useful in its business
or that of any Guarantor, (c) transfers of assets necessary to give effect to
merger, sale or consolidation transactions permitted by Section 9.8, (d) the
disposition of Eligible Securities in the ordinary course of management of
the investment portfolio of the Borrower and the Guarantors, and (e)
transfers of assets from one Guarantor to another or to the Borrower so long
as after giving effect thereto the Agent shall have a first priority
perfected security interest in such assets;
9.7. Investments . Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
62
exist any interest whatsoever in any other Person or permit to exist any
loans or advances to any Person, except that Borrower may maintain
investments or invest in:
(a) securities of any Person acquired in an Acquisition permitted
hereunder;
(b) Securities;
(c) investments existing as of the date hereof and as set forth in
Schedule 7.4;
(d) receivable arising and trade credit granted in the ordinary
course of business and any securities received in satisfaction or
partial satisfaction thereof in connection with accounts of financially
troubled Persons to the extent reasonably necessary in order to prevent
or limit loss; and
(e) investments in or loans to Guarantors;
(f) other loans, advances and investments in an aggregate principal
amount at any time outstanding not to exceed $500,000;
9.8. Merger or Consolidation . (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise
dispose of all or a substantial part of its assets (other than sales
permitted under Section 9.6 (a), (b) and (d)); provided, however, (i) any
Guarantor may merge or transfer all or substantially all of its assets into
or consolidate with the Borrower or any Guarantor, and (ii) any other Person
may merge into or consolidate with the Borrower or any Guarantor and any
Guarantor may merge into or consolidate with any other Person in order to
consummate an Acquisition permitted by Section 9.2, provided further, that
any resulting or surviving entity shall execute and deliver such agreements
and other documents, including a Facility Guaranty, and take such other
action as the Agent may require to evidence or confirm its express assumption
of the obligations and liabilities of its predecessor entities under the Loan
Documents;
9.9. Restricted Payments . Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing
except;
(a) any Guarantor may make Restricted Payments to the Borrower; or
(b) any Guarantor may make Restricted Payments to another Guarantor; or
(c) those distributions set forth on Schedule 9.9;
9.10. Transactions with Affiliates . Other than transactions permitted
under Sections 9.7 and 9.8, and transactions with Guarantors, enter into any
transaction after the Closing Date, including, without limitation, the
purchase, sale, lease or exchange of property, real or personal, or the
63
rendering of any service, with any Affiliate of the Borrower, except (a) that
such Persons may render services to the Borrower or the Guarantors for
compensation at the same rates generally paid by Persons engaged in the same
or similar businesses for the same or similar services, (b) that the Borrower
or any Guarantor may render services to such Persons for compensation at the
same rates generally charged by the Borrower or such Guarantor and (c) in
either case in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's (or any Guarantor's) business consistent with
past practice of the Borrower and the Guarantors and upon fair and reasonable
terms no less favorable to the Borrower (or any Guarantor) than would be
obtained in a comparable arm's-length transaction with a Person not an
Affiliate;
9.11. Compliance with ERISA . With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA Affiliate
to the PBGC; or
(b) permit the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any ERISA Affiliate may be required to make
under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) establishment of any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee
Benefit Plan which establishment or amendment could result in liability
to the Borrower or any ERISA Affiliate or increase the obligation of the
Borrower or any ERISA Affiliate to a Multiemployer Plan which liability
or increase, individually or together with all similar liabilities and
increases, is in excess of $50,000; or
(g) fail, or permit the Borrower or any ERISA Affiliate to fail, to
establish, maintain and operate each Employee Benefit Plan in compliance
in all material respects with the provisions of ERISA, the Code, all
applicable Foreign Benefit Laws and all other applicable laws and the
regulations and interpretations thereof;
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9.12. Fiscal Year . Change its Fiscal Year;
9.13. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 9.8;
9.14. Change in Control . Cause, suffer or permit to exist or occur any
Change of Control;
9.15. Rate Hedging Obligations . Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to
Rate Hedging Obligations, except for Rate Hedging Obligations incurred to
limit risks of currency or interest rate fluctuations to which the Borrower
and the Guarantors are subject by virtue of the Indebtedness evidenced by the
Notes.
9.16. Negative Pledge Clauses . Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or
limits the ability of any of the Borrower or any Guarantor to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, provided that the Borrower
and any Guarantor may enter into such an agreement in connection with
property subject to any Lien permitted by this Agreement and not released
after the date hereof, when such prohibition or limitation is by its terms
effective only against the assets subject to such Lien;
9.17. Change in Management . Suffer any change in management wherein
Mitchell Eisenberg fails to be actively involved in the management of
Borrower; provided, however, Borrower shall have a period of 120 days
thereafter to select a replacement which is acceptable to the Required
Lenders in their sole and absolute discretion.
9.18. Deferred Excess Compensation . Cause or permit the outstanding
liability for Deferred Excess Compensation in any event to exceed $3,000,000
in the aggregate at any time.
ARTICLE X
Events of Default and Acceleration
----------------------------------
10.1. Events of Default . If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever
(and whether such occurrence shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of
any Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan, Reimbursement Obligation or other Obligation,
when and as the same shall be due and payable whether pursuant to any
provision of Article II or Article III, at maturity, by acceleration or
otherwise; or
65
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan, Reimbursement Obligation or other
Obligation or of any fees or other amounts payable to any of the Lenders
or the Agent on the date on which the same shall be due and payable and
such default shall continue for four (4) or more days; or
(c) if default shall be made in the performance or observance of
any covenant set forth in Section 8.7, 8.11, 8.20, or Article IX;
(d) if a default shall be made in the performance or observance of,
or shall occur under, any covenant, agreement or provision contained in
this Agreement or the Notes (other than as described in clauses (a), (b)
or (c) above) and such default shall continue for 30 or more days after
the earlier of receipt of notice of such default by the Authorized
Representative from the Agent or an officer of the Borrower becomes
aware of such default, or if a default shall be made in the performance
or observance of, or shall occur under, any covenant, agreement or
provision contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any instrument
or document evidencing or creating any obligation, guaranty, or Lien in
favor of the Agent or any of the Lenders or delivered to the Agent or
any of the Lenders in connection with or pursuant to this Agreement or
any of the Obligations, or if any Loan Document ceases to be in full
force and effect (other than by reason of any action by the Agent), or
if without the written consent of the Lenders, this Agreement or any
other Loan Document shall be disaffirmed or shall terminate, be
terminable or be terminated or become void or unenforceable for any
reason whatsoever (other than in accordance with its terms in the
absence of default or by reason of any action by the Lenders or the
Agent); or
(e) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect
to any Indebtedness (other than the Loans and other Obligations) of the
Borrower or any Guarantor in an amount not less than $100,000 in the
aggregate outstanding, or (ii) a default, which is not waived, in the
performance, observance or fulfillment of any term or covenant contained
in any agreement or instrument under or pursuant to which any such
Indebtedness may have been issued, created, assumed, guaranteed or
secured by the Borrower or any Guarantor, or (iii) any other event of
default as specified in any agreement or instrument under or pursuant to
which any such Indebtedness may have been issued, created, assumed,
guaranteed or secured by the Borrower or any Guarantor, and such default
or event of default shall continue for more than the period of grace, if
any, therein specified, or such default or event of default shall permit
the holder of any such Indebtedness (or any agent or trustee acting on
behalf of one or more holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent or any Lender by or on
behalf of the Borrower or any other Credit Party pursuant to or in
connection with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
66
(g) if the Borrower or any Guarantor or other Credit Party shall be
unable to pay its debts generally as they become due; file a petition to
take advantage of any insolvency statute; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole
or any substantial part of its property; file a petition or answer which
in either case seeks liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other applicable
law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator
or conservator of the Borrower or any Guarantor or of the whole or any
substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Borrower or any Guarantor seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which petition is not dismissed
or stayed within sixty (60) days; or if, under the provisions of any
other law for the relief or aid of debtors, a court of competent
jurisdiction shall assume custody or control of the Borrower or any
Guarantor or of the whole or any substantial part of its properties,
which control is not relinquished within sixty (60) days; or if there is
commenced against the Borrower or any Guarantor any proceeding or
petition seeking reorganization, arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state which proceeding or petition
remains undismissed for a period of sixty (60) days; or if the Borrower
or any Guarantor takes any action to indicate its consent to or approval
of any such proceeding or petition; or
(i) if (i) one or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $100,000 is rendered against the Borrower or
any Guarantor, or (ii) there is any attachment, injunction or execution
against any of the Borrower's or Guarantors' properties for any amount
in excess of $100,000 in the aggregate; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged, unbonded
or undismissed for a period of thirty (30) days; or
(j) if the Borrower or any Guarantor shall, other than in the
ordinary course of business (as determined by past practices), suspend
all or any part of its operations material to the conduct of the
business of the Borrower and such Guarantor, taken as a whole, for a
period of more than 30 days; or
(k) if the Borrower or any Guarantor shall breach any of the
material terms or conditions of any agreement under which any Rate
Hedging Obligations permitted hereby is created and such breach shall
continue beyond any grace period, if any, relating thereto pursuant to
the terms of such agreement, or if the Borrower or any Guarantor shall
disaffirm or seek to disaffirm any such agreement or any of its
obligations thereunder; or
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(l) if there shall occur and not be waived an Event of Default as
defined in any of the other Loan Documents;
(m) (i) cancellation, revocation, suspension or termination of any
Medicare Certification, Medicare Provider Agreement, Medicaid
Certification or Medicaid Provider Agreement affecting the Borrower, any
Guarantor or any Contract Provider, or (ii) the loss of any other
permits, licenses, authorizations, certifications or approvals from any
federal, state or local Governmental Authority or termination of any
contract with any such authority, in either case which cancellation,
revocation, suspension, termination or loss (X) in the case of any
suspension or temporary loss only, continues for a period greater than
60 days and (Y) results in the suspension or termination of operations
of the Borrower or any Guarantor or in the failure of the Borrower or
any Guarantors or any Contract Provider to be eligible to participate in
Medicare or Medicaid programs or to accept assignments of rights to
reimbursement under Medicaid Regulations or Medicare Regulations;
provided that any such events described in this Section 10.1(m) shall
result either singly or in the aggregate in the termination,
cancellation, suspension or material impairment of operations or rights
to reimbursement which produce 5% or more of the Borrower's gross
revenues (on an annualized basis);
(n) if there shall occur any Termination Event;
(o) any actual or asserted invalidity (other than by the Agent and
Lenders) of any of the Loan Documents;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders and the Issuing
Bank to make further Revolving Loans or to issue additional
Letters of Credit terminated, whereupon the obligation of
each Lender to make further Revolving Loans and of the
Issuing Bank to issue additional Letters of Credit,
hereunder shall terminate immediately, and (ii) the Agent
shall at the direction of the Required Lenders, at their
option, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same,
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including all interest accrued thereon and all other
obligations of the Borrower to the Agent and the Lenders,
shall forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of
any kind, all of which are hereby expressly waived, anything
contained herein or in any instrument evidencing the
Obligations to the contrary notwithstanding; provided,
however, that notwithstanding the above, if there shall
occur an Event of Default under clause (g) or (h) above,
then the obligation of the Lenders to make Revolving Loans
and of the Issuing Bank to issue Letters of Credit hereunder
shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Agent or the Required Lenders
or notice to the Agent or the Lenders;
(B) the Borrower shall, upon demand of the Agent or the
Required Lenders, deposit cash with the Agent in an amount
equal to the amount of any Letter of Credit Outstandings, as
collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts
shall be held by the Agent pursuant to the terms of the LC
Account Agreement; and
(C) the Agent and each of the Lenders shall have all of
the rights and remedies available under the Loan Documents
or under any applicable law.
10.2. Agent to Act . In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or
remedies either by suit in equity or by action at law, or both, whether for
the specific performance of any covenant, agreement or other provision
contained herein or in any other Loan Document, or to enforce the payment of
the Obligations or any other legal or equitable right or remedy.
10.3. Cumulative Rights . No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right
or remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing at
law or in equity or by statute, or otherwise.
10.4. No Waiver . No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or
otherwise available to it shall operate as a waiver of any rights or remedies
and no single or partial exercise of any rights or remedies shall operate as
a waiver or preclude the exercise of any other rights or remedies hereunder
or of the same right or remedy on a future occasion.
10.5. Allocation of Proceeds . If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant
to Article X hereof, all payments received by the Agent hereunder, in respect
of any principal of or interest on the Obligations or any other amounts
payable by the Borrower hereunder, shall be applied by the Agent in the
following order:
(a) amounts due to the Lenders pursuant to Sections 2.10, 3.3, 3.4
and 12.5;
(b) amounts due to the Agent pursuant to Section 11.11;
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(c) payments of interest on Loans and Reimbursement Obligations, to
be applied for the ratable benefit of the Lenders;
(d) payments of principal of Loans and Reimbursement Obligations,
to be applied for the ratable benefit of the Lenders;
(e) payments of cash amounts to the Agent in respect of outstanding
Letters of Credit pursuant to Section 10.1(B);
(f) amounts due to the Lenders pursuant to Sections 3.2(g), 8.15
and 12.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
(h) amounts due to any of the Lenders in respect of Obligations
consisting of liabilities under any Swap Agreement with any of the
Lenders on a pro rata basis according to the amounts owed; and
(i) any other Indebtedness.
ARTICLE XI
The Agent
---------
11.1. Appointment . Each Lender hereby irrevocably designates and
appoints NationsBank as the Agent for the Lenders under this Agreement, and
each of the Lenders hereby irrevocably authorizes NationsBank as the Agent
for such Lender, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers as
are expressly delegated to the Agent by the terms of this Agreement and such
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with
any of the Lenders, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against the Agent. So long as
NationsBank shall be the sole Lender, the term Agent shall mean NationsBank
as sole Lender.
11.2. Attorneys-in-fact . The Agent may execute any of its duties under
the Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence, gross
negligence or willful misconduct of any agents or attorneys-in-fact selected
by it with reasonable care.
11.3. Limitation on Liability . Neither the Agent nor any of its
officers, directors, employees, agents or attorneys-in-fact shall be liable
to the Lenders for any action lawfully taken or omitted to be taken by it or
70
them under or in connection with the Loan Documents except for its or their
own gross negligence or willful misconduct. Neither the Agent nor any of its
affiliates shall be responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower, any
other Credit Party or any officer or representative thereof contained in any
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in or received by the Agent under or in
connection with any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Loan Document, or for any
failure of the Borrower or any other Credit Party to perform its obligations
under any Loan Document, or for any recitals, statements, representations or
warranties made, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any collateral. The Agent shall not be under
any obligation to any of the Lenders to ascertain or to inquire as to the
observance or performance of any of the terms, covenants or conditions of any
Loan Document on the part of the Borrower or any other Credit Party or to
inspect the properties, books or records of the Borrower or the Guarantors or
any other Credit Party.
11.4. Reliance . The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telefacsimile or telex
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and
other experts selected by the Agent. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless an Assignment and
Acceptance shall have been filed with and accepted by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under the
Loan Documents unless it shall first receive advice or concurrence of the
Lenders or the Required Lenders as provided in this Agreement or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under the Loan Documents
in accordance with a request of the Required Lenders, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all present and future holders of the Notes.
11.5. Notice of Default . The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, the Authorized
Representative or the Borrower 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 shall
promptly give notice thereof to the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
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 Event of Default as it shall deem advisable in the best
interests of the Lenders.
11.6. No Representations . Each Lender expressly acknowledges that
neither the Agent nor any of its affiliates has made any representations or
71
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Borrower, the Guarantors or any other Credit
Party, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that 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 financial condition,
creditworthiness, affairs, status and nature of the Borrower and each other
Credit Party and made its own decision to enter into this Agreement. Each
Lender also represents that 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 under the
Loan Documents and to make such investigation as it deems necessary to inform
itself as to the status and affairs, financial or otherwise, of the Borrower,
the Guarantors and any other Credit Party. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
affairs, financial condition or business of the Borrower, its Subsidiaries
and any other Credit Party which may come into the possession of the Agent or
any of its affiliates.
11.7. Indemnification . Notwithstanding the amendment and restatement of
the Prior Agreement by this Agreement, the Borrower shall continue to be
liable to NationsBank with respect to agreements on the part of the Borrower
under the Prior Agreement to indemnify and hold harmless NationsBank from and
against all claims, demand, liabilities, damages, losses, costs, charges and
expenses to which NationsBank may be subject arising in connection with the
Prior Agreement. Each of the Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower or any other
Credit Party and without limiting any obligations of the Borrower or any
other Credit Party to do so), ratably according to the respective principal
amount of the Notes held by them (or, if no Notes are outstanding, ratably in
accordance with their respective Applicable Commitment Percentages as then in
effect) from and against any and all liabilities, obligations, losses
(excluding any losses suffered by the Agent as a result of Borrower's failure
to pay any fee owing to the Agent), damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may at any time (including without limitation at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of any Loan Document or any other
document contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the Facility
Termination Date and the termination of this Agreement.
11.8. Lender . The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower
and the Guarantors as though it were not the Agent hereunder. With respect to
its Loans made or renewed by it and any Note issued to it, the Agent shall
72
have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity.
11.9. Resignation . If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint, with the consent, so long
as there shall not have occurred and be continuing a Default or Event of
Default, of the Borrower, which consent shall not be unreasonably withheld, a
successor Agent forthe Lenders, which successor Agent shall be a commercial
bank organized under the laws of the United States or any state thereof,
having a combined surplus and capital of not less than $500,000,000,
whereupon such successor Agent shall succeed to the rights, powers and duties
of the former Agent and the obligations of the former Agent shall be
terminated and canceled, without any other or further act or deed on the part
of such former Agent or any of the parties to this Agreement; provided,
however, that the former Agent's resignation shall not become effective until
such successor Agent has been appointed and has succeeded of record to all
right, title and interest in any collateral held by the Agent; provided,
further, that if the Required Lenders and, if applicable, the Borrower cannot
agree as to a successor Agent within ninety (90) days after such resignation,
the Agent shall appoint a successor Agent which satisfies the criteria set
forth above in this Section 11.9 for a successor Agent and the parties hereto
agree to execute whatever documents are necessary to effect such action under
this Agreement or any other document executed pursuant to this Agreement;
provided, however that in such event all provisions of the Loan Documents,
shall remain in full force and effect. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article XI shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
11.10. Sharing of Payments, etc . Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than
pursuant to Article V) which results in its receiving more than its pro rata
share of the aggregate payments with respect to all of the Obligations (other
than any payment expressly provided hereunder to be distributed on other than
a pro rata basis and payments pursuant to Article V), then (a) such Lender
shall be deemed to have simultaneously purchased from the other Lenders a
share in their Obligations so that the amount of the Obligations held by each
of the Lenders shall be pro rata and (b) such other adjustments shall be made
from time to time as shall be equitable to insure that the Lenders share such
payments ratably; provided, however, that for purposes of this Section 11.10
the term "pro rata" shall be determined with respect to the Revolving Credit
Commitment of each Lender and to the Total Revolving Credit Commitments after
subtraction in each case of amounts, if any, by which any such Lender has not
funded its share of the outstanding Loans and Obligations. If all or any
portion of any such excess payment is thereafter recovered from the Lender
which received the same, the purchase provided in this Section 11.10 shall be
rescinded to the extent of such recovery, without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that each Lender
so purchasing a portion ofthe other Lenders' Obligations may exercise all
rights of payment (including, without limitation, all rights of set-off,
banker's lien or counterclaim) with respect to such portion as fully as if
such Lender were the direct holder of such portion.
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11.11. Fees . The Borrower agrees to pay to the Agent, for its
individual account, an annual Administrative Agent's fee as from time to time
agreed to by the Borrower and Agent in writing.
ARTICLE XII
Miscellaneous
-------------
12.1. Assignments and Participations .
(a) At any time after the Closing Date each Lender may, with the prior
consent of the Agent and (so long as no Default or Event of Default shall
have occurred and be continuing) the Borrower, which consents shall not be
unreasonably withheld, assign to one or more banks or financial institutions
all or a portion of its rights and obligations under the Loan Documents
(including, without limitation, all or a portion of any Note payable to its
order); provided, that (i) each such assignment shall be of a constant and
not a varying percentage of all of the assigning Lender's rights and
obligations under the Revolving Credit Facility and Letter of Credit
Facility, (ii) for each assignment involving the issuance and transfer of a
Note, the assigning Lender shall execute an Assignment and Acceptance and the
Borrower hereby agrees to execute a replacement Note to give effect to the
assignment, (iii) the amount of Revolving Credit Commitment and Letter of
Credit Commitment which shall be assigned is a minimum of $5,000,000, and, if
greater, an amount which is an integral multiple of $1,000,000, or if such
Lender's Revolving Credit Commitment or Letter of Credit Commitment is less
than $5,000,000, the full amount of such Revolving Credit Commitment or
Letter of Credit Commitment, (iv) such assignee shall have an office located
in the United States, and (v) no consent of the Borrower or the Agent shall
be required in connection with any assignment by a Lender to another Lender
or to an affiliate of any Lender. Upon such execution, delivery, approval and
acceptance, from and after the effective date specified in each Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder or under any such Note have
been assigned or negotiated to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and a holder of such
Note and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder or under such Note have been assigned or negotiated by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement. Any Lender who makes an
assignment shall pay to the Agent a one-time administrative fee of $3,500
which fee shall not be reimbursed by the Borrower.
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) the assignment made
under such Assignment and Acceptance is made under such Assignment and
Acceptance without recourse; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the Guarantors or the performance or
observance by the Borrower or any other Credit Party of any of its
obligations under any Loan Document or any other instrument or Document
furnished pursuant hereto; (iii) such assignee confirms that it has received
a copy of this Agreement, together with copies of the financial statements
delivered pursuant to Section 7.6(a) or Section 8.1, as the case may be, and
such other Loan Documents and other documents and information as it has
74
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender 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 any Loan Document; (v) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms hereof
and thereof, together with such powers as are reasonably incidental thereto;
and (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender and a holder of such Notes.
(c) The Agent shall maintain at its address referred to herein a copy of
each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Nothing herein shall prohibit any Lender from pledging or assigning,
without notice to or consent of the Borrower and without the payment of the
administrative fee referred to in Section 12.1(a), any Note to any Federal
Reserve Bank in accordance with applicable law.
(f) Each Lender may sell participations at its expense to one or more
banks or other entities as to all or a portion of its rights and obligations
under this Agreement; provided, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any Note issued to
it for the purpose of this Agreement, (iv) such participations shall be in a
minimum amount of $5,000,000 and, if greater, an amount which is an integral
multiple of $1,000,000, or if such Lender's Revolving Credit Commitment or
Letter of Credit Commitment is less than $5,000,000, the full amount of such
Revolving Credit Commitment or Letter of Credit Commitment, and shall include
an allocable portion of such Lender's Participation, (v) 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 with regard to any and all payments to be made under this
Agreement; provided, that the participation agreement between a Lender and
its participants may provide that such Lender will obtain the approval of
such participant prior to such Lender's agreeing to any amendment or waiver
of any provisions of any Loan Document which would (A) extend the maturity of
any Note, (B) reduce the interest rates hereunder or (C) increase the
Revolving Credit Commitment or Letter of Credit Commitment of the Lender
granting the participation, and (vi) the sale of any such participations
which require Borrower to file a registration statement with the United
States Securities and Exchange Commission or under the securities regulations
or laws of any state shall not be permitted.
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(g) The Borrower may not assign, nor shall it cause, suffer or permit
any other Credit Party to assign any rights, powers, duties or obligations
under this Agreement or the other Loan Documents without the prior written
consent of all the Lenders.
12.2. Notices . Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which
delivered (including hand delivery by commercial courier service) to such
party (against receipt therefor), (ii) on the date of receipt at such
address, telefacsimile number or telex number as may from time to time be
specified by such party in written notice to the other parties hereto or
otherwise received), in the case of notice by telegram, telefacsimile or
telex, respectively (where the receipt of such message is verified by
return), or (iii) on the fifth Business Day after the day on which mailed, if
sent prepaid by certified or registered mail, return receipt requested, in
each case delivered, transmitted or mailed, as the case may be, to the
address, telex number or telefacsimile number, as appropriate, set forth
below or such other address or number as such party shall specify by notice
hereunder:
(a) if to the Borrower:
Sheridan Healthcare, Inc.
4561 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attn: Mitchell Eisenberg, M.D., President
Telephone: (954) 986-7550
Telefacsimile: (954) 987-8359
with a copy to:
Jay A. Martus, Esquire, Vice President and General Counsel
(b)if to the Agent:
NationsBank, National Association (South)
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 388-3916
Telefacsimile: (704) 386-9923
(c)if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
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(d)if to any Guarantor, at the address set forth on
the signature page of the Facility Guaranty or
Security Instrument executed by such Guarantor, as
the case may be.
12.3. Setoff . The Borrower agrees that the Agent and each Lender shall
have a lien for all the Obligations of the Borrower upon all deposits or
deposit accounts, of any kind, or any interest in any deposits or deposit
accounts thereof, now or hereafter pledged, mortgaged, transferred or
assigned to the Agent or such Lender or otherwise in the possession or
control of the Agent or such Lender (other than for safekeeping) for any
purpose for the account or benefit of the Borrower and including any balance
of any deposit account or of any credit of the Borrower with the Agent or
such Lender, whether now existing or hereafter established, hereby
authorizing the Agent (and each of its affiliates) and each Lender (and each
of its affiliates) at any time or times with or without prior notice to apply
such balances or any part thereof to such of the Obligations of the Borrower
to the Lenders then past due and in such amounts as they may elect, and
whether or not the collateral or the responsibility of other Persons
primarily, secondarily or otherwise liable may be deemed adequate. For the
purposes of this paragraph, all remittances and property shall be deemed to
be in the possession of the Agent or such Lender as soon as the same may be
put in transit to it by mail or carrier or by other bailee.
12.4. Survival . All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans
and the issuance of the Letters of Credit and the execution and delivery to
the Lenders of this Agreement and the Notes and shall continue in full force
and effect so long as any of Obligations remain outstanding or any Lender has
any commitment hereunder or the Borrower has continuing obligations hereunder
unless otherwise provided herein. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party and all covenants, provisions
and agreements by or on behalf of the Borrower which are contained in the
Loan Documents shall inure to the benefit of the successors and permitted
assigns of the Lenders or any of them.
12.5. Expenses . The Borrower agrees (a) to pay or reimburse the Agent
for all its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of, and any
amendment, supplement or modification to, any of the Loan Documents
(including due diligence expenses and travel expenses), and the consummation
of the transactions contemplated thereby, including the reasonable fees (not
to exceed $50,000) and disbursements of counsel to the Agent, (b) to pay or
reimburse the Agent and the Lenders for all their costs and expenses incurred
in connection with the enforcement or preservation of any rights under the
Loan Documents, including the reasonable fees and disbursements of their
counsel and any payments in indemnification or otherwise payable by the
Lenders to the Agent pursuant to the Loan Documents, and (c) to pay,
77
indemnify and hold the Agent and the Lenders harmless from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any failure to pay or delay in paying, documentary, stamp,
excise and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of any of the Loan
Documents, or consummation of any amendment, supplement or modification of,
or any waiver or consent under or in respect of, any Loan Document.
12.6. Amendments . No amendment, modification or waiver of any provision
of any Loan Document and no consent by the Lenders to any departure therefrom
by the Borrower or any Guarantor shall be effective unless such amendment,
modification or waiver shall be in writing and signed by the Agent and
Borrower, shall have been approved by the Required Lenders through their
written consent, and the same shall then be effective only for the period and
on the conditions and for the specific instances and purposes specified in
such writing; provided, however, that, no such amendment, modification or
waiver
(i) which changes, extends or waives any provision of
Section 2.6, Section 11.9 or this Section 12.6, the amount
of or the due date of any scheduled installment of any
Obligation, which decreases the rate of interest payable on
any Obligation, which changes the definition of "Required
Lenders", which permits an assignment by any Credit Party of
its Obligations under any Loan Document, which reduces the
required consent of Lenders provided hereunder, which
increases, decreases (other than pursuant to the express
terms hereof) or extends (other than pursuant to the express
terms hereof) the Revolving Credit Commitment or Letter of
Credit Commitment of any Lender, or which waives any
condition to the making of any Loan, shall be effective
unless in writing and signed by each of the Lenders;
(ii) which releases Collateral or the guaranty
obligation under any Facility Guaranty (other than pursuant
to the express terms hereof or thereof) shall be effective
unless with the written consent of each of the Lenders; or
(iv) which affects the rights, privileges or
obligations of the Issuing Bank as issuer of Letters of
Credit, shall be effective unless signed in writing by the
Issuing Bank;
(v) which affects the rights, privileges, immunities or
indemnities of the Agent shall be effective unless in
writing and signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the
contrary, as between the Agent and the Lenders, execution by the Agent shall
not be deemed conclusive evidence that the Agent has obtained the written
consent of the Required Lenders. No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances, except as otherwise expressly provided
herein. No delay or omission on any Lender's or the Agent's part in
exercising any right, remedy or option shall operate as a waiver of such or
any other right, remedy or option or of any Default or Event of Default.
12.7. Counterparts . This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
78
12.8. Termination . The termination of this Agreement shall not affect
any rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of
such termination, and the provisions hereof shall continue to be fully
operative until all transactions entered into or rights created or
obligations incurred prior to such termination have been fully disposed of,
concluded or liquidated and the Obligations arising prior to or after such
termination have been irrevocably paid in full. The rights granted to the
Agent for the benefit of the Lenders under the Loan Documents shall continue
in full force and effect, notwithstanding the termination of this Agreement,
until all of the Obligations have been paid in full after the termination
hereof (other than Obligations in the nature of continuing indemnities or
expense reimbursement obligations not yet due and payable, which shall
continue) or the Borrower has furnished the Lenders and the Agent with an
indemnification satisfactory to the Agent and each Lender with respect
thereto. All representations, warranties, covenants, waivers and agreements
contained herein shall survive termination hereof until payment in full of
the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, any Lender is for any reason compelled to surrender such payment
to any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and the Borrower shall be
liable to, and shall indemnify and hold the Agent or such Lender harmless
for, the amount of such payment surrendered until the Agent or such Lender
shall have been finally and irrevocably paid in full. The provisions of the
foregoing sentence shall be and remain effective notwithstanding any contrary
action which may have been taken by the Agent or the Lenders in reliance upon
such payment, and any such contrary action so taken shall be without
prejudice to the Agent or the Lenders' rights under this Agreement and shall
be deemed to have been conditioned upon such payment having become final and
irrevocable.
12.9. Indemnification; Limitation of Liability . In consideration of the
execution and delivery of this Agreement by the Agent and each Lender and the
extension of credit under the Loans, the Borrower hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their respective
affiliates, officers, directors, employees, agents and advisors
(collectively, the "Indemnified Parties") free and harmless from and against
any and all claims, actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities") that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the execution, delivery, enforcement,
performance or administration of this Agreement and the other Loan Documents,
or any transaction financed or to be financed in whole or in part, directly
79
or indirectly, with the proceeds of any Loan or Letter of Credit, whether or
not such action is brought against the Agent or any Lender, the shareholders
or creditors of the Agent or any Lender or an Indemnified Party or an
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated herein are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The Borrower agrees that no Indemnified Party shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to it, any of the Guarantors, any Credit Party, or any security
holders or creditors thereof arising out of, related to or in connection with
the transactions contemplated herein, except to the extent that such
liability is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence
or willful misconduct; provided, however, in no event shall any Indemnified
Party be liable for consequential, indirect or special, as opposed to direct,
damages.
12.10. Severability . If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more
of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither illegal
nor invalid, and in any event all other provisions hereof shall remain
effective and binding on the parties hereto.
12.11. Entire Agreement . This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between
or among the parties, both oral and written, with respect thereto.
12.12. Agreement Controls . In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of
this Agreement, the terms and provisions of this Agreement shall control to
the extent of such conflict.
12.13. Usury Savings Clause . Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term
is defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest
Lawful Rate (as defined below), the outstanding amount of the Loans made
hereunder shall bear interest at the Highest Lawful Rate until the total
amount of interest due hereunder equals the amount of interest which would
have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect. In addition, if when the Loans
made hereunder are repaid in full the total interest due hereunder (taking
into account the increase provided for above) is less than the total amount
of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
80
the extent permitted by law, the Borrower shall pay to the Agent an amount
equal to the difference between the amount of interest paid and the amount of
interest which wouldhave been paid if the Highest Lawful Rate had at all
times been in effect. Notwithstanding the foregoing, it is the intention of
the Lenders and the Borrower to conform strictly to any applicable usury
laws. Accordingly, if any Lender contracts for, charges, or receives any
consideration which constitutes interest in excess of the Highest Lawful
Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to theBorrower. As used in
this paragraph, the term "Highest Lawful Rate" means the maximum lawful
interest rate, if any, that at any time or from time to time may be
contracted for, charged, or received under the laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
12.14. Governing Law; Waiver of Jury Trial .
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE
SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF BROWARD, STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS
PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING,
AND THE BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY HEREBY AGREES THAT SERVICE OF PROCESS MAY BE MADE
BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED
OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER
PROVIDED IN SECTION 12.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED
FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
81
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S PROPERTY OR
ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE
APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY
ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
UNDER APPLICABLE LAW.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE AGENT AND THE
LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY
SUCH ACTION OR PROCEEDING.
12.15. Confidentiality. Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement, which
has been identified as confidential by the Borrower or which is known by such
Lender to be confidential, in accordance with such Lender's customary
procedures for handling confidential information of such nature and in
accordace with customary banking practices, provided that this Section 12.15
is subject to Section 8.1(h) and in any event it is understood and agreed
that each lender may make disclosure of such information (a) to its examiners
and Affiliates, auditors and counsel, and to other professional advisors in
connection with this Agreement, provided they shall likewise hold such
information confidential, (b) as reasonably required by any bona fide
prospective participant or actual participant in connection with the
contemplated transfer of any Commitment, Loan or Note or any participation
therein provided they shall likewise hold such information confidential, or
(c) as required or requested by any Governmental Authority or pursuant to
legal process; provided, further, that in no event shall any Lender be
obligated or required to return any material furnished by the borrower or any
Guarantor. In the foregoing events the Lenders shall upon request return and
use its best efforts to cause any other person to whom the Lenders shall have
furnished information to return or destroy, all confidential information
furnished to it or them by the borrower or any Guarantor. In the event the
Borrower or a Guarantor shall furnish to the Agent or a Lender information
which the Borrower or Guarantor shall have received from another Person and
which information is subject to a confidentiality agreement, then, in such
event, so long as the Agent shall have been advised of the terms of such
confidentiality agreement by the Borrower, then the Agent and the Lenders
receiving such information shall likewise be bound by the terms of such
confidentiality agreement.
82
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
made, executed and delivered by their duly authorized officers as of the day
and year first above written.
SHERIDAN HEALTHCARE INC.
WITNESS:
- ------------------------- By:
-------------------------------------------
Name:
- ------------------------- -----------------------------------------
Title:
----------------------------------------
WITNESS: NATIONSBANK, NATIONAL ASSOCIATION (SOUTH),
AS AGENT FOR THE LENDERS
- ------------------------- By:
-------------------------------------------
- ------------------------- Name:
-----------------------------------------
Title:
----------------------------------------
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH)
By:
------------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Lending Office:
NationsBank, National Association (South)
Independence Center, 15th Floor
NCI-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 388-3916
Telefacsimile (704) 386-9923
Wire Transfer Instructions:
NationsBank, Natioinal Association (South)
ABA#
--------------------------------------
Account No.:
------------------------------
Reference:
--------------------------------
Attention:
--------------------------------
83
EXHIBIT F
Form of Note
Promissory Note
(Revolving Loan)
$35,000,000 ----------,------------
--------, 199-
FOR VALUE RECEIVED, SHERIDAN HEALTHCARE, INC., a Delaware corporation
haveing its principal place of business located in Hollywood, Florida (the
"Borrower"), hereby promises to pay to the order of
______________________________________ (the "Lender"), in its individual
capacity, in care of NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), as agent for
the Lender (the "Agent"), at One Independence Center, 101 North Tryon Stree,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or
places as the Agent may designate in writing) at the times set forth in the
Amended and Restated Credit Agreement dated as of ____________________, 1997
among the Borrower, the financial institutions party thereto (collectively,
the "Lenders") and the Agent (the "Agreement"-- all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of _______________________ DOLLARS
($_____________________) or, if less than such principal amount, the
aggregate unpaid principal amount of all Revolving Loans made by the Lender
to the Borrower pursuant to the Agreement on the Revolving Credit Termination
Date or such earlier date as may be required pursuant to the terms of the
Agreement, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the rates
provided in Article II of the Agreement. All or any portion of the principal
amount of Loans may be prepaid or required to be prepaid as provided in the
Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement, the then remaining principal amount and accrued but unpaid
interest shall bear interest which shall be payable on demand at the rates
per annum set forth in the proviso to Section 2.2 (a) of the Agreement.
Further, in the event of such acceleration, this Note shall become
immediately due and payable, without presentation, demand, protest or notice
of any kind, all of which are hereby waived by the Borrower.
In the event this 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 costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
1
This Note is one of the Notes referred to in the Agreement and is issued
pursuant to and entitled to the benefits and security of the Agreement to
which reference is hereby made for a more complete statement of the terms and
conditions upon which the Revolving Loans evidenced hereby were or are made
and are to be repaid. This Note is subject to certain restrictions on
transfer or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, Guarantors, endorsers or otherwise, hereby
waive to the full extent permitted by law the benefits of all provisions of
law for stay or delay of execution or sale of property or other satisfaction
of judgement against any of them on account of liability hereon until
judgement be obtained and execution issues against any other of them and
returned satisfied or until it can be shown that the maker or any other party
hereto had no property available for the satisfaction of the debt eveidenced
by this instrument, or until any other proceedings can be had against any of
them, also their right, if any, to require the holder hereof to hold as
security for this Note any collateral deposited by any of said Persons as
security. Protest, notice of protest, notice of dishonor, diligence or any
other formality are hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized representative as of the date
and year first above written, all pursuant to authority duly granted.
SHERIDN HEALTHCARE, INC.
WITNESS:
- ------------------------ By:
- ------------------------ ---------------------------
Name:
-------------------------
Title:
------------------------