SECOND AMENDED AND RESTATED CREDIT AGREEMENT
by and among
SHERIDAN HEALTHCARE, INC.,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
April 30, 1998
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April
30, 1998 (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, 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, 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, (a) the Borrower and NationsBank have heretofore entered into
a Revolving Credit Agreement dated November 1, 1995 (the "Original Agreement")
pursuant to which NationsBank agreed to make a revolving credit facility to the
Borrower, which facility was guaranteed by certain subsidiaries and affiliates
(the "Original Guarantors") of the Borrower by Guaranty Agreements (the
"Original Guarantys"), and (b) the Borrower and the Original Guarantors have
secured their obligations pursuant to a Security Agreement dated November 1,
1995 (the "Original Security Agreement") by which the Borrower and the Original
Guarantors granted to NationsBank a security interest in property described
therein, and (c) the Borrower and certain subsidiaries and affiliates (the
"Original Pledgors") have secured their obligations and the Borrower's
obligations pursuant to a Securities Pledge Agreement dated November 1, 1995
(the "Original Pledge Agreement") pursuant to which the Original Pledgors
granted to NationsBank a security interest in the securities described therein;
and
WHEREAS, by the Amended and Restated Credit Agreement dated March 12,
1997, as amended by the First Amendment to the Amended and Restated Credit
Agreement dated December 17, 1997 (the "Existing Agreement") the Borrower, the
Agent and certain Lenders (the "Existing Lenders") amended and restated the
Original Agreement in its entirety; and
WHEREAS, in conjunction with the entering into of the Existing
Agreement, (a) the Original Guarantors amended and restated the Original
Guarantys in their entirety pursuant to (i) that certain Amended and Restated
Guaranty Agreement dated March 12, 1997 and (ii) subsequent Guaranty Agreements
delivered to the Agent pursuant to Section 8.20 of the Existing Agreement
(collectively, the "Existing Guarantys"), (b) the Borrower and the Original
Guarantors amended and restated the Original Security Agreement in its entirety
pursuant to (i) that certain Amended and Restated Security Agreement dated March
12, 1997 and (ii) subsequent Security Agreements delivered to the Agent pursuant
to Section 8.20 of the Existing Agreement (collectively, the "Existing Security
Agreements"), and (c) the Original Pledgors have amended and restated the
Original Pledge Agreement in its entirety pursuant to (i) that certain Amended
and Restated Securities Pledge Agreement and (ii) subsequent Securities Pledge
Agreements delivered to the Agent pursuant to Section 8.20 of the Existing
Agreement (collectively, the "Existing Pledge Agreements"); and
WHEREAS, the Borrower has requested that the Lenders amend and restate
the Existing Agreement in its entirety in order to provide for a revolving
credit facility of $75,000,000, the proceeds of which are to be used as provided
in Section 2.12 and which shall include a letter of credit facility of
$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 Existing 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 Existing Agreement, except as otherwise provided
herein, shall be superseded by this Agreement.
Notwithstanding the amendment and restatement of the Existing Agreement
by this Agreement, the Borrower shall continue to be liable to the Agent and the
Existing Lenders with respect to agreements on the part of the Borrower under
the Existing Agreement to indemnify and hold harmless the Agent and Existing
Lenders from and against all claims, demands, liabilities, damages, losses,
costs, charges and expenses to which the Agent and the Existing Lenders may be
subject arising in connection with the Existing Agreement. This Agreement is
given as a substitution of, and not as a payment of, the obligations of Borrower
under the Existing Agreement and is not intended to constitute a novation of the
Existing Agreement. Except as otherwise selected by the Borrower by delivery of
a Borrowing Notice or Interest Rate Protection 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 Existing Agreement as of
the Closing Date, as determined by the Lenders, shall constitute Advances
hereunder accruing interest with respect to Base Rate Loans under the Existing
Agreement, at the Base Rate hereunder. The parties hereto agree that the
Interest Periods for all Eurodollar Rate Loans outstanding under the Existing
Agreement on the Closing Date shall be terminated and the Borrower shall furnish
to the Agent an Interest Rate Selection Notice for existing Loans and a
Borrowing Notice for additional Loans as may be required in connection with the
allocation of Loans among Lenders in accordance with their Applicable Commitment
Percentages. All of the indebtedness, liabilities and obligations owing by the
Borrower under the Existing Agreement shall continue to be secured by the
"Collateral" as defined in the Existing Agreement and the Borrower acknowledges
and agrees that the "Collateral" as defined in the Existing Agreement remains
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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 that portion of the Total Revolving Credit Commitment (including
its Participations and its obligations hereunder to the Issuing Bank to
acquire Participations) allocable to such Lender (i) with respect to
Lenders as of the Closing Date, as set forth in Exhibit A and (ii) with
respect to any Person who becomes a Lender hereafter, as reflected in
each Assignment and Acceptance to which such Lender is a party
Assignee; 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 Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
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"Applicable Margin" and "Applicable Unused Fee" 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 Applicable Unused Fee
I Less than 1.50 to 1.00 1.000% 0.250%
II Equal to or greater than 1.50 to 1.125% 0.375%
1.00 and less than 2.00 to 1.00
III Equal to or greater than 2.00 to 1.375% 0.375%
1.00 and less than 2.50 to 1.00
IV Equal to or greater than 2.50 to 1.875% 0.500%
1.00 and equal to or less than 3.00
to 1.00
From the Closing Date to through October 31, 1998, the Applicable
Margin and Applicable Unused Fee shall be Tier IV. Thereafter, the
Applicable Margin and Applicable Unused Fee shall be established at the
end of each fiscal quarter of the Borrower (each, a "Determination
Date"). Any change in the Applicable Margin or Applicable Unused Fee
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 and
Applicable Unused Fee shall be Tier IV until the appropriate
certificate is so delivered.
"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.
"Asset Disposition" means any voluntary disposition, whether
by sale, lease or transfer of (a) any or all of the assets, excluding
cash and cash equivalents, of the Borrower or any Subsidiary or any
professional corporation or association whose financial results are
included in the consolidated financial statements of the Borrower, and
(b) any of the capital stock, or securities and investments
interchangeable, exercisable or convertible for or into, or otherwise
entitling the holder to receive, any of the capital stock of any
Subsidiary or any professional corporation or association whose
financial results are included in the consolidated financial statements
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of the Borrower (other than a disposition permitted under Sections 9.6
or Section 9.9 hereof).
"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.
"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, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (1/2%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall become effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate.
"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.
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"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) by the
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 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) 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
(iii) 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.
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"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, and (vi) certain
demonstrable adjustments approved by the Agent in connection with an
Acquisition all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis; 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".
"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.
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"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 cash dividends paid to shareholders of the
Borrower, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis; 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 Fixed Charges 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".
"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
8
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.
"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 of the primary obligor;
(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
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(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.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"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.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.8 or Article V of
one Type of Loan into another Type of Loan.
"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.
"Debt Offering" means the incurrence of any Indebtedness for
Money Borrowed permitted hereunder in connection with a public offering
or private placement of debt securities of the Borrower or any
Subsidiary or any professional corporation or association whose
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financial results are included in the consolidated financial statements
of the Borrower; provided however, the term "Debt Offering" shall not
include any Indebtedness permitted by Section 9.5.
"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 employment 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.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 12.1, the Borrower,
such approval not to be unreasonably withheld or delayed by the Agent
or the Borrower, it being agreed that the Borrower may withhold its
approval if as a result of such assignment the Borrower incurs
increased costs under Section 5.1 or Section 5.6; provided, however,
that neither the Borrower nor an affiliate of the Borrower shall
qualify as an Eligible Assignee.
"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
11
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
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.
"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.
"Equity Offering" means a public or private offering of equity
securities (including, without limitation, any security or investment
exchangeable, exercisable or convertible for or into, or otherwise
entitling the holder to receive, equity securities) of the Borrower or
any Subsidiary or any professional corporation or association whose
financial results are included in the consolidated financial statements
of the Borrower (other than securities issued to the Borrower or a
Subsidiary); provided however, the term "Equity Offering" shall not
include any issuance of equity securities in connection with (i) the
exercise of stock options granted, or purchase of restricted stock,
pursuant to Schedule 9.9, or (ii) an Acquisition permitted by Section
9.2 and constituting all or a portion of the Cost of Acquisition.
12
"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- Reserve Requirement Margin
"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.
"Excluded Asset Dispositions" means, collectively (or
individually as the context may indicate), (i) the sale of certain
assets of Primedica Healthcare, Inc. pursuant to the terms of that
certain Consent Letter dated April 16, 1998, and (ii) the sale of the
furniture, equipment and medical supplies of the primary care and
rheumatology practice located at 4700 North Habana Avenue, #201, Tampa,
Florida pursuant to the terms set forth in the Sheridan Healthcare,
Inc. Memorandum dated April 17, 1998.
"Facility Guaranty" means the Second Amended and Restated
Guaranty and Suretyship Agreement among the Guarantors and the Agent
for the benefit of the Lenders, delivered as of the Closing Date and
such other Guaranty and Suretyship Agreements otherwise pursuant to
Section 8.20, as from time to time amended, revised, modified,
supplemented or amended and restated.
"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.
13
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 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 if such day is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day.
"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 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.
14
"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; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%).
"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,
15
(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 seven (7) 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.
"LC Account 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.
"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.
16
"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, revised, modified, supplemented
or amended and restated amended from the time to time.
"Loan Party" means, collectively, the Borrower, each Guarantor
and each other Person providing Collateral pursuant to any Security
Instrument.
"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 Loan 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).
"Material Guarantor" means any Guarantor which (i) has total
assets equal to or greater than 5% of Consolidated Total Assets
17
(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).
"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
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
18
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.
"NationsBank" means NationsBank, National Association.
"Net Proceeds" means (a) from any Equity Offering or Debt
Offering cash payments received by the Borrower or any Subsidiary or
any professional corporation or association whose financial results are
included in the consolidated financial statements of the Borrower
therefrom as and when received, net of all legal, accounting, banking
and underwriting 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 issuance; (b)
from any Asset Disposition cash payments received by the Borrower or
any Subsidiary or any professional corporation or association whose
financial results are included in the consolidated financial statements
of the Borrower therefrom (including cash payments received pursuant to
any note or other debt security received in connection with any Asset
Disposition) as and when received, net of (i) all legal, accounting,
banking and underwriting fees and expenses and other fees and expenses
paid to third parties and incurred in connection therewith, (ii) all
taxes required to be paid or accrued as a consequence of such sale,
(iii) amounts applied to repayment of Indebtedness (other than the
Obligations) secured by a Lien on the asset or property disposed, and
(iv) any other necessary costs incurred in connection with such Asset
Disposition.
"Note Pledge Agreement" means that certain Amended and
Restated Note Pledge Agreement dated April 16, 1998 between Primedica
Healthcare, Inc. and the Agent, for the benefit of the Lenders, as from
time to time amended, revised, modified, supplemented or amended and
restated.
19
"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.
"NMS" means NationsBanc Montgomery Securities LLC.
"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 the Borrower to any Lender or an affiliate of 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 an affiliate 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.
"Permitted Liens" has the meaning given to such term in
Section 9.4.
"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 Second 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
20
Agent and the Lenders, and (ii) any additional Pledge Agreement
delivered to the Agent pursuant to Section 8.20, as from time to time
amended, revised, modified, supplemented or amended and restated.
"Pledged Partnership Interests" has the meaning given to such
term in the Pledge Agreement.
"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 per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank
presently located at 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.
21
"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 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 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.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
22
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"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.
"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.
"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 Obligations (including the discharge of all Obligations to the
Issuing Bank and the Lenders with respect to Letters of Credit and
Participations).
"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.
"Securities Pledge Agreement Supplement" means, collectively
(or individually as the context may indicate) any duly completed and
signed Securities Pledge Agreement Supplement in the form of Exhibit A
to the Pledge Agreement delivered to the Agent pursuant to the terms of
the Pledge Agreement or Section 8.20.
23
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Second 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 from time to time
amended, revised, modified, supplemented or amended and restated.
"Security Instruments" means, collectively, the Pledge
Agreement, the Security Agreement, the LC Account Agreement, the Note
Pledge 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, revised, modified,
supplemented or amended and restated 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.
"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 April 30, 2001.
"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.
24
"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.
"Total Revolving Credit Commitment" means a principal amount
equal to $75,000,000, as reduced from time to time in accordance with
Section 2.7.
"Type" shall mean any type of Loan (i.e. a Base Rate Loan or a
Eurodollar Rate Loan).
"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.
25
(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.
(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 of
construction 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.
26
ARTICLE II
The Revolving Credit Facility
-----------------------------
2.1. Revolving Loans .
(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.
(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) $750,000, and, if greater than
$750,000, an integral multiple of $500,000 in the case of Eurodollar
Rate Loans, and (ii) $500,000, and if greater than $500,000, an
integral multiple of $100,000 in the case of Base Rate Loans.
(c) Advances. 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
27
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 seven (7) different Interest Periods. If the
Agent does not receive a Borrowing 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
28
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.
(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 June 30, 1998 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 . (a) Manner of Payment. 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)
$750,000 or such greater amount which is an integral multiple of
29
$500,000 in the case of Eurodollar Rate Loans, (ii) $500,000 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 and all interest accrued thereon or such other amount as
necessary to comply with Section 2.1(b) or Section 2.8.
(b) Mandatory Prepayments. The Borrower shall make the
following required prepayments, each such payment to be made to the
Agent for the benefit of the Lenders within the time period specified
below:
(i) Equity Offerings. The Borrower shall make, or shall cause
each applicable Subsidiary or any professional corporation or
association whose financial results are included in the consolidated
financial statements of the Borrower to make, a prepayment from the Net
Proceeds of any Equity Offering in an amount equal to one hundred
percent (100%) of such Net Proceeds, but excluding up to $20,000,000 in
Net Proceeds of an Equity Offering of the Borrower within ninety (90)
days of the Closing Date. Each such prepayment shall be made within
fifteen (15) Business Days of receipt of such Net Proceeds and upon not
less than three (3) Business Days' written notice to the Agent, and
shall include within one (1) Business Day of repayment a certificate of
an Authorized Representative setting forth in reasonable detail the
calculations utilized in computing the amount of the Net Proceeds.
(ii) Debt Offerings. The Borrower shall make, or shall cause
each applicable Subsidiary or any professional corporation or
association whose financial results are included in the consolidated
financial statements of the Borrower to make, a prepayment from the Net
Proceeds of any Debt Offering in an amount equal to one hundred percent
(100%) of such Net Proceeds. Each such prepayment shall be made within
fifteen (15) Business Days of receipt of such Net Proceeds and upon not
less than three (3) Business Days' written notice to the Agent, and
shall include within one (1) Business Day of repayment a certificate of
an Authorized Representative setting forth in reasonable detail the
calculations utilized in computing the amount of the Net Proceeds.
(iii) Asset Dispositions. The Borrower shall make, or shall
cause each applicable Subsidiary or any professional corporation or
association whose financial results are included in the consolidated
financial statements of the Borrower to make, a prepayment from the Net
Proceeds of any Asset Disposition in an amount equal to one hundred
percent (100%) of such Net Proceeds, but excluding the Net Proceeds of
any Excluded Asset Disposition. Each such prepayment shall be made
within fifteen (15) Business Days of receipt of such Net Proceeds and
upon not less than three (3) Business Days' written notice to the
Agent, and shall include within one (1) Business Day of repayment a
certificate of an Authorized Representative setting forth in reasonable
detail the calculations utilized in computing the amount of the Net
Proceeds.
All mandatory prepayments made pursuant to this Section 2.3
shall permanently reduce the Total Revolving Credit Commitment by the
amount of such mandatory prepayment and shall be applied first to all
Base Rate Loans until all Base Rate Loans shall have been repaid and
30
then to Eurodollar Rate Loans. Any prepayment of a Eurodollar Rate Loan
pursuant to this Section 2.3 other than on the last day of an Interest
Period shall be accompanied by the additional payment, if any, required
under Section 5.4 hereof.
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.
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
31
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
$750,000 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
. 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
(b) provided that no Default or Event of Default shall have
occurred and be continuing and 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.
32
2.10. Unused 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 the Applicable Unused Fee 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 June 30, 1998 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 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 corporate purposes, including refinancing
certain Indebtedness, working capital needs, and 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
33
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 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
the Issuing 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).
34
(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.
(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.
35
(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, 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 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) 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
36
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, an
amount to be agreed upon from time to time by the Issuing Bank and the
Borrower, based on the aggregate amount 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
--------
4.1. Security . As security for the full and timely payment
and performance of all Obligations, the Loan 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).
37
4.2. Further Assurances. At the request of the Agent, the
Borrower will or will cause the Guarantors or other Loan 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, 1993 (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, 1993, (c) each
location in which goods constituting Collateral are or have been
located since January 1, 1993 (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, 1993 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 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
Change in Circumstances
-----------------------
5.1 Increased Cost and Reduced Return .
(a) If, after the date hereof, the adoption of any applicable
law, rule, or regulation, or any change in any applicable law, rule, or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank, or comparable
38
agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any
such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Reserve Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Eurodollar Rate Loans or to reduce any
sum received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or its Note with respect to any Eurodollar
Rate Loans, then the Borrower shall pay to such Lender on demand such
amount or amounts as will compensate such Lender for such increased
cost or reduction; provided that no Lender will be entitled to any
compensation for any such increased cost or reduction if demand for
payment thereof is made by such Lender more than 180 days after the
occurrence of the circumstances giving rise to such claim. If any
Lender requests compensation by the Borrower under this Section 5.1(a),
the Borrower may, by notice to such Lender (with a copy to the Agent),
suspend the obligation of such Lender to make or Continue Loans of the
Type with respect to which such compensation is requested, or to
Convert Loans of any other Type into Loans of such Type, until the
event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 5.4 shall be applicable);
provided that such suspension shall not affect the right of such Lender
to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of
such
39
Lender or any corporation controlling such Lender as a consequence of
such Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand
the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this
Section and will designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this
Section shall furnish to the Borrower and the Agent a statement setting
forth the additional amount or amounts to be paid to it hereunder which
shall be conclusive in the absence of manifest error. In determining
such amount, such Lender may use any reasonable averaging and
attribution methods that such Lender uses for its customers that are
similarly situated to the Borrower.
5.2 Limitation on Types of Loans . If on or prior to the first
day of any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying
the relevant Type of Loans and the relevant amounts or periods, and so
long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Loans of such Type, Continue Loans of
such Type, or to Convert Loans of any other Type into Loans of such
Type and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Loans of the affected Type,
either prepay such Loans or Convert such Loans into another Type of
Loan in accordance with the terms of this Agreement.
5.3. Illegality . Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate
Loans hereunder, then such Lender shall promptly notify the Borrower
thereof and such Lender's obligation to make or Continue Eurodollar
Rate Loans and to Convert other Types of Loans into Eurodollar Rate
Loans shall be suspended until such time as such Lender may again make,
maintain, and fund Eurodollar Rate Loans (in which case the provisions
of Section 5.4 shall be applicable).
40
5.4. Treatment of Affected Loans . If the obligation of any
Lender to make a Eurodollar Rate Loan or to Continue, or to Convert
Loans of any other Type into, Loans of a particular Type shall be
suspended pursuant to Section 5.1 or 5.3 hereof (Loans of such Type
being herein called "Affected Loans" and such Type being herein called
the "Affected Type"), such Lender's Affected Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of
a Conversion required by Section 5.3 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to
such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent)
that the circumstances specified in Section 5.1 or 5.3 hereof that gave
rise to the Conversion of such Lender's Affected Loans pursuant to this
Section 5.4 no longer exist (which such Lender agrees to do promptly
upon such circumstances ceasing to exist) at a time when Loans of the
Affected Type made by other Lenders are outstanding, such Lender's Base
Rate Loans shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Loans of the
Affected Type, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Loans of the Affected
Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective
Revolving Credit Commitments.
5.5. Compensation . Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender) to compensate it
for any loss, cost, or expense (including loss of anticipated profits)
incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 10.1) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article VI to be satisfied) to borrow, Convert, Continue, or prepay an
Eurodollar Rate Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this
Agreement.
5.6. Taxes . (a) Any and all payments by the Borrower to or
for the account of any Lender or the Agent hereunder or under any other
41
Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender (or its Applicable
Lending Office) or the Agent (as the case may be) is organized or any
political subdivision thereof (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to any Lender
or the Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.6) such
Lender or the Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance
with applicable law, and (iv) the Borrower shall furnish to the Agent,
at its address referred to in Section 12.2, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Agreement or any other Loan Document or from
the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent
for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 5.6) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto. (d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes
a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Agent (but
only so long as such Lender remains lawfully able to do so), shall
provide the Borrower and the Agent with (i) Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled
to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest
or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the
United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code), certifying that such Lender is
entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Loan Documents.
42
(e) For any period with respect to which a Lender has failed
to provide the Borrower and the Agent with the appropriate form
pursuant to Section 5.6(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 5.6(a), 5.6(b), or 5.6(c)
with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 5.6, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 5.6 shall survive the termination of
the Revolving Credit Commitments and the payment in full of the Notes.
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
--------------------------------------------------------
6.1. Conditions of Initial Advance . The obligation of the
Lenders to continue to make Advances under the Revolving Credit
Facility, and of the Issuing Bank to continue to issue any Letter of
Credit, is subject to the conditions precedent that:
(a) NationsBank and NMS 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 Facility Guaranty, 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 Loan Parties
dated the Closing Date, addressed to the 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 Loan Party certified by its secretary or
43
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 Loan
Party executing the Loan Documents on behalf of such Loan
Party, certified by the secretary or assistant secretary of
such Loan Party; and
(v) the charter documents of each Loan Party
certified as of a recent date by the Secretary of State of its
state of organization or a certificate of the secretary or
assistant secretary of each Loan Party that there has been no
change in such charter documents since the date they were last
delivered to the Agent and such charter documents remain in
full force and effect; and
(vi) the bylaws of each Loan Party certified as of
the Closing Date as true and correct by its secretary or
assistant secretary or a certificate of the secretary or
assistant secretary of each Loan Party that there has been no
change in such bylaws since the date they were last delivered
to the Agent and such bylaws remain in full force and effect;
and
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of
formation of each Loan Party as to the due existence and good
standing of each Loan 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 Loan 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
or a certificate of the General Partner that there has been no
change in such partnership agreement and certificate of
limited partnership since the date they were last delivered to
the Agent and such partnership documents remain in full force
and effect; 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
44
covenants contained in Sections 9.1(a) through 9.1(c), and
Section 9.5, as of March 31, 1998, substantially in the form
of Exhibit H; and
(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 additional Uniform
Commercial Code financing statements, if any, 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 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) the consolidated financial statements of the
Borrower and the Guarantors for the fiscal year 1997,
including balance sheets, statements of operations,
stockholders' equity, and cash flow statements, audited by
independent public accountants of national standing and
prepared in accordance with GAAP and on a Consistent Basis;
and
(xvii) financial projections of the Borrower and the
Guarantors for the next four (4) Fiscal Years, in such detail
and based on such assumptions as are acceptable to the Agent
in its sole discretion; and
(xviii) a schedule of the current ownership of the
Borrower; and
45
(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
(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 December 31,
1997 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 Loan
Documents; and
(iii) the Borrower, the Guarantors and any other Loan
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, including
the terms and conditions set forth in the Existing Agreement;
and
(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 and NMS in their sole discretion
based on reasonable judgment; and
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:
46
(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 of the 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.
3. ARTICLE
Representations and Warranties
------------------------------
47
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 Loan Party is a
party will be the legal, valid and binding obligation or
agreement, as the case may be, of the Borrower or such Loan
Party, enforceable against the Borrower or such Loan 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 Loan 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 Loan 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 Loan Party;
(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
48
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 Loan 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, 1997 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. 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 results of their operations and the changes in its
stockholders' equity for the Fiscal Year then ended, all in conformity
with GAAP applied on a Consistent Basis; and
(b) Except as set forth on Schedule 6.1, since December 31,
1997 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
49
(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;
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
50
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; provided however that the Borrower
may purchase its own stock as provided in Section 9.9(d) only so long
as the Loans are not considered "indirectly secured" by such stock
pursuant to Section 221.1(g)(2) of Regulation U. 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 Loan 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 Loan 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;
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
51
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;
(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;
52
(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
(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,
53
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.
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
54
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) and 9.5, 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 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
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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 or any 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) 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
(f) 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 Guarantor;
(g) 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
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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 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
57
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, 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
Loan 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
58
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 the applicability 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' 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 Further 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,
59
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 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 . At all times continue 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
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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) the Securities Pledge Agreement Supplement
if such Guarantor is a party to the Pledge Agreement, or a Pledge
Agreement substantially in the form of Exhibit L if the Guarantor
has not executed and delivered to the Agent a Pledge Agreement;
(iv) if such Guarantor is a partnership not described
in clause (iii) immediately above, (A) the certificate of the
Registrar of such partnership with respect to the registration of
the Lien on Partnership Interests, which certificate shall be in the
form of Exhibit K and (B) the Securities Pledge Agreement Supplement
if such Guarantor is a party to the Pledge Agreement, or a Pledge
Agreement substantially in the form of Exhibit L if the Guarantor
has not executed and delivered to the Agent a Pledge Agreement;
(v) a supplement to Schedule 4.3 and 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 Guarantor, 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:
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(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 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
------------------
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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) $35, 847,500 at the Closing Date and
through June 29, 1998, 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) 50% 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 Net Proceeds of any Equity Offering.
(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 to be less than that set forth
opposite each such period:
Four-Quarter Period Ending Consolidated Fixed Charge Ratio
Closing - September 30, 1998 2.00 to 1.00
October 1, 1998 - September 30, 1999 2.25 to 1.00
Thereafter 2.75 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:
(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
63
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
$10,000,000 in cash, or (B) exceed $12,500,000 in the aggregate, or (C)
cause the aggregate Cost of Acquisitions incurred in any Fiscal Year to
exceed $40,000,000, the Required Lenders shall consent to such
Acquisition in their discretion; provided that all Acquisitions
completed before the Closing Date shall not be counted toward the
limitation in clause (C) for Fiscal Year 1998.
9.3 [Reserved] .
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 the following (collectively, the "Permitted
Liens"):
(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;
(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;
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(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 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 $10,00,000 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 $10,000,000 in the
aggregate at any time;
(f) purchase money Indebtedness described in Section
9.4(f); provided that the aggregate outstanding principal amount of
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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 $10,000,000 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 $10,000,000 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 $10,000,000 in the aggregate at any time;
(i) Deferred Excess Compensation.
9.6. Transfer of Assets . Sell, lease, transfer or otherwise
dispose of any assets of Borrower or any Guarantor in excess of
$250,000 per Fiscal Year 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 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) Eligible 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
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(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; or
(d) subject to the limitation of Section 7.11, if the
Consolidated Leverage Ratio is less than 2.50 to 1.00 as of
the end of the previous fiscal quarter, the Borrower may
purchase its own stock so long as the aggregate value (as
quoted by a national securities exchange on any date) held as
treasury stock does not at any time exceed $2,000,000;
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 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;
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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;
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;
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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;
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
(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
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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 Loan Party pursuant to or in connection
with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
(g) if the Borrower or any Guarantor or other Loan
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
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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
(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
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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, 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
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(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
11.8;
(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;
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(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, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under
this Agreement and the other Loan Documents with such powers and
discretion as are specifically delegated to the Agent by the terms of
this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as
used in this sentence and in Section 11.5 and the first sentence of
Section 11.6 hereof shall include its affiliates and its own and its
affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in
this Agreement and shall not be a trustee or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document
referred to or provided for in, or received by any of them under, any
Loan Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other
document referred to or provided for therein or for any failure by any
Loan Party or any other Person to perform any of its obligations
thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Loan Party or the satisfaction of any
condition or to inspect the property (including the books and records)
of any Loan Party or any of its Subsidiaries or affiliates; (d) shall
not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and (e) shall not be responsible
for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence
or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
11.2. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone
or telefacsimile) believed by it to be genuine and correct and to have
been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including
counsel for any Loan Party), independent accountants, and other experts
selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the
Agent receives and accepts an Assignment and Acceptance executed in
accordance with Section 12.1 hereof. As to any matters not expressly
provided for by this Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to
74
act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders;
provided, however, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary
to any Loan Document or applicable law or unless 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
any such action.
11.3. Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default
unless the Agent has received written notice from a Lender or the
Borrower specifying 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 of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 11.2 hereof) take such action with
respect to such Default or Event of Default as shall reasonably be
directed by the Required Lenders, provided that, unless and until the
Agent shall have received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
11.4. Rights as Lender. With respect to its Commitment and the
Loans made by it, NationsBank (and any successor acting as Agent) in
its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. NationsBank (and any successor acting
as Agent) and its affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, make investments in,
provide services to, and generally engage in any kind of lending,
trust, or other business with any Loan Party or any of its Subsidiaries
or affiliates as if it were not acting as Agent, and NationsBank (and
any successor acting as Agent) and its affiliates may accept fees and
other consideration from any Loan Party or any of its Subsidiaries or
affiliates for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.
11.5. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed under Section 12.9 hereof, but
without limiting the obligations of the Borrower under such Section)
ratably in accordance with their respective Revolving Credit
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, reasonable costs and expenses
(including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Agent (including by any Lender) in any way relating to or arising out
of any Loan Document or the transactions contemplated thereby or any
action taken or omitted by the Agent under any Loan Document; provided
that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its
75
ratable share of any costs or expenses payable by the Borrower under
Section 12.5, to the extent that the Agent is not promptly reimbursed
for such costs and expenses by the Borrower. The agreements contained
in this Section shall survive payment in full of the Loans and all
other amounts payable under this Agreement.
11.6. Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or
any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Loan Parties
and their Subsidiaries and decision to enter into this Agreement and
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 analysis and
decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information
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 any Loan Party or any of
its Subsidiaries or affiliates that may come into the possession of the
Agent or any of its affiliates.
11.7 Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a
successor Agent subject to the approval of the Borrower so long as no
Default or Event of Default shall have occurred and be continuing, such
approval not to be unreasonably withheld. If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial
bank organized under the laws of the United States of America having
combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article XI shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent.
11.8. 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) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including, without limitation,
all or a portion of its Loans, its Note, and its Revolving Credit
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
76
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, any such partial assignment
shall be in an amount at least equal to $5,000,000 or an
integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Agreement and the Note; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit B hereto, together with any
Note subject to such assignment and a processing fee of
$3,500.
Upon execution, delivery, and acceptance of such Assignment
and Acceptance, the assignee thereunder shall be a party
hereto and, to the extent of such assignment, have the
obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations
under this Agreement. Upon the consummation of any assignment
pursuant to this Section, the assignor, the Agent and the
Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws
of the United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of Taxes in accordance
with Section 5.6.
(b) The Agent shall maintain at its address referred to in Section 12.2
a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
B hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights and obligations or rights and obligations under
this Agreement (including all or a portion of its Revolving Credit
Commitment or its Loans); provided, however, that (i) any such
participation shall be in an amount at least equal to $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (ii)such Lender*s
obligations under this Agreement shall remain unchanged, (iii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iv) the participant shall be entitled to
the benefit of the yield protection provisions contained in Article V and
the right of set-off contained in Section 12.3, and (v) the Borrower shall
continue to deal solely and directly with such Lender in connection with
such Lender*s rights and obligations under this Agreement, and such Lender
shall retain the sole right to enforce the obligations of the Borrower
relating to its Loans and its Note and to approve any amendment,
77
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal
of or the rate at which interest is payable on such Loans or Note,
extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Note, or extending its Revolving
Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its
Loans and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from
its obligations hereunder.
(f) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 12.15
hereof.
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 or any Guarantor:
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:
Sheridan Healthcare, Inc.
4561 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attn:Jay A. Martus, Esquire, Vice President and General Counsel
Telephone: (954) 986-7770
Telefacsimile: (954) 987-8359
78
(b) if to the Agent:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 388-3916
Telefacsimile: (704) 386-9923
with a copy to:
NationsBank, National Association
100 North Tryon Street, 8th Floor
Charlotte, North Carolina 28255
Attention: Michael A. Crabb, III
Telephone: (704) 388-6000
Telefacsimile: (704) 388-6002
(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.
12.3. Right of Setoff; Adjustments . (a) Upon the occurrence
and during the continuance of any Event of Default, each Lender (and
each of its affiliates) is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by
such Lender (or any of its affiliates) to or for the credit or the
account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement and the Note
held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each
Lender under this Section 12.3 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that
such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans owing to it, or
interest thereon, such benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of each such
other Lender's Loans owing to it, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of
79
the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without
interest. The Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this Section 12.3 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of the Borrower in the
amount of such participation.
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 to pay on demand all
reasonable costs and expenses of the Agent in connection with the
syndication, preparation, execution, and delivery of this Agreement,
the other Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under the
Loan Documents. The Borrower further agrees to pay on demand all
reasonable costs and expenses of the Agent, including without
limitation, the reasonable fees and expenses of counsel for the Agent,
in connection with any future modification or amendment of this
Agreement, the other Loan Documents, and the other documents delivered
hereunder. The Borrower further agrees to pay on demand all costs and
expenses of the Agent and the Lenders, if any (including, without
limitation, reasonable attorneys' fees and expenses), in connection
with the enforcement (whether through negotiations, legal proceedings,
or otherwise) of the Loan Documents and the other documents to be
delivered hereunder. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 12.5 shall survive the payment
in full of the Loans and all other amounts payable under this
Agreement.
12.6. Amendments and Waivers . Any provision of this Agreement
or any other Loan Document may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower
and the Required Lenders (and, if Article XI or the rights or duties of
80
the Agent are affected thereby, by the Agent); provided that no such
amendment or waiver shall, unless signed by all the Lenders, (i)
increase the Revolving Credit Commitments of the Lenders, (ii) reduce
the principal of or rate of interest on any Loan or any fees or other
amounts payable hereunder, (iii) postpone any date fixed for the
payment of any scheduled installment of principal of or interest on any
Loan or any fees or other amounts payable hereunder or for termination
of any Revolving Credit Commitment, (iv) change the percentage of the
Revolving Credit Commitments or of the unpaid principal amount of the
Notes, or the number of Lenders, which shall be required for the
Lenders or any of them to take any action under this Section or any
other provision of this Agreement or (v) release any Guarantor or all
or substantially all of the Collateral.
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.
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
81
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 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
Loan 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. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 12.9 shall survive the payment in full of the
Loans and all other amounts payable under this Agreement.
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
82
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 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 would have 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 the
Borrower. 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, NOTWITHSTANDING ITS EXECUTION AND DELIVERY OUTSIDE 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
83
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 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. The Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished
or made available to it by the Borrower pursuant to this Agreement;
provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any
affiliate of any Lending Party, or any officer, director, employee,
agent or advisor of any Lending Party or affiliate of any Lending
Party, (b) to any other Person who agrees to comply with the terms of
84
this Section 12.15 if reasonably incidental to the administration of
the credit facility provided herein, (c) as required by any law, rule,
or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulator agency or
authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Agreement, (g) in
connection with any litigation to which such Lending Party or any of
its affiliates may be a party, (h) to the extent necessary in
connection with the exercise of any remedy under this Agreement or any
other Loan Document, and (i) subject to provisions substantially
similar to those contained in this Section, to any actual or proposed
assignee.
12.16 Payments. All principal, interest, and other amounts to
be made by the Borrower under this Agreement and the other Loan
Documents shall be made to the Agent at the Principal Office in Dollars
and in immediately available funds, without setoff, deduction or
counterclaim. Subject to the definition of "Interest Period" herein,
whenever any payment under this Agreement or any other Loan Document
shall be stated to be due on a day this is not a Business Day, such
payment may be made on the next succeeding Business Day, and such
extension of time in such case shall be included in the computation of
interest and fees, as applicable, and as the case may be.
[Signatures on following pages]
85
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:
s/Wade M. Kennedy By: s/Jay A. Martus, V.P.
- - ------------------ ------------------------------
Name: Jay A. Martus
s/Lucy L. Tate Title: Vice President
WITNESS: NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
s/Kimberly Saltrick By: s/Michael S. Sylvester
- - -------------------- ----------------------
Name: Michael S. Sylvester
s/Lucy L. Tate Title: Vice President
- - --------------------
NATIONSBANK, NATIONAL ASSOCIATION
By: s/Michael S. Sylvester
-------------------------------
Name: Michael S. Sylvester
Title: Vice President
Applicable Lending Office:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 388-3916
Facsimile: (704) 386-9923
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: s/J. Walter Bland
------------------------------
Name: J. Walter Bland
------------------------------
Title: Vice President
------------------------------
By: s/Robert B. Benoit
------------------------------
Name: Robert B. Benoit
------------------------------
Title: Senior Vice President
------------------------------
Applicable Lending Office:
1201 W. Peachtree Street, Suite 3450
Atlanta, Georgia 30309
Attention: Mr. Walter Bland, Vice President
Telephone: (404) 877-9113
Facsimile: (404) 877-9150
FIRST UNION NATIONAL BANK
By: s/Joseph H. Towell
Name: Joseph H. Towell
Title: Senior Vice President
Applicable Lending Office:
One First Union Center
Charlotte, North Carolina 28288-0735
Attention: Mr. Rodney Carson, Vice President
Telephone: (704) 383-4097
Facsimile: (704) 383-9144
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: s/Janet P. Sammons
Name: Janet P. Sammons
Title: Vice President
Applicable Lending Office:
200 S. Orange Avenue, Mail Code: 0-1101
Orlando, Florida 32802
Attention: Ms. Karen George, Executive Vice President
Telephone: (407) 237-4541
Facsimile: (407) 237-5489
BANKBOSTON, N.A.
By: s/Walter J. Marullo
Name: Walter J. Marullo
Title: Vice President
Applicable Lending Office:
100 Federal Street, MS 01-08-06
Boston, Massachusetts 02110
Attention: Mr. Walter J. Marullo, Vice President
Telephone: (617) 434-2308
Facsimile: (617) 434-0819
LASALLE NATIONAL BANK
By: s/Jody M. Staszesky
Name: Jody M. Staszesky
Title: First Vice President
Applicable Lending Office:
135 S. LaSalle Street
Chicago, Illinois 60603
Attention: Ms. Jody M. Staszesky
Telephone: (312) 904-5416
Facsimile: (312) 904-6457
UNION BANK OF CALIFORNIA, N.A.
By: s/Jennifer L. Banks
Name: Jennifer L. Banks
Title: Vice President
Applicable Lending Office:
445 S. Figueroa Street
Los Angeles, California 90071
Attention: Mr. Ted Scribner, Credit Officer
Telephone: (213) 236-6918
Facsimile: (213) 236-7636
Form of Note
Promissory Note
(Revolving Loan)
$--------------- ---------, --------------
April 30, 1998
FOR VALUE RECEIVED, SHERIDAN HEALTHCARE, INC., a Delaware corporation
having its principal place of business located in Hollywood, Florida (the
"Borrower"), hereby promises to pay to the order of
__________________________________________ (the "Lender"), in its individual
capacity, in care of NATIONSBANK, NATIONAL ASSOCIATION, as agent for the Lenders
(the "Agent"), at One Independence Center, 101 North Tryon Street,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the Agent may designate in writing) pursuant to the Second Amended and
Restated Credit Agreement dated as of April___, 1998 among the Borrower, the
financial institutions party thereto (collectively, the "Lenders") and the Agent
(the "Agreement" -- all capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Agreement), in lawful money of the
United States of America, in immediately available funds, the principal amount
of ___________ DOLLARS ($__________) 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.
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 judgment
against any of them on account of liability hereon until judgment 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 evidenced 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.
SHERIDAN HEALTHCARE, INC.
WITNESS:
- - ---------------------- By:
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- - ---------------------- Name:
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Title:
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