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CREDIT AGREEMENT
(TENDER OFFER FINANCING)
Dated as of April 26, 1999
among
VESTAR/SHERIDAN, INC.,
VESTAR/SHERIDAN HOLDINGS, INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N. A., as Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS. 1
1.1 Definitions. 1
1.2 Computation of Time Periods. 12
1.3 Accounting Terms. 13
SECTION 2 CREDIT FACILITY. 13
2.1 Tender Loan. 13
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITY. 15
3.1 Default Rate. 15
3.2 Extension and Conversion. 15
3.3 Voluntary Prepayments. 16
3.4 Capital Adequacy. 16
3.5 Limitation on Eurodollar Loans. 16
3.6 Illegality. 17
3.7 Requirements of Law. 17
3.8 Treatment of Affected Loans. 18
3.9 Taxes. 19
3.10 Compensation. 21
3.11 Pro Rata Treatment. 21
3.12 Sharing of Payments. 22
3.13 Payments, Computations, Etc. 23
3.14 Evidence of Debt. 24
3.15 Replacement of Lenders. 25
SECTION 4 GUARANTY. 25
4.1 The Guaranty. 25
4.2 Obligations Unconditional. 25
4.3 Reinstatement. 26
4.4 Certain Additional Waivers. 27
4.5 Remedies. 27
4.6 Guarantee of Payment; Continuing Guarantee. 27
SECTION 5 CONDITIONS. 27
5.1 Closing Conditions. 27
5.2 Conditions to Extension of Credit. 28
5.3 Conditions to all Extensions of Credit. 30
SECTION 6 REPRESENTATIONS AND WARRANTIES. 31
6.1 Organization and Good Standing. 31
6.2 Power; Authorization; Enforceable Obligations. 31
6.3 No Conflicts. 32
6.4 No Default. 32
6.5 Ownership. 32
6.6 Indebtedness. 32
6.7 Litigation. 32
6.8 Taxes. 33
6.9 Compliance with Law. 33
6.10 Subsidiaries. 33
6.11 ERISA. 33
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6.12 Governmental Regulations, Etc. 33
6.13 Location of Chief Executive Office. 34
6.14 Disclosure. 34
6.15 Brokers' Fees. 34
SECTION 7 AFFIRMATIVE COVENANTS. 34
7.1 Information Covenants. 34
7.2 Preservation of Existence and Franchises. 35
7.3 Books and Records. 35
7.4 Compliance with Law. 35
7.5 Performance of Obligations. 35
7.6 Use of Proceeds. 35
7.7 Consummation of Merger. 35
SECTION 8 NEGATIVE COVENANTS. 35
8.1 Indebtedness. 36
8.2 Liens. 36
8.3 Consolidation, Merger, Dissolution, etc. 36
8.4 Asset Dispositions. 36
8.5 Investments. 36
8.6 Restricted Payments. 36
8.7 Limitations on Business Activities. 36
8.8 No Further Negative Pledges, etc. 37
8.9 ERISA. 37
8.10 Limitations on Business Activities. 37
SECTION 9 EVENTS OF DEFAULT. 37
9.1 Events of Default. 37
9.2 Acceleration; Remedies. 39
SECTION 10 AGENCY PROVISIONS. 40
10.1 Appointment, Powers and Immunities. 40
10.2 Reliance by Agent. 40
10.3 Defaults. 41
10.4 Rights as a Lender. 41
10.5 Indemnification. 41
10.6 Non-Reliance on Agent and Other Lenders. 42
10.7 Successor Agent. 42
SECTION 11 MISCELLANEOUS. 42
11.1 Notices. 42
11.2 Right of Set-Off; Adjustments. 44
11.3 Benefit of Agreement. 45
11.4 No Waiver; Remedies Cumulative. 46
11.5 Expenses; Indemnification. 47
11.6 Amendments, Waivers and Consents. 48
11.7 Counterparts. 49
11.8 Headings. 49
11.9 Survival. 49
11.10 Governing Law; Submission to Jurisdiction; Venue. 49
11.11 Severability. 50
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11.12 Entirety. 50
11.13 Binding Effect; Termination. 50
11.14 Confidentiality. 50
11.15 Conflict. 51
SCHEDULES
Schedule 2.1(a) Lenders
Schedule 6.7 Litigation
Schedule 6.13 Chief Executive Offices/Principal Places
of Business
EXHIBITS
Exhibit 1.1A Form of Pledge Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Tender Loan Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (TENDER OFFER FINANCING), dated as of April 26, 1999
(as amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), is by and among VESTAR/SHERIDAN, INC., a Delaware corporation (the
"Borrower"), VESTAR/SHERIDAN HOLDINGS, INC., a Delaware corporation (the
"Parent"), the Lenders (as defined herein) and NATIONSBANK, N. A., as Agent for
the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide tender offer
credit facilities in an aggregate amount of $33.2 million (the "Credit
Facility") for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested Credit Facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition" means the acquisition by the Borrower of the Tendered
Shares pursuant to the Tender Offer.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N. A., NC1-001-15-04,
101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency
Services, or such other address as may be identified by written notice
from the Agent to the Borrower.
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"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"Applicable Lending Office" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrower by written notice as
the office by which its Eurodollar Loans are made and maintained.
"Asset Disposition", by any Person, means any disposition (including
pursuant to a sale and leaseback) by such Person of any or all of its
Property (including without limitation Capital Stock of a Subsidiary of
such Person), whether by sale, lease, transfer or otherwise.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to
the entry of an order for relief in an involuntary case under any such
law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) such
Person shall be unable to, or shall admit in writing its inability to, pay
its debts generally as they become due.
"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 (0.5%) 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 be
effective on the effective date of such change in the Prime Rate or
Federal Funds Rate.
"Base Rate Loan" means any portion of the Tender Loan bearing
interest at a rate determined by reference to the Base Rate.
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"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close, except that, when
used in connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in Dollar deposits in London,
England.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership,
partnership interests (whether general or limited), (iv) in the case of a
limited liability company, membership interests and (v) any other interest
or participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means, as at any date, (a) securities issued or
directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of
not more than twelve months from the date of acquisition, (b) Dollar
denominated time deposits and certificates of deposit of (i) any Lender,
(ii) any domestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof
or from Moody's is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more than
360 days from the date of acquisition, (c) commercial paper and variable
or fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any of
the Lenders) or recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least
100% of the amount of the repurchase obligations and (e) Investments,
classified in accordance with GAAP as current assets, in money market
investment programs registered under the Investment Company Act of 1940,
as amended, which are administered by reputable financial institutions
having capital of at least $500,000,000 and the portfolios of which are
substantially limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: (a) the
Parent shall fail to own directly 100% of the outstanding Capital Stock of
the Borrower, (b) the Investor Group shall fail to own directly 100% of
the outstanding Capital Stock of the Parent, (c) the failure of the
Sponsor to control, whether through ownership of Voting Stock, by
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contract or otherwise, a majority of the seats (excluding vacant seats) on
the Parent's Board of Directors or (d) the Borrower shall fail to own
directly at least a majority of the voting power (determined on a
fully-diluted basis) of all Voting Stock of Sheridan. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make its portion of the Tender Loan in a principal amount
equal to such Lender's Commitment Percentage of the lesser of (i) the
Committed Amount and (ii) 50% of the purchase price actually paid by the
Borrower for Tendered Shares. "Commitment Percentage" means, for any
Lender, the percentage identified as its Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Committed Amount" means Thirty-three Million Two Hundred Thousand Dollars
($33,200,000).
"Common Stock" means the Common Stock, par value $0.01 per share, of
Sheridan.
"Common Stock Price" means, as of any date of determination, the
closing sale price of the Common Stock on the Stock Market on the last
full trading day immediately preceding such date of determination.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.5 through 3.10, inclusive, of a Base
Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Tender Loan Notes, the Pledge Agreement and all other
related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto (in each case as the same may be
amended, modified, restated, supplemented, extended, renewed or replaced
from time to time), and "Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower and
the Parent, and
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"Credit Party" means either one of them.
"Credit Party Obligations" means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the Agent, whenever
arising, under this Credit Agreement, the Tender Loan Notes, the Pledge
Agreement or any of the other Credit Documents (including, but not limited
to, any interest accruing after the occurrence of a Bankruptcy Event with
respect to any Credit Party, regardless of whether such interest is an
allowed claim under the Bankruptcy Code).
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has
failed to make its portion of the Tender Loan or purchase a Participation
Interest required pursuant to the term of this Credit Agreement within one
Business Day of when due, (b) other than as set forth in (a) above, has
failed to pay to the Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement within one Business Day of
when due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of the assets
of which) a receiver, trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States.
"Effective Date" means the date on and after the Closing Date on
which the conditions set forth in Section 5.2 of the Credit Agreement
shall have been satisfied or waived in accordance with the introductory
paragraph of Section 5.2; provided, however, that the Effective Date shall
not be a date later than August 25, 1999.
"Eligible Assignee" means (i) a Lender; (ii) unless an assignment to
such Person would result in any increased cost to the Borrower under
Section 3.7 or 3.9, an Affiliate of a Lender or, with respect to any
Lender that is a fund that invests in bank loans, any other fund that
invests in bank loans and is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such investment advisor; and
(iii) any other Person approved by the Agent and, unless an Event of
Default under Section 9.1(a), 9.1(c)(i) or 9.1(f) has occurred and is
continuing at the time any assignment is effected in accordance with
Section 11.3, the Borrower (such approval by the Agent or the Borrower not
to be unreasonably withheld or delayed and such approval to be deemed
given by the Borrower if no objection is received by the assigning Lender
and the Agent from the Borrower within two Business Days after notice of
such proposed assignment has been provided by the assigning Lender to the
Borrower and has actually been received by an Executive Officer of the
Borrower); provided, however, that neither the Borrower nor an Affiliate
of the Borrower shall qualify as an Eligible Assignee.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to
time. References to sections of
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ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common control with
either Credit Party within the meaning of Section 4001(a)(14) of ERISA, or
is a member of a group which includes either Credit Party and which is
treated as a single employer under Sections 414(b) or (c) of the Code.
"Eurodollar Loan" means any portion of the Tender Loan that bears
interest at a rate based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
obtained by dividing (a) the Interbank Offered Rate for such Eurodollar
Loan for such Interest Period by (b) 1 minus the Eurodollar Reserve
Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar 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 Eurodollar Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to
(i) any category of 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 Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning assigned to such term in
Section 9.1.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief
financial officer or treasurer of such Person.
"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 (a) 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, and (b) if no such rate is so published
on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual
capacity) on such day on such transactions as determined by the Agent.
"GAAP" means generally accepted accounting principles in the United
States
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applied on a consistent basis and subject to the terms of Section 1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease
or purchase Property, securities or services primarily for the purpose of
assuring the holder of such Indebtedness, or (iv) to otherwise assure or
hold harmless the holder of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall (subject to
any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily made,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person (other
than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase
price of Property or services purchased by such Person (other than trade
debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds
of production from, Property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (f) all Guaranty
Obligations of such Person with respect to Indebtedness of another Person,
(g) the principal portion of all obligations of such Person under leases
classified as capital leases under GAAP, (h) all net obligations of such
Person under any interest rate protection agreement or exposure under
foreign currency exchange agreement, (i) the maximum amount of all
performance and standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (j)
the principal portion of all obligations of such Person under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified
as an
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operating lease under GAAP and (k) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or
a joint venturer to the extent that such Person is liable for such
Indebtedness.
"Indemnified Party" shall have the meaning assigned to such term in
Section 11.5(b).
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Page 3750 (or any
successor page) of the Dow Jones Markets Service as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London
time) two Business Days prior to the first day of such Interest Period for
a term comparable to such Interest Period. If for any reason such rate is
not available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, 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, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect, commencing,
in each case, on the date of the borrowing (including continuations and
conversions thereof); provided, however, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Maturity Date and (c) where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall end on
the last Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets (other than equipment, inventory and supplies in the
ordinary course of business), Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment inventory and supplies in the
ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on behalf
of such Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"Investor Group" means the Sponsor and the Management Investors.
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"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Lending Party" shall have the meaning assigned to such term in
Section 11.14.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such Property, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof and any option or other
agreement to sell or give a security interest).
"Loan" or "Loans" means the Tender Loan (or a portion of the Tender
Loan bearing interest at the Base Rate or the Eurodollar Rate and referred
to as a Base Rate Loan or a Eurodollar Loan), individually or
collectively, as appropriate.
"Management Investors" means Mitchell Eisenberg, Lewis Gold, Michael
Schundler, Jay Martus and other members of management party to the
Stockholders Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets,
liabilities or results of operations of the Credit Parties, (ii) the
ability of any Credit Party to perform any material obligation under the
Credit Documents to which it is a party or (iii) the material rights and
remedies of the Agent and the Lenders under the Credit Documents.
"Maturity Date" means the earlier of (i) the date that the Merger is
consummated and (ii) August 31, 1999.
"Merger" means the merger of the Borrower into Sheridan (with
Sheridan as the surviving corporation) pursuant to the terms of the Merger
Agreement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as
of March 24, 1999, by and among the Borrower, the Parent and Sheridan, as
it may be amended on or prior to the Closing Date.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"NationsBank" means NationsBank, N. A. and its successors.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
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"Offer to Purchase" means the Offer to Purchase, dated as of March
31, 1999, pursuant to which the Borrower has offered to purchase for cash
all of the outstanding Shares at $9.25 net per share, as the same may be
amended, supplemented or modified on or prior to the Closing Date.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.9(b).
"Parent" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Participation Interest" means a purchase by a Lender of a
participation in any Loans as provided in Section 3.12.
"Permitted Investments" means Investments which are (i) cash and
Cash Equivalents; (ii) Investments of the Parent in the Capital Stock of
the Borrower; and (iii) Investments of the Borrower in the Capital Stock
of Sheridan pursuant to the Tender Offer and the Merger Agreement.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens for taxes, assessments or governmental charges or levies
not yet due;
(iii) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(iv) judgment liens in respect of judgments that do not constitute
and Event of Default under Section 9.1(b); and
(v) normal and customary rights of set-off upon deposits of cash in
favor of banks or other depository institutions.
"Permanent Credit Agreement" means that certain Credit Agreement
(Permanent Financing), dated as of the Closing Date, by and among the
Borrower, the Parent, the lenders parties thereto and NationsBank, as
agent for such lenders.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which either
Credit Party or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an
"employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement, dated as of the
Effective Date,
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in the form of Exhibit 1.1A to be executed in favor of the Agent by each
of the Credit Parties, as amended, modified, restated or supplemented from
time to time.
"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 Charlotte, North Carolina.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Purchase Documents" shall have the meaning assigned to such term in
Section 5.2(g).
"Register" shall have the meaning assigned to such term in Section
11.3(c).
"Regulation D, T, U, or X" means Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Required Lenders" means, at any time, Lenders other than Defaulting
Lenders which are then in compliance with their obligations hereunder (as
determined by the Agent) and holding in the aggregate at least a majority
of the outstanding Loans and Participation Interests therein.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or to which any of its material
property is subject.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of either Credit Party, now or hereafter outstanding
(including without limitation any payment in connection with any
dissolution, merger, consolidation or disposition involving either Credit
Party), or to the holders, in their capacity as such, of any shares of any
class of Capital Stock of either Credit Party, now or hereafter
outstanding (other than dividends or distributions payable in the same
class of Capital Stock of the applicable Person or to any Credit Party
(directly or indirectly through Subsidiaries)), (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of Capital Stock
of either Credit Party, now or hereafter outstanding and (iii) 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 Capital Stock of
either Credit Party, now or hereafter outstanding.
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"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor or assignee of the business
of such division in the business of rating securities.
"Securities Act" means the Securities Act of 1933, as amended, and
all regulations issued pursuant thereto.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended, and all regulations issued pursuant thereto.
"Shares" means all of the outstanding shares of Common Stock and
Class A Common Stock, par value $0.01 per share, of Sheridan.
"Sheridan" means Sheridan Healthcare, Inc., a Delaware corporation.
"Sponsor" means a collective reference to Vestar Capital Partners
III, L.P. and its Affiliates.
"Stock Market" shall have the meaning assigned to such term in
Section 5.2(u).
"Stockholders Agreement" means the Stockholders Agreement, dated as
of March 24, 1999, among the Parent, Sheridan, Vestar/Sheridan Investors,
LLC and certain members of management of Sheridan.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of
the directors of such corporation (irrespective of whether or not at such
time, any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at such
time owned by such Person directly or indirectly through Subsidiaries, and
(b) any partnership, association, joint venture or other entity of which
such Person directly or indirectly through Subsidiaries owns at such time
more than 50% of the Capital Stock.
"Taxes" shall have the meaning assigned to such term in Section
3.9(a).
"Tender Loan" shall have the meaning assigned to such term in
Section 2.1(a). "Tender Loan Note" or "Tender Loan Notes" means the
promissory notes of the Borrower in favor of each Lender provided pursuant
to Section 2.1(e) and evidencing the Tender Loans of such Lender,
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"Tender Offer" means the offer by the Borrower made pursuant to the
Offer to Purchase and the related Letter of Transmittal to purchase all
outstanding Shares.
"Tendered Shares" means the Shares (and any options or other rights
to acquire
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shares of Common Stock) tendered by the holders thereof and accepted for
payment by the Borrower (including, without limitation, Tendered Shares
tendered pursuant to a Notice of Guaranteed Delivery), pursuant to the
Offer to Purchase.
"Transaction" means a collective reference to the Tender Offer, the
Acquisition, the Merger and the related financings and other transactions
contemplated by this Credit Agreement, the Purchase Documents and the
Permanent Credit Agreement.
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such 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 though the
right so to vote has been suspended by the happening of such a
contingency.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis.
SECTION 2
CREDIT FACILITY
2.1 Tender Loan.
(a) Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein each
Lender severally agrees to make available to the Borrower as hereinafter
provided such Lender's Commitment Percentage of two (2) advances of a term
loan in Dollars (the "Tender Loan") in an aggregate principal amount for
both such advances equal to the lesser of (i) the Committed Amount and
(ii) 50% of the purchase price actually paid by the Borrower for Tendered
Shares. The first advance on the Tender Loan shall be made on the
Effective Date and shall be in an amount equal to 50% of the purchase
price paid by the Borrower for Tendered Shares other than Tendered Shares
which are tendered pursuant to a Notice of Guaranteed Delivery. Unless the
Commitments shall have been earlier terminated as provided herein, the
second and final advance on the Tender Loan shall (subject to and upon the
terms and conditions hereof (including without limitation the terms and
conditions set forth in Section 5)), be available on a Business Day prior
to the date five (5) Business Days after the Effective Date and shall be
in an amount equal to 50% of the
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purchase price paid by the Borrower for Tendered Shares which are tendered
pursuant to a Notice of Guaranteed Delivery. The Tender Loan may consist
of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than 2 Eurodollar
Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the Tender Loan may not be
reborrowed.
(b) Tender Loan Advances.
(i) Notice of Borrowing. The Borrower shall submit an
appropriate Notice of Borrowing to the Agent not later than 11:00
A.M. (Charlotte, North Carolina time) on the Business Day of the
requested borrowing, with respect to Base Rate Loans, or on the
third Business Day prior to the Business Day of the requested
borrowing, with respect to Eurodollar Loans, which Notice of
Borrowing shall be irrevocable and shall specify (A) that a Tender
Loan advance is requested, (B) the date of the requested advance
(which shall be a Business Day and either the Effective Date or a
date prior to the date five (5) Business Days after the Effective
Date), (C) the aggregate principal amount to be advanced and (D)
whether the advance shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. If the Borrower
shall fail to specify in any such Notice of Borrowing (x) an
applicable Interest Period, in the case of a requested Eurodollar
Loan, then such notice shall be deemed to be a request for an
Interest Period of one month or (y) the type of Loan advance
requested, then such notice shall be deemed to be a request for a
Base Rate Loan. The Agent shall give notice to each Lender promptly
upon receipt of each Notice of Borrowing pursuant to this Section
2.1(b)(i), the contents thereof and each such Lender's share of any
borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan
that is part of the Tender Loan shall be in an aggregate principal
amount that is not less than $5,000,000 and integral multiples of
$100,000 (or the then remaining principal balance of the Tender
Loan, if less).
(iii) Advances. Each Lender will make its Commitment
Percentage of each Tender Loan advance available to the Agent for
the account of the Borrower as specified in Section 3.15(a), or in
such other manner as the Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such advance will then be made available to
the Borrower by the Agent by crediting the account of the Borrower
on the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received
by the Agent.
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(c) Repayment of Tender Loan. The principal amount of the Tender
Loan shall be due and payable in full on the Maturity Date, unless
accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1, the Tender
Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Tender Loan
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the Base
Rate plus 1%.
(ii) Eurodollar Loans. During such periods as the Tender Loan
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to
the Eurodollar Rate plus 2%.
Interest on the Tender Loan shall be payable in arrears on the Maturity
Date.
(e) Tender Loan Notes. The portion of the Tender Loan made by each
Lender shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in an original principal amount equal to such
Lender's Commitment Percentage of the Tender Loan and substantially in the
form of Exhibit 2.1(e).
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITY
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Base Rate plus 2%).
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.6, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Loans extended as, or converted
into, Eurodollar Loans shall be subject to the terms of the definition of
"Interest Period" set forth in Section 1.1 and shall be in such minimum amounts
as provided in Section 2.1(b)(ii), (iii) no more than 2 Eurodollar Loans shall
be outstanding hereunder at any time (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
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separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period) and (iv) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephonic notice promptly confirmed
in writing) to the office of the Agent specified in Schedule 2.1(a), or at such
other office as the Agent may designate in writing, prior to 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall be irrevocable. In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any such
conversion or extension is not permitted or required by this Section, then such
Eurodollar Loan shall be automatically converted into a Base Rate Loan at the
end of the Interest Period applicable thereto. The Agent shall give each Lender
notice as promptly as practicable of any such proposed extension or conversion
affecting any Loan.
3.3 Voluntary Prepayments.
The Borrower shall have the right to prepay the Tender Loan in whole or in
part from time to time; provided, however, that each partial prepayment of the
Tender Loan shall be in a minimum principal amount of $1,000,000 and integral
multiples of $100,000 in excess thereof (or the then remaining principal balance
of the Tender Loan, if less). Subject to the foregoing terms, amounts prepaid
under this Section 3.3(a) shall be applied as the Borrower may elect; provided
that if the Borrower fails to specify a voluntary prepayment then such
prepayment shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities. All prepayments under this
Section 3.3(a) shall be subject to Section 3.10, but otherwise without premium
or penalty.
3.4 Capital Adequacy.
(a) If any Lender has determined, after the date hereof, that the
adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding
capital adequacy, or compliance by such Lender with any request or
directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's
capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrower, specifying in
reasonable detail the basis for such claim, the Borrower shall
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be obligated to pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction. Each determination by any
such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto.
(b) The Borrower shall not be required to compensate a Lender
pursuant to this Section 3.4 for any additional amounts incurred more than
180 days prior to the date that such Lender notifies the Borrower of the
change of law giving rise to such additional amounts and of such Lender's
intention to claim compensation therefor; provided that, if the change of
law giving rise to such additional amounts is retroactive, then such
180-day period referred to above shall be extended to include the period
of retroactive effect thereof.
3.5 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any Eurodollar
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, in writing, that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.6 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.8 shall be
applicable).
3.7 Requirements of Law.
(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
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comparable 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 Loans, its Notes, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Credit
Agreement or its Notes in respect of any Eurodollar 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
Eurodollar 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
Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Credit Agreement or its Notes 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 Loans or to reduce any sum
received or receivable by such Lender (or its Applicable Lending Office)
under this Credit Agreement or its Notes with respect to any Eurodollar
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. If any Lender requests compensation by the Borrower under this
Section 3.7, the Borrower may, by notice to such Lender (with a copy to
the Agent), suspend the obligation of such Lender to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in
effect (in which case the provisions of Section 3.8 shall be applicable);
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested. 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 3.7 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 3.7 shall furnish to the Borrower and the
Agent a statement setting forth the additional amount or amounts to be
paid to it hereunder and showing the calculation thereof in reasonable
detail which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
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(b) The Borrower shall not be required to compensate a Lender
pursuant to this Section 3.7 for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender notifies
the Borrower of the change of law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
provided that, if the change of law giving rise to such increased costs or
reductions is retroactive, then such 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
3.8 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.5, 3.6 or 3.7 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion, 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 3.5, 3.6 or
3.7 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar 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 Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
Converted into Eurodollar Loans 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 3.5, 3.6 or 3.7 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.8 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans 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
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.9 Taxes.
(a) Any and all payments by any Credit Party to or for the account
of any Lender or the Agent hereunder or under any other Credit 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
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political subdivision thereof (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If any Credit Party shall be required
by law to deduct any Taxes from or in respect of any sum payable under
this Credit Agreement or any other Credit 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 3.9) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Credit Party shall make such deductions,
(iii) such Credit Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law,
and (iv) such Credit Party shall furnish to the Agent, at its address
referred to in Section 11.1, 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
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit 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 3.9) 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 that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit 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 W-8 BEN or W-8 ECI,
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 to
zero the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Credit 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/or (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 tax on payments pursuant to this Credit
Agreement or any of the other Credit Documents.
(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 3.9(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
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indemnification under Section 3.9(a) or 3.9(b) with respect to Taxes
imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from 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 any Credit Party is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.9, 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) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 3.9 shall survive the repayment of the
Tender Loan and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
(i) If the Agent or any Lender receives a refund with respect to
Taxes paid by the Borrower, which in the good faith judgment of such
Lender is allocable to such payment, the Agent or Lender, respectively
shall promptly pay such refund, together with any other amounts paid by
the Borrower in connection with such refunded Taxes, to the Borrower, net
of all out-of-pocket expenses of such Lender incurred in obtaining such
refund, provided, however, that the Borrower agrees to promptly return
such refund to the Agent or the applicable Lender, as the case may be, if
it receives notice from the Agent or applicable Lender that such Agent or
Lender is required to repay such refund. Each of the Agent and each Lender
agrees that it will contest such Taxes or liabilities if the Agent or such
Lender determines, in its reasonable judgment, that it would not be
materially disadvantaged or prejudiced as a result of such contest.
3.10 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 (excluding loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) 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 Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation,
or Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid,
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or not so borrowed, Converted or Continued, for the period from the date of such
prepayment or of such failure to borrow, Convert or Continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, Convert
or Continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, any margin included therein, if
any) over (b) the amount of interest (as reasonably determined by such Lender)
which would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The covenants of the Borrower set forth in this Section 3.10 shall
survive the repayment of the Tender Loan and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
3.11 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or prepayment of principal of any
Loan, each payment of interest on the Loans and each conversion or
extension of any Loan, shall be allocated pro rata among the Lenders in
accordance with the respective principal amounts of their outstanding
Loans and Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of
its obligations hereunder. Unless the Agent shall have been notified by
any Lender prior to the date of any requested borrowing that such Lender
does not intend to make available to the Agent its ratable share of such
borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such borrowing,
and the Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled
to recover from the Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate.
3.12 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan or any other obligation owing to
such Lender under this Credit Agreement through the exercise of a right of
setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
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interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan or other obligation in the amount of such
Participation Interest. Except as otherwise expressly provided in this Credit
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or the Agent to the Agent or such
other Lender pursuant to this Credit Agreement on the date when such amount is
due, such payments shall be made together with interest thereon for each date
from the date such amount is due until the date such amount is paid to the Agent
or such other Lender at a rate per annum equal to the Federal Funds Rate. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.12 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders under
this Section 3.12 to share in the benefits of any recovery on such secured
claim.
3.13 Payments, Computations, Etc.
(a) Generally. Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent in Dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding of
any kind, at the Agent's office specified in Schedule 2.1(a) not later
than 2:00 P.M. (Charlotte, North Carolina time) on the date when due.
Payments received after such time shall be deemed to have been received on
the next succeeding Business Day. The Borrower shall, at the time it makes
any payment under this Credit Agreement, specify to the Agent the Loans,
fees, interest or other amounts payable by the Borrower hereunder to which
such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms
hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of
Section 3.11(a)). The Agent will distribute such payments to such Lenders,
if any such payment is received prior to 2:00 P.M. (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to the
end of such Business Day and otherwise the Agent will distribute such
payment to such Lenders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be
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extended to the next succeeding Business Day (subject to accrual of
interest for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made in
the next following calendar month, then such payment shall instead be made
on the next preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the basis
of actual number of days elapsed over a year of 360 days, except with
respect to computation of interest on Base Rate Loans which shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest
shall accrue from and include the date of borrowing, but exclude the date
of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of the
Agent in connection with enforcing its rights under the Credit Documents
or otherwise with respect to the Credit Party Obligations;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations;
SIXTH, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party Obligations
owing to such Lender;
SEVENTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "SIXTH"
above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; and (ii)
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each of the Lenders shall receive an amount equal to its pro rata share
(based on the proportion that the then outstanding Loans held by such
Lender bears to the aggregate then outstanding Loans) of amounts available
to be applied pursuant to clauses "FOURTH", "FIFTH", "SIXTH" and "SEVENTH"
above.
3.14 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from
time to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder from or for the account of any Credit Party and each Lender's
share thereof. The Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.14 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Credit Parties therein recorded; provided, however, that the failure of
any Lender or the Agent to maintain any such account, such Register or
such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Credit Parties to repay the Credit
Party Obligations owing to such Lender.
3.15 Replacement of Lenders.
If any Lender requests compensation under Sections 3.4 or 3.7, or if the
Borrower is required to pay any additional amount to any Lender or any authority
pursuant to Section 3.9, or if any Lender ceases making, maintaining or funding
any Eurodollar Loans pursuant to Section 3.6, or if any Lender shall become a
Defaulting Lender, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 11.3), all its interests, rights and obligations under this Credit
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Agent, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other
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amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under Sections 3.4 or 3.7 or payments required to be made pursuant
to Section 3.9, such assignment will result in a reduction in such compensation
or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
SECTION 4
GUARANTY
4.1 The Guaranty.
The Parent hereby guarantees to each Lender and the Agent as hereinafter
provided, as primary obligor and not as surety, the prompt payment of the Credit
Party Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Parent hereby further agrees
that if any of the Credit Party Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Parent will promptly pay the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Credit Party Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.
4.2 Obligations Unconditional.
The obligations of the Parent under Section 4.1 are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, or any substitution, release, impairment or
exchange of any other guarantee of or security for any of the Credit Party
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of the Parent
hereunder shall be absolute and unconditional under any and all circumstances.
The Parent agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower for amounts paid under this
Section 4 until such time as the Lenders have been paid in full in respect of
all Credit Party Obligations and all Commitments under this Credit Agreement
have been terminated. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of the Parent
hereunder which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to the Parent,
the time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
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(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents or any other agreement or instrument referred to in the
Credit Documents shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents or any other agreement or instrument referred to in the
Credit Documents shall be waived or any other guarantee of any of the
Credit Party Obligations or any security therefor shall be released,
impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of the Parent) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of the Parent).
With respect to its obligations hereunder, the Parent hereby expressly waives
diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that the Agent or any Lender exhaust any right, power or
remedy or proceed against any Person under any of the Credit Documents or any
other agreement or instrument referred to in the Credit Documents, or against
any other Person under any other guarantee of, or security for, any of the
Credit Party Obligations.
4.3 Reinstatement.
The obligations of the Parent under this Section 4 shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Credit Party Obligations is rescinded or must be
otherwise restored by any holder of any of the Credit Party Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
the Parent agrees that it will indemnify the Agent and each Lender on demand for
all reasonable costs and expenses (including, without limitation, fees and
expenses of counsel) incurred by the Agent or such Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 4, the
Parent hereby specifically waives the benefits of N.C. Gen. Stat. ss.ss. 26-7
through 26-9, inclusive, to the extent applicable. The Parent further agrees
that it shall have no right of recourse to security for the Credit Party
Obligations, except through the exercise of rights of subrogation pursuant to
Section 4.2.
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4.5 Remedies.
The Parent agrees that, to the fullest extent permitted by law, as between
the Parent, on the one hand, and the Agent and the Lenders, on the other hand,
the Credit Party Obligations may be declared to be forthwith due and payable as
provided in Section 9.2 (and shall be deemed to have become automatically due
and payable in the circumstances provided in said Section 9.2) for purposes of
Section 4.1 notwithstanding any stay, injunction or other prohibition preventing
such declaration (or preventing the Credit Party Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Credit Party Obligations being deemed to have
become automatically due and payable), the Credit Party Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Parent for purposes of Section 4.1. The Parent acknowledges and agrees
that its obligations hereunder are secured in accordance with the terms of the
Pledge Agreement and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
4.6 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions.
This Credit Agreement shall become effective, subject to the terms of
Section 11.3, upon satisfaction of each of the following conditions (in form and
substance satisfactory to the Agent) on or before the Closing Date:
(a) Executed Credit Agreement. Receipt by the Agent of a duly
executed copy of this Credit Agreement.
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(b) Other. Receipt by the Agent of such other documents,
instruments, agreements or information as reasonably requested by the
Agent in connection with the Borrower, the Parent or the Transaction.
5.2 Conditions to Extension of Credit.
The obligation of the Lenders to make the Tender Loan shall be subject to
satisfaction of the following conditions (in form and substance acceptable to
the Agent), in addition to satisfaction of each of the conditions set forth in
Section 5.1 as of the Closing Date:
(a) Executed Tender Loan Notes and Pledge Agreement. Receipt by the
Agent of duly executed copies of the Tender Loan Notes and the Pledge
Agreement.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Effective Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Effective Date.
(iv) Good Standing. Copies of (A) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authorities of the State of Delaware and (B) to the extent
available, a certificate indicating payment of all corporate or
comparable franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and
correct as of the Effective Date.
(c) Legal Opinion. The Agent shall have received a legal opinion of
Simpson Thacher & Bartlett, dated as of the Effective Date, in form and
substance reasonably satisfactory to the Agent.
(d) Pledged Stock. The Agent shall have received all certificates
evidencing the Tendered Shares, together with duly executed in blank,
undated stock powers attached thereto, except for the certificates
representing Tendered Shares which were tendered pursuant to a Notice of
Guaranteed Delivery.
(e) Consents and Approvals, etc. Receipt by the Agent of evidence
that all governmental, shareholder and material third party consents
(including, but not limited to, the termination or expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvement Act and
including consent of the lenders under Sheridan's existing credit
facility) and approvals necessary or desirable in connection with the
Tender Offer and expiration of all applicable waiting periods without any
action being taken by any authority that could restrain, prevent or impose
any material adverse conditions on the
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Tender Offer or that could seek or threaten any of the foregoing, and no
law or regulation shall be applicable which in the reasonable judgment of
the Agent could have such effect. The restrictions of Section 203 of the
Delaware General Corporation Law and any other impediment under the
Delaware General Corporation Law shall be inapplicable to the acquisition
of the Shares pursuant to the Offer to Purchase, and no legal impediment
(under Section 251 or Section 253 of the Delaware General Corporation Law
or otherwise) to the consummation of the Merger shall exist.
(f) Merger Agreement and Tender Offer. There shall not have been any
material modification, amendment, supplement or waiver to the Merger
Agreement, the Offer to Purchase or any other document executed or
delivered in connection with the Tender Offer (collectively, the "Purchase
Documents") and the contents of all disclosure schedules and exhibits
relating to the Purchase Documents without the prior written consent of
the Agent, including, but not limited to, any modification, amendment,
supplement or waiver relating to the amount or type of consideration
(i.e., $9.25 per Share) to be paid in connection with the acquisition of
Sheridan, and the Tender Offer shall have been consummated (other than
payment for the Tendered Shares) upon satisfaction of any material
conditions specified in the Offer to Purchase and there shall have been
validly tendered and not properly withdrawn prior to the expiration of the
Tender Offer a number of Shares that satisfies the Minimum Condition (as
defined in the Tender Offer to Purchase), in each case, for consideration
not to exceed $9.25 per Share. The Agent shall have received a fully
executed copy, certified by an Executive Officer of the Borrower as true
and complete, of each of the Purchase Documents, together with all
exhibits and schedules thereto.
(g) Cost of Transaction. The Agent shall have received satisfactory
evidence that (i) the total amount payable by the Borrower to consummate
the Tender Offer (excluding fees and expenses in connection therewith)
will not exceed $66.3 million and (ii) the Borrower has no reason to
believe that total amount paid or to be paid by the Borrower to consummate
the Transaction will exceed $165.0 million.
(h) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Effective Date, in form and substance satisfactory to
the Agent, stating that (A) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents and
the transactions contemplated thereby have been obtained, (B) except as
disclosed in Schedule 6.7, no action, suit, investigation or proceeding is
pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect any Credit Party or
the consummation of the Transaction, (C) the transactions contemplated by
the Purchase Documents have been consummated in accordance with the terms
thereof (other than payment for the Tendered Shares), including, but not
limited to, the satisfaction of all conditions to the Borrower's
obligation to accept for payment, and to pay for, the Shares that are set
forth in Section 9 of the Offer to Purchase, (D) none of the conditions
set forth in clause (iii) of Section 9 of the Offer to Purchase has
occurred prior to the Effective Date and (E) immediately after giving
effect to consummation of the Tender Offer and the Acquisition on the
Effective Date, (1) no Default or Event of Default will exist and (2) all
representations and
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warranties contained herein and in the other Credit Documents will be true
and correct in all material respects.
(i) Material Adverse Change. No material adverse change shall have
occurred since December 31, 1998 in the condition (financial or
otherwise), business, results of operations or prospects of Sheridan.
(j) Compliance with Existing Obligations. After giving effect to the
consummation of the Tender Offer and the Acquisition, Sheridan and its
Subsidiaries shall be in compliance with all of their existing material
financial obligations.
(k) Permanent Credit Agreement. The Agent shall have received a
fully executed copy, certified by an Executive Officer of the Borrower as
true and complete, of the Permanent Credit Agreement, together with all
exhibits and schedules thereto.
(l) Other. Receipt by the Agent of such other documents,
instruments, agreements or information as reasonably requested by the
Agent in connection with the Borrower, the Parent or the Transaction.
3. Conditions to all Extensions of Credit.
The obligations of each Lender to make any Loan (including the initial
Loans) are subject to satisfaction of each of the following conditions (in
addition to satisfaction of each of the conditions set forth in Section 5.1 as
of the Closing Date and satisfaction on of each of the conditions set forth in
Section 5.2 as of the Effective Date):
(a) The Borrower shall have delivered an appropriate Notice of
Borrowing;
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against either of the Credit
Parties or Sheridan an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any case,
proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or for the winding up
or liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) Immediately after giving effect to the making of such Loan, the
aggregate outstanding principal amount of Loans shall not exceed the
lesser of (i) the Committed Amount and (ii) 50% of the purchase price paid
by the Borrower for Tendered Shares;
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(f) In the case of the second advance on the Tender Loan, the Agent
shall have received all certificates evidencing the Tendered Shares which
were tendered pursuant to a Notice of Guaranteed Delivery; and
(g) The Agent shall have received evidence that the Investor Group
shall have made aggregate cash equity investments in the Borrower
(directly or indirectly through the Parent) on terms that are satisfactory
to the Agent and in an amount at least equal to 50% of the purchase price
actually paid by the Borrower for Tendered Shares plus all expenses
incurred by the Borrower in connection with the Tender Offer
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Credit Parties of the correctness of the matters specified in
subsections (b), (c) and (d).
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Organization and Good Standing.
Each of the Credit Parties (a) is duly organized, validly existing and is
in good standing under the laws of the jurisdiction of its incorporation or
organization, (b) has the corporate or other necessary power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where failure to
do so could not reasonably be expected to have a Material Adverse Effect.
6.2 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate or other
necessary action to authorize the borrowings and other extensions of credit on
the terms and conditions of this Credit Agreement and to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party. No consent or authorization of, filing with, notice to or other similar
act by or in respect of, any Governmental Authority or any other Person is
required to be obtained or made by or on behalf of any Credit Party in
connection with (i) the borrowings or other extensions of credit hereunder, (ii)
the execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party or (iii) the consummation of the
Tender Offer. This Credit Agreement has been, and each other Credit Document to
which any Credit Party is a party will be, duly executed and delivered on behalf
of the Credit Parties. This Credit Agreement constitutes, and each other Credit
Document to which any Credit Party is a party when executed and delivered will
constitute, a
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legal, valid and binding obligation of such Credit Party enforceable against
such party in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyence, reorganization, moratorium or laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in proceedings in equity or at law and by an
implied covenant of good faith and fair dealing.
6.3 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any other
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.4 No Default.
Neither of the Credit Parties is in default in any respect under any
contract, lease or other agreement or obligation to which it is a party or by
which any of its Property is bound. No Default or Event of Default has occurred
or exists as of the Effective Date.
6.5 Ownership.
Each Credit Party is the owner of, and has good and marketable title to,
all of its respective assets necessary for the conduct of its business and none
of such assets is subject to any Lien other than Permitted Liens.
6.6 Indebtedness.
Except as otherwise permitted under Section 8.1, neither of the Credit
Parties has any Indebtedness.
6.7 Litigation.
Except as disclosed in Schedule 6.7, there does not exist (i) any order,
decree, judgment, ruling or injunction which restrains the consummation of the
Transaction or (ii) pending or, to the knowledge of any Executive Officer of
either Credit Party, threatened any action, suit, investigation or legal,
equitable, arbitration or administrative proceedings, against either Credit
Party, which if adversely determined, could reasonably be expected to have a
Material Adverse Effect.
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6.8 Taxes.
Each Credit Party has filed, or caused to be filed, all tax returns
(federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. Neither of the
Credit Parties is aware as of the Effective Date of any proposed tax assessments
against either of the Credit Parties.
6.9 Compliance with Law.
Each of the Credit Parties is in compliance with all material Requirements
of Law and all other laws, rules, regulations, orders and decrees applicable to
it, or to its properties, unless such failure to comply could not reasonably be
expected to have a Material Adverse Effect.
6.10 Subsidiaries.
The Parent has no direct Subsidiaries other than the Borrower, and the
Borrower has no Subsidiaries other than Sheridan and the Subsidiaries of
Sheridan.
6.11 ERISA.
Neither of the Credit Parties maintains any Plan.
6.12 Governmental Regulations, Etc.
(a) None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds
of the Tender Loan) will violate or result in a violation of the
Securities Act, the Securities Exchange Act or any of Regulations T, U and
X.
(b) Neither of the Credit Parties is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, neither of
the Credit Parties is (i) an "investment company" registered or required
to be registered under the Investment Company Act of 1940, as amended, and
is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
6.13 Location of Chief Executive Office.
The location of the chief executive office and principal place of business
of each Credit Party as of the Effective Date is set forth on Schedule 6.13.
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6.14 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of either Credit Party in connection with the
transactions contemplated hereby, when taken as a whole, contains, on the
Effective Date, any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein or
herein not misleading in light of the circumstances under which they were made.
6.15 Brokers' Fees.
Neither of the Credit Parties has any obligation to any Person in respect
of any finder's, broker's, investment banking or other similar fee in connection
with any of the transactions contemplated under the Credit Documents.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the Agent:
(a) Reports. Promptly upon transmission or receipt thereof, copies
of any filings and registrations by either Credit Party with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency.
(b) Notices. Upon any Executive Officer of a Credit Party obtaining
knowledge thereof, the Credit Parties will give written notice to the
Agent immediately of (i) the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and
existence thereof and what action the Credit Parties propose to take with
respect thereto, and (ii) the occurrence of any of the following with
respect to either Credit Party (A) the pendency or commencement of any
litigation, arbitral or governmental proceeding against such Person or (B)
the institution of any proceedings against such Person with respect to, or
the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal, state
or local law, rule or regulation, which, in the case of either (A) or (B),
could reasonably be expected to have a Material Adverse Effect.
(c) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of either Credit Party as the Agent or the Required
Lenders may reasonably request.
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7.2 Preservation of Existence and Franchises.
Each Credit Party will do all things necessary to preserve and keep in
full force and effect its existence and the rights and franchises material to
the conduct of its business.
7.3 Books and Records.
Each Credit Party will keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will comply with all laws, rules, regulations and
orders, and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.
7.5 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its material obligations under the terms
of all material agreements to which it is a party or by which it is bound.
7.6 Use of Proceeds.
The Borrower will use the proceeds of the Tender Loan solely for the
purpose of financing the purchase of the Tendered Shares pursuant to the Tender
Offer.
7.7 Consummation of Merger.
Within five (5) Business Days after the Effective Date (or, if less than
90% of all of the Shares are acquired by the Borrower pursuant to the Tender
Offer, by August 31, 1999), (i) the Merger shall have been consummated pursuant
to and in accordance with the Merger Agreement and (ii) the Borrower shall be
merged into Sheridan.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
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Neither of the Credit Parties will contract, create, incur, assume or
permit to exist any Indebtedness, except (i) Indebtedness arising under this
Credit Agreement and the other Credit Documents and (ii) fees and expenses of up
to $12 million incurred in connection with the Transaction.
8.2 Liens.
Neither of the Credit Parties will contract, create, incur, assume or
permit to exist any Lien with respect to any of its Property, whether now owned
or after acquired, except for Permitted Liens.
8.3 Consolidation, Merger, Dissolution, etc.
Neither of the Credit Parties will enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), except for the Merger.
8.4 Asset Dispositions.
Neither of the Credit Parties will make any Asset Disposition.
8.5 Investments.
Neither of the Credit Parties will make Investments in or to any Person,
except for Permitted Investments.
8.6 Restricted Payments.
Neither of the Credit Parties will, directly or indirectly, declare,
order, make or set apart any sum for or pay any Restricted Payment, except
loans, advances, dividends or distributions by the Borrower to the Parent to
enable the Parent to pay for corporate, administrative and operating expenses in
the ordinary course of business (including, without limitation, costs and
expenses in connection with the Transaction).
8.7 Limitations on Business Activities.
(a) The Borrower shall not (i) hold any assets other than Capital
Stock of Sheridan and cash, (ii) have any liabilities other than the
liabilities under the Credit Documents and fees and expenses in connection
with the Transaction or (iii) engage in any business other than (A) owning
Capital Stock of Sheridan and activities incidental or related thereto,
(B) acting as the Borrower hereunder and pledging the Capital Stock of
Sheridan owned by it to the Agent, for the benefit of the Lenders,
pursuant to the Pledge Agreement.
(b) The Parent shall not (i) hold any assets other than the Capital
Stock of the Borrower and, without limiting the terms of Section 8.6,
cash, (ii) have any liabilities other than the liabilities under the
Credit Documents and fees and expenses in connection
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with the Transaction or (iii) engage in any business other than (A) owning
the Capital Stock of the Borrower and activities incidental or related
thereto, (B) acting as a guarantor hereunder and pledging the Capital
Stock of the Borrower owned by it to the Agent, for the benefit of the
Lenders, pursuant to the Pledge Agreement.
8.8 No Further Negative Pledges, etc.
Neither of the Credit Parties will enter into, assume or become subject to
any agreement (other than the Credit Documents) prohibiting or otherwise
restricting (a) the creation or assumption of any Lien upon any of its Property
for the purpose of securing the Credit Party Obligations or requiring the grant
of any security for any obligation if security is given for the Credit Party
Obligations or (b) the ability of such Person to act as a Credit Party and
pledge its assets pursuant to the Credit Documents.
8.9 ERISA.
Neither of the Credit Parties will establish any Plan.
8.10 Limitations on Business Activities.
Neither of the Credit Parties will issue or have outstanding any shares of
preferred Capital Stock which by the terms thereof could be (at the request of
the holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration (other than as a result of a Change of Control
or an Asset Disposition that does not in fact result in a redemption of such
preferred Capital Stock) at any time prior to the Maturity Date.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of the
Tender Loan, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans, or of any fees or other amounts owing hereunder, under any of
the other Credit Documents or in connection herewith or therewith;
or
(b) Representations. Any representation, warranty or statement made
or
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deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2 (as it relates to
corporate existence), 7.6, 7.7 or 8.1 through 8.9, inclusive; or
(ii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) of this Section 9.1) contained in
this Credit Agreement or any other Credit Document and such default
shall continue unremedied for a period of at least 30 days after the
earlier of an Executive Officer of a Credit Party becoming aware of
such default or notice thereof by the Agent; or
(d) Other Credit Documents. Any Credit Document shall fail to be in
full force and effect or to give the Agent and/or the Lenders the Liens,
rights, powers and privileges purported to be created thereby (other than
as a result of the Agent's failure to maintain possession of the Stock
certificates delivered to it pursuant to the Pledge Agreement), or any
Credit Party shall so state in writing; or
(e) Guaranty. The guaranty given by the Parent hereunder or any
provision thereof shall cease to be in full force and effect, or the
Parent hereunder or any Person acting by or on behalf of the Parent shall
deny or disaffirm the Parent's obligations under such guaranty, or the
Parent shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed hereunder;
or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
to either Credit Party; or
(g) Defaults under Other Agreements. Either Credit Party shall
default in the performance or observance (beyond the applicable grace or
cure period with respect thereto, if any) of any material obligation or
condition of any material contract or lease to which such Credit Party is
a party; or
(h) Judgments. One or more judgments or decrees shall be entered
against one or both of the Credit Parties involving a liability of
$100,000 or more in the aggregate (to the extent not paid or fully covered
by insurance provided by a carrier who has acknowledged coverage and has
the ability to perform) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) Ownership. There shall occur a Change of Control; or
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(j) Approval of Merger. The board of directors of Sheridan shall
withdraw, modify or amend in a manner adverse to the Borrower its approval
of the Merger Agreement or its recommendation to the stockholders of
Sheridan that they vote in favor of the adoption of the Merger Agreement
(or announce publicly their intention to do so); or
(k) Stock Market Events. Except as a direct result of the
consummation of the Tender Offer or the Merger, the Common Stock for any
reason no longer shall be included in the Stock Market or trading in the
Common Stock on the Stock Market for any reason shall be halted; or
(l) Legal Proceedings. A court or governmental agency having
jurisdiction in the premises shall enter a decree or order restraining,
preventing or materially delaying the consummation of the Transaction.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. If the Tender Loan shall have been advanced
pursuant to Section 2.1(a), declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other
indebtedness or obligations of any and every kind owing by the Credit
Parties to the Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties.
(c) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Pledge Agreement,
all rights and remedies against the Parent as a guarantor of the Credit
Party Obligations and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to the Borrower, then the Commitments shall
automatically terminate and all Loans, all accrued interest in respect thereof,
all accrued and unpaid fees and other indebtedness or obligations owing to the
Agent and/or any of the Lenders hereunder automatically shall immediately become
due and payable without the giving of any notice or other action by the Agent or
the Lenders.
SECTION 10
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AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 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 Credit 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 Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
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
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit 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.
10.2 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 telecopy) 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 Credit 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 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the 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 Credit 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.
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10.3 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 a Credit Party 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 10.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders (or such other Lenders as required by Section 11.6), 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.
10.4 Rights as a 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
Credit 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 Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably (in accordance with their respective
outstanding Loans and Participation Interests therein) for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, 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
Credit Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Credit 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 ratable share of any costs or expenses payable by the Credit
Parties under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Credit Parties. The agreements in
this Section 10.5 shall survive the repayment of the Tender Loan and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
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10.6 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 Credit Parties and their
Subsidiaries and decision to enter into this Credit 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 Credit 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 Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Credit Parties. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent which, unless an Event of Default
under Section 9.1(f) has occurred and is continuing, shall have approved by the
Borrower (such approval not to be unreasonably withheld or delayed). 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 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 Section 10 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.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
2.1(a), or at such other address as such party may specify by written notice to
the other parties hereto:
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if to any Credit Party:
Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 200
Hollywood, Florida 33021
Attn: Mitchell Eisenberg, M.D., President
Telephone: (954) 986-7550
Telecopy: (954) 987-8359
with a copy to:
Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 200
Hollywood, Florida 33021
Attn: Jay A. Martus, Esq., Vice President and General Counsel
Telephone: (954) 986-7770
Telecopy: (954) 987-8359
with a copy to:
Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 200
Hollywood, Florida 33021
Attn: Michael F. Schundler, Chief Financial Officer
Telephone: (954) 986-7506
Telecopy: (954) 987-8359
with a copy to:
Vestar Capital Partners III, L.P.
245 Park Avenue, 41st Floor
New York, New York 10167
Attn: James Elrod, Jr.
David Hooper
Telephone: (212) 351-1609
Telecopy: (212) 808-4922
and
Marissa C. Wesely, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Telephone: (212) 455-7173
Telecopy: (212) 455-2502
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if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services -- Kathy Mumpower
Telephone: (704) 386-6837
Telecopy: (704) 409-0021
with a copy to:
NationsBank, N.A. c/o Bank of America
Agency Management 10831, 12th Floor
1455 Market Street
San Francisco, California 94103
Attn: Charles Graber
Telephone: (415) 436-3495
Telecopy: (415) 436-3425
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center, 13th Floor
100 North Tryon Street
Charlotte, North Carolina 28255
Attn: Bob Klawinski
Telephone: (704) 387-0467
Telecopy: (704) 386-9607
11.2 Right of Set-Off; Adjustments.
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 any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Tender Loan Notes, under any other Credit
Document or otherwise, irrespective of whether such Lender shall have made any
demand under hereunder or thereunder and although such obligations may be
unmatured. Each Lender agrees promptly to notify any affected Credit Party 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 11.2 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
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11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written
consent of each of the Lenders; provided further that the rights of each
Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender, an
Affiliate of an existing Lender or, with respect to any Lender that
is a fund that invests in bank loans, any other fund that invests in
bank loans and is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor or an
assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount
at least equal to $1,000,000 (or, if less, the remaining amount of
the Commitment being assigned by such Lender) or an integral
multiple of $1,000,000 in excess thereof; and
(iii) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the
form of Exhibit 11.3(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 Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Agent and the Credit
Parties shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
a United States person under Section 7701(a)(30) of the Code, it shall
deliver to the Credit Parties and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 3.9.
(c) The Agent shall maintain at its address referred to in Section
11.1 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 Credit Parties, the Agent and the Lenders may treat each
Person
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whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Credit Parties or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Any assignment of any Loan
or other Credit Party Obligations shall be effective only upon an entry
with respect thereto being made in the Register.
(d) 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
11.3(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.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations
under this Credit Agreement (including all or a portion of its Commitment
or its Loans); provided, however, that (i) such Lender's obligations under
this Credit Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in Sections 3.5
through 3.10, inclusive, and the right of set-off contained in Section
11.2, provided that the participant shall not be entitled to receive any
greater payment under Sections 3.5 through 3.10 than the applicable Lender
would have been entitled to receive with respect to the participation sold
to such participant, and (iv) the Credit Parties shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Credit Parties
relating to the Credit Party Obligations owing to such Lender and to
approve any amendment, modification, or waiver of any provision of this
Credit 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 Notes, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
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.
(g) Any Lender may furnish any information concerning the Credit
Parties 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 11.14 hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power
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or privilege hereunder or under any other Credit Document and no course of
dealing between the Agent or any Lender and any of the Credit Parties shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies provided herein
are cumulative and not exclusive of any rights or remedies which the Agent or
any Lender would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle the Credit Parties to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Agent or the Lenders to any other or further action in any circumstances
without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all reasonable costs and
expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Credit Agreement, the other Credit Documents, and the other documents to
be delivered hereunder, including, without limitation, the reasonable fees
and expenses of counsel for the Agent (including the cost of internal
counsel) with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under the Credit Documents. The Borrower
further agrees to pay on demand all reasonable costs and expenses of the
Agent and the Lenders, if any (including, without limitation, reasonable
attorneys' fees of one firm of outside counsel and expenses and the cost
of internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and
the other documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses, liabilities, costs,
and expenses (including, without limitation, reasonable attorneys' fees)
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
(including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection
therewith) the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans, except
to the extent such claim, damage, loss, liability, cost, or expense has
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.5 applies, such
indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by any of the Credit Parties, their respective
directors, shareholders or creditors or an Indemnified Party or any other
Person or any Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated hereby are consummated. The Credit
Parties agree not to assert any claim against the Agent, any Lender, any
of their Affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability,
for special, indirect, consequential, or punitive damages arising out of
or otherwise relating to the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of
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the proceeds of the Tender Loan.
(c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 11.5 shall survive the repayment of the
Tender Loan and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby, neither
this Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of the Tender Loan or any
portion thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder,
(iii) reduce or waive the principal amount of any Loan,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) release any of the Capital Stock of the Borrower or of
Sheridan pledged to the Agent pursuant to the Pledge Agreement,
(vi) release either of the Credit Parties from its payment
obligations under the Credit Documents,
(vii) amend, modify or waive any provision of this Section
11.6,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by either Credit
Party of its obligations under (or in respect of) the Credit
Documents except as permitted thereby; and
(b) without the consent of the Agent, no provision of Section 10 may
be amended.
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Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled
to vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in
Section 3.9, 3.10, 10.5 or 11.5 shall survive the execution and delivery of this
Credit Agreement, the making of the Tender Loan, the repayment of the Tender
Loan and other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the Credit
Parties herein shall survive delivery of the Tender Loan Notes and the making of
the Tender Loan hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the courts of the State of New
York, or of the United States for the Southern District of New York, and,
by execution and delivery of this Credit Agreement, each of the Credit
Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. Each of the Credit Parties further irrevocably consents to
the service of
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process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices pursuant
to Section 11.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS,
EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by each Credit
Party and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon
and inure to the benefit of each Credit Party, the Agent and each Lender
and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Credit Party
Obligations shall remain outstanding, all of the Credit Party Obligations
have been
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irrevocably satisfied in full and all of the Commitments hereunder shall
have expired or been terminated.
11.14 Confidentiality.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Credit
Parties pursuant to this Credit Agreement that is marked confidential; 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 if reasonably
incidental to the administration of the Credit Facility, (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 regulatory 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 Credit 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 Credit
Agreement or any other Credit Document, (i) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, (j) to
any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty (i) has
been approved in writing by the Borrower and (ii) agrees in a writing
enforceable by the Borrower to be bound by the provisions of this Section 11.14)
and (k) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee.
11.15 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: VESTAR/SHERIDAN, INC.
By: /s/ James L. Elrod
Name: James L. Elrod
Title: President
PARENT: VESTAR/SHERIDAN HOLDINGS, INC.
By: /s/ James L. Elrod
Name: James L. Elrod
Title: President
Signature Page to the
Tender Offer Financing Credit Agreement
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LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Robert Klawinski
Name: Robert Klawinski
Title: Senior Vice President
Signature Page to the
Tender Offer Financing Credit Agreement
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Exhibit 1.1A
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
April ___, 1999 among VESTAR/SHERIDAN, INC., a Delaware corporation (the
"Borrower"), VESTAR/SHERIDAN HOLDINGS, INC., a Delaware corporation (the
"Parent"; together with the Borrower, individually a "Pledgor", and collectively
the "Pledgors") and NATIONSBANK, N.A., in its capacity as agent (in such
capacity, the "Agent") for the lenders from time to time party to the Credit
Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement (Tender Offer
Financing) dated as of April 26, 1999 (as amended, modified, extended, renewed
or replaced from time to time, the "Credit Agreement") among the Borrower, the
Parent, the Lenders and the Agent, the Lenders have agreed to make the Tender
Loan upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make the Tender Loan under the
Credit Agreement that the Pledgors shall have executed and delivered this Pledge
Agreement to the Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement..
2. Pledge and Grant of Security Interest. To secure the prompt payment and
performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
(a) Pledged Shares. (i) 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of capital stock owned
by such Pledgor of the Borrower set forth on Schedule 2(a) attached hereto
and (ii) 100% (or, if less, the full amount owned by such Pledgor) of the
issued and outstanding shares of capital stock owned by such Pledgor of
Sheridan Healthcare, Inc., a Delaware corporation, in each case together
with the certificates (or other agreements or instruments), if any,
representing such shares, and all options and other rights, contractual or
otherwise, with respect thereto
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(the "Pledged Shares").
(b) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral security
for the Pledgor Obligations. Upon delivery to the Agent, such additional shares
of stock shall be deemed to be part of the Pledged Collateral of such Pledgor
and shall be subject to the terms of this Pledge Agreement whether or not
Schedule 2(a) is amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created hereby
in the Pledged Collateral of each Pledgor constitutes continuing collateral
security for all of the Credit Party Obligations, now existing or hereafter
arising pursuant to the Credit Documents, owing from the Borrower or any other
Credit Party to any Lender or the Agent, howsoever evidenced, created, incurred
or acquired, whether primary, secondary, direct, contingent, or joint and
several, including, without limitation, all obligations and liabilities incurred
in connection with collecting and enforcing the foregoing (collectively, the
"Pledgor Obligations").
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously with
or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Shares of such Pledgor and (ii)
promptly upon the receipt thereof by or on behalf of a Pledgor, all other
certificates and instruments constituting Pledged Collateral of a Pledgor.
Prior to delivery to the Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Agent pursuant hereto. All such
certificates shall be delivered in suitable form for transfer by delivery
or shall be accompanied by duly executed instruments of transfer or
assignment in blank, substantially in the form provided in Exhibit 4(a)
attached hereto.
(b) Financing Statements. Each Pledgor shall execute and deliver to
the Agent such UCC or other applicable financing statements as may be
reasonably requested by the Agent in order to perfect and protect the
security interest created hereby in the Pledged Collateral of such
Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document is in effect,
and until all of the Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of any Person. All other shares of
stock constituting Pledged Collateral will be duly authorized and validly
issued, fully paid and nonassessable and not subject to the
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preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-302 of the Uniform Commercial Code as in effect in
the State of New York as of the date hereof (the "UCC") with respect to
the Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of its rights
and remedies hereunder will not violate any material law or governmental
regulation or any material contractual restriction binding on or affecting
a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action by,
and no notice or filing with any Governmental Authority or with the issuer
of any Pledged Stock is required either (i) for the pledge made by a
Pledgor or for the granting of the security interest by a Pledgor pursuant
to this Pledge Agreement or (ii) for the exercise by the Agent or the
Lenders of their rights and remedies hereunder (except as may be required
by laws affecting the offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates a
valid security interest in favor of the Agent, for the benefit of the
Lenders, in the Pledged Collateral. The taking possession by the Agent of
the certificates representing the Pledged Shares and all other
certificates and instruments constituting Pledged Collateral will perfect
and establish the first priority of the Agent's security interest in the
Pledged Shares and, when properly perfected by filing or registration, in
all other Pledged Collateral represented by such Pledged Shares and
instruments securing the Pledgor Obligations. Except as set forth in this
Section 5(e), no action is necessary to perfect or otherwise protect such
security interest.
(f) No Other Shares. No Pledgor owns any shares of stock other than
as set forth on Schedule 2(a) attached hereto.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding or any Credit Document is in effect, and
until all of the Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Mark its books and records (and shall cause
the issuer of the Pledged Shares of such Pledgor to mark its books and
records) to reflect the security interest granted to the Agent, for the
benefit of the Lenders, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the
claims and demands of all other parties claiming an interest therein, keep
the Pledged Collateral free from all Liens, except for Permitted Liens,
and not sell, exchange, transfer, assign, lease or
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otherwise dispose of Pledged Collateral of such Pledgor or any interest
therein, except as permitted under the Credit Agreement and the other
Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that may
be reasonably necessary and desirable or that the Agent may reasonably
request in order to (i) perfect and protect the security interest created
hereby in the Pledged Collateral of such Pledgor (including without
limitation any and all action necessary to satisfy the Agent that the
Agent has obtained a first priority perfected security interest in any
capital stock); (ii) enable the Agent to exercise and enforce its rights
and remedies hereunder in respect of the Pledged Collateral of such
Pledgor; and (iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Agent, delivering to
the Agent irrevocable proxies in respect of the Pledged Collateral of such
Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Pledged Collateral of such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein and upon written notice to such
Pledgor, the Agent may, at its sole option and in its sole discretion, perform
the same and in so doing may expend such sums as the Agent may reasonably deem
advisable in the performance thereof, including, without limitation, the payment
of any insurance premiums, the payment of any taxes, a payment to obtain a
release of a Lien or potential Lien, expenditures made in defending against any
adverse claim and all other expenditures which the Agent or the Lenders may make
for the protection of the security hereof or which may be compelled to make by
operation of law. All such sums and amounts so expended shall be repayable by
the Pledgors on a joint and several basis promptly upon timely notice thereof
and demand therefor, shall constitute additional Pledgor Obligations and shall
bear interest from the date said amounts are expended at the default rate
specified in Section 3.1 of the Credit Agreement for Loans that are Base Rate
Loans. No such performance of any covenant or agreement by the Agent or the
Lenders on behalf of any Pledgor, and no such advance or expenditure therefor,
shall relieve the Pledgors of any default under the terms of this Pledge
Agreement or the other Credit Documents. The Lenders may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
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8. Events of Default. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default shall be an Event of Default
hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Agent and the Lenders shall have, in
respect of the Pledged Collateral of any Pledgor, in addition to the
rights and remedies provided herein, in the Credit Documents or by law,
the rights and remedies of a secured party under the UCC or any other
applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the
generality of this Section and without notice, the Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged
Collateral, or any part thereof, in one or more parcels, at public or
private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem commercially
reasonable, for cash, credit or for future delivery or otherwise in
accordance with applicable law. To the extent permitted by law, any Lender
may in such event, bid for the purchase of such securities. Each Pledgor
agrees that, to the extent notice of sale shall be required by law and has
not been waived by such Pledgor, any requirement of reasonable notice
shall be met if notice, specifying the place of any public sale or the
time after which any private sale is to be made, is personally served on
or mailed, postage prepaid, to such Pledgor, in accordance with the notice
provisions of Section 11.1 of the Credit Agreement at least 10 days before
the time of such sale. The Agent shall not be obligated to make any sale
of Pledged Collateral of such Pledgor regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the Agent may
deem it impracticable to effect a public sale of all or any part of the
Pledged Shares or any of the securities constituting Pledged Collateral
and that the Agent may, therefore, determine to make one or more private
sales of any such securities to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire such securities for
their own account, for investment and not with a view to the distribution
or resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices
and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Agent shall have no obligation to delay sale of any such securities for
the period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act of 1933.
Each Pledgor further acknowledges and agrees that any offer to sell such
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securities which has been (i) publicly advertised on a bona fide basis in
a newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act of 1933),
or (ii) made privately in the manner described above shall be deemed to
involve a "public sale" under the UCC, notwithstanding that such sale may
not constitute a "public offering" under the Securities Act of 1933, and
the Agent may, in such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. In addition to the rights and
remedies hereunder, upon the occurrence and during the continuance of an
Event of Default, the Agent may, after providing the notices required by
Section 9-505(2) of the UCC or otherwise complying with the requirements
of applicable law of the relevant jurisdiction, retain all or any portion
of the Pledged Collateral in satisfaction of the Pledgor Obligations.
Unless and until the Agent shall have provided such notices, however, the
Agent shall not be deemed to have retained any Pledged Collateral in
satisfaction of any Pledgor Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Agent or the Lenders are legally entitled, the Pledgors shall be jointly
and severally liable for the deficiency, together with interest thereon at
the default rate specified in Section 3.1 of the Credit Agreement for
Loans that are Base Rate Loans, together with the costs of collection and
the reasonable fees of any attorneys employed by the Agent to collect such
deficiency. Any surplus remaining after the full payment and satisfaction
of the Pledgor Obligations shall be returned to the Pledgors or to
whomsoever a court of competent jurisdiction shall determine to be
entitled thereto.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Pledged Collateral of such
Pledgor, all as the Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any of the Pledged Collateral of such
Pledgor and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the Agent
may deem reasonably appropriate;
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(iv) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any of
the Pledged Collateral to make payment of any and all monies due and
to become due thereunder directly to the Agent or as the Agent shall
direct;
(vi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in
respect of or arising out of any Pledged Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies,
stock powers, verifications, notices and other documents relating to
the Pledged Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give
such discharges or releases as the Agent may deem reasonably
appropriate;
(ix) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may reasonably determine
necessary in order to perfect and maintain the security interests
and liens granted in this Pledge Agreement and in order to fully
consummate all of the transactions contemplated therein;
(x) to exchange any of the Pledged Collateral of such Pledgor
or other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Pledged Collateral of such
Pledgor with any committee, depository, transfer agent, registrar or
other designated agency upon such terms as the Agent may determine;
(xi) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of the
Pledged Shares of such Pledgor into the name of the Agent or one or
more of the Lenders or into the name of any transferee to whom the
Pledged Shares of such Pledgor or any part thereof may be sold
pursuant to Section 10 hereof; and
(xii) to do and perform all such other acts and things as the
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding or any Credit Document is
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in effect and (ii) until all of the Commitments shall have been
terminated. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Agent in this Pledge Agreement, and shall not be
liable for any failure to do so or any delay in doing so. The Agent shall
not be liable for any act or omission or for any error of judgment or any
mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross
negligence or willful misconduct. This power of attorney is conferred on
the Agent solely to protect, preserve and realize upon its security
interest in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations. If any
Pledgor fails to perform any agreement or obligation contained herein, the
Agent itself may perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection therewith
shall be payable by the Pledgors on a joint and several basis pursuant to
Section 13 hereof.
(c) Assignment by the Agent. In connection with the succession of
the Agent pursuant to Section 10.7 of the Credit Agreement, the Agent may
assign the Pledgor Obligations and any portion thereof and/or the Pledged
Collateral and any portion thereof, and the assignee shall be entitled to
all of the rights and remedies of the Agent under this Pledge Agreement in
relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while being held
by the Agent hereunder, the Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
the Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral of such Pledgor, and the Agent shall be relieved of all
responsibility for Pledged Collateral upon surrendering it or tendering
the surrender of it to the Pledgors. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equal to that which the Agent accords its own
property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters; or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing, to the extent permitted by law, each Pledgor may
exercise any and all voting and other consensual rights pertaining
to the Pledged Collateral of such Pledgor or any part thereof for
any purpose not inconsistent with the terms of this Pledge Agreement
or the Credit Agreement; and
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(ii) Upon the occurrence and during the continuance of an
Event of Default, all rights of a Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease and
all such rights shall thereupon become vested in the Agent which
shall then have the sole right to exercise such voting and other
consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing, each Pledgor may receive and retain any and all
dividends (other than stock dividends and other dividends
constituting Pledged Collateral which are addressed hereinabove) or
interest paid in respect of the Pledged Collateral to the extent
they are allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuance of an
Event of Default:
(A) all rights of a Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (i) of this Section,
upon written notice to such Pledgor, shall cease and all such
rights shall thereupon be vested in the Agent which shall then
have the sole right to receive and hold as Pledged Collateral
such dividends and interest payments; and
(B) all dividends and interest payments which are
received by a Pledgor contrary to the provisions of paragraph
(A) of this Section shall be received in trust for the benefit
of the Agent, shall be segregated from other property or funds
of such Pledgor, and shall be forthwith paid over to the Agent
as Pledged Collateral in the exact form received, to be held
by the Agent as Pledged Collateral and as further collateral
security for the Pledgor Obligations.
(g) Release of Pledged Collateral. The Agent may release any of the
Pledged Collateral from this Pledge Agreement or may substitute any of the
Pledged Collateral for other Pledged Collateral without altering, varying
or diminishing in any way the force, effect, lien, pledge or security
interest of this Pledge Agreement as to any Pledged Collateral not
expressly released or substituted, and this Pledge Agreement shall
continue as a first priority lien on all Pledged Collateral not expressly
released or substituted.
11. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 3.13(b)
of the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of
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such payments and proceeds and acknowledges and agrees that the Agent shall have
the continuing and exclusive right to apply and reapply any and all such
payments and proceeds in the Agent's sole discretion, notwithstanding any entry
to the contrary upon any of its books and records.
12. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable documented costs and expenses of
(a) the Agent or the Lenders, as required under Section 11.5 of the Credit
Agreement and (b) the Agent as necessary to protect the Pledged Collateral or to
exercise any rights or remedies under this Pledge Agreement or with respect to
any Pledged Collateral. All of the foregoing costs and expenses shall constitute
Pledgor Obligations hereunder.
13. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the
Pledgor Obligations remain outstanding or any Credit Document is in
effect, and until all of the Commitments thereunder shall have terminated
(other than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Pledge Agreement shall be automatically
terminated and the Agent and the Lenders shall, upon the request and at
the expense of the Pledgors, forthwith release all of their liens and
security interests hereunder and shall promptly execute and deliver all
UCC termination statements and/or other documents reasonably requested by
the Pledgors evidencing such termination. Notwithstanding the foregoing
all releases and indemnities provided hereunder shall survive termination
of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Pledgor Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Pledgor
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any reasonable legal fees
and disbursements) incurred by the Agent or any Lender in defending and
enforcing such reinstatement shall be deemed to be included as a part of
the Pledgor Obligations.
14. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
15. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral and shall be binding upon
each Pledgor, its successors and assigns and shall inure, together with the
rights and remedies of the Agent and the Lenders hereunder, to the benefit of
the Agent and the Lenders and their successors and permitted assigns;
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provided, however, that none of the Pledgors may assign its rights or delegate
its duties hereunder without the prior written consent of each Lender or the
Required Lenders, as required by the Credit Agreement. To the fullest extent
permitted by law, each Pledgor hereby releases the Agent and each Lender, and
its successors and assigns, from any liability for any act or omission relating
to this Pledge Agreement or the Pledged Collateral, except for any liability
arising from the gross negligence or willful misconduct of the Agent, or such
Lender, or its officers, employees or agents.
16. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
17. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
18. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
19. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Pledge Agreement may be brought in the
courts of the State of New York in New York County, or of the United
States for the Southern District of New York, and, by execution and
delivery of this Pledge Agreement, each Pledgor hereby irrevocably accepts
for itself and in respect of its property, generally and unconditionally,
the jurisdiction of such courts. Each Pledgor further irrevocably consents
to the service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1 of the Credit Agreement, such service to become
effective 30 days after such mailing. Nothing herein shall affect the
right of the Agent to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against any
Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Pledge
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
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LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
21. Severability. If any provision of any of the Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Pledge Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated therein.
23. Survival. All representations and warranties of the Pledgors hereunder
shall survive the execution and delivery of this Pledge Agreement and the other
Credit Documents, the delivery of the Tender Loan Note and the making of the
Tender Loan under the Credit Agreement.
24. Other Security. To the extent that any of the Pledgor Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence and during the
continuance of any Event of Default, and the Agent and the Lenders have the
right, in their sole discretion, to determine which rights, security, liens,
security interests or remedies the Agent and the Lenders shall at any time
pursue, relinquish, subordinate, modify or take with respect thereto, without in
any way modifying or affecting any of them or any of the Agent's and the
Lenders' rights or the Pledgor Obligations under this Pledge Agreement or under
any other of the Credit Documents.
25. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under the Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Pledgors and in consideration of
the undertakings of each of the Pledgors to accept joint and several
liability for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with
respect to the payment and performance of all of the Pledgor Obligations
arising under this Pledge Agreement and the other Credit Documents, it
being the intention of the parties hereto that all the Pledgor Obligations
shall be the joint and several obligations of each of the Pledgors without
preferences or distinction among them.
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(c) Notwithstanding any provision to the contrary contained herein
or in any of the Credit Documents, the obligations of each Pledgor shall
be limited to an aggregate amount equal to the largest amount that would
not render such obligations subject to avoidance under Section 548 of the
Bankruptcy Code or any comparable provisions of any applicable state law.
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: VESTAR/SHERIDAN, INC.
By:
Name:
Title:
PARENT: VESTAR/SHERIDAN HOLDINGS, INC. ,
By:
Name:
Title:
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Agent
By:
Name:
Title:
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Exhibit 4(a)
to
Pledge Agreement
dated as of April ___, 1999
in favor of NationsBank, N.A.
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of _____________________, a ____________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
_________________________________
By:
Name:
Title:
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Exhibit 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Lenders
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Vestar/Sheridan, Inc. (the "Borrower"), refers to the
Credit Agreement (Tender Offer Financing), dated as of April 26, 1999 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), among the Borrower, Vestar/Sheridan Holdings, Inc., the Lenders and
NationsBank, N. A., as Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives notice pursuant to Section 2.1 of the
Credit Agreement that it requests the Tender Loan under the Credit Agreement on
the Effective Date, and in connection therewith sets forth below the terms on
which such Tender Loan advance is requested to be made:
(A) Principal Amount of Borrowing _______________________
(B) Interest rate basis _______________________
(C) Interest Period and the last day thereof _______________________
VESTAR/SHERIDAN, INC.
By:
Name:
Title:
75
Exhibit 2.1(e)
FORM OF TENDER LOAN NOTE
$33,200,000 April __, 1999
FOR VALUE RECEIVED, VESTAR/SHERIDAN, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of NATIONSBANK, N.A., its
successors and assigns (the "Lender"), at the office of NationsBank, N. A., as
Agent (the "Agent"), at 101 North Tryon Street, Independence Center,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the holder hereof may designate), at the times set forth in the Credit
Agreement (Tender Offer Financing) dated as of the date hereof among the
Borrower, Vestar/Sheridan Holdings, Inc., the Lenders and the Agent (as it may
be as amended, modified, restated or supplemented from time to time, the "Credit
Agreement"; all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event later than the
Maturity Date, in Dollars and in immediately available funds, the principal
amount of THIRTY THREE MILLION TWO HUNDRED THOUSAND DOLLARS ($33,200,000), or,
if less than such principal amount, the aggregate unpaid principal amount of the
Tender Loan made by the Lender to the Borrower pursuant to the Credit 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 selected in
accordance with Section 2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, 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.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
VESTAR/SHERIDAN, INC.
By:
Name:
Title:
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Exhibit 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Lenders
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Vestar/Sheridan, Inc. (the "Borrower"), refers to the
Credit Agreement (Tender Offer Financing), dated as of April 26, 1999 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), among the Borrower, Vestar/Sheridan Holdings, Inc., the Lenders and
NationsBank, N. A., as Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives notice pursuant to Section 3.2 of the
Credit Agreement that it requests an extension or conversion of a Tender Loan
outstanding under the Credit Agreement, and in connection therewith sets forth
below the terms on which such extension or conversion is requested to be made:
(A) Loan Type _______________________
(B) Date of Extension or Conversion
(which is the last day of the the
applicable Interest Period) _______________________
(C) Principal Amount of Extension or Conversion _______________________
(D) Interest rate basis _______________________
(E) Interest Period and the last day thereof _______________________
VESTAR/SHERIDAN, INC.
By:
Name:
Title:
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Exhibit 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement (Tender Offer Financing), dated
as of April 26, 1999, as amended and modified from time to time thereafter (the
"Credit Agreement"), among Vestar/Sheridan, Inc., the other Credit Parties party
thereto, the Lenders party thereto and NationsBank, N.A., as Agent. Terms
defined in the Credit Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Credit Documents as of the date hereof equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement and the other Credit Documents. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the Loans owing
to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Tender Loan Notes held by the Assignor
and requests that the Agent exchange such Tender Loan Notes for new Tender Loan
Notes payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and to the Assignor in an amount equal
to the Commitment retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are
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reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.9.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Tender Loan Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Tender
Loan Notes for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By:
Name:
Title:
_____________________, as Assignee
By:
Name:
Title:
Notice address of Assignee:
<<Assignee>>
______________________________
______________________________
Attn: ________________________
Telephone: (___) ________
Telecopy: (___) ________
CONSENTED TO:
NATIONSBANK, N.A., *
as Agent
By:
Name:
Title:
VESTAR/SHERIDAN, INC.*
By:
Name:
Title:
- ----------
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
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