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EXHIBIT 10.1
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PARACELSUS HEALTHCARE CORPORATION
CREDIT AGREEMENT
Dated as of August 16, 1996
$400,000,000 Reducing Revolving Credit Facility
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent,
BANQUE PARIBAS,
as Documentation Agent
and
NATIONSBANK OF TEXAS, N.A.,
as Managing Agent
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TABLE OF CONTENTS
Page
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ARTICLE 1 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 1.3 Accounting Terms and Determinations. . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 2 - Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.1 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.3 Repayment of Revolving Credit Loans. . . . . . . . . . . . . . . . . . . . . 28
Section 2.4 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.5 Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.6 Optional Prepayments, Commitment Terminations and Reductions,
Conversions and Continuations of Loans . . . . . . . . . . . . . . . . . . . . 30
Section 2.7 Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.8 Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.9 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.12 Computations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.13 Reduction or Termination of Commitments . . . . . . . . . . . . . . . . . . . . 33
Section 2.14 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 3 - Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.1 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.2 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.3 Sharing of Payments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.4 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.5 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.6 Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 4 - Yield Protection and Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.1 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.2 Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.3 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.4 Treatment of Affected Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.6 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.7 Additional Interest on Eurodollar Loans . . . . . . . . . . . . . . . . . . . . 42
Section 4.8 Substitution of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 5 - Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.1 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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Section 5.2 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.3 New Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.4 Release of Collateral and Termination of Guarantees . . . . . . . . . . . . . . 44
Section 5.5 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 6 - Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.1 Initial Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.2 All Extensions of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.3 Closing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 7 - Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.1 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.3 Corporate Action; No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.4 Operation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.5 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.6 Litigation and Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.7 Rights in Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.8 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.9 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.10 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.12 Margin Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 7.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 7.14 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.15 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.16 Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.18 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.19 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.21 Labor Disputes and Acts of God . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.22 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.23 Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.24 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.25 Related Transactions Documents . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.26 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.27 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.28 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 7.29 Fraud and Abuse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 8 - Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 8.1 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 8.2 Maintenance of Existence; Conduct of Business . . . . . . . . . . . . . . . . . 61
Section 8.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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Section 8.4 Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.6 Inspection Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.7 Keeping Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.8 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.9 Compliance with Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.12 Borrower's Treatment of Subsidiaries . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE 9 - Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.1 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 9.2 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.3 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.4 Limitation on Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 9.5 Limitation on Business Acquisitions . . . . . . . . . . . . . . . . . . . . . . 67
Section 9.6 Limitation on Loans and Credit . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 9.7 Limitation on Contracts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 9.8 Ownership of Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 9.9 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 9.10 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 9.11 Limitation on Issuance of Capital Stock . . . . . . . . . . . . . . . . . . . . 70
Section 9.12 Disposition of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.14 Intercompany Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.15 Modification of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 72
Section 9.16 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE 10 - Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.1 Ratio of Senior Leverage to Adjusted EBITDA . . . . . . . . . . . . . . . . . . 73
Section 10.2 Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.3 Ratio of Total Debt to Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . 73
Section 10.4 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 11 - Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 11.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 11.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 11.3 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 11.4 Performance by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE 12 - The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 12.1 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . 78
Section 12.2 Rights of Agent as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 12.3 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 12.4 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
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Section 12.5 Independent Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 12.6 Several Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 12.7 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 12.8 Managing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE 13 - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 13.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 13.2 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 13.3 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 13.4 No Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 13.5 No Fiduciary Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 13.6 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 13.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 13.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 13.9 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 13.10 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 13.11 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 13.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 13.13 GOVERNING LAW; SUBMISSION TO JURISDICTION;
SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 13.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 13.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 13.16 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 13.17 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 13.18 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.19 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.20 Approvals and Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
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INDEX TO EXHIBITS
Exhibit Description of Exhibit Section
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A Form of Assignment and Acceptance 1.1 and 13.7
B Form of Krukemeyer Subordinated Note 1.1
C Form of Revolving Credit Loans Note 1.1, 2.2 and 13.7
D Form of Security and Pledge Agreement 1.1
E Form of Master Guaranty with JoinderAgreement 1.1
F Form of Subsidiary Security and Pledge Agreement 1.1
G Forms of Notice of Borrowing and Notice of
Conversion/Continuation and Notice of
Termination/Commitment Reduction/Prepayment 2.9
H Form of Opinion of General Counsel of Borrower 6.1
I Form of Opinion of Outside Counsel to Borrower 6.1
INDEX TO SCHEDULES
Schedule Description of Schedule
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1.1(a) Excluded Subsidiaries
1.1(b) Existing Letters of Credit
1.1(c) Permitted Liens
1.1(d) Related Transaction Documents
7.6 Litigation and Judgments
7.11 Taxes
7.13 Plans
7.15 Subsidiaries
7.22 Material Contracts
7.27 Employee Matters
7.28 Insurance
9.1 Existing Debt
9.4 Investments
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 16, 1996, is among PARACELSUS
HEALTHCARE CORPORATION, a corporation organized under the laws of the State of
California (the "Borrower"), each of the banks or other lending institutions
which is a party hereto (as evidenced by the signature pages of this Agreement)
or which may from time to time become a party hereto or any successor or
assignee thereof in accordance with the terms hereof (individually, a "Lender"
and, collectively, the "Lenders"), and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association ("B of A"), as lead agent
for the Lenders (in such capacity, together with its successors in such
capacity, the "Agent") and as the issuing bank, BANQUE PARIBAS, a bank
organized and existing under the laws of the Republic of France, as
documentation agent for the Lenders (in such capacity, "Documentation Agent"),
NATIONSBANK OF TEXAS, N.A., a national banking association, as managing agent
for the Lenders, CREDIT LYONNAIS NEW YORK BRANCH, as co-agent, and TORONTO-
DOMINION (TEXAS), INCORPORATED, as co-agent.
RECITALS:
A. The Borrower has entered into the Merger Agreement with CHC
pursuant to which PC Merger Sub, Inc. has merged into CHC to form Champion, a
Wholly-Owned Subsidiary of the Borrower.
B. The Borrower has requested the Lenders to extend to the Borrower
a reducing revolving credit facility, with a letter of credit subfacility.
C. Subject to the terms, conditions and provisions of this
Agreement, the Lenders have agreed to make available to the Borrower the
requested credit facility.
D. Concurrently with the Closing Date, the obligations under the
Existing Paracelsus Credit Agreement will be satisfied in full and the Existing
Letters of Credit will be deemed issued on the Closing Date pursuant to Section
2.14.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted EBITDA" means, on a consolidated basis without duplication for
Borrower and its Subsidiaries, the sum of (a) income before taxes and
extraordinary items and cumulative effect
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of a change in accounting (inclusive of minority interest income and expense),
plus interest expense, plus depreciation expense, plus amortization expense,
plus other non-cash items to the extent deducted in determining consolidated
net income in each case, measured on a twelve (12) month basis and calculated
as of the last day of the fiscal quarter most recently ended, plus any one time
charges or expenses incurred in connection with the offering of subordinated
debt or of common stock or this Agreement of the Borrower, plus any non-cash
net loss incurred in connection with exiting a line of business or market, and
plus any non-cash net loss realized in connection with an asset disposition,
plus (i) the Settlement Expense Allowance, (ii) interest paid on the unpaid
dividend referred to in Section 9.10(h), (iii) Paracelsus and CHC
Merger-related expenses that have not been capitalized, and (iv) expenses to
conform the Borrower's accounting policies and procedures to CHC standards
through December 31, 1996; provided, however, that interest and expenses
described in clauses (a)(ii), (iii) and (iv) of this definition shall not
exceed, in the aggregate, $85,000,000, plus (b) with respect to an acquisition
by Borrower or a Subsidiary of Borrower which has not been owned for a full
fiscal quarter, the Borrower will compute the Adjusted EBITDA (as calculated
pursuant to (a) above) based on the actual period owned plus the remaining
months of prior ownership to total twelve months and upon being owned one full
fiscal quarter, the Adjusted EBITDA will be computed based on annualized
results and plus (c) with respect to PHC Salt Lake Hospital acquired by the
Borrower in May, 1996, the Borrower will compute the Adjusted EBITDA (as
calculated pursuant to (a) above) based on the actual period owned plus the
remaining months of prior ownership to total twelve months based on a assumed
$9,400,000 Adjusted EBITDA and upon being owned one full fiscal quarter, the
Adjusted EBITDA will be computed based on annualized results of PHC Salt Lake
Hospital, minus (d) with respect to any divestiture of any entity (corporate,
partnership or joint venture) by Borrower or a Subsidiary of the Borrower, the
Borrower will exclude from Adjusted EBITDA any amounts attributable to such
entity in the computation of Adjusted EBITDA pursuant to (a) above for the
period following the divestiture.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined by the Agent to be equal to the Eurodollar
Rate for such Eurodollar Loan for such Interest Period divided by 1 minus the
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"Affiliate" means, as to any Person, any other Person (a) that directly
or indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, such Person; (b) that directly or
indirectly beneficially owns or holds ten percent or more of any class of
voting stock of such Person; or (c) ten percent or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; provided, however, in no event shall the Agent, the Documentation
Agent, the Managing Agent, the Arranger, any Co-Agent or any Lender be deemed
an Affiliate of the Borrower or any of its Subsidiaries.
"Agent" means as specified in the introductory paragraph of this
Agreement.
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"Agent's Fee Letter" means the letter agreement dated as of July 9, 1996
(and accepted by the Borrower as of July 9, 1996) among the Borrower, the Agent
and the Arranger.
"Agreement" means this Credit Agreement and any and all amendments,
modifications, supplements, renewals, extensions or restatements hereof.
"Applicable Lending Office" means for each Lender and each Type of Loan,
the Lending Office of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan below its name on the signature pages hereof
(or, with respect to a Lender that becomes a party to this Agreement pursuant
to an assignment made in accordance with Section 13.7, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to the
Borrower and the Agent as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" means, for any day, a fluctuating rate per annum for
Base Rate Loans or Eurodollar Loans, as applicable, equal to the percentage
determined by reference to both the Senior Leverage Ratio and the Interest
Coverage Ratio then applicable as follows:
Pricing Senior Interest Eurodollar Base Commitment
Level Leverage Ratio Coverage Ratio Rate Margin Rate Margin Fee
----- -------------- ----------------- ----------- ----------- ----------
1 Less than 0.75 Greater than 3.25 0.875% 0.0% 0.25%
2 Less than 1.00 Greater than 3.00 1.125% 0.0% 0.30%
3 Less than 1.50 Greater than 2.75 1.375% 0.125% 0.325%
4 Less than 2.00 Greater than 2.50 1.625% 0.375% 0.375%
5 Less than 2.50 Greater than 2.25 1.75% 0.50% 0.375%
6 Less than or Less than
equal to 2.50 or equal to 2.25 2.0% 0.75% 0.50%
The Applicable Margin shall be calculated on the basis of the financial
statements delivered by the Borrower pursuant to Section 8.1(a) and (b) and the
certificate delivered by the Borrower pursuant to Section 8.1(d); provided, that
(a) from the Closing Date until the first day of the month following the date
any such certificate is required to be delivered pursuant to Section 8.1(d), the
Senior Leverage Ratio and Interest Coverage Ratio shall be assumed to be,
respectively, 1.93:1 and 2.67:1, and (b) if the Borrower fails to deliver to the
Agent such financial statements or certificate when required, the Senior
Leverage Ratio and Interest Coverage Ratio shall be assumed to be respectively,
greater than or equal to 2.50:1 and less than or equal to 2.25:1, until five (5)
Business Days after such financial statements and certificate are received by
the Agent, after which the Applicable Margin shall be determined as otherwise
provided herein. If the Senior Leverage Ratio and Interest Coverage Ratio are
at any time determined (as provided herein) to fall within different pricing
levels on the grid set forth above, then the pricing level with the higher
Applicable Margin shall apply. Changes in the Applicable Margin shall be
effective on the first day of the month following the close of the fiscal period
for which Agent has received financial statements or a certificate
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reflecting a Senior Leverage Ratio and/or Interest Coverage Ratio warranting a
change in the Applicable Margin.
"Arranger" means BA Securities, Inc.
"Asset Disposition" means the disposition of any or all of the
Property of the Borrower or any of its Subsidiaries, whether by sale, lease,
transfer, assignment, condemnation or otherwise, and including any involuntary
disposition resulting from casualty damage to Property in excess of $500,000;
provided, however, that the issuance and sale by a Person of its own Capital
Stock shall not constitute an Asset Disposition.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and its Assignee and accepted by the Agent and consented to by
the Borrower (such consent not to be unreasonably withheld) pursuant to Section
13.7(e), in substantially the form of Exhibit A hereto.
"Assignee" means as specified in Section 13.7(b).
"Assigning Lender" means as specified in Section 13.7(b).
"Bankruptcy Code" means as specified in Section 11.1(e).
"Base Rate" means, for any day, the higher of (a) the rate of interest
in effect for such day as publicly announced from time to time by B of A in San
Francisco, California as its "reference rate"; and (b) 0.50% per annum plus the
latest Federal Funds Rate. The "reference rate" is a rate set by B of A based
upon various factors including B of A's costs and desired return, general
economic conditions, and other factors, and is used as a reference point for
pricing some loans which may be priced at, above, or below the announced rate.
Any change in the Base Rate shall take effect at the opening of business on the
day specified in the public announcement of such change, or, if there is not
such public announcement, on the date of such change.
"Base Rate Loans" means Loans that bear interest at rates based upon
the Base Rate.
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"B of A" means as specified in the initial paragraph of this
Agreement.
"Borrower" means as specified in the initial paragraph of this
Agreement.
"Business Acquisitions" means acquisitions of Facilities, health
related businesses, or related lines of business (including acquisitions of all
or substantially all of the Capital Stock of
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an entity owning or leasing any of the foregoing) by the Borrower or any
Subsidiary of the Borrower.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Los Angeles, California, Houston, Texas, and
New York, New York and (b) with respect to all borrowings, payments,
Conversions, Continuations, Interest Periods and notices in connection with
Eurodollar Loans, any day which is a Business Day described in clause (a) above
and which is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
"Capital Expenditures" means, for any period, expenditures (including
the aggregate amount of Capital Lease Obligations incurred during such period)
made by the Borrower or any of its Subsidiaries to acquire or construct fixed
assets, plant or equipment (including renewals, improvements or replacements,
but excluding repairs) during such period and which, in accordance with GAAP,
are classified as capital expenditures.
"Capital Lease Obligations" means, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) real and/or personal Property, which
obligations are classified as a capital lease on a balance sheet of such Person
under GAAP.
"Capital Stock" means corporate stock and any and all shares,
partnership interests, membership interests, equity interests, participations,
rights or other equivalents (however designated) of corporate stock issued by
any entity (whether a corporation, a partnership or another entity).
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by an
agency thereof and backed by the full faith and credit of the United States of
America, maturing within 180 days after the date of acquisition thereof; (b)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within 180 days after the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poors' Ratings Group ("S&P") or Moody's Investors
Service, Inc. ("Moody's"); (c) commercial paper, other than commercial paper
issued by Borrower or any of its Affiliates, maturing no more than 180 days
after the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 or P-1 from either S&P or Moody's; (d) domestic
certificates of deposit or time deposits or bankers' acceptances maturing within
180 days after the date of acquisition thereof or investments in money market or
mutual funds or accounts, in each case issued or managed by any commercial bank
or other financial institution organized under the laws of the United States of
America or any state thereof or the District of Columbia or by any foreign bank
which is a Lender, and in any case having combined capital and surplus of not
less than $100,000,000; (e) deposits in any financial institution insured by the
Federal Deposit Insurance Corporation; and (f) any of the foregoing marketable
direct obligations, commercial paper, certificates of deposit or bankers'
acceptances, regardless of maturity, acquired from a securities brokerage firm
or financial institution reasonably
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believed to be financially sound pursuant to a repurchase contract which
requires that such securities be repurchased by such securities brokerage firm
or financial institution, as the case may be, within 180 days of their original
acquisition.
"CHC" means Champion Healthcare Corporation, a Delaware corporation.
"Champion" means PHC/CHC Holdings, Inc., a Delaware corporation, the
survivor of the merger of PC Merger Sub, Inc. into CHC pursuant to the Merger
Agreement.
"Change of Control" means the existence or occurrence of any of the
following: (a) any Person or two or more Persons (other than the Permitted
Holders) acting as a group (as defined in Section 13d-3 of the Securities
Exchange Act of 1934), becomes the "beneficial owner" (within the meaning of
Rule 13d-3 and/or Rule 13d-5 under the Securities Exchange Act of 1934, as
amended, except that a Person shall be deemed to have "beneficial ownership" of
all shares that such Person has the right to acquire without condition, other
than the passage of time, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than thirty percent
(30%) or more of the combined voting power of all securities of the Borrower
entitled to vote in the election of directors, other than securities having such
power only by reason of the happening of a contingency (other than the passage
of time); and (b) individuals who, as of the Closing Date, constitute the Board
of Directors of the Borrower (the "Borrower Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors of the
Borrower; provided, however, that any individual becoming a director of the
Borrower subsequent to the Closing Date whose election, or nomination for
election by the Borrower's shareholders was approved by a vote of at least a
majority of the directors then comprising the Borrower Incumbent Board, shall be
considered as though such individual were a member of the Borrower Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934) or other actual or
threatened solicitation of proxies or contest by or on behalf of a Person other
than the Board of Directors of the Borrower.
"Closing Date" means the date of this agreement as specified in the
introductory paragraph of this Agreement.
"Co-Agents" means Credit Lyonnais New York Branch and Toronto-Dominion
(Texas), Incorporated.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property and interests in Property and proceeds
thereof now owned or hereafter acquired by Borrower and/or its Subsidiaries in
or upon which a Lien now or hereafter exists in favor of the Lenders, or Agent
on behalf of the Lenders, whether under this Agreement or under any other
documents executed by any such Persons and delivered to Agent or the Lenders in
connection herewith as security for the Obligations or any portion thereof.
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"Commitments" means the Revolving Credit Loans Commitments and
"Commitment" means, for any Lender, such Lender's respective percentage of the
Revolving Credit Loans Commitments.
"Commitment Fee" means as specified in Section 2.11(a).
"Commitment Percentage" means, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by the total Commitments of all
of the Lenders, as adjusted from time to time in accordance with Section 13.7.
"Consolidated Tangible Assets" means the total assets of Borrower and
its Subsidiaries less all intangible assets of Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.
"Contract Rate" means as specified in Section 13.11(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Current Date" means a date occurring no more than 30 days prior to the
Closing or such earlier date which is reasonably acceptable to the Agent.
"Dakota" means Dakota Foundation, a North Dakota non-profit corporation.
"DHHS" means Dakota/Champion Partnership d/b/a Dakota Heartland Health
System, a North Dakota general partnership.
"DHHS Operating Agreement" means that certain Operating Agreement dated
December 21, 1994 entered into by and among Dakota, DHHS, Champion and
Paracelsus-Fargo, as the same may be amended or otherwise modified from time-to-
time.
"DHHS Partnership Agreement" means that certain Amended and Restated
Partnership Agreement of Dakota/Champion Partnership dated as of December 21,
1994 entered into by and between Dakota and Paracelsus-Fargo, as the same may be
amended or otherwise modified from time-to-time.
"Debt" means as to any Person at any time (without duplication):
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar instruments,
(c) all obligations of such Person to pay the deferred purchase price of
Property or services, except trade accounts payable of such Person arising in
the ordinary course of business, (d) all Capital Lease Obligations of such
Person, (e) all Debt of
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others Guaranteed by such Person,(f) all obligations (other than trade accounts
payable permitted under clause (c) above) to the extent secured by a Lien
existing on Property owned by such Person, whether or not the obligations
secured thereby have been assumed by such Person or are non-recourse to such
Person, (g) all reimbursement obligations of such Person (whether contingent or
otherwise) in respect of letters of credit, bankers' acceptances, surety or
other bonds and similar instruments, (h) all obligations and liabilities of such
Person under Interest Rate Protection Agreements, and all liabilities of such
Person in respect of unfunded vested benefits under any Pension Plan; provided,
however, that "Debt" does not include (i) any obligations pursuant to
receivables financing that are not required by GAAP to be booked as liabilities
on the balance sheet of the Borrower and its Subsidiaries. Notwithstanding the
foregoing, the contingent obligations of Champion and Paracelsus-Fargo under
Section 3.03(g) of the DHHS Partnership Agreement shall not be deemed to
constitute Debt of the Borrower until such time as the obligations are no longer
contingent or until such time as Dakota gives the Borrower, Champion or
Paracelsus-Fargo notice that it is exercising its rights under Section 3.03(g)
of the DHHS Partnership Agreement.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation or any other amount payable by the Borrower under this
Agreement or any other Loan Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full equal to the
sum of two percent (2%) plus the Base Rate as in effect from time to time plus
the Applicable Margin for Base Rate Loans; provided, however, that if such
amount in default is principal of a Eurodollar Loan and the due date is a day
other than the last day of an Interest Period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest Period therefor, two percent (2%)
plus the interest rate for such Eurodollar Loan for such Interest Period as
provided in Section 2.4(a) hereof and, thereafter, the rate provided for above
in this definition.
"Deposit Account" means a deposit account maintained by the Borrower
with a bank selected by the Borrower and reasonably acceptable to the Agent.
"Dollars" and "$" mean lawful money of the U.S.
"EBITDA" means, on a consolidated basis without duplication for any
Person and its Subsidiaries, the sum of (a) income before taxes and
extraordinary items (inclusive of minority interest income and expense), plus
interest expense, plus depreciation expense, plus amortization expense, in each
case, measured on a twelve (12) month basis and calculated as of the last day of
the fiscal quarter most recently ended, plus (b) with respect to any operations
acquired by such Person or a Subsidiary of such Person during such twelve-month
period, the EBITDA of such operations (as calculated pursuant to (a) above) for
the portion of such twelve-month period prior to the respective date of
acquisition, plus (c) EBITDA demonstrated and certified by such Person,
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to the reasonable satisfaction of Agent, as attributable to newly acquired
businesses during such twelve month period.
"Eligible Assignee" means (a) a commercial bank organized under the laws
of the United States, or any state thereof; or (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such country provided that such bank is acting through a branch or agency in
the United States, and, in the case of each of (a) and (b), having combined
capital and surplus of at least $100,000,000; or (c) a Person that is primarily
engaged in the business of commercial banking and that is (i) a Subsidiary of a
Lender, (ii) a Subsidiary of a Person of which a Lender is a Subsidiary, or
(iii) a Person of which a Lender is a Subsidiary, or (d) any other commercial
bank, savings and loan association, savings bank, finance company, insurance
company, pension fund, mutual fund or other financial institution (whether a
corporation, partnership or other entity) acceptable to the Agent, such
acceptance not to be unreasonably withheld or delayed.
"Environmental Law" means any federal, state, local or foreign law,
statute, code or ordinance, principle of common law, rule or regulation, as well
as any Permit, order, decree or injunction, issued, promulgated, approved or
entered thereunder applicable to the Borrower or any of its Subsidiaries,
relating to pollution or the protection, cleanup or restoration of the
environment or natural resources, or to the public health or safety, or
otherwise governing the generation, use, handling, collection, treatment,
storage, transportation, recovery, recycling, discharge or disposal of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., the Superfund Amendment and Reauthorization Act of 1986, 99-499, 100 Stat.
1613, the Resource Conservation and Recovery Act of 1976, 42 U. S. C. Section
6901 et seq., the Occupational Safety and Health Act, 29 U S.C. Section 651 et
seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act,
33 U.S.C. Section 1251 et seq., the Emergency Planning and Community Right to
Know Act, 42 U.S.C. Section 11001 et seq., the Federal Insecticide, Fungicide
and Rodenticide Act, 7 U.S.C. Section 136 et seq., and the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., and any state or local
counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal or civil statute, including, without
limitation, any Environmental Law or Permit, order, decree or injunction with
any Governmental Authority or other Person, arising from environmental, health
or safety conditions or the Release or threatened Release of a Hazardous
Material into the environment.
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"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock or securities convertible into
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for Capital Stock).
"Equity Issuance" means any issuance by the Borrower of any Capital
Stock of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business Loan Party
is also a member and which is treated as a single employer within the meaning of
Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means Loans that bear interest at rates based upon
the Adjusted 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 1/16 of 1%) quoted by the Reference Lender at approximately 11:00 a.m.
London time (or as soon thereafter as practicable) two Business Days prior to
the first day of such Interest Period for the offering by the Reference Lender
to leading banks in the London interbank market of Dollar deposits in
immediately available funds having a term comparable to such Interest Period and
in an amount comparable to the principal amount of the Eurodollar Loan made by
the Reference Lender to which such Interest Period relates. If the Reference
Lender is not participating in any Eurodollar Loans during any Interest Period
therefor (whether as a result of Section 4.4 or for any other reason), the
Eurodollar Rate and the Adjusted Eurodollar Rate for such Loans for such
Interest Period shall be determined by reference to the amount of the Loans
which the Reference Lender would have made had it been participating in such
Loans.
"Event of Default" has the meaning specified in Section 11.1.
"Excluded Subsidiaries" means
(a) a Subsidiary of the Borrower, including, but not limited to any
Subsidiary which is a partnership or owns a partnership interest, if at all
times (x) the book value of the total Property of such Subsidiary is less than
five percent (5%) of the book value of the total Property of the Borrower
(determined on a consolidated basis for the Borrower and all of its
Subsidiaries) and such Subsidiary's EBITDA does not exceed five percent (5%) of
the Adjusted EBITDA of the Borrower (determined on a consolidated basis for
Borrower and all of its Subsidiaries), and (y) the aggregate book value of the
total Property of all Excluded Subsidiaries of the Borrower and the aggregate
EBITDA for all Excluded Subsidiaries of the Borrower at no time exceeds five
percent (5%) of the book value of the total Property of the Borrower (determined
on a consolidated basis for the Borrower and all of its Subsidiaries) or five
percent (5%) of the
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Adjusted EBITDA of the Borrower (determined on a consolidated basis for the
Borrower and all of its Subsidiaries), respectively.
(b) In addition, the following are Excluded Subsidiaries:
(i) DHHS;
(ii) Metropolitan Hospital, L.P.;
(iii) Monrovia Community Hospital, a California limited
partnership;
(iv) PHC Funding Corp.;
(v) Hospital Assurance Company, Ltd., a Cayman Island
corporation;
(vi) IV Care, L.P.; and
(vii) To be formed partnership of Psychiatric Healthcare
Corporation of Louisiana and a subsidiary of Community Health Services,
Inc.
The Excluded Subsidiaries as of the Closing Date under clause (a) above are
listed on Schedule 1.1(a). All changes in the designation, from time to time,
of Excluded Subsidiaries after the Closing Date shall be by written notice from
Borrower to the Agent.
"Existing Indenture" means the Indenture dated as of October 15, 1993,
by and between Borrower and The Bank of New York, as trustee relating to
$75,000,000 of 9 7/8% Senior Subordinated Notes due 2003 issued by Borrower as
amended or otherwise modified from time to time in a manner not prohibited
hereby.
"Existing Paracelsus Credit Agreement" means that certain Second
Amended and Restated Credit Agreement dated as of December 8, 1995, among
Borrower, the lenders named therein, B of A as the issuing bank and as agent, as
previously amended from time to time.
"Existing Letters of Credit" means those certain letters of credit
issued by B of A for the account of Borrower or a Subsidiary pursuant to the
Existing Paracelsus Credit Agreement and listed on Schedule 1.1(b).
"Existing Subordinated Note Documents" means the Existing Indenture and
the Existing Subordinated Notes issued and authenticated thereunder, including
all exhibits thereto.
"Existing Subordinated Notes" means the 9-7/8% Senior Subordinated
Notes Due 2003 issued by Borrower in the original aggregate principal amount of
$75,000,000 under and pursuant to the Existing Indenture.
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"Facility" means a hospital or other medical or healthcare facility or
an assisted living facility where the respective land and improvements are owned
or leased one hundred percent (100%) by Borrower and/or one or more Wholly-Owned
Subsidiaries of Borrower, Majority-Owned Subsidiaries of Borrower or
Majority-Owned Joint Ventures.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest one-sixteenth of one percent
(1/16 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 the
day for which such rate is to be determined 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 such rate is not so published on such next succeeding Business Day, the
Federal Funds Rate for any day shall be the average rate charged to the
Reference Lender on such day on such transactions as determined by the Agent.
"Fee Letters" means the Agent's Fee Letter and the Paribas Fee
Letter.
"Fixed Charge Coverage Ratio" means on a consolidated basis
for Borrower and its Subsidiaries, as of the end of any fiscal quarter, the
ratio of (a) the sum of (i) Adjusted EBITDA, plus (ii) operating lease payments
(to the extent treated as an expense and deducted from Adjusted EBITDA), minus
(iii) federal and state income tax expense, in each case for the twelve (12)
months ended on the last day of the fiscal quarter most recently ended, minus
(iv) the "Maintenance Capital Expenditures", minus (v) with respect to any
operations acquired by Borrower or a Subsidiary of Borrower during such
twelve-month period, the "Maintenance Capital Expenditures" of any such Person
included for purposes of calculating Adjusted EBITDA, to (b) the sum of (w)
Interest Expense (including the actual interest expense incurred by any
operations acquired by Borrower or any of its Subsidiaries for such
twelve-month period and excluding the actual interest expenses incurred by any
operations divested by Borrower or any of its Subsidiaries for such twelve-
month period), plus (x) Operating Lease payments (to the extent treated as an
expense and deducted from Adjusted EBITDA), plus (y) all scheduled payments of
principal, in each case for the twelve (12) months ended on the last day of the
fiscal quarter most recently ended.
"GAAP" means generally accepted accounting principles, applied
on a consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their respective
successors or such other statements by such other entity as may be approved by
a significant segment of the accounting profession of the United States, and
which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
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"Governmental Authority" means any nation or government, any
state or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Requirement" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
Permit, order, decree, injunction or other directive or requirement of any
federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Guarantee" means, as to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Debt, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, including the obligation to make take-or-pay or
similar payments; (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation, or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the financial
condition, net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the
holder of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation; or (d) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof,
including without limitation with respect to letter of credit obligations,
currency swap agreements, foreign exchange contracts and other derivative or
similar agreements; provided, however, that the term Guarantee shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder as determined by such Person in good faith, but
in each case without duplication of any such primary obligation).
Notwithstanding the foregoing, the contingent obligations of Champion and
Paracelsus-Fargo under Section 3.03(g) of the DHHS Partnership Agreement shall
not be deemed to constitute Debt of the Borrower until such time as the
obligations are no longer contingent or until such time as Dakota gives the
Borrower, Champion or Paracelsus-Fargo notice that it is exercising its rights
under Section 3.03(g) of the DHHS Partnership Agreement.
"Hazardous Material" means any substance, product, waste,
pollutant, chemical, contaminant, insecticide, pesticide, constituent or
material which is or becomes listed, regulated or addressed under any
Environmental Law, including, without limitation, asbestos, dioxin, petroleum,
underground storage tanks (whether empty or containing any substance),
polychlorinated biphenyls and any medical waste.
"Indentures" means the Existing Indenture and the New Indenture.
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"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service mark registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information, engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.
"Interest Coverage Ratio" means, for any twelve month period, the
ratio of (a) Adjusted EBITDA of the Borrower and its Subsidiaries for such
period to (b) Interest Expense (including the Interest Expense for CHC and
including the actual interest expense incurred by any operations acquired by
Borrower or any of its Subsidiaries for such twelve-month period and excluding
the actual interest expense incurred by any operations divested by Borrower or
any of its Subsidiaries for such twelve-month period) for such period.
"Interest Expense" means for any period, all interest on Debt
of the Borrower and its Subsidiaries paid or accrued during such period,
including the interest portion of payments under Capital Lease Obligations.
"Interest Period" means, with respect to any Eurodollar Loan,
each period commencing on the date such Loan is made or Converted from a Base
Rate Loan or (if Continued) the last day of the next preceding Interest Period
with respect to such Loan, and ending on the numerically corresponding day in
the first, second, third or sixth and, if available, ninth or twelfth calendar
month thereafter, as the Borrower may select as provided in Section 2.9 hereof,
except that each such Interest Period which commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on
the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (b) any Interest Period
which would otherwise extend beyond an applicable Maturity Date shall end on
such Maturity Date; (c) no more than ten (10) Interest Periods for Eurodollar
Loans shall be in effect at the same time; (d) no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be a shorter period, such Loans shall not be available
hereunder; and (e) each Interest Period shall be interpreted in accordance with
the customs and practices of the international interbank markets.
"Interest Rate Protection Agreements" means, with respect to
any Person, an interest rate swap, cap or collar agreement or similar
arrangement between such Person and one or more Lenders that are parties to
this Agreement providing for the transfer or mitigation of interest rate risks
either generally or under specified contingencies.
"Investments" means as specified in Section 9.4.
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"Issuing Bank" means B of A or such other Lender which shall issue
Letters of Credit pursuant to Section 2.14.
"Joinder Agreements" means the agreements executed by each Subsidiary
after the Closing Date (other than Excluded Subsidiaries) whereby such
Subsidiary becomes a party to the Master Guaranty.
"Krukemeyer" means Dr. Manfred George Krukemeyer, an individual.
"Krukemeyer Subordinated Note" means that certain 6.51% subordinated
note to be issued by Borrower in the aggregate principal amount of $7,185,467,
substantially in the form of Exhibit B, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof not
prohibited by this Agreement.
"Lender" and "Lenders" means as specified in the initial paragraph of
this Agreement.
"Letter of Credit" means any standby letter of credit issued or deemed
issued by the Issuing Bank for the account of the Borrower pursuant to this
Agreement.
"Letter of Credit Agreement" means, with respect to each Letter of
Credit to be issued by the Issuing Bank, the letter of credit application and
reimbursement agreement which such Issuing Bank requires to be executed by the
Borrower in connection with the issuance of such Letter of Credit.
"Letter of Credit Liabilities" means, at any time, the aggregate
undrawn face amounts of all outstanding Letters of Credit and all unreimbursed
drawings under Letters of Credit.
"Leverage Ratio" means as of any date, the ratio of (a) Total Debt
including Letter of Credit Liabilities, to (b) Adjusted EBITDA for the twelve
(12) months ending with the last day of the fiscal quarter most recently ended.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation or other encumbrance of any kind or nature whatsoever
(including, without limitation, any conditional sale or title retention
agreement), whether arising by contract, operation of law or otherwise.
"Loans" means the Revolving Credit Loans.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Fee Letters, the Letters of Credit, the Letter of Credit
Agreements and all other agreements, documents and instruments now or hereafter
executed and/or delivered by any Loan Party to the Agent, the Documentation
Agent, the Managing Agent, the Arranger, any Co-Agent, the Issuing Bank or any
Lender pursuant to or in connection with any of the foregoing, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
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"Loan Party" means the Borrower, each of the Subsidiaries (other than
Excluded Subsidiaries) of the Borrower and any other Person who is or becomes a
party to any agreement, document or instrument that Guarantees or secures
payment or performance of the Obligations or any part thereof.
"Maintenance Capital Expenditures" means an amount equal to three
percent (3%) of the net revenues of the Borrower and its Subsidiaries (and, in
the case of any partnership or joint venture, 3% of its net revenues multiplied
by the Borrower's or any of its Subsidiary's right to receive distributable cash
flow) determined in accordance with GAAP for the twelve (12) months ended on the
last day of the fiscal quarter most recently ended.
"Majority-Owned Joint Venture" means any partnership or joint venture:
(a) in which a majority of the equity interest is owned by Borrower and/or a
Wholly-Owned Subsidiary of Borrower; (b) in which Borrower and/or a Wholly-Owned
Subsidiary of Borrower is the sole general partner; and (c) which operates a
Facility and is properly licensed to do so.
"Majority-Owned Subsidiary" means a Subsidiary of Borrower which is
reported with Borrower on a consolidated basis under GAAP and the rules and
regulations of the Securities and Exchange Commission, and which is engaged in
the health care business or a related line of business.
"Master Guaranty" means the Master Guaranty substantially in the form
of Exhibit E dated of even date herewith entered into (i) on the Closing Date,
by and among all of the existing Subsidiaries (except the Excluded
Subsidiaries), and (ii) after the Closing Date, by the execution of Joinder
Agreements by all newly-formed or newly-acquired Subsidiaries (except Excluded
Subsidiaries) as well as Subsidiaries that were formerly but no longer remain
Excluded Subsidiaries.
"Material Adverse Effect" means (a) any event that could reasonably be
expected to have a material and adverse effect on (i) the condition (financial
or otherwise), assets or business operations of Borrower and its Subsidiaries,
taken as a whole, or (ii) the ability of Borrower and its Subsidiaries to
perform their obligations under the Loan Documents, and (b) any material and
adverse change in (x) the condition (financial or otherwise), assets or business
operations of Borrower and its Subsidiaries, taken as a whole, or (y) the
ability of Borrower and its Subsidiaries to perform their obligations under the
Loan Documents.
"Material Contracts" means, as to any Person, any supply, purchase,
service, employment (including all contracts with physicians), tax, indemnity,
Majority-Owned Joint Venture, shareholder or other agreements or contracts for
which the aggregate amount or value of services performed or to be performed for
or by, or funds or other Property transferred or to be transferred to or by,
such Person or any of its Subsidiaries party to such agreement or contract, or
by which such Person or any of its Subsidiaries or any of their respective
Properties are otherwise bound, during any fiscal year of the Borrower exceeds
$5,000,000, and any and all amendments, modifications, supplements, renewals or
restatements thereof.
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"Maturity Date" means the Revolving Credit Loans Maturity Date.
"Maximum Rate" means the maximum non-usurious interest rate, if any,
that any time or from time to time may be contracted for, taken, reserved,
charged or received with respect to the particular Obligations as to which such
rate is to be determined, payable to any Lender or any other Person pursuant to
this Agreement or any other Loan Document, under laws applicable to such Lender
or other Person which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than applicable laws now allow. The
Maximum Rate shall be calculated in a manner that takes into account any and all
fees, payments and other charges in respect of the Loan Documents that
constitute interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at the time of
such change in the Maximum Rate. For purposes of determining the Maximum Rate
under Texas law, the applicable rate ceiling shall be the indicated rate ceiling
described in, and computed in accordance with, Article 5069-1.04, Vernon's Texas
Civil Statutes; provided, however, that, to the extent permitted by applicable
law, the Agent shall have the right to change the applicable rate ceiling from
time to time in accordance with applicable law.
"Merger" means the merger of PC Merger Sub, Inc. into CHC, pursuant to
the terms of the Merger Agreement.
"Merger Agreement" means that certain Agreement and Plan of Merger,
dated April 12, 1996, by and among Borrower, CHC and PC Merger Sub, Inc., as
amended and restated on May 29, 1996, pursuant to which Champion has become a
Wholly-Owned Subsidiary of the Borrower.
"Merger Documents" means the Merger Agreement and the Certificate of
Merger filed with the Secretary of State of Delaware with respect to the Merger.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from any Loan Party or any ERISA Affiliate within six (6) years of the time in
question and which is covered by Title IV of ERISA.
"Net Earnings" means the net income of Borrower and its Subsidiaries
on a consolidated basis determined in accordance with GAAP.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the
gross proceeds received by the Borrower or any of its Subsidiaries from such
Asset Disposition (including, without limitation, cash or notes, minus (b) the
amount, if any, of all taxes paid or payable by the Borrower or any of its
Subsidiaries directly resulting from such Asset Disposition (including the
amount, if any, estimated by the Borrower in good faith at the time of such
Asset Disposition for taxes payable by the Borrower or any of its Subsidiaries
on or measured by net income or gain resulting from such Asset Disposition),
minus (c) the reasonable out-of-pocket costs and expenses incurred by the
Borrower or such Subsidiary in connection with such Asset Disposition (including
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reasonable brokerage fees paid to a Person other than an Affiliate of the
Borrower) excluding any fees or expenses paid to an Affiliate of the Borrower.
"Net Proceeds" with respect to any Asset Disposition shall also include
proceeds (after deducting any amounts specified in clauses (b) and (c) of the
preceding sentence) of insurance with respect to any actual or constructive
loss of Property, or an agreed or compromised loss of Property or the taking of
any Property under the power of eminent domain and condemnation awards and
awards in lieu of condemnation for the taking of Property under the power of
eminent domain, except such proceeds and awards as are released to and used by
the Borrower in accordance with Section 8.5. In no event shall any item be
included in "Net Proceeds" in respect of any joint venture or partnership to
the extent it shall exceed the Borrower's direct or indirect share of the
earnings from such joint venture or partnership.
"Net Worth" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of the Borrower and its Subsidiaries.
"New Indenture" means the Indenture dated as of August 16, 1996 by and
between Borrower and AmSouth Bank of Alabama, as trustee related to $325,000,000
of ten percent (10%) Senior Subordinated Notes due 2006 issued by Borrower.
"New Subordinated Debt" means the obligations of Borrower under the
New Subordinated Notes.
"New Subordinated Note Documents" means the New Indenture and the New
Subordinated Notes issued and authenticated thereunder, including all exhibits
related thereto.
"New Subordinated Notes" means the Senior Subordinated Notes due 2006
issued by Borrower in the aggregate principal amount of $325,000,000 under and
pursuant to the New Indenture.
"Notes" means the promissory notes made by the Borrower evidencing the
Revolving Credit Loans, in the form of Exhibit C hereto.
"Obligations" means any and all (a) indebtedness, liabilities and
obligations of the Loan Parties, or any of them, to the Agent, the Issuing Bank,
the Documentation Agent, the Managing Agent, any Co-Agent and the Lenders, or
any of them, evidenced by and/or arising pursuant to any of the Loan Documents,
now existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several or joint and
several, including, without limitation, (i) the obligations of the Loan Parties
to repay the Loans and the Reimbursement Obligations, to pay interest on the
Loans and Reimbursement Obligations (including, without limitation, interest
accruing after any, if any, bankruptcy, insolvency, reorganization or other
similar filing) and to pay all fees, indemnities, costs and expenses (including
attorneys' fees) provided for in the Loan Documents and (ii) the indebtedness
constituting the Loans, the Reimbursement Obligations and such fees,
indemnities, costs and
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expenses, and (b) indebtedness, liabilities and obligations of the Borrower
under any and all Interest Rate Protection Agreements that it may enter into
with any Lender.
"Operating Lease" means, with respect to any Person, any lease, rental
or other agreement for the use by that Person of any Property which is not a
Capital Lease Obligation.
"Outstanding Credit" means, at any particular time, the sum of (a) the
outstanding principal amount of the Revolving Credit Loans and (b) the Letter of
Credit Liabilities.
"Paracelsus-Fargo" means Paracelsus Healthcare Corporation of North
Dakota, Inc., a Wholly-Owned Subsidiary of Borrower.
"Paribas Fee Letter" means the letter agreement dated as of July 18,
1996 (and accepted by the Borrower as of July 23, 1996), between Borrower and
the Documentation Agent.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PC Merger Sub, Inc." means PC Merger Sub, Inc., a Delaware corporation.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (excluding any Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within six years of the time in question, by the Borrower or any ERISA
Affiliate for employees of the Borrower or any ERISA Affiliate.
"Permit" means any permit, certificate, approval, license or other
authorization issued by a Governmental Authority.
"Permitted Acquisitions" means as specified in Section 9.5.
"Permitted Holders" means (a) any Person employed by the Borrower and
its Subsidiaries in a management capacity as of the Closing Date, (b)
Krukemeyer, (c) any 80% or more owned Subsidiary of Krukemeyer, or a spouse or
immediate family member of Krukemeyer, and (d) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding a controlling interest of which consist of
Krukemeyer and/or any such other Persons referred to in clause (c) above.
"Permitted Liens" means:
(a) Liens disclosed on Schedule 1.1(c) hereto;
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(b) Liens securing the Obligations in favor of
the Agent (for the benefit of the Agent and the Lenders or the Issuing Bank)
pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning
restrictions or other restrictions on the use of real Property or minor
imperfections to title which do not (individually or in the aggregate)
materially affect the value of the Property encumbered thereby or materially
impair the ability of the Borrower or any of its Subsidiaries to use such
Property in its businesses, and none of which is violated in any material
respect by existing or proposed structures or land use;
(d) Liens for current taxes, assessments or other
governmental charges which are not yet due or which are being contested in good
faith and for which adequate reserves have been provided on the books of the
Borrower or such Subsidiary, as the case may be;
(e) Liens of mechanics, materialmen,
warehousemen, carriers, landlords (including contractual landlords Liens) or
other similar statutory Liens securing obligations that are not yet due and are
incurred in the ordinary course of business or which are being contested in
good faith and for which adequate reserves have been established;
(f) Liens resulting from good faith deposits to
secure payment of worker's compensation (or to participate in any fund in
connection with worker's compensation insurance), unemployment insurance,
pension or other social security programs or to secure the performance of
tenders, statutory obligations, taxes, customs, duties or other charges, surety
and appeal bonds, bids, contracts (other than for payment of Debt) or leases,
all in the ordinary course of business;
(g) Liens incurred in connection with Capital Lease
Obligations;
(h) Purchase-money Liens on any Property now
owned or hereafter acquired or the assumption after the Closing Date of any
Lien on Property existing at the time of such acquisition (and not created in
contemplation of such acquisition), or a Lien incurred prior to or after the
Closing Date in connection with any conditional sale or other title retention
agreement other than Capital Lease Obligations; provided that:
(i) any Property subject to the foregoing is or
was acquired by the Borrower or any of its Subsidiaries in the
ordinary course of its respective business and the Lien on the
Property attaches concurrently or within 90 days after the
acquisition thereof;
(ii) the Debt secured by any Lien so created,
assumed or existing shall not exceed the lesser of the cost or
fair market value at the time of acquisition of the Property
covered thereby;
(iii) each such Lien shall attach only to the
Property so acquired and the proceeds thereof; and
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(iv) the Debt secured by all such Liens
shall not exceed three percent (3%) of the book value of the
total Property of the Borrower and all of its Subsidiaries;
(i) Liens against the Property and Capital Stock of any
Excluded Subsidiary;
(j) judgment Liens on appeal if and only if (i)
the amount, applicability or validity thereof is currently (at the time in
question) being contested in good faith by appropriate action promptly and
diligently conducted and adequate cash reserves (segregated to the extent
required by GAAP) have been set aside therefor, (ii) levy and execution thereon
have been stayed and continue to be stayed, and (iii) they do not in the
aggregate materially detract from the value of the Property of the Person in
question or materially impair the use of such Property in such Person's
business;
(k) other Liens so long as the obligations
secured thereby do not exceed $1,000,000 in the aggregate at any one time
outstanding; and
(l) Any extension, renewal or replacement of any
of the foregoing, provided that Liens permitted under this clause (l) shall not
be extended or spread to cover any additional indebtedness or Property;
provided, however, that none of the Permitted Liens (except those in favor of
the Agent and except for Liens permitted under subsection (d) of this
definition) may attach or relate to the Capital Stock of or any other ownership
interest in any Subsidiary of the Borrower (other than the Excluded
Subsidiaries), or the proceeds thereof.
"Person" means any individual, corporation, trust, association,
company, partnership, joint venture, limited liability company, Governmental
Authority or other entity.
"PHC Funding Corp." means PHC Funding Corp. II, a California
corporation.
"PHC Funding Sale Documents" means all documents, instruments and
agreements executed and delivered by PHC Funding Corp. as of April 16, 1993,
together with any documents, instruments and agreements executed and delivered
in connection with any amendment, modification or change thereto, and including
any similar documentation entered into between a third-party lender and a
Subsidiary established for the special purpose of obtaining accounts receivable
financing.
"PHC Salt Lake Hospital" means the assets relating to FHP Hospital, a
125-bed acute care hospital and its surrounding campus in Salt Lake City, Utah.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any
ERISA Affiliate, including any Pension Plan.
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"Principal Office" means the principal office of the Agent in
Los Angeles, California, presently located at 555 South Flower Street, 11th
Floor, Los Angeles, California 90071.
"Pro Formas" means the unaudited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries dated on or about June 26, 1996 and
provided to the Agent prior to the Closing Date.
"Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
"Projections" means the Borrower's forecasted consolidated (a) balance
sheets, (b) income statements, and (c) cash flow statements, together with
appropriate supporting details and a statement of underlying assumptions, dated
on or about June 26, 1996 and provided to the Agent prior to the Closing Date.
"Property" means property or assets of all kinds, real, personal or
mixed, tangible or intangible (including, without limitation, all rights
relating thereto), and including all stock and other equity interests, whether
owned or acquired before, on or after the Closing Date.
"Quarterly Date" means the last day of each March, June, September and
December of each year, the first of which shall be the first such
day after the Closing Date.
"Reference Lender" means B of A.
"Register" means as specified in Section 13.7(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Lender, any change after
the Closing Date in any U.S. federal or state or foreign laws or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of lenders including
such Lender of or under any U.S. federal or state or foreign laws or
regulations (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Bank for any drawing under a Letter of Credit.
"REIT Debt" means all indebtedness outstanding under (a) the Amended
and Restated Note dated as of April 13, 1993, signed by Psychiatric Healthcare
Corporation of Missouri payable to the order of Health Care REIT, Inc.
("HCRI"), in the original principal sum of $7,000,000, (b) the Note dated as of
March 22, 1995 signed by Psychiatric Healthcare Corporation of Louisiana
("PHCL") payable to the order of HCRI in the original principal sum of
$1,595,000
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and (c) the Note dated as of April 13, 1993 signed by PHCL payable to the order
of HCRI in the original principal amount of $3,225,000.
"Related Transactions" means, collectively, (a) the Merger, (b) the
execution and delivery of the Related Transactions Documents, and (c) the
issuance and funding of the New Subordinated Notes.
"Related Transactions Documents" means the Merger Agreement (including
only those schedules and exhibits to the Merger Agreement designated by the
Agent and listed on Schedule 1.1(d) hereto), the New Subordinated Note
Documents, the Existing Subordinated Note Documents and the Krukemeyer
Subordinated Note.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water or
ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform
post-remedial monitoring, care or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section 4043(b)
or (c) of ERISA other than a Reportable Event as to which the provision of 30
days' notice to the PBGC is waived under applicable regulations.
"Required Lenders" means, at any date of determination, Lenders having
in the aggregate at least 51% (in dollar amount as to any one or more of the
following) of the sum of the aggregate outstanding Revolving Credit Loans
Commitments (or, if such Commitments have terminated or expired, the aggregate
outstanding principal amount of the Revolving Credit Loans and the aggregate
Letter of Credit Liabilities).
"Required Payment" means as specified in Section 3.4.
"Reserve Requirement" means, for any Eurodollar Loan of any
Lender for any Interest Period therefor, the maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under any regulations of the Board of
Governors of the Federal Reserve System (or any successor) by such Lender for
deposits exceeding $100,000,000 against "Eurocurrency Liabilities" as such term
is used in Regulation D.
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"Responsible Officer" means, as to any Loan Party, the chief financial
officer, chief operating officer, chief executive officer, treasurer or general
counsel of such Person.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
(other than the Excluded Subsidiaries) now or hereafter outstanding, except a
dividend payable solely in shares of stock or cash payments in lieu of
fractional shares; (b) any redemption, conversion, exchange, 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 the Borrower or any of
its Subsidiaries now or hereafter outstanding; (c) any payment or prepayment of
principal of, premium, if any, or interest on, or any redemption, conversion,
exchange, purchase, retirement, redemption or defeasance of, or payment with
respect to, any Subordinated Debt; and (d) 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 the Borrower or any of its
Subsidiaries now or hereafter outstanding; provided, however, that the term
"Restricted Payment" shall not include (i) any of the foregoing made solely in
the form of shares of the Borrower's Capital Stock, options, warrants or other
rights to acquire shares of the Borrower's Capital Stock or securities
convertible into, or exchangeable for, shares of the Borrower's Capital Stock
other than debt securities that are convertible into, or exchangeable for,
shares of the Borrower's Capital Stock, (ii) payments under the service
agreement and the insurance agreement with Krukemeyer contemplated by the Merger
Agreement, or (iii) any payments under Section 3.03(g) of the DHHS Partnership
Agreement.
"Revolving Credit Loans" means as specified in Section 2.1(a).
"Revolving Credit Loans Commitment" means, as to any Lender, the
obligation of such Lender to make or continue Revolving Credit Loans and incur
or participate in Letter of Credit Liabilities hereunder in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite the name of such Lender on the signature pages hereto under
the heading "Revolving Credit Loans Commitment" or, if such Lender is a party to
an Assignment and Acceptance, the amount set forth in the most recent Assignment
and Acceptance of such Lender, as the same may be reduced or terminated pursuant
to Sections 2.7, 2.13 or 11.2, and "Revolving Credit Loans Commitments" means
such obligations of all Lenders; provided, however, that the Revolving Credit
Loans Commitments shall be permanently reduced by $50,000,000 on each of August
15, 1999 and August 15, 2000 and such reductions pursuant to this proviso shall
be applied ratably to the respective Commitment of each Lender in accordance
with its respective Commitment Percentage. As of the Closing Date, the
aggregate principal amount of the Revolving Credit Loans Commitments is
$400,000,000.
"Revolving Credit Loans Maturity Date" means August 15, 2001.
"Revolving Credit Loans Notes" means the Notes.
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"Security Agreement" means the Security and Pledge Agreement
substantially in the form of Exhibit D executed by Borrower in favor of the
Agent for the benefit of the Agent and the Lenders, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Security Documents" means the Security Agreement, the Subsidiary
Security Agreements and the Master Guaranty, as they may be amended, modified,
supplemented, renewed, extended or restated from time to time, and any and all
other agreements, deeds of trust, mortgages, chattel mortgages, security
agreements, pledges, guaranties, assignments of proceeds, assignments of income,
assignments of contract rights, assignments of partnership interests,
assignments of royalty interests, assignments of performance or other collateral
assignments, completion or surety bonds, standby agreements, subordination
agreements, undertakings and other agreements, documents, instruments and
financing statements now or hereafter executed and/or delivered to or for the
benefit of the Agent and the Lenders by any Loan Party in connection with or as
security or assurance for the payment or performance of the Obligations or any
part thereof.
"Senior Leverage Ratio" means, as of any date, the ratio of (a) Total
Debt, including Letter of Credit Liabilities, less Subordinated Debt, to (b)
Adjusted EBITDA for the twelve (12) months ending with the last day of the
fiscal quarter most recently ended.
"Settlement Expense Allowance" means the amount of up to $22,356,000 in
expenses incurred in connection with the settlement of two lawsuits (one with
Aetna and one with another party), associated legal expenses, and the write-off
of certain psychiatric receivables.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subordinated Debt" means (a) the Debt of the Borrower under the
Existing Subordinated Notes, the New Subordinated Notes and the Krukemeyer
Subordinated Note, and (b) any and all other current or future Debt of the
Borrower or any Subsidiary of the Borrower which is
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subordinated to all or any portion of the Obligations and which is approved in
writing by Required Lenders, and (c) Debt incurred to refinance the Subordinated
Debt in existence as of the Closing Date provided that (i) the proceeds of such
Debt are used solely to retire, replace or refinance the Subordinated Debt (and
the transaction costs relating thereto), (ii) such Debt is subordinated to the
Obligations on terms and conditions that are substantially no less favorable to
the Agent and the Lenders than the Subordinated Debt being refinanced, and (iii)
the terms of such Debt do not provide for scheduled payments of any principal of
such Debt (including scheduled repayments or sinking fund payments) prior to
August 31, 2001, and are not materially more restrictive on Borrower or any of
its Subsidiaries than the terms of the Subordinated Debt being refinanced,
including, without limitation, with respect to sales of assets, incurrence of
Debt, change of control or the granting of Liens, as reasonably determined by
Required Lenders.
"Subordinated Debt Documents" means (a) the Existing Subordinated Note
Documents, the New Subordinated Note Documents, and the Krukemeyer Subordinated
Note, and (b) any and all other agreements, documents and instruments now or
hereafter evidencing or governing any Subordinated Debt.
"Subordinated Notes" means the Existing Subordinated Notes, the New
Subordinated Notes, the Krukemeyer Subordinated Note, and any and all
amendments, modifications, supplements, renewals, extensions or restatements of
such Subordinated Notes.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or Persons performing similar functions) of
such corporation or entity (irrespective of whether or not at the time, in the
case of a corporation, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more of its Subsidiaries or by such Person and one or more of
its Subsidiaries and, with respect to Paracelsus-Fargo, DHHS, but not any
subsidiary or partnership owned or controlled by DHHS.
"Subsidiary Guarantor" means each current and future Subsidiary of
Borrower (other than an Excluded Subsidiary).
"Subsidiary Pledgor" means each Subsidiary (other than Excluded
Subsidiaries) that has executed a Subsidiary Security Agreement pledging certain
Capital Stock to the Agent for the benefit of the Lenders.
"Subsidiary Security Agreement" means the Security Agreement
substantially in the form of Exhibit F executed by each Subsidiary Pledgor in
favor of the Agent for the benefit of the Agent and the Lenders, and any
security agreement executed pursuant to Section 5.3 hereof, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
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"Total Debt" means, at any particular time, the aggregate principal
amount of all Debt of the Borrower and its Subsidiaries outstanding, determined
on a consolidated basis.
"Type" means any type of Loan (i.e., a Base Rate Loan or Eurodollar
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas and/or any other jurisdiction, the laws of which may be applicable to the
creation, perfection or priority of any Lien on any Property created pursuant to
any Security Document.
"UCP" means as specified in Section 2.14(b).
"U.S." means the United States of America.
"U.S. Person" means a citizen or resident of the U.S., a corporation,
partnership or other entity created or organized in or under any laws of the
U.S. or any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"U.S. Taxes" means any present or future tax, assessment or other charge
or levy imposed by or on behalf of the U.S. or any taxing authority thereof.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of whose outstanding Capital Stock (other than
directors' qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries, and which is engaged in the
health care business or a related line of business.
Section 1.2 Other Definitional Provisions. All definitions
contained in this Agreement are equally applicable to the singular and plural
forms of the terms defined. The words "hereof", "herein" and "hereunder" and
words of similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations.
(a) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP consistent with such accounting principles
applied in the preparation of the audited financial statements referred to in
Section 7.2(a). All financial information delivered to the Agent pursuant to
Section 8.1 shall, unless otherwise specified herein, be prepared in accordance
with GAAP applied on a basis consistent with such accounting principles applied
in the preparation of the audited financial statements referred to in Section
7.2(a) or in accordance with Section 8.7. The parties acknowledge and agree that
all calculations made to determine compliance with covenants contained in this
Agreement, including the financial covenants set forth in Article 10, shall be
made on a consolidated basis for Borrower and its Subsidiaries.
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(b) The Borrower shall deliver to the Lenders at the same time as
the delivery of any annual or quarterly financial statement under Section 8.1
(i) a description, in reasonable detail, of any material variation between the
application of GAAP employed in the preparation of the next preceding annual or
quarterly financial statements and (ii) reasonable estimates of the difference
between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in this Agreement (including Article 10 hereof),
the Borrower will not, without giving the Agent at least 90 days advance written
notice thereof, change the last day of its fiscal year from December 31, or the
last days of the first three fiscal quarters of the Borrower in each of its
fiscal years from that existing on the Closing Date (except to fix the last day
of the first, second and third fiscal quarters of the Borrower at March 31, June
30 and September 30, respectively) and any such change of the last day of its
fiscal year or a fiscal quarter shall not be made if it has the effect of
circumventing any of the financial covenants contained in the Loan Documents.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, each Lender severally agrees to make one or more revolving
credit loans to the Borrower from time to time from and including the Closing
Date to but excluding the Revolving Credit Loans Maturity Date up to but not
exceeding the amount of such Lender's Revolving Credit Loans Commitment as
then in effect. (Such revolving credit loans now or hereafter made by the
Lenders to the Borrower from and including and after the Closing Date are
hereinafter collectively called the "Revolving Credit Loans") Subject to the
foregoing limitations and the other terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow the Revolving Credit Loans; provided,
however, that the Revolving Credit Loans Commitments shall be permanently
reduced by $50,000,000 on each of August 15, 1999 and August 15, 2000, and such
reductions shall be applied ratably to the respective Commitment of each Lender
in accordance with its respective Commitment Percentage.
(b) Continuation and Conversion of Loans. Subject to the terms
and conditions of this Agreement, the Borrower may borrow the Loans as Base
Rate Loans or Eurodollar Loans and, until the Revolving Credit Loans Maturity
Date, the Borrower may Continue Eurodollar Loans or Convert Loans of one Type
into Loans of the other Type.
(c) Lending Offices. Loans of each Type made by each Lender shall
be made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 2.2.2 Notes. The Revolving Credit Loans made by each
Lender shall be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit C hereto, dated the Closing Date, payable to
the order of such Lender in a principal amount equal
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to its Revolving Credit Loans Commitment as originally in effect and otherwise
duly completed. Each Lender is hereby authorized by the Borrower to endorse on
the schedule (or a continuation thereof) attached to each Note of such Lender,
to the extent applicable, the date, amount and Type of and the Interest Period
for each Loan made by such Lender to the Borrower hereunder and the amount of
each payment or prepayment of principal of such Loan received by such Lender,
provided that any failure by such Lender to make any such endorsement shall not
affect the obligations of the Borrower under such Note or this Agreement in
respect of such Loan.
Section 2.3 Repayment of Revolving Credit Loans. The
Borrower shall pay to the Agent for the account of each applicable Lender the
outstanding principal of the Revolving Credit Loans (and the outstanding
principal of the Revolving Credit Loans shall be due and payable) on the
Revolving Credit Loans Maturity Date.
Section 2.4 Interest.
(a) Interest Rate. The Borrower shall pay to the Agent for the
account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(i) during the periods such Loan is a Base Rate Loan, the
Base Rate plus the Applicable Margin; and
(ii) during the periods such Loan is a Eurodollar Loan, the
Adjusted Eurodollar Rate plus the Applicable Margin.
(b) Payment Dates. Accrued interest on the Loans shall be due and
payable as follows:
(i) in the case of Base Rate Loans, on each Quarterly
Date;
(ii) in the case of each Eurodollar Loan, on the last day
of the Interest Period with respect thereto and, in the case of an
Interest Period greater than three months, at three-month intervals
after the first day of such Interest Period;
(iii) upon the payment or prepayment of any Eurodollar Loan
or the mandatory prepayment of Base Rate Loans, or upon the Conversion
of any Eurodollar Loan to a Loan of the other Type (but only on the
principal amount so paid, prepaid or Converted); and
(iv) on the Maturity Date for such Loan.
(c) Default Interest. Notwithstanding the foregoing, the Borrower
will pay to the Agent for the account of each Lender interest at the applicable
Default Rate on any principal of any Loan made by such Lender, any
Reimbursement Obligation and (to the fullest extent permitted by law) any other
amount payable by the Borrower under this Agreement or any other Loan
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Document to or for the account of such Lender, which is not paid in full when
due (whether at stated maturity, by acceleration or otherwise), for the period
from and including the due date thereof to but excluding the date the same is
paid in full. Interest payable at the Default Rate shall be payable from time
to time on demand by the Agent.
Section 2.5 Borrowing Procedure. The Borrower shall give
the Agent written notice of each borrowing hereunder in accordance with Section
2.9. Not later than 10:00 a.m. (Los Angeles time) on the date specified for
each borrowing hereunder or in the case of Base Rate Loans made on the same
date as a notice of borrowing is given, 1:00 p.m. (Los Angeles time), each
Lender will make available the amount of the Loan to be made by it on such date
in immediately available funds to Agent at B of A, ABA No. 121000358,
Attention: Agency Management Services 5596 for credit to Bancontrol Account
Number 12357-00475 with a reference to Paracelsus Healthcare Corporation, or at
such other address as Agent may designate. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement and unless Agent
determines that any applicable condition precedent set forth in Article 6 has
not been satisfied or waived, be made available to the Borrower no later than
11:00 a.m. (Los Angeles time) where notice has been given in accordance with
Section 2.9, but no later than 2:00 p.m. (Los Angeles time) where Base Rate
Loans are made on the same day as notice has been given, each by wire transfer
of immediately available funds to the Deposit Account.
Section 2.6 Optional Prepayments, Commitment Terminations
and Reductions, Conversions and Continuations of Loans. Subject to Section
2.7, the Borrower shall have the right from time to time to prepay the Loans,
to terminate or reduce the Commitments in whole or in part, to Convert all or
part of a Loan of one Type into a Loan of another Type or to Continue
Eurodollar Loans; provided that: (a) the Borrower shall give the Agent notice
of each such prepayment, termination, reduction, Conversion or Continuation as
provided in Section 2.9, (b) Eurodollar Loans may only be Converted on the last
day of the Interest Period and (c) except for Conversions of Eurodollar Loans
into Base Rate Loans, no Conversions or Continuations shall be made while a
Default has occurred and is continuing. Any optional termination or reduction
of Commitments by the Borrower shall be permanent.
Section 2.7 Mandatory Prepayments.
(a) Asset Dispositions. The Borrower shall pay to the Agent, for
the benefit of the Lenders, as a prepayment of the Revolving Credit Loans, an
aggregate amount equal to 100% of the Net Proceeds from all Asset Dispositions
permitted by Section 9.12, unless such proceeds are used by the Borrower within
one year of receipt of such proceeds in cash, to make Investments permitted by
Sections 9.4(b), (c) or (d).
(b) Outstanding Credit Exceeds Commitments. If at any time the
Outstanding Credit exceeds the amount of the Revolving Credit Loans Commitments
at such time, the Borrower shall immediately pay to the Agent the amount of
such excess as a prepayment of the Revolving Credit Loans.
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(c) Application of Mandatory Prepayments. All repayments or
prepayments pursuant to subsections (a) and (b) preceding shall be allocated to
the unpaid principal amounts of the Revolving Credit Loans, and, with respect
to the prepayments under subsection (a), the Commitments shall be permanently
reduced in an amount equal to the amount of such repayments and prepayments,
which reductions shall be in addition to any other mandatory commitment
reductions under this Agreement, and such reduction shall be applied ratably to
the respective Commitment of each Lender in accordance with their respective
Commitment Percentages.
Section 2.8 Minimum Amounts. Except for Conversions and
prepayments pursuant to Section 2.7 and Article 4, each borrowing, each
Conversion and each prepayment of principal of the Loans shall be in an amount
at least equal to $1,000,000 or an integral multiple of $1,000,000 in excess
thereof (borrowings, prepayments or Conversions of or into Loans of different
Types or, in the case of Eurodollar Loans, having different Interest Periods at
the same time hereunder shall be deemed separate borrowings, prepayments and
Conversions for purposes of the foregoing, one for each Type or Interest
Period).
Section 2.9 Certain Notices. Notices by the Borrower to the
Agent of terminations or reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received by the Agent not
later than 9:00 a.m. (Los Angeles time) on the same Business Day in the case of
certain Base Rate Loans or on the Business Day prior to the date of the
relevant termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period, in each case specified
below:
Number of
Notice Business Days Prior
------ -------------------
Borrowing of Revolving Credit Loans which are Base Rate Loans 1*
Borrowing of Revolving Credit Loans which are Eurodollar Loans 3
Conversions or Continuations of Loans 3
Prepayments of Revolving Credit Loans which are Base Rate Loans 1
Prepayments of Revolving Credit Loans which are Eurodollar Loans 3
* If notice is timely received by 9:00 a.m. (Los Angeles time), Agent shall
make Base Rate Loans on same day as notice. If notice is received after
9:00 a.m. (Los Angeles time), Agent shall make Base Rate Loans on the Business
Day following such notice.
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 2.8 hereof)
and Type of the Loans to be borrowed, Converted, Continued or prepaid
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(and, in the case of a Conversion, the Type of Loans to result from such
Conversion) and the date of borrowing, Conversion, Continuation or prepayment
(which shall be a Business Day) and the duration of the Interest Period
selected, if applicable. Notices of termination or reductions of Commitments,
borrowings, Conversions, Continuations or prepayments shall be in the form of
Exhibit G hereto, appropriately completed as applicable. Each such notice of
the duration of an Interest Period shall specify the Loans to which such
Interest Period is to relate. The Agent shall promptly notify the Lenders of
the contents of each such notice. In the event the Borrower fails to select
the Type of Loan, or the duration of any Interest Period for any Eurodollar
Loan, within the time period and otherwise as provided in this Section 2.9, or
fails to satisfy the conditions precedent set forth in Section 6.2(b), such
Loan (if outstanding as a Eurodollar Loan) will be automatically Converted
(without any need to comply with the conditions precedent set forth in Section
6.2) into a Base Rate Loan on the last day of the preceding Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan.
Section 2.10 Use of Proceeds.
(a) The Borrower represents and warrants that the proceeds of the
Revolving Credit Loans to be made on and after the Closing Date shall be used in
accordance with the terms and conditions of this Agreement by the Borrower and
only for the following purposes: (i) to refinance the existing indebtedness
under the Existing Paracelsus Credit Agreement, (ii) to pay transaction costs
associated with the Merger and the Related Transactions, including the payment
of dividends and bonuses to, and payments for phantom stock appreciation rights
held by, executive management, (iii) to repay the REIT Debt, (iv) to repay the
Existing Subordinated Notes, and (v) for general business purposes, including
working capital needs, Permitted Acquisitions permitted under Section 9.5 and
Capital Expenditures.
(b) None of the proceeds of any Loan have been or will be used to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Securities Exchange Act of 1934, as amended, or to purchase or carry any
margin stock (within the meaning of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System).
Section 2.11 Fees.
(a) The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee (the "Commitment Fee") on the daily average unused
or unfunded amount of such Lender's Revolving Credit Loans Commitment, for the
period from and including the Closing Date to and including the Revolving Credit
Loans Maturity Date, at the applicable rate per annum equal to the percentage
corresponding to both the Senior Leverage Ratio and the Interest Coverage Ratio
set forth on the pricing matrix in the definition of "Applicable Margin" under
the column entitled "Commitment Fee," which accrued commitment fees shall be
payable in arrears on each Quarterly Date beginning on September 30, 1996 and on
the Revolving Credit Loans Maturity Date. Changes in the Commitment Fee shall
be determined in the same manner, and effective at the same time, as changes to
the Applicable Margin are determined.
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(b) The Borrower agrees to pay to the Agent for the account of
each Lender on the Closing Date a participation fee as set forth in the side
letter dated of even date herewith.
(c) The Borrower agrees to pay to the Agent and the Documentation
Agent such additional fees as are specified in their respective Fee Letters,
which fees shall be payable in such amounts and on such dates as are specified
therein.
Section 2.12 Computations. Interest and fees payable by the
Borrower under this Agreement and under the other Loan Documents on all Loans,
other than interest on Base Rate Loans, shall be computed on the basis of a
year of 360 days and the actual number of days elapsed (including the first day
but excluding the last day) occurring in the period for which payable unless,
in the case of any amount constituting interest under applicable law, such
calculation would result in a usurious rate, in which case such amount of
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be. Interest payable by the Borrower hereunder and under the other
Loan Documents on Base Rate Loans shall be computed on the basis of a year of
365 or 366 days, as the case may be.
Section 2.13 Reduction or Termination of Commitments. The
Borrower shall have the right to permanently terminate or reduce in part the
unused portion of the Revolving Credit Loans Commitments at any time and from
time to time, without premium or penalty, provided that (a) the Borrower shall
give notice of each such termination or reduction as provided in Section 2.9,
(b) each partial reduction shall be in an aggregate amount of at least
$1,000,000 and in integral multiples of $1,000,000 in excess thereof, and shall
be applied ratably to the respective Commitment of each Lender in accordance
with its respective Commitment Percentage, (c) in no event shall the
Commitments be reduced below the amount of the Outstanding Credit without a
simultaneous payment of Revolving Credit Loans and all accrued interest thereon
such that the amount of the Outstanding Credit does not exceed the remaining
aggregate Commitments after being so reduced, and (d) no Eurodollar Loans shall
be prepaid other than on the last day of the applicable Interest Period unless
such prepayment is in accordance with Section 4.5 hereof. The Revolving Credit
Loans Commitments may not be reinstated after they have been terminated or (if
applicable) reduced.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may utilize the Revolving Credit Loans Commitments by requesting that
the Issuing Bank issue Letters of Credit; provided, that the aggregate amount of
outstanding Letter of Credit Liabilities shall not at any time exceed the lesser
of (i) $40,000,000 and (ii) the Revolving Credit Loans Commitments less the then
outstanding and unpaid Revolving Credit Loans. Upon the date of issue of each
Letter of Credit, the Issuing Bank shall be deemed, without further action by
any party hereto, to have sold to each Lender, and each Lender shall be deemed,
without further action by any party hereto, to have purchased from the Issuing
Bank, a participation to the extent of such Lender's Commitment Percentage in
such Letter of Credit.
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(b) The Borrower shall give the Issuing Bank (with a copy to the
Agent) at least five Business Days irrevocable prior notice (effective upon
receipt) specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice the Agent
shall promptly notify each applicable Lender of the contents thereof and of such
Lender's Commitment Percentage of the amount of the proposed Letter of Credit.
Each Letter of Credit shall have an expiration date that does not exceed one
year from the date of issuance and that does not extend beyond the Revolving
Credit Loans Maturity Date, shall be payable in Dollars, shall support a
transaction entered into in the course of the Borrower's business, shall be
satisfactory in form and substance to the Issuing Bank, and shall be issued
pursuant to such agreements, documents and instruments (including a Letter of
Credit Agreement) as the Issuing Bank may reasonably require, none of which
shall be inconsistent with this Agreement. Without limiting the generality of
the foregoing, no provision of any Letter of Credit Agreement shall give the
Agent, the Issuing Bank or any Lender any rights or remedies that are greater
than the rights or remedies such Person would otherwise have under this
Agreement. Each Letter of Credit shall (i) provide for the payment of drafts
presented for, on or thereunder by the beneficiary in accordance with the terms
thereof, when such drafts are accompanied by the documents (if any) described in
the Letter of Credit and (ii) to the extent not inconsistent with the terms
hereof or any applicable Letter of Credit Agreement, be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 (together with any subsequent revision
thereof approved by a Congress of the International Chamber of Commerce and
adhered to by the Issuing Bank, the "UCP"), and shall, as to matters not
governed by the UCP, be governed by, and construed and interpreted in accordance
with, the laws of the State of Texas.
(c) Borrower agrees to pay to Agent a nonrefundable letter of
credit fee on the face amount of each Letter of Credit calculated at a rate per
annum equal to the Applicable Margin for Eurodollar Loans pursuant to the
pricing matrix set forth in the definition of "Applicable Margin." The letter
of credit fee shall be payable quarterly in arrears on the first Business Day of
the calendar quarter following the date any Letter of Credit is issued
commencing with the calendar quarter beginning on October 1, 1996, for the
period through the earliest of the expiry date of each Letter of Credit, the
last day of such calendar quarter or the Revolving Credit Loans Maturity Date,
to Agent for the ratable benefit of Lenders. Changes in the Letter of Credit
fee shall be determined in the same manner, and effective at the same time, as
changes to the Applicable Margin are determined. The Agent agrees to pay to
each Lender, promptly after receiving any payment of letter of credit fees
referred to above in this subsection (c), such Lender's Commitment Percentage of
such fees.
(d) The Borrower also agrees to pay to the Issuing Bank for its
own account, on the date of issuance of any Letter of Credit, a nonrefundable
letter of credit issuance fee with respect to each Letter of Credit issued by
the Issuing Bank hereunder in an amount equal to (A) one-quarter of one percent
(0.25%) per annum, multiplied by (B) the face amount of the Letter of Credit.
In addition to the foregoing fees, the Borrower shall pay or reimburse the
Issuing Bank for such normal and customary costs and expenses, including,
without limitation, administrative, issuance, amendment, payment and negotiation
charges, as are incurred or charged by the Issuing
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Bank in issuing, effecting payment under, amending or otherwise administering
any Letter of Credit.
(e) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment or other drawing under such Letter of Credit, the
Issuing Bank shall promptly notify the Borrower and each Lender as to the amount
to be paid as a result of such demand or drawing and the respective payment
date. If at any time the Issuing Bank shall make a payment to a beneficiary of
a Letter of Credit pursuant to a drawing under such Letter of Credit, each
Lender will pay to the Issuing Bank, immediately upon the Issuing Bank's demand
at any time commencing after such payment until reimbursement therefor in full
by the Borrower, an amount equal to such Lender's Commitment Percentage of such
payment, together with interest on such amount for each day from the date of
such payment to the date of payment by such Lender of such amount at a rate of
interest per annum equal to the Federal Funds Rate.
(f) In the event Borrower shall fail to reimburse the Issuing
Bank for the account of the Issuing Bank the full amount of any drawing by 9:00
a.m. (Los Angeles time) on the same date such drawing is honored by the Issuing
Bank under any Letter of Credit, the Issuing Bank shall promptly notify Agent
and the Agent shall as promptly as possible notify each Lender thereof and
Borrower shall be deemed to have requested that Base Rate Loans be made by the
Lenders to be disbursed on the date of payment by the Issuing Bank under such
Letter of Credit, without requiring the Borrower to satisfy the conditions of
Section 6.2. Any notice given by the Issuing Bank or Agent pursuant hereto may
be oral if immediately confirmed in writing (including telex); provided that the
lack of such an immediate confirmation shall not affect the conclusiveness and
binding effect of such notice.
(g) The Borrower shall be irrevocably and unconditionally
obligated to immediately reimburse the Issuing Bank for any amounts paid by the
Issuing Bank upon any drawing under any Letter of Credit, without presentment,
demand, protest or other formalities of any kind. The Issuing Bank will pay to
each Lender such Lender's Commitment Percentage of all amounts received from or
on behalf of the Borrower for application in payment, in whole or in part, of
the Reimbursement Obligation in respect of any Letter of Credit, but only to
the extent such Lender has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant to subsection (d) above. Outstanding Reimbursement
Obligations shall bear interest at the Default Rate and such interest shall be
payable on demand.
(h) The Reimbursement Obligations of the Borrower under this
Agreement and the other Loan Documents shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and the other Loan Documents under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Letter
of Credit or any other Loan Document;
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(ii) Any amendment or waiver of or any consent to
departure from any Loan Document other than an amendment, waiver or
consent which directly affects such Reimbursement Obligations;
(iii) The existence of any claim, setoff, counterclaim,
defense or other right which any Loan Party or other Person may have at
any time against any beneficiary of any Letter of Credit, the Agent,
the Issuing Bank, the Lenders or any other Person, whether in
connection with this Agreement or any other Loan Document or any
unrelated transaction;
(iv) Any statement, draft or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient (other than insufficiency on the face of such draft or
other document) in any respect or any statement therein being untrue
or inaccurate in any respect whatsoever;
(v) Payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, provided, that such payment
shall not have constituted gross negligence or willful misconduct of
the Issuing Bank; and
(vi) Any other circumstance whatsoever, whether or not
similar to any of the foregoing, provided that such other circumstance
or event shall not have been the result of the gross negligence or
willful misconduct of the Issuing Bank.
(i) The Borrower assumes all risks of the acts or omissions of
any beneficiary of any Letter of Credit with respect to its use of such Letter
of Credit. The Issuing Bank may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
(j) All Letters of Credit issued pursuant to the Existing
Paracelsus Credit Agreement shall be deemed to be Letters of Credit issued
pursuant to this Agreement.
ARTICLE 3
Payments
Section 3.1 Method of Payment. All payments of principal,
interest, fees and other amounts to be made by the Borrower under this
Agreement and the other Loan Documents shall be made to the Agent at its
Bancontrol Account No.12357-00475, reference: Paracelsus Healthcare
Corporation, 1850 Gateway Blvd., Concord, California 94520, or at such other
address as Agent may designate, for the account of each Lender in Dollars and
in immediately available funds, without setoff, deduction or counterclaim, not
later than 10:00 a.m. (Los Angeles time) on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Borrower
shall, at the time of making each such payment, specify to the Agent the sums
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payable by the Borrower under this Agreement and the other Loan Documents to
which such payment is to be applied (and in the event that the Borrower fails
to so specify, or if an Event of Default has occurred and is continuing, the
Agent may apply such payment to the Obligations in such order and manner as the
Agent may elect, subject to Section 3.2.) Upon the occurrence and during the
continuation of an Event of Default, all proceeds of any Collateral may be
applied by the Agent to the Obligations in such order and manner as the Agent
may elect, subject to Section 3.2. Each payment received by the Agent under
this Agreement or any other Loan Document for the account of a Lender shall be
paid promptly to such Lender, in immediately available funds, for the account
of such Lender's Applicable Lending Office. Whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, except as may be contemplated by the definition of Interest
Period, such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of interest and commitment fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
provided in this Agreement: (a) each Loan shall be made by the Lenders under
Section 2.1, each payment of commitment fees under Section 2.11(a) shall be
made for the account of the Lenders, and each termination or reduction of the
Commitments under Section 2.13 shall be applied to the Commitments of the
Lenders, pro rata according to the respective unused Commitments; (b) the
making, Conversion and Continuation of Loans of a particular Type (other than
Conversions provided for by Section 4.4) shall be made pro rata among the
Lenders holding Loans of such Type according to the amounts of their respective
Commitments; (c) each payment and prepayment by the Borrower of principal of or
interest on Loans of a particular Type shall be made to the Agent for the
account of the Lenders holding Loans of such Type pro rata in accordance with
the respective unpaid principal amounts of such Loans held by such Lenders; (d)
Interest Periods for Loans of a particular Type shall be allocated among the
Lenders holding Loans of such Type pro rata according to the respective
principal amounts held by such Lenders; and (e) the Lenders (other than the
Issuing Bank) shall purchase participations in the Letters of Credit pro rata
in accordance with their Commitment Percentages of the aggregate Revolving
Credit Loans Commitments.
Section 3.3 Sharing of Payments, Etc. If a Lender shall obtain
payment of any principal of or interest on any of the Obligations due to such
Lender hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Obligations held by the other Lenders
in such amounts, and make such adjustments from time to time as shall be
equitable to the end that all the Lenders shall share pro rata in accordance
with the unpaid principal and interest on the Obligations then due to each of
them. To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be
restored. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any Lender so purchasing a participation in the
Obligations by the other Lenders may exercise all rights of setoff, banker's
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Obligations in the amount of
such participation.
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Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.
Section 3.4 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Lender or the Borrower (the "Payor") prior to the
date on which such Lender is to make payment to the Agent of the proceeds of a
Loan to be made by it hereunder or the Borrower is to make a payment to the
Agent for the account of one or more of the Lenders, as the case may be (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date and,
if the Payor has not in fact made the Required Payment to the Agent, the
recipient of such payment shall, on demand, pay to the Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the Federal
Funds Rate for such period.
Section 3.5 Withholding Taxes. All payments by the Borrower of
principal of and interest on the Loans and of all fees and other amounts
payable under the Loan Documents shall be made free and clear of, and without
deduction by reason of, any present or future taxes, duties, imposts,
assessments or other charges levied or imposed by any Governmental Authority
(other than taxes on or measured by or calculated on the basis of the overall
net income or capital of any Lender). If any such taxes, duties, imposts,
assessments or other charges are so levied or imposed, the Borrower will make
additional payments in such amounts so that every net payment of principal of
and interest on the Loans and of all other amounts payable by it under the Loan
Documents, after withholding or deduction for or on account of any such present
or future taxes, duties, imposts, assessments or other charges (other than any
tax imposed on or measured by or calculated on the basis of net income or
capital of a Lender attributable to payments made to or on behalf of a Lender
pursuant to this Section 3.5 and any penalties or interest attributable to such
payments), will not be less than the amount provided for herein or therein
absent such withholding or deduction, provided that the Borrower shall have no
obligation to pay such additional amounts to any Lender to the extent that such
taxes, duties, imposts, assessments or other charges are levied or imposed by
reason of the failure of such Lender to comply with the provisions of Section
3.6. The Borrower shall furnish promptly to the Agent for distribution to each
affected Lender, as the case may be, upon the reasonable request of such
Lender, official receipts evidencing any such withholding or reduction.
Section 3.6 Withholding Tax Exemption. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on the Closing Date or the date upon which it
becomes a party to this Agreement and if it is legally able to do so, deliver
to the Borrower and the Agent two duly completed copies of U.S. Internal
Revenue Service Form 1001, 4224 or W-8, as appropriate, certifying in any case
that such Lender is entitled to receive payments from the Borrower under any
Loan Document without deduction or withholding of any U.S. federal income
taxes. Each Lender which so delivers a Form 1001,
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4224 or W-8 further undertakes to deliver to Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent, in each case certifying that such Lender is entitled to
receive payments from the Borrower under any Loan Document without deduction or
withholding of any U.S. federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such Lender
advises the Borrower and the Agent that it is not capable of receiving such
payments without any deduction or withholding of U.S. federal income tax.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a) The Borrower shall pay directly to each Lender from time to
time, promptly upon the request of such Lender, the costs incurred by such
Lender which such Lender reasonably determines are attributable to its making
or maintaining of any Eurodollar Loans hereunder or its obligation to make any
of such Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), in each case resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or its Note in respect of any of
such Loans (other than taxes imposed on or measured by or calculated
on the basis of the overall net income or capital of such Lender or
its Applicable Lending Office for any of such Loans);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (including any of such
Loans or any deposits referred to in the definition of "Eurodollar
Rate" in Section 1.1 hereof, but excluding the Reserve Requirement to
the extent it is included in the calculation of the Adjusted
Eurodollar Rate); or
(iii) imposes any other condition affecting this Agreement
or the Notes or any of such extensions of credit or liabilities or
commitments.
Each Lender will notify the Borrower (with a copy to the Agent) of any event
occurring after the Closing Date which will entitle such Lender to compensation
pursuant to this Section 4.1 (a) as promptly as practicable after it obtains
knowledge thereof and determines to request such
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compensation, and (if so requested by the Borrower) will designate a different
Applicable Lending Office for the Eurodollar Loans of such Lender if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, violate any law, rule or
regulation or be in any way disadvantageous to such Lender, provided that such
Lender shall have no obligation to so designate an Applicable Lending Office
located in the U.S. Each Lender will furnish the Borrower with a certificate
setting forth the basis and the amount of each request of such Lender for
compensation under this Section 4.1(a). If any Lender requests compensation
from the Borrower under this Section 4.1(a), the Borrower may, by notice to
such Lender (with a copy to the Agent), suspend the obligation of such Lender
to make or Continue making, or Convert Base Rate Loans into, Eurodollar Loans
until the Regulatory Change giving rise to such request ceases to be in effect
(in which case the provisions of Section 4.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Section 4.1, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs, that the Borrower has indicated it
will not pay, based on or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such Lender which
includes deposits by reference to which the interest rate on Eurodollar Loans
is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Lender which includes Eurodollar Loans or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if such Lender so elects by notice to the
Borrower (with a copy to the Agent), the obligation of such Lender to make or
Continue making, or Convert Base Rate Loans into, Eurodollar Loans hereunder
shall be suspended until such Regulatory Change ceases to be in effect (in
which case the provisions of Section 4.4 hereof shall be applicable).
(c) Determinations and allocations by any Lender for purposes of
this Section 4.1 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or of making or maintaining Loans or
on amounts receivable by it in respect of Loans, and of the additional amounts
required to compensate such Lender in respect of any Additional Costs, shall be
conclusive in the absence of manifest error, provided that such determinations
and allocations are made on a reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) The Agent determines on a reasonable basis (which
determination shall be conclusive absent manifest error) that
quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in Section 1.1 hereof are not
being provided in the relative amounts or for the relative maturities
for purposes of determining the rate of interest for such Loans as
provided in this Agreement; or
(b) Required Lenders determine on a reasonable basis
(which determination shall be conclusive absent manifest error) and
notify the Agent that the relevant rates of interest referred to in
the definition of "Eurodollar Rate" or "Adjusted Eurodollar Rate"
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in Section 1.1 hereof on the basis of which the rate of interest for
such Loans for such Interest Period is to be determined do not
accurately reflect the cost to the Lenders of making or maintaining
such 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 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 Loans or Convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
During the 30 days next succeeding the giving of such notice by the Agent to
the Borrower, the Borrower, the Agent and each of the Required Lenders shall
negotiate in good faith in order to arrive at a mutually satisfactory interest
rate for the rates of interest referred to in the definition "Eurodollar Rate"
or "Adjusted Eurodollar Rate" for proposed Eurodollar Loans. If within such 30
day period the Borrower, the Agent and the Required Lenders shall agree in
writing upon a substitute interest rate and the effective date thereof, such
substituted interest rate shall be applicable to all requests by the Borrower
for proposed Eurodollar Loans. During any period when the borrowing of
Eurodollar Loans is suspended or when an alternative interest rate is in force
pursuant to this subsection, the Agent, in consultation with the Lenders, shall
periodically, at least once a month, determine whether circumstances are such
that the interest rates referred to in the definitions of "Eurodollar Rate" or
"Adjusted Eurodollar Rate" may again be determined. If such a determination is
made, the Agent shall forthwith give written notice to the Borrower and each
Lender, where upon the Agent, the Borrower and the Lenders shall begin
redetermining the "Eurodollar Rate" and the "Adjusted Eurodollar Rate" in
accordance with the terms of the definition thereof.
Section 4.3 Illegality. Notwithstanding any other provision of
this Agreement, but subject however to the provisions of Section 4.1(a), in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to (a) honor its obligation to make Eurodollar Loans hereunder or (b) maintain
Eurodollar Loans hereunder, then such Lender shall promptly notify the Borrower
(with a copy to the Agent) thereof and such Lender's obligation to make or
maintain Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of Section 4.4 hereof
shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of
any Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar
Loans is suspended pursuant to Section 4.1, 4.2 or 4.3 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 the Eurodollar Loans
(or, in the case of a Conversion required by Section 4.1(b) or 4.3 hereof, on
such earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that
the circumstances specified in Section 4.1 or 4.3 hereof which gave rise to
such Conversion no longer exist:
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(a) To the extent that such Lender's Eurodollar
Loans have been so Converted, all payments and prepayments of
principal which would otherwise be applied to such Lender's Eurodollar
Loans shall be applied instead to its Base Rate Loans; and
(b) All Loans which would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made as or
Converted into Base Rate Loans and all Loans of such Lender which
would otherwise be Converted into Eurodollar Loans shall be Converted
instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof which gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans 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, Types and Interest Periods) in accordance with
their respective Commitments.
Section 4.5 Compensation. The Borrower shall pay to the Agent
for the account of each Lender, promptly upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a
Eurodollar Loan for any reason (including, without limitation, the
acceleration of the outstanding Loans pursuant to Section 11.2) on a
date other than the last day of an Interest Period for such Loan; or
(b) Any failure by the Borrower for any reason
(including, without limitation, the failure of any conditions
precedent specified in Article 6 to be satisfied) to borrow, Convert
or prepay a Eurodollar Loan on the date for such borrowing, Conversion
or prepayment specified in the relevant notice of borrowing,
prepayment or Conversion under this Agreement; provided, however, that
where such failure is solely attributable to the circumstances set
forth in Sections 4.1(b)(ii) or 4.3 with respect to Lenders' inability
to make such Eurodollar Loans, then no such compensation shall be
required.
Section 4.6 Capital Adequacy. If, after the Closing Date, any
Lender shall have determined that the adoption or implementation of any
applicable law, rule or regulation regarding capital adequacy (including,
without limitation, any law, rule or regulation implementing the Basle Accord),
or after the Closing Date any change therein, or after the Closing Date any
change in the interpretation or administration thereof by any central bank or
other Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender (or its parent) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any central bank or other Governmental Authority issued after
the Closing Date (including, without limitation, any guideline or other
requirement implementing the Basle
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Accord), has or would have the effect of reducing the rate of return on such
Lender's (or its parent's) capital as a consequence of its obligations
hereunder or the transactions contemplated hereby to a level below that which
such Lender (or its parent) could have achieved but for such adoption,
implementation, change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, within ten Business Days after demand
by such Lender (with a copy to the Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender (or its
parent) for such reduction. A certificate of such Lender claiming compensation
under this Section 4.6 and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive absent manifest error, provided that
the determination thereof is made on a reasonable basis. In determining such
amount or amounts, such Lender may use any reasonable averaging and attribution
methods.
Section 4.7 Additional Interest on Eurodollar Loans. The
Borrower shall pay, directly to each Lender from time to time, additional
interest on the unpaid principal amount of each Eurodollar Loan held by such
Lender, from the date of the making of such Eurodollar Loan until such
principal amount is paid in full, at an interest rate per annum determined by
such Lender in good faith equal to the positive remainder (if any) of (a) the
Adjusted Eurodollar Rate applicable to such Eurodollar Loan minus (b) the
Eurodollar Rate applicable to such Eurodollar Loan. Each payment of additional
interest pursuant to this Section 4.7 shall be payable by the Borrower on each
date upon which interest is payable on such Eurodollar Loan pursuant to Section
2.4(b); provided, however, that the Borrower shall not be obligated to make any
such payment of additional interest until the first Business Day after the date
when the Borrower has been informed (i) that such Lender is subject to a
Reserve Requirement and (ii) of the amount of such Reserve Requirement (after
which time the Borrower shall be obligated to make all such payments of
additional interest, including, without limitation, such payments of additional
interest that otherwise would have been payable by the Borrower on or prior to
such time had the Borrower been earlier informed).
Section 4.8 Substitution of Lender. If (a) the obligation of any
Lender to make or Continue or Convert Loans into Eurodollar Loans has been
suspended pursuant to Section 4.1(b) or 4.3, (b) any Lender has demanded
compensation under Sections 4.1, 4.5, 4.6 or 4.7, or (c) any Lender has
notified the Borrower that it is not capable of receiving payments without
deduction or withholding for taxes pursuant to Section 3.6, the Borrower may
replace such Lender by designating in a notice given to the Agent an Eligible
Assignee to replace such Lender, and the Agent may assist the Borrower in
finding Eligible Assignees willing to replace such Lender. If the Borrower so
designates an Eligible Assignee, then the Agent shall give notice thereof to
the Lender to be replaced, and thereupon and concurrently with the payment in
full to such Lender of all amounts owed to such Lender, such Lender shall
promptly consummate an assignment, in accordance with Section 13.7, of such
Lender's Revolving Credit Loans Commitment, Loans, Notes, participations in
Letters of Credits and other rights and obligations hereunder relative to the
Revolving Loans Commitment of such Lender.
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ARTICLE 5
Security
Section 5.1 Collateral. To secure the full and complete payment
and performance of the Obligations, the Borrower will, and will cause each of
the Subsidiary Pledgors to grant to the Agent for the benefit of the Agent and
the Lenders a perfected, first priority Lien on all of its right, title and
interest in and to all Capital Stock of the Subsidiaries of the Borrower that
are corporations (except for Excluded Subsidiaries) owned by the Borrower or
any Subsidiary (except for Excluded Subsidiaries) of the Borrower, whether now
owned or hereafter acquired, pursuant to the Security Documents.
Section 5.2 Guaranties. The Borrower shall cause each Subsidiary
Guarantor to guaranty the payment and performance of the Obligations pursuant
to the Master Guaranty. In all events, Pioneer Valley Hospital, Inc. shall not
be required to execute and deliver the Master Guaranty or a Joinder Agreement,
but so long as the Capital Stock of Pioneer Valley Hospital, Inc. is pledged as
collateral security to the Agent, for the benefit of the Agent and the Lenders,
Pioneer Valley Hospital, Inc. shall not be an Excluded Subsidiary for any
purpose of this Agreement.
Section 5.3 New Subsidiaries. Contemporaneously with the
creation or acquisition of any Subsidiary (other than Excluded Subsidiaries) of
the Borrower after the Closing Date, the Borrower shall:
(a) grant or cause to be granted to the Agent, for the
benefit of the Agent and the Lenders, a perfected, first priority
security interest in all Capital Stock or other ownership interests in
such Subsidiary owned by the Borrower or owned by any other Subsidiary
(other than an Excluded Subsidiary) of the Borrower (to the extent
such Capital Stock or other ownership interests or indebtedness are
already not so pledged to the Agent); and
(b) cause each such Subsidiary (other than an Excluded
Subsidiary) to guaranty the payment and performance of the Obligations
by executing and delivering to the Agent a Joinder Agreement and
thereby becoming a party to the Master Guaranty.
Section 5.4 Release of Collateral and Termination of Guarantees.
Upon (a) any sale, transfer or other disposition of Collateral that is
expressly permitted under Section 9.12 or (b) any designation by the Borrower
of Excluded Subsidiaries by which a Subsidiary Guarantor becomes an Excluded
Subsidiary, and, in each case, upon five Business Days prior written request by
the Borrower, the Agent shall execute at the Borrower's expense such documents
as may be necessary to evidence the release by the Agent of its Liens on such
Collateral, including the pledge of the Equity Interests of any such
redesignated Subsidiary, and appropriate releases of any Subsidiary Guarantor
where such release is required in connection with the transfer or
redesignation; provided, however, that (a) the Agent shall not be required to
release any Lien on any Collateral or any Subsidiary Guarantor if a Default
shall have occurred and be continuing, (b) the Agent
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shall not be required to execute any such document on terms which, in the
Agent's reasonable opinion, would expose the Agent to liability or create any
obligation not reimbursed by the Borrower or entail any consequences other than
the release of such Lien or such Subsidiary Guarantor without recourse or
warranty, and (c) such release shall not in any manner discharge, affect or
impair any of the Obligations or any of the Agent's Liens on any Collateral
retained by the Borrower or any of its Subsidiaries, including, without
limitation, its Liens on the proceeds of any such sale, transfer or other
disposition (except for the Equity Interests of any newly designated Excluded
Subsidiary), or any other Subsidiary Guarantor.
Section 5.5 Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time
to time, without notice to the Borrower (any such notice being hereby expressly
waived by the Borrower), 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 to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Agreement, such Lender's Note or any other
Loan Document, irrespective of whether or not the Agent or such Lender shall
have made any demand under this Agreement, such Lender's Note or any such other
Loan Document and although such Obligations may be unmatured. Each Lender
agrees promptly to notify the Borrower (with a copy to the Agent) after any
such setoff and application, provided that the failure to give such notice
shall not affect the validity of such setoff and application. The rights and
remedies of each Lender hereunder are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have.
ARTICLE 6
Conditions Precedent
Section 6.1 Initial Extension of Credit. Each of the obligations
of each Lender to make its initial Loan under this Agreement and the obligation
of the Issuing Bank to issue the initial Letter of Credit under this Agreement
are subject to the conditions precedent that the Agent shall have received, on
or before the Closing Date or such later date (if any) as may be specified in
this Section 6.1 below, all of the following in form and substance reasonably
satisfactory to the Agent and, in the case of actions to be taken, evidence
that the following required actions have been taken to the satisfaction of the
Agent:
(a) Resolutions. Resolutions of the Board of Directors
of each Loan Party certified by its Secretary or an Assistant
Secretary which authorize the execution, delivery and performance by
such Loan Party of the Loan Documents to which it is or is to be a
party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan
Party certifying the name of each officer of such Loan Party (i) who
is authorized to sign the Loan Documents to which such Loan Party is
or is to be a party (including any certificates contemplated therein),
together with specimen signatures of each such officer, and (ii) who
will, until replaced by other officers
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duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other
communications in connection with the Loan Documents and the
transactions contemplated thereby;
(c) Articles or Certificate of Incorporation, etc. The
articles or certificate of incorporation, certificate of formation,
certificate of limited partnership, partnership agreement or other
applicable constitutional document of each Loan Party certified by the
Secretary or Assistant Secretary of such Loan Party;
(d) Bylaws. The bylaws of each Loan Party certified by
the Secretary or an Assistant Secretary of such Loan Party;
(e) Governmental Certificates. Short form certificates
of appropriate officials as to the good standing of each Loan Party in
their respective jurisdictions of incorporation or organization and
any and all jurisdictions where such Loan Party is qualified to do
business as a foreign corporation or other entity and where the
failure to so qualify could reasonably be expected to have a Material
Adverse Effect, each such certificate to be dated as of a Current
Date;
(f) Revolving Credit Loans Notes. The Revolving Credit
Loans Notes duly completed and executed by the Borrower;
(g) Master Guaranty. The Master Guaranty executed by
each of the Subsidiary Guarantors;
(h) Security Agreement. The Security Agreement executed
by the Borrower;
(i) Subsidiary Security Agreements. A Subsidiary
Security Agreement executed by each of the Subsidiary Pledgors;
(j) Insurance Policies. Certificates of, or, upon
request therefor by Agent, copies of insurance policies required by
this Agreement and the other Loan Documents, together with loss
payable endorsements naming the Agent as loss payee under all such
casualty insurance policies and the Agent as an additional insured
party under all such liability policies;
(k) Stock Certificates. The stock certificates
representing all of the issued and outstanding Capital Stock pledged
to the Agent by Borrower and each of the Subsidiary Pledgors
accompanied by appropriate stock powers signed in blank, except to the
extent that such Capital Stock is not required to be pledged in
accordance with Section 5.1(a);
(l) Financing Statements. UCC-1 financing statements
executed by the Loan Parties necessary to perfect the Liens created
pursuant to the Security Documents or otherwise requested by the
Agent;
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(m) Lien Releases. Within thirty (30) days of the
Closing Date, duly executed releases of Liens and UCC-3 financing
statements in recordable form, as may be necessary to reflect that the
Liens created by the Security Documents are first priority Liens
subject only to Permitted Liens;
(n) Lien Searches. Within thirty (30) days of the
Closing Date, lien searches in the names of the Borrower and each
Subsidiary (other than Excluded Subsidiaries) of the Borrower (and in
all names under which each such Person has done business within the
last five years) in each state where each such Person maintains an
office or has Property, showing no financing statements or other Lien
instruments of record except for Permitted Liens;
(o) Letter of Credit Agreement. With respect to any
issuance of a Letter of Credit, a Letter of Credit Agreement in the
form required by the Issuing Bank with respect thereto executed by the
Borrower;
(p) Related Transactions Documents. Copies of the Merger
Agreement (including only those schedules and exhibits to the Merger
Agreement designated by the Agent and listed on Schedule 1.1(d)
hereto) and the New Indenture, all certified by a Responsible Officer
of the Borrower as being true and correct copies of such documents as
of the Closing Date and all in form and substance satisfactory to the
Agent, together with a copy or other evidence satisfactory to the
Agent of the filing of the Certificate of Merger;
(q) Additional Funding of Capital Structure. Evidence
that on or before the Closing Date, the aggregate net proceeds to or
on behalf of Borrower (consisting wholly of cash) from (i) the
issuance by Borrower of the New Subordinated Debt pursuant to the New
Indenture and/or (ii) the issuance by Borrower of Borrower Common
Stock equals or exceeds $175,000,000:
(r) Subordination Provisions. The subordination
provisions contained in the New Subordinated Note Documents (i) shall
be binding and enforceable against the Loan Parties thereto in
accordance with their terms and (ii) shall be satisfactory in form and
substance to the Agent and the Lenders;
(s) Payment of Interest, Fees and Expenses. The Borrower
shall have paid all interest and fees accrued to the Closing Date and
not previously paid with respect to the loans or reimbursement
obligations outstanding under the Existing Paracelsus Credit
Agreement, and the Borrower shall have paid all fees due on or before
the Closing Date as specified in this Agreement or in the Fee Letters
and all fees and expenses of or incurred by the Agent, the
Documentation Agent and their counsel, Jenkens & Gilchrist, a
Professional Corporation and billed to the Borrower prior to the
Closing Date;
(t) Regulatory Approvals. Copies of (i) an
acknowledgment letter from the Federal Trade Commission of its receipt
of all filings (if any) required of the Borrower or
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any of its Subsidiaries under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 required in connection with the Merger, and
setting forth any applicable waiting periods, and a certificate from a
Responsible Officer of the Borrower confirming the lapse of all
waiting periods with respect thereto and (ii) a copy of the letter
from the Federal Trade Commission approving the transfer of the Salt
Lake Regional Medical Center;
(u) Compliance with Laws. Each Loan Party that is a
party to this Agreement, any of the other Loan Documents or the Merger
Agreement shall have complied in all material respects with all
Governmental Requirements applicable to such Person and necessary to
consummate the transactions contemplated by this Agreement and the
other Loan Documents and the Merger Agreement;
(v) No Prohibitions. No Governmental Requirement shall
prohibit the consummation of the Merger or the transactions
contemplated by this Agreement, or any other Loan Document, and no
order, judgment or decree applicable to any of the Loan Parties of any
Governmental Authority or arbitrator shall, and no litigation or other
proceeding shall be pending or threatened against any of the Loan
Parties which would, enjoin, prohibit, restrain or could otherwise
reasonably be expected to have a material adverse effect with respect
to the consummation of the Merger or the transactions contemplated by
this Agreement or the other Loan Documents;
(w) No Material Adverse Change. No material adverse
change shall have occurred with respect to the financial condition,
business, operations, capitalization, liabilities or prospects of
Borrower and its Subsidiaries taken as a whole since March 31, 1996;
(x) Tax Matters. Copies of legal opinions provided in
connection with the Merger opining as to any tax ramifications of the
Merger.
(y) Wiring Instructions. A letter of direction from the
Borrower to the Agent with respect to the disbursement of the proceeds
of the Loans;
(z) Financial Statements. Copies of each of the
financial statements referred to in Section 7.2;
(aa) Opinions of Counsel. The written opinion of Robert
Joyner, Esq., General Counsel of Borrower and certain of its
Subsidiaries, and the written opinion of Mayor, Day, Caldwell &
Keeton, L.L.P., special counsel for the Loan Parties, with respect to
the Borrower and its Subsidiaries and with respect to the Loan
Documents, in each case dated the Closing Date, in substantially the
form of Exhibit H and I, respectively;
(bb) Certificate as to Health Care Regulatory Matters. A
certificate, dated the Closing Date, signed by a Responsible Officer
of Borrower, to the effect that, other than as disclosed to the Agent
in writing on or before the Closing Date and to the best knowledge of
the officer signing such certificate, there has been no claim,
complaint,
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notice or request for information received by Borrower or any of its
Facilities, Subsidiaries or Majority-Owned Joint Ventures with respect
to compliance with health care regulatory requirements that could
reasonably be expected to have a Material Adverse Effect and (other
than malpractice claims, but including claims relating to patient
dumping, in the case of the operation of an emergency department),
including, but not limited to, any alleged violation of any federal,
state or local statute, regulation or ordinance relating to the
delivery of medical services, and payment made thereof, including, but
not limited to the requirements applicable under federal Medicare and
Medi-Cal (or Medicaid) statutes, 42 U.S.C. Sections 1320a-7,
1320a-7(a) and 1320a-7b, or the regulations promulgated pursuant to
such statutes or related state or local statutes or regulations; and
(cc) Additional Documentation. The Agent shall have
received such additional approvals, opinions, agreements, documents
and instruments as the Agent may reasonably request.
Upon the request of the Borrower, the Agent shall inform the Borrower in
writing as to the status of satisfaction of the conditions precedent set forth
in this Section 6.1.
Section 6.2 All Extensions of Credit. Except as otherwise
provided in Sections 2.9 and 2.14 the obligation of each Lender to make any
Loan (including the initial Loan) and the obligation of the Issuing Bank to
issue any Letter of Credit (including the initial Letter of Credit) under this
Agreement are subject to the satisfaction of each of the conditions precedent
set forth in Section 6.1 (except to the extent that, in accordance with Section
6.1, such conditions are to be satisfied as of a date later than the proposed
date of the making of the subject Loan or the issuance of the subject Letter of
Credit) and each of the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit; and
(b) Representations and Warranties. All of the
representations and warranties of the Borrower and the other Loan
Parties contained in Article 7 hereof and in the other Loan Documents
shall be true and correct on and as of the date of such Loan or Letter
of Credit with the same force and effect as if such representations
and warranties had been made on and as of such date except for any
such representations and warranties as are expressly stated to be made
as of a particular date.
Except as otherwise provided in this Agreement, each notice of borrowing or
request for the issuance of a Letter of Credit by the Borrower hereunder shall
constitute a representation and warranty by the Borrower that the conditions
precedent set forth in Sections 6.2(a) and (b) have been satisfied (both as of
the date of such notice and, unless the Borrower otherwise notifies the Agent
prior to such borrowing or Letter of Credit, as of the date of such borrowing or
Letter of Credit).
Section 6.3 Closing Certificates. The Borrower shall,
concurrently with the execution and delivery of this Agreement, execute and
deliver to the Agent a Closing Certificate, in form
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and substance satisfactory to the Agent, certifying as to the satisfaction of
each of the conditions precedent set forth in Section 6.1 and 6.2 which are
required to be satisfied on or before the Closing Date; provided, however, that
with respect to Sections 6.1(m), (n), (r), and (s), no certification shall be
required with respect to whether the evidence or the Documents referenced
therein were, in fact, satisfactory to the Agent.
ARTICLE 7
Representations and Warranties
The Borrower represents and warrants to the Agent and the Lenders that
the following statements are true, correct and complete:
Section 7.1 Corporate Existence. Each Loan Party (a) is a
corporation, or a limited liability company, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority to own its Properties
and carry on its business as now being or as proposed to be conducted, and (c)
is qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where the failure to so qualify
would have a Material Adverse Effect. Each Loan Party has the power and
authority to execute, deliver and perform its obligations under the Loan
Documents and the Related Transactions Documents to which it is a party.
Section 7.2 Financial Statements.
(a) The Borrower has delivered to the Agent (i) audited
consolidated statements of operations and statements of cash flow of Borrower
for the fiscal years ended September 30, 1993, 1994 and 1995, (ii) audited
consolidated balance sheets of Borrower as of September 30, 1994 and 1995,
(iii) audited consolidated statements of operations and statements of cash flow
of CHC for the fiscal years ended December 31, 1993, 1994 and 1995, (iv)
audited consolidated balance sheets of CHC as of December 31, 1994 and 1995,
and (v) the unaudited balance sheets of Borrower and CHC as of March 31, 1996
and the related income statement for the six-month and three-month periods,
respectively, then ended. To the Borrower's knowledge, such financial
statements are true and correct, have been prepared in accordance with GAAP and
fairly and accurately present the financial condition of Borrower and its
consolidated Subsidiaries and CHC and its consolidated Subsidiaries as of the
respective dates indicated therein and the results of operations for the
respective periods indicated therein. There has not occurred, as of the
Closing Date with respect to Borrower and its consolidated Subsidiaries and CHC
and its consolidated Subsidiaries, any material adverse change in the business,
condition (financial or otherwise), operations, prospects or Properties of
Borrower and its consolidated Subsidiaries, or CHC and its consolidated
Subsidiaries since the effective dates of the most recent applicable financial
statements referred to in this Section 7.2(a).
(b) The Pro-Formas were prepared by the Borrower on a basis
substantially consistent with the financial statements referred to in Section
7.2(a). Neither the Borrower nor any of its Subsidiaries has any material
contingent liabilities, liabilities for taxes, unusual forward or long-
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term commitments or unrealized or unanticipated losses from any unfavorable
commitments except as referred to or reflected in the Pro-Formas.
(c) The Projections were prepared by the Borrower on a basis
substantially consistent with the financial statements referred to in Section
7.2(a). The Projections represent, as of the Closing Date, the good faith
estimate of the Borrower and its senior management concerning the probable
financial condition and performance of the Borrower and its Subsidiaries based
on assumptions believed to be reasonable at the time made.
Section 7.3 Corporate Action; No Breach. The execution, delivery
and performance by each Loan Party of the Loan Documents and Related
Transactions Documents to which it is a party and compliance with the terms and
provisions hereof and thereof have been duly authorized by all requisite
corporate or other entity action on the part of the Loan Parties and do not and
will not (a) violate or conflict with, or result in a breach of, or require any
consent, except as may have been obtained under (i) the articles or
certificates of incorporation or bylaws (or, with respect to any Loan Party
that is not a corporation, certificate of formation or other organizational
documents) of any Loan Party the violation of, conflict with, or breach, which
could reasonably be expected to have a Material Adverse Effect, (ii) any
Governmental Requirement or any order, writ, injunction or decree of any
arbitrator the violation of, conflict with, or breach of, which could
reasonably be expected to have a Material Adverse Effect, or (iii) any material
agreement, document or instrument to which any Loan Party is a party or by
which any Loan Party or any of its Property is bound or subject, the violation
of, conflict with, or breach or default of, which could reasonably be expected
to have a Material Adverse Effect, or (b) constitute a default under any such
material agreement, document or instrument which default could reasonably be
expected to have a Material Adverse Effect, or result in the creation or
imposition of any Lien (except under the Security Documents as provided in
Article 5 and except for Permitted Liens) upon any of the revenues or Property
of any Loan Party.
Section 7.4 Operation of Business. The Loan Parties possess all
Permits and franchises necessary to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted except
where the failure to so possess would not cause a Material Adverse Effect.
None of such Persons is in material violation of any such Permits or
franchises.
Section 7.5 Intellectual Property. The Loan Parties own or
possess (or will be licensed or have the full right to use) all Intellectual
Property which is necessary for the operation of their respective businesses as
presently conducted and as proposed to be conducted except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect,
without any known conflict with the rights of others that could reasonably be
expected to have a Material Adverse Effect. The consummation of the
transactions contemplated by this Agreement, the other Loan Documents and the
Related Transactions Documents will not materially alter or impair,
individually or in the aggregate, any of such rights of such Persons where such
alteration or impairment could reasonably be expected to have a Material
Adverse Effect. No product of the Loan Parties infringes upon any Intellectual
Property owned by any other Person, and no claim or litigation is pending or,
to the knowledge of the Borrower, threatened against any Loan Party or any such
Person contesting its right to use any product or material, in each case which
could
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reasonably be expected to have a Material Adverse Effect. There is no
violation by any Loan Party of any right of such Loan Party with respect to any
material Intellectual Property owned or used by such Loan Party, in each case,
that could reasonably be expected to have a Material Adverse Effect.
Section 7.6 Litigation and Judgments. Except as is disclosed on
Schedule 7.6, as of the Closing Date, there are no actions, suits,
investigations or proceedings before or by any Governmental Authority or
arbitrator pending or, to the knowledge of the Borrower, threatened against or
affecting any Loan Party, or that relate to any of the Related Transactions
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, there are no outstanding judgments
against any Loan Party or their respective Subsidiaries that could reasonably
be expected to have a Material Adverse Effect.
Section 7.7 Rights in Properties; Liens. Each of the Loan
Parties has good and indefeasible title to or, except as expressly stated to
the contrary on Schedule 1.1(b), valid leasehold interests in its Properties
and assets, real and personal, including as of the Closing Date the Properties,
assets and leasehold interests reflected in the financial statements described
in Section 7.2(a) and the Pro-Formas, and none of the Properties or leasehold
interests of any Loan Party or any of its Subsidiaries is subject to any Lien,
except Permitted Liens.
Section 7.8 Enforceability. The Loan Documents and the New
Indenture have been duly and validly executed and delivered by each of the Loan
Parties that is a party thereto and constitute the legal, valid and binding
obligations of such Loan Parties, enforceable against such Loan Parties in
accordance with their respective terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of,
and no filing or registration with or notice to, any Governmental Authority is
or will be necessary for the execution, delivery or performance by any Loan
Party of any of the Loan Documents to which it is a party or for the validity
or enforceability thereof in respect of any Loan Party, except for such
consents, approvals and filings as have been validly obtained or made and are
in full force and effect. The consummation of the Related Transactions does
not require any of the Loan Parties to obtain the consent or approval of any
other Person, except such consents and approvals (a) as have been in full force
and effect or (b) as to which the failure to obtain would not, individually or
in the aggregate, have a Material Adverse Effect. None of the Loan Parties has
failed to obtain any governmental consent, Permit or franchise necessary for
the ownership of any of its Properties or the conduct of its business except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 7.10 Debt. As of the Closing Date, the Loan Parties and
their Subsidiaries have and will have no Debt except for (a) the Obligations,
(b) the Debt evidenced by the Subordinated Notes, (c) the Debt disclosed on the
most recent balance sheets referred to in Section 7.2(a), (d) the Debt
disclosed on Schedule 9.1 or permitted under Section 9.1, and (e) Debt a
Subsidiary may have as a partner or joint venturer.
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Section 7.11 Taxes. The Loan Parties have filed all tax returns
(federal, state and local) required to be filed, including all income,
franchise, employment, Property and sales tax returns, and have paid all of
their respective liabilities for taxes, assessments, governmental charges and
other levies that are shown to be due and payable on such returns except for
any of the foregoing which are not the subject of any recorded tax lien and do
not involve amounts in excess of $1,000,000 in the aggregate. The Borrower is
not aware of any pending investigation of any Loan Party or any Subsidiary of a
Loan Party, by any taxing authority or of any pending but unassessed tax
liability of any Loan Party or any Subsidiary of a Loan Party, other than with
respect to (a) ad valorem or other real property taxes not in excess of
$1,000,000 as to any such Person and (b) other taxes in an aggregate amount as
to any such Person which could not, if an adverse determination is made with
respect to such taxes, reasonably be expected to materially and adversely
affect such Person, and (c) taxes, assessments, governmental charges and other
levies, which are currently being contested in good faith by appropriate
proceedings diligently conducted by or on behalf of such Person and as to
which, if required by GAAP, such Person has established adequate reserves. No
tax Liens (other than Permitted Liens) have been filed and, except as disclosed
on Schedule 7.11, no claims are being asserted as of the Closing Date against
any Loan Party or any Subsidiary of a Loan Party, with respect to any taxes.
Except as disclosed on Schedule 7.11 hereto, as of the Closing Date, none of
the U.S. income tax returns of the Loan Parties or any Subsidiary of a Loan
Party, are under audit. The charges, accruals and reserves on the books of the
Loan Parties in respect of taxes or other governmental charges are in
accordance with GAAP.
Section 7.12 Margin Securities. None of the Loan Parties or any
of their respective Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System), and no part of
the proceeds of any Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock.
Section 7.13 ERISA. As of the Closing Date, neither any Loan
Party nor any ERISA Affiliate maintains or contributes to, or has any
obligation under, any Pension Plan other than the Pension Plans identified on
Schedule 7.13. Each Plan of each Loan Party is in compliance in all material
respects with all applicable provisions of ERISA and the Code. Neither a
Reportable Event nor, to the knowledge of the Borrower, a Prohibited
Transaction has occurred within the last 60 months with respect to any Pension
Plan. No notice of intent to terminate a Pension Plan has been filed, nor has
any Pension Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Pension Plan, nor has the PBGC instituted any such
proceedings. As of the Closing Date, neither any of the Loan Parties nor any
ERISA Affiliate has completely or partially withdrawn from a Multiemployer
Plan. Each Loan Party and each ERISA Affiliate have met their minimum funding
requirements under ERISA and the Code with respect to all of their Pension
Plans subject to such requirements, and, as of the Closing Date except as
specified on Schedule 7.13, the present value of all vested benefits under each
funded Pension Plan does not and will not exceed the fair market value of all
such Pension Plan assets allocable to such benefits, as determined on the most
recent valuation date of such Pension Plan and in accordance with
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ERISA. As of the Closing Date, neither any of the Loan Parties nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA (other than any
required insurance premiums, all of which that have become due prior to the
Closing Date have been paid). As of the Closing Date, no litigation is pending
or, to the knowledge of any Loan Party, threatened concerning or involving any
Pension Plan. There are no unfunded or unreserved liabilities relating to any
Pension Plan that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect if such Loan Party were required to
fund or reserve such liability in full. As of the Closing Date, no funding
waivers have been or will have been requested or granted under Section 412 of
the Code with respect to any Pension Plan. No unfunded or unreserved liability
for benefits under any Pension Plan or Pension Plans (exclusive of any
Multiemployer Plans) exceeds $1,500,000 with respect to any such Plan or
$3,000,000 with respect to all such Plans in the aggregate as of the Closing
Date.
Section 7.14 Disclosure. The Pro Formas and Projections have been
prepared in a manner consistent with Sections 7.2(b) and (c) hereof. No
other written statement, information, report, representation or warranty made
to the Agent or any Lender by any Loan Party in any Loan Document or furnished
to the Agent or any Lender by any Loan Party in connection with the Loan
Documents or any transaction contemplated hereby or thereby contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein in light of the circumstances in which
they were made not misleading as of the respective dates thereof. No material
adverse change shall have occurred with respect to the financial condition,
business, operations, capitalization, liabilities or prospects of Borrower and
its Subsidiaries taken as a whole since March 31, 1996.
Section 7.15 Subsidiaries. Schedule 7.15 correctly sets forth the
name of each Subsidiary of Borrower and a statement of the ownership of the
Capital Stock or other interest of each such Subsidiary as of the date hereof.
All outstanding Capital Stock of each Subsidiary of Borrower that has been
pledged to the Agent has been validly issued, is fully paid and is
nonassessable and is free and clear of all Liens, charges and encumbrances
(except the Liens in favor of Agent, for the ratable benefit of Lenders, and
for Permitted Liens).
Section 7.16 Agreements. None of the Loan Parties is in default
in any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement, document or
instrument binding on it or its Properties, except for instances of
noncompliance that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
Section 7.17 Compliance with Laws. None of the Loan Parties is in
violation of any Governmental Requirement, except for instances of
non-compliance that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
Section 7.18 Investment Company Act. None of the Loan Parties is
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
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Section 7.19 Public Utility Holding Company Act. None of the Loan
Parties is a "holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.20 Environmental Matters.
(a) Except for instances of noncompliance with or exceptions to
any of the following representations and warranties that could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect:
(i) The Loan Parties and all of their respective
Properties and operations are in full compliance with all Environmental
Laws. The Borrower is not aware of, nor has the Borrower received
written notice of, any past, present or future conditions, events,
activities, practices or incidents which may interfere with or prevent
the compliance or continued compliance by any Loan Party with all
Environmental Laws;
(ii) The Loan Parties have obtained all Permits that are
required under applicable Environmental Laws, and all such Permits are
in good standing and all such Persons are in compliance with all of the
terms and conditions thereof;
(iii) No Hazardous Materials exist on, about or within or
have been (to the Borrower's knowledge) or are being used, generated,
stored, transported, disposed of on or Released from any of the
Properties of the Loan Parties except in compliance with applicable
Environmental Laws. The use which the Loan Parties make and intend to
make of their respective Properties will not result in the use,
generation, storage, transportation, accumulation, disposal or Release
of any Hazardous Material on, in or from any of their Properties except
in compliance with applicable Environmental Laws;
(iv) Neither the Loan Parties nor any of their respective
currently or, to the Borrower's knowledge, previously owned or leased
Properties or operations is subject to any outstanding or, to the best
of the Borrower's knowledge, threatened order from or agreement with
any Governmental Authority or other Person or subject to any judicial
or administrative proceeding with respect to (A) any failure to comply
with Environmental Laws, (B) any Remedial Action, or (C) any
Environmental Liabilities;
(v) There are no conditions or circumstances associated
with the currently or to the Borrower's knowledge previously owned or
leased Properties or operations of the Loan Parties that could
reasonably be expected to give rise to any Environmental Liabilities or
claims resulting in any Environmental Liabilities. None of the Loan
Parties is subject to, or has received written notice of any claim from
any Person alleging that any of the Loan Parties is or will be subject
to, any Environmental Liabilities;
(vi) None of the Properties of the Loan Parties is a
treatment facility (except for the recycling of Hazardous Materials
generated onsite and the treatment of liquid wastes
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subject to the Clean Water Act), storage facility (except for
temporary storage of Hazardous Materials generated onsite prior to
their disposal offsite) or disposal facility requiring a permit under
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., regulations thereunder or any comparable provision of state law.
The Loan Parties and their Subsidiaries are in compliance with all
applicable financial responsibility requirements of all Environmental
Laws; and
(vii) None of the Loan Parties has failed to file any
notice required under applicable Environmental Law reporting a Release.
(b) No Lien arising under any Environmental Law that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect has attached to any Property or revenues of any Loan Party.
Section 7.21 Labor Disputes and Acts of God. Neither the business
nor the Properties of any Loan Party are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that is having or could reasonably be
expected to have a Material Adverse Effect.
Section 7.22 Material Contracts. Attached hereto as Schedule 7.22
is a complete list, as of the Closing Date of all Material Contracts of the
Loan Parties, other than the Loan Documents, the Indentures and the
Subordinated Notes. As of the Closing Date, all of the Material Contracts are
in full force and effect and none of the Loan Parties is in default under any
Material Contract and, to the best of the Borrower's knowledge after due
inquiry, no other Person that is a party thereto is in default under any of the
Material Contracts, in each case, in any material respect. None of the
Material Contracts prohibit the transactions contemplated under the Loan
Documents or the Related Transactions Documents. The Borrower will, upon the
Agent's request therefor, deliver to the Agent a complete and current copy of
each Material Contract requested by the Agent in a reasonably prompt fashion
after the request therefor.
Section 7.23 Outstanding Securities. As of the Closing Date, all
outstanding securities (as defined in the Securities Act of 1933, as amended,
or any successor thereto, and the rules and regulations of the Securities and
Exchange Commission thereunder) of the Loan Parties have been offered, issued,
sold and delivered in compliance in all material respects with all applicable
Governmental Requirements.
Section 7.24 Subordination. The Loans and all other Obligations
of the Borrower to the Agent and the Lenders under the Loan Documents
constitute "Senior Indebtedness" of the Borrower (as such term is defined in
the New Indenture), and the holders thereof from time to time shall be entitled
to all of the rights of a holder of "Senior Indebtedness" (as such term is
defined in the New Indenture) pursuant to the New Indenture. The principal and
interest owed by the Borrower under the Loans constitute "Senior Indebtedness"
of the Borrower (as such term is defined in the Existing Indenture), and the
holders thereof from time to time shall be entitled
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to all of the rights of a holder of "Senior Indebtedness" (as such term is
defined in the Existing Indenture) pursuant to the Existing Indenture.
Section 7.25 Related Transactions Documents.
(a) The Borrower has delivered to the Agent complete and correct
copies of all Related Transactions Documents.
(b) As of the Closing Date, after giving effect to the Merger, the
Borrower will be the owner of substantially all of the Capital Stock of
Champion free and clear of any Liens, except Permitted Liens.
Section 7.26 Solvency. The Borrower and each of the Subsidiary
Guarantors as separate corporate entities and on a consolidated basis, are
Solvent, after giving effect to the Loans and the Related Transactions.
Section 7.27 Employee Matters. Except as set forth on Schedule
7.27, as of the Closing Date, (a) none of the Loan Parties or any of their
respective Subsidiaries other than Excluded Subsidiaries, or any of their
respective employees, is subject to any collective bargaining agreement, and
(b) no petition for certification or union election is pending with respect to
the employees of any Loan Party or any of their respective Subsidiaries other
than Excluded Subsidiaries, and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of any
of the Loan Parties or any of their respective Subsidiaries other than Excluded
Subsidiaries. There are no strikes, slowdowns, work stoppages or controversies
pending or, to the best knowledge of the Borrower after due inquiry, threatened
against, any of the Loan Parties or any of their respective Subsidiaries, and
their respective employees, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Section 7.28 Insurance. Schedule 7.28 sets forth a complete and
accurate description of all policies of insurance that will be in effect as of
the Closing Date for the Borrower and its Subsidiaries. To the extent such
policies have not been replaced, no notice of cancellation has been received
for such policies and the Borrower and its Subsidiaries are in compliance in
all material respects with all of the terms and conditions of such policies.
Section 7.29 Fraud and Abuse. Borrower, its Subsidiaries and all
Majority-Owned Joint Ventures, and their respective officers and directors, and
persons who provide professional services under agreements with any of
Borrower, its Subsidiaries and all Majority-Owned Joint Ventures, have not
engaged in any activities which are prohibited under federal Medicare and
Medi-Cal (or Medicaid) statutes, 42 U.S.C. Sections 1320a-7, 1320a-7(a) and
1320a-7b, or the regulations promulgated pursuant to such statutes or related
state or local statutes or regulations, including but not limited to the
following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made
any false statement or representation of a material fact for use in determining
rights to any benefit or payment;
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(c) presenting or causing to be presented a claim for reimbursement for
services under Medicare, Medi-Cal (or Medicaid), or other state health care
program that is for an item or service that is known or should be known to be
(1) not provided as claimed, or (2) false or fraudulent; (d) failing to
disclose knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another, with intent to fraudulently secure such benefit or payment;
(e) knowingly and willfully offering, paying, soliciting or receiving any
remuneration (including any kickback, bribe, or rebate but excluding any
activities which come within a "safe harbor" under federal law), directly or
indirectly, overtly or covertly, in cash or in kind (1) in return for referring
an individual to a person for the furnishing or arranging for the furnishing of
any item or service for which payment may be made in whole or in part by
Medicare or Medi-Cal (or Medicaid), or other state health care program, or (2)
in return for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing, or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare or Medi-Cal (or Medicaid)
or other state health care program but excluding any activities which come
within a "safe harbor" under federal law; (f) knowingly making a payment,
directly or indirectly, to a physician as an inducement to reduce or limit
services to individuals who are under the direct care of the physician and who
are entitled to benefits under Medicare, Medi-Cal (or Medicaid), or other state
health care program but excluding any activities which come within a "safe
harbor" under federal law; (g) providing to any person information that is
known or should be known to be false or misleading that could reasonably be
expected to influence the decision when to discharge a hospital in-patient from
the hospital; (h) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omit to state a fact required to be stated therein or
necessary to make the statements contained therein not misleading) of a
material fact with respect to (1) the conditions or operations of a facility in
order that the facility may qualify for Medicare, Medi-Cal (or Medicaid) or
other state health care program certifications, or (2) information required to
be provided under Section 1124A of the Social Security Act (42 U.S.C. Section
1320a-3; (i) knowingly and willfully (1) charging for any Medi-Cal (or
Medicaid) service money or other consideration at a rate in excess of the rates
established by the state, or (2) charging, soliciting, accepting or receiving,
in addition to amounts paid by Medi-Cal (or Medicaid), any gift money, donation
or other consideration (other than a charitable, religious or other
philanthropic contribution from an organization or from a person unrelated to
the patient) (x) as a precondition of admitting the patient, or (y) as a
requirement for the patient's continued stay in the facility. Borrower, its
Subsidiaries and all Majority-Owned Joint Ventures and their respective
officers and directors, and persons who provide professional services under
agreements with any of Borrower, its Subsidiaries and all Majority-Owned Joint
Ventures, in the case of a hospital with a hospital emergency department,
provide for an appropriate medical screening examination within the capacity of
the hospital's emergency department, including ancillary services routinely
available to the emergency department, if any individual (whether or not
eligible for Medicare benefits) comes to the emergency department and a request
is made on the individual's behalf for examination or treatment for a medical
condition, to determine whether or not an emergency medical condition exists.
Representations and warranties set forth in this Section 7.31 shall not be
deemed breached unless any such activity or failure to provide services could
reasonably be expected to have a Material Adverse Effect on Borrower and its
Subsidiaries, taken as a whole.
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ARTICLE 8
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or any Lender has any Commitment hereunder
or any Letter of Credit remains outstanding hereunder, the Borrower will
perform and observe, or cause to be performed and observed, the following
covenants:
Section 8.1 Reporting Requirements. The Borrower will furnish to
the Agent:
(a) Annual Financial Statements. As soon as available,
and in any event within 120 days after the end of each fiscal year of
the Borrower, beginning with the fiscal year ending December 31, 1996,
(i) a copy of the annual audit report of the Borrower and its
consolidated Subsidiaries as of the end of and for such fiscal year
then ended containing, on a consolidated basis, balance sheets and
statements of income, retained earnings and cash flow, in each case
setting forth in comparative form the figures for the preceding fiscal
year, all in reasonable detail and audited and certified by Ernst &
Young or any other "Big Six" accounting firm, or other independent
certified public accountants of recognized standing reasonably
acceptable to the Agent and containing no qualification thereto except
as may be reasonably acceptable to the Agent, to the effect that such
report has been prepared in accordance with GAAP and (ii) a
certificate of such independent certified public accountants to the
Agent stating that to their knowledge no Default has occurred and is
continuing or, if in their opinion a Default has occurred and is
continuing, stating the nature thereof;
(b) Quarterly Financial Statements. As soon as
available, and in any event within forty-five (45) days after the end
of each of the first three quarters of each fiscal year of the
Borrower, beginning with the fiscal quarter ending September 30, 1996,
a copy of an unaudited financial report of the Borrower and its
consolidated Subsidiaries as of the end of such fiscal quarter and for
the portion of the fiscal year then ended containing, on a
consolidated basis, balance sheets and statements of income, retained
earnings and cash flow, in each case setting forth in comparative form
the figures for the corresponding period of the preceding fiscal year,
all in reasonable detail certified by a Responsible Officer of the
Borrower to have been prepared in accordance with GAAP and to fairly
and accurately present (subject to year-end audit adjustments) the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries, on a consolidated basis, at the date, and
for the periods indicated therein and a schedule reflecting the EBITDA
and net revenues of the material operating Subsidiaries for each of
the four fiscal quarters of each fiscal year of Borrower in a format
substantially similar to Schedule 8.1(b);
(c) Certificate of No Default. Concurrently with the
delivery of each of the financial statements referred to in Sections
8.1(a) and 8.1(b), a certificate of a Responsible Officer of the
Borrower (i) stating that, to the best of such officer's knowledge, no
Default has occurred and is continuing or, if a Default
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has occurred and is continuing, stating the nature thereof and the
action that has been taken and is proposed to be taken with respect
thereto, and (ii) showing (with respect to each certificate delivered
concurrently with the delivery of each of the financial statements
referred to in Section 8.1(a) or 8.1(b)) in reasonable detail the
calculations demonstrating compliance with Article 10;
(d) Applicable Margin Certificate. Concurrently with the
delivery of each of the financial statements referred to in Sections
8.1(a) and 8.1(b), a certificate of a Responsible Officer of the
Borrower showing in reasonable detail the calculation of the
Applicable Margin;
(e) Budget. As soon as available and in any event no
later than sixty (60) days after the beginning of each fiscal year of
the Borrower, a copy of the budget of the Borrower and its
Subsidiaries for such fiscal year (segregated by entity and quarter
and setting forth all material assumptions), which budget shall have
been presented to and reviewed and approved by the Board of Directors
of the Borrower and which is subject to year-end adjustments;
provided, however, that the requirement to provide the budget as
described in this Section 8.1(e) shall terminate on the later to occur
of (i) the second anniversary of the Closing Date or (ii) the earliest
date on which the ratio of Total Debt to Adjusted EBITDA is equal to
or less than 2.5 to 1;
(f) Notice of Litigation. Promptly and in any event
within five (5) days after the Borrower's obtaining knowledge of the
threat or commencement thereof, notice of all actions, suits and
proceedings before any Governmental Authority or arbitrator affecting
any Loan Party which, if determined adversely to any such Person,
could reasonably be expected to have a Material Adverse Effect;
(g) Notice of Default. Promptly and in any event within
five (5) days after the Borrower's knowledge of the occurrence of any
Default, a written notice setting forth the details of such Default
and the action that the Borrower has taken and proposes to take with
respect thereto;
(h) ERISA Reports. Promptly, and in any event within ten
(10) Business Days after any such Person knows or has reason to know
that any Multiemployer Plan is insolvent, or that any Reportable Event
or Prohibited Transaction has occurred with respect to any Pension
Plan or Multiemployer Plan, or that the PBGC, any Loan Party or any
ERISA Affiliate has instituted or will institute proceedings under
ERISA to terminate or withdraw from or reorganize any Pension Plan or
Multiemployer Plan, written notice of a Responsible Officer of the
Borrower setting forth the details as to such insolvency, withdrawal,
Reportable Event, Prohibited Transaction or termination and the action
that the Borrower has taken and proposes to take with respect thereto;
(i) Reports to Other Creditors. Promptly after the
furnishing thereof, a copy of any notice furnished by the Borrower to
the Trustee under either of the Indentures as
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to the occurrence of a default or event of default thereunder and not
otherwise required to be furnished to the Agent pursuant to any other
subsection of this Section 8.1;
(j) Notice of Material Adverse Effect. Within five (5)
Business Days after the Borrower becomes aware thereof, written notice
of any matter that could reasonably be expected to have a Material
Adverse Effect;
(k) Proxy Statements, Etc. As soon as available, one
copy of each financial statement, report, notice or proxy statement
sent by the Borrower to its stockholders generally and one copy of
each regular, periodic or special report, registration statement or
prospectus filed by the Borrower with any securities exchange or the
Securities and Exchange Commission or any successor agency, and of all
press releases made by the Borrower to the public containing material
developments in its business;
(l) Notice of New Subsidiaries. Concurrently with the
delivery of each of the financial statements referred to in Sections
8.1(a), and 8.1(b), notice of the creation or acquisition of any
Subsidiary of the Borrower (other than any Excluded Subsidiary) after
the Closing Date and subsequent to the last delivery of such
information;
(m) Plan Information. From time to time, as reasonably
requested by the Agent or any Lender, such books, records and other
documents relating to any Pension Plan or Multiemployer Plan as the
Agent or any Lender shall specify; prior to any termination, partial
termination or merger of a Pension Plan, or a transfer of assets of a
Pension Plan, written notification thereof; and
(n) General Information. Promptly, such other
information concerning the Loan Parties and their respective
Subsidiaries as the Agent or any Lender may from time to time
reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. The
Borrower will, and will cause each of its Subsidiaries (other than the Excluded
Subsidiaries) to, preserve and maintain its corporate existence (except for
mergers of Subsidiaries permitted by Section 9.3 and Subsidiaries substantially
all the assets of which have been disposed of pursuant to Section 9.12) and all
of its material leases, privileges, licenses, Permits, franchises,
qualifications and rights that are necessary in the ordinary conduct of its
business, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. The Borrower will, and will cause each of its
Subsidiaries (other than Excluded Subsidiaries) to, conduct its business in an
orderly and efficient manner in accordance with good business practices.
Section 8.3 Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, maintain, keep and preserve all of its
Properties necessary in the proper conduct of its business in good repair,
working order and condition (ordinary wear and tear excepted and other than
Facilities closed and held for disposition) and make all necessary repairs,
renewals, replacements, betterments and improvements thereof.
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Section 8.4 Taxes and Claims. The Borrower will, and will cause
each of its Subsidiaries to, pay or discharge at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments and governmental charges
imposed on it or its income or profits or any of its Property and (b) all
lawful claims for labor, material and supplies, which, if unpaid, might become
a Lien upon any of its Property; provided, however, that neither the Borrower
nor any of its Subsidiaries shall be required to pay or discharge any tax,
levy, assessment or governmental charge or claim for labor, material or
supplies (i) so long as the aggregate of such taxes, levies, assessments,
charges or claims for which Liens have been recorded do not exceed $1,000,000
or (ii) whose amount, applicability or validity is being contested in good
faith by appropriate proceedings being diligently pursued and for which
adequate reserves have been established under GAAP; provided, however, that
with respect to the Liens described in subsection (i) of this Section 8.4, if
such Liens have not been discharged within 60 days of the time of their filing,
then the Subsidiary against whose Property the Liens have been recorded shall
become an Excluded Subsidiary, after such 60-day period.
Section 8.5 Insurance. (a) The Borrower will, and will cause
each of its Subsidiaries to, keep insured by financially sound and reputable
insurers, including, but not limited to Hospital Assurance Company, Ltd., all
Property of a character usually insured by responsible corporations engaged in
the same or a similar business similarly situated against loss or damage of the
kinds and in the amounts customarily insured against by such corporations and
carry such other insurance as is usually carried by such corporations all in
amounts and of the type currently carried by Borrower and its Subsidiaries.
(b) If no Event of Default or payment Default shall have occurred
and be continuing, the Borrower may use each insurance recovery to repair,
restore or replace the Property that was the subject of such insurance
recovery.
(c) If an Event of Default or payment Default shall have occurred
and be continuing, the Borrower will cause all proceeds of insurance paid on
account of the loss of or damage to any Property of the Borrower or any of its
Subsidiaries and all awards of compensation for any Property of the Borrower or
any of its Subsidiaries taken by condemnation or eminent domain to be paid
directly to the Agent to be applied against or held as security for the
Obligations, at the election of the Agent and the Required Lenders and, to the
extent such proceeds of insurance are applied against the Obligations, there
shall be a prepayment of the Revolving Credit Loans.
Section 8.6 Inspection Rights. The Borrower will, and will cause
each of its Subsidiaries to, permit representatives and agents of the Agent and
each Lender, during normal business hours and upon reasonable notice to the
Borrower, to examine, copy and make extracts from its books and records except
confidential patient records, to visit and inspect its Properties and to
discuss its business, operations and financial condition with its officers and
independent certified public accountants; provided, however, that prior to a
Default, discussions with Borrower's independent certified public accountants
shall only take place in the presence of a Responsible Officer unless Borrower
otherwise consents. Following the occurrence of a Default or Event of Default,
Agent and each Lender may meet with Borrower's independent certified public
accountants without any Responsible Officer of Borrower present. By this
provision,
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Borrower hereby authorizes said accountants to discuss with Agent and Lenders
and their agents and representatives, the affairs, finances and accounts of
Borrower and its Subsidiaries in accordance with this Section 8.6.
Section 8.7 Keeping Books and Records. The Borrower will, and
will cause each of its Subsidiaries to, maintain appropriate books of record
and account in accordance with GAAP consistently applied in which true, full
and correct entries will be made of all their respective dealings and business
affairs. If any material changes in accounting principles from those used in
the preparation of the financial statements referenced in Section 8.1 are
hereafter required or permitted by GAAP and are adopted by the Borrower or any
of its Subsidiaries with the concurrence of its independent certified public
accountants and such changes in GAAP result in a change in the method of
calculation or the interpretation of any of the financial covenants, standards
or terms found in Section 8.1 or Article 10 or any other provision of this
Agreement, the Borrower and the Required Lenders agree to amend any such
affected terms and provisions so as to reflect such changes in GAAP with the
result that the criteria for evaluating the Borrower's or such Subsidiaries'
financial condition shall be the same after such changes in GAAP as if such
changes in GAAP had not been made; provided that, until any necessary
amendments have been made, the certificate required to be delivered under
Section 8.1(c) hereof demonstrating compliance with Article 10 shall include
calculations setting forth the adjustments from the relevant items as shown in
the current financial statements based on the changes to GAAP to the
corresponding items based on GAAP as used in the financial statements
referenced in Section 7.2(a), in order to demonstrate how such financial
covenant compliance was derived from the current financial statements.
Section 8.8 Compliance with Laws. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable Governmental
Requirements, except for instances of noncompliance that could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 8.9 Compliance with Agreements. The Borrower will, and
will cause each of its Subsidiaries to, comply with all agreements, contracts
and instruments binding on it or affecting its Properties or business, except
for instances of noncompliance that could not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. The Borrower will
comply with all terms and provisions of Article 10 in the Existing Indenture
and Article 12 of the New Indenture which are intended to benefit the holders
of any "Senior Indebtedness" (as such term is defined in each of the
Indentures).
Section 8.10 Further Assurances. The Borrower will, and will
cause each of its Subsidiaries to, execute and deliver such further agreements,
documents and instruments and take such further action as may be reasonably
requested by the Agent to carry out the provisions and purposes of this
Agreement and the other Loan Documents, to evidence the Obligations and to
create, preserve, maintain and perfect the Liens of the Agent for the benefit
of itself and the Lenders in and to the Collateral and the required priority of
such Liens.
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Section 8.11 ERISA. The Borrower will, and will employ reasonable
efforts to cause each of its ERISA Affiliates to, comply with all minimum
funding requirements and all other material requirements of ERISA, if
applicable, so as not to give rise to any liability thereunder.
Section 8.12 Borrower's Treatment of Subsidiaries. In
consideration of the Loans made hereunder and the execution and delivery of the
Master Guaranty by each Subsidiary Guarantor, Borrower hereby agrees that it
will remain solvent at all times. Determinations of compliance with this
Section 8.12 shall be made by computing the amount of contingent liabilities at
any time at the amount which, in light of the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
ARTICLE 9
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, or
any Letter of Credit remains outstanding hereunder, the Borrower will perform
and observe, or cause to be performed and observed, the following covenants:
Section 9.1 Debt. Except as permitted by Sections 9.6 and 9.9,
the Borrower will not, and will not permit any of its Subsidiaries to, incur,
create, assume or permit to exist any Debt, except:
(a) Debt of the Borrower and its Subsidiaries to the
Lenders pursuant to the Loan Documents;
(b) Existing Debt described on Schedule 9.1 hereto and
renewals, extensions or refinancings of such Debt which do not
increase the outstanding principal amount of such Debt;
(c) Capital Lease Obligations;
(d) Debt incurred in payment for the acquisition of
goods, supplies or merchandise on normal trade credit in the ordinary
course of its respective business;
(e) Purchase money Debt secured by purchase money Liens,
which Debt and Liens are permitted under and meet all of the
requirements of clause (h) of the definition of Permitted Liens
contained in Section 1.1;
(f) the Subordinated Debt, which shall include, for a
period no greater than ten (10) days after the Closing Date, all
outstanding indebtedness under the Existing Subordinated Notes on the
Closing Date as well as the New Subordinated Notes; provided, however,
that as long as at least $73,000,000 of indebtedness represented by
Existing Subordinated Notes has been repaid within such ten-day
period, the amount of the repaid
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Existing Subordinated Notes will not be included in calculating the
financial covenants set forth in Article 10;
(g) Pre-existing Debt assumed by the Borrower or a
Subsidiary as a condition to a Business Acquisition permitted under
Section 9.5 provided, however, that such Debt shall be unsecured,
unless the related collateral is only Property of an Excluded
Subsidiary;
(h) Intercompany Debt between or among the Borrower and
any of its Majority-Owned or Wholly-Owned Subsidiaries (other than an
Excluded Subsidiary), subject to the following requirements: any and
all of the Debt permitted pursuant to this Section 9.1(h) shall be
unsecured, shall be evidenced, at the Borrower's option, either on the
books and records of the Borrower and the relevant Subsidiary or by
instruments reasonably satisfactory to the Agent and all such Debt
shall be subordinated to the Obligations pursuant to the Master
Guaranty or by separate agreement;
(i) Intercompany Debt between or among the Excluded
Subsidiaries permitted under Section 9.4;
(j) the transactions contemplated by the PHC Funding Sale
Documents permitted by Section 9.12A(d);
(k) Intercompany Loans to DHHS. The Borrower or any of
its Subsidiaries may make loans or advances to DHHS; provided,
however, such loans and advances may only be made so long as (a) DHHS
has (i) agreed not to permit any Liens (other than those in favor of
one or more of the Lenders as hereinafter provided and those securing
Capital Lease Obligations, to the extent that such Liens attach only
to the Property leased and such Capital Lease Obligations are
permitted under the terms of this Agreement) to attach to any of the
Property of DHHS, (ii) agreed not to enter into a negative pledge in
favor of any Person other than the Agent and the Lenders except in
connection with Permitted Liens, and (iii) agreed not to incur any
Debt other than (x) Capital Lease Obligations and (y) Debt owed to one
or more of the Lenders as hereinafter provided, and (b) such amounts
do not exceed the product obtained by multiplying three (3) times that
portion of the EBITDA of DHHS which is attributable to
Paracelsus-Fargo's EBITDA distribution percentage under the DHHS
Partnership Agreement. The foregoing restrictions on loans and
advances shall not apply to any loan transaction DHHS may enter into
with one or more of the Lenders as long as the terms and conditions of
such loan transaction have been approved by the Required Lenders
(which approval shall not be unreasonably withheld), and are not
inconsistent with the representations, warranties and covenants set
forth in this Agreement. Except as expressly contemplated above,
notwithstanding anything to the contrary contained herein or any other
Loan Document, the Loan Documents do not permit DHHS to incur Debt
other than that described above and other Debt permitted by Section
9.1.
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(l) Debt owed to the Borrower or any of its
Majority-Owned Subsidiaries or Wholly-Owned Subsidiaries by any Person
which is not a Majority-Owned Subsidiary or Wholly-Owned Subsidiary of
Borrower, so long as the aggregate amount of such Debt, together with
Investments permitted by Section 9.4(d), does not exceed ten percent
(10%) of Consolidated Tangible Assets;
(m) Other unsecured Debt of the Borrower and its
Subsidiaries in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding; and
(n) All extensions or renewals of the above-referenced
Debt which do not increase the outstanding principal amount of such
Debt.
Section 9.2 Limitation on Liens. The Borrower will not, and will
not permit any of its Subsidiaries to, incur, create, assume or permit to exist
any Lien (including, without limitation, the Lien of an attachment, judgment or
execution) upon any of its Property or revenues, whether now owned or hereafter
acquired, except Permitted Liens.
Section 9.3 Limitation on Fundamental Changes. Except as
otherwise permitted under this Agreement, the Borrower will not, and will not
permit any of its Subsidiaries (other than Excluded Subsidiaries) to, become a
party to a merger, consolidation, partnership, joint venture, or other
combination, or wind-up, dissolve or liquidate itself, or sell, lease or
dispose of all or a substantial portion of its business or assets; provided,
however, that any Wholly-Owned Subsidiary may merge into, consolidate with or
transfer its business or assets to Borrower or any other Wholly-Owned
Subsidiary if (a) in such a merger, consolidation or transfer Borrower or such
other Wholly-Owned Subsidiary (other than an Excluded Subsidiary) survives and
in the case of such a Subsidiary, remains a Wholly-Owned Subsidiary of
Borrower, and (b) no Default or Event of Default occurs and is continuing after
giving effect to such merger, consolidation or transfer; provided, further,
that Borrower and its Subsidiaries shall be permitted to form partnerships and
joint ventures which, after formation, are Subsidiaries and are otherwise
permitted by this Agreement. Borrower will not, nor will it permit any of its
Subsidiaries to, form any Subsidiary that would be a second-tier Subsidiary of
Borrower that would not be an Excluded Subsidiary unless Borrower's
Subsidiaries shall not be prohibited by the terms and conditions of any
contract or agreement to which Borrower or any of its Subsidiaries is a party,
including without limitation either of the Indentures, to pledge the stock of
such second-tier Subsidiary to Agent for the benefit of Banks in accordance
with the provision of Section 5.3.
Section 9.4 Limitation on Investment. Except to the extent
permitted by Sections 9.1, 9.6 or 9.10, Borrower will not, nor will it permit
any of its Subsidiaries to, make or permit to remain outstanding any loan,
extension of credit or capital contribution to or investment in any Person, or
purchase or own any stock, bonds, notes, debentures or other securities of any
Person, or acquire or purchase the assets or business of any other Person, or
acquire or purchase securities or become a joint venturer with or partner of
any Person (all such transactions being herein called "Investments"), other
than:
(a) Cash Equivalents;
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(b) acquisitions permitted by Section 9.5;
(c) Investments (whether in cash or property, and if in
property, valued at its then current appraised value) in Wholly-Owned
Subsidiaries or Majority-Owned Subsidiaries of Borrower, in either
event so long as such Wholly-Owned Subsidiaries or Majority-Owned
Subsidiaries are not Excluded Subsidiaries;
(d) Other Investments (whether in cash or in property,
and if in property, valued at its then current appraised value) made
after the Closing Date in any Person, including Excluded Subsidiaries,
in an aggregate amount (together with Debt permitted by Section
9.1(l)) not to exceed ten percent (10%) of Consolidated Tangible
Assets;
(e) Other Investments made by Hospital Assurance Company,
Ltd., a Wholly-Owned Subsidiary of Borrower, in investment grade
securities;
(f) receivables owing to it, if created in the ordinary
course of business or dischargeable in accordance with customary trade
terms;
(g) Investments between and among the Excluded
Subsidiaries; and
(h) Existing Investments (other than the Investments
covered under subsections (a) through (g) above) identified on
Schedule 7.15(a) or Schedule 9.4 hereto;
provided, however, that, no Investments may be made by the Borrower or any of
its Subsidiaries pursuant to clauses (b) or (d) preceding if an Event of
Default exists at the time of such Investment or would result therefrom.
Section 9.5 Limitation on Business Acquisitions. Borrower will
not, nor will it permit any of its Subsidiaries (other than DHHS or any other
partnership or joint venture) to, make expenditures or incur any obligations or
consent to make expenditures or incur obligations, to make Business
Acquisitions (including, without limitation, all Capital Lease Obligations and
Operating Lease obligations to be assumed by Borrower or any of its
Subsidiaries), except as follows (the acquisitions permitted under this Section
9.5 are sometimes referred to herein as "Permitted Acquisitions"): (a) the
acquisition must be of Facilities, health related businesses or related lines
of business and (b) except with respect to any Business Acquisition where the
obligations incurred are in an amount of less than $5,000,000, in conjunction
with, or, with respect to Business Acquisitions for which the purchase price or
consideration in any twelve (12) month period does not exceed, in the
aggregate, the applicable amounts set forth below based upon a determination of
the Leverage Ratio of the Borrower and its Subsidiaries, calculated as of the
end of the most recently completed fiscal quarter, then at least five days
before the closing of any such Business Acquisition the Borrower shall provide
to the Agent a notice briefly describing such Business Acquisition and
demonstrating compliance with all financial covenants and agreements of
Borrower under this Agreement, including, without limitation, compliance with
the Leverage Ratios set forth below:
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Leverage Ratio: Maximum Consideration
--------------- ---------------------
Greater than 4.0x $ 25,000,000
Greater than 3.5x and #4.0x $ 50,000,000
Greater than 3.0x and #3.5x $ 75,000,000
Less than 3.0x $ 150,000,000
In connection with any Business Acquisition under clause (b) above for which
the obligations to be incurred exceed, in the aggregate with obligations
incurred for all other Business Acquisitions during any twelve (12) month
period, the amount shown above under the heading "Maximum Consideration"
opposite the applicable Leverage Ratio prior to the date of determination, not
less than forty-five (45) days prior to any such acquisition, Borrower shall
have submitted to the Lenders pro-forma financial statements, based upon
projections (based on good faith estimates of the Borrower and its senior
management based on assumptions believed to be reasonable at the time made),
demonstrating compliance with all financial covenants and agreements of
Borrower pursuant to this Agreement, after such proposed acquisition, all in
form and substance reasonably satisfactory to the Lenders. Any such Business
Acquisitions described in the immediately preceding sentence may only be made
with the prior consent of the Agent and the Required Lenders (such consent not
to be unreasonably withheld) and the Agent and the Required Lenders shall
notify the Borrower within two weeks of the Borrower's delivery of financial
statements required under this Section 9.5 whether they have consented to such
Business Acquisition (with any failure of the Agent and the Required Lenders to
provide their consent within such two week period to be deemed a refusal to
consent). Any acquisition permitted under this Section 9.5 shall have been
approved by the appropriate officers, or, if required, by the Board of
Directors or other governing body, of the company or business to be acquired or
holding the assets to be acquired.
Section 9.6 Limitation on Loans and Credit. Except to the extent
permitted by Section 9.1 and Section 9.4, Borrower will not, nor will it permit
any of its Subsidiaries to, make any loans or extend any credit, except:
(a) extensions of credit in the ordinary course of its
respective health care related business;
(b) to employees of Borrower or its Subsidiaries, and to
physicians associated with operating entities of Borrower and its
Subsidiaries not in excess of $1,000,000 for loans and extensions of
credit to any such employee or physician; provided, however, that all
such loans and extensions of credit, when added to the guaranties made
to health care professionals pursuant to Section 9.9(c), may not
exceed $10,000,000 in the aggregate at any one time outstanding for
Borrower and its Subsidiaries;
(c) extensions of credit permitted under Section 9.9; and
(d) a loan to Krukemeyer in the principal amount of
$4,000,000 as of the Closing Date.
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Section 9.7 Limitation on Contracts, Etc. Borrower will not, nor
will it permit any of its Subsidiaries engage in any business activities or
operations substantially different from or not related to the healthcare
industry.
Section 9.8 Ownership of Subsidiaries. Borrower will not dispose
of or agree to dispose of any shares of any Subsidiary of Borrower (other than
Excluded Subsidiaries) if such disposition would result in Borrower's owning
less than a majority of the outstanding shares of such Subsidiary or failure to
otherwise control such Subsidiary, except pursuant to Section 9.3.
Section 9.9 Contingent Obligations. Borrower will not directly
enter into any partnership or joint venture and will not enter into any
agreement pursuant to which it directly assumes any liabilities of any joint
venture or partnership entered into by any of its Subsidiaries. In addition,
Borrower will not, after the Closing Date, and will not permit any of its
Subsidiaries to Guarantee any Debt or indebtedness of any other Persons,
including, without limitation, any Affiliate, except:
(a) Guarantees by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary
course of business;
(b) pursuant to the Master Guaranty;
(c) each of Borrower's Subsidiaries may Guarantee the
income or debts of individual health care professionals (or of
professional corporations or partnerships owned one hundred percent
(100%) by individual health care professionals) associated with its
respective health care institution;
(d) each of Borrower's Wholly-Owned Subsidiaries the sole
asset of which is a joint venture interest acquired after the Closing
Date in a less than one hundred percent (100%) owned Subsidiary of
Borrower permitted by Sections 9.4(d), may assume, Guarantee, endorse
or otherwise become directly or contingently liable in connection with
any Debt or indebtedness of such joint venture, provided that prior to
any such Subsidiary becoming so obligated for the Debt or indebtedness
of such joint venture, Borrower shall furnish to Agent, (i) a
certificate of a Responsible Officer of Borrower stating that all
reasonable steps have been taken in the opinion of Borrower to
insulate Borrower from any liability for the debts of such Subsidiary,
and (ii) such other documents as Agent and Required Lenders shall
reasonably request to confirm that reasonable steps have been taken to
so insulate Borrower from any liability for the debts of such
Subsidiary;
(e) any liability, contingent or otherwise, which is
permitted pursuant to Section 9.1; and
(f) Guarantees of Debt permitted by Section 9.1.
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Section 9.10 Restricted Payments. Except as permitted by Section
9.1, the Borrower will not, and will not permit any of its Subsidiaries (other
than Excluded Subsidiaries) to, make any Restricted Payments, except:
(a) Subject to the subordination provisions relating
thereto, the Borrower and its Subsidiaries may make regularly
scheduled payments of interest and principal on the Subordinated Notes
and on any other Subordinated Debt approved in writing by the Required
Lenders;
(b) The Borrower may, from time to time, repurchase or
redeem the Existing Subordinated Notes if the Senior Leverage Ratio
is equal to or less than 2.5 to 1.0 after such repurchase is
completed;
(c) The Borrower may refinance any Subordinated Debt
(including, without limitation, Debt under the Existing Subordinated
Notes) with other Subordinated Debt;
(d) The Borrower may make Restricted Payments with
respect to its Capital Stock up to an aggregate amount of $1,000,000
per calendar year; provided, however, Borrower shall not be subject to
the foregoing $1,000,000 limitation if Borrower's senior unsecured
long-term debt ratings are BBB- and BAA3 or better from S&P and
Moody's, respectively;
(e) Subsidiaries of the Borrower may make Restricted
Payments to the Borrower or Wholly-Owned Subsidiaries or
Majority-Owned Subsidiaries (in either event other than Excluded
Subsidiaries) of the Borrower;
(f) Subsidiaries of the Borrower that are joint ventures
or partnerships may make Restricted Payments to their joint venturers
or partners in accordance with their joint venture agreements as in
effect from time to time;
(g) The Borrower or any Subsidiary may redeem or
repurchase any Equity Interests of the Borrower or any Subsidiary held
by any officers, directors or employees of the Borrower (or any of its
Subsidiaries) whose employment has been terminated or who have died or
become disabled, so long as the aggregate amount of payments for all
such redemptions or repurchases in any fiscal year do not exceed $5.0
million;
(h) The Borrower may pay a one-time dividend to Park
Hospital, GmbH in an amount not to exceed $22,000,000 and may make the
payments referred to in Section 2.10(a)(ii); and
provided, however, that no Restricted Payments may be made, except pursuant to
clauses (d), (e) (f), (g) and (h) preceding, if a Default exists at the time of
such Restricted Payment or would result therefrom, except that the foregoing
provision will not be violated by the payment by the Borrower of any dividend
within 60 days of the date of declaration thereof if at such date of
declaration such payment would have complied with the provisions of this
Section 9.10.
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Section 9.11 Limitation on Issuance of Capital Stock. The
Borrower will not permit any of its Subsidiaries (other than the Excluded
Subsidiaries) to, at any time issue, sell, assign or otherwise dispose of any
of its Equity Interests; provided, however, that, if and to the extent not
otherwise prohibited by this Agreement or the other Loan Documents any
Subsidiary of the Borrower may issue additional shares of its Capital Stock if
and to the extent that the Borrower and its Subsidiaries continue to own a
majority of the shares of such Capital Stock; and provided, further, that all
of such additional shares of Capital Stock referred to in the foregoing proviso
that are issued to the Borrower or any Subsidiary Pledgor (other than the
shares of Excluded Subsidiaries) shall be pledged to the Agent, on behalf of
the Agent and the Lenders, as security for the Obligations pursuant to a pledge
agreement substantially similar to the Subsidiary Security Agreements delivered
pursuant to Section 6.1.
Section 9.12 Disposition of Property.
A. Except as permitted by Section 9.4, the Borrower will not,
and will not permit any of its Subsidiaries to, sell, lease, assign, transfer
or otherwise dispose of any of its Property, except:
(a) sales of assets of the closed Bellwood Health Center,
the closed Palmdale Community Hospital, IV Care, Inc. and IV Care,
L.P., Heartland Hospital owned by DHHS, and Physicians and Surgeons
Hospital in Midland, Texas;
(b) other Asset Dispositions by the Borrower and its
Subsidiaries to Persons other than the Borrower or its Wholly-Owned
Subsidiaries or its Majority-Owned Subsidiaries (other than Excluded
Subsidiaries) if each of the following conditions have been satisfied:
(i) the aggregate fair market value of the assets sold, disposed of or
otherwise transferred by the Borrower and its Subsidiaries in any
twelve-month period does not exceed ten percent (10%) of the fair
market value of the Consolidated Tangible Assets of the Borrower and
its Subsidiaries,(ii) the consideration received by the Borrower or
its Subsidiaries is at least equal to the fair market value of such
assets, and (iii) no Default exists at the time of or will result from
such Asset Disposition;
(c) Asset Dispositions by the Borrower and its
Subsidiaries to the Borrower or any Wholly-Owned Subsidiary or
Majority-Owned Subsidiary of the Borrower other than an Excluded
Subsidiary if no Default exists at the time of or will result from
such Asset Disposition;
(d) the sale of accounts receivable under the PHC Funding
Sale Documents in an amount sufficient to derive Net Proceeds of no
more than $100,000,000;
(e) asset swaps as long as no more than twenty percent
(20%) of the total consideration paid is in cash;
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(f) dispositions of Property no longer used or useful in
the ordinary course of business; and
(g) transfers otherwise permitted under this Agreement.
B. In connection with an authorized Asset Disposition under this
Section 9.12, Agent hereby agrees to release such Collateral and, where
applicable, a Subsidiary Guarantor, as is required to effectuate the authorized
Asset Disposition.
Section 9.13 Environmental Protection. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use (or permit any tenant to
use) any of its Properties for the handling, processing, storage,
transportation or disposal of any Hazardous Material except in compliance with
applicable Environmental Laws, (b) generate any Hazardous Material except in
compliance with applicable Environmental Laws, (c) conduct any activity that is
likely to cause a Release or threatened Release of any Hazardous Material in
violation of any Environmental Law, or (d) otherwise conduct any activity or
use any of its Properties in any manner that violates or is likely to violate
any Environmental Law or create any Environmental Liabilities for which the
Borrower or any of its Subsidiaries would be responsible, except for
circumstances or events described in clauses (a) through (d) preceding that
would not have, individually or in the aggregate, a Material Adverse Effect.
Section 9.14 Intercompany Transactions. Except as may be
expressly permitted or required by the Loan Documents, the Borrower will not,
and will not permit any of its Subsidiaries to, create or otherwise cause or
permit to exist or become effective any material consensual encumbrance or
restriction of any kind on the ability of any Subsidiary (other than Excluded
Subsidiaries) to (a) pay dividends or make any other distribution to the
Borrower or any of its Subsidiaries in respect of such Subsidiary's Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any indebtedness owed to the Borrower or any of its
Subsidiaries, (c) make any loan or advance to the Borrower or any of its
Subsidiaries, or (d) sell, lease or transfer any of its Property to the
Borrower or any of its Subsidiaries.
Section 9.15 Modification of Other Agreements. The Borrower will
not, and will not permit any of its Subsidiaries to, consent to or implement
any termination, amendment, modification, supplement or waiver of (a) the
subordination provisions of the Subordinated Debt Documents, and (b) the
certificate of incorporation or bylaws (or analogous constitutional documents)
of the Borrower or any of the Borrower's Subsidiaries (other than Excluded
Subsidiaries) if the same could reasonably be expected to have a Material
Adverse Effect or otherwise could reasonably be expected to be materially
adverse to the Agent or the Lenders, or (c) any other Material Contract to
which it is a party or any Permit which it possesses if the same could
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of and in addition to the foregoing, except as otherwise permitted
in this Agreement, the Borrower will not consent to or implement any
termination, amendment, modification, supplement or waiver of the Subordinated
Debt Documents (i) to increase the principal amount of any Subordinated Debt,
(ii) to shorten the maturity of, or any date for the payment of any principal
of or interest
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on, any Subordinated Debt, (iii) to increase the rate of interest on or with
respect to any Subordinated Debt, (iv) to otherwise amend or modify the payment
or subordination terms of any Subordinated Debt, (v) to provide any Collateral
or security for payment or collection of any Subordinated Debt, or (vi) in any
other respect that could reasonably be expected to have a Material Adverse
Effect or to be materially adverse to the Agent and the Lenders.
Section 9.16 ERISA. The Borrower will not:
(a) allow or take or to the extent, after the Company
employs reasonable efforts, such action is within the Borrower's
effective control permit any ERISA Affiliate to take any action which
would cause, any unfunded or unreserved liability for benefits under
any Pension Plan (exclusive of any Multiemployer Plan) to exist or to
be created that exceeds $1,500,000 with respect to any such Pension
Plan or $3,000,000 with respect to all such Pension Plans in the
aggregate; and
(b) with respect to any Multiemployer Plan, allow, or
take (or to the extent, after the Company employs reasonable efforts,
such action is within the Borrower's effective control) permit any
ERISA Affiliate to take) any action which would cause, any unfunded or
unreserved liability for benefits under any Multiemployer Plan to
exist or to be created with respect to the Borrower or any ERISA
Affiliate, either individually as to any such Multiemployer Plan or in
the aggregate as to all such Multiemployer Plans, that could, upon any
partial or complete withdrawal by the Borrower or any ERISA Affiliate
from or termination of any such Multiemployer Plan or Plans, could
reasonably be expected to have a Material Adverse Effect.
ARTICLE 10
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
any Letter of Credit remains outstanding, the Borrower will perform and observe
the following covenants:
Section 10.1 Ratio of Senior Leverage to Adjusted EBITDA. The
Borrower will not permit the Senior Leverage Ratio at the end of any fiscal
quarter to exceed, during the following time periods, the following respective
ratios:
Calendar Year Quarters Ending Maximum Permitted
----------------------------- -----------------
During the following Periods Senior Leverage Ratio
---------------------------- ---------------------
Closing Date through June 30, 1998 3.00 : 1.00
July 1, 1998 through June 30, 1999 2.75 : 1.00
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Calendar Year Quarters Ending Maximum Permitted
----------------------------- -----------------
During the following Periods Senior Leverage Ratio
---------------------------- ---------------------
July 1, 1999 and thereafter 2.50 : 1.00
Section 10.2 Minimum Net Worth. As of the close of each fiscal
quarter ending on or after December 31, 1996, the Borrower will not permit Net
Worth to be less than (a) 85% of $236,000,000, plus (b) for each quarter on a
cumulative basis ending on or after the fiscal quarter ending December 31,1996
or thereafter, fifty percent (50%) of Borrower's net income, if any, plus
seventy-five percent (75%) of the net proceeds from any Equity Issuance
following the Closing Date, and (c) shall exclude any extraordinary item
related to the extinguishment of Debt or any cumulative effect of a change in
accounting.
Section 10.3 Ratio of Total Debt to Adjusted EBITDA. The Borrower
will not permit the ratio, calculated as of the end of each fiscal quarter
ending during the periods below, of (i) Total Debt to (ii) Adjusted EBITDA for
the period then ended, to exceed the ratio set forth below:
Period Ratio
------- -----
From the Closing Date through March 31, 1997 5.25 to 1.00
From April 1, 1997 through September 30, 1997 5.00 to 1.00
From October 1, 1997 through March 31, 1998 4.50 to 1.00
From April 1, 1998 through December 31, 1998 4.00 to 1.00
From January 1, 1999 and at all times thereafter 3.50 to 1.00
Section 10.4 Fixed Charge Coverage Ratio. The Borrower will not
permit the Fixed Charge Coverage Ratio, calculated as of the end of each fiscal
quarter commencing with the fiscal quarter ending September 30, 1996 then ended
to be less than (i) 1.25 to 1.00 during the period beginning on the Closing
Date and through March 31, 1998, and (ii) 1.50 to 1.00 for the period beginning
on April 1, 1998 and at all times thereafter.
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall be
deemed an "Event of Default":
(a) The Borrower shall fail to pay, repay or prepay
within one (1) day after the due date thereof any amount of principal,
and within five (5) days after the due date thereof any interest, fees
or other amount or other Obligation owing to the Agent or any Lender
pursuant to this Agreement or any other Loan Document.
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(b) Any representation or warranty made or deemed made by
the Borrower or any Loan Party in any Loan Document or in any
certificate, report, notice or financial statement furnished at any
time in connection with this Agreement or any other Loan Document
shall be false, misleading or erroneous in any material respect when
made or deemed to have been made.
(c) The Borrower shall fail to perform, observe or
comply, or to cause any of its Subsidiaries to perform, observe or
comply, with any covenant, agreement or term contained in this
Agreement (other than covenants and agreements pertaining to payment
of the Obligations which shall be governed by Section 11.1(a)), or the
Borrower, any Subsidiary of the Borrower or any other Loan Party shall
fail to perform, observe or comply with any covenant, agreement or
term contained in the other Loan Documents; and such failure is not
remedied to the sole satisfaction of Agent and the Required Lenders or
waived in writing by Agent and the Required Lenders within 30 days
after any officer of the Borrower has knowledge that, or Agent has
given Borrower notice that, such failure occurred. Notwithstanding
the foregoing, there shall be no grace period in the event of (i) the
breach of any financial covenant under Article 10, or (ii) the failure
of any Loan Party to comply with the provisions of Sections 8.2
(Maintenance of Existence) and 8.5 (Insurance).
(d) Any of the Loan Parties shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts
become due.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator or the like of itself or of all or any
substantial part of its Property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under
the United States Bankruptcy Code (as now or hereafter in effect, the
"Bankruptcy Code"), (iv) institute any proceeding or file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, winding-up or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Bankruptcy
Code, or (vi) take any corporate action for the purpose of authorizing
any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of any of the Loan Parties in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of any
of the Loan Parties or of all or any substantial part of its Property,
or (iii) similar relief in respect of any of the Loan Parties under
any law relating to bankruptcy, insolvency, reorganization, winding-up
or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or an order
for relief
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against any of the Loan Parties shall be entered in an involuntary
case under the Bankruptcy Code.
(g) Any of the Loan Parties shall fail to discharge
within a period of 30 days after the commencement thereof any order of
attachment, sequestration, forfeiture or similar order or orders
involving an aggregate amount of $1,000,000 or more against any of its
Properties.
(h) A judgment or judgments shall be entered against
Borrower or any of its Subsidiaries in the aggregate amount at any
time of $1,000,000 or more in excess of any amounts covered by
insurance, on any claim or claims, and Borrower or its respective
Subsidiaries shall not have satisfied or appealed such judgment or
judgments, and obtained a stay of such judgment or judgments pending
appeal, within the time period available for appeal under applicable
law;
(i) (i) Any of the Loan Parties shall fail to pay when
due, after taking into account any applicable cure or grace periods,
any principal of or interest on any Debt (other than the Obligations
and Debt under the Krukemeyer Subordinated Note) having (either
individually or in the aggregate) a principal amount of at least
$5,000,000, or (ii) the maturity of any such Debt shall have been
accelerated, or (iii) other than in connection with a redemption or
defeasance pursuant to a refinancing of Subordinated Debt permitted by
Section 9.1(f) or as otherwise provided by Sections 9.10(b) and (c)
(x) any such Debt shall have been required to be prepaid prior to the
stated maturity thereof, or (y) any event shall have occurred (and
shall not have been waived or otherwise cured) that permits after
taking into account any applicable cure or grace periods any holder or
holders of such Debt or any Person acting on behalf of such holder or
holders to accelerate the maturity thereof or require any such
prepayment.
(j) This Agreement or any other Loan Document shall cease
to be in full force and effect or shall be declared null and void or
the validity or enforceability thereof shall be contested or
challenged by any Loan Party or any of its shareholders, or any Loan
Party shall deny that it has any further liability or obligation under
any of the Loan Documents, or any Lien created by the Loan Documents
shall for any reason cease to be a valid, first priority perfected
Lien (subject only to Permitted Liens) upon any of the Collateral
purported to be covered thereby.
(k) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Pension Plan; (iii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Pension Plan or the termination of
any Pension Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee
to administer, any Pension Plan, or the institution by the PBGC of any
such proceedings; (v) any "accumulated funding deficiency" (as defined
in Section 406 of ERISA or Section 412 of the Code), whether or not
waived, shall exist with
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respect to any Pension Plan; or (vi) complete or partial withdrawal
under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency or termination of any Pension Plan or
Multiemployer Plan; and in each case above, such event or condition,
together with all other events or conditions, if any, have subjected
or could in the reasonable opinion of Required Lenders subject any
Loan Party or any ERISA Affiliate to any tax, penalty or other
liability to a Plan, a Multiemployer Plan, the PBGC or otherwise (or
any combination thereof) which in the aggregate exceed or could
reasonably be expected to exceed $1,500,000.
(l) The occurrence of a Change of Control.
(m) If, at any time, the subordination provisions of any
of the Subordinated Notes, the Indentures or any other Subordinated
Debt Documents shall be invalidated or shall otherwise cease to be in
full force and effect.
(n) If, at any time, (i) any acceleration of the maturity
of the Krukemeyer Subordinated Note shall occur for any reason, or
(ii) other than in connection with a refinancing of such Subordinated
Debt permitted by Section 9.1(f) or as otherwise provided in Sections
9.10(b) and 9.10(c), the Borrower shall initiate or give any election
or notice relating to any redemption or other prepayment of any such
Subordinated Debt.
(o) Borrower and/or its Subsidiaries shall fail to
deliver to the Agent, for the ratable benefit of the Lenders,
certificates evidencing outstanding certificated Capital Stock of the
Subsidiaries as required by this Agreement, the Security Agreement and
each of the Subsidiary Security Agreements.
(p) Any involuntary Lien or Liens securing in the
aggregate at any time the sum of $1,000,000 or more, of any kind or
character, other than Permitted Liens or any other Lien being
contested in good faith by appropriate proceedings or any Lien for
taxes due but not in default, and, in either case, for which adequate
reserves in the reasonable opinion of Agent, have been provided on the
books of Borrower or its Subsidiary, as the case may be, shall attach
to any assets or property of Borrower or any Subsidiary of Borrower
which Lien or Liens shall not have been removed or the performance of
such Lien obligation bonded for an amount equal to such Lien
obligations within thirty (30) days after said attachment.
(q) An event or condition shall occur which results in a
Material Adverse Effect.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (subject to Section 13.10 with respect to clauses (a)
and (b) below) and, if directed by the Required Lenders, the Agent shall do any
one or more of the following:
(a) Acceleration. Declare all outstanding principal of
and accrued and unpaid interest on the Loans and all other amounts
payable by the Borrower under the Loan
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Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest or other formalities of any kind, all of
which are hereby expressly waived by the Borrower;
(b) Termination of Commitments. Terminate the
Commitments (including, without limitation, the obligation of the
Issuing Bank to issue Letters of Credit) without notice to the
Borrower;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of the Agent and the Lenders to
secure payment and performance of the Obligations in accordance with
the terms of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies
afforded by the laws of the State of Texas or any other jurisdiction,
by any of the Loan Documents, by equity or otherwise, including, but
not limited to, its right of offset with respect to all bank accounts
of Borrower and its Subsidiaries;
provided, however, that upon (i) the occurrence of an Event of Default under
Section 11.1(e) or Section 11.1(f), the Commitments of all of the Lenders
(including, without limitation, the obligation of the Issuing Bank to issue
Letters of Credit) shall immediately and automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Borrower under the Loan Documents shall thereupon
become immediately and automatically due and payable, and (ii) upon the
occurrence of an Event of Default under clause (ii) of Section 11.1(n), the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Borrower under the Loan Documents shall thereupon
become immediately and automatically due and payable, all (with respect to each
of clause (i) and (ii) preceding) without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
Section 11.3 Cash Collateral. If an Event of Default shall have
occurred and be continuing the Borrower shall, if requested by the Agent or the
Required Lenders, pledge to the Agent as security for the Obligations an amount
in immediately available funds equal to the then outstanding Letter of Credit
Liabilities, such funds to be held in a cash collateral account satisfactory to
the Agent without any right of withdrawal by the Borrower.
Section 11.4 Performance by the Agent. If any Loan Party shall
fail to perform any covenant or agreement in accordance with the terms of the
Loan Documents, the Agent may, at the direction of the Required Lenders, during
the continuance of an Event of Default, perform or attempt to perform such
covenant or agreement on behalf of such Loan Party. In such event, the
Borrower shall, at the request of the Agent, promptly pay any reasonable amount
expended by the Agent or the Lenders in connection with such performance or
attempted performance to the Agent
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at the Principal Office, together with interest thereon at the applicable
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it
is expressly agreed that neither the Agent nor any Lender shall have any
liability or responsibility for the performance of any obligation of the
Borrower or any other Loan Party under this Agreement or any of the other Loan
Documents.
ARTICLE 12
The Agent
Section 12.1 Appointment, Powers and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Neither the Agent nor any of its Affiliates, officers,
directors, employees, attorneys or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
this Agreement or any of the other Loan Documents except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Agent (a) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Agent, (b) shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any Lender,
(c) shall not be required to initiate any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by
the Required Lenders, (d) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained in this Agreement
or any other Loan Document, or any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or for the value, validity, effectiveness, enforceability or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder, (e) may consult with
legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing reasonably believed by it
to be genuine and signed or sent by the proper party or parties. As to any
matters not expressly provided for by this Agreement, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action which exposes the Agent
to liability or which is contrary to this Agreement or any other Loan Document
or applicable law.
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Section 12.2 Rights of Agent as a Lender. With respect to its
Commitment, the Loans made by it and the Note issued to it, B of A (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. The Agent and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, act as
trustee under indentures of, provide merchant banking services to, own
securities of, and generally engage in any kind of banking, trust or other
business with, the Loan Parties or any of their Affiliates and any other Person
who may do business with or own securities of the Loan Parties or any of their
Affiliates, all as if it were not acting as the Agent and without any duty to
account therefor to the Lenders.
Section 12.3 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than the non-payment
of principal of or interest on the Loans or of commitment fees) unless the
Agent has received notice from a Lender or the Borrower specifying such 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, the Agent shall
give prompt notice thereof to the Lenders (and shall give each Lender prompt
notice of each such non-payment). The Agent shall (subject to Section 12.1 and
Section 13.10) take such action with respect to such Default as shall be
directed by the Required Lenders, provided that unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall seem advisable and in the best interest of the Lenders.
Section 12.4 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO
INDEMNIFY THE AGENT AND THE DOCUMENTATION AGENT FROM AND HOLD THE AGENT AND THE
DOCUMENTATION AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED UNDER
SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER
UNDER SECTIONS 13.1 AND 13.2), RATABLY IN ACCORDANCE WITH THEIR PRO RATA SHARES
(CALCULATED ON THE BASIS OF THE COMMITMENT PERCENTAGES), ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST THE AGENT OR THE DOCUMENTATION AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY THE AGENT OR THE DOCUMENTATION AGENT UNDER OR IN RESPECT
OF ANY OF THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE
FOR ANY PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY, RESPECTIVELY, THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE LENDERS
THAT THE AGENT AND THE DOCUMENTATION AGENT SHALL BE INDEMNIFIED HEREUNDER FROM
AND HELD HARMLESS AGAINST ALL OF SUCH
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LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND
DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT OR THE
DOCUMENTATION AGENT, AS THE CASE MAY BE (EXCEPT TO THE EXTENT THE SAME ARE
CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSONS TO BE
INDEMNIFIED). WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION 12.4, EACH
LENDER AGREES TO REIMBURSE THE AGENT AND THE DOCUMENTATION AGENT, AS
APPROPRIATE, PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON THE
BASIS OF THE COMMITMENT PERCENTAGES) OF ANY AND ALL OUT-OF-POCKET EXPENSES
(INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENT OR THE DOCUMENTATION AGENT IN
CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE AGENT OR THE
DOCUMENTATION AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE
BORROWER.
Section 12.5 Independent Credit Decisions. Each Lender agrees
that it has independently and without reliance on the Agent, the Documentation
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Borrower and the
other Loan Parties and its own decision to enter into this Agreement and that
it will, independently and without reliance upon the Agent, the Documentation
Agent, or any other Lender, and based upon 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 this Agreement or any of the
other Loan Documents. The Agent shall not be required to keep itself informed
as to the performance or observance by any Loan Party of this Agreement or any
other Loan Document or to inspect the Properties or books of any Loan Party.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Agent hereunder or under the
other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other financial information concerning
the affairs, financial condition or business of any Loan Party (or any of their
Affiliates) which may come into the possession of the Agent or any of its
Affiliates.
Section 12.6 Several Commitments. The Commitments and other
obligations of the Lenders under this Agreement are several. The default by
any Lender in making a Loan in accordance with its Commitment shall not relieve
the other Lenders of their obligations under this Agreement. In the event of
any default by any Lender in making any Loan, each nondefaulting Lender shall
be obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event
shall any Lender be required to advance an amount or amounts with respect to
any of the Loans which would in the
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aggregate exceed such Lender's Commitment with respect to such Loans. No
Lender shall be responsible to the Agent or any other Lender for any act or
omission of any other Lender.
Section 12.7 Successor Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower and the Agent may
be removed at any time with cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders will have the right to appoint
another Lender as a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, and with the consent of the Borrower, which
consent shall not be unreasonably withheld, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the U.S. or any state
thereof or of a foreign country if acting through its U.S. branch and having
combined capital and surplus of at least $100,000,000. Upon the acceptance of
its appointment as successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges, immunities
and duties of the resigning or removed Agent, and the resigning or removed
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any Agent's resignation or removal as
Agent, the provisions of this Article 12 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was the Agent.
Section 12.8 Managing Agent and Co-Agents. The Managing Agent and
Co-Agents, as such, shall have no duties or obligations whatsoever under this
Agreement or any Loan Document or any other document or any matter related
hereto or thereto (but shall have the duties and obligations of a Lender), but
shall nevertheless be entitled to all of the indemnities and other protection
afforded to the Agent and Documentation Agent under this Article 12.
ARTICLE 13
Miscellaneous
Section 13.1 Expenses. Whether or not the transactions
contemplated hereby are consummated, the Borrower hereby agrees, on demand, to
pay or reimburse the Agent, the Documentation Agent and each of the Lenders
for: (a) all reasonable out-of-pocket costs and expenses of the Agent and the
Documentation Agent in connection with the preparation, negotiation, execution,
administration and delivery of this Agreement and the other Loan Documents, and
any and all amendments, modifications, renewals, extensions and supplements
thereof and thereto, and the syndication of the Loans, including, without
limitation, the reasonable fees and expenses of legal counsel for the Agent and
the Documentation Agent, (b) all reasonable out-of-pocket costs and expenses of
(i) the Agent in connection with any Default or any Event of Default, and (ii)
the Documentation Agent and the Lenders in connection with any Event of
Default, the exercise thereafter of any right or remedy and the enforcement of
this Agreement or any other Loan Document or any term or provision hereof or
thereof, including, without limitation, the reasonable fees and expenses of
legal counsel for any such Person, (c) subject to
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Articles 3 and 4 hereof, all out-of-pocket transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement or any of the other Loan Documents, (d)
all reasonable costs, expenses, assessments and other charges incurred by the
Agent or Documentation Agent in connection with any filing, registration,
recording or perfection of any Lien contemplated by this Agreement or any other
Loan Document, and (e) all reasonable out-of-pocket costs and expenses incurred
by the Agent and the Documentation Agent in connection with due diligence,
computer services, copying, appraisals, collateral audits, insurance,
consultants and search reports.
Section 13.2 INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE
AGENT, THE DOCUMENTATION AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS FROM, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' AND CONSULTANTS' FEES BUT SUBJECT TO THE PROVISIONS OF
SECTION 13.1) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR
INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY,
PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B)
ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY
ANY LOAN PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE USE OR PROPOSED USE OF ANY LOAN
OR LETTER OF CREDIT, (E) SUBJECT TO ARTICLES 3 AND 4 HEREOF, ANY AND ALL TAXES,
LEVIES, DEDUCTIONS AND CHARGES IMPOSED ON THE AGENT, THE ISSUING BANK OR ANY
LENDER IN RESPECT OF ANY LOAN OR LETTER OF CREDIT, (F) THE PRESENCE, RELEASE,
THREATENED RELEASE, DISPOSAL, REMOVAL OR CLEANUP OF ANY HAZARDOUS MATERIAL
LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF THE PROPERTIES OF ANY LOAN PARTY,
EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE OR CLAIM IS DIRECTLY ATTRIBUTABLE TO
(i) AN INTENTIONAL AND AFFIRMATIVE ACT BY ANY PERSON TO BE INDEMNIFIED THAT
CONSTITUTES NEGLIGENCE OR OTHER MISCONDUCT OF SUCH PERSON, OR (ii) ANY ACTION
OR INACTION OF ANY PERSON TO BE INDEMNIFIED SUBSEQUENT TO THE EXERCISE OF
VOTING OR OTHER OWNERSHIP RIGHTS OR THE TAKING OF ANY FORECLOSURE ACTION WITH
RESPECT TO THE CAPITAL STOCK OF SUCH LOAN PARTY THAT CONSTITUTES NEGLIGENCE OR
OTHER MISCONDUCT OF SUCH PERSON, TO THE EXTENT SUCH PERSON IS A "PERSON IN
CONTROL" UNDER ANY ENVIRONMENTAL LAW, OR (G) ANY INVESTIGATION, LITIGATION OR
OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING
ANY OF THE FOREGOING TO THE EXTENT ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY
PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS
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THE EXPRESS INTENTION OF THE PARTIES HERETO THAT (EXCEPT AS PROVIDED IN
SUBCLAUSE (F) ABOVE) EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION 13.2
SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RESULTING
FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. THE OBLIGATIONS OF
THE BORROWER UNDER THIS SECTION 13.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS.
Section 13.3 Limitation of Liability. None of the Agent, the
Documentation Agent, any Lender or any Affiliate, officer, director, employee,
attorney or agent thereof shall be liable for any error of judgment or act done
in good faith, or be otherwise liable or responsible under any circumstances
whatsoever (including such Person's negligence, except as contemplated by
Section 13.2(F)), except for such Person's gross negligence, willful
misconduct, intentional fraud or violation of the law. None of the Agent, the
Documentation Agent, any Lender or any Affiliate, officer, director, employee,
attorney or agent thereof shall have any liability with respect to, and the
Borrower hereby waives, releases and agrees not to sue any of them upon, any
claim for any special, incidental or consequential damages suffered or incurred
by the Borrower or any other Loan Party in connection with, arising out of or
in any way related to this Agreement or any of the other Loan Documents, or any
of the transactions contemplated by this Agreement or any of the other Loan
Documents. The Borrower hereby waives, releases and agrees not to sue the
Agent, the Documentation Agent or any Lender or any of their respective
Affiliates, officers, directors, employees, attorneys or agents for exemplary
or punitive damages in respect of any claim in connection with, arising out of
or in any way related to this Agreement or any of the other Loan Documents, or
any of the transactions contemplated by this Agreement or any of the other Loan
Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers and
other professional Persons and consultants retained by the Agent, the
Documentation Agent and the Lenders shall have the right to act exclusively in
the interest of the Agent, the Documentation Agent and the Lenders and shall
have no duty of disclosure, duty of loyalty, duty of care or other duty or
obligation of any type or nature whatsoever to the Borrower or any of the
Borrower's shareholders or any other Person other than the Agent, the
Documentation Agent, and the Lenders.
Section 13.5 No Fiduciary Relationship. The relationship between
the Borrower and each Lender is solely that of debtor and creditor, and neither
the Agent, the Documentation Agent nor any Lender has any fiduciary or other
special relationship with the Borrower or any other Loan Party, and no term or
condition of any of the Loan Documents shall be construed so as to deem the
relationship between the Borrower and any Lender, or any other Loan Party and
any Lender, to be other than that of debtor and creditor. No joint venture or
partnership is created by this Agreement among the Lenders or among the
Borrower or any other Loan Party and the Lenders.
Section 13.6 No Waiver; Cumulative Remedies. No failure on the
part of the Agent or any Lender to exercise and no delay in exercising, and no
course of dealing with respect to, any
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right, power or privilege under this Agreement or any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided for in this
Agreement and the other Loan Documents are cumulative and not exclusive of any
rights and remedies provided by law.
Section 13.7 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns in accordance
with this Agreement. Neither the Borrower nor any other Loan Party may assign
or transfer any of its rights or obligations under this Agreement or any other
Loan Document without the prior written consent of the Agent and all of the
Lenders. Any Lender may sell participations in all or a portion of its rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Commitment and the Revolving Credit
Loans owing to it); provided, however, that (i) such Lender's obligations under
this Agreement and the other Loan Documents (including, without limitation, its
Commitment) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the Borrower for the performance of such obligations, (iii) such
Lender shall remain the holder of its Note for all purposes of this Agreement,
(iv) the Borrower and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents, and (v) such Lender shall not sell a
participation that conveys to the participant the right to vote or give or
withhold consents under this Agreement or any other Loan Document, other than
(if and to the extent that such Lender so agrees) the right to vote upon or
consent to the following, to the extent any of the following affect the rights
of such participant (A) any increase of such Lender's Commitment (other than an
increase resulting from an assignment to or in favor of such Lender from
another Lender in accordance with this Agreement), (B) any reduction of the
principal amount of, or interest to be paid on, the Loans of such Lender, (C)
any reduction of any commitment fee or other amount payable to such Lender
under any Loan Document if and to the extent that such reduction would decrease
the fee or other amount payable to the participant, (D) any postponement of any
date for the payment of any amount payable in respect of the Loans of such
Lender, (E) any release of a material portion of the Collateral from the Liens
created by the Security Documents and not otherwise expressly authorized by the
Loan Documents, and (F) any release of any Loan Party from liability under the
Loan Documents other than as expressly authorized by the Loan Documents.
(b) The Borrower and each of the Lenders agree that any Lender
(the "Assigning Lender") may at any time assign to one or more Eligible
Assignees all, or a proportionate part of all, of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Commitment, Loans and Letters of Credit) (each an "Assignee");
provided, however, that (i) except with respect to a Lender's assignment to any
of its bank Affiliates or to another Lender, the Borrower has consented to such
assignment, such consent shall not be unreasonably withheld, (ii) each such
assignment may be of a varying percentage of the Assigning Lender's rights and
obligations under this Agreement and the other Loan Documents and may
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relate to some but not all of such rights and/or obligations, (iii) except in
the case of an assignment of all of a Lender's rights and obligations under
this Agreement and the other Loan Documents, the amount of the Commitment and
Loans of the Assigning Lender being assigned pursuant to each assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment), shall in no event be less than the lesser of (A) an aggregate
amount equal to $5,000,000 (calculated based upon the sum of the Revolving
Credit Loans Commitment assigned (or, if such Commitment has terminated or
expired, the aggregate outstanding principal amount of the Revolving Credit
Loans and the Letter of Credit Liabilities assigned), or (B) an aggregate
amount equal to five percent (5%) of the sum of the aggregate outstanding
Revolving Credit Loans Commitments (or, if such Commitments have terminated or
expired, the aggregate outstanding principal amount of the Revolving Credit
Loans and the Letter of Credit Liabilities), and (iv) the parties to each such
assignment shall execute and deliver to the Agent for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance,
together with the Note subject to such assignment, and the Assigning Lender
and/or the Assignee shall pay the Agent a processing and recordation fee of
$2,500. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, or, if so specified in such Assignment and Acceptance, the date of
acceptance thereof by the Agent, (1) the Assignee thereunder shall be a party
hereto as a "Lender" and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and under the Loan Documents, and
(2) the Assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights, from and after the effective date of such
Assignment and Acceptance, and be released from its obligations under this
Agreement and the other Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of a Lender's rights and
obligations under the Loan Documents, such Lender shall cease to be a party
thereto, provided that such Lender's rights under Article 4, Section 13.1 and
Section 13.2 accrued through the date of assignment shall continue).
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any other instrument
or document furnished pursuant thereto; (ii) such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of its obligations under the Loan Documents; (iii) such Assignee
confirms that it has received a copy of the other Loan Documents, together with
copies of the financial statements referred to in Section 7.2 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
Assignee will, independently and without reliance upon the Agent or such
Assigning Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own
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credit decisions in taking or not taking action under this Agreement and the
other Loan Documents; (v) such Assignee confirms that it is an Eligible
Assignee; (vi) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and exercise such powers under the Loan Documents
as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; and (vii) such Assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender.
(d) The Agent shall maintain on behalf of the Lenders at its
Principal Office 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 Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes under the Loan
Documents. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice. Upon Borrower's request therefor, from time to time, Agent will
provide Borrower with a list of the Lenders who are then Loan Parties as set
forth in the Register.
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Note subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt written
notice thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its expense, shall execute and deliver to the
Agent in exchange for each surrendered Note evidencing particular Loans, a new
Note evidencing such Loans payable to the order of such Eligible Assignee in an
amount equal to such Loans assigned to it and, if the Assigning Lender has
retained any Loans, a new Note evidencing such Loans payable to the order of
the Assigning Lender in the amount of such Loans retained by it (each such
promissory note shall constitute a "Note" for purposes of the Loan Documents).
Such new Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit C
hereto.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.7, disclose to the Assignee or participant or proposed Assignee or
participant any information relating to the Borrower or any of its Subsidiaries
furnished to such Lender by or on behalf of the Borrower or any of its
respective Subsidiaries; provided that each such actual or proposed Assignee or
participant shall agree to be bound by the provisions of Section 13.18.
Section 13.8 Survival. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the Agent or any
Lender or any closing shall affect the representations and warranties or the
right of the Agent or
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any Lender to rely upon them. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the obligations of the Borrower under
Article 4 and Sections 13.1 and 13.2 shall survive repayment of the Loans and
Reimbursement Obligations and termination of the Commitments.
Section 13.9 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND
THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES HERETO.
Section 13.10 Amendments. No amendment or waiver of any provision
of this Agreement, the Notes or any other Loan Document, nor any consent to any
departure therefrom, shall in any event be effective unless the same shall be
agreed or consented to in writing by the Required Lenders and each Loan Party
which is a party thereto, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, that no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders and the Borrower, do any of the following: (a)
increase the Commitments of the Lenders or subject the Lenders to any
additional obligations; (b) reduce the principal of, or interest on, the Loans,
the Reimbursement Obligations or any fees or other amounts payable hereunder to
the Lenders; (c) postpone any scheduled date fixed for any payment (including,
without limitation, any mandatory prepayment) of principal of, or interest on,
the Loans, the Reimbursement Obligations or any fees or other amounts payable
hereunder to the Lenders ; (d) change the Commitment Percentages or the
aggregate unpaid principal amount of the Loans or the number or interests of
the Lenders which shall be required for the Lenders or any of them to take any
action under this Agreement; (e) change any provision contained in Section 3.2,
Section 9.15 or this Section 13.10 or modify the definition of "Required
Lenders" contained in Section 1.1; or (f) except as expressly authorized in
Section 5.4 of this Agreement, release any Collateral from any of the Liens
created by the Security Documents or release any Guaranty of all or any portion
of the Obligations; and provided, further, however, that, except in the case of
the automatic acceleration of maturity of the Loans and the automatic
termination of the Commitments pursuant to Section 11.2 as a result of the
occurrence of an Event of Default under Section 11.1(e) or Section 11.1(f),
after any acceleration of the maturity of the Loans by the Agent pursuant to
Section 11.2(a) or any termination of the Commitments by the Agent pursuant to
Section 11.2(b) without the consent of the Required Lenders, the acceleration
of the maturity of the Loans may be rescinded and the Commitments may be
reinstated with the prior written consent of (i) all of the Lenders where the
acceleration of the maturity of the Loans resulted from an Event of Default
under Section 11.1(a), and (ii) the Required Lenders in all other
circumstances. Notwithstanding anything to the contrary contained in this
Section 13.10, no amendment, waiver or consent shall be made with respect to
Article 12 hereof without the prior written consent of the Agent.
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Section 13.11 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate nor shall the amount of
interest contracted for, charged, received, taken, collected, reserved or
applied exceed the maximum amount permitted by applicable law. If at any time
the interest rate (the "Contract Rate") for any Obligation shall exceed the
Maximum Rate, thereby causing the interest accruing on such Obligation to be
limited to the Maximum Rate, then, to the extent permitted by law, any
subsequent reduction in the Contract Rate for such Obligation shall not reduce
the rate of interest on such Obligation below the Maximum Rate until the
aggregate amount of interest accrued on such Obligation equals the aggregate
amount of interest which would have accrued on such Obligation if the Contract
Rate for such Obligation had at all times been in effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions of this
Agreement or the other Loan Documents shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Maximum
Rate; and neither the Agent, the Documentation Agent, the Managing Agent, the
Arranger, the Issuing Bank, any Co-Agent nor any Lender nor any other Person
shall ever charge, receive, take, collect, reserve or apply, as interest on the
Obligations, any amount in excess of the Maximum Rate or the maximum amount
permitted by applicable law or any unearned interest in violation of applicable
law. The parties hereto agree that any interest, charge, fee, expense or other
obligation provided for in this Agreement or in the other Loan Documents which
constitutes interest under applicable law shall be, ipso facto and under any
and all circumstances, limited or reduced to an amount equal to the lesser of
(i) the amount of such interest, charge, fee, expense or other obligation that
would be payable in the absence of this Section 13.11(b) or (ii) an amount,
which when added to all other interest payable under this Agreement and the
other Loan Documents, equals the Maximum Rate and in no event exceeds the
maximum amount permitted by applicable law. If, notwithstanding the foregoing,
the Agent, the Documentation Agent, the Managing Agent, the Arranger, the
Issuing Bank or any Lender ever contracts for, charges, receives, takes,
collects, reserves or applies as interest any amount in excess of the Maximum
Rate, such amount which would be deemed excessive interest shall be deemed a
partial payment or prepayment of principal of the Obligations and treated
hereunder as such; and if the Obligations, or applicable portions thereof, are
paid in full, any remaining excess shall promptly be paid to the Borrower. In
determining whether the interest paid or payable, under any specific
contingency, exceeds the Maximum Rate, the Borrower, the Agent, the
Documentation Agent, the Managing Agent, the Arranger, the Issuing Bank, any
Co-Agent and the Lenders shall, to the maximum extent permitted by applicable
law, (i) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) amortize, prorate, allocate and spread in equal or unequal
parts the total amount of interest throughout the entire contemplated term of
the Obligations, or applicable portions thereof, so that the interest rate does
not exceed the Maximum Rate at any time during the term of the Obligations;
provided that, if the unpaid principal balance is paid and performed in full
prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate to
the maximum extent permitted by applicable law, the Agent, the Documentation
Agent, the Managing
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Agent, the Arranger, the Issuing Bank, each Co-Agent and/or the Lenders, as
appropriate, shall refund to the Borrower the amount of such excess and, in
such event, the Agent, the Documentation Agent, the Managing Agent, the
Arranger, the Issuing Bank, each Co-Agent, and the Lenders shall not be subject
to any penalties provided by any laws for contracting for, charging, receiving,
taking, collecting, reserving or applying interest in excess of the Maximum
Rate.
(c) Pursuant to Article 15.10(b) of Chapter 15, Subtitle 79,
Revised Civil Statutes of Texas 1925, as amended, the Borrower agrees that such
Chapter 15 (which regulates certain revolving credit loan accounts and
revolving tri-party accounts) shall not govern or in any manner apply to the
Obligations.
Section 13.12 Notices. All notices and other communications
provided for or in connection with this Agreement and the other Loan Documents
to which the Borrower is a party shall be given or made by telecopy or in
writing and telecopied, mailed by certified mail return receipt requested or
delivered to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof (or, with respect to a Lender that
becomes a party to this Agreement pursuant to an assignment made in accordance
with Section 13.7, in the Assignment and Acceptance executed by it); or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party given in accordance with this Section 13.12.
Notices by Borrower under this Agreement may be given to Agent on behalf of all
Lenders at Agent's then most current address specified in accordance herewith.
Except as otherwise provided in this Agreement, all such communications shall
be deemed to have been duly given when transmitted by telecopy or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid; provided, however, that notices with respect to
Borrowings to the Agent shall be deemed given when received by the Agent.
Section 13.13 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE
OF PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND APPLICABLE LAWS OF THE
U.S. THE BORROWER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE U.S.
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS AND OF ANY TEXAS STATE COURT
SITTING IN HOUSTON, TEXAS, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER IRREVOCABLY CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING BY CERTIFIED MAIL ADDRESSED TO THE CHIEF FINANCIAL OFFICER OR GENERAL
COUNSEL OF THE BORROWER OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS
ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO. THE BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
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WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM.
Section 13.14 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 13.15 Severability. Any provision of this Agreement held
by a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Agreement and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 13.16 Headings. The headings, captions and arrangements
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 13.17 Construction. Each of the Borrower, the Agent, the
Documentation Agent, the Managing Agent, the Issuing Bank and the Arranger and
each Lender acknowledges that it has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and
the other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Section 13.18 Confidentiality. Each of the Agent, the
Documentation Agent, the Managing Agent and each Lender (each a "Recipient")
agrees to exercise its reasonable efforts to keep any non-public information
delivered or made available by any Loan Party to it confidential from anyone
other than Persons employed by such Recipient who are or are expected to become
engaged in evaluating, approving, structuring or administering the Loans and
who shall be advised of and bound by the provisions of this Section 13.18;
provided that nothing herein shall prevent any Recipient from disclosing such
information (a) to any other Recipient, (b)upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Recipient, (d) which has been
publicly disclosed by a Person other than a Recipient, (e) in connection with
any litigation to which such Recipient or its Affiliates may be a party, (f) to
the extent reasonably required in connection with the exercise of any remedy
under the Loan Documents, (g) to such Recipient's legal counsel, independent
auditors and such Recipient's Affiliates, provided that each such Person agrees
to be bound by the provisions of this Section 13.18; and (h) to any actual or
proposed participant or Assignee of all or any part of such Recipient's rights
hereunder, so long as such actual or proposed participant or Assignee agrees to
be bound by the provisions of this Section 13.18; provided, however, that to
the extent practicable and unless otherwise prohibited by any Governmental
Requirement, any Recipient disclosing any non-public information pursuant to
clauses (b) or (e) shall endeavor in good faith to give the Borrower prior
written notice of such disclosure.
Section 13.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN
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ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT, THE
DOCUMENTATION AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION OR
ENFORCEMENT THEREOF.
Section 13.20 Approvals and Consent. In any instance under this
Agreement or the other Loan Documents where the approval, consent or exercise
of judgment of the Agent or any Lender is requested or required, no approval or
consent of the Agent or any Lender shall be effective unless the same shall be
in writing and the same shall be effective only in the specific instance and
for the specific purpose for which given.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
--------
PARACELSUS HEALTHCARE CORPORATION
By: /s/ DEBORAH H. FRANKOVICH
----------------------------------------
Deborah H. Frankovich
Vice President and Treasurer
Address for Notices:
-------------------
515 West Greens Road, Suite 800
Houston, Texas 77067
Telephone No.: 713-873-6623
Telecopy No.: 713-873-6689
Attention: James G. VanDevender
Executive Vice President and
Chief Financial Officer
and
Robert C. Joyner
Senior Vice President, General
Counsel and Secretary
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Address: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
Agency Management Services
555 South Flower Street, 11th Floor
Los Angeles, California 90071 By: /s/ WYATT R. RITCHIE
Attention: Ruth Edwards ---------------------------------
Telephone: (213) 228-2678 Name: WYATT R. RITCHIE
Telecopy: (213) 228-2299 -------------------------------
Title: Managing Director
------------------------------
Address: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender and as
Credit Products - Healthcare Services the Issuing Bank
555 South Flower Street, 11th Floor
Los Angeles, California 90071
Attention: Ruth Edwards By: /s/ WYATT R. RITCHIE
Telephone: (213) 228-2678 ---------------------------------
Telecopy: (213) 228-2756 Name: WYATT R. RITCHIE
-------------------------------
Title: Managing Director
------------------------------
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LENDERS:
-------
REVOLVING CREDIT LOANS BANK OF AMERICA NATIONAL TRUST AND
- ---------------------- SAVINGS ASSOCIATION, as a Lender and as the
COMMITMENT: Issuing Bank
- -----------
$62,000,000 By: /s/ WYATT R. RITCHIE
----------------------------------------
Name: WYATT R. RITCHIE
--------------------------------------
Title: Managing Director
-------------------------------------
Address for Notices:
-------------------
Agency Management Services
555 South Flower Street, 11th Floor
Los Angeles, California 90071
Telephone: 213-228-2678
Telecopy: 213-228-2756
Attention: Ruth Edwards
Vice President
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REVOLVING CREDIT LOANS BANQUE PARIBAS, as Documentation Agent
- ---------------------- and as a Lender
COMMITMENT:
- ----------- By: /s/ GLENN E. MEALEY
----------------------------------
$50,000,000 Glenn E. Mealey
Vice President
By: /s/ TIMOTHY A. DONNON
----------------------------------
Name: Timothy A. Donnon
--------------------------------
Title: Regional General Manager
-------------------------------
Address for Notices:
-------------------
Banque Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telephone No.: 713-659-4811
Telecopy No.: 713-659-3832
Attention: Corporate Banking Group
Lending Office for Base Rate Loans:
----------------------------------
Banque Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attention: Leah Hughes
Operations Officer
Lending Office for Eurodollar Loans:
-----------------------------------
Banque Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attention: Leah Hughes
Operations Officer
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REVOLVING CREDIT LOAN NATIONSBANK OF TEXAS, N.A., as Managing
- --------------------- Agent and as a Lender
COMMITMENT:
- -----------
By: /s/ ELIZABETH GOULD, V.P.
$42,750,000 ------------------------------------
Elizabeth Gould
Vice President
Address for Notices:
-------------------
444 South Flower Street, Suite 4100
Los Angeles, California 90071-2901
Telephone: 213-236-4912
Telecopy: 213-624-5815
Attention: Brad DeSpain
Vice President
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REVOLVING CREDIT LOAN AMSOUTH OF ALABAMA
- ---------------------
COMMITMENT:
- -----------
By:/s/ W. PAGE BARNES
$17,750,000 ----------------------------------------
Name: W. Page Barnes
Title: Senior Vice President-Manager
Address for Notices:
-------------------
1900 5th Avenue North
7th Floor, M-Sonat Tower
Birmingham, Alabama 35203
Telephone: 205-326-4081
Telecopy: 205-326-4790
Attention:
--------------------------------
--------------------------------
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REVOLVING CREDIT LOAN BANK OF NEW YORK
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ LISA Y. BROWN
--------------------------------------
Lisa Y. Brown
Vice President
Address for Notices:
-------------------
10990 Wilshire Boulevard, Suite 1125
Los Angeles, California 90024
Telephone: 310-996-8656
Telecopy: 310-996-8667
Attention: Lisa Y. Brown
Vice President
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REVOLVING CREDIT LOAN THE BANK OF NOVA SCOTIA
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ DANA MALONEY
--------------------------------------
Dana Maloney
Relationship Manager
Address for Notices:
-------------------
600 Peachtree Street, N.E., Suite 2700
Atlanta, Georgia 30308-2214
Telephone: 404-877-1524
Telecopy: 404-888-8998
Attention: Dana Maloney
Relationship Manager
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REVOLVING CREDIT LOAN CREDIT LYONNAIS NEW YORK BRANCH,
- ---------------------
COMMITMENT: As Co-Agent and as a Lender
- -----------
$25,000,000
By: /s/ F. TAVANGAR
--------------------------------------
Farboud Tavangar
Vice President
Address for Notices:
-------------------
1301 Avenue of the Americas
New York, New York 10019-6022
Telephone: 212-261-7685
Telecopy: 212-973-2738
Attention: Farboud Tavangar
Vice President
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REVOLVING CREDIT LOAN CORESTATES BANK, N.A.
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ GEOFFREY C. SMITH
--------------------------------------
Geoffrey C. Smith
Commercial Officer
Address for Notices:
-------------------
1399 Chestnut Street, FC1-8-3-22
Philadelphia, Pennsylvania 19101-7618
Telephone: 215-786-4363
Telecopy: 215-973-2738
Attention: Geoffrey C. Smith
Commercial Officer
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REVOLVING CREDIT LOAN FUJI BANK LIMITED
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ DAVID KELLEY
------------------------------------------
David Kelley
Senior Vice President
Address for Notices:
-------------------
One Houston Center, Suite 4100
1221 McKinney Street
Houston, Texas 77010
Telephone: 713-650-4844
Telecopy: 713-759-0048
Attention: David Kelley
Senior Vice President
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REVOLVING CREDIT LOAN FLEET NATIONAL BANK
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ VIRGINIA C. STOLZENTHALER
------------------------------------------
Virginia C. Stolzenthaler
Vice President
Address for Notices:
-------------------
75 State Street, Mail Stop: MABOFO4A
Boston, Massachusetts 02109
Telephone: 617-346-1647
Telecopy: 617-346-1634
Attention: Virginia C. Stolzenthaler
Vice President
S-12
111
REVOLVING CREDIT LOAN KEY BANK OF UTAH
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ MICHAEL B. HOBBS
-----------------------------------------
Michael B. Hobbs
Vice President
Address for Notices:
-------------------
50 South Main, Suite 2006
Salt Lake City, Utah 84130
Telephone: 801-535-1047
Telecopy: 801-535-1120
Attention: Michael B. Hobbs
Vice President
S-13
112
REVOLVING CREDIT LOAN THE LONG-TERM CREDIT
- ---------------------
COMMITMENT: BANK OF JAPAN, LTD.
- -----------
$17,750,000
By: /s/ T. MORGAN EDWARDS. II
------------------------------------------
Morgan Edwards
Deputy General Manager
Address for Notices:
-------------------
Los Angeles Agency
350 South Grand Avenue, Suite 3000
Los Angeles, California 90071
Telephone: 213-689-6355
Telecopy: 213-622-6908
Attention: Takaomi Tomioka
Vice President
S-14
113
REVOLVING CREDIT LOAN MELLON BANK, N.A.
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ LINDA L. DASH AVP
------------------------------------------
Linda L. Dash
Assistant Vice President
Address for Notices:
-------------------
2 Mellon Bank Center, Room 152-0270
Pittsburgh, Pennsylvania 15259-0001
Telephone: 412-234-2780
Telecopy: 412-234-9010
Attention: Linda L. Dash
Assistant Vice President
S-15
114
REVOLVING CREDIT LOAN PNC BANK, N.A.
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ KAREN M. GEORGE
------------------------------------------
Karen M. George
Assistant Vice President
Address for Notices:
-------------------
National Healthcare Group
1 PNC Plaza, 5th Floor, P1-POPP-5-3
249 5th Avenue
Pittsburgh, Pennsylvania 15222-2707
Telephone: 412-762-6552
Telecopy: 412-762-2784
Attention: Karen M. George
Assistant Vice President
S-16
115
REVOLVING CREDIT LOAN TORONTO-DOMINION (TEXAS), INCORPORATED
- ---------------------
COMMITMENT: As Co-Agent and as a Lender
- -----------
$25,000,000
By: /s/ FREDERIC B. HAWLEY
-----------------------------------
Frederic B. Hawley
Vice President
Address for Notices:
-------------------
909 Fannin, Suite 1700
Houston, Texas 77010
Telephone: 713-653-8281
Telecopy: 713-951-9921
Attention: Frederic B. Hawley
Vice President
S-17
116
REVOLVING CREDIT LOAN UNION BANK OF CALIFORNIA, N.A.
- ---------------------
COMMITMENT:
- -----------
$17,750,000
By: /s/ LYNN E. VINE
------------------------------------------
Lynn E. Vine
Vice President
Address for Notices:
-------------------
Corporate Banking Division
550 South Hope Street, 3rd Floor
Los Angeles, California 90071
Telephone: 213-243-3509
Telecopy: 213-243-3552
Attention: Lynn E. Vine
Vice President
S-18