Exhibit 4.3
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 30 1999,
among
EVEREST HEALTHCARE SERVICES CORPORATION,
HARRIS TRUST AND SAVINGS BANK,
individually and as Agent
and
the Lenders
which are or become parties hereto
_____________________________________________________________________________
_____________________________________________________________________________
TABLE OF CONTENTS
Page
Section 1. The Credits
Section 1.1. Revolving Credit
Section 1.2. Revolving Loans
Section 1.3. Letters of Credit
(a) General Terms
(b) Applications
(c) The Reimbursement Obligation
(d) The Participating Interests
(e) Indemnification
Section 1.4. Acquisition Financing Credit
Section 1.5. Supplemental Revolving Credit
Section 1.6. Y2K Revolving Credit
Section 1.7. Manner of Borrowing Loans
(a) Generally
(b) Reimbursement Obligation
(c) Agent Reliance on Bank Funding
(d) Reliance
Section 1.8. Commitment Conversion Option.
Section 2. Interest
Section 2.1. Options
Section 2.2. Base Rate Portion
Section 2.3. LIBOR Portions
Section 2.4. Manner of Rate Selection
Section 2.5. Change of Law
Section 2.6. Unavailability of Deposits or Inability to Ascertain the
Adjusted LIBOR Rate
Section 2.7. Taxes and Increased Costs
Section 2.8. Funding Indemnity
Section 2.9. Lending Branch
Section 2.10. Discretion of Lenders as to Manner of Funding
Section 2.11. Computation of Interest
Section 2.12. Capital Adequacy
Section 3. Fees, Payments, Reductions, Applications and Notations
Section 3.1. Revolving Credit Commitment Fee
Section 3.2. Acquisition Financing Commitment Fee
Section 3.3. Letter of Credit Fees
Section 3.4. Audit Fees
Section 3.5. Agent's Fee
Section 3.6. Voluntary Prepayments
Section 3.7. Mandatory Prepayments
Section 3.8. Terminations
Section 3.9. Place and Application
Section 3.10. Notations and Requests
Section 4. The Collateral and Guaranties
Section 4.1. Collateral
Section 4.2. Guaranties
Section 4.3. Further Assurances
Section 4.4. Liens on AfterAcquired Real Property
Section 5. Representations and Warranties
Section 5.1. Organization and Qualification
Section 5.2. Subsidiaries
Section 5.3. Corporate Authority and Validity of Obligations
Section 5.4. Use of Proceeds; Margin Stock
Section 5.5. Financial Reports
Section 5.6. No Material Adverse Change
Section 5.7. Full Disclosure
Section 5.8. Trademarks, Franchises, and Licenses
Section 5.9. Governmental Authority and Licensing
Section 5.10. Good Title
Section 5.11. Litigation and Other Controversies
Section 5.12. Taxes
Section 5.13. Approvals
Section 5.14. Affiliate Transactions
Section 5.15. Investment Company; Public Utility Holding Company
Section 5.16. ERISA
Section 5.17. Compliance with Laws
Section 5.18. Other Agreements
Section 5.19. No Default
Section 5.20. Solvency
Section 5.21. Year 2000 Compliance
Section 6. Conditions Precedent
Section 6.1. All Advances
Section 6.2. Initial Advance
Section 6.3. Y2K Revolving Credit Advances
Section 7. Covenants
Section 7.1. Maintenance of Business
Section 7.2. Maintenance of Properties
Section 7.3. Taxes and Assessments
Section 7.4. Insurance
Section 7.5. Financial Reports
Section 7.6. Inspection
Section 7.7. Total Funded Debt to Active Patients
Section 7.8. Cash Flow Leverage Ratio
Section 7.9. Net Worth
Section 7.10. Fixed Charge Coverage Ratio
Section 7.11. Subordinated Indenture Fixed Charge Coverage Ratio
Section 7.12. Indebtedness for Borrowed Money
Section 7.13. Liens
Section 7.14. Investments, Acquisitions, Loans, Advances and Guaranties
Section 7.15. Mergers, Consolidations and Sales
Section 7.16. Maintenance of Subsidiaries
Section 7.17. Dividends and Certain Other Restricted Payments
Section 7.18. ERISA
Section 7.19. Compliance with Laws
Section 7.20. Burdensome Contracts with Affiliates
Section 7.21. No Changes in Fiscal Year
Section 7.22. Formation of Subsidiaries
Section 7.23. Change in the Nature of Business
Section 7.24. Subordinated Debt
Section 7.25. Use of Loan Proceeds
Section 7.26. Assets and Earnings Concentrations
Section 7.27. No Restrictions on Subsidiary Distributions
Section 7.28. Year 2000 Assessment
Section 7.29. Interest Rate Protection
Section 8. Events of Default and Remedies
Section 8.1. Events of Default
Section 8.2. Non-Bankruptcy Remedies
Section 8.3. Bankruptcy Remedies
Section 8.4. Collateral for Undrawn Letters of Credit
Section 9. Definitions; Interpretations
Section 9.1. Definitions
Section 9.2. Interpretation
Section 10. The Agent
Section 10.1. Appointment and Authorization
Section 10.2. Rights as a Lender
Section 10.3. Standard of Care
Section 10.4. Costs and Expenses
Section 10.5. Indemnity
Section 10.6. Pledging Liability
Section 11. Miscellaneous
Section 11.1. Withholding Taxes
(a) Payments Free of Withholding
(b) U.S. Withholding Tax Exemptions
(c) Inability of Lender to Submit Forms
Section 11.2. Non-Business Days
Section 11.3. No Waiver, Cumulative Remedies
Section 11.4. Waivers, Modifications and Amendments
Section 11.5. Costs and Expenses
Section 11.6. Documentary Taxes
Section 11.7. Survival of Representations
Section 11.8. Construction
Section 11.9. Notices
Section 11.10. Lender's Obligations Several
Section 11.11. Headings
Section 11.12. Severability of Provisions
Section 11.13. Counterparts
Section 11.14. Binding Nature and Governing Law
Section 11.15. Entire Understanding
Section 11.16. Participations
Section 11.17. Assignment Agreements
Section 11.18. Confidentiality
Section 11.19. Set-off
Section 11.20. Sharing of Set-Off
Section 11.21. Submission to Jurisdiction; Waiver of Jury Trial
Signature Page
Exhibit A - Revolving Credit Note
Exhibit B - Notice Of Payment Request
EXHIBIT C - Acquisition Term Financing Note
EXHIBIT D - Supplemental Revolving Credit Note
EXHIBIT E - Y2K Revolving Credit Note
EXHIBIT F - Borrowing Base Certificate
EXHIBIT G - Compliance Certificate
EXHIBIT H - Opinion of Counsel
EXHIBIT I - Assignment and Acceptance
SCHEDULE 5.2 - Subsidiaries
SCHEDULE 5.12 - Tax Matters
SCHEDULE 5.14 - Affiliate Transactions
AMENDED AND RESTATED CREDIT AGREEMENT
Harris Trust and Savings Bank
Chicago, Illinois
and the other Lenders from time to time party hereto
Ladies and Gentlemen:
The undersigned, Everest Healthcare Services Corporation, a Delaware
corporation (the "Company"), refers to that certain Credit Agreement dated as of
April 16, 1996, as amended and thereafter restated by that certain Amended and
Restated Credit Agreement dated as of May 15, 1997, as amended and thereafter
restated by that certain Second Amended and Restated Credit Agreement dated as
of May 18, 1998, as amended and currently in effect among the Company, Harris
Trust and Savings Bank, as agent, and the lenders party thereto (the "Original
Credit Agreement"). The Company hereby requests that the aggregate commitments
available under the Original Credit Agreement be increased, that certain
additional amendments be made to the Original Credit Agreement and, for the sake
of clarity and convenience, that the Original Credit Agreement be restated in
its entirety as so amended. This Amended and Restated Credit Agreement amends
and replaces in its entirety the Original Credit Agreement, and from the
Effective Date all references made to the Original Credit Agreement in any Loan
Document or in any other instrument or document shall, without more, be deemed
to refer to this Amended and Restated Credit Agreement. This Amended and
Restated Credit Agreement shall become effective as of June 30, 1999 (the
"Effective Date"), and supersedes all provisions of the Original Credit
Agreement as of such date, upon the execution of this Amended and Restated
Credit Agreement by each of the parties hereto and the fulfillment of the
conditions precedent contained in Section 6.2 hereof. All capitalized terms used
herein without definition shall have the same meanings herein as such terms are
defined in Section 9.1 hereof.
SECTION 1. THE CREDITS.
Section 1.1. Revolving Credit. Subject to the terms and conditions
hereof, each Lender, by its acceptance hereof, severally agrees to extend a
revolving credit (the "Revolving Credit") to the Company in the aggregate amount
of such Lender's commitment to extend the Revolving Credit as set forth on the
applicable signature page hereof or pursuant to Section 11.17 hereof (its
"Revolving Credit Commitment" and cumulatively for all Lenders the "Revolving
Credit Commitments") (subject to any reductions thereof pursuant to the terms
hereof) prior to the Termination Date. The Revolving Credit, subject to all of
the terms and conditions hereof, may be utilized by the Company in the form of
Revolving Loans and Letters of Credit, all as more fully hereinafter set forth;
provided, however, that the aggregate principal amount of the Revolving Loans
and L/C Obligations outstanding at any one time shall not at any time exceed the
lesser of (i) the Revolving Credit Commitments then in effect and (ii) the
Borrowing Base as then determined and computed. During the period from and
including the date thereof to but not including the Termination Date, the
Company may use the Revolving Credit Commitments by borrowing, repaying and
reborrowing Revolving Loans in whole or in part and/or by having the Agent issue
Letters of Credit, having such Letters of Credit expire or otherwise terminate
without having been drawn upon or, if drawn upon, reimbursing the Agent for each
such drawing, and having the Agent issue new Letters of Credit, all in
accordance with the terms and conditions of this Agreement. For all purposes of
this Agreement, where a determination of the unused or available amount of the
Revolving Credit Commitments is
necessary, the Revolving Loans and L/C Obligations shall all be deemed to
utilize the Revolving Credit Commitments. The obligations of the Lenders
hereunder are several and not joint, and no Lender shall under any circumstances
be obligated to extend credit hereunder in excess of its Revolving Credit
Commitment.
Section 1.2. Revolving Loans. Subject to the terms and conditions
hereof, the Revolving Credit may be availed of in the form of loans
(individually a "Revolving Loan" and collectively the "Revolving Loans"). Each
Borrowing of Revolving Loans shall be made ratably by the Lenders in accordance
with their Percentages. Each Borrowing of Revolving Loans shall be in an amount
of $250,000 or such greater amount which is an integral multiple of $50,000;
provided, however, that (i) a Borrowing made to repay a Reimbursement Obligation
may be made in the amount thereof and (ii) a Borrowing of Revolving Loans, or
any part thereof, which bears interest with reference to the Adjusted LIBOR Rate
shall be in such greater amount as is required by Section 2 hereof. All
Revolving Loans made by a Lender shall be evidenced by a single Revolving Credit
Note of the Company (individually a "Revolving Credit Note" and collectively the
"Revolving Credit Notes", which shall include the Revolving Credit Notes issued
pursuant to Section 11.17 hereof) payable to the order of such Lender in the
amount of its Revolving Credit Commitment, each Revolving Credit Note to be in
the form (with appropriate insertions) attached hereto as Exhibit A. Each
Revolving Credit Note shall be dated the date of issuance thereof, be expressed
to bear interest as set forth in Section 2 hereof, and be expressed to mature on
the Termination Date. Without regard to the principal amount of each Revolving
Credit Note stated on its face, the actual principal amount at any time
outstanding and owing by the Company on account thereof shall be the sum of all
Revolving Loans then or theretofore made thereon less all payments of principal
actually received thereon.
Section 1.3. Letters of Credit.
(a) General Terms. Subject to the terms and conditions hereof, as part
of the Revolving Credit, the Agent shall issue standby letters of credit (each a
"Letter of Credit") for the account of the Company in U.S. Dollars in an
aggregate undrawn face amount up to the amount of the L/C Commitment. Each
Letter of Credit shall be issued by the Agent, but each Lender shall be
obligated to reimburse the Agent for such Lender's Percentage of the amount of
each draft drawn under a Letter of Credit and, accordingly, each Letter of
Credit shall be deemed to utilize the Revolving Credit Commitment of each Lender
pro rata in accordance with its Percentage thereof.
(b) Applications. At any time before the Termination Date, the Agent
shall, at the request of the Company, issue one or more Letters of Credit to or
for the account of the Company in a form satisfactory to the Agent, with
expiration dates no later than 12 months from the date of issuance (or be
cancellable not later than 12 months from the date of issuance and each
renewal), in an aggregate face amount as set forth above, upon the receipt of an
application for the relevant Letter of Credit in the form then customarily
prescribed by the Agent duly executed by the Company (each an "Application").
For purposes of this Agreement and the other Loan Documents, Harris Trust and
Savings Bank Standby Letter of Credit SPL no. 33769 issued for the account of
WSKC Dialysis Services, Inc. (f/k/a West Suburban Kidney Center, S.C.) in favor
of Bankamerica Trust & Banking Corporation (Cayman) Limited shall be deemed a
Letter of Credit issued under this Agreement, and the Company agrees that from
and after the date of this Agreement the Company shall be jointly and severally
liable with WSKC Dialysis Services, Inc. for all obligations owing to Harris
Trust and
Savings Bank with respect to such Letter of Credit, including all reimbursement
obligations arising under or relating to that certain Application and Agreement
for Irrevocable Standby Letter of Credit dated December 8, 1989, as amended,
with respect thereto (which agreement shall be deemed an Application for all
purposes of this Agreement and the other Loan Documents). On the Termination
Date, the Company shall pay to the Agent an amount equal to the aggregate
amounts undrawn on all Letters of Credit which are outstanding on that date to
be held as cash collateral for the Obligations of the Company with respect to
such Letters of Credit. Notwithstanding anything contained in any Application to
the contrary, (i) the obligation of the Company to pay fees in connection with
each Letter of Credit shall be as set forth in Section 3.3 hereof and (ii)
except during the existence of an Event of Default, the Agent will not call for
the funding by the Company of any amount under a Letter of Credit, or any other
form of collateral security for the obligations of the Company in connection
with such Letter of Credit, before being presented with a drawing thereunder
other than the collateral security contemplated by this Agreement and the
Collateral Documents. The Agent will promptly notify the Lenders of each
issuance by the Agent of a Letter of Credit. If the Agent issues any Letter of
Credit with an expiration date that is automatically extended unless the Agent
gives notice that the expiration date will not so extend beyond its then
scheduled expiration date, the Agent will give such notice of non-renewal before
the time necessary to prevent such automatic extension if, before such required
notice date, (i) the expiration date of such Letter of Credit if so extended
would be after the Termination Date, (ii) the Revolving Credit Commitments have
been terminated or (iii) a Default or an Event of Default has occurred and is
continuing and the Required Lenders have given the Agent instructions not to so
permit the extension of the expiration date of such Letter of Credit. The Agent
agrees to issue amendments to the Letter(s) of Credit increasing the amount, or
extending the expiration date, thereof at the request of the Company subject to
the conditions of Section 6 and the other terms of this Section 1.3. Without
limiting the generality of the foregoing, the Agent will not issue, amend or
extend the expiration date of any Letter of Credit if the Required Lenders
notify the Agent of any failure to satisfy or otherwise comply with the
conditions and terms of Section 6 and of this Section 1.3 and direct the Agent
not to take such action.
(c) The Reimbursement Obligation. Subject to Section 1.3(b) hereof, the
obligation of the Company to reimburse the Agent for all drawings under a Letter
of Credit (a "Reimbursement Obligation") shall be governed by the Application
related to such Letter of Credit, except that (i) reimbursement of each drawing
shall be made in immediately available funds at the Agent's principal office in
Chicago, Illinois by no later than 12:00 noon Chicago time on the date when such
drawing is paid if the Company has been informed of such drawing by the Agent on
or before 11:30 a.m. Chicago time on the date when such drawing is paid or, if
notice of such drawing is given to Company after 11:30 a.m. Chicago time on the
date when such drawn is paid, by the end of such day and (ii) the Company's
Reimbursement Obligation shall bear interest (which the Company hereby promises
to pay), whether before or after judgment, until payment in full thereof at the
rate per annum equal to 2% plus the Applicable Margin for Revolving Loans plus
the Base Rate as in effect from time to time. If the Company does not make any
such reimbursement payment on the date due and the Participating Lenders fund
their participations therein in the manner set forth in Section 1.3(d) below,
then all payments thereafter received by the Agent in discharge of any of the
relevant Reimbursement Obligations shall be distributed in accordance with
Section 1.3(d) below.
(d) The Participating Interests. Each Lender (other than the Lender then
acting as Agent in issuing Letters of Credit), by its acceptance hereof,
severally agrees to purchase from the Agent, and the Agent hereby agrees to sell
to each such Lender (a "Participating Lender"), an undivided percentage
participating interest (a "Participating Interest"), to the extent of its
Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Upon any failure by the Company to pay any
Reimbursement Obligation in respect of a Letter of Credit at the time required
on the date the related drawing is paid, as set forth in Section 1.3(c) above,
or if the Agent is required at any time to return to the Company or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit B
hereto from the Agent to such effect, if such certificate is received before
2:00 p.m. Chicago time, or not later than the following Business Day, if such
certificate is received after such time, pay to the Agent an amount equal to
such Lender's Percentage of such unpaid or recaptured Reimbursement Obligation
together with interest on such amount accrued from the date the related payment
was made by the Agent to the date of such payment by such Participating Lender
at a rate per annum equal to (i) from the date the related payment was made by
the Agent to the date 2 Business Days after payment by such Participating Lender
is due hereunder, the Federal Funds Rate for each such day and (ii) from the
date 2 Business Days after the date such payment is due from such Participating
Lender to the date such payment is made by such Participating Lender, the Base
Rate in effect for each such day. Each such Participating Lender shall
thereafter be entitled to receive its Percentage of each payment received in
respect of the relevant Reimbursement Obligation and of interest paid thereon,
with the Agent retaining its Percentage as a Lender hereunder.
The several obligations of the Participating Lenders to the Agent under
this Section 1.3 shall be absolute, irrevocable and unconditional under any and
all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Participating Lender may have or
have had against the Company, the Agent, any other Lender or any other Person
whatsoever. Without limiting the generality of the foregoing, such obligations
shall not be affected by any Default or Event of Default or by any reduction or
termination of any Revolving Credit Commitment of any Lender, and each payment
by a Participating Lender under this Section 1.3 shall be made without any
offset, abatement, withholding or reduction whatsoever. The Agent shall be
entitled to offset amounts received for the account of a Lender under this
Agreement against unpaid amounts due from such Lender to the Agent hereunder
(whether as fundings of participations, indemnities or otherwise), but shall not
be entitled to offset against amounts owed to the Agent by any Lender arising
outside this Agreement.
(e) Indemnification. The Participating Lenders shall, to the extent of
their respective Percentages, indemnify the Agent (to the extent not reimbursed
by the Company) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from the Agent's gross negligence or willful misconduct) that the Agent may
suffer or incur in connection with any Letter of Credit. The obligations of the
Participating Lenders under this Section 1.3(e) and all other parts of this
Section 1.3 shall survive termination of this Agreement, the Applications, and
all drafts and any other documents presented in connection with a drawing under
any Letter of Credit.
Section 1.4. Acquisition Financing Credit. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make on or after the date of
this Agreement one or more loans (individually an "Acquisition Financing Loan"
and collectively the "Acquisition Financing Loans") to the Company in the
aggregate amount of such Lender's commitment to make Acquisition Financing Loans
as set forth on the applicable signature page hereof or pursuant to Section
11.17 hereof (its "Acquisition Financing Commitment" and cumulatively for all
Lenders the "Acquisition Financing Commitments") (subject to increases thereof
pursuant to Section 1.8 hereof and to any reductions thereof pursuant to the
terms hereof) prior to the Acquisition Financing Termination Date. Each
Borrowing of Acquisition Financing Loans shall be made ratably by the Lenders in
accordance with their Percentages. Each Borrowing of Acquisition Financing Loans
shall be in an amount of $500,000 or such greater amount which is an integral
multiple of $50,000; provided, however, that a Borrowing of Acquisition
Financing Loans, or any part thereof, which bears interest with reference to the
Adjusted LIBOR Rate shall be in such greater amount as is required by Section 2
hereof. The principal amount of each Acquisition Financing Loan shall
permanently reduce the amount available to the Company under each Lender's
Acquisition Financing Commitment, and no amount repaid or prepaid on any
Acquisition Financing Loan may be borrowed again. The proceeds of each
Acquisition Financing Loan shall be used solely for the purposes set forth in
Section 5.4(d) hereof. The obligations of the Lenders hereunder are several and
not joint, and no Lender shall under any circumstances be obligated to extend
credit hereunder in excess of its Acquisition Financing Commitment.
(b) On June 30 of each of 2000, 2001, and 2002 (each, a "Conversion Date"),
the aggregate principal amount of Acquisition Financing Loans outstanding on
each Conversion Date shall convert into term loans (individually a "Term Loan"
and collectively the "Term Loans"). The conversion of outstanding Acquisition
Financing Loans into Term Loans on each Conversion Date shall be deemed a
Borrowing of Term Loans made ratably by the Lenders in accordance with their
Percentages of the outstanding Acquisition Financing Loans being converted. Each
Term Loan shall mature in quarterly principal installments, in an amount equal
to 1/28th of the original principal amount of the relevant Term Loan, commencing
on the date which is three calendar months after the date on which the relevant
Acquisition Financing Loans are converted into such Term Loan and continuing on
the same date of each and every third calendar month thereafter (or if no such
date exists for any one or more of such installments, then on the last day of
such third calendar month), with a final payment of both principal and interest
not sooner paid due on the Term Loan Final Maturity Date. No amount repaid or
prepaid on any Term Loan may be borrowed again.
(c) All Acquisition Financing Loans made by a Lender to the Company, and all
Term Loans created by conversion thereof pursuant to this Section 1.4, shall
initially be evidenced by a single Acquisition Financing/Term Note of the
Company (individually an "Acquisition Financing/Term Note" and collectively the
"Acquisition Financing/Term Notes", which shall include the Acquisition
Financing/Term Notes issued pursuant to Section 11.17 hereof) payable to the
order of such Lender in the amount of its Acquisition Financing Commitment, each
Acquisition Financing/Term Note to be in the form (with appropriate insertions)
attached hereto as Exhibit C. Each Acquisition Financing/Term Note shall be
dated the date of issuance thereof, be expressed to bear interest as set forth
in Section 2 hereof, and be expressed to mature on the Term Loan Final Maturity
Date. Without regard to the principal amount of each Acquisition Financing/Term
Note
stated on its face, the actual principal amount at any time outstanding and
owing by the Company on account thereof shall be the sum of all Acquisition
Financing Loans then or theretofore made thereon and all Term Loans created by
conversion thereof less all payments of principal actually received thereon.
Section 1.5. Supplemental Revolving Credit. (a) Subject to the terms and
conditions hereof, and only for so long as the Acquisition Financing Commitments
remain outstanding, each Lender, by its acceptance hereof, severally agrees to
extend a supplemental revolving credit (the "Supplemental Revolving Credit") to
the Company in the aggregate amount of such Lender's commitment to extend the
Supplemental Revolving Credit as set forth on the applicable signature page
hereof or pursuant to Section 11.17 hereof (its "Supplemental Revolving Credit
Commitment" and cumulatively for all Lenders the "Supplemental Revolving Credit
Commitments") (subject to any reductions thereof pursuant to the terms hereof)
prior to the Supplemental Revolving Credit Termination Date. The Supplemental
Revolving Credit, subject to all of the terms and conditions hereof, may be
utilized by the Company in the form of loans (individually a "Supplemental
Revolving Loan" and collectively the "Supplemental Revolving Loans"), all as
more fully hereinafter set forth; provided, however, that:
(i) the aggregate principal amount of the Supplemental
Revolving Loans outstanding at any one time shall not at any time
exceed the difference between (x) the Supplemental Revolving Credit
Commitments then in effect minus (y) the aggregate amount of loans and
advances made by the Company or any Restricted Subsidiary to, and
guarantees made by the Company or any Restricted Subsidiary in respect
of the obligations of, any Person (other than Restricted Subsidiaries)
in which the Company, directly or indirectly, holds an equity interest
in (determined in accordance with Section 7.14 hereof, but determined
exclusive of any such loans or advances financed with the proceeds of a
Supplemental Revolving Loan); and
(ii) the sum of the aggregate principal amount of the
Supplemental Revolving Loans at any one time outstanding plus the
original principal amount of all Acquisition Financing Loans made
hereunder (without regard to any conversions thereof into Term Loans or
any payments of principal on the Acquisition Financing/Term Notes)
shall not at any time exceed the difference of (i) $65,000,000 plus any
portion (up to $10,000,000) of the Revolving Credit Commitments
converted into Acquisition Financing Commitments pursuant to Section
1.8 hereof minus (ii) all amounts of the Acquisition Financing
Commitments voluntarily terminated pursuant to Section 3.8 hereof.
The proceeds of each Supplemental Revolving Loan shall be used solely for the
purposes set forth in Section 5.4(b) hereof. During the period from and
including the date thereof to but not including the Supplemental Revolving
Credit Termination Date, the Company may use the Supplemental Revolving Credit
Commitments by borrowing, repaying and reborrowing Supplemental Revolving Loans
in whole or in part, all in accordance with the terms and conditions of this
Agreement.
(b) Each Borrowing of Supplemental Revolving Loans shall be made ratably by
the Lenders in accordance with their Percentages. Each Borrowing of Supplemental
Revolving Loans shall be in an amount of $250,000 or such greater amount which
is an integral multiple of $50,000; provided, however, that a Borrowing of
Supplemental Revolving Loans, or any part thereof, which bears interest with
reference to the Adjusted LIBOR Rate shall be in such greater amount as is
required by Section 2 hereof. All Supplemental Revolving Loans made by a Lender
shall be evidenced by a single Supplemental Revolving Credit Note of the Company
(individually a "Supplemental Revolving Credit Note" and collectively the
"Supplemental Revolving Credit Notes", which shall include the Supplemental
Revolving Credit Notes issued pursuant to Section 11.17 hereof) payable to the
order of such Lender in the amount of its Supplemental Revolving Credit
Commitment, each Supplemental Revolving Credit Note to be in the form (with
appropriate insertions) attached hereto as Exhibit D. Each Supplemental
Revolving Credit Note shall be dated the date of issuance thereof, be expressed
to bear interest as set forth in Section 2 hereof, and be expressed to mature on
the Supplemental Revolving Credit Termination Date. Without regard to the
principal amount of each Supplemental Revolving Credit Note stated on its face,
the actual principal amount at any time outstanding and owing by the Company on
account thereof shall be the sum of all Supplemental Revolving Loans then or
theretofore made thereon less all payments of principal actually received
thereon. The obligations of the Lenders hereunder are several and not joint, and
no Lender shall under any circumstances be obligated to extend credit hereunder
in excess of its Supplemental Revolving Credit Commitment.
Section 1.6. Y2K Revolving Credit. (a) Subject to the terms and conditions
hereof, and commencing on January 1, 2000 (the "Y2K Commencement Date"), each
Lender, by its acceptance hereof, severally agrees to extend a revolving credit
to fund governmentrelated reimbursement interruptions associated with Year 2000
Problems of governmental entities (the "Y2K Revolving Credit") to the Company in
the aggregate amount of such Lender's commitment to extend the Y2K Revolving
Credit as set forth on the applicable signature page hereof or pursuant to
Section 11.17 hereof (its "Y2K Revolving Credit Commitment" and cumulatively for
all Lenders the "Y2K Revolving Credit Commitments") (subject to any reductions
thereof pursuant to the terms hereof) prior to the Y2K Revolving Credit
Termination Date. The Y2K Revolving Credit, subject to all of the terms and
conditions hereof, may be utilized by the Company in the form of loans
(individually a "Y2K Revolving Loan" and collectively the "Y2K Revolving
Loans"), all as more fully hereinafter set forth; provided, however, that the
aggregate principal amount of the Y2K Revolving Loans outstanding at any one
time shall not at any time exceed the lesser of (i) the Y2K Revolving Credit
Commitments then in effect and (ii) the Y2K Borrowing Base as then determined
and computed less the aggregate principal amount of all Revolving Loans and L/C
Obligations then outstanding. The proceeds of each Y2K Revolving Loan shall be
used solely for the purposes set forth in Section 5.4(e) hereof. During the
period from and including the Y2K Commencement Date to but not including the Y2K
Revolving Credit Termination Date, the Company may use the Y2K Revolving Credit
Commitments by borrowing, repaying and reborrowing Y2K Revolving Loans in whole
or in part, all in accordance with the terms and conditions of this Agreement.
The obligations of the Lenders hereunder are several and not joint, and no
Lender shall under any circumstances be obligated to extend credit hereunder in
excess of its Y2K Revolving Credit Commitment.
(b) Each Borrowing of Y2K Revolving Loans shall be made ratably by the
Lenders in accordance with their Percentages. Each Borrowing of Y2K Revolving
Loans shall be in an amount of $250,000 or such greater amount which is an
integral multiple of $50,000; provided, however, that a Borrowing of Y2K
Revolving Loans, or any part thereof, which bears interest with reference to the
Adjusted LIBOR Rate shall be in such greater amount as is required by Section 2
hereof. All
Y2K Revolving Loans made by a Lender shall be evidenced by a single Y2K
Revolving Credit Note of the Company (individually a "Y2K Revolving Credit Note"
and collectively the "Y2K Revolving Credit Notes", which shall include the Y2K
Revolving Credit Notes issued pursuant to Section 11.17 hereof) payable to the
order of such Lender in the amount of its Y2K Revolving Credit Commitment, each
Y2K Revolving Credit Note to be in the form (with appropriate insertions)
attached hereto as Exhibit E. Each Y2K Revolving Credit Note shall be dated the
date of issuance thereof, be expressed to bear interest as set forth in Section
2 hereof, and be expressed to mature on the Y2K Revolving Credit Termination
Date. Without regard to the principal amount of each Y2K Revolving Credit Note
stated on its face, the actual principal amount at any time outstanding and
owing by the Company on account thereof shall be the sum of all Y2K Revolving
Loans then or theretofore made thereon less all payments of principal actually
received thereon.
Section 1.7. Manner of Borrowing Loans.
(a) Generally. The Company shall give the Agent notice (which may be
written or oral, but if oral, promptly confirmed in writing, including notice by
telecopy) by 10:00 a.m. Chicago time on any Business Day of each request for any
Borrowing of Loans, in each case specifying the amount of each such Borrowing,
the type of Loan being requested, and the date such Borrowing is to be made
(which shall be a Business Day). The Agent shall notify each Lender of its
receipt of each such notice by 12:00 noon Chicago time on the Business Day any
Borrowing of Loans constituting the Base Rate Portion is to be made and by 12:00
noon Chicago time on the Business Day it receives such a request for any
Borrowing of Loans constituting a LIBOR Portion. Each Borrowing shall initially
constitute part of the relevant Base Rate Portion except to the extent the
Company has timely elected that such Borrowing, or any part thereof, constitute
part of a LIBOR Portion as provided in Section 2 hereof. Not later than 2:00
p.m. Chicago time on the date specified for any Borrowing of Loans to be made
hereunder, each Lender shall make the proceeds of its Loan comprising part of
such Borrowing available in immediately available funds to the Agent in Chicago,
Illinois, except in the case of the Term Loans, in which case each Lender shall
record the Term Loan made by it as part of the conversion of the Acquisition
Financing Loans, or such portion thereof, held by it into such Term Loan on its
books and records. Subject to all of the terms and conditions hereof, the
proceeds of each Lender's Loan shall be made available to the Company in
accordance with the instruction of the Company at the office of the Agent in
Chicago, Illinois and in funds there current.
(b) Reimbursement Obligation. In the event the Company fails to give
notice pursuant to Section 1.7(a) above of a Borrowing equal to the amount of a
Reimbursement Obligation and has not notified the Agent by 11:30 a.m. Chicago
time on the day such Reimbursement Obligation becomes due that the Company
intends to repay such Reimbursement Obligation through funds not borrowed under
this Agreement, the Company shall be deemed to have requested a Borrowing of
Revolving Loans constituting part of the Base Rate Portion on such day in the
amount of the Reimbursement Obligation then due, subject to Section 6 hereof,
which Borrowing shall be applied to pay the Reimbursement Obligation then due.
(c) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Lender before the date on which such Lender is scheduled to make
payment to the Agent of the proceeds of a Loan (which notice shall be effective
upon receipt) that such Lender does not intend to make such payment, the Agent
may assume that such Lender has made such payment when due
and the Agent may in reliance upon such assumption (but shall not be required
to) make available to the Company the proceeds of the Loan to be made by such
Lender and, if any Lender has not in fact made such payment to the Agent, such
Lender shall, on demand, pay to the Agent the amount made available to the
Company attributable to such Lender together with interest thereon in respect of
each day during the period commencing on the date such amount was made available
to the Company and ending on (but excluding) the date such Lender pays such
amount to the Agent at a rate per annum equal to (i) from the date the related
advance was made by the Agent to the date 2 Business Days after payment by such
Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from
the date 2 Business Days after the date such payment is due from such Lender to
the date such payment is made by such Lender, the Base Rate in effect for each
such day. If such amount is not received from such Lender by the Agent
immediately upon demand, the Company will, on demand, repay to the Agent the
proceeds of the Loan attributable to such Lender with interest thereon at a rate
per annum equal to the interest rate applicable to the relevant Loan, but
without such payment being considered a payment or prepayment of a Loan under
Section 2.8 hereof, so that the Company will have no liability under Section 2.8
with respect to such payment.
(d) Reliance. All requests for Borrowings and selection of interest rates
to be applicable thereto may be written or oral, including by telephone or
telecopy. The Company agrees that the Agent may rely on any such notice given by
any person the Agent in good faith believes is an Authorized Representative
without the necessity of independent investigation (the Company hereby
indemnifying the Agent and Lenders from any liability or loss ensuing from such
reliance), and in the event any such telephonic or other oral notice conflicts
with any written confirmation, such oral or telephonic notice shall govern if
the Agent has acted in reliance thereon.
Section 1.8. Commitment Conversion Option. At any time prior to the
Acquisition Financing Termination Date, the Company shall have the option from
time to time to convert up to $10,000,000 of the Revolving Credit Commitments in
the aggregate into Acquisition Financing Commitments, provided that (a) the
Company shall give the Agent and the Lenders not less than 5 Business Days prior
written notice of the Company's exercise of such option, (b) the minimum amount
of Revolving Credit Commitments converted at any one time into Acquisition
Financing Commitments pursuant hereto shall not be less than $1,000,000 at such
time, or such greater amount which is an integral multiple of $1,000,000, (c)
the Revolving Credit Commitments shall be permanently reduced by the amount so
converted to Acquisition Financing Commitments, which reduction shall be applied
ratably among the Lenders in accordance with their Percentages, and (d) after
giving effect to the conversion, the Revolving Loans and L/C Obligations then
outstanding must not exceed the Revolving Credit Commitments in effect after
giving effect to such conversion.
Section 2. Interest.
Section 2.1. Options. Subject to all of the terms and conditions of this
Section 2, portions of the principal indebtedness evidenced by the Notes (all of
the indebtedness evidenced by Notes of the same type and, with respect to the
Term Loans, relating to the same Borrowing, and bearing interest at the same
rate for the same period of time being hereinafter referred to as a "Portion")
may, at the option of the Company, bear interest with reference to the Base Rate
("Base Rate Portions") or with reference to the Adjusted LIBOR Rate ("LIBOR
Portions"), and Portions may be converted from time to time from one basis to
the other. All of the indebtedness evidenced by
the Notes of the same type and, with respect to the Term Loans, relating to the
same Borrowing, which is not part of a LIBOR Portion shall constitute a single
Base Rate Portion. All of the indebtedness evidenced by the Notes of the same
type and, with respect to the Acquisition Financing/Term Notes, relating to the
same Borrowing, which bears interest with reference to a particular Adjusted
LIBOR Rate for a particular Interest Period shall constitute a single LIBOR
Portion. Anything contained herein to the contrary notwithstanding, there shall
not be more than 6 LIBOR Portions applicable to Notes of the same type and, with
respect to the Term Loans, relating to the same Borrowing, outstanding at any
one time and each Lender shall have a ratable interest in each Portion. The
Company hereby promises to pay interest on each Portion applicable to it at the
rates and times specified in this Section 2.
Section 2.2. Base Rate Portion. Each Base Rate Portion shall bear interest
(which the Company hereby promises to pay at the times herein provided) at the
rate per annum determined by adding the Applicable Margin to the Base Rate as in
effect from time to time, provided that if a Base Rate Portion is not paid when
due (whether by lapse of time, acceleration or otherwise), such Portion shall
bear interest (which the Company hereby promises to pay at the times hereinafter
provided), whether before or after judgment, and until payment in full thereof,
at the rate per annum determined by adding 2% to the sum of the Applicable
Margin plus the Base Rate as in effect from time to time. Interest on the Base
Rate Portions shall be payable on the last day of each March, June, September
and December in each year and at maturity of the applicable Notes, and interest
after maturity shall be due and payable upon demand.
Section 2.3. LIBOR Portions. Each LIBOR Portion shall bear interest (which
the Company hereby promises to pay at the times herein provided) for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable Margin to the Adjusted LIBOR Rate for such Interest Period, provided
that if any LIBOR Portion is not paid when due (whether by lapse of time,
acceleration or otherwise), such Portion shall bear interest (which the Company
hereby promises to pay at the times hereinafter provided), whether before or
after judgment, and until payment in full thereof, through the end of the
Interest Period then applicable thereto at the rate per annum determined by
adding 2% to the interest rate otherwise applicable thereto and effective at the
end of such Interest Period, such LIBOR Portion shall automatically be converted
into and added to the applicable Base Rate Portion and shall thereafter bear
interest at the interest rate applicable to such Base Rate Portion after
default. Interest on each LIBOR Portion shall be due and payable on the last day
of each Interest Period applicable thereto (provided that if any Interest Period
is longer than three months, then interest on the LIBOR Portion having such
Interest Period shall be due and payable on the date occurring every three
months after the date such Interest Period began and on the last day of such
Interest Period), and interest after maturity shall be due and payable upon
demand. The Company shall notify the Agent on or before 10:00 a.m. Chicago time
on the third Business Day preceding the end of an Interest Period applicable to
a LIBOR Portion whether such LIBOR Portion is to continue as a LIBOR Portion, in
which event the Company shall notify the Agent of the new Interest Period
selected therefor, and in the event the Company shall fail to so notify the
Agent, such LIBOR Portion shall automatically be converted into and added to the
applicable Base Rate Portion as of and on the last day of such Interest Period.
The Agent shall promptly notify each Lender of each notice received from the
Company pursuant to the foregoing provisions. Each LIBOR Portion shall be in an
amount equal to $1,000,000 or such greater amount
which is an integral multiple of $100,000. Anything contained herein to the
contrary notwithstanding, the obligation of the Lenders to create, continue or
effect by conversion any LIBOR Portion shall be conditioned upon the fact that
at the time no Default or Event of Default shall have occurred and be
continuing.
Section 2.4. Manner of Rate Selection. The Company shall notify the Agent
by 10:00 a.m. Chicago time at least 3 Business Days prior to the date upon which
it requests that any LIBOR Portion be created or that any part of the applicable
Base Rate Portion be converted into a LIBOR Portion (such notice to specify in
each instance the amount thereof and the Interest Period selected therefor) and
the Agent shall advise each Lender of each such notice by 12:00 noon Chicago
time on the same Business Day it receives such notice. If any request is made to
convert a LIBOR Portion into the applicable Base Rate Portion, such conversion
shall only be made so as to become effective as of the last day of the Interest
Period applicable thereto. All requests for the creation, continuance or
conversion of Portions under this Agreement shall, subject to Section 2.6
hereof, be irrevocable.
Section 2.5. Change of Law. Notwithstanding any other provisions of this
Agreement or the Notes, if at any time a Lender shall determine in good faith
that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for such Lender to create or continue
to maintain LIBOR Portions, it shall promptly so notify the Agent (which shall
in turn promptly notify the Company and the other Lenders) and the obligation of
such Lender to create, continue or maintain any LIBOR Portion under this
Agreement shall be suspended until it is no longer unlawful for such Lender to
create, continue or maintain LIBOR Portions. The Company shall, on demand, if
the continued maintenance of a LIBOR Portion is unlawful, thereupon prepay the
outstanding principal amount of the LIBOR Portion, together with all interest
accrued thereon and all other amounts payable to the affected Lender with
respect thereto under this Agreement; provided, however, that the Company may
instead elect to convert the principal amount of the affected LIBOR Portion into
the applicable Base Rate Portion, subject to the terms and conditions of this
Agreement.
Section 2.6. Unavailability of Deposits or Inability to Ascertain the
Adjusted LIBOR Rate. Notwithstanding any other provision of this Agreement or
the Notes, if prior to the commencement of any Interest Period, (a) any Lender
shall inform the Agent that such Lender has determined that United States dollar
deposits in the amount of any LIBOR Portion scheduled to be outstanding during
such Interest Period are not readily available to such Lender in the offshore
interbank market or (b) the Required Lenders shall advise the Agent that LIBOR
as determined by the Agent will not adequately and fairly reflect the cost to
such Lenders of funding such LIBOR Portion for such Interest Period, the Agent
shall promptly give notice thereof to the Company and each other Lender and the
obligations of the Lenders to create, continue or effect by conversion any LIBOR
Portion in such amount and for such Interest Period shall be suspended until the
circumstances giving rise to such termination no longer exist.
Section 2.7. Taxes and Increased Costs. With respect to the LIBOR Portions,
if any Lender shall determine in good faith that any change in any applicable
law, treaty, regulation or guideline (including, without limitation, Regulation
D of the Board of Governors of the Federal Reserve System) or any new law,
treaty, regulation or guideline, or any interpretation of any of the foregoing
by any governmental authority charged with the administration thereof or any
central bank or other
fiscal, monetary or other authority having jurisdiction over such Lender or its
lending branch or the Portions contemplated by this Agreement (whether or not
having the force of law) shall:
(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by, such Lender which is not in any instance already
accounted for in computing the Adjusted LIBOR Rate;
(ii) subject such Lender, the LIBOR Portions or any Note to
the extent it evidences such Portions, to any tax (including, without
limitation, any United States interest equalization tax or similar tax
however named applicable to the acquisition or holding of debt
obligations and any interest or penalties with respect thereto), duty,
charge, stamp tax, fee, deduction or withholding in respect of this
Agreement, any LIBOR Portion or any Note to the extent it evidences
such a Portion, except such taxes as may be measured by the overall net
income or gross receipts of such Lender or its lending branches and
imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which such Lender's principal executive office or
its lending branch is located;
(iii) change the basis of taxation of payments of principal and
interest due from the Company to such Lender hereunder or under any
Note to the extent it evidences any LIBOR Portion (other than by a
change in taxation of the overall net income or gross receipts of such
Lender or its lending branches); or
(iv) impose on such Lender any penalty with respect to the
foregoing or any other condition regarding this Agreement, any LIBOR
Portion, or any Note to the extent it evidences any LIBOR Portion;
and such Lender shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to such
Lender of creating or maintaining any LIBOR Portion hereunder or to reduce the
amount of principal or interest received or receivable by such Lender, then the
Company shall pay on demand to the Agent for the account of such Lender from
time to time as specified by such Lender such additional amounts as such Lender
shall reasonably determine are sufficient to compensate and indemnify it for
such increased cost or reduced amount. If a Lender makes such a claim for
compensation, it shall provide to the Company (with a copy to the Agent) a
certificate setting forth in reasonable detail the computation of the increased
cost or reduced amount as a result of any event mentioned herein and such
certificate shall be deemed prima facie correct.
Section 2.8. Funding Indemnity. In the event any Lender shall incur any
loss, cost or expense (including, without limitation, any loss (including loss
of profit), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired or contracted to be acquired by
such Lender to fund or maintain its part of any LIBOR Portion or the relending
or reinvesting of such deposits or other funds or amounts paid or prepaid to
such Lender) as a result of:
(i) any payment of a LIBOR Portion on a date other than the
last day of the then applicable Interest Period for any reason, whether
before or after default, and whether or not such payment is required by
any provisions of this Agreement; or
(ii) any failure by the Company to create, borrow, continue or
effect by conversion a LIBOR Portion on the date specified in a notice
given pursuant to this
Agreement;
then, upon the demand of such Lender, the Company shall pay on demand to the
Agent for the account of such Lender such amount as will reimburse such Lender
for such loss, cost or expense. If a Lender requests such a reimbursement, it
shall provide the Company (with a copy to the Agent) with a certificate setting
forth in reasonable detail the computation of the loss, cost or expense giving
rise to the request for reimbursement and such certificate shall be deemed prima
facie correct.
Section 2.9. Lending Branch. Each Lender may, at its option, elect to make,
fund or maintain its Loans hereunder at the branches or offices specified on the
signature pages hereof or on any Assignment Agreement executed and delivered
pursuant to Section 11.17 hereof or at such other of its branches or offices as
such Lender may from time to time elect. To the extent reasonably possible, a
Lender shall designate an alternative branch or funding office with respect to
its pro rata share of the LIBOR Portions to reduce any liability of the Company
to such Lender under Section 2.7 hereof or to avoid the unavailability of an
interest rate option under Section 2.6 hereof, so long as such designation is
not otherwise disadvantageous to the Lender.
Section 2.10. Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Notes in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including
determinations under Sections 2.6, 2.7 and 2.8 hereof) shall be made as if each
such Lender had actually funded and maintained its share of each LIBOR Portion
during each Interest Period applicable thereto through the purchase of deposits
in the offshore interbank market in the amount of its share of such LIBOR
Portion, having a maturity corresponding to such Interest Period and bearing an
interest rate equal to LIBOR for such Interest Period.
Section 2.11. Computation of Interest. All interest on the Notes, and all
fees, charges and commissions due hereunder, shall be computed on the basis of a
year of 360 days for the actual number of days elapsed, except that interest on
the Base Rate Portions of the Notes and on Reimbursement Obligations with
respect to Letters of Credit shall be computed on the basis of a year of 365 or
366 days (as the case may be) for the actual number of days elapsed.
Section 2.12. Capital Adequacy. If any Lender shall determine that any
applicable law, rule or regulation regarding capital adequacy instituted after
the date hereof, or any change in the interpretation or administration of any
applicable law, rule or regulation regarding capital adequacy by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by such Lender (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital as a consequence of its obligations hereunder or credit
extended by it hereunder to a level below that which such Lender could have
achieved but for such law, rule, regulation, 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 15
days after demand by such Lender, the Company shall pay to the Agent for the
account of such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Any Lender claiming compensation under this Section
shall accompany its demand for compensation with a certificate (with a copy to
the Agent) setting forth the additional amount or
amounts to be paid to it hereunder in reasonable detail, which certificate shall
be conclusive if reasonably determined. In determining such amount, such Lender
may use any reasonable averaging and attribution methods.
Section 3. Fees, Payments, Reductions, Applications and Notations.
Section 3.1. (a) Revolving Credit Commitment Fee. For the period from the
date hereof to but not including the Termination Date, the Company shall pay to
the Agent for the account of the Lenders in accordance with their Percentages a
commitment fee at the rate equal to 0.50% per annum on the average daily unused
amount of the Revolving Credit Commitments hereunder. Such fee shall be payable
in arrears on the last day of each March, June, September, and December in each
year (commencing with the first of such dates after the date hereof) and on the
Termination Date.
(b) Y2K Revolving Credit Commitment Fee. For the period from January 1.
2000 to but not including the Y2K Revolving Credit Termination Date, the Company
shall pay to the Agent for the account of the Lenders in accordance with their
Percentages a commitment fee at the rate equal to 0.50% per annum on the average
daily unused amount of the Y2K Revolving Credit Commitments (including the full
amount thereof for all periods prior to the Y2K Commencement Date) hereunder.
Such fee shall be payable in arrears on the last day of each March, June,
September, and December in each year (commencing with the first of such dates
after the date hereof) and on the Y2K Revolving Credit Termination Date.
Section 3.2. Acquisition Financing Commitment Fee. For the period from the
date hereof to but not including the Acquisition Financing Termination Date, the
Company shall pay to the Agent for the account of the Lenders in accordance with
their Percentages a commitment fee at the rate per annum equal to 0.75% per
annum on the average daily unused amount of the Acquisition Financing
Commitments hereunder. For purposes of this Section, Supplemental Revolving
Loans shall be deemed a utilization of the Acquisition Financing Commitments.
Such fee shall be payable in arrears on the last day of each March, June,
September, and December in each year (commencing with the first of such dates
after the date hereof) and on the date the Acquisition Financing Termination
Date.
Section 3.3. Letter of Credit Fees. Quarterly in arrears, on the last day
of each March, June, September, and December in each year (commencing on the
first of such dates after the date hereof), the Company shall pay to the Agent,
for the benefit of the Lenders, a letter of credit fee at the Applicable Margin
per annum applied to the daily average face amount of Letters of Credit
outstanding during such quarter. In addition, the Company shall pay to the Agent
for its own use and benefit an issuance fee of 0.125% per annum as the issuing
bank and the Agent's standard drawing, negotiation, amendment and other
administrative fees for each Letter of Credit, as such standard fees may be
established by the Agent from time to time.
Section 3.4. Audit Fees. The Company shall pay to the Agent for its own use
and benefit charges for audits of the Collateral by the Agent in such amounts as
the Agent may from time to time request (the Agent acknowledging and agreeing
that such charges shall be computed in the same manner as it at the time
customarily uses for the assessment of charges for similar collateral audits);
provided, however, that in the absence of any Default or Event of Default, the
Company shall not be required to pay the Agent for more than one such audit per
calendar year (determined exclusive of Y2K Audits which are at the expense of
the Company pursuant to Section 7.6 hereof).
Section 3.5. Agent's Fee. The Company shall pay to the Agent, for its own
use and benefit, such agency and arrangement fees as may from time to time be
mutually agreed upon by the Company and the Agent.
Section 3.6. Voluntary Prepayments. The Company shall have the privilege of
prepaying the Revolving Credit Notes, the Y2K Revolving Credit Notes, and the
Supplemental Revolving Credit Notes in whole or in part (but if in part, then in
a minimum amount of $250,000 or such greater amount which is an integral
multiple of $50,000) and the Acquisition Financing/Term Notes in whole or in
part (but if in part, then in a minimum amount of $500,000 or such greater
amount which is an integral multiple of $50,000) at any time upon written notice
to the Agent (prior to 12:00 noon Chicago time on any Business Day and any such
notice received after such time to be treated as though received at the opening
of business on the next Business Day), which shall promptly so notify the
Lenders, by paying to the Agent for the account of the Lenders the principal
amount to be prepaid and (i) if such a prepayment prepays the Revolving Credit
Notes in full and is accompanied by the termination in whole of the Revolving
Credit Commitments, accrued interest thereon to the date of prepayment plus any
commitment fee which has accrued and is unpaid plus any prepayment fee due under
Section 3.8 hereof, (ii) if such a prepayment prepays the Acquisition
Financing/Term Notes in full, accrued interest thereon to the date of prepayment
plus, if accompanied by the termination in whole of the Acquisition Financing
Commitments, any commitment fee which has accrued and is unpaid plus any
prepayment fee due under Section 3.8 hereof, (iii) if such a prepayment prepays
the Supplemental Revolving Credit Notes in full and is accompanied by the
termination in whole of the Supplemental Revolving Credit Commitments, accrued
interest thereon to the date of prepayment plus any prepayment fee due under
Section 3.8 hereof, (iv) if such prepayment prepays the Y2K Revolving Credit
Notes in full and is accompanied by the termination in whole of the Y2K
Revolving Credit Commitments, accrued interest thereon to the date of prepayment
plus any commitment fee which has accrued and is unpaid plus any prepayment fee
due under Section 3.8 hereof, and (v) any amounts due to the Lenders under
Section 2.8 hereof.
Section 3.7. Mandatory Prepayments. (a) The Company covenants and agrees
that if at any time the sum of the unpaid principal balance of the Revolving
Loans and the L/C Obligations outstanding at any one time shall be in excess of
the Borrowing Base as then determined and computed, the Company shall
immediately and without notice or demand pay over the amount of the excess to
the Agent for the account of the Lenders as and for a mandatory prepayment on
such Obligations, with each such prepayment first to be applied to the Revolving
Credit Notes until payment in full thereof with any remaining balance to be held
by the Agent as collateral security for the Obligations owing under the
Applications with respect to the Letters of Credit.
(b) The Company covenants and agrees that if any time the sum of the unpaid
principal balance of the Y2K Revolving Credit Loans, the Revolving Loans, and
the L/C Obligations outstanding at any one time shall be in excess of the Y2K
Borrowing Base as then determined and computed, the Company shall immediately
and without notice or demand pay over the amount of the excess to the Agent for
the account of the Lenders as and for a mandatory prepayment on such
Obligations, with each such prepayment first to be applied to the Y2K Revolving
Credit Notes until payment in full thereof, then to the Revolving Credit Notes
until payment in full thereof, with any remaining balance to be held by the
Agent as collateral security for the Obligations owing under the
Applications with respect to the Letters of Credit.
(c) Within 90 days after the close of each fiscal year of the Company
(commencing with the fiscal year ending September 30, 2000), the Company shall
pay over to the Agent for the account of the Lenders as and for a mandatory
prepayment on the Acquisition Financing/Term Notes an amount equal to 50% of
Excess Cash Flow for the most recently completed fiscal year, provided that if
the Cash Flow Leverage Ratio computed as of the last day of any fiscal quarter
and as of the last day of the immediately preceding fiscal quarter (in each case
computed on a rolling four quarter basis) is less than 3.0 to 1.0, then the
mandatory prepayment due hereunder for all subsequent fiscal years shall be
reduced to 25% of Excess Cash Flow. Mandatory prepayments of the Acquisition
Financing/Term Notes pursuant to this Section 3.7(b) shall be applied first to
the Term Loans then outstanding (which application shall be made to the most
recent Borrowing of Term Loans made to the Company and applied to the several
installments thereon in the inverse order of maturity) and then to the
Acquisition Financing Loans.
(d) The Company covenants and agrees that if at any time the sum of the
unpaid principal balance of the Supplemental Revolving Loans then outstanding
plus the original principal amount of all Acquisition Financing Loans made
hereunder (determined without regard to any subsequent payments of principal
thereon) shall be in excess of the maximum permitted amounts thereof as
determined under Section 1.5(a)(i) or Section 1.5(a)(ii) hereof, the Company
shall immediately and without notice or demand pay over the amount of the excess
to the Agent for the account of the Lenders as and for a mandatory prepayment on
the Supplemental Revolving Credit Notes.
(e) If the Company or any Subsidiary shall at any time or from time to time
make or agree to make a Disposition or shall suffer an Event of Loss resulting
in Net Cash Proceeds in excess of $1,000,000 in any fiscal year of the Company,
then (x) the Company shall promptly notify the Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated Net Cash
Proceeds to be received by the Company or such Subsidiary in respect thereof)
and (y) promptly upon, and in no event later than the Business Day after,
receipt by the Company or the relevant Subsidiary of the Net Cash Proceeds of
such Disposition or Event of Loss, the Company shall prepay the Acquisition
Financing/Term Notes in an aggregate amount equal to 100% of the amount of such
Net Cash Proceeds; provided that in the case of each Disposition or Event of
Loss, if the Company states in its notice of such event that the Company or the
applicable Subsidiary intends to reinvest, within 180 days of the applicable
Disposition or receipt of Net Cash Proceeds from an Event of Loss, the Net Cash
Proceeds thereof in assets in a Permitted Line of Business, then so long as no
Default or Event of Default then or thereafter exists, the Company shall not be
required to make a mandatory prepayment under this Section in respect of such
Net Cash Proceeds to the extent such Net Cash Proceeds are actually reinvested
in such similar assets within such 180 day period. Promptly after the end of
such 180 day period, the Company shall notify the Agent whether the Company or
such Subsidiary has reinvested such Net Cash Proceeds in assets in a Permitted
Line of Business, and to the extent such Net Cash Proceeds have not been so
reinvested, the Company shall promptly prepay the Acquisition Financing/Term
Notes in the amount of such Net Cash Proceeds not so reinvested. The amount of
each such prepayment shall be applied first to the Term Loans then outstanding
(which application shall be made to the most recent Borrowing of Term Loans made
to the Company and applied to the several installments thereon in the inverse
order of maturity) and then to the Acquisition Financing Loans. The Company
acknowledges that
its performance hereunder shall not limit the rights and remedies of the Lenders
for any breach of any other provisions of this Agreement.
(f) If the Company or any Restricted Subsidiary issues any equity
securities in a public offering or issues at least $5,000,000 of debt securities
in a private placement at any time after the date hereof, the Company shall pay
to the Agent for the account of the Lenders, as and for a mandatory prepayment
on the Acquisition Financing/Term Notes, 50% of any Net Issuance Proceeds
(calculated without giving effect to any non-cash proceeds). Mandatory
prepayments of the Acquisition Financing/Term Notes made pursuant to this
Section shall be applied first to the Term Loans then outstanding (which
application shall be made to the most recent Borrowing of Term Loans made to the
Company and applied to the several installments thereon in the inverse order of
maturity) and then to the Acquisition Financing Loans.
(g) Notwithstanding anything in this Section 3.7 to the contrary, prior to
the final maturity of the relevant Notes, the Company shall not be required to
make any prepayment of any LIBOR Portions pursuant to this Section 3.7 until the
last day of the Interest Period with respect thereto (provided that, in the case
of clause (e), any such cash collateral shall have the same effect as a
prepayment of the Loans for purposes of the Senior Subordinated Notes or any
issue of Subordinated Debt requiring that Subordinated Debt be retired out of
the proceeds of any such Disposition or Event of Loss after giving effect to any
mandatory prepayment of the Obligations) so long as (i) no Default or Event of
Default then exists or arises until the last day of the applicable Interest
Period and (ii) an amount equal to the principal amount of such LIBOR Portions
is deposited by the Company in a segregated cash collateral account with the
Agent for the benefit of the Lenders to be held in such account on terms
reasonably satisfactory to the Agent. The amount held on deposit in such account
shall if and when requested by the Company be invested in direct obligations of,
or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a remaining maturity of one
year or less, or other investments mutually satisfactory to the Company and the
Agent. On the last day of such Interest Period, the amount held in such account
shall be applied so as to make such prepayment, and except during the
continuance of any Default or Event of Default, any balance remaining on deposit
in such account after such application shall be remitted to the Company.
Section 3.8. Terminations. (a) Voluntary. The Company shall have the
privilege upon 5 Business Days prior notice to the Agent (which shall promptly
notify the Lenders) to ratably terminate the Revolving Credit Commitments and/or
the Acquisition Financing Commitments and/or the Supplemental Revolving Credit
Commitments and/or after March 31, 2000, the Y2K Revolving Credit Commitments in
whole or in part (but if in part then in the amount of $5,000,000 or such
greater amount which is an integral multiple of $5,000,000) and upon payment of
any prepayment premium required by the terms of the following sentence. On the
effective date of any such termination of the Commitments, or any part thereof,
the Company shall pay as a prepayment premium to the Agent for the account of
the Lenders, as liquidated damages for the loss of bargain and not as a penalty,
an amount equal to 0.50% per annum, in the case of any termination of the
Revolving Credit Commitments and 0.75% per annum, in the case of any termination
of the Acquisition Financing Commitments, times the aggregate Commitments then
being terminated multiplied by a fraction, the numerator of which is the number
of days remaining until September 30, 2000, and the denominator of which is 360
days. No partial terminations of the
Revolving Credit Commitments may be made below the L/C Commitment then in
effect, unless the L/C Commitment is concurrently reduced by a like amount. No
partial terminations of the Acquisition Financing Commitments may be made below
the Supplemental Revolving Credit Commitments then in effect, unless the
Supplemental Revolving Credit Commitments are concurrently reduced by a like
amount. Not later than the termination date stated in such notice, there shall
be made such payments to the Agent as may be necessary to reduce the sum of the
aggregate outstanding principal amount of the relevant Loans to the amount to
which the relevant Commitments have been reduced, together with (x) any amount
due the Lenders under this Section 3.8 and under Section 2.8 hereof and (y) in
the case of a termination in whole, all interest, fees and other amounts due on
the Obligations. The foregoing to the contrary notwithstanding, (i) no
termination of the Revolving Credit Commitment may be effected hereunder if as a
result thereof the outstanding aggregate amount of L/C Obligations would exceed
the L/C Commitment as reduced by such termination and (ii) the relevant
Commitments may not be terminated below $5,000,000 except concurrently with
their termination in whole.
(b) Mandatory Revolving Credit Terminations. If at any time Net Cash
Proceeds or Net Issuance Proceeds remain after the prepayment of the Acquisition
Financing/Term Notes in full pursuant to Section 3.7(e) or (f) hereof, the
Acquisition Financing Commitments and the Revolving Credit Commitments shall
terminate by an amount equal to 100% of such excess proceeds (first to the
Acquisition Financing Commitments until reduced to zero and then to the
Revolving Credit Commitments).
(c) Mandatory Termination Upon a Change of Control. After the occurrence of
a Change of Control, the Required Lenders may, by written notice to the Company
at any time on or before the date occurring 90 days after the date the Company
notifies the Lenders of such Change of Control, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which shall in no event be sooner than 30 days after the
occurrence of such Change of Control). On the date the Commitments are so
terminated, all outstanding Obligations (including, without limitation, all
principal of and accrued interest on the Notes) shall forthwith be due and
payable without further demand, presentment, protest, or notice of any kind and
the Company shall immediately pay to the Lenders the full amount then available
for drawing under each Letter of Credit, such amount to be held by the Agent as
collateral security for the Letters of Credit and the Applications therefor and
any remaining Obligations (the Company agreeing to immediately make such payment
on the date the Commitments are so terminated and acknowledging and agreeing
that the Lenders would not have an adequate remedy at law for the failure by the
Company to honor any such demand and that the Lenders, and the Agent on their
behalf, shall have the right to require the Company to specifically perform such
undertaking whether or not any drawings or other demands for payment have been
made under any of the Letters of Credit).
(d) Any termination of the Commitments pursuant to this Section may not be
reinstated.
Section 3.9. Place and Application. All payments of principal, interest,
fees and any other Obligations shall be made to the Agent at its office 111 West
Monroe Street, Chicago, Illinois (or at such other place as the Agent may
specify) in immediately available and freely transferable funds at the place of
payment. All such payments shall be made without setoff or counterclaim and
without reduction for, and free from, any and all present or future taxes,
levies, imposts, duties, fees,
charges, deductions, withholdings, restrictions or conditions of any nature
imposed by any government or political subdivision or taxing authority thereof.
Payments received by the Agent after 12:00 noon Chicago time shall be deemed
received as of the opening of business on the next Business Day. Except as
herein provided, all payments shall be received by the Agent for the ratable
account of the Lenders and shall be promptly distributed by the Agent to the
Lenders in accordance with their Percentages. Unless the Company otherwise
directs, payments (including prepayments) on any Loans shall be deemed first
applied to the applicable Base Rate Portion until payment in full thereof, with
any balance applied to the LIBOR Portions in the order in which their Interest
Periods expire. Any amount prepaid on the Revolving Credit Notes, Y2K Revolving
Credit Notes or Supplemental Revolving Credit Notes may, subject to all of the
terms and conditions hereof, be borrowed, repaid and borrowed again. No amounts
prepaid on the Acquisition Financing/Term Notes may be reborrowed, and any
partial prepayments (whether voluntary or mandatory) shall be applied first to
the Term Loans then outstanding (which application shall be made to the most
recent Borrowing of Term Loans made to the Company and applied to the several
installments thereon in the inverse order of maturity) and then to the
Acquisition Financing Loans. All payments (whether voluntary or required) shall
be accompanied by any amount due the Lenders under Section 2.8 hereof, but no
acceptance of such a payment without requiring payment of amounts due under
Section 2.8 shall preclude a later demand by the Lenders for any amount due them
under Section 2.8 in respect of such payment.
Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Agent or any of the Lenders after
the occurrence and during the continuation of an Event of Default shall be
remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Agent in monitoring, verifying, protecting, preserving or
enforcing the Liens on the Collateral or by the Agent in protecting,
preserving or enforcing rights under the Loan Documents, and in any event
all costs and expenses of a character which the Company has agreed to pay
under Section 11.5 hereof (such funds to be retained by the Agent for its
own account unless the Agent has previously been reimbursed for such costs
and expenses by the Lenders, in which event such amounts shall be remitted
to the Lenders to reimburse them for payments theretofore made to the
Agent);
(b) second, to the payment of any outstanding interest or other fees
or amounts due under the Notes and the other Loan Documents, in each case
other than for principal or in reimbursement or collateralization of L/C
Obligations, ratably as among the Agent and the Lenders in accord with the
amount of such interest and other fees or amounts owing each;
(c) third, to the payment of the principal of the Notes and any unpaid
Reimbursement Obligations, and to the Agent to be held as collateral
security for any other L/C Obligations (until the Agent is holding an
amount of cash equal to the then outstanding amount of all such L/C
Obligations) and, during the existence of any Event of Default when the
Obligations have been declared due and payable pursuant to Section 8.2 or
8.3 hereof, to the payment of any unpaid Hedging Liability and ACH
Liability, the aggregate amount paid to or held as collateral security for
the Lenders to be allocated pro rata as among the
Lenders in accordance with the then respective aggregate unpaid principal
balances of their Loans, interests in the Letters of Credit, and such
unpaid Hedging Liability;
(d) fourth, to the Agent and the Lenders ratably in accordance with
the amounts of any other indebtedness, obligations or liabilities of the
Company owing to each of them and secured by the Collateral Documents
unless and until all such indebtedness, obligations and liabilities have
been fully paid and satisfied; and
(e) fifth, to the Company or whoever else may be lawfully entitled
thereto.
In the event that the amount of any Hedging Liability is not fixed and
determined at the time any funds are to be allocated thereto pursuant to the
above provisions, the amount thereof shall be reasonably estimated by the Lender
(or its affiliate) to whom such Hedging Liability is owed and in a manner
reasonably acceptable to the Agent, with such funds so allocated to be held by
the Agent as collateral security until such Hedging Liability is fixed and
determined and the same shall then be applied to the Hedging Liability, with any
surplus reallocated among the Lenders, to cover any deficiency which would not
have existed had the exact amount of the Hedging Liability been known at the
time such funds were originally distributed.
Section 3.10. Notations and Requests. All Borrowings made against the
Notes, the status of all amounts evidenced by the Notes as constituting part of
the applicable Base Rate Portion or LIBOR Portion and the rates of interest and
Interest Periods applicable to such Portions shall be recorded by the Lenders on
their books or, at their option in any instance, endorsed on the reverse side of
the Notes and the unpaid principal balances and status, rates and Interest
Periods so recorded or endorsed by the Lenders shall, absent manifest error, be
prima facie evidence in any court or other proceeding brought to enforce the
Notes of the principal amount remaining unpaid thereon, the status of such
Borrowings and the interest rates and Interest Periods applicable thereto. Prior
to any negotiation of any Note, the Lender holding such Note shall endorse
thereon the status of all amounts evidenced thereby as constituting part of the
Base Rate Portion or LIBOR Portion and the rates of interest and the Interest
Periods applicable thereto.
Section 4. The Collateral and Guaranties.
Section 4.1. Collateral. The Obligations shall be secured by valid and
enforceable security interests in and liens on all now owned or hereafter
acquired accounts, general intangibles, instruments, documents, chattel paper,
investment property, inventory, equipment, real estate and certain other goods
and assets of the Company and of each Restricted Subsidiary, in each case
whether now owned or hereafter acquired or arising, and all proceeds thereof.
The Company acknowledges and agrees that the Liens on the Collateral shall be
granted to the Agent for the benefit of itself, the Lenders and, with respect to
any Hedging Liability or ACH Liability, their affiliates, and shall be valid and
perfected first priority Liens subject, however, to Liens permitted by Section
7.13 hereof, and each case pursuant to one or more Collateral Documents from
such Persons in form and substance satisfactory to the Agent.
Section 4.2. Guaranties. The payment and performance of the Obligations
shall at all times be guaranteed by each Restricted Subsidiary pursuant to a
guaranty agreement executed by such Restricted Subsidiary in form and substance
satisfactory to the Agent (individually a "Guaranty" and collectively the
"Guaranties").
Section 4.3. Further Assurances. The Company agrees that it will, and will
cause each Restricted Subsidiary to, from time to time at the request of the
Agent or the Required Lenders,
execute and deliver such documents and do such acts and things as the Agent or
the Required Lenders may reasonably request in order to provide for or perfect
or protect such Liens on the Collateral. In the event the Company or any
Restricted Subsidiary forms or acquires any Restricted Subsidiary after the date
hereof, the Company shall within 10 Business Days of such formation or
acquisition cause such newly formed or acquired Restricted Subsidiary to execute
a Guaranty and such Collateral Documents as the Agent may then require, and the
Company shall also deliver, or cause such Restricted Subsidiary to deliver, at
the Company's cost and expense, such other instruments, documents, certificates,
and opinions required by the Agent in connection therewith.
Section 4.4. Liens on AfterAcquired Real Property. In the event that the
Company or any Restricted Subsidiary owns or hereafter acquires any real
property, at the request of the Agent or the Required Lenders, the Company
shall, or shall cause such Restricted Subsidiary to, execute and deliver to the
Agent (or a security trustee therefor) a mortgage or deed of trust acceptable in
form and substance to the Agent for the purpose of granting to the Agent for the
benefit of the Lenders a lien on such real property to secure the Obligations,
shall pay all taxes, costs and expenses incurred by the Agent in recording such
mortgage or deed of trust, and shall at its expense supply to the Agent a Phase
I environmental site assessment, a survey and a mortgagee's policy of title
insurance from a title insurer reasonably acceptable to the Agent insuring the
validity of such mortgage or deed of trust and its status as a first lien
(subject to liens permitted by this Agreement) on the real property encumbered
thereby.
Section 5. Representations and Warranties.
The Company represents and warrants to the Lenders as follows:
Section 5.1. Organization and Qualification. The Company is duly organized,
validly existing and in good standing as a corporation under the laws of the
State of Delaware, has full and adequate corporate power to own its Property and
conduct its business as now conducted, and is duly licensed or qualified and in
good standing in each jurisdiction in which the nature of the business conducted
by it or the nature of the Property owned or leased by it requires such
licensing or qualifying.
Section 5.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying. Schedule 5.2 hereto (as the same may be
deemed amended pursuant to Section 7.14(g) or 7.15 hereof) identifies each
Subsidiary, the jurisdiction of its incorporation or organization, as the case
may be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by the Company and the
Subsidiaries and, if such percentage is not 100% (excluding directors'
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 5.2 (as the same may be deemed amended
pursuant to Section 7.14(g) or 7.15 hereof) as owned by the Company or a
Subsidiary are owned, beneficially and of record, by the Company or such
Subsidiary free and clear of all Liens
other than the Liens granted in favor of the Agent pursuant to the Collateral
Documents. Except as disclosed on Schedule 5.2 hereof, there are no outstanding
commitments or other obligations of any Subsidiary to issue, and no options,
warrants or other rights of any Person to acquire, any shares of any class of
capital stock or other equity interests of any Subsidiary.
Section 5.3. Corporate Authority and Validity of Obligations. The Company
has full right and authority to enter into this Agreement and the other Loan
Documents executed by it, to make the borrowings herein provided for, to issue
its Notes in evidence thereof, to grant to the Agent the Liens described in the
Collateral Documents executed by the Company, and to perform all of its
obligations hereunder and under the other Loan Documents executed by it. Each
Restricted Subsidiary has full right and authority to enter into the Loan
Documents executed by it, to guarantee the Obligations, to grant to the Agent
the Liens described in the Collateral Documents executed by such Restricted
Subsidiary, and to perform all of its obligations under the Loan Documents
executed by it. The Loan Documents delivered by the Company and by each of its
Restricted Subsidiaries have been duly authorized, executed and delivered by
such Person and constitute valid and binding obligations of such Person
enforceable in accordance with their terms except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by the Company or any Restricted
Subsidiary of any of the matters and things herein or therein provided for, (a)
contravene or constitute a default under any provision of law or any judgment,
injunction, order or decree binding upon the Company or any Restricted
Subsidiary or any provision of the charter, articles of incorporation or by-laws
of the Company or any Restricted Subsidiary, (b) contravene or constitute a
default under any covenant, indenture or agreement of or affecting the Company
or any Restricted Subsidiary or any of its Property, in each case where such
contravention or default is reasonably likely to have a Material Adverse Effect,
or (c) result in the creation or imposition of any Lien on any Property of the
Company or any Restricted Subsidiary other than the Liens granted in favor of
the Agent pursuant to the Collateral Documents.
Section 5.4. Use of Proceeds; Margin Stock. The Company shall use the
proceeds of the Loans and other extensions of credit made available hereunder
solely for its general working capital purposes and for such other legal and
proper purposes as are consistent with all applicable laws, except that (a)
Revolving Loan proceeds shall not be used, directly or indirectly, to invest in,
or make loans or advances to, Persons who are not Restricted Subsidiaries, (b)
Supplemental Revolving Loan proceeds shall only be used by the Company to make
loans and advances, directly or indirectly through a Restricted Subsidiary, to
Persons (other than Restricted Subsidiaries) to the extent permitted by Section
7.14(i) hereof, (c) Letters of Credit shall only be issued in support of
insurance policy obligations of the Company or any Restricted Subsidiary or for
such other purpose as is acceptable to the Agent in its sole discretion, (d) the
proceeds of the Acquisition Financing Loans shall only be used (1) to make
Permitted Acquisitions, (2) to finance the acquisition and construction of new
dialysis or perfusion clinics and expansion to existing dialysis or perfusion
clinics and to refinance Revolving Loans which were used for such purpose;
provided that no more than $20,000,000 of the proceeds of the Acquisition
Financing Loans may be used pursuant to this subsection (2), and (e) the
proceeds of the Y2K Revolving Loans shall only be used to fund
government-related reimbursement interruptions associated with Year 2000
Problems of governmental entities. Neither the Company nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan or any other extension of credit made hereunder will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
Section 5.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at September 30, 1998, and the related
consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
Ernst & Young, independent public accountants, and the unaudited interim
consolidated balance sheet of the Company and its Subsidiaries as at March 31,
1999, and the related consolidated statements of income and retained earnings of
the Company and its Subsidiaries for the 6 months then ended, heretofore
furnished to the Lenders, fairly present in all material respects the
consolidated financial condition of the Company and its Subsidiaries as at said
dates and the consolidated results of their operations and cash flows for the
periods then ended in conformity with generally accepted accounting principles
applied on a consistent basis. Neither the Company nor any Subsidiary has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 7.5 hereof.
Section 5.6. No Material Adverse Change. Since March 31, 1999, there has
been no change in the condition (financial or otherwise) or business prospects
of the Company or any Subsidiary, except those occurring in the ordinary course
of business, none of which individually or in the aggregate have been materially
adverse.
Section 5.7. Full Disclosure. The statements and information furnished to
the Lenders in connection with the negotiation of this Agreement and the other
Loan Documents and the commitments by the Lenders to provide all or part of the
financing contemplated hereby do not contain any untrue statements of a material
fact or omit a material fact necessary to make the material statements contained
herein or therein not misleading; the Lenders acknowledging that as to any
projections furnished to the Lenders, the Company only represents that the same
were prepared on the basis of information and estimates the Company believed to
be reasonable at the time made.
Section 5.8. Trademarks, Franchises, and Licenses. The Company and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.
Section 5.9. Governmental Authority and Licensing. The Company and its
Subsidiaries have received all licenses, permits, and approvals of all Federal,
state, local, and foreign governmental authorities, if any, necessary to conduct
their business as now conducted and to receive Medicare and Medicaid
reimbursement and/or payments for health care currently provided
by them, including all certificates of need and other licenses, permits, and
approvals, if any, required to own and/or operate any health care facilities or
services currently owned or operated by them, in each case where the failure to
obtain or maintain the same is reasonably likely to have a Material Adverse
Effect. No investigation or proceeding which, if adversely determined, is
reasonably likely to result in revocation or denial of any material license,
permit, or approval, or of any right to receive reimbursement or payments under
Medicare or other governmental thirdparty reimbursement or prospective payment
program, is pending or, to the knowledge of the Company, threatened.
Section 5.10. Good Title. The Company and its Subsidiaries each have good
and defensible title to their assets as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries furnished to the
Lenders (except for sales of assets by the Company and its Subsidiaries in the
ordinary course of business), subject to no Liens other than such thereof as are
permitted by Section 7.13 hereof.
Section 5.11. Litigation and Other Controversies. There is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
the Company threatened, against the Company or any Subsidiary which if adversely
determined is reasonably likely to have a Material Adverse Effect.
Section 5.12. Taxes. Except as disclosed on Schedule 5.12 hereof, all tax
returns required to be filed by the Company or any Subsidiary in any
jurisdiction have, in fact, been filed, and all taxes, assessments, fees and
other governmental charges upon the Company or any Subsidiary or upon any of
their respective Properties, income or franchises, which are shown to be due and
payable in such returns, have been paid, except such taxes, assessments, fees
and governmental charges, if any, as are being contested in good faith and by
appropriate proceedings which prevent enforcement of the matter under contest
and as to which adequate reserves established in accordance with GAAP have been
provided. The Company does not know of any proposed additional tax assessment
against the Company or any of its Subsidiaries for which adequate provisions in
accordance with GAAP have not been made on their accounts. Adequate provisions
in accordance with GAAP for taxes on the books of the Company and each
Subsidiary have been made for all open years, and for its current fiscal period.
Section 5.13. Approvals. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Company, any Subsidiary, or any other Person, is or will be necessary to the
valid execution, delivery or performance by the Company of this Agreement or by
the Company or any Subsidiary of any other Loan Document, except for such
approvals which have been obtained prior to or concurrently with the execution
and delivery of this Agreement and which remain in full force and effect.
Section 5.14. Affiliate Transactions. Except for agreements in effect on
the date hereof and described on Schedule 5.14 attached hereto, neither the
Company nor any Subsidiary is a party to any contracts or agreements with any of
its Affiliates (other than with WhollyOwned Subsidiaries) on terms and
conditions which are less favorable to the Company or such Subsidiary than would
be usual and customary in similar contracts or agreements between Persons not
affiliated with each other.
Section 5.15. Investment Company; Public Utility Holding Company. Neither
the Company
nor any Subsidiary is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "public utility holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
Section 5.16. ERISA. The Company and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA. Neither the Company nor any Subsidiary has any contingent
liabilities with respect to any post-retirement benefits under a Welfare Plan,
other than liability for continuation coverage described in article 6 of Title I
of ERISA.
Section 5.17. Compliance with Laws. The Company and each of its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their
Properties or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, laws and regulations relating to the providing of health care services,
and laws and regulations establishing quality criteria and standards for air,
water, land and toxic or hazardous wastes and substances), where any such non-
compliance, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect. Neither the Company nor any Subsidiary has received
notice to the effect that its operations are not in compliance with any of the
requirements of applicable federal, state or local environmental, health and
safety statutes and regulations or are the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, where
any such non-compliance or remedial action, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
Section 5.18. Other Agreements. Neither the Company nor any Subsidiary is
in default under the terms of any covenant, indenture or agreement of or
affecting the Company, any Subsidiary, or any of their Properties, which default
if uncured is reasonably likely to have a Material Adverse Effect.
Section 5.19. No Default. No Default or Event of Default has occurred and
is continuing.
Section 5.20. Solvency. The Company and its Subsidiaries are solvent, able
to pay their debts as they become due, and have sufficient capital to carry on
their business and all businesses in which they are about to engage.
Section 5.21. Year 2000 Compliance. The Company has conducted a review and
assessment of the computer applications of the Company and its Subsidiaries and
has made inquiry of their material suppliers, service vendors (including data
processors) and customers, with respect to any defect in computer software, data
bases, hardware, controls and peripherals related to the occurrence of the year
2000 or the use at any time of any date which is before, on and after December
31, 1999, in connection therewith. Based on the foregoing review, assessment and
inquiry, the Company believes that no such defect would reasonably be expected
to have a Material Adverse Effect, except for government-related reimbursement
interruptions associated with Year 2000 Problems of governmental entities.
Section 6. Conditions Precedent.
Section 6.1. All Advances. The obligation of each Lender to make any Loan or
of the Agent to issue, extend the expiration date of or increase the amount of
any Letter of Credit under this Agreement (including the first such extension of
credit) shall be subject to the conditions precedent that as of the time of the
making of each such extension of credit:
(a) each of the representations and warranties set forth herein and in
the other Loan Documents shall be and remain true and correct as of said
time, except to the extent the same expressly relate to an earlier date;
(b) the Company and each Restricted Subsidiary shall be in compliance
with all of the terms and conditions hereof and of the other Loan
Documents, and no Default or Event of Default shall have occurred and be
continuing;
(c) after giving effect to such extension of credit, the aggregate
principal amount of all Revolving Loans and L/C Obligations outstanding
under this Agreement shall not exceed the lesser of (i) the Revolving
Credit Commitments then in effect and (ii) the Borrowing Base;
(d) after giving effect to such extension of credit, the aggregate
principal amount of all Y2K Revolving Loans outstanding under this
Agreement shall not exceed the lesser of (i) the Y2K Revolving Credit
Commitments then in effect and (ii) the Y2K Borrowing Base less the
aggregate principal amount of all outstanding Revolving Loans and L/C
Obligations;
(e) in the case of the issuance of any Letter of Credit, the Agent
shall have received a properly completed Application therefor and, in the
case of an extension or increase in the amount of the Letter of Credit, the
Agent shall have received a written request therefor, in a form acceptable
to the Agent, with such Application or written request, in each case to be
accompanied by the fees required by this Agreement;
(f) in the case of the initial Borrowing of Y2K Revolving Loans, the
conditions set forth in Section 6.3 below shall have been satisfied; and
(g) such extension of credit shall not violate any order, judgment
or decree of any court or other authority or any provision of law or
regulation applicable to the Agent or any Lender (including, without
limitation, Regulation U of the Board of Governors of the Federal Reserve
System) as then in effect.
The Company's request for any Loan or Letter of Credit shall constitute its
warranty as to the facts specified in subsections (a) through (f), both
inclusive, above.
Section 6.2. Initial Advance. At or prior to the time of the initial
extension of credit hereunder, the following conditions precedent shall also
have been satisfied:
(a) the Agent shall have received the following for the account of the
Lenders (each to be properly executed and completed) and the same shall
have been approved as to form and substance by the Agent:
(i) the Revolving Credit Notes, Acquisition Financing/Term
Notes, the Supplemental Revolving Credit Notes and the Y2K Revolving
Credit Notes (which Notes are being executed and delivered in
substitution and replacement for, and shall evidence the indebtedness
outstanding on the Effective Date currently evidenced by, the
promissory notes of the Company issued under the Original Credit
Agreement);
(ii) an Amended and Restated Guaranty from each Restricted
Subsidiary;
(iii) an Amended and Restated Security Agreement from the
Company and each Restricted Subsidiary;
(iv) an Amended and Restated Pledge Agreement from the Company
and each Restricted Subsidiary;
(v) a restated Mortgage and Security Agreement with Assignment
of Rents from the Company and each Restricted Subsidiary with respect
to all real property owned by then and currently securing the Original
Credit Agreement, together with an amended or restated title policy
with respect to each such parcel in form and substance acceptable to
the Agent;
(vi) copies (executed or certified as may be appropriate) of
resolutions of the Board of Directors of the Company and of
resolutions of the Board of Directors (or other governing body) of
each Restricted Subsidiary, in each case authorizing the execution,
delivery and performance of the Loan Documents to which it is a party
and all other documents relating thereto;
(vii) an incumbency certificate containing the name, title
and genuine signature of the Company's Authorized Representatives and
each authorized signatory of each Restricted Subsidiary;
(viii) a good standing certificate (or its equivalent) for the
Company and each Restricted Subsidiary, dated as of a date no earlier
than 60 days prior to the date hereof, from the appropriate
governmental offices in the state of its incorporation or organization
and in each state in which it is qualified to do business as a foreign
corporation or organization;
(ix) articles of incorporation and by-laws for the Company and
articles of incorporation and bylaws (or equivalent organizational
documents) for each Restricted Subsidiary, in each case certified by
such Person's corporate Secretary or other appropriate officer
acceptable to the Agent; and
(x) evidence of the maintenance of insurance by the Company
and each Restricted Subsidiary as required hereby or by the Collateral
Documents;
(b) the Agent shall have received financing statement, tax and
judgment lien searches evidencing the filing of the UCC financing
statements requested in connection with the Collateral Documents and the
absence of any other Liens except as permitted by Section 7.13 hereof;
(c) the Lenders shall have received a borrowing base certificate in
substantially the form of Exhibit F setting forth the computation of the
Borrowing Base at such time and a compliance certificate in substantially
the form of Exhibit G setting forth the computation of the financial
covenants as of such time;
(d) all legal matters incident to the transactions contemplated hereby
shall be acceptable to the Lenders and their counsel, and the Agent shall
have received for the account of the Lenders the favorable written opinion
of counsel to the Company and its Restricted Subsidiaries, in the form of
Exhibit H hereto or in such other form as is acceptable to the Agent and
its counsel;
(e) the Agent shall have received for itself and for the Lenders the
initial fees, if any, called for hereby;
(f) all loans outstanding under the Original Credit Agreement shall
be refinanced out of the initial Borrowings hereunder; and
(g) the Agent shall have received for the account of the Lenders such
other agreements, instruments, documents, certificates and opinions as the
Agent may reasonably request.
Section 6.3. Y2K Revolving Credit Advances. At or prior to the time of the
initial extension of credit under the Y2K Revolving Credit, the following
conditions precedent shall also have been satisfied:
(a) the Agent shall have received a certified copy of the Indenture
and all amendments thereto evidencing, among other things, the increase in
the amount of the permitted senior credit facility referred to therein from
$100 million to an amount not less than $140 million in form and substance
satisfactory to the Agent; and
(b) the Agent shall have received for the account of the Lenders the
favorable written opinion of counsel to the Company and its Restricted
Subsidiaries in form and substance acceptable to the Agent and including,
without limitation, an opinion that all Obligations under this Credit
Agreement constitute "Permitted Indebtedness" (as defined in the
Indenture); and
(c) the Agent shall have received a certificate from the Company
stating that there has been a government-related reimbursement interruption
associated with a Year 2000 Problem of a governmental entity, and, written
or oral evidence, to the extent available, from the affected governmental
entity regarding such interruption (including, without limitation, evidence
in the form of published statements or newsletters from the relevant
intermediaries or carriers).
Section 7. Covenants.
The Company agrees that, so long as any credit is available to or in use by
the Company hereunder, except to the extent compliance in any case or cases is
waived in writing by the Required Lenders:
Section 7.1. Maintenance of Business. The Company shall, and shall cause each
of its Subsidiaries to, preserve and maintain its existence, except as otherwise
provided in Section 7.15(c) hereof. The Company shall, and shall cause each of
its Subsidiaries to, preserve and keep in force and effect all licenses,
permits, franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights, and other proprietary rights necessary to the proper conduct of its
business (including, without limitation, all such licenses, permits, franchises,
and approvals referred to in Sections 5.8 and 5.9 of this Agreement) where the
failure to do so is reasonably likely to have a Material Adverse Effect.
Section 7.2. Maintenance of Properties. The Company shall, and shall cause
each of its Subsidiaries to, maintain, preserve and keep its property, plant and
equipment in good repair, working order and condition (ordinary wear and tear
excepted) and shall from time to time make all needful and proper repairs,
renewals, replacements, additions and betterments thereto so that at all times
the efficiency thereof shall be fully preserved and maintained, except to the
extent that, in the reasonable business judgment of the Company, any such
Property is no longer necessary for the proper conduct of the business of such
Person.
Section 7.3. Taxes and Assessments. The Company shall duly pay and
discharge, and shall
cause each of its Subsidiaries to duly pay and discharge, all taxes, rates,
assessments, fees and governmental charges upon or against it or its Properties,
in each case before the same become delinquent and before penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves are provided therefor.
Section 7.4. Insurance. The Company shall insure and keep insured, and
shall cause each of its Subsidiaries to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Company shall insure, and shall cause each of its
Subsidiaries to insure, such other hazards and risks (including professional
liability, employers' and public liability risks) with good and responsible
insurance companies as and to the extent usually insured by Persons similarly
situated and conducting similar businesses. The Company shall in any event
maintain, and cause each of its Subsidiaries to maintain, insurance on the
Collateral to the extent required by the Collateral Documents. The Company
shall, upon the reasonable request of the Agent, furnish to the Agent and each
Lender a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section.
Section 7.5. Financial Reports. The Company shall, and shall cause each of
its Subsidiaries to, maintain a standard system of accounting in accordance with
GAAP and shall furnish to the Agent, each Lender and each of their duly
authorized representatives such information respecting the business and
financial condition of the Company and its Subsidiaries as the Agent or such
Lender may reasonably request; and without any request, shall furnish to the
Agent and the Lenders:
(a) as soon as available, and in any event within 25 days after the
last day of each calendar month, a Borrowing Base certificate in the form
attached hereto as Exhibit F showing the computation of the Borrowing Base
(and if the Y2K Revolving Credit has been utilized, the Y2K Borrowing Base)
and an accounts receivable aging summary in reasonable detail as of the
close of business on the last day of such month, prepared by the Company
and certified to by the Company's chief financial officer, or another
officer of the Company reasonably acceptable to the Agent;
(b) as soon as available, and in any event within 45 days after the
close of each fiscal quarter of the Company, a copy of the consolidated
balance sheet of the Company and its Restricted Subsidiaries (and of the
Company and its Subsidiaries) as of the last day of such period and the
consolidated statements by business segments of income, retained earnings
and cash flows of the Company and its Restricted Subsidiaries (and of the
Company and its Subsidiaries) for the fiscal quarter and for the fiscal
year-to-date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous fiscal year, prepared by the Company in accordance with GAAP and
certified to by the Company's chief financial officer, or another officer
of the Company reasonably acceptable to the Agent, it being understood that
the delivery by the Company of its Form 10Q as filed with, and in
accordance with the rules and regulations of, the Securities and Exchange
Commission or any successor agency shall satisfy this Section 7.5(b);
(c) as soon as available, and in any event within 120 days after the
close of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the last day of the
period then ended and the consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for the period
then ended, and accompanying notes thereto, each in reasonable detail
showing in comparative form the figures for the previous fiscal year,
accompanied by an unqualified opinion thereon of Ernst & Young or another
firm of independent public accountants of recognized national standing,
selected by the Company and reasonably satisfactory to the Agent, to the
effect that the financial statements have been prepared in accordance with
GAAP and present fairly, in all material respects, in accordance with GAAP
the consolidated financial condition of the Company and its Subsidiaries as
of the close of such fiscal year and the results of their operations and
cash flows for the fiscal year then ended and that an examination of such
accounts in connection with such financial statements has been made in
accordance with generally accepted auditing standards and, accordingly,
such examination included such tests of the accounting records and such
other auditing procedures as were considered necessary in the
circumstances, it being understood that the delivery by the Company of its
Form 10K as filed with, and in accordance with the rules and regulations
of, the Securities and Exchange Commission or any successor agency shall
satisfy this Section 7.5(c);
(d) promptly after the sending or filing thereof, copies of each
financial statement, report, notice or proxy statement sent by the Company
or any Subsidiary to its stockholders, and copies of each regular, periodic
or special report, registration statement or prospectus filed by the
Company or any of its Subsidiaries with any securities exchange or the
Securities and Exchange Commission or any successor agency;
(e) promptly after receipt thereof, a copy of each audit made by any
regulatory agency of the books and records of the Company or any of its
Subsidiaries or of any notice of any such audit or of any notice of
material noncompliance with any applicable law, regulation, or guideline
relating to the Company or any of its Subsidiaries or any of their
respective businesses;
(f) as soon as available, and in any event within 120 days after the
end of each fiscal year of the Company, a copy of the Company's
consolidated and consolidating business plan for the following fiscal year,
such business plan to show the Company's projected consolidated and
consolidating revenues, expenses, and balance sheet on a month-by-month
basis, such business plan to be in reasonable detail prepared by the
Company and in form reasonably satisfactory to the Agent;
(g) promptly after the occurrence thereof, notice of any Change of
Control; and
(h) promptly after knowledge thereof shall have come to the attention
of any responsible officer of the Company, written notice of any threatened
or pending litigation or governmental proceeding or labor controversy
against the Company or any of its Subsidiaries which, if adversely
determined, is reasonably likely to have a Material Adverse Effect or of
the occurrence of any Default or Event of Default hereunder.
Each of the financial statements furnished to the Lenders pursuant to
subsections (b) and (c) of this Section 7.5 shall be accompanied by a written
certificate in the form attached hereto as Exhibit G
signed by the chief financial officer of the Company, or another officer of the
Company reasonably acceptable to the Agent, to the effect that to the best of
such officer's knowledge and belief no Default or Event of Default has occurred
during the period covered by such statements or, if any such Default or Event of
Default has occurred during such period, setting forth a description of such
Default or Event of Default and specifying the action, if any, taken by the
Company or any Subsidiary to remedy the same. Such certificate shall also set
forth the calculations supporting such statements in respect of Sections 7.7,
7.8, 7.9, 7.10 and 7.11 of this Agreement.
Section 7.6. Inspection. The Company shall, and shall cause each of its
Subsidiaries to, permit the Agent, each Lender and each of their duly authorized
representatives and agents to visit and inspect any of its Properties, corporate
books and financial records, to examine and make copies of its books of accounts
and other financial records, and to discuss its affairs, finances and accounts
with, and to be advised as to the same by, its executive officers, employees and
independent public accountants (and by this provision the Company hereby
authorizes such accountants to discuss with the Agent and such Lenders the
finances and affairs of the Company and of each of its Subsidiaries) at such
reasonable times during business hours and intervals as the Agent or any such
Lender may designate with prior notice to the Company; provided that within 30
days after the first extension of credit under the Y2K Revolving Credit, and
every 45 days after the completion of the previous audit so long as any portion
of the Y2K Revolving Credit is outstanding, the Agent shall be permitted to
conduct such additional audits and inspections concerning Year 2000 issues as
the Agent may require and at the Company's expense ("Y2K Audits"). The Agent
shall promptly provide copies of such audit reports to the Lenders. Confidential
information obtained during any such visit or inspection shall be subject to the
provisions of Section 11.18 hereof.
Section 7.7. Total Funded Debt to Active Patients. As of the last day of each
fiscal quarter of the Company, the Company shall not permit the ratio of (a)
Total Funded Debt to (b) the number of renal dialysis care patients actively
being treated by the Company and its Restricted Subsidiaries (computed on a
combined basis without duplication) to exceed $35,000 to 1.0.
Section 7.8. Cash Flow Leverage Ratio. As of the last day of each fiscal
quarter of the Company ending during each of the periods specified below, the
Company shall not permit the Cash Flow Leverage Ratio to exceed:
Ratio Shall Not Be
From and Including To and Including Greater Than
the date hereof 12/31/2000 5.25 to 1.0
1/1/2001 6/30/2001 4.75 to 1.0
7/1/2001 9/30/2002 4.50 to 1.0
10/1/2002 and all times thereafter 4.00 to 1.0
Section 7.9. Net Worth. The Company shall, at all times, maintain Net Worth
of not less than the sum of (a) $58,255,646, plus (b) 75% of Net Income for each
fiscal year of the Company ending after the date hereof (commencing with the
fiscal year ending September 30, 1999) for which such Net Income is a positive
amount (i.e., there shall be no reduction to the amount of Net Worth required to
be maintained hereunder for any fiscal year in which Net Income is less than
zero), plus (c) 100% of the Net Issuance Proceeds from the issuance of any
equity securities by the Company or its Restricted Subsidiaries subsequent to
the date of this Agreement.
Section 7.10. Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter of the Company, the Company shall maintain a ratio of EBITDA for the
four fiscal quarters of the Company then ended to Fixed Charges for the same
four fiscal quarters then ended of not less than 1.75 to 1.0.
Section 7.11. Subordinated Indenture Fixed Charge Coverage Ratio. In addition
to its obligations in Section 7.12 hereof, so long as any Subordinated Debt
remains outstanding under the Indenture, beginning September 30, 1999, the
Company agrees that it will comply with, abide by, and be restricted by the
covenant set forth in Section 4.12 of the Indenture (Limitation on
Indebtedness), which covenant, together with the related definitions, exhibits
and ancillary provisions, is incorporated herein by reference, mutatis mutandis,
and made a part hereof to the same extent and with the same force and effect as
if the same had been herein set forth in its entirety, and will be deemed to
continue in effect for the benefit of the Lenders without regard or giving
effect to any amendment or modification of such provisions, except for the
amendment contemplated by Section 6.3 hereof, or any waiver of compliance
therewith, no such amendment, modification of such provisions or any manner
constitute an amendment, modification or waiver of the provisions thereof as
incorporated herein unless consented to in writing by the Required Lenders,
except for the amendment contemplated by Section 6.3 hereof; provided, that said
provisions for purposes of the incorporation described herein shall be amended
in the following respects:
(i) the terms "Event of Default" and "Default" appearing in said
provisions shall mean and refer to the Event of Default and Default,
respectively, as defined in this Agreement; and
(ii) the level of the Consolidated Fixed Charge Coverage Ratio
required shall be 2.15 to 1.0.
Section 7.12. Indebtedness for Borrowed Money. The Company shall not, nor
shall it permit any of its Subsidiaries to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money; provided, however, that the
foregoing shall not restrict nor operate to prevent:
(a) the Obligations of the Company owing to the Agent and the Lenders
hereunder;
(b) Capitalized Lease Obligations entered into in the ordinary course
of business;
(c) obligations of the Company arising out of interest rate hedging
agreements entered into with financial institutions in the ordinary course
of business;
(d) guaranties expressly permitted by Section 7.14 hereof;
(e) indebtedness from time to time owing by any Restricted Subsidiary
to the Company or to any other Restricted Subsidiary arising in the
ordinary course of business;
(f) indebtedness from time to time owing by any NonRestricted
Subsidiary to
the Company or any Restricted Subsidiary which, in the aggregate for all
NonRestricted Subsidiaries, does not exceed $15,000,000 at any one time
outstanding;
(g) indebtedness from time to time owing by any NonRestricted
Subsidiary to any Person (other than the Company or any Restricted
Subsidiary), and any renewals or refinancings thereof;
(h) unsecured Subordinated Debt in an aggregate original principal
amount not to exceed $7,000,000 owing by The Extracorporeal Alliance,
L.L.C. ("Alliance") to Bay Extracorporeal Technologies, Inc. ("BeTech"),
Great Lakes Medical Services, Inc. ("Services"), and Great Lakes Perfusion,
Inc. ("Perfusion"), and Michael Hurdle ("Hurdle"), and their successors and
assigns, together with such additional Subordinated Debt issued to such
Persons pursuant to the terms of that certain Agreement for Sale of Assets
and L.L.C. Interests, dated as of November 26, 1996, by and among Alliance,
BeTech, Services, Perfusion, Hurdle, the Company, Rick Kuntz ("Kuntz"),
Chet Czaplicka ("Czaplicka") and Gregory Lewis ("Lewis") (the "Alliance
Purchase Agreement") or the Put/Call Agreements (as such term is defined in
the Alliance Purchase Agreement) executed and delivered in connection
therewith, as reduced from time to time by permitted payments of principal
thereon;
(i) unsecured Subordinated Debt consisting of the Senior Subordinated
Notes and any other Subordinated Debt approved in writing by the Agent and
the Required Lenders, as reduced from time to time by permitted payments of
principal thereon; and
(j) other indebtedness of the Company and its Subsidiaries arising
in the ordinary course of business (and not incurred in connection with an
acquisition) in an aggregate amount not to exceed $5,000,000 at any one
time outstanding, provided that, if such indebtedness is secured, the
indebtedness shall only be subject to Liens permitted by Section 7.13(e)
hereof.
Section 7.13. Liens. The Company shall not, nor shall it permit any of its
Subsidiaries to, create, incur or permit to exist any Lien of any kind on any
Property owned by the Company or any of its Subsidiaries; provided, however,
that the foregoing shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's compensation,
unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges (other
then Liens arising under ERISA), good faith cash deposits in connection
with tenders, contracts or leases to which the Company or any of its
Subsidiaries is a party or other cash deposits required to be made in the
ordinary course of business, provided in each case that the obligation is
not for borrowed money and that the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate proceedings
which prevent enforcement of the matter under contest and adequate reserves
have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers', or
other similar Liens arising in the ordinary course of business with respect
to obligations which are not due or which are being contested in good faith
by appropriate proceedings which prevent enforcement of the matter under
contest;
(c) the pledge of assets for the purpose of securing an appeal, stay
or discharge in the course of any legal proceeding, provided that the
aggregate amount of liabilities of the
Company and its Subsidiaries secured by a pledge of assets permitted under
this subsection, including interest and penalties thereon, if any, shall
not be in excess of $500,000 at any one time outstanding;
(d) the Liens granted in favor of the Agent for the benefit of the
Lenders pursuant to the Collateral Documents;
(e) Liens on property of the Company or any of its Subsidiaries
created solely for the purpose of securing indebtedness permitted by
Section 7.12(b) or 7.12(j) hereof, representing or incurred to finance,
refinance or refund the purchase price of Property, provided that no such
Lien shall extend to or cover other Property of the Company or such
Subsidiary other than the respective Property so acquired, and the
principal amount of indebtedness secured by any such Lien shall at no time
exceed the original purchase price of such Property;
(f) Liens on Property of any NonRestricted Subsidiary securing
indebtedness of such Subsidiary permitted by Section 7.12(f) or 7.12(g)
hereof; and
(g) Liens on limited liability company units in Alliance repurchased
pursuant to the terms of those certain Put/Call Agreements (as defined in
the Alliance Purchase Agreement) executed and delivered in connection with
the Alliance Purchase Agreement, but only to the extent such Liens secure
Subordinated Debt permitted under Section 7.12(h) hereof and which Liens
are at all times junior and subordinate to the Liens of the Agent therein
pursuant to the terms of the relevant subordination agreement relating to
such Subordinated Debt.
Section 7.14. Investments, Acquisitions, Loans, Advances and Guaranties. The
Company shall not, nor shall it permit any of its Subsidiaries to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances (other
than for travel advances and other similar cash advances made to employees in
the ordinary course of business) to, any other Person, or acquire all or any
substantial part of the assets or business of any other Person or division
thereof, or be or become liable as endorser, guarantor, surety or otherwise for
any debt, obligation or undertaking of any other Person, or otherwise agree to
provide funds for payment of the obligations of another, or supply funds thereto
or invest therein or otherwise assure a creditor of another against loss, or
apply for or become liable to the issuer of a letter of credit which supports an
obligation of another, or subordinate any claim or demand it may have to the
claim or demand of any other Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided
that any such obligations shall mature within one year of the date of
issuance thereof;
(b) investments in commercial paper rated at least P1 by Moody's
Investors Services, Inc. and at least A1 by Standard & Poor's Ratings
Services Group, a division of The McGraw-Hill Companies, Inc. maturing
within one year of the date of issuance thereof;
(c) investments in certificates of deposit issued by any Lender or
by any United States commercial bank having capital and surplus of not less
than $100,000,000 which have a maturity of one year or less;
(d) investments in repurchase obligations with a term of not more
than 7 days for underlying securities of the types described in subsection
(a) above entered into with any bank meeting the qualifications specified
in subsection (c) above, provided all such agreements require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System;
(e) investments in money market funds that invest solely, and which
are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding subsections
(a)-(d) above;
(f) the Company's investments from time to time in its Restricted
Subsidiaries, and investments made from time to time by a Restricted
Subsidiary in another Restricted Subsidiary; and intercompany advances made
from time to time between the Company and one or more Restricted
Subsidiaries or between Restricted Subsidiaries in the ordinary course of
business;
(g) Permitted Acquisitions;
(h) Guaranties executed by one or more Restricted Subsidiaries in
favor of the Agent and the Lenders;
(i) investments in, loan and advances to, and guarantees in respect of
the obligations of, Non-Restricted Subsidiaries and other Persons (other
than Subsidiaries) in which the Company, directly or indirectly, holds an
equity interest in, aggregating not more than $15,000,000 at any one time
outstanding;
(j) guaranties issued by the Company or any Restricted Subsidiary
guaranteeing or otherwise supporting the repayment of indebtedness of the
Company or a Restricted Subsidiary otherwise permitted by Section 7.12
hereof;
(k) the loan outstanding on the date of this Agreement owing by
Nephrology Associates of Northern Illinois, Ltd. to the Company in the
amount of $6,811,897.34, as the same may be increased by interest payable
thereon and as reduced by repayments of principal thereon;
(l) trade receivables from time to time owing to the Company or any of
its Subsidiaries created or acquired in the ordinary course of its
business;
(m) endorsement of items for deposit or collection of commercial paper
received in the ordinary course of business;
(n) Acquisitions or investments consented to by the Required Lenders
(as such term is defined in the Original Credit Agreement) pursuant to the
Original Credit Agreement; and
(o) other investments, loans and advances in addition to those
otherwise permitted by this Section in an aggregate amount not to exceed
$1,000,000 at any one time outstanding.
In determining the amount of investments, acquisitions, loans, advances and
guaranties permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guaranties shall be taken at
the amount of the obligations guaranteed thereby.
Section 7.15. Mergers, Consolidations and Sales. The Company shall not, nor
shall it permit
any of its Subsidiaries to, be a party to any merger or consolidation, or sell,
transfer, lease or otherwise dispose of all or any part of its Property,
including any disposition of Property as part of a sale and leaseback
transaction, or in any event sell or discount (with or without recourse) any of
its notes or accounts receivable; provided, however, that this Section shall not
apply to nor operate to prevent:
(a) the sale of inventory in the ordinary course of business;
(b) the sale, transfer, lease, or other disposition of Property of
the Company or any Restricted Subsidiary to one another in the ordinary
course of its business;
(c) a merger of any Restricted Subsidiary with and into the Company
or any other Restricted Subsidiary; provided that, in the case of any
merger involving the Company, the Company is the corporation surviving the
merger;
(d) the sale, transfer, or other disposition of any tangible
personal property that, in the reasonable business judgment of the Company
or its Subsidiary, has become uneconomical, obsolete, or worn out, and
which is disposed of in the ordinary course of business; and
(e) the sale, transfer, lease, or other disposition of Property of
the Company or any Subsidiary aggregating for the Company and its
Subsidiaries not more than $1,000,000 during any 12month period.
In the event of any merger permitted by Section 7.15(c) above, the Company shall
give the Agent and the Lenders prior written notice of any such event and,
immediately after giving effect to any such merger, Schedule 5.2 of this
Agreement shall be deemed amended excluding reference to any such Subsidiary
merged out of existence. So long as no Default or Event of Default has occurred
and is continuing or would arise as a result thereof, upon the written request
of the Company, the Agent shall release its Lien on any Property sold pursuant
to subsections (a), (d), or (e) above.
Section 7.16. Maintenance of Subsidiaries. The Company shall not assign, sell
or transfer, or permit any of its Subsidiaries to issue, assign, sell or
transfer, any shares of capital stock of a Subsidiary; provided, however, that
the foregoing shall not operate to prevent (w) the Lien on the capital stock of
each Subsidiary granted to the Agent pursuant to the Collateral Documents, (x)
the issuance, sale and transfer to any person of any shares of capital stock of
a Subsidiary solely for the purpose of qualifying, and to the extent legally
necessary to qualify, such person as a director of such Subsidiary, (y) any
transaction permitted by Section 7.15(c) above, and (z) the issuance of capital
stock of a Restricted Subsidiary if after giving effect to such issuance such
Subsidiary remains a Restricted Subsidiary.
Section 7.17. Dividends and Certain Other Restricted Payments. The Company
shall not, nor shall it permit any Subsidiary to, during any fiscal year (i)
declare or pay any dividends on or make any other distributions in respect of
any class or series of its capital stock (other than dividends payable solely in
its capital stock) or (ii) directly or indirectly purchase, redeem or otherwise
acquire or retire any of its capital stock, except that:
(a) nothing herein contained shall prevent the repurchase by (1)
Alliance of its units pursuant to the terms of those certain Put/Call
Agreements (as defined in the Alliance Purchase Agreement) executed and
delivered in connection with the Alliance Purchase Agreement, (2) Alliance
of the units of Tri-State Perfusion, L.L.C. held by Tri-State Perfusion
Services, Inc., pursuant to Section 6.4 of the Limited Liability Company
Agreement of Tri-State Perfusion, L.L.C., (3) Alliance of the units of
Perfusion Resource Association, L.L.C. held by Perfusion Resource
Association, Inc., pursuant to Section 6.5 of the Limited Liability Company
Agreement of Perfusion Resource Association, L.L.C. or (4) Saint Margaret
Mercy Dialysis Centers, L.L.C., of its units (other than units held by or
for the account of the Company) on terms reasonably acceptable to the Agent
and the Required Lenders, provided that in each case any consideration to
be paid therefor (other than consideration in the form of additional
Subordinated Debt permitted by Section 7.12(h) hereof) shall only be
payable so long as no Default or Event of Default exists prior to or would
result after giving effect to such payment;
(b) nothing herein contained shall prevent the making of dividends or
distributions out of earnings by a WhollyOwned Subsidiary to the Company;
(c) nothing herein contained shall prevent the making of dividends
or distributions out of earnings by any other Subsidiary ratably to its
equity interest holders so long as no Default or Event of Default exists
prior to or would result after giving effect to any such dividend, except
that any Subsidiary which is either a partnership or limited liability
company may make distributions to the extent necessary to allow each of its
partners or members, as the case may be, to make payment of its federal and
state income tax liability attributable to such Subsidiary's taxable income
regardless of whether or not a Default or Event of Default then exists;
(d) the Company may declare and pay dividends on its capital stock
in an aggregate amount during any fiscal year not to exceed 10% of Net
Income of the Company from the immediately preceding fiscal year so long as
no Default or Event of Default exists prior to or would result after giving
effect to any such dividend; and
(e) nothing herein contained shall prevent the purchase, redemption
or other acquisition or retirement of the capital stock of the Company in
connection with the death, retirement or termination of any officer,
director, employee or independent contractor of the Company or any
Restricted Subsidiary so long as no Default or Event of Default exists
hereunder or under the Indenture prior to or would result after giving
effect to any such purchase, redemption or other acquisition or retirement.
Section 7.18. ERISA. The Company shall, and shall cause each of its
Subsidiaries to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed is reasonably
likely to result in the imposition of a Lien against any of its Properties. The
Company shall, and shall cause each of its Subsidiaries to, promptly notify the
Agent and each Lender of (i) the occurrence of any reportable event (as defined
in ERISA) with respect to a Plan, (ii) receipt of any notice from the PBGC of
its intention to seek termination of any Plan or appointment of a trustee
therefor, (iii) its intention to terminate or withdraw from any Plan, and (iv)
the occurrence of any event with respect to any Plan which would result in the
incurrence by the Company or any of its Subsidiaries of any material liability,
fine or penalty, or any material increase in the contingent liability of the
Company or any of its Subsidiaries with respect to any post-retirement Welfare
Plan benefit.
Section 7.19. Compliance with Laws. The Company shall, and shall cause each
of its Subsidiaries to, comply in all respects with the requirements of all
federal, state and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to its Properties or business
operations, where any such non-compliance, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect or could result in a Lien
upon any of their Property.
Section 7.20. Burdensome Contracts with Affiliates. (a) The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any Property or the rendering of any service) with, or for the
benefit of, any Affiliate of the Company or its Restricted Subsidiaries (each an
"Affiliate Transaction"), other than (x) Affiliate Transactions permitted under
paragraph (b) below and (y) Affiliate Transactions on terms that are no less
favorable to the Company or such Restricted Subsidiary than those that could
reasonably have been obtained in a comparable transaction at such time on an
arm's length basis from a Person that is not an Affiliate of the Company or such
Restricted Subsidiary. All Affiliate Transactions (and each series of related
Affiliate Transactions which are similar or part of a common plan) involving
aggregate payments or other Property with a fair market value in excess of
$1,000,000 shall be approved by the Board of Directors of the Company or such
Restricted Subsidiary, as the case may be, such approval to be evidenced by a
Board Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
aggregate payments or other property with a fair market value of more than
$5,000,000, the Company or such Restricted Subsidiary, as the case may be,
shall, prior to the consummation thereof, obtain a favorable opinion as to the
fairness of such transaction or series of related transactions to the Company or
the relevant Restricted Subsidiary, as the case may be, from a financial point
of view, from an independent financial advisor acceptable to the Agent and
deliver the same to the Agent.
(b) The restrictions set forth in Section 7.20(a) above shall not apply to,
and the following shall be deemed not to be Affiliate Transactions: (i)
reasonable fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any Subsidiary of the Company
as determined in good faith by the Company's Board of Directors; (ii)
transactions exclusively between or among the Company and any of its Wholly-
Owned Subsidiaries or exclusively between or among such Wholly-Owned
Subsidiaries, provided such transactions are not otherwise prohibited by this
Agreement; (iii) any agreement described in Schedule 5.14 hereof or any
amendment thereto or any transaction contemplated thereby (including pursuant to
any amendment thereto) in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Lenders in
any material respect than the original agreement as in effect on the date
hereof; (iv) investments, acquisitions, loans, advances or guarantees permitted
by Section 7.14 hereof; (v) dividends and other restricted payments permitted by
Section 7.17 hereof; (vi) contracts pursuant to which the Company or a Wholly-
Owned Subsidiary provides management services to an Affiliate in exchange for
payments in cash or cash equivalents, that are not less favorable to the Company
or such Wholly-Owned Subsidiary than those that could reasonably be obtained in
a comparable transaction at such time on an arm's-length basis from a Person
that is not an Affiliate of the Company or such Wholly-Owned Subsidiary; and
(vii) leases of employees for payments in cash or cash equivalents that are
greater than or equal to the wage and benefit cost of such employees.
Section 7.21. No Changes in Fiscal Year. The Company shall not, nor
shall it permit any of its Subsidiaries to, change its fiscal year from its
present basis without the prior written consent of the Required Lenders.
Section 7.22. Formation of Subsidiaries. Except for existing
Subsidiaries designated on Schedule 5.2 hereto, Restricted Subsidiaries formed
for the purpose of acquiring all or substantially all of the assets of, or all
or substantially all of the equity interest of, another Person pursuant to a
Permitted Acquisition, or Restricted Subsidiaries (and any such Restricted
Subsidiary's Subsidiaries) acquired pursuant to a Permitted Acquisition, the
Company shall not, nor shall it permit any of its Subsidiaries to, form or
acquire any Subsidiary without the prior written consent of the Required
Lenders.
Section 7.23. Change in the Nature of Business. The Company shall not, nor
shall it permit any of its Subsidiaries to, engage in any business or activity
if as a result the general nature of the business of the Company or any of its
Subsidiaries would be changed in any material respect from the general nature of
the business engaged in by it as of the date of this Agreement or as of the date
such Person becomes a Subsidiary hereunder.
Section 7.24. Subordinated Debt. The Company shall at all times ensure that
all Obligations now existing or hereafter arising constitute "Senior Debt", or
words of like import, under each indenture, instrument, or agreement evidencing
or otherwise setting forth the terms or conditions applicable to any outstanding
Subordinated Debt. Neither the Company nor any Subsidiary shall amend or modify,
other than the amendment contemplated by Section 6.3 hereof, any of the terms
and conditions relating to any Subordinated Debt or make any voluntary
prepayment thereof or affect any voluntary redemption thereof or make any
payment on account of Subordinated Debt which is prohibited under the terms of
any instrument or agreement subordinating the same to the Obligations; provided,
however, that nothing contained herein shall prohibit any payment obligation
under Section 7 of the Alliance Purchase Agreement of Hurdle, Kuntz, BeTech,
Services, Perfusion, Czaplicka or Lewis from being satisfied by set-off in
accordance with the terms of the Alliance Purchase Agreement.
Section 7.25. Use of Loan Proceeds. The Company shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 5.4 hereof.
Section 7.26. Assets and Earnings Concentrations. On the last day of each
fiscal quarter of the Company, and on the date of any Permitted Acquisition, and
immediately after giving effect thereto, the Company shall not permit (a) the
total assets of its Subsidiaries in which the Company's ownership interest
therein is less than 80% to be more than 15% of the total consolidated assets of
the Company and its Subsidiaries and (b) the total net income of its
Subsidiaries in which the Company's ownership interest therein is less than 80%
to be more than 15% of consolidated net income of the Company and its
Subsidiaries.
Section 7.27. No Restrictions on Subsidiary Distributions. Except as
provided herein, the Company shall not and shall not permit any of its
Restricted Subsidiaries directly or indirectly to create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Restricted Subsidiary to: (1) pay dividends or
make any other distribution on any of such Restricted Subsidiary's capital stock
or other equity interests owned by the Company or any other Restricted
Subsidiary; (2) pay any indebtedness owed to the Company or any other Restricted
Subsidiary; (3) make loans or advances to the Company or any
other Restricted Subsidiary; (4) transfer any of its property or assets to the
Company or any other Restricted Subsidiary; or (5) guarantee the Obligations, or
grant Liens to the Agent on its Property as collateral security therefor, as
required by Section 4 hereof.
Section 7.28. Year 2000 Assessment. The Company shall take all actions
necessary and commit adequate resources to assure that its computerbased and
other systems (and those of all Subsidiaries) are able to effectively process
dates, including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that would reasonably be expected to have a
Material Adverse Effect. At the request of the Agent, the Company will provide
the Agent with written assurances and substantiations (including, but not
limited to, the results of internal or external audit reports prepared in the
ordinary course of business) reasonably acceptable to the Agent as to the
capability of the Company and its Subsidiaries to conduct its and their
businesses and operations before, on and after January 1, 2000, without
experiencing a Year 2000 Problem which would reasonably be expected to have a
Material Adverse Effect.
Section 7.29. Interest Rate Protection. Within 60 days following each
Conversion Date, the Company will hedge its interest rate risk on 50% of the
principal amount outstanding on the Term Loan(s) created on such Conversion Date
for a minimum of three years, through the use of one or more Hedging
Arrangements, with all of the foregoing to effectively limit the amount of
interest that the Company must pay on notional amounts of not less than such
portion of the Term Loans to not more than a rate acceptable to the Agent in its
reasonable discretion. Any Hedging Arrangements entered into after the date of
this Agreement shall be on terms and conditions, and with such parties,
reasonably acceptable to the Agent.
Section 8. Events of Default and Remedies.
Section 8.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default in the payment when due of all or any part of the
principal of or interest on any Note (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any
Reimbursement Obligation or of any fee or other Obligation payable
hereunder or under any other Loan Document;
(b) default in the observance or performance of any covenant set
forth in Sections 7.5, 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15,
7.16, 7.17, 7.24, 7.25 or 7.26 hereof or of any provision in any Loan
Document dealing with the use, disposition or remittance of the proceeds of
Collateral or requiring the maintenance of insurance thereon;
(c) default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within 30 days
after the earlier of (i) the date on which such failure shall first become
known to any officer of the Company or (ii) written notice thereof is given
to the Company by the Agent (provided that the Company shall have an
additional 30 days to cure any such default before the same becomes an
"Event of Default" hereunder if such default is reasonably susceptible to
cure within the additional 30day period but only so long as the Company
diligently and in good faith works to cure such default during the
additional 30day period);
(d) any material representation or warranty made herein or in any
other Loan Document or in any certificate furnished to the Agent or the
Lenders pursuant hereto or thereto or in connection with any transaction
contemplated hereby or thereby proves untrue
in any material respect as of the date of the issuance or making or deemed
making thereof;
(e) any event occurs or condition exists (other than those described
in subsections (a) through (d) above) which is specified as an event of
default under any of the other Loan Documents, or any of the Loan Documents
shall for any reason not be or shall cease to be in full force and effect,
or any of the Loan Documents is declared to be null and void, or any of the
Collateral Documents shall for any reason fail to create a valid and
perfected first priority Lien in favor of the Agent in any Collateral
purported to be covered thereby except as expressly permitted by the terms
thereof, or any Restricted Subsidiary takes any action for the purpose of
terminating, repudiating or rescinding any Loan Document executed by it or
any of its obligations thereunder;
(f) default shall occur under any Indebtedness for Borrowed Money
aggregating in excess of $1,000,000 issued, assumed or guaranteed by the
Company or any Restricted Subsidiary or under any indenture, agreement or
other instrument under which the same may be issued, and such default shall
continue for a period of time sufficient to permit the acceleration of the
maturity of any such Indebtedness for Borrowed Money (whether or not such
maturity is in fact accelerated), or any such Indebtedness for Borrowed
Money shall not be paid when due (whether by demand, lapse of time,
acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant or warrants
of attachment, or any similar process or processes in an aggregate amount
in excess of $1,000,000 in excess of any applicable insurance coverage
shall be entered or filed against any of the Company or any Restricted
Subsidiary or against any of its Property and which remains undischarged,
unvacated, unbonded or unstayed for a period of 30 days;
(h) the Company or any member of its Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess $1,000,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $1,000,000 (collectively, a
"Material Plan") shall be filed under Title IV of ERISA by the Company or
any other member of its Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against the Company or any member of its
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be terminated;
(i) the Company or any Restricted Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its Property, (v) institute any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take any
corporate action in furtherance of any matter described in parts (i)
through (v) above, or (vii) fail to contest in good faith any appointment
or proceeding described in Section 8.1(j) hereof; or
(j) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Company or any Restricted Subsidiary or
any substantial part of any of its Property, or a proceeding described in
Section 8.1(i)(v) shall be instituted against the Company or any Restricted
Subsidiary, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 days.
Section 8.2. Non-Bankruptcy Remedies. When any Event of Default
described in subsections 8.1(a) to 8.1(h), both inclusive, has occurred and is
continuing, the Agent shall, upon request of the Required Lenders, by notice to
the Company, take any or all of the following actions:
(a) terminate the obligations of the Lenders to extend any further
credit hereunder on the date (which may be the date thereof) stated in such
notice;
(b) declare the principal of and the accrued interest on the Notes
to be forthwith due and payable and thereupon the Notes, including both
principal and interest, and all fees, charges and other Obligations payable
hereunder and under the other Loan Documents, shall be and become
immediately due and payable without further demand, presentment, protest or
notice of any kind; and
(c) enforce any and all rights and remedies available to it under
the Loan Documents or applicable law.
Section 8.3. Bankruptcy Remedies. When any Event of Default described in
subsection 8.1(i) or 8.1(j) has occurred and is continuing, then the Notes,
including both principal and interest, and all fees, charges and other
Obligations payable hereunder and under the other Loan Documents, shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligations of the Lenders to extend further credit
pursuant to any of the terms hereof shall immediately terminate. In addition,
the Agent may exercise any and all remedies available to it under the Loan
Documents or applicable law.
Section 8.4. Collateral for Undrawn Letters of Credit. If and when (x) any
Event of Default, other than an Event of Default described in subsections (i) or
(j) of Section 8.1, has occurred and is continuing, the Company shall, upon
demand of the Agent, and (y) any Event of Default described in subsections (i)
or (j) of Section 8.1 has occurred or any Letter of Credit is outstanding on the
Termination Date (whether or not any Event of Default has occurred), the Company
shall, without notice or demand from the Agent, immediately pay to the Agent the
full amount of each Letter of Credit, the Company agreeing to immediately make
each such payment and acknowledging and agreeing that the Agent and the Lenders
would not have an adequate remedy at law for failure of the Company to honor any
such demand and that the Agent shall have the right to require the Company to
specifically perform such undertaking whether or not any draws have been made
under the Letters of Credit.
Section 9. Definitions; Interpretations.
Section 9.1. Definitions. The following terms when used herein have the
following
meaning:
"ACH Liability" means the liability of the Company, or any Subsidiary, to
Harris Trust and Savings Bank and its affiliates arising out of the processing
of incoming and outgoing transfers of funds by automatic clearing house
transfer, wire transfer, or otherwise pursuant to agreement or otherwise arising
out of overdrafts and related cash management services afforded to the Company
or any such Subsidiary by any such financial institutions, not to exceed
$5,000,000 in the aggregate at any one time outstanding or such greater amount
agreed to by the Company, Harris Trust and Savings Bank and the Required
Lenders.
"Acquired Business" means the entity or assets acquired by the Company or a
Subsidiary in an Acquisition, whether before or after the date hereof.
"Acquired Business Cash Flow" means, with respect to any period, the amount
(if any) by which (A) the difference (if any) of (i) net income of the Acquired
Business for such period plus the sum of all amounts deducted in arriving at
such net income amount in respect of all charges for depreciation of fixed
assets, amortization of intangible assets, and all other non-cash items charged
to net income for such period, minus (plus) (ii) additions (reductions) to
noncash working capital of the Acquired Business for such period (i.e., the
increase or decrease in noncash current assets minus the current liabilities
(excluding the current maturities of longterm debt) of the Acquired Business
from the beginning to the end of such period) exceeds (B) the aggregate amount
of capital expenditures to be incurred by or in connection with the Acquired
Business during such period, adjusted reflecting the Company's equity interest
therein if the Acquired Business is not operated by a Wholly-owned Subsidiary.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that the Borrower or the Subsidiary is the
surviving entity.
"Acquisition EBITDA" means, with reference to any period and any Acquired
Business of a Target, the total net income (as determined in accordance with
GAAP) of such Target arising out of the Acquired Business plus the sum of all
amounts deducted in arriving at such net income amount in respect of (a)
interest expense for such period, (b) federal, state, and local income taxes for
such period, and (c) depreciation of fixed assets and amortization of intangible
assets for such period, and adjusted for nonrecurring expenses and non-recurring
revenue reasonably determined by the Company in good faith and established to
the reasonable satisfaction of the Agent.
"Acquisition Financing Commitments" is defined in Section 1.4(a) hereof.
"Acquisition Financing Loans" is defined in Section 1.4(a) hereof.
"Acquisition Financing/Term Notes" is defined in Section 1.4(c) hereof.
"Acquisition Financing Termination Date" means June 30, 2002, or such
earlier date on which the Acquisition Financing Commitments are terminated in
whole pursuant to Section 3.8, 8.2 or 8.3 hereof.
"Adjusted EBITDA" means, as of the last day of any fiscal quarter of the
Company, the sum (without duplication) of the following:
(a) EBITDA of the Company and is Subsidiaries for the four fiscal
quarters then ended (computed exclusive of that portion of EBITDA
attributable to an Acquired Business acquired during such period); plus
(b) for each Acquired Business acquired during the fiscal quarter
then ended, Acquisition EBITDA of such Acquired Business for the most
recently completed period of four fiscal quarters ending immediately prior
to the date of the relevant Acquisition; plus
(c) for each Acquired Business acquired prior to the beginning of
the most recently completed fiscal quarter of the Company, but within four
fiscal quarters of the Company then ended, EBITDA of such Acquired Business
for the period from the date of the relevant Acquisition to the last day of
the fiscal quarter then ended multiplied by a fraction, the numerator of
which is 365 and the denominator of which is the number of days elapsed
since the date of the Acquisition and adjusted for nonrecurring
Acquisitionrelated expenses and nonrecurring Acquisitionrelated revenue for
such period as reasonably determined by the Company in good faith and
established to the reasonable satisfaction of the Agent.
"Adjusted LIBOR Rate" means a rate per annum determined by the Agent
pursuant to the following formula:
Adjusted LIBOR Rate = LIBOR
-----------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing the Adjusted LIBOR
Rate, the maximum rate of all reserve requirements (including, without
limitation, any marginal emergency, supplemental or other special reserves)
imposed by the Board of Governors of the Federal Reserve System (or any
successor) under Regulation D on Eurocurrency liabilities (as such term is
defined in Regulation D) for the applicable Interest Period as of the first day
of such Interest Period, but subject to any amendments to such reserve
requirement by such Board or its successor, and taking into account any
transitional adjustments thereto becoming effective during such Interest Period.
For purposes of this definition, LIBOR Portions shall be deemed to be
Eurocurrency liabilities as defined in Regulation D without benefit of or credit
for prorations, exemptions, or offsets under Regulation D. "LIBOR" means, for
each Interest Period, (a) the LIBOR Index Rate for such Interest Period, if such
rate is available, and (b) if the LIBOR Index Rate cannot be determined, the
arithmetic average of the rate of interest per annum (rounded upwards, if
necessary, to nearest 1/100 of 1%) at which deposits in U.S. dollars in
immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) 2 Business Days before the beginning of such Interest Period by 3
or more major banks in the interbank eurodollar market selected by the Agent for
a period equal to such Interest Period and in an amount equal or comparable to
the principal amount of the applicable LIBOR Portion scheduled to be made by the
Agent as part of such Borrowing. "LIBOR Index Rate" means, for any Interest
Period, the rate per annum (rounded upwards, if necessary, to the next higher
one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period, which appears on the Telerate Page 3750 as
of 11:00 a.m. (London, England time) on the day 2 Business Days before the
commencement of such Interest Period. "Telerate Page 3750" means the display
designated as "Page 3750" on the Dow Jones Telerate Service (or such other page
as may replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information vendor for the
purpose
of displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits). Each determination of LIBOR made by the Agent shall be
conclusive and binding on the Company and the Lenders absent manifest error.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
"Agent" means Harris Trust and Savings Bank and any successor thereto
appointed pursuant to Section 10.1 hereof.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Alliance" is defined in Section 7.12(h) hereof.
"Alliance Purchase Agreement" is defined in Section 7.12(h) hereof.
"Applicable Margin" means, with respect to Revolving Loans, Acquisition
Financing Loans, Term Loans, Supplemental Revolving Loans and Y2K Revolving
Loans, the rate per annum specified below:
Applicable Margin for Base Rate Portion
of Revolving Loans and Y2K Revolving Loans: 0.75%
Applicable Margin for LIBOR Portions
of Revolving Loans and Y2K Revolving Loans and for Letters of Credit: 2.50%
Applicable Margin for Base Rate Portion of
Acquisition Financing Loans, Term Loans, and Supplemental Revolving Loans: 1.00%
Applicable Margin for LIBOR Portions of
Acquisition Financing Loans, Term Loans, and Supplemental Revolving Loans: 2.75%
; provided, however, that the Applicable Margins shall be subject to quarterly
adjustments (commencing with an adjustment with respect to the fiscal quarter
ending June 30, 1999 as follows:
Applicable Margin Applicable Margin Applicable Margin
for LIBOR Portions for Base Rate for LIBOR Portions
Applicable Margin for of Revolving Loans Portion of of Acquisition
Base Rate Portion of and Y2K Revolving Acquisition Financing Loans,
If as of the Last Day of the Revolving Loans and Loans and for Financing Loans, Term Loans and
Most Recently Completed Y2K Revolving Loans is Letters of Credit Term Loans and Supplemental
Fiscal Quarter the Cash Flow is Supplemental Revolving Loans is
Leverage Ratio is Revolving Loans is
greater than or equal to 4.5 1.00% 2.75% 1.25% 3.00%
to 1.0
less than 4.5 to 1.0 but
greater than or equal to 3.5 .75% 2.50% 1.00% 2.75%
to 1.0
less than 3.5 to 1.0 but
greater than or equal to 2.5 .50% 2.25% .75% 2.50%
to 1.0
less than 2.5 to 1.0 Nil 2.00% .25% 2.25%
After the close of each quarterly fiscal period of the Company (the close of
such quarterly fiscal period being hereinafter referred to as the "Margin
Testing Time"), the Agent shall (i) confirm that the financial statements
theretofore furnished to it indicate compliance with the ratios required above
as of the Margin Testing Time and (ii) notify the Company and the Lenders of
such determination and of any change in the Applicable Margin resulting
therefrom. Any change in the Applicable Margin shall be effective on the 3rd day
following the Agent's receipt of the quarterly covenant compliance certificate
called for by Section 7.5 hereof and with such new Applicable Margin to continue
in effect until the effectiveness of the next redetermination thereof. Any
determination by the Agent of the Applicable Margin shall be conclusive and
binding upon the Company and the Lenders provided that it has been made in good
faith and based upon the financial statements described above.
"Application" is defined in Section 1.3 hereof.
"Authorized Representative" means those persons shown on the list of
individuals provided by the Company pursuant to Section 6.2 hereof or on any
update of any such list provided by the Company to the Agent, or any further or
different individuals so named by an Authorized Representative of the Company in
a written notice to the Agent.
"Base Rate" means a fluctuating interest rate per annum equal at all times
to the greater of (a) the rate of interest announced by the Agent from time to
time as its prime commercial rate as in effect on such day, with any change in
such rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Agent's best or lowest
rate); and (b) the sum of (x) the rate determined by the Agent to be the average
(rounded upwards, if necessary, to the next higher 1/100 of 1%) of the rates per
annum quoted to the Agent at approximately 10:00 a.m. Chicago time (or as soon
thereafter as is practicable) on such day (or, if such day is not a Business
Day, on the immediately preceding Business Day) by two or more Federal funds
brokers selected by the Agent for the sale to the Agent at face value of Federal
funds in the secondary market in an amount equal or comparable to the principal
amount owed to the Agent for which such rate is being determined, plus (y) 1/2
of 1%.
"Base Rate Portions" is defined in Section 2.1(a) hereof.
"Borrowing" means the total of Loans of a single type made to the Company
by all the Lenders on a single date, and if such Loans are to be part of a LIBOR
Portion, for a single Interest Period. Borrowings of Loans are made and
maintained ratably from each of the Lenders according to their Percentages of
the relevant Commitment.
"Borrowing Base" means, as of any time it is to be determined, the sum of
(a) 75% of the then outstanding unpaid amount of Eligible Accounts, and (b) the
lesser of (i) $2,000,000 and (ii) 50% of the value (computed at the lower of
market or cost using the first-in/first-out method of inventory valuation
applied by the Company in accordance with GAAP) of Eligible Inventory; provided
that the Borrowing Base shall be computed only as against and on so much of the
Collateral as is included on the certificates to be furnished from time to time
by the Company pursuant to Section 7.5(a) hereof and, if required by the Agent
pursuant to any of the terms hereof or any Collateral Document, as verified by
such other evidence reasonably required to be furnished to the Agent or the
Lenders pursuant hereto or pursuant to any such Collateral Document.
"Business Day" shall mean any day (other than a Saturday or Sunday) on
which banks are not authorized or required to close in Chicago, Illinois and,
when used with respect to LIBOR Portions, a day on which banks are also dealing
in United States Dollar deposits in London, England.
"Capital Lease" means any lease of Property (whether real or personal)
which in accordance with GAAP is required to be capitalized on the balance sheet
of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown on
the balance sheet of any Person in respect of a Capital Lease determined in
accordance with GAAP.
"Cash Flow Leverage Ratio" means, as of the last day of any fiscal quarter
of the Company, the ratio of (a) Total Funded Debt then outstanding excluding
the outstanding principal amount of Y2K Revolving Loans to (b) Adjusted EBITDA
for the four fiscal quarters of the Company then ended.
"Change of Control" means the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Company and its Subsidiaries taken as a whole to any Person or group of
related Persons for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "Group") together with any Affiliates
thereof; (b) the approval
by the holders of capital stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company; (c) the acquisition of beneficial
ownership (within the meaning of Rule 13d3 under the Exchange Act) in one or
more transactions by any Person or Group other than a Person who is a
stockholder of the Company as of the date hereof or Group comprised solely of
such Persons (the "Control Group") of either more than 25% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Company or more than 25% of the aggregate issued and outstanding common
stock of the Company and such beneficial ownership percentage is greater than
the beneficial ownership of the Control Group; (d) either Home Dialysis of
America, Inc. or WSKC Dialysis Services, Inc. cease to be a Restricted
Subsidiary and a WhollyOwned Subsidiary of the Company; (e) the replacement of a
majority of the Board of Directors of the Company over a twoyear period from the
directors who constituted the Board of Directors of the Company at the beginning
of such period, and such replacement shall not have been approved by a vote of
at least a majority of the Board of Directors of the Company then still in
office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved; or (f) any "Change of Control" (or words of like
import), as defined in any instrument, agreement or indenture relating to any
issue of Subordinated Debt, shall occur, the effect of which is to cause the
acceleration of any Subordinated Debt or to enable the holder of any
Subordinated Debt to cause the Company or any Subsidiary to repurchase, redeem,
repay, or otherwise retire any Subordinated Debt.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral" means all properties, rights, interests and privileges from
time to time subject to the Liens granted to the Agent by the Collateral
Documents.
"Collateral Documents" means all security agreements, pledge agreements,
assignments, financing statements and other documents as shall from time to time
secure or relate to the Obligations.
"Commitments" means and includes the Revolving Credit Commitments, the L/C
Commitment, the Acquisition Financing Commitments, the Supplemental Revolving
Credit Commitments and the Y2K Revolving Credit Commitments. The parties
acknowledge that the aggregate Commitments available to the Company do not
exceed $140,000,000 as of the date of this Agreement.
"Company" is defined in the introductory paragraph of this Agreement.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Conversion Date" is defined in Section 1.4(b) hereof.
"Default" means any event or condition the occurrence of which would, with
the lapse of time or the giving of notice, or both, constitute an Event of
Default.
"Disposition" means the sale, lease, conveyance, or other disposition of
Property, other than sales or other dispositions expressly permitted under
Section 7.15(a) or 7.15(b) hereof.
"EBITDA" means, with reference to any period, Net Income for such period
plus the sum of all amounts deducted in arriving at such Net Income amount in
respect of (a) non-reoccurring
acquisition expenses incurred in connection with Permitted Acquisition as
reasonably determined by the Company in good faith and established to the
reasonable satisfaction of the Agent, (b) Interest Expense for such period, (c)
federal, state and local income taxes for such period, and (d) depreciation of
fixed assets and amortization of intangible assets for such period.
"Eligible Account" means each account receivable of the Company and of each
Restricted Subsidiary who has executed and delivered a Guaranty and the
Collateral Documents called for by this Agreement that:
(a) arises out of the sale by the Company or such Subsidiary of
goods delivered to and accepted by, or out of the rendition of services
fully performed by the Company or such Subsidiary and accepted by, the
account debtor on such account receivable;
(b) the account debtor on such account receivable is located within
the United States of America;
(c) is the valid, binding and legally enforceable obligation of the
account debtor obligated thereon and such account debtor is not (i) an
Affiliate of the Company or such Subsidiary, (ii) a shareholder, director,
officer or employee of the Company or any Subsidiary, (iii) a debtor under
any proceeding under the United States Bankruptcy Code, as amended, or any
other comparable bankruptcy or insolvency law, or (iv) an assignor for the
benefit of creditors;
(d) is not evidenced by an instrument or chattel paper unless the
same has been endorsed and delivered to the Agent;
(e) is an asset of the Company or such Subsidiary to which it has
good and marketable title, is freely assignable, is subject to a perfected,
first priority Lien in favor of the Agent for the benefit of the Lenders,
and is free and clear of any other Lien other than Liens permitted by
Section 7.13(a) and (b) hereof;
(f) is net of any credit or allowance given by the Company or such
Subsidiary to such account debtor;
(g) is not subject to any asserted offset, counterclaim or other
defense with respect thereto;
(h) is not unpaid more than 120 days after the original invoice date
(which must be not more than 5 days subsequent to the shipment date or the
date services were fully performed by the Company or such Subsidiary); and
(i) does not arise from a sale to an account debtor on a bill-and-
hold, guaranteed sale, sale-or-return, sale-on-approval, consignment or any
other repurchase or return basis.
"Eligible Inventory" means all pre-packaged medical supplies inventory of
the Company and of each Restricted Subsidiary who has executed and delivered a
Guaranty and the Collateral Documents called for by this Agreement, provided
that such inventory:
(a) is an asset of the Company or such Subsidiary to which it has
good and defensible title, is freely assignable, and is subject to a
perfected, first priority Lien in favor of the Agent, and is free and clear
of any other Lien other than Liens permitted by Section 7.13(a) and (b)
hereof;
(b) is located at a Permitted Collateral Location (as such term is
defined in the relevant Collateral Documents for such inventory) or such
other locations as are approved in writing by the Agent; and
(c) is not obsolete, and is of good and merchantable quality free
from any defects which reasonably would be expected to materially adversely
affect the market value thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto.
"Event of Default" means any event or condition specified as such in
Section 8.1 hereof.
"Event of Loss" means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property or (b) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property.
"Excess Cash Flow" means, with respect to any period, the amount (if any)
by which (a) EBITDA during such period exceeds (b) the sum of (i) capital
expenditures for the Company and its Restricted Subsidiaries during such period
(computed on a consolidated basis in accordance with GAAP) plus (ii) payments of
principal made with respect to Indebtedness for Borrowed Money of the Company
and its Restricted Subsidiaries during such period (excluding payments made with
respect to Revolving Loans, Supplemental Revolving Loans, Y2K Revolving Loans or
mandatory prepayments required pursuant to Section 3.7 hereof) plus (iii)
federal, state and local income taxes of the Company and its Restricted
Subsidiaries actually paid during such period plus (iv) interest charges of the
Company and its Restricted Subsidiaries actually paid during such period, minus
(plus) (v) additions (reductions) to noncash working capital of the Company and
its Restricted Subsidiaries for such period (i.e., the increase or decrease in
consolidated noncash current assets of the Company and its Restricted
Subsidiaries minus the consolidated current liabilities (excluding current
maturities of long term debt) of the Company and its Restricted Subsidiaries
from the beginning to the end of such period).
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (b) of the definition of Base Rate.
"Fixed Charges" means, with reference to any period, the sum of (a) the
aggregate amount of payments required to be made by the Company and its
Restricted Subsidiaries during such period in respect of principal on all
Indebtedness for Borrowed Money (whether at maturity, as a result of mandatory
sinking fund redemption, mandatory prepayment, acceleration or otherwise), plus
(b) Interest Expense for the same period.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Company and its Subsidiaries on a basis consistent
with the preparation of the Company's most recent financial statements furnished
to the Lenders pursuant to Section 7.5 hereof.
"Guaranty" and "Guaranties" are defined in Section 4.2 hereof.
"Hedging Arrangement" means any interest rate swap, cap, collar or other
recognized interest rate hedging arrangement.
"Hedging Liability" means the liability of the Company to any of the
Lenders or their affiliates in respect of any Hedging Arrangements as the
Company may from time to time enter into pursuant to Section 7.29 hereof or
otherwise with the Agent's prior written consent. Unless and until the amount
of the Hedging Liability is fixed and determined, the Hedging Liability shall be
deemed to be 4% per annum of the notional amount of the hedge from the date of
computation to the date the hedge expires.
"Hostile Acquisition" means the acquisition of the capital stock or other
equity interests of
a Person through a tender offer or similar solicitation of the owners of such
capital stock or other equity interests which has not been approved (prior to
such acquisition) by resolutions of the Board of Directors of such Person or by
similar action if such Person is not a corporation, and as to which such
approval has not been withdrawn.
"Indebtedness for Borrowed Money" means for the Company and its
Subsidiaries the sum (without duplication) of (a) all indebtedness of the
Company and each of its Subsidiaries for borrowed money, whether current or
funded, or secured or unsecured, (b) all indebtedness for the deferred purchase
price of Property or services, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by the Company or any of its Subsidiaries (even though the rights and
remedies of the seller or lender under such agreement in the event of a default
are limited to repossession or sale of such Property), (d) all indebtedness
secured by a purchase money mortgage or other Lien to secure all or part of the
purchase price of Property subject to such mortgage or Lien, (e) all obligations
under leases which shall have been or must be, in accordance with GAAP, recorded
as Capital Leases in respect of which the Company or any of its Subsidiaries is
liable as lessee, (f) any liability in respect of banker's acceptances or
letters of credit, (g) any indebtedness, whether or not assumed, secured by
Liens on Property acquired by the Company or any of its Subsidiaries at the time
of acquisition thereof and (h) all indebtedness referred to in clause (a), (b),
(c), (d), (e), (f) or (g) above which is directly or indirectly guaranteed by
the Company or any of its Subsidiaries or which any of the foregoing have agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which any of them have otherwise assured a creditor against loss, it being
understood that the term "Indebtedness for Borrowed Money" shall not include
trade payables arising in the ordinary course of business.
"Indenture" means that certain Indenture dated as of May 5, 1998, by and
among the Company, certain guarantors which are or may become party thereto and
American National Bank and Trust Company of Chicago, as trustee, as the same may
be amended in accordance with Section 7.24 hereof.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Company and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Interest Period" means, with respect to any LIBOR Portion the period
commencing on, as the case may be, the creation, continuation or conversion date
with respect to such LIBOR Portion and ending 1, 2, 3 or 6 months thereafter as
selected by the Company in its notice as provided herein; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:
(a) if any Interest Period would otherwise end on a day which is not
a Business Day, that Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(b) no Interest Period may extend beyond the final maturity date of
the relevant Notes;
(c) the interest rate to be applicable to each Portion for each
Interest Period shall
apply from and including the first day of such Interest Period to but
excluding the last day thereof; and
(d) no Interest Period may be selected if after giving effect
thereto the Company will be unable to make a principal payment scheduled to
be made during such Interest Period without paying part of a LIBOR Portion
on a date other than the last day of the Interest Period applicable
thereto.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.
"L/C Commitment" means $3,000,000, as reduced pursuant to Section 3.8
hereof.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lenders" means Harris Trust and Savings Bank and all other lenders
becoming parties hereto pursuant to Section 11.17 hereof.
"Letter of Credit" is defined in Section 1.3 hereof.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind or nature in respect of any Property, including the
interest of a vendor or lessor under any conditional sale, Capital Lease or
other title retention arrangement.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Collateral Documents, the Guaranties, and each other instrument or document to
be delivered hereunder or thereunder or otherwise in connection therewith.
"Loans" means and includes Revolving Loans, the Acquisition Financing
Loans, the Term Loans, the Supplemental Revolving Loans and the Y2K Revolving
Loans.
"Material Adverse Effect" means (a) a material adverse change in, or
material adverse effect upon, the business, Property, condition (financial or
otherwise), results of operations or business prospects of the Company and its
Subsidiaries taken as a whole, (b) a material adverse effect upon the ability of
the Company or any Restricted Subsidiary to perform its obligations under the
Loan Documents, or (c) a material adverse effect upon the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Agent or the Lenders thereunder.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition, (ii) sale, use, or other transactional taxes paid or payable by
such Person as a direct result of such Disposition, and (iii) amounts required
to be applied to repay principal of, premium, if any, and interest on any
Indebtedness for Borrowed Money secured by a Lien on the Property (or portion
thereof) sold or otherwise disposed of (other than the Obligations hereunder)
which is required to be and is repaid in connection with such Disposition and
(b) with respect to any Event of Loss of a Person, cash and cash equivalent
proceeds received by or for such Person's account (whether as a result of
payments made under any applicable insurance policy therefor or in connection
with condemnation proceedings or otherwise), net of reasonable direct costs
incurred in connection with the collection of such proceeds, awards or other
payments.
"Net Income" means, with reference to any period, the net income (or net
loss) of the Company and its Restricted Subsidiaries for such period computed on
a consolidated basis in accordance with GAAP.
"Net Worth" means, at any time the same is to be determined, total
shareholder's equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock) which would appear on a
consolidated balance sheet of the Company and its Restricted Subsidiaries
prepared on a consolidated basis in accordance with GAAP.
"Net Issuance Proceeds" means, as to any issuance of equity by the Company
or its Restricted Subsidiaries, cash proceeds and non-cash proceeds received or
receivable by such Person in connection therewith, net of reasonable out-of-
pocket costs and expenses paid or incurred in connection therewith.
"NonRestricted Subsidiary" means any Subsidiary which is not a Restricted
Subsidiary.
"Notes" means and includes the Revolving Credit Notes, the Acquisition
Financing/ Term Notes, the Supplemental Revolving Credit Notes and the Y2K
Revolving Credit Notes.
"Obligations" means all obligations of the Company to pay principal and
interest on the Loans, all Reimbursement Obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment
obligations of the Company or any Subsidiary arising under or in relation to any
Loan Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means, for each Lender, the percentage of the applicable
Commitments represented by such Lender's Commitment or, if the Commitments have
been terminated, the percentage held by such Lender (including through
participation interests in L/C Obligations) of the aggregate principal amount of
all outstanding Obligations.
"Permitted Acquisition" means any Acquisition by the Company or any
Restricted Subsidiary of the stock or assets of other Persons which satisfies
all of the following conditions:
(a) the Acquired Business is in a Permitted Line of Business;
(b) the Acquisition is not a Hostile Acquisition;
(c) fortyfive days prior to the consummation of any such
Acquisition, or such shorter period as the Agent may agree to in writing,
the Company shall have notified the Lenders of the proposed transaction in
reasonable detail as to the terms thereof (including sources and uses of
funds therefor) and furnished the Lenders historic and pro forma financial
information and, for a dialysis-related Acquisition, financial valuation
analysis supporting the purchase price per patient and, for all
Acquisitions, compliance calculations reasonably satisfactory to the Agent
demonstrating no Default or Event of Default exists or, on a pro forma
basis, would occur after giving effect to such transaction and, for all
Acquisitions where the Total Consideration for such Acquisition exceeds
$20,000,000, at the expense of the Company, a report in such detail as the
Agent may require from an independent auditor acceptable to the Agent
supporting the Company's determination of pro-forma EBITDA after giving
effect to such proposed Acquisitions;
(d) with respect to any Acquisition occurring after the date of this
Agreement
when the cumulative Total Consideration for all Acquisitions occurring
after the date of this Agreement for which the Required Lenders have not
given their prior written consent thereto pursuant to clause (e) below is
less than or equal to $25,000,000, any one of the following shall be
satisfied (the Company, when notifying the Agent and the Lenders of the
proposed Acquisition, shall designate which of the following conditions,
(i), (ii) or (iii), is being utilized): (i) with respect to any
dialysisrelated Acquisition, the Total Consideration paid for the Acquired
Business shall not exceed the lesser of 6.5 multiplied by Acquisition
EBITDA of the Acquired Business for the four fiscal quarter period ending
immediately proceeding the date of the Acquisition or $65,000 multiplied by
the number of dialysis patients of the Acquired Business, (ii) with respect
to any perfusionrelated Acquisition, (X) the Total Consideration paid for
the Acquired Business shall not exceed the net revenues (i.e., gross
revenues less contractual discounts) of the Acquired Business for the four
fiscal quarter period ending immediately preceding the date of the
Acquisition, (Y) the projected annual Acquired Business Cash Flow for a
period of not less than three (3) years following the date of the relevant
Acquisition (as reasonably determined by the Company in good faith and
established to the reasonable satisfaction of the Agent) is greater than
$1.00 per annum, and (Z) the projected annual internal rate of return of
the Acquired Business for a period of not less than three (3) years
following the date of the relevant Acquisition (expressed as a percentage
based on the ratio of projected annual Acquired Business Cash Flow to Total
Consideration paid for the Acquired Business, all as reasonably determined
by the Company in good faith and established to the reasonable satisfaction
of the Agent) is greater than 15% per annum, or (iii) the cumulative Total
Consideration for all Acquisitions occurring after the date of this
Agreement and not qualifying under (i) or (ii) above is less than or equal
to $3,000,000;
(e) with respect to any Acquisition occurring after the date of this
Agreement when (i) the cumulative Total Consideration for all Acquisitions
occurring after the date of this Agreement for which the Required Lenders
have not given their prior written consent thereto pursuant to this clause
(e) is greater than $25,000,000, or (ii) the Total Consideration for such
Acquisition is greater than $10,000,000, the Required Lenders have given
their prior written consent to the relevant Acquisition;
(f) with respect to any Acquisition occurring during the period from
July 1, 1999 through January 15, 2000, if the Acquired Business has a
different management information system which would reasonably be expected
to result in a Year 2000 Problem, the Agent has given its prior written
consent to the relevant Acquisition;
(g) no Default or Event of Default exists or would arise immediately
after giving effect to any such Acquisition, and the Company shall have
provided to the Agent a written certificate attesting to the Company's
compliance with the requirements set forth herein (including, where
relevant, its computation of the purchase price guidelines set forth in
clause (d) above);
(h) without limiting the generality of Section 7.12 hereof, no
indebtedness to any seller of an Acquired Business is incurred; and
(i) if such transaction results in a new Subsidiary, within 10
Business Days of such formation or acquisition, as the case may be, the
Company shall cause such new
Subsidiary to execute and deliver to the Agent (with sufficient number of
copies for each Lender) a Guaranty and such Collateral Documents as the
Agent may require, together with such other instruments, documents,
certificates and opinions required at that time by the Agent, each of which
to be in form and substance satisfactory to the Agent (including, without
limitation, Board of Director resolutions (or their equivalent) of such
Subsidiary authorizing the execution, delivery, and performance of such
Loan Documents by such Subsidiary), and Schedules 4.1 and 5.2 of this
Agreement shall from and after such date be deemed amended to include
reference to such new Subsidiary.
"Permitted Affiliates" means Neph Associates of Northern Illinois,
Ltd., ARE Partnership, and Continental Health Care, Ltd.
"Permitted Line of Business" means any Person in the business of providing
health care services such as delivery of dialysis and nephrology services and
extracorporeal services such as plasmapheresis, intra-operative autotransfusion,
perfusion, physician management and health management services and any other
business line reasonably related thereto consented to in writing by the Required
Lenders, which consent shall not be unreasonably delayed or withheld.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group, or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Portion" is defined in Section 2.1(a) hereof.
"Property" means, as to any Person, all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent balance sheet of such Person and its subsidiaries under GAAP.
"Reimbursement Obligation" is defined in Section 1.3 hereof.
"Required Lenders" means, as of the date of determination thereof, Lenders
whose outstanding Loans and interest in Letters of Credit and undrawn
Commitments constitute more than 66 2/3% of the sum of the total outstanding
Loans, interests and Letters of Credit, and unused Commitments of the Lenders.
"Restricted Subsidiary" means each of those existing Subsidiaries listed on
Schedule 4.1 hereof, any other Subsidiary existing as of the date hereof who is
hereafter designated in writing by the Company to the Agent to become a
"Restricted Subsidiary" and who thereafter executes and delivers a Guaranty and
such Collateral Documents required pursuant to Section 4 hereof, and any other
Subsidiaries formed or acquired after the date hereof who are required to
execute and deliver a Guaranty and Collateral Documents pursuant to Section
7.14(g) hereof.
"Revolving Credit Commitments" is defined in Section 1.1 hereof.
"Revolving Credit Notes" is defined in Section 1.2 hereof.
"Revolving Loans" is defined in Section 1.2 hereof.
"Senior Subordinated Notes" means those certain $100,000,000 9.75% Senior
Subordinated Notes due 2008 issued pursuant to the Indenture.
"Subordinated Debt" means the Senior Subordinated Notes and any other
Indebtedness for Borrowed Money of the Company or of any Restricted Subsidiary
owing to any Person on terms and conditions, and in such amounts, acceptable to
the Agent and the Required Lenders in their sole discretion and which is
subordinated in right of payment to the prior payment in full of the Obligations
pursuant to written subordination provisions satisfactory to the Agent and the
Required Lenders.
"subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
The term "Subsidiary" shall mean, when used with reference to the Company, a
subsidiary of, respectively, the Company or any of its direct or indirect
Subsidiaries.
"Supplemental Revolving Credit" is defined in Section 1.5 hereof.
"Supplemental Revolving Credit Commitments" is defined in Section 1.5
hereof.
"Supplemental Revolving Loans" is defined in Section 1.5 hereof.
"Supplemental Revolving Credit Notes" is defined in Section 1.5 hereof.
"Supplemental Revolving Credit Termination Date" means June 30, 2002, or
such earlier date on which the Supplemental Revolving Credit Commitments are
terminated in whole pursuant to Section 3.8, 8.2 or 8.3 hereof.
"Target" means the Persons whose assets or equity interests are the subject
of an Acquisition.
"Term Loan Final Maturity Date" means June 15, 2005.
"Term Loans" is defined in Section 1.4(b) hereof.
"Termination Date" means June 30, 2002, or such earlier date on which the
Revolving Credit Commitments are terminated in whole pursuant to Section 3.8,
8.2 or 8.3 hereof.
"Total Consideration" means the total amount (but without duplication) of
(a) cash paid in connection with any Acquisition, plus (b) indebtedness payable
to the seller in connection with such Acquisition, plus (c) the fair market
value of any equity securities, including any warrants or options therefor,
delivered in connection with any Acquisition, plus (d) the present value of
covenants not to compete entered into in connection with such Acquisition or
other future payments which are required to be made over a period of time
(discounted at the Base Rate), but only to the extent not included in clause
(a), (b), or (c) above, plus (e) the amount of indebtedness assumed in
connection with such Acquisition.
"Total Funded Debt" means, at any time the same is to be determined, the
aggregate of all Indebtedness for Borrowed Money of the Company and its
Restricted Subsidiaries at such time, including all Indebtedness for Borrowed
Money of any other Person which is directly or indirectly guaranteed by the
Company or any of its Restricted Subsidiaries or which the Company or any of its
Restricted Subsidiaries has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which the Company or any of its Restricted
Subsidiaries has otherwise assured a creditor against loss.
"Unfunded Vested Liabilities" means, for any Plan at any time, the amount
(if any) by which
the present value of all vested nonforfeitable accrued benefits under such Plan
exceeds the fair market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan, but only to
the extent that such excess represents a potential liability of a member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA.
"Voting Stock" of any Person means capital stock or other equity interests
of any class or classes (however designated) having ordinary power for the
election of directors or other similar governing body of such Person, other than
stock or other equity interests having such power only by reason of the
happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares as
required by law) or other equity interests are owned by the Company and/or one
or more wholly-owned subsidiaries of the Company within the meaning of this
definition.
"Y2K Audit" is defined in Section 7.6 hereof.
"Y2K Borrowing Base" means, as of any time it is to be determined, the
Borrowing Base as then determined and computed plus, without duplication, 75% of
the then outstanding unpaid amount of each account receivable of the Company and
each Restricted Subsidiary who has executed a Guaranty and the Collateral
Documents called for by this Agreement which (a) originated after August 31,
1999, (b) has an account debtor which is the U.S. government or any state
thereof or any agency or political subdivision thereof, (c) would otherwise be
an Eligible Account except that clause (h) of the definition of Eligible Account
is not satisfied and (d) the Agent has been provided with documentation
satisfactory to it (including certificates from the Company as to such matters)
that such account receivable has not been paid only as a result of a Year 2000
Problem of a governmental entity.
"Y2K Commencement Date" is defined in Section 1.6 hereof.
"Y2K Revolving Credit" is defined in Section 1.6 hereof.
"Y2K Revolving Credit Commitments" is defined in Section 1.6 hereof.
"Y2K Revolving Credit Notes" is defined in Section 1.6 hereof.
"Y2K Revolving Credit Termination Date" means June 30, 2000, or such
earlier date on which the Y2K Revolving Credit Commitments are terminated
pursuant to Section 3.8, 8.2 or 8.3 hereof.
"Y2K Revolving Loans" is defined in Section 1.6 hereof.
"Year 2000 Problem" means, as to any Person, any significant risk that
computer hardware, software, or equipment containing embedded microchips
essential to the business or operations of such Person or any of its
subsidiaries will not accurately recognize and process dates or time periods
occurring after December 31, 1999, including the making of accurate leap year
calculations.
Section 9.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The
words "hereof", "herein", and "hereunder" and words of like import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All references to time of day herein
are references to Chicago, Illinois time unless otherwise specifically provided.
Where the character or amount of any asset or liability or item of income or
expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, it shall
be done in accordance with GAAP except where such principles are inconsistent
with the specific provisions of this Agreement. For purposes of determining the
"Applicable Margin" and for purposes of computing the covenants set forth in
Section 7.7, 7.8, 7.9, 7.10, 7.14(g), and 7.17(d) of this
Agreement, the assets (e.g., amounts due from and investments in affiliates),
equity and earnings attributable to Persons (other than Restricted Subsidiaries
and Permitted Affiliates) in which the Company has an ownership interest therein
shall be excluded in making such determinations and computations, except to the
extent any such earnings are actually received by the Company or a Restricted
Subsidiary in the form of a cash dividend or other cash distribution.
Section 10. The Agent.
Section 10.1. Appointment and Authorization. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders expressly agree that
the Agent is not acting as a fiduciary of the Lenders in respect of the Loan
Documents, the Company or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Agent or any of
the Lenders except as expressly set forth herein. The Agent may resign at any
time by sending 20 days prior written notice to the Company and the Lenders. In
the event of any such resignation, the Required Lenders may appoint a new agent
after consultation with the Company (and, so long as no Default or Event of
Default exists, the Company's prior written consent) which shall succeed to all
the rights, powers and duties of the Agent hereunder and under the other Loan
Documents. Any resigning Agent shall be entitled to the benefit of all the
protective provisions hereof with respect to its acts as an agent hereunder, but
no successor Agent shall in any event be liable or responsible for any actions
of its predecessor. If the Agent resigns and no successor is appointed, the
rights and obligations of such Agent shall be automatically assumed by the
Required Lenders and (i) the Company shall be directed to make all payments due
each Lender hereunder directly to such Lender and (ii) the Agent's rights in the
Collateral Documents shall be assigned without representation, recourse or
warranty to the Lenders as their interests may appear.
Section 10.2. Rights as a Lender. The Agent has and reserves all of
the rights, powers and duties hereunder and under the other Loan Documents as
any Lender may have and may exercise the same as though it was not the Agent.
The terms "Lender" and "Lenders" as used herein and in all other Loan Documents
shall, unless the context otherwise expressly indicates, include the Agent in
its individual capacity as Lender.
Section 10.3. Standard of Care. The Lenders acknowledge that they have
received and approved copies of the Loan Documents and such other information
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent makes no representations
or warranties of any kind or character to the Lenders with respect to the
validity, enforceability, genuineness, perfection, value, worth or
collectibility hereof or of the Notes or any of the other Obligations or of the
Loan Documents or of the Liens provided for thereby or of any other documents
called for hereby or thereby or of the Collateral. The Agent need not verify the
worth or existence of the Collateral and may rely exclusively on reports of the
Company with respect thereto. Neither the Agent nor any director, officer,
employee, agent or representative thereof (including any security trustee
therefor) shall in any event be liable for any clerical errors
or errors in judgment, inadvertence or oversight, or for action taken or omitted
to be taken by it or them hereunder or under the Loan Documents or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct. The Agent shall not incur any liability to the Lenders under or in
respect of this Agreement or any other Loan Documents by acting upon any notice,
certificate, warranty, instruction or statement (oral or written) of anyone
(including anyone in good faith believed by it to be authorized to act on behalf
of the Company), unless it has actual knowledge of the untruthfulness of same.
The Agent may execute any of its duties hereunder by or through representatives,
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders for the default or misconduct of any such representatives, employees,
agents or attorneys-in-fact selected with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder, and shall incur no liability to the
Lenders and be fully protected in acting upon the advice of such counsel. The
Agent shall be entitled to assume that no Default or Event of Default exists
unless notified to the contrary by a Lender. The Agent shall in all events be
fully protected in acting or failing to act in accordance with the instructions
of the Required Lenders. Upon the occurrence of an Event of Default hereunder,
the Agent shall take such action with respect to the enforcement of its Liens on
the Collateral and the preservation and protection thereof as it shall be
directed to take by the Required Lenders but, unless and until the Required
Lenders have given such direction, the Agent shall take or refrain from taking
such actions as the Agent determines are appropriate and in the best interest of
all Lenders. The Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
the Agent by reason of taking or continuing to take any such action. The Agent
may treat the owner of any Note as the holder thereof until written notice of
transfer shall have been filed with the Agent signed by such owner in form
satisfactory to the Agent. Each Lender acknowledges that it has independently
and without reliance on the Agent or any other Lender and based upon such
information, investigations and inquiries as it deems appropriate made its own
credit analysis and decision to extend credit to the Company. It shall be the
responsibility of each Lender to keep itself informed as to the creditworthiness
of the Company and the Agent shall have no liability to any Lender with respect
thereto.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse the Agent
for all costs and expenses (including, without limitation, reasonable attorneys'
fees) suffered or incurred by the Agent or any security trustee in performing
its duties hereunder and under the other Loan Documents, or in the exercise of
any right or power imposed or conferred upon the Agent hereby or thereby, to the
extent that the Agent is not promptly reimbursed for same by the Company after
making request of the Company for payment thereof, or out of the Collateral, all
such costs and expenses to be borne by the Lenders ratably in accordance with
their Percentages.
Section 10.5. Indemnity. The Lenders shall ratably indemnify and hold the
Agent, and its directors, officers, employees, agents, representatives or
attorneys-in-fact (including as such any security trustee therefor), harmless
from and against any liabilities, losses, costs or expenses suffered or incurred
by it hereunder or under the other Loan Documents or in connection with the
transactions contemplated hereby or thereby, regardless of when asserted or
arising, except to the extent it is promptly reimbursed for the same by the
Company or out of the Collateral and except to the extent that any event giving
rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified.
Section 10.6. Hedging Liability/ACH Liability. By virtue of a Lenders'
execution of this Agreement or an Assignment Agreement pursuant to Section 11.17
hereof, as the case may be, any Affiliate of such Lender with whom the Company
has entered into a Hedging Arrangement or agreement or arrangement creating ACH
Liability shall be deemed a Lender party hereto for purposes of any reference in
a Loan Document to the parties for whom the Agent is acting, it being understood
and agreed that the rights and benefits of such Affiliate under the Loan
Documents consist exclusively of such Affiliate's right to share in payments and
collections out of the Collateral and the Guarantees as more fully set forth in
other provisions hereof.
Section 11. Miscellaneous.
Section 11.1. Withholding Taxes.
(a) Payments Free of Withholding. Except as otherwise required by law and
subject to Section 11.1(b) hereof, each payment by the Company under this
Agreement or the other Loan Documents shall be made without withholding for or
on account of any present or future taxes (other than overall net income taxes
on the recipient) imposed by or within the jurisdiction in which the Company is
domiciled, any jurisdiction from which the Company makes any payment, or (in
each case) any political subdivision or taxing authority thereof or therein. If
any such withholding is so required, the Company shall make the withholding, pay
the amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
each Lender and the Agent free and clear of such taxes (including such taxes on
such additional amount) is equal to the amount which that Lender or the Agent
(as the case may be) would have received had such withholding not been made. If
the Agent or any Lender pays any amount in respect of any such taxes, penalties
or interest the Company shall reimburse the Agent or that Lender for that
payment on demand in the currency in which such payment was made. If the
Company pays any such taxes, penalties or interest, it shall deliver official
tax receipts evidencing that payment or certified copies thereof to the Lender
or Agent on whose account such withholding was made (with a copy to the Agent if
not the recipient of the original) on or before the thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Company and the Agent on or before the earlier of the date the
initial Borrowing is made hereunder and 30 days after the date hereof, two duly
completed and signed copies of either Form 1001 (relating to such Lender and
entitling it to a complete exemption from withholding under the Code on all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents and the Obligations) or Form 4224 (relating to all amounts to be
received by such Lender, including fees, pursuant to the Loan Documents and the
Obligations) of the United States Internal Revenue Service. Thereafter and from
time to time, each Lender shall submit to the Company and the Agent such
additional duly completed and signed copies of one or the other of such Forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) requested by the Company in a
written notice, directly or through the Agent, to such Lender and (ii) required
under thencurrent United States law or regulations to avoid or reduce United
States withholding taxes on payments in respect of all amounts to be received by
such Lender, including fees, pursuant to the Loan Documents or the Obligations.
(c) Inability of Lender to Submit Forms. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Company or Agent any form or certificate that such Lender is obligated to submit
pursuant to subsection (b) of this Section 11.1 or that such Lender is required
to withdraw or cancel any such form or certificate previously submitted or any
such form or certificate otherwise becomes ineffective or inaccurate, such
Lender shall promptly notify the Company and the Agent of such fact and the
Lender shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable.
Section 11.2. Non-Business Days. If any payment hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment shall
be extended to the next succeeding Business Day on which date such payment shall
be due and payable. In the case of any payment of principal falling due on a day
which is not a Business Day, interest on such principal amount shall continue to
accrue during such extension at the rate per annum then in effect, which accrued
amount shall be due and payable on the next scheduled date for the payment of
interest.
Section 11.3. No Waiver, Cumulative Remedies. No delay or failure on the
part of the Agent or any Lender in the exercise of any power or right shall
operate as a waiver thereof or as an acquiescence in any default, nor shall any
single or partial exercise of any right preclude any other or further exercise
thereof or the exercise of any other power or right. The rights and remedies
hereunder of the Agent and the Lenders are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
Section 11.4. Waivers, Modifications and Amendments. Any provision hereof
or of the other Loan Documents may be amended, modified, waived or released and
any Default or Event of Default and its consequences may be rescinded and
annulled upon the written consent of the Company and the Required Lenders;
provided, however, that without the written consent of each Lender no such
amendment, modification or waiver shall increase the amount or extend the terms
of such Lender's Commitments or reduce the amount of any principal of or
interest rate applicable to, or extend the maturity of, any Obligation owed to
it or reduce the amount of fees or other amounts to which it is entitled
hereunder or release any guaranty of any Obligations or release all or any
substantial (in value) part of the collateral security afforded by the Loan
Documents (except in connection with a sale or other disposition permitted to be
effected by the provisions hereof or of the Loan Documents) or change this
Section 11.4 or change the definition of "Required Lenders" or change the number
of Lenders required to take any action hereunder or under the other Loan
Documents. No amendment, modification or waiver of the Agent's protective
provisions shall be effective without the prior written consent of the Agent.
Section 11.5. Costs and Expenses. (a) The Company agrees to pay on demand
all reasonable costs and expenses of the Agent in connection with the
negotiation, preparation, execution and delivery of the Loan Documents and in
connection with any one or more assignments of the Obligations and Commitments
(as set forth in Section 11.17 hereof) and in connection with any consents
hereunder or thereunder and any waivers or amendments hereto or thereto,
including the reasonable fees and expenses of counsel for the Agent with respect
to all of the foregoing, and all recording, filing, title insurance or other
fees, costs and taxes incident to perfecting a Lien upon the collateral security
for the Obligations, and all reasonable costs and expenses (including reasonable
attorneys' fees) incurred by the Agent, the Lenders or any other holders of the
Obligations in connection with a default or the enforcement of the Loan
Documents (including, without limitation, all such costs and expenses arising
out of any bankruptcy or insolvency proceeding relating to the Company or any
Restricted Subsidiary), and all reasonable costs, fees and taxes of the types
enumerated above incurred in supplementing (and recording or filing supplements
to) the Loan Documents in connection with assignments contemplated by Section
11.17 hereof if counsel to the Agent believes such supplements to be appropriate
or desirable. The Company agrees to indemnify and save the Lenders, the Agent
and any security trustee for the Agent or the Lenders harmless from any and all
liabilities, losses, costs and expenses incurred by the Lenders or the Agent in
connection with any action, suit or proceeding brought against the Agent, any
security trustee or any Lender by any Person which arises out of the
transactions contemplated or financed by any of the Loan Documents or out of any
action or inaction by the Agent, any security trustee or any Lender thereunder,
including without limitation those caused by the negligence of any party but
except for such thereof as is caused by the gross negligence or willful
misconduct of the party indemnified and except for costs or liabilities incurred
in suits which are exclusively among the Lenders or the Lenders and the Agent.
The provisions of this Section 11.5 and the protective provisions of Section 2
hereof shall survive payment of the Obligations.
(b) The Company unconditionally agrees to forever indemnify, defend and
hold harmless, and covenants not to sue for any claim for contribution against,
the Agent and the Lenders for any damages, costs, loss or expense, including
without limitation, response, remedial or removal costs, arising out of any of
the following: (i) any presence, release, threatened release or disposal of any
hazardous or toxic substance or petroleum by the Company or any Subsidiary or
otherwise occurring on or with respect to its property (whether owned or
leased), (ii) the operation or violation of any environmental law, whether
federal, state, or local, and any regulations promulgated thereunder, by the
Company or any Subsidiary or otherwise occurring on or with respect to its
property (whether owned or leased), (iii) any claim for personal injury or
property damage in connection with the Company or any Subsidiary or otherwise
occurring on or with respect to its property (whether owned or leased), and (iv)
the inaccuracy or breach of any environmental representation, warranty or
covenant by the Company or any Subsidiary made herein or in any promissory note,
mortgage, deed of trust, security agreement or any other instrument or document
evidencing or securing any Obligations or setting forth terms and conditions
applicable thereto or otherwise relating thereto, except for damages arising
from the willful misconduct or gross negligence of, or material breach of the
Loan Documents by, the party claiming indemnification. This indemnification
shall survive the payment and satisfaction of all Obligations and the
termination of this Agreement, and shall remain in force beyond the expiration
of any applicable statute of limitations and payment or satisfaction in full of
any single claim under this indemnification. This indemnification shall be
binding upon the successors and assigns of the Company and shall inure to the
benefit of Agent and the Lenders and their directors, officers, employees,
agents, and collateral trustees, and their successors and assigns.
Section 11.6. Documentary Taxes. The Company agrees that it will pay any
documentary, stamp or similar taxes payable in respect to any Loan Document,
including interest and penalties, in the event any such taxes are assessed,
irrespective of when such assessment is made and whether or not any credit to it
is then in use or available.
Section 11.7. Survival of Representations. All representations and
warranties made herein and in the other Loan Documents and in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.
Section 11.8. Construction. Nothing contained herein shall be deemed or
construed to permit any act or omission which is prohibited by the terms of any
Collateral Document, the covenants and agreements contained herein being in
addition to and not in substitution for the covenants and agreements contained
in the Collateral Documents.
Section 11.9. Notices. Except as otherwise specified herein, all notices
hereunder shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, in the case of the Company, or on the appropriate
signature page hereof, in the case of the Lenders and the Agent, or such other
address or telecopier number as such party may hereafter specify by notice to
the Agent and the Company given by United States certified or registered mail,
by telecopy or by other telecommunication device capable of creating a written
record of such notice and its receipt. Notices hereunder to the Company shall be
addressed to:
Everest Healthcare Services Corporation
101 North Scoville Avenue
Oak Park, Illinois 60302
Attention: Lawrence D. Damron
Telephone: (708) 386-9076
Telecopy: (708) 386-1711
with a copy of any notice of default also sent to:
Katten, Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
Attention: Alan M. Berry
Telephone: (312) 902-5202
Telecopy: (312) 902-1061
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the addresses specified in this Section; provided that any
notice given pursuant to Section 1 or Section 2 hereof shall be effective only
upon receipt.
Section 11.10. Lender's Obligations Several. The obligations of the Lenders
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by the Lenders pursuant hereto shall be deemed to constitute the
Lenders a partnership, association, joint venture or other entity.
Section 11.11. Headings. Section headings used in this Agreement are for
convenience of reference only and are not a part of this Agreement for any other
purpose.
Section 11.12. Severability of Provisions. Any provision of this Agreement
which is unenforceable or prohibited in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability or
prohibition without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction. All
rights, remedies and powers provided in this Agreement and the other Loan
Documents may be exercised only to the extent that the exercise thereof does not
violate any applicable mandatory provisions of law, and all the provisions of
this Agreement and other Loan Documents are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement or
the other Loan Documents invalid or unenforceable.
Section 11.13. Counterparts. This Agreement may be executed in any number
of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 11.14. Binding Nature and Governing Law. This Agreement shall be
binding upon the Company and its successors and assigns, and shall inure to the
benefit of the Agent and the Lenders and the benefit of their successors and
permitted assigns, including any subsequent holder of an interest of the
Obligations. This Agreement and the rights and duties of the parties hereto
shall be construed and determined in accordance with, and shall be governed by,
the internal laws of the State of Illinois without regard to principles of
conflicts of law. The Company may not assign its rights hereunder without the
written consent of the Agent and the Lenders.
Section 11.15. Entire Understanding. This Agreement, together with the
other Loan Documents, constitute the entire understanding of the parties with
respect to the subject matter hereof and any prior agreements, whether written
or oral, with respect thereto are superseded hereby.
Section 11.16. Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other bank or lending institution (a
"Participant") provided that (i) no Participant shall thereby acquire any direct
rights under this Agreement, (ii) no Lender shall agree with a Participant not
to exercise any of its rights hereunder without the consent of such Participant
except for rights which under the terms hereof may only be exercised by all
Lenders, and (iii) no sale of a participation in extensions of credit shall in
any manner relieve the selling Lender of its obligations hereunder.
Section 11.17. Assignment Agreements. Each Lender may, from time to time
upon at least 5 Business Days notice to the Agent and the Company, assign to
other banks or lending institutions all or part of its rights and obligations
under this Agreement (including, without limitation, the indebtedness evidenced
by the Notes then owned by such assigning Lender, together with an equivalent
proportion of its obligation to make loans and advances and participate in
Letters of Credit hereunder) pursuant to an Assignment Agreement in the form
attached hereto as Exhibit I (the "Assignment Agreements"); provided, however,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this Agreement
and the assignment shall cover the same percentage of such Lender's Commitments,
Loans, Notes and interests in Letters of Credit; (ii) unless the Agent otherwise
consents, the aggregate amount of the Commitments, Loans, Notes and interests in
the Letters of Credit of the assigning Lender being assigned pursuant to each
such assignment (determined as of the effective
date of the relevant Assignment Agreement) shall in no event be less than
$5,000,000 and shall be an integral multiple of $1,000,000 and, unless the
assigning Lender shall have assigned all of its Commitments, Loans, Notes and
interests in Letters of Credit, the aggregate amount of Commitments, Loans,
Notes, and interests in Letters of Credit retained by the assigning Lender shall
in no event be less than $5,000,000; (iii) the Agent and, so long as no Event of
Default then exists, the Company must each consent, which consent shall not be
unreasonably withheld and shall be evidenced by execution of a counterpart of
the relevant Assignment Agreement in the space provided thereon for such
acceptance, to each such assignment to a party which was not an original
signatory of this Agreement; and (iv) the assigning Lender must pay to the Agent
a processing and recordation fee of $3,500 and any reasonable out-of-pocket
attorney's fees incurred by the Agent in connection with such Assignment
Agreement. Upon the execution of each Assignment Agreement by the assigning
Lender thereunder, the assignee lender thereunder, the Agent and so long as no
Event of Default then exists, the Company, and payment to such assigning Lender
by such assignee lender of the purchase price for the portion of the
indebtedness of the Company being acquired by it, (i) such assignee lender shall
thereupon become a "Lender" for all purposes of this Agreement with Commitments
in the amount set forth in such Assignment Agreement and with all the rights,
powers and obligations afforded a Lender hereunder, (ii) such assigning Lender
shall have no further liability for funding the portion of its Commitments
assumed by such other Lender and (iii) the address for notices to such assignee
Lender shall be as specified in the Assignment Agreement executed by it.
Concurrently with the execution and delivery of such Assignment Agreement, the
Company shall execute and deliver Notes to the assignee Lender in the respective
amounts of its Commitments and new Notes to the assigning Lender in the
respective amounts of its Commitments after giving effect to the reduction
occasioned by such assignment, all such Notes to constitute "Notes" for all
purposes of this Agreement and the other Loan Documents.
Section 11.18. Confidentiality. Any information disclosed by the Company or
any of its Subsidiaries to the Agent or any Lender which was designated
proprietary or confidential at the time of its receipt by the Agent or such
Lender, and which is not otherwise in the public domain, shall not be disclosed
by the Agent or such Lender to any other Person except (i) to its independent
accountants and legal counsel (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential), (ii) pursuant
to statutory and regulatory requirements, (iii) pursuant to any mandatory court
order, subpoena or other legal process, (iv) to the Agent or any other Lender,
(v) pursuant to any agreement heretofore or hereafter made between such Lender
and the Company which permits such disclosure, (vi) in connection with the
exercise of any remedy under the Loan Documents, or (vii) subject to an
agreement containing provisions substantially the same as those of this Section,
to any participant in or assignee of, or prospective participant in or assignee
of, any Obligation or Commitment (it being understood that prior to any such
disclosures contemplated by clauses (ii) and (iii) above, the Agent or such
Lender shall, if practicable, give the Company prior written notice of such
disclosure).
Section 11.19. Set-off. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of and during the continuation of any Event of Default, each Lender
and each subsequent holder of any Obligation is hereby authorized by the Company
at any time or from time to time, without notice to the Company or to
any other Person, any such notice being hereby expressly waived, to setoff and
to appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts, and in whatever currency
denominated) and any other indebtedness at any time held or owing by that Lender
or that subsequent holder to or for the credit or the account of the Company,
whether or not matured, against and on account of the Obligations of the Company
to that Lender or that subsequent holder under the Loan Documents, including,
but not limited to, all claims of any nature or description arising out of or
connected with the Loan Documents, irrespective of whether or not (a) that
Lender or that subsequent holder shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or Notes and other amounts due
hereunder shall have become due and payable pursuant to Section 8 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
Section 11.20. Sharing of Set-Off. Each Lender agrees with each other
Lender a party hereto that if such Lender shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise, on any of
the Loans or reimbursement obligations with respect to Letters of Credit in
excess of its ratable share of payments on all such Obligations then outstanding
to the Lenders, then such Lender shall purchase for cash at face value, but
without recourse, ratably from each of the other Lenders such amount of the
Loans or Reimbursement Obligations, or participations therein, held by each such
other Lenders (or interest therein) as shall be necessary to cause such Lender
to share such excess payment ratably with all the other Lenders; provided,
however, that if any such purchase is made by any Lender, and if such excess
payment or part thereof is thereafter recovered from such purchasing Lender, the
related purchases from the other Lenders shall be rescinded ratably and the
purchase price restored as to the portion of such excess payment so recovered,
but without interest.
Section 11.21. Submission to Jurisdiction; Waiver of Jury Trial. The
Company hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Company irrevocably waives, to
the fullest extent permitted by law, any objection 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 forum. The Company, the Agent, and each Lender hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to any Loan Document or the transactions contemplated
thereby.
[Signature Pages to Follow]
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of this 30th day of June, 1999.
Everest Healthcare Services Corporation
By: /s/ Craig W. Moore
Name: Craig W. More
Title: Chief Executive Officer
Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written. Amount and Percentage of Commitments:
Revolving Credit Acquisition Financing Harris Trust and Savings Bank
Commitment Commitment
$8,750,000.00 $16,250,000.01
Y2K Revolving Portion of Acquisition By /s/ Gloria CompeanEndicott
Credit Commitment Financing Commitment
Name: Gloria CompeanEndicott
$9,999,999.99 available as part of its
Title: Vice President
Supplemental Revolving
Credit Commitment
$3,749,999.99
Address:
111 West Monroe Street, 5W
Chicago, Illinois 60603
Attention: Ms. Gloria Compean-Endicott
Telephone: (312) 461-2324
Telecopy: (312) 461-7365
-77-
Revolving Credit Acquisition Financing Comerica Bank
Commitment Commitment
$6,250,000.00 $11,607,142.86
Y2K Revolving Portion of Acquisition By /s/ Colleen M. Murphy
Credit Commitment Financing Commitment
Name: Colleen M. Murphy
$7,142,857.14 available as part of its
Title: Assistant Vice President
Supplemental Revolving
Credit Commitment
$2,678,571.43
Address:
Comerica Bank
Two Mid American Plaza, Suite 616
Oakbrook Terrace, Illinois 60181
Attention: Colleen Murphy
Telephone: (630) 645-7376
Telecopy: (630) 575-2164
Revolving Credit Acquisition Financing Firstar Bank, N.A.
Commitment Commitment
$3,750,000.00 $6,964,285.71
Y2K Revolving Portion of Acquisition By /s/ William Jordan
Credit Commitment Financing Commitment
Name: William Jordan
$4,285,714.29 available as part of its
Title: Vice President
Supplemental Revolving
Credit Commitment
$1,607,142.86
Address:
9575 West Higgins Road
Rosemont, Illinois 60018
Attention: William Jordan
Telephone: (847) 318-6349
Telecopy: (847) 696-9437
-79-
Revolving Credit Acquisition Financing Mercantile Bank National Association
Commitment Commitment
$3,750,000.00 $6,964,285.71
Y2K Revolving Portion of Acquisition By /s/ Mary Ann Lemonds
Credit Commitment Financing Commitment
Name: Mary Ann Lemonds
$4,285,714.29 available as part of its
Title: Vice President
Supplemental Revolving
Credit Commitment
$1,607,142.86
Address:
721 Locust
St. Louis, Missouri 63101
Attention: Mary Ann Lemonds
Telephone: (314) 425-8178
Telecopy: (314) 418-8394
Revolving Credit Acquisition Financing Bank of America National Trust and
Commitment Commitment
Savings Association
$5,000,000.00 $9,285,714.29
Y2K Revolving Portion of Acquisition By /s/ Rhomes Ritter
Credit Commitment Financing Commitment
Name: Rhomes Rotter
$5,714,285.71 available as part of its
Title: Vice President
Supplemental Revolving
Credit Commitment
$2,142,857.14
Address:
231 S. LaSalle Street
Chicago, Illinois 60603
Attention: Tom Smith
Telephone: (312) 828-6086
Telecopy: (312) 763-2193
-81-
Revolving Credit Acquisition Financing Key Corporate Capital Inc.
Commitment Commitment
$3,750,000.00 $6,964,285.71
Y2K Revolving Portion of Acquisition By /s/ Pamela LeRose
Credit Commitment Financing Commitment
Name: Pamela LeRose
$4,285,714.29 available as part of its
Title: Assistant Vice President
Supplemental Revolving
Credit Commitment
$1,607,142.86
Address:
Mailcode: OH-01-27-0605
127 Public Square
Cleveland, Ohio 44114
Attention: Pamela LeRose
Telephone: (216) 689-3630
Telecopy: (216) 689-5970
Revolving Credit Acquisition Financing M&I Marshall & Ilsley Bank
Commitment Commitment
$3,750,000.00 $6,964,285.71
Y2K Revolving Portion of Acquisition By /s/ Peter R. Van Housen
Credit Commitment Financing Commitment
Name: Peter R. Van Housen
$4,285,714.29 available as part of its
Title: Vice President
Supplemental Revolving
Credit Commitment
$1,607,142.86
Address:
770 N. Water Street
P.O. Box 2035
Milwaukee, Wisconsin 53201
Attention: Peter R. Van Housen
Telephone: (414) 765-7677
Telecopy: (414) 765-7625
-83-
Exhibit A
Revolving Credit Note
Chicago, Illinois
$________________ _______________, 19__
On the Termination Date, for value received, the undersigned, Everest
Healthcare Services Corporation, a Delaware corporation (the "Company") hereby
promises to pay to the order of ____________________________________________
(the "Lender"), at the principal office of Harris Trust and Savings Bank in
Chicago, Illinois, the principal sum of (i) ____________________________________
Dollars ($_________), or (ii) such lesser amount as may at the time of the
maturity hereof, whether by acceleration or otherwise, be the aggregate unpaid
principal amount of all Revolving Loans owing from the Company to the Lender
under the Credit Agreement hereinafter mentioned.
This Note evidences Revolving Loans constituting part of a "Base Rate
Portion" and "LIBOR Portions" as such terms are defined in that certain Amended
and Restated Credit Agreement dated as of June 30, 1999, among the Company,
Harris Trust and Savings Bank, individually and as Agent, and the other Lenders
which are now or may from time to time hereafter become parties thereto (said
Credit Agreement, as the same may from time to time be modified, amended or
restated being referred to herein as the "Credit Agreement") made and to be made
to the Company by the Lender under the Credit Agreement, and the Company hereby
promises to pay interest at the office specified above on each Revolving Loan
evidenced hereby at the rates and times specified therefor in the Credit
Agreement.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement and is secured by, among other things, the Collateral
Documents, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms have in the Credit Agreement.
The Company hereby promises to pay all reasonable costs and expenses
(including reasonable attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Company hereby waives presentment for payment and demand. This Note shall be
construed in accordance with, and governed by, the internal laws of the State of
Illinois without regard to principles of conflicts of law.
Everest Healthcare Services Corporation
By
Name
Title
Exhibit B
Notice of Payment Request
[Date]
[Name of Lender]
[Address]
Attention:
Reference is made to the Amended and Restated Credit Agreement, dated as of
June 30, 1999, among Everest Healthcare Services Corporation, the Lenders named
therein, and Harris Trust and Savings Bank, as Agent (the "Credit Agreement").
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Credit Agreement. [The Company has failed to pay a Reimbursement
Obligation in the amount of $__________. Your Percentage of the unpaid
Reimbursement Obligation is $___________] or [Harris Trust and Savings Bank has
been required to return a payment by the Company of a Reimbursement Obligation
in the amount of $__________. Your Percentage of the returned Reimbursement
Obligations is $____________].
Very truly yours,
Harris Trust and Savings Bank, as Agent
By
Name
Title
-85-
Exhibit C
Acquisition Financing/Term Note
Chicago, Illinois
$_________________ _________________, 19__
For value received, the undersigned, Everest Healthcare Services
Corporation, a Delaware corporation (the "Company"), hereby promises to pay to
the order of ______________________ (the "Lender"), at the principal office of
Harris Trust and Savings Bank in Chicago, Illinois, the principal sum of (i)
______________________________ Dollars ($______________), or (ii) if less, the
aggregate unpaid principal amount of all Acquisition Financing Loans and Term
Loans made or maintained by the Lender to the Company pursuant to the Credit
Agreement in installments in the amounts called for by Section 1.4 of the Credit
Agreement, except that all principal and interest not sooner paid shall be due
on the Term Loan Final Maturity Date.
This Note evidences Acquisition Financing Loans and Term Loans constituting
part of a "Base Rate Portion" and "LIBOR Portions" as such terms are defined in
that certain Amended and Restated Credit Agreement dated as of June 30, 1999,
among the Company, Harris Trust and Savings Bank, individually and as Agent
thereunder, and the other Lenders which are now or may from time to time
hereafter become parties thereto (said Credit Agreement, as the same may be
amended, modified or restated from time to time, being referred to herein as the
"Credit Agreement") made and to be made to the Company by the Lender under the
Credit Agreement, and the Company hereby promises to pay interest at the office
specified above on each Acquisition Financing Loan and Term Loan evidenced
hereby at the rates and at the times specified therefor in the Credit Agreement.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement and is secured by, among other things, the Collateral
Documents, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayment are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in the Credit Agreement.
The Company hereby promises to pay all reasonable costs and expenses
(including reasonable attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Company hereby waives presentment for payment and demand. This Note shall be
construed in accordance with, and governed by, the internal laws of the State of
Illinois without regard to principles of conflict of law.
Everest Healthcare Services Corporation
By
Name
Title
-87-
Exhibit D
Supplemental Revolving Credit Note
Chicago, Illinois
$__________ _________________, 19__
On the Supplemental Revolving Credit Termination Date, for value received,
the undersigned, Everest Healthcare Services Corporation, a Delaware corporation
(the "Company") hereby promises to pay to the order of ________________________
(the "Lender"), at the principal office of Harris Trust and Savings Bank in
Chicago, Illinois, the principal sum of (i) ___________________________ Dollars
($_________), or (ii) such lesser amount as may at the time of the maturity
hereof, whether by acceleration or otherwise, be the aggregate unpaid principal
amount of all Supplemental Revolving Loans owing from the Company to the Lender
under the Credit Agreement hereinafter mentioned.
This Note evidences Supplemental Revolving Loans constituting part of a
"Base Rate Portion" and "LIBOR Portions" as such terms are defined in that
certain Amended and Restated Credit Agreement dated as of June 30, 1999, among
the Company, Harris Trust and Savings Bank, individually and as Agent, and the
other Lenders which are now or may from time to time hereafter become parties
thereto (said Credit Agreement, as the same may from time to time be modified,
amended or restated being referred to herein as the "Credit Agreement") made and
to be made to the Company by the Lender under the Credit Agreement, and the
Company hereby promises to pay interest at the office specified above on each
Supplemental Revolving Loan evidenced hereby at the rates and times specified
therefor in the Credit Agreement.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement and is secured by, among other things, the Collateral
Documents, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms have in the Credit Agreement.
The Company hereby promises to pay all reasonable costs and expenses
(including reasonable attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Company hereby waives presentment for payment and demand. This Note shall be
construed in accordance with, and governed by, the internal laws of the State of
Illinois without regard to principles of conflicts of law.
Everest Healthcare Services Corporation
By
Name
Title
Exhibit E
Y2K Revolving Credit Note
Chicago, Illinois
$__________ _________________, 19__
On the Y2K Revolving Credit Termination Date, for value received, the
undersigned, Everest Healthcare Services Corporation, a Delaware corporation
(the "Company") hereby promises to pay to the order of ________________________
(the "Lender"), at the principal office of Harris Trust and Savings Bank in
Chicago, Illinois, the principal sum of (i) ___________________________ Dollars
($_________), or (ii) such lesser amount as may at the time of the maturity
hereof, whether by acceleration or otherwise, be the aggregate unpaid principal
amount of all Y2K Revolving Loans owing from the Company to the Lender under the
Credit Agreement hereinafter mentioned.
This Note evidences Y2K Revolving Loans constituting part of a "Base Rate
Portion" and "LIBOR Portions" as such terms are defined in that certain Amended
and Restated Credit Agreement dated as of June 30, 1999, among the Company,
Harris Trust and Savings Bank, individually and as Agent, and the other Lenders
which are now or may from time to time hereafter become parties thereto (said
Credit Agreement, as the same may from time to time be modified, amended or
restated being referred to herein as the "Credit Agreement") made and to be made
to the Company by the Lender under the Credit Agreement, and the Company hereby
promises to pay interest at the office specified above on each Y2K Revolving
Loan evidenced hereby at the rates and times specified therefor in the Credit
Agreement.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement and is secured by, among other things, the Collateral
Documents, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms have in the Credit Agreement.
The Company hereby promises to pay all reasonable costs and expenses
(including reasonable attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Company hereby waives presentment for payment and demand. This Note shall be
construed in accordance with, and governed by, the internal laws of the State of
Illinois without regard to principles of conflicts of law.
Everest Healthcare Services Corporation
By
Name
Title
-89-
EXHIBIT F
Borrowing Base Certificate
To: Harris Trust and Savings Bank, as Agent
under, and the Lenders party to, the
Credit Agreement described below.
Pursuant to the terms of the Amended and Restated Credit Agreement dated as
of June 30, 1999, among us (the "Credit Agreement"), we submit this Borrowing
Base Certificate to you and certify that the information set forth below and on
any attachments to this Certificate is true, correct and complete as of the date
of this Certificate.
A. Accounts in Borrowing Base
1. Gross Accounts
______________
Less
(a)
Ineligible sales or
services (i.e., not
within the U.S.)
___________________
(b)
Owed by an account
debtor who is a
Subsidiary or an
Affiliate
___________________
(c)
Owed by an account
debtor who is in an
insolvency or
reorganization
proceeding
___________________
(d) Credits/allowances/
retainage
___________________
(e)
-90-
Unpaid more than
120 days
__________________
(f)
Otherwise ineligible
___________________
2.
Total Deductions
(sum of lines A1a - A1f)
______________
3.
Eligible Accounts
(line A1 minus line A2)
______________
4.
Accounts in Borrowing Base
(line A3 x .75)
______________
B. Inventory in Borrowing Base
1.
Gross pre-packaged medical
supplies inventory
______________
Less
(a) Inventory not located at
approved locations
______________
(b) Obsolete, slow moving or
not merchantable
______________
(c) Otherwise ineligible
______________
2.
Total Deductions (Sum of B1a - B1c)
______________
3.
Eligible Inventory
______________
4.
Eligible Inventory included in Borrowing
Base determinations (B3 x 50%)
______________
5.
Inventory Cap
$2,000,000
6. Eligible Inventory in Borrowing Base
(lesser of B4 and B5)
______________
C. Total Borrowing Base
1.
Borrowing Base
(Sum of A4 and B6)
_____________
D. Revolving Credit Advances
1.
Revolving Credit Loans
______________
2.
Letters of Credit
______________
3.
Total Revolving Credit Outstanding
(line D1 plus D2)
______________
E. Unused Revolving Credit Availability
(line C3 minus line D3)
______________
F. Y2K Borrowing Base (if Y2K Revolving Credit
is being utilized)
1.
Borrowing Base(line C1)
_______________
2.
Government accounts receivable originated
after August 31, 1999 and more than
120 days past invoice date
_______________
3.
Government accounts in the Y2K Borrowing Base
-92-
(line F2 x .75)
_______________
4.
Y2K Borrowing Base
(sum of line F1 and F3)
_______________
5.
Net Y2K Borrowing Base
(line F4 minus line D3)
_______________
G. Y2K Revolving Credit Loans Outstanding
_______________
H. Unused Y2K Revolving Credit Availability
(line F5 minus line G)
_______________
Dated as of this _________ day of __________________, _______.
Everest Healthcare Services Corporation
By
Name
Title
Exhibit G
Compliance Certificate
To: Harris Trust and Savings Bank, as Agent
under, and the Lenders party to,
the Credit Agreement described below
This Compliance Certificate is furnished to the Agent and the Lenders
pursuant to that certain Amended and Restated Credit Agreement dated as of June
30, 1999, by and among Everest Healthcare Services Corporation (the "Company")
and you (the "Credit Agreement"). Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.
The Undersigned hereby certifies that:
1. I am the duly elected ________________________________ of the Company;
2. I have reviewed the terms of the Credit Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Company and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or the occurrence of any event
which constitutes a Default or Event of Default during or at the end of the
accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth below;
4. The financial statements required by Section 7.5 of the Credit
Agreement and being furnished to you concurrently with this Certificate are
true, correct and complete as of the date and for the periods covered thereby;
and
5. The Schedule I hereto sets forth financial data and computations
evidencing the Company's compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this _________ day of
__________________, _____.
Everest Healthcare Services Corporation
By
Name
Title
-94-
Schedule I
To Everest Healthcare Services Corporation Compliance Certificate
Compliance Calculations
For June 30, 1999 Amended And Restated Credit Agreement
Calculations as of _________________
================================================================================
================================================================================
A. Total Funded Debt to Active Patients (Section 7.7)
1.
Total Funded Debt
$___________
2.
Number of renal dialysis patients actively
being treated by the Company and its
Restricted Subsidiaries
___________
3.
Ratio of Line A1 to A2
____: 1.0
4.
Line A4 ratio not to exceed
$35,000: 1.0
5. The Company is in compliance (circle yes or no)
yes/no
B. Cash Flow Leverage Ratio (Section 7.8)
1. Total Funded
Debt $___________
less Y2K
Revolving Loans $___________
$___________
2.
Net Income for past 4 quarters
___________
3.
Interest Expense for past 4 quarters (relating
to operations owned for 4 quarters then ended)
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___________
4.
Income Taxes for past 4 quarters (relating to
operations owned for 4 quarters then ended)
___________
5.
Depreciation and Amortization Expense for
past 4 quarters (relating to operations owned
for 4 quarters then ended)
___________
6.
Non-recurring acquisition expenses (relating
to operations owned for 4 quarters then ended)
___________
7.
Sum of Lines B2, B3, B4, B5 and B6
(EBITDA")
___________
8.
Net Income arising out of Acquired Business
for past 4 quarters (for Acquired Business
owned for less than 1 quarter)
___________
9.
Interest Expense arising out of Acquired
Business for past 4 quarters (for Acquired
Business owned for less than 1 quarter)
___________
10.
Income Taxes arising out of Acquired
Business for past 4 quarters (for Acquired
Business owned for less than 1 quarter)
___________
11.
Depreciation and Amortization Expense
arising out of Acquired Business for past 4
quarters (for Acquired Business owned for
less than 1 quarter)
___________
12.
Non-recurring expenses and revenue arising
out of Acquired Business for past 4 quarters
(for Acquired Business owned for less than 1
quarter)
___________
13.
Sum of Lines B8, B9, B10, B11 and B12
("Acquisition EBITDA")
___________
14.
Net Income arising out of Acquired Business
since Acquisition (for Acquired Business
owned more than 1 quarter but less than 4
quarters)
___________
15.
Interest Expense arising out of Acquired
Business since Acquisition (for Acquired
Business owned more than 1 quarter but less
than 4 quarters)
___________
16.
Income Taxes arising out of Acquired
Business since Acquisition (for Acquired
Business owned more than 1 quarter but less
than 4 quarters)
___________
17.
Depreciation and Amortization Expense arising
out of Acquired Business since Acquisition
(for Acquired Business owned more than 1
quarter but less than 4 quarters)
___________
18.
Non-recurring expenses and revenue arising
out of Acquired Business since Acquisition
(for Acquired Business owned more than 1
quarter but less than 4 quarters)
___________
19.
Sum of Lines B14, B15, B16, B17 and B18
-97-
___________
20.
365 divided by number of days since
Acquisition
___________
21.
Line B19 multiplied by Line B20
___________
22.
Sum of Lines B7, B13, B21 ("Adjusted
EBITDA")
___________
23.
Ratio of Line B1 to B22 ("Cash Flow
Leverage Ratio")
____: 1.0
24.
Line B23 ratio must not exceed
____: 1.0
25.
The Company is in compliance
(circle yes or no)
yes/no
C. Net Worth (Section 7.9)
1. Net Worth
$___________
2.
Line C1 shall not be less than
___________
3.
The Company is in compliance
(circle yes or no)
yes/no
D. Fixed Charge Coverage Ratio (Section 7.10)
1.
EBITDA (Line B7 above) for past 4 quarters
$___________
2. Principal payments on Indebtedness for
Borrowed Money for past 4 quarters
___________
3.
Interest Expense for past 4 quarters
___________
4.
Sum of Line D2 and D3 ("Fixed Charges")
___________
5.
Ratio of Line D1 to Line D4
____: 1.0
6.
Line D5 ratio must not be less than
1.75: 1.0
7.
The Company is in compliance
(circle yes or no)
yes/no
-99-
Exhibit H
Opinion of Counsel
Exhibit I
Assignment and Acceptance
Dated ________________
Reference is made to the Amended and Restated Credit Agreement dated as of
June 30, 1999 (the "Credit Agreement") among Everest Healthcare Services
Corporation, a Delaware corporation (the "Company"), the Lenders (as defined in
the Credit Agreement) and Harris Trust and Savings Bank, as Agent for the
Lenders (the "Agent"). Terms defined in the Credit Agreement are used herein
with the same meaning. ______________________________________ (the "Assignor")
and _________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a _______% interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the Effective Date (as defined below), including, without limitation, such
percentage interest in the Assignor's Commitments as in effect on the Effective
Date and the Loans, if any, owing to the Assignor on the Effective Date and the
Assignor's Percentage of any outstanding L/C Obligations, if any.
2. The Assignor (i) represents and warrants that as of the date hereof
(A) its Revolving Credit Commitment is $_________________, its Acquisition
Financing Commitment is $____________, its Supplemental Revolving Credit
Commitment is $____________, and its Y2K Revolving Credit Commitment is
$____________, (B) the aggregate outstanding principal amount of Loans made by
it under the Credit Agreement that have not been repaid is $_______________
($________________ Revolving Loans, $_______________ Term Loan, $______________
Acquisition Financing Loans, $________________ Supplemental Revolving Loans and
$___________________ Y2K Revolving Loans) and a description of the interest
rates and interest periods for such Loans is attached as Schedule I hereto, and
(C) the aggregate principal amount of Assignor's outstanding L/C Obligations is
$___________; (ii) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim, lien, or encumbrance of any kind; (iii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or any Subsidiary or the performance or
observance by the Company or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered to the Lenders pursuant to in Section 7.5(b) and (c) thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and
-101-
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) appoints and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (v) specifies as its lending
offices (and address for notices) the offices set forth beneath its name on the
signature pages hereof.
4. As consideration for the assignment and sale contemplated in Section 1
hereof, the Assignee shall pay to the Assignor on the date hereof in Federal
funds an amount equal to $________________/1//*/. It is understood that
commitment and/or Letter of Credit fees accrued to the date hereof with respect
to the interest assigned hereby are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
5. The effective date for this Assignment and Acceptance shall be
________________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Company for its
acceptance on behalf of the Company and to the Agent for acceptance and
recording by the Agent.
6. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Credit Agreement in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement for periods prior to the Effective Date directly
between themselves.
8. In accordance with Section 11.17 of the Credit Agreement, the Assignor
and the Assignee request and direct that the Agent prepare and cause the Company
to execute and deliver to the Assignee Notes payable to the Assignee in the
amount of its Commitments and new Notes to the Assignor in the amount of its
Commitments after giving effect to the assignment hereunder.
____________________
/1/
/*/ Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be
preferable in an appropriate case to specify these amounts generically or
by formula rather than as a fixed sum.
9. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
[Assignor Lender]
By
Name
Title
[Assignee Lender]
By
Name
Title
Lending Office
(and address for notices):
Accepted and consented this _____
day of _____________
Everest Healthcare Services
Corporation
By...................................
Name..............................
Title.............................
Accepted and consented to by the
Agent this ____ day of _________
Harris Trust and Savings Bank,
as Agent
By...................................
Name..............................
Title.............................
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Schedule I
Type of Last day of
Principal Amount Loan Interest Rate Interest Period
Schedule 4.1
Restricted Subsidiaries
Name Jurisdiction of Percentage
Organization Ownership
WSKC Dialysis Services, Inc. Illinois 100%/2///1/
New York Dialysis Management, Inc. New York 100%/1/
Mercy Dialysis Center, Inc. Wisconsin 100%/1/
DuPage Dialysis, Ltd. Illinois 100%/1/
Home Dialysis of America, Inc. Arizona 100%/1/
Amarillo Acute Dialysis Specialists, L.L.C. Texas 100%/3///2/
Dialysis Specialists of Corpus Christi, L.L.C. Texas 100%/2/
Home Dialysis of Eastgate, Inc. Ohio 60.9%/2/
Dialysis Services of Cincinnati, Inc. Ohio 65%/2/
_______________________________
/2/
/1/ owned by Everest Healthcare Services Corporation
/3/
/2/ owned by Home Dialysis of America, Inc.
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Saint Margaret Mercy Dialysis Centers, L.L.C. Illinois 80%/1/
Everest Management, Inc. Delaware 100%/1/
The Extracorporeal Alliance, L.L.C. Delaware 80%/1/
Continental Health Care, Ltd. Illinois 100%/1/
Con-Med Supply Company, Inc. Illinois 100%/4///3 /
North Buckner Dialysis Center, Inc. Delaware 100%/1/
Home Dialysis of Mount Auburn, Inc. Ohio 80.5%/2/
Dialysis Specialists of South Texas, L.L.C. Texas 100%/5///4/
Hemo Dialysis of Amarillo, L.L.C. Texas 100%/2/
Tri-State Perfusion, L.L.C. Delaware 51%/6///5/
Perfusion Resource Association, L.L.C. Delaware 70%/5/
____________________________
/4/
/3/ owned by Continental Health Care, Ltd.
/5/
/4/ owned 77.8% by Home Dialysis of America, Inc.; 22.2% by Everest Healthcare
Services Corporation
/6/
/5/ owned by The Extracorporeal Alliance, L.L.C.
Home Dialysis of Dayton, Inc. Ohio 100%/2/
Everest New York Holdings, Inc. New York 100%/1/
Dialysis Specialists of Topeka, Inc. Kansas 75%/2/
Home Dialysis of Columbus, Inc. Ohio 100%/2/
Home Dialysis of Fairfield, Inc. Ohio 100%/2/
Everest One IPA, Inc. New York 100%/7///6/
Everest Two IPA, Inc. New York 100%/6/
Everest Three IPA, Inc. New York 100%/6/
Terrell Dialysis Center, L.L.C. Delaware 70%/2/
Acute Extracorporeal Services, L.L.C. Delaware 100%/2/
Dialysis Specialists of Central Cincinnati, Ltd. Ohio 100%/2/
Dialysis Specialists of Tulsa, Inc. Oklahoma 100%/2/
Everest Healthcare Indiana, Inc. Indiana 100%/1/
Northern New Jersey Dialysis, L.L.C. Delaware 100%/1/
_______________________________
/7/
/6/ owned by Everest New York Holdings, Inc.
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Schedule 5.2
Subsidiaries
Name Jurisdiction of Percentage
Organization Ownership
WSKC Dialysis Services, Inc. Illinois 100%/8///1/
New York Dialysis Management, Inc. New York 100%/1/
Mercy Dialysis Center, Inc. Wisconsin 100%/1/
DuPage Dialysis, Ltd. Illinois 100%/1/
Home Dialysis of America, Inc. Arizona 100%/1/
Amarillo Acute Dialysis Specialists, L.L.C. Texas 100%/9///2/
Dialysis Specialists of Corpus Christi, L.L.C. Texas 100%/2/
Home Dialysis of Eastgate, Inc. Ohio 60.9%/2/
Dialysis Specialists of Marietta, Ltd. Ohio 51%/2/
____________________________
/8/
/1/ owned by Everest Healthcare Services Corporation
/9/
/2/ owned by Home Dialysis of America, Inc.
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Dialysis Services of Cincinnati, Inc. Ohio 65%/2/
Saint Margaret Mercy Dialysis Centers, L.L.C. Illinois 80%/1/
Everest Management, Inc. Delaware 100%/1/
The Extracorporeal Alliance, L.L.C. Delaware 80%/1/
Continental Health Care, Ltd. Illinois 100%/1/
Con-Med Supply Company, Inc. Illinois 100%/10///3/
North Buckner Dialysis Center, Inc. Delaware 100%/1/
Home Dialysis of Mount Auburn, Inc. Ohio 80.5%/2/
Dialysis Specialists of South Texas, L.L.C. Texas 100%/11///4/
Hemo Dialysis of Amarillo, L.L.C. Texas 100%/2/
Tri-State Perfusion, L.L.C. Delaware 51%/12//5/
________________________
/10/
/3/ owned by Continental Health Care, Ltd.
/11/
/4/ owned 77.8% by Home Dialysis of America, Inc.; 22.2% by Everest Healthcare
Services Corporation
/12/
/5/ owned by The Extracorporeal Alliance, L.L.C.
Perfusion Resource Association, L.L.C. Delaware 70%/5/
Home Dialysis of Dayton, Inc. Ohio 100%/2/
Dialysis Specialists of Northeast Ohio, Ltd. Ohio 51%/1/
Everest New York Holdings, Inc. New York 100%/1/
Dialysis Specialists of Topeka, Inc. Kansas 75%/2/
Home Dialysis of Columbus, Inc. Ohio 100%/2/
Home Dialysis of Fairfield, Inc. Ohio 100%/2/
Everest One IPA, Inc. New York 100%/13///6/
Everest Two IPA, Inc. New York 100%/6/
Everest Three IPA, Inc. New York 100%/6/
Terrell Dialysis Center, L.L.C. Delaware 70%/2/
Acute Extracorporeal Services, L.L.C. Delaware 100%/2/
Dialysis Specialists of Central Cincinnati, Ltd. Ohio 100%/2/
___________________________
/13/
/6/ owned by Everest New York Holdings, Inc.
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Dialysis Specialists of Tulsa, Inc. Oklahoma 100%/2/
Everest Healthcare Indiana, Inc. Indiana 100%/1/
Northern New Jersey Dialysis, L.L.C. Delaware 100%/1/
Schedule 5.12
Tax Matters
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Schedule 5.14
Affiliate Transactions