1
EXHIBIT 4.5
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 30th day of
March, 1998 (the "Credit Agreement" or "Agreement"), is made among PROVINCE
HEALTHCARE COMPANY, a Delaware corporation (formerly known as Principal Hospital
Company) with its principal offices in Brentwood, Tennessee (the "Borrower");
the banks and other financial institutions from time to time parties hereto
(each, a "Lender," and collectively, the "Lenders"); and FIRST UNION NATIONAL
BANK (formerly known as First Union National Bank of North Carolina), as Agent
(the "Agent") and as Issuing Bank.
RECITALS
A. The Borrower, certain banks and other financial institutions, and
the Agent are parties to a Credit Agreement, dated as of December 17, 1996 (as
amended prior to the date hereof, the "Original Credit Agreement"), providing
for the availability to the Borrower of a revolving credit facility in the
aggregate principal amount of $65,000,000 and a term loan facility in the
aggregate principal amount of $35,000,000, on the terms and subject to the
conditions set forth therein.
B. The Borrower has requested certain amendments to the Original Credit
Agreement, including that the Lenders make available to the Borrower, in lieu of
the revolving credit facility and the term loan facility made available under
the Original Credit Agreement, a revolving credit facility in the aggregate
principal amount of up to $225,000,000. The Lenders have agreed to such
amendments and to make a $225,000,000 revolving credit facility available to the
Borrower by amending and restating the Original Credit Agreement in its entirety
on the terms and subject to the conditions hereinafter set forth.
AGREEMENT
NOW THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree that, as of the
Amendment Effective Date, the Original Credit Agreement shall be amended and
restated in its entirety as follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. For purposes of this Credit Agreement, in addition
to the terms defined elsewhere in this Credit Agreement, the following terms
shall have the meanings set forth below:
"ABR Loan" shall mean, at any time, any Loan that bears interest at
such time at the Alternate Base Rate.
"Account Designation Letter" shall mean a letter from the Borrower to
the Agent, duly completed and signed by an Authorized Officer of the Borrower,
listing any one or more accounts to which the Borrower may from time to time
request the Agent to forward the proceeds of any Loans made hereunder.
2
"Accounts" shall mean all "accounts," within the meaning of the Uniform
Commercial Code, of the Borrower and each of its Subsidiaries, including,
without limitation, (to the extent permitted by law) any existing and future
Medicare, Medicaid, MediCal and other similar accounts receivable.
"Acquisition" shall mean any acquisition consummated on or after the
date hereof, whether in a single transaction or series of related transactions,
by the Borrower or any one or more of its Subsidiaries, or any combination
thereof, of (i) all or a substantial part of the assets, equity or a going
business or division, of any Person, whether through purchase of assets or
securities, by merger or otherwise (including, without limitation, the
acquisition of a Facility or an operating lease for a Facility), (ii) control of
at least a majority of the outstanding securities of an existing corporation
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors or (iii) control of a greater
than 50% ownership interest in any existing partnership, joint venture or other
Person.
"Acquisition Amount" shall mean, with respect to any Permitted
Acquisition, the sum (without duplication) of (i) the amount of cash paid by the
Borrower and its Subsidiaries in connection with such Permitted Acquisition,
(ii) the Fair Market Value of all capital stock or other ownership interests of
the Borrower or any of its Subsidiaries issued or given in connection with such
Permitted Acquisition, (iii) the amount (determined by using the face amount or
the amount payable at maturity, whichever is greater) of all Debt incurred,
assumed or acquired in connection with such Permitted Acquisition, (iv) all
additional purchase price amounts in the form of earnouts and other contingent
obligations, (v) all amounts paid in respect of covenants not to compete,
consulting agreements and other affiliated contracts in connection with such
Permitted Acquisition other than bona fide employment and similar agreements not
a part of the allocation of the purchase price, and (vi) the aggregate Fair
Market Value of all other consideration given by the Borrower and its
Subsidiaries in connection with such Permitted Acquisition. All Capital
Expenditures made or projected to be incurred by the Borrower or its
Subsidiaries within ninety (90) days and in connection with any Permitted
Acquisition shall be included in the Acquisition Amount attributable to such
Permitted Acquisition and shall not be included in the calculation of Capital
Expenditures for purposes of SECTION 6.14.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate plus the Applicable Margin for
LIBOR Loans, each as in effect at such time.
"Affiliate" shall mean, as to any Person, each of the Persons that
directly, or indirectly through one or more intermediaries, owns or controls, or
is controlled by or under common control with, such Person. For the purpose of
this definition, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" shall mean First Union, in its capacity as agent as appointed
in ARTICLE IX hereof, and its permitted successors and assigns.
"Agreement" or "this Agreement" or "Credit Agreement" shall mean this
Amended and Restated Credit Agreement and any further amendments, modifications
and supplements hereto, any replacements, renewals, extensions and restatements
hereof, and any substitutes herefor, in whole or in part, and all schedules and
exhibits hereto, and shall refer to this Agreement as the same may be in effect
at the time such reference becomes operative.
"Alternate Base Rate" shall mean, at any time with respect to any ABR
Loan, a rate per
3
annum equal to the Base Rate plus the Applicable Margin for ABR Loans, each as
in effect at such time.
"Amendment Effective Date" shall mean the date on which all conditions
precedent set forth in SECTION 3.2 have been satisfied or waived in accordance
with the terms of this Agreement.
"Annualized Cash Taxes" shall mean, as of the last day of any fiscal
quarter, Cash Taxes for the four (4) consecutive fiscal quarters ending on such
date.
"Annualized Consolidated EBITDAR" shall mean, as of the last day of any
fiscal quarter, Consolidated EBITDAR for the two (2) consecutive fiscal quarters
ending on such date, multiplied by two (2); provided, that for purposes of this
calculation, losses of an extraordinary nature included in Consolidated Net
Income shall not be multiplied by two.
"Annualized Facility Rent Expense" shall mean, as of the last day of
any fiscal quarter, Facility Rent Expense for the two (2) consecutive fiscal
quarters ending on such date, multiplied by two (2).
"Annualized Interest Expense" shall mean, as of the last day of any
fiscal quarter, Interest Expense for the two (2) consecutive fiscal quarters
ending on such date, multiplied by two (2).
"Annualized Joint Venture EBITDAR" shall mean, as of the last day of
any fiscal quarter, Joint Venture EBITDAR for the two (2) consecutive fiscal
quarters ending on such date, multiplied by two (2); provided, that for purposes
of this calculation, losses of an extraordinary nature included in Consolidated
Net Income shall not be multiplied by two.
"Annualized Non-Landlord Consent EBITDAR" shall mean, as of the last
day of any fiscal quarter, Non-Landlord Consent EBITDAR for the two (2)
consecutive fiscal quarters ending on such date, multiplied by two (2);
provided, that for purposes of this calculation, losses of an extraordinary
nature included in Consolidated Net Income shall not be multiplied by two.
"Applicable Margin" shall mean, at any time with respect to any Loan,
the applicable percentage points as determined under the following matrix with
reference to the ratio of Consolidated Adjusted Debt to Annualized Consolidated
EBITDAR calculated as provided below:
Ratio of Consolidated Adjusted
Debt to Annualized Applicable Margin Applicable Margin
Consolidated EBITDAR (ABR Rate) (LIBOR Rate)
- -------------------- ------------------ ------------------
Greater than or equal to
4.0 to 1.0 0.75% 2.00%
Less than 4.0 to 1.0
but greater than or equal to
3.5 to 1.0 0.50% 1.75%
Less than 3.5 to 1.0
but greater than or equal to
3.0 to 1.0 0.25% 1.50%
4
Less than 3.0 to 1.0
but greater than or equal to
2.5 to 1.0 0.00% 1.25%
Less than 2.5 to 1.0
but greater than or equal to
2.0 to 1.0 0.00% 1.00%
Less than 2.0 to 1.0 0.00% 0.75%
From the Amendment Effective Date until the fifth (5th) Business Day after
receipt by the Agent of the financial statements for the fiscal quarter ended
March 31, 1998 pursuant to SECTION 5.1(B) below, the Applicable Margin shall be
1.25% for LIBOR Loans and 0% for ABR Loans. The Applicable Margins shall be
reset from time to time in accordance with the above matrix on the fifth (5th)
Business Day after receipt by the Agent in accordance with SECTIONS 5.1(A) or
(B) of financial statements together with a Compliance Certificate attaching an
Interest Rate Calculation Worksheet (reflecting the computation of the ratio of
Consolidated Adjusted Debt to Annualized Consolidated EBITDAR as of the last day
of the preceding fiscal quarter or fiscal year, as appropriate) that provides
for different Applicable Margins than those then in effect.
"Assigned Rights" shall have the meaning assigned to such term in
SECTION 2.17.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
Agreement entered into between a Lender and an Eligible Assignee, and accepted
by the Agent, in substantially the form of EXHIBIT D.
"Assignment Restrictions" shall mean (i) with respect to any contracts
or agreements assigned to the Agent, on behalf of the Lenders, as Collateral by
the Borrower or any of its Subsidiaries, any restriction or prohibition on
assignment that has not been waived or consented to by the Person for whose
benefit such restriction or prohibition exists; provided that such restriction
or prohibition will not be permitted if the Agent has required such waiver or
consent, such requirement of waiver or consent not to unreasonably interfere
with the ordinary course of business of the Borrower and its Subsidiaries and
may only be required with respect to a material contract, and (ii) with respect
to Medicare, Medicaid and MediCal accounts receivable, assignment restrictions
as provided in the Medicare Regulations, the Medicaid Regulations and the
MediCal Regulations.
"Authorized Officer" shall mean any of (i) the Chief Executive Officer,
Chief Financial Officer, Vice President-Finance or Vice President-Controller,
and (ii) any other officer of the Borrower authorized by resolution of the board
of directors of the Borrower to take the action specified herein with respect to
such officer and whose signature and incumbency shall have been certified to the
Agent by the secretary or an assistant secretary of the Borrower.
"Bankruptcy Code" shall mean 11 U.S.C. ss. 101 et seq., as amended, and
any successor statute or statute having substantially the same function.
"Base Rate" shall mean the higher of (i) the Prime Rate, or (ii)
one-half percentage point (0.5%) in excess of the Federal Funds Rate, as
adjusted to conform to changes as of the opening of business on the date of any
such change in the Federal Funds Rate.
"Bloodborne Pathogens Standard" shall mean the Final Standard for
Occupational Exposure to Bloodborne Pathogens promulgated by OSHA at 56 Federal
Register 64004 et
5
seq. (December 6, 1991) and codified at 29 C.F.R. ss. 1910.1030, or any similar
regulation promulgated by any Governmental Authority.
"Borrower" shall mean Province Healthcare Company, a Delaware
corporation (formerly known as Principal Hospital Company), and its successors
and assigns.
"Borrowing" shall mean the incurrence by the Borrower on a given date
(including as a result of conversions of outstanding Loans pursuant to SECTION
2.9) of one Type of Loan (or a Swingline Loan made by the Swingline Lender)
having in the case of LIBOR Loans the same Interest Period, provided that ABR
Loans incurred pursuant to SECTION 2.11(C) shall be considered part of the
related Borrowing of LIBOR Loans.
"Borrowing Date" shall have the meaning assigned to such term in
SECTION 2.2(B).
"Business Day" shall mean (i) any day other than a Saturday or Sunday,
a legal holiday or a day on which commercial banks in Charlotte, North Carolina
are required by law to be closed and (ii) in respect of any determination
relevant to a LIBOR Loan or any Swap Agreement, any such day that is also a day
on which tradings are conducted in the London interbank Eurodollar market.
"Capital Asset" shall mean any asset that would, in accordance with
Generally Accepted Accounting Principles, be required to be classified and
accounted for as a capital asset.
"Capital Expenditures" shall mean the aggregate amount of all
expenditures and liabilities (including, without limitation, Capital Lease
Obligations) made and incurred in respect of the acquisition by the Borrower or
any of its Subsidiaries of Capital Assets, but excluding Capital Assets acquired
in the form of a Permitted Acquisition and excluding expenditures and
liabilities not to exceed $25,000,000 in the aggregate made and incurred by the
Borrower or any of its Subsidiaries prior to May 31, 2001 in respect of the
acquisition of Capital Assets at Havasu Samaritan Regional Hospital.
"Capital Lease" shall mean any lease of any property that would, in
accordance with Generally Accepted Accounting Principles, be required to be
classified and accounted for as a capital lease on the balance sheet of the
lessee.
"Capital Lease Obligation" shall mean, with respect to any Capital
Lease, the amount of the obligation of the lessee thereunder that would, in
accordance with Generally Accepted Accounting Principles, appear on a balance
sheet as a liability of such lessee in respect of such Capital Lease.
"Cash Collateral Account" shall have the meaning assigned to such term
in SECTION 2.18(I).
"Cash Investments" shall mean (i) marketable direct obligations (x)
issued or unconditionally guaranteed by the United States of America or (y)
issued by any agency thereof having a rating of A or higher by Standard & Poor's
or A-2 or higher by Moody's Investors Service, Inc., in each case maturing
within one year from the date of acquisition thereof; (ii) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either Standard & Poor's
Rating Services or Moody's Investors Service, Inc.; (iii) marketable commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 or the equivalent
6
thereof by Standard & Poor's Rating Services or at least P-1 or the equivalent
thereof by Moody's Investors Service, Inc.; (iv) demand deposits, time deposits
and certificates of deposit maturing within one (1) year from the date of
issuance thereof and issued by a Lender or a bank or trust company organized
under the laws of the United States of America or any state thereof and having a
long term debt rating by Standard & Poor's Rating Services of A or higher; (v)
repurchase agreements with a term not exceeding seven days with respect to
underlying securities of the types described in clause (I) above entered into
with a bank or trust company meeting the qualifications specified in clause (IV)
above; and (vi) mutual funds that invest solely in any of the items described
above.
"Cash Management Line of Credit" shall mean a cash management line of
credit between the Borrower and First Union in an aggregate principal amount not
in excess of $5,000,000.
"Cash Taxes" shall mean, for any fiscal quarter, the aggregate amount
of cash payments made by or on behalf of the Borrower or any Subsidiaries to
Governmental Authorities for taxes, levies, charges or withholdings during such
fiscal quarter.
"Change of Control" shall mean (i) any Person or "group" (within the
meaning of Section 13(d)(3) under the Exchange Act), shall, directly or
indirectly, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become, after the Amendment
Effective Date, the "beneficial owner" (within the meanings of Rules 13d-3 and
13d-5 under the Exchange Act) of securities of the Borrower representing 30% or
more of the combined voting power of the then outstanding securities of the
Borrower ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors, assuming the conversion,
exchange or exercise into or for voting stock of all outstanding shares so
convertible (other than GTCR Fund IV, Bruce V. Rauner or Joseph P. Nolan, which
are currently the beneficial owners of 36.6% of the voting securities of the
Borrower and may increase such holdings without causing a Change of Control), or
(ii) the members of the Board of Directors of the Borrower shall cease to
consist of a majority of the individuals (y) who constituted the Board of
Directors as of the date hereof or (z) who shall have become members thereof
subsequent to the date hereof after having been nominated, or otherwise approved
in writing, by at least a majority of individuals who constituted the Board of
Directors of the Borrower as of the date hereof. For purposes of this
definition, "voting power" shall be determined with reference to the then
outstanding securities of the Borrower ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors, assuming the conversion, exchange or exercise into or for voting
stock of all outstanding securities of the Borrower other than voting stock.
"Collateral" shall mean all assets, property and interests in property
of the Borrower and its Subsidiaries, whether now owned or hereafter acquired,
that shall, from time to time, directly or indirectly secure the Credit
Obligations or the Guaranty Obligations, including, without limitation, the
assets, property or interests in property described in the Security and Pledge
Agreement; provided, that with respect to Subsidiaries acquired or created after
the Amendment Effective Date in accordance with SECTION 5.11, "Collateral" shall
mean all Stock, Interests and promissory notes owned by such Subsidiaries or by
the Borrower with respect to such Subsidiaries; and provided, further that
"Collateral" shall not include Realty acquired after the Amendment Effective
Date by the Borrower or any of its Subsidiaries.
"Commitment" shall mean, for any Lender, such Lender's Revolving Credit
Commitment including its Swingline Commitment.
"Commitment Letter" shall mean the commitment letter to the Borrower
from First Union
7
National Bank dated March 11, 1998, confirming its commitment to provide a
portion of the Revolving Credit Facility pursuant to this Agreement.
"Compliance Certificate" shall mean a fully completed certificate in
the form of EXHIBIT C.
"Consolidated Adjusted Debt" shall mean the sum of (a) Consolidated
Debt, and (b) the product of (i) Annualized Facility Rent Expense, multiplied by
(ii) eight (8).
"Consolidated Adjusted Senior Debt" shall mean, at any time,
Consolidated Adjusted Debt less Subordinated Debt.
"Consolidated Debt" shall mean, at any date, the aggregate (without
duplication) of all Debt of the Borrower and its Subsidiaries as of such date,
determined on a consolidated basis.
"Consolidated EBITDAR" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis as of the last day of any period, EBITDAR
for the period ending on such date determined in accordance with Generally
Accepted Accounting Principles. Consolidated EBITDAR shall be deemed to include,
without duplication, historical Consolidated EBITDAR, of any business acquired
and operated by the Borrower or any Subsidiary after the commencement of the
relevant measurement period, as if such business had been acquired by the
Borrower or such Subsidiary as of the first day of such measurement period,
subject to pro forma expense adjustments as set forth below; provided that such
Consolidated EBITDAR is supported by financial statements, tax returns or other
financial data acceptable to the Agent in its sole discretion. Calculations of
Consolidated EBITDAR shall exclude the results of operations of any entity
disposed of by the Borrower or any Subsidiary at any time after the first day of
the relevant measurement period. Consolidated EBITDAR shall be adjusted for pro
forma expense adjustments in connection with newly acquired entities, if and
only to the extent approved in writing by the Required Lenders.
"Consolidated Net Income" shall mean, for any fiscal quarter, the net
income (or loss) of the Borrower and its Subsidiaries, on a consolidated basis
and excluding intercompany items, for such quarter, determined in accordance
with Generally Accepted Accounting Principles, but excluding the effect of: (a)
gains on the sale, conversion or other disposition of Capital Assets, (b) gains
on the acquisition, retirement, sale or other disposition of stock of the
Borrower or any of its Subsidiaries, (c) gains on the collection of life
insurance proceeds, (d) any write-up of any asset, (e) any other gain or credit
of an extraordinary nature, and (f) noncash losses approved in writing by the
Agent.
"Consolidated Net Revenues" shall mean, for any fiscal quarter, the net
revenues of the Borrower and its Subsidiaries, on a consolidated basis and
excluding intercompany items, for such quarter, determined in accordance with
Generally Accepted Accounting Principles.
"Consolidated Net Worth" shall mean, as of the last day of any fiscal
year, the net worth of the Borrower and its Subsidiaries as of such date,
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Contingent Obligation" shall mean, with respect to any Person, any
direct or indirect liability of such Person with respect to any Debt, lease,
dividend, guaranty, letter of credit (other than a standby letter of credit with
no reasonable likelihood of draw, in the reasonable opinion of the Agent) or
other obligation (the "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such
8
primary obligations, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation, or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability of the primary
obligor to perform in respect thereof. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by such Person in good faith.
"Covenant Compliance Worksheet" shall mean a fully completed
certificate in the form of Attachment A to EXHIBIT C.
"Credit Obligations" shall mean and include (i) the Loans, any
Reimbursement Obligations and all other loans, advances, indebtedness,
liabilities and obligations owing, arising, due or payable from the Borrower to
the Agent, the Issuing Bank or any Lender of any kind or nature, present or
future, howsoever evidenced, created, incurred, acquired or owing, that arise
under this Agreement, the Notes or the other Loan Documents, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however acquired, and (ii) all interest (including, to the extent permitted
by law, all post-petition interest), charges, expenses, fees, attorneys' fees
and any other sums payable by the Borrower to the Agent, the Issuing Bank or any
Lender under this Agreement, or any of the other Loan Documents (other than any
interest payments or lease payments made in connection with the End Loaded Lease
Facility).
"Debt" shall mean, with respect to any Person or group of Persons,
without duplication, (i) all indebtedness of such Person for money borrowed,
(ii) all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not
matured), (iii) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (iv) all obligations of such Person to pay
the deferred purchase price of property or services (including earnouts and
other similar contingent obligations, calculated in accordance with Generally
Accepted Accounting Principles), other than trade payables, (v) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (vi) all Capital Lease
Obligations of such Person, (vii) all monetary obligations and amounts owing of
such Person under the End Loaded Lease Facility or any other synthetic or end
loaded lease facility of such Person, (viii) the net termination obligations of
such Person under any Swap Agreement or other interest rate protection or
hedging arrangement, calculated as of any date as if such agreement or
arrangement were terminated as of such date, (ix) all obligations of such Person
to purchase, redeem, retire, defease or otherwise make any payment in respect of
any capital stock or other equity securities that, by their stated terms (or by
the terms of any equity securities issuable upon conversion thereof or in
exchange therefor), or upon the occurrence of any event, mature or are
mandatorily redeemable, or are redeemable at the option of the holder thereof,
in whole or in part, (x) all indebtedness referred to in clauses (I) through
(IX) above secured by any lien on any property or asset owned or held by such
Person regardless of whether the indebtedness secured thereby shall have been
assumed by such Person or is nonrecourse to the credit of such Person, and (xi)
any Contingent Obligation of such Person to the extent that such Contingent
Obligation in accordance with Generally Accepted Accounting Principles would be
9
set forth in a specific Dollar amount on the liability side of a balance sheet,
and excluding any guaranty of Debt related to an operating lease, provided that
such guaranty will be included as a Contingent Obligation if the guaranty is
called and there is not a corresponding forgiveness of lease payments in like
amounts commencing in the order due, and provided, further, that Contingent
Obligations of such Person under the End Loaded Lease Facility shall constitute
"Debt" of such Person.
"Default" shall mean any event that, with the passage of time or giving
of notice, or both, would constitute an Event of Default.
"Dollars" or "$" shall mean dollars of the United States of America.
"EBITDAR" shall mean, for any Person for any fiscal quarter, (i)
Consolidated Net Income, plus (ii) the sum of Interest Expense, taxes,
depreciation, amortization, and Facility Rent Expense.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States or any state thereof and having total assets in
excess of $1,000,000,000, (ii) a commercial bank organized under the laws of any
other country that is a member of the OECD or a political subdivision of any
such country and having total assets in excess of $1,000,000,000, provided that
such bank is acting through a branch or agency located in the United States, in
the country under the laws of which it is organized or in another country that
is also a member of the OECD, (iii) the central bank of any country that is a
member of the OECD, (iv) a finance company, mutual fund, insurance company or
other financial institution that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and having
total assets in excess of $250,000,000, (v) any Affiliate of an existing Lender
or (vi) any other Person (other than an Affiliate of any Borrower) approved by
the Agent and the Borrower, which approval shall not be unreasonably withheld.
"Employee Plan" shall mean any "employee benefit plan" within the
meaning of Section 3(3) of ERISA maintained by the Borrower or any of its
Subsidiaries.
"End Loaded Lease Commitments" shall mean, with respect to any Lender
at any time, the amount set forth under such Lender's name on Schedule 1.1 to
the End Loaded Lease Credit Agreement or, if such Lender has entered into one or
more Assignment and Acceptances, the amount set forth for such Lender at such
time in the Register maintained by the Agent pursuant to Section 9.9(a) of the
End Loaded Lease Credit Agreement as such Lender's aggregate "End Loaded Lease
Commitment", as such amount may be reduced at or prior to such time pursuant to
the terms of the End Loaded Lease Credit Agreement.
"End Loaded Lease Credit Agreement" shall mean the credit agreement,
dated the Amendment Effective Date, among the Owner Trustee, the lenders party
thereto and First Union, as agent, together with any amendments, modifications,
and supplements thereto, any replacements, renewals, extensions, restatements
and confirmations thereof, and any substitutes therefor, in whole or in part.
"End Loaded Lease Facility" shall mean a $35,000,000 end loaded lease
financing facility arranged by First Union Capital Markets for the Company, as
embodied in the Participation Agreement and the other Operative Agreements (as
defined in the Participation Agreement).
"End Loaded Lease Loans" shall mean loans made by the lenders party
thereto pursuant to the End Loaded Lease Credit Agreement.
10
"End Loaded Lease Notes" shall mean the promissory notes of the
Borrower executed and delivered to the lenders party thereto with End Loaded
Lease Commitments pursuant to the End Loaded Lease Credit Agreement.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by the Borrower or any of its Subsidiaries solely in the
ordinary course of its business and not in response to any third party action or
request of any kind) or proceedings relating in any way to any Environmental Law
or any permit issued, or any approval given, under any such Environmental Law
(hereinafter, "Claims"), including, without limitation, (i) any and all Claims
by Governmental Authorities for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable Environmental
Law and (ii) any and all Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Substances or arising from alleged injury or threat of
injury to human safety, health or the environment, (iii) any violation or
alleged violation of any Environmental Law or other legal requirement by
Borrower or its Subsidiaries with respect to any property owned, leased or
operated by Borrower or its Subsidiaries (in the past, currently or in the
future) and/or (iv) any Claim arising out of any presence, suspected presence,
generation, treatment, storage, disposal, transport, movement, release,
suspected release or threatened release of any Hazardous Material in, on, to or
from any property (or any part thereof including without limitation the soil and
groundwater thereon and thereunder) owned, leased or operated by Borrower or its
Subsidiaries (in the past, currently or in the future).
"Environmental Laws" shall mean any and all applicable laws, as in
effect from time to time at the effective time of any applicable representation,
warranty, covenant or indemnity, including, without limitation, federal, state
and local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, and orders of courts or Governmental Authorities, relating to the
protection of human health or the environment, including, but not limited to,
requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Substances. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.) ("RCRA"), the Federal
Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42
U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601
et seq.), the Safe Drinking Water Act (42 U.S.C. ss. 300f, et seq.), the
Environmental Protection Agency's regulations relating to underground storage
tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act
(29 U.S.C. ss. 651 et seq.), to the extent that it regulates exposure to
Hazardous Substances, ("OSHA"), as such laws have been amended or supplemented,
and any analogous federal, state or local statutes, as in effect from time to
time at the effective time of any applicable representation, warranty, covenant
or indemnity, and the rules and regulations promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and all rules and regulations from time to time
promulgated thereunder.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified
Plan (as defined in SECTION 4.16); (b) a withdrawal by the Borrower or any of
its Subsidiaries from a Qualified Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial
11
employer (as defined in Section 4001(a)(2) of ERISA); (c) a complete or partial
withdrawal by the Borrower or any of its Subsidiaries from a Multiemployer Plan;
(d) the filing of a notice of intent to terminate, the treatment of a plan
amendment as a termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the Pension Benefit Guaranty Corporation to
terminate a Qualified Plan or Multiemployer Plan subject to Title IV of ERISA;
(e) a failure to make required contributions to a Qualified Plan or
Multiemployer Plan; (f) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Qualified Plan or Multiemployer
Plan; (g) the imposition of any liability under Title IV of ERISA, other than
Pension Benefit Guaranty Corporation premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any of its Subsidiaries; (h) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Internal Revenue Code with respect to any
Qualified Plan; (i) the Borrower or any of its Subsidiaries engages in or
otherwise becomes liable for a nonexempt Prohibited Transaction; or (j) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the Internal Revenue Code by any
fiduciary with respect to any Qualified Plan for which the Borrower or any of
its Subsidiaries may be directly or indirectly liable.
"Event of Default" shall have the meaning specified in ARTICLE VII
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and all rules and regulations from time to time
promulgated thereunder.
"Existing Loans" shall have the meaning assigned to such term in
SECTION 2.1(A).
"Facility" shall mean a hospital or other health care facility,
together with other ancillary businesses, all buildings and improvements
associated therewith, that are owned or leased in whole or in part, by the
Borrower or any of its Subsidiaries.
"Facility Rent Expense" shall mean, for any fiscal quarter, all amounts
paid, payable or accrued during such fiscal quarter by the Borrower and its
Subsidiaries on a consolidated basis with respect to all operating leases of
hospitals and the operating lease of any other Facility with a Lease Expense in
excess of $200,000 annually; provided that Facility Rent Expense shall exclude
any amounts that constitute Debt pursuant to clause (vii) of the Debt
definition.
"Fair Market Value" shall mean, with respect to any capital stock or
other ownership interests issued or given by the Borrower or any of its
Subsidiaries in connection with a Permitted Acquisition, (i) in the case of
common stock of the Borrower that is then designated as a national market system
security by the National Association of Securities Dealers, Inc. ("NASDAQ") or
is listed on a national securities exchange, the average of the last reported
bid and ask quotations or prices reported thereon for such common stock or (ii)
in all other cases, the determination of the fair market value thereof in good
faith by a majority of members of the board of directors of the Borrower or such
Subsidiary with no direct or indirect (other than by virtue of being a director)
economic interest in such Permitted Acquisition, in each case effective as of
the close of business on the Business Day immediately preceding the closing date
of such Permitted Acquisition.
"Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of Richmond, or
if such rate is not so published on the relevant Business Day, the
12
average of the quotations for such day on such transactions received by the
Agent from three federal funds brokers of recognized standing selected by the
Agent.
"Fee Letter" shall mean the letter, dated March 11, 1998, as amended,
from First Union and First Union Capital Markets to the Borrower, relating to
the fees payable to First Union Capital Markets as of the Amendment Effective
Date for its own account and the administrative fee payable to the Agent from
time to time for its own account, the obligations under which have been assumed
by the Borrower.
"Financial Condition Certificate" shall mean a fully completed
certificate, with the attachments required thereby, in the form of EXHIBIT E.
"Financials" or "Financial Statements" shall mean the audited
consolidated balance sheet of the Borrower and its Subsidiaries as of December
31, 1996, 1995 and 1994, and related statements of operations, stockholders'
equity and cash flows for the fiscal years then ended, together with the opinion
of Ernst & Young LLP thereon; and (ii) the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as of December 31, 1997 and the related
statements of operations, stockholders' equity and cash flows for the six-month
period then ended.
"Financing Statements" shall mean financing statements approved for
filing in accordance with the applicable adopted version of the Uniform
Commercial Code and all other titles, documents and certificates that the Agent
has required or may reasonably require from the Borrower or any Guarantor to
describe and perfect the security interests created hereunder or under the other
Loan Documents, and all assignments thereof and amendments thereto, in form and
substance satisfactory to the Agent.
"First Union" shall mean First Union National Bank, a national banking
association, and its successors and assigns.
"First Union Capital Markets" shall mean First Union Capital Markets, a
division of Wheat First Securities, Inc.
"Fixed Charges" shall mean, as of the last day of any fiscal quarter,
(a) Scheduled Principal Payments, plus (b) the sum of the following as of the
fiscal quarter then ending: (i) Annualized Interest Expense payable in cash,
(ii) Annualized Facility Rent Expense, (iii) actual Capital Expenditures
(excluding, for measurement dates ending on or prior to September 30, 1998,
aggregate acquisition expenditures and current building programs incurred on or
prior to December 31, 1997 at Parkview Regional Hospital, Mexia, Texas and
Colorado Plains Medical Center, Fort Morgan, Colorado, not to exceed $3,200,000)
for the four fiscal quarters then ending and (iv) Annualized Cash Taxes.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles, as recognized by the American Institute of
Certified Public Accountants, consistently applied and maintained on a
consistent basis for the Borrower and its Subsidiaries on a consolidated basis
throughout the period indicated and consistent with the financial practice of
the Borrower and its Subsidiaries after the date hereof.
"GTCR Fund IV" shall mean the Golder, Thoma, Cressy, Rauner Fund IV,
L.P.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or
13
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Guarantors" shall mean any Subsidiary of the Borrower that jointly and
severally guarantees the Credit Obligations of the Borrower. As of the Amendment
Effective Date, the Guarantors shall include, without limitation,
Blythe-Province, Inc., Brim Equipment Services, Inc., Brim Fifth Avenue, Inc.,
Brim Healthcare, Inc., Brim Hospitals, Inc., Brim Outpatient Services, Inc.,
Brim Pavilion, Inc., Brim Services Group, Inc., Care Health Company, Inc.,
Integrated Health Management, LLC, Mexia Principal Healthcare Limited
Partnership, Mexia-Principal, Inc., Palestine Limited Partnership,
Palestine-Principal G.P., Inc., Palestine-Principal, Inc., Principal Hospital
Company of Nevada, Inc., Principal Knox Company, PHC-Eunice, Inc., PHC-Lake
Havasu, Inc., PHC of Delaware, Inc. and Principal-Needles, Inc.
"Guaranty Agreement" shall mean the Amended and Restated Guaranty
Agreement dated as of the date hereof, executed by each Guarantor in favor of
the Agent, whereby each Guarantor guarantees to the Lenders the payment and
performance of the Credit Obligations, together with any amendments, accessions,
modifications and supplements thereto, any replacements, renewals, extensions,
restatements and confirmations thereof, and any substitutes therefor, in whole
or in part.
"Guaranty Documents" shall mean the Guaranty Agreement and the security
agreements, pledge agreements, collateral assignments of agreements and any
other documents or agreements between the Agent and any of the Guarantors,
whereby the Guarantors have pledged Collateral to the Agent as security for the
obligations of the Guarantors under the Guaranty Agreement, including, without
limitation, the Security and Pledge Agreement and the Mortgages, together with
any amendments, modifications, accessions and supplements thereto, any
replacements, renewals, extensions, restatements and confirmations thereof, and
any substitutes therefor, in whole or in part.
"Guaranty Obligations" shall mean the obligations of the Guarantors
pursuant to the Guaranty Agreement and the Guaranty Documents.
"HCFA" shall mean the United States Health Care Financing
Administration and any successor agency.
"Hazardous Substances" means any substances or materials (i) that are,
at any time of determination, defined as hazardous wastes, hazardous substances,
pollutants, contaminants or toxic substances under any Environmental Law; (ii)
that are toxic, explosive, corrosive, flammable, infectious, radioactive,
mutagenic or otherwise hazardous and are, at any time of determination,
regulated by any Governmental Authority; (iii) the presence of which requires
investigation or remediation under any Environmental Law or common law; or (iv)
that contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
"IRS" shall mean the Internal Revenue Service and any successor
thereto.
"Indemnified Costs" shall have the meaning assigned to such term in
SECTION 10.7.
"Indemnified Person" shall have the meaning assigned to such term in
SECTION 10.7.
"Intercompany Management Agreements" shall mean and include any and all
management agreement now or hereafter existing between the Borrower and any of
its
14
Subsidiaries or between such Subsidiaries under which the Borrower or a
Subsidiary receives management, consulting or other similar fees for services
rendered thereunder, and includes without limitation those management agreements
described on SCHEDULE 6.20 attached hereto, together with all amendments,
supplements and restatements thereof.
"Interest Expense" shall mean, for any fiscal quarter, total interest
expense of the Borrower and its Subsidiaries on a consolidated basis for such
fiscal quarter (including, without limitation, interest expense attributable to
Capital Lease Obligations), determined in accordance with Generally Accepted
Accounting Principles, and all lease payments made by the Borrower and its
Subsidiaries in connection with the End Loaded Lease Facility.
"Interest Period" shall have the meaning assigned to such term in
SECTION 2.8.
"Interest Rate Calculation Worksheet" shall mean a fully completed
worksheet in the form of Attachment B to EXHIBIT C.
"Interests" shall mean all ownership or profit-sharing interests
(howsoever designated) in any general or limited partnership, limited liability
company or joint venture, and all agreements, instruments and documents
convertible, in whole or in part, into any one or more or all of the foregoing.
"Internal Revenue Code" or "IRC" shall mean the Internal Revenue Code
of 1986, as amended from time to time, applicable United States Treasury
Department regulations promulgated under the IRC, published administrative
positions of the Internal Revenue Service and any judicial decisions related
thereto.
"Issuing Bank" shall mean First Union, in its capacity as issuer of the
Letters of Credit, and its successors and assigns in such capacity.
"Joint Venture EBITDAR" shall mean, for any fiscal quarter,
Consolidated EBITDAR attributable to any Non-Wholly Owned Consolidated
Subsidiary of the Borrower or any other of its Subsidiaries for such fiscal
quarter, but excluding EBITDAR attributable to the Palestine Limited
Partnership.
"L/C Participant" shall have the meaning assigned to such term in
SECTION 2.18(C).
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at
such time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next higher 1/100 of one percentage
point) obtained by dividing (a) the rate of interest determined by Agent to be
the rate for deposits in U.S. Dollars for the applicable Interest Period which
appears on the Telerate Page 3750 or successor page or successor service at
approximately 11:00 a.m. London time, two (2) Business Days prior to the first
date of the applicable Interest Period, or if such rate is not available, the
rate per annum at which, in the reasonable opinion of Agent, U.S. Dollars
substantially in the amount of the corresponding Borrowing are being offered to
leading reference banks in the London interbank market for settlement at
approximately 11:00 a.m. London time, two (2) Business Days prior to the first
date of the applicable Interest Period, by (b) the percentage equal to one
hundred percent (expressed as a decimal fraction) minus the Reserve Requirement
for such Interest Period. Each calculation by the Agent of the applicable LIBOR
Rate shall be conclusive and binding for all purposes, absent bad faith or
manifest error.
15
"Landlord Consents" shall mean (i) a waiver and consent from each
landlord with respect to all Facility Leased Properties of the Borrower and its
Subsidiaries and (ii) all other landlord consents that the Agent or the Required
Lenders may reasonably require of the Borrower or any of its Subsidiaries from
time to time in respect of amendments, modifications or renewals of the leases
referred to in clause (i) above or in respect of any other leases to which the
Borrower or any of its Subsidiaries is now or hereafter a party, in each case in
form and substance reasonably satisfactory to the Agent, together with any
amendments, modifications and supplements thereto and restatements thereof, in
whole or in part.
"Lease Expense" shall mean, for any fiscal quarter, all amounts paid,
payable or accrued during such fiscal quarter by the Borrower and its
Subsidiaries on a consolidated basis with respect to all leases and rental
agreements, including, without limitation, all amounts paid as Facility Rent
Expense, of the Borrower and its Subsidiaries, other than Capital Leases,
determined in accordance with Generally Accepted Accounting Principles; provided
that Lease Expense shall exclude any amounts that constitute Debt pursuant to
clause (vii) of the Debt definition.
"Leased Properties" shall mean the real properties leased and occupied
by the Borrower and its Subsidiaries, as of the date hereof and at any time
hereafter and consisting, as of the date hereof, of the properties set forth in
SCHEDULE 4.8 hereof.
"Lender" shall mean each financial institution signatory hereto and
each other financial institution that becomes a "Lender" hereto pursuant to
SECTION 10.5, and their permitted successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the branch or
branches (or Affiliates) from which any of such Lender's Loans are made or
maintained.
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit at such time
and (ii) the aggregate amount of all Reimbursement Obligations at such time.
"Letter of Credit Request" shall have the meaning assigned to such term
in SECTION 2.18(B).
"Letters of Credit" shall have the meaning assigned to such term in
SECTION 2.18(A).
"Line of Business" shall mean the business of owning or operating
nonurban hospitals and managing hospitals and engaging in businesses ancillary
to the aforesaid line of business that enhance or support it and that are not
materially different from the foregoing.
"Loan Documents" shall mean and collectively refer to this Agreement,
the Notes, the Security and Pledge Agreement, the Guaranty Documents, the
Financing Statements, the Mortgages, the Landlord Consents, the Letters of
Credit, the Fee Letter, Swap Agreements (if any) between the Borrower and any
Lender, and any and all other material agreements and instruments, including,
without limitation, notes, guaranties, mortgages, deeds to secure debt, deeds of
trust, chattel mortgages, pledges, powers of attorney, consents, assignments,
contracts, security agreements, trust account agreements heretofore, now or
hereafter executed by or on behalf of the Borrower or any of its Subsidiaries
and heretofore, now or hereafter delivered to the Agent or any Lender with
respect to this Agreement, and in each case, together with any amendments,
modifications and supplements thereto, any replacements, renewals, extensions
and restatements thereof, and any substitutes therefor, in whole or in part.
16
"Loans" shall mean and collectively refer to the Revolving Credit Loans
and the Swingline Loans.
"Material Adverse Effect" or "Material Adverse Change" shall mean,
subject to any applicable cure or grace periods, a material adverse effect upon,
or a material adverse change in, any of (a) the financial condition, operations,
business, properties or prospects of the Borrower and its Subsidiaries, taken as
a whole; (b) the ability of the Borrower or any of its Subsidiaries to perform
its material obligations under any Material Loan Document; (c) the legality,
validity or enforceability of any Material Loan Document; (d) the perfection or
priority of the liens of the Agent granted under the Material Loan Documents or
the rights and remedies of the Agent or the Lenders under the Material Loan
Documents; or (e) the condition or value of any portion of the Collateral, which
compared to the total Collateral, is material (other than market fluctuations in
the values of such Collateral); provided, that a material adverse effect or a
material adverse change caused solely by the Agent's or the Lenders' failure to
file continuation statements shall not be a Material Adverse Effect or a
Material Adverse Change for purposes of this Agreement.
"Material Loan Documents" shall mean and collectively refer to this
Agreement, the Notes, the Security and Pledge Agreement, the Guaranty Documents,
the Financing Statements, the Mortgages, the Landlord Consents, the Letters of
Credit, the Fee Letter, Swap Agreements (if any) between the Borrower and any
Lender, and in each case, together with any amendments, modifications and
supplements thereto, any replacements, renewals, extensions and restatements
thereof, and any substitute therefor, in whole or in part.
"Medicaid Regulations" shall mean, collectively, (i) all federal
statutes (whether set forth in Title XIX of the Social Security Act, 42 USC
ss.ss. 1396 et seq., or elsewhere) affecting the medical assistance program
established by Title XIX of the Social Security Act, and any statutes succeeding
thereto; (ii) all applicable provisions of all federal rules, regulations,
manuals and orders of all Governmental Authorities promulgated pursuant to or in
connection with the statutes described in clause (i) above and all federal
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in connection
with the statutes described in clause (i) above; (iii) all state statutes and
plans for medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all applicable
provisions of all rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (iii) above and all state administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (iii) above,
in each case as may be amended, supplemented or otherwise modified from time to
time.
"MediCal Regulations" shall mean collectively, all California state
statutes (whether set forth in Cal. Welf. & Inst. Code ss.ss. 14000 et seq., or
elsewhere) affecting the health insurance program for the aged and disabled
established in connection with Title XIX of the Social Security Act, and any
statutes succeeding thereto; together with all applicable provisions of all
rules, regulations, manuals and orders and administrative, reimbursement and
other guidelines having the force of law of all Governmental Authorities
(including without limitation, the California Department of Health Services)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, in each case as may be amended, supplemented or otherwise modified
from time to time.
"Medicare Regulations" shall mean, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act, 42 USC ss.ss. 1396
et seq., or elsewhere) affecting the health
17
insurance program for the aged and disabled established by Title XVIII of the
Social Security Act and any statutes succeeding thereto; together with all
applicable provisions of all rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines having the force of law of
all Governmental Authorities (including without limitation, Health and Human
Services ("HHS"), HCFA, the Office of the Inspector General for HHS, or any
Person succeeding to the functions of any of the foregoing) promulgated pursuant
to or in connection with any of the foregoing having the force of law, in each
case as may be amended, supplemented or otherwise modified from time to time.
"Mortgages" shall mean all fee and leasehold mortgages, deeds of trust
and similar instruments pursuant to which the Borrower or any Guarantor grants
to the Agent, for the benefit of the Lenders, a mortgage lien, or an assignment
of any mortgage lien obtain by such Person from another Person, to secure any or
all of the Credit Obligations or the Guaranty Obligations, and shall include,
without limitation, the deeds of trust and security agreements dated as of
December 17, 1996, July 31, 1997 or August 11, 1997, executed by the Borrower
and/or certain of its Subsidiaries with respect to the parcels of Realty located
at (i) General Hospital, Eureka, Humboldt County, California; (ii) Palo Verde
Community Hospital, Blythe, Riverside County, California; (iii) Parkview
Regional Hospital, Mexia, Limestone County, Texas; (iv) Colorado Plains Medical
Center, Fort Morgan, Morgan County, Colorado; (v) Memorial Hospital, Palestine,
Anderson, Leon and Houston Counties, Texas; (vi) Starke Memorial Hospital, Knox,
Starke County, Indiana, (vii) Brim headquarters building, Portland, Multnomah
County, Oregon, (viii) Colorado River Medical Center, Needles, San Bernardino
County, California (formerly known as Needles Desert Community Hospital) and
(ix) Ojai Valley Community Hospital, Ojai, Ventura County, California, in all
cases together with any amendments, modifications and supplements thereto, any
replacements, renewals, extensions and restatements thereof, and any substitutes
therefor, in whole or in part.
"Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which the Borrower or any of its
Subsidiaries is required to make contributions.
"Non-Landlord Consent EBITDAR" shall mean, for any fiscal quarter,
Consolidated EBITDAR attributable to all Facility Leased Properties of the
Borrower for which a Landlord Consent has not been delivered to the Agent
pursuant to Section 5.13.
"Non-Wholly Owned Subsidiary" shall mean any Subsidiary of which less
than one- hundred percent (100%) of the outstanding equity is, directly or
indirectly, owned by the Borrower.
"Notes" shall mean the Revolving Credit Notes and the Swingline Note.
"Notice of Borrowing" shall have the meaning assigned to such term in
SECTION 2.2(B).
"Notice of Conversion/Continuation" shall have the meaning assigned to
such term in SECTION 2.9(B).
"Notice of Swingline Borrowing" shall have the meaning given to such
term in SECTION 2.2(F).
"Original Credit Agreement" shall have the meaning given to such term
in the recitals hereof.
"Original Credit Agreement Date" shall mean December 17, 1996.
18
"Original Lenders" shall mean the banks and other financial
institutions that are "Lenders" (within the meaning of the Original Credit
Agreement) under the Original Credit Agreement as of the Amendment Effective
Date.
"OSHA" shall mean the Occupational Safety and Health Act, as amended
from time to time, and all rules and regulations from time to time promulgated
thereunder.
"Owner Trustee" shall mean First Security Bank, National Association,
in its capacity as owner trustee under the End Loaded Lease Facility.
"Palestine Limited Partnership" shall mean Palestine Principal
Healthcare Limited Partnership, a Texas limited partnership and a Subsidiary of
the Borrower.
"Palestine Limited Partnership Agreement" shall mean the Amended and
Restated Agreement of Limited Partnership of the Palestine Principal Healthcare
Limited Partnership dated as of June 30, 1997 between PHC of Delaware, Inc., as
original general partner, Palestine-Principal G.P., Inc., as successor general
partner, and Palestine-Principal, Inc., a Tennessee corporation and a Subsidiary
of the Borrower, and Mother Frances Hospital Regional Health Care Center, as
limited partners.
"Palestine Limited Partnership Note" shall mean the promissory note of
the Palestine Limited Partnership dated July 26, 1996, in the principal amount
of $13,700,000, payable to the Borrower, together with any supplements,
amendments, restatements or modifications thereof to the extent approved in
writing by the Required Lenders.
"Participant" shall mean any Person, now or at any time hereafter,
participating with any Lender in the Loans pursuant to this Agreement, and its
permitted successors and assigns.
"Participation Agreement" shall mean the Participation Agreement, dated
the Amendment Effective Date, among the Borrower, as construction agent and
lessee, the various parties from time to time party thereto as guarantors, the
Owner Trustee, the various banks and other lending institutions from time to
time party thereto as lenders, the various banks and other lending institutions
party thereto as holders, and First Union, as agent.
"Pension Plan" shall mean any "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA maintained by the Borrower or any of its
Subsidiaries (other than any Multiemployer Plan that is subject to the
provisions of Title IV of ERISA).
"Permitted Acquisition" shall mean (a) the acquisition of Havasu
Samaritan Regional Hospital on or before May 31, 1998 for an Acquisition Amount
not to exceed $110,000,000 or (b) an Acquisition approved in writing by the
Required Lenders pursuant to SECTIONS 5.12 and 6.7; provided however, that the
approval of the Required Lenders shall not be required for (i) any Acquisition
of a Facility for which the Acquisition Amount is $25,000,000 or less, or (ii)
any lease of a Facility with a present value (calculated using a reasonable
discount rate determined in good faith by the Borrower and consistent with the
projections provided pursuant to SECTION 5.12(C)(III)) of aggregate lease
payments and related asset acquisition costs of $15,000,000 or less, in each
case subject to an aggregate Acquisition Amount of $40,000,000 for all
Acquisitions consummated during any four consecutive fiscal quarters.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, an Acquisition shall be a Permitted Acquisition only if all
requirements of SECTIONS 5.11 (if any new Subsidiaries are acquired or created
in connection with such Acquisition), 5.12, 6.2 (if any Debt is assumed in
connection with such Acquisition) and 6.3 (if any Liens are incurred in
connection with such
19
Acquisition) are met with respect thereto.
"Permitted Liens" shall mean any of the following liens, restrictions
or encumbrances securing any liability or indebtedness of the Borrower or any of
its Subsidiaries on, or otherwise affecting, any of the Borrower's or such
Subsidiary's property, real or personal, whether now owned or hereafter
acquired:
(a) Liens granted to the Agent, for the benefit of the Lenders;
(b) Liens granted for the benefit of the lenders to the End Loaded
Lease Facility pursuant to such facility;
(c) Liens for taxes, assessments or other governmental charges
that are not delinquent or remain payable without any penalty or that are being
contested in good faith and with due diligence by appropriate proceedings,
provided that if reasonably requested by the Agent, the Borrower or such
Subsidiary has established reserves with respect thereto in accordance with
Generally Accepted Accounting Principles;
(d) Liens upon property leased under a Capital Lease (including
sale/leaseback transactions permitted by SECTION 6.17) and placed upon such
property at the time of, or within sixty (60) days after, the commencement of
the lease thereof to secure the lease payments under such Capital Lease,
provided that any such lien (i) shall not encumber any other property of the
Borrower or any of its Subsidiaries, and (ii) shall not exceed the total of such
lease payments;
(e) Liens set forth on SCHEDULE 1.1(A) attached hereto (as
modified from time to time in accordance with SECTION 5.17 in connection with
Acquisitions or otherwise), provided that the Debt related to such liens is not
increased above the amount then outstanding;
(f) Purchase money liens incurred or assumed in the purchase of
equipment permitted under SECTION 6.14 hereof, provided that any such lien (i)
attaches to such asset concurrently with or within ten (10) days after the
acquisition thereof, (ii) shall not encumber any other property of the Borrower
or any of its Subsidiaries and (iii) shall not exceed the purchase price of such
asset;
(g) Assignment Restrictions;
(h) Easements, rights of way, restrictive covenants, conditions,
zoning restrictions and other similar title, survey or other encumbrances on
real estate that do not materially impair the current use and value of the
property to which they relate;
(i) Carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like non-consensual liens arising in the
ordinary course of business that are not overdue for a period of more than
thirty (30) days, or, if overdue for more than thirty (30) days, (i) which are
being contested in good faith and by appropriate proceedings; and (ii) for which
adequate reserves in accordance with Generally Accepted Accounting Principles
have been established on the books of the Borrower or appropriate Subsidiary;
provided however, that any such landlord liens shall be subject to the Landlord
Consents to the extent applicable;
(j) Pledges or deposits in connection with workers' compensation
insurance, unemployment insurance and like matters;
(k) Deposits to secure the performance of bids, trade contracts
(other than for
20
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(l) Liens in respect of any writ of execution, attachment,
garnishment, judgment or award in an amount less than $500,000, the time for
appeal or petition for rehearing of which shall not have expired, or in respect
of which an appeal or appropriate proceeding for review is being prosecuted in
good faith and a stay of execution pending such appeal or proceeding for review
has been secured;
(m) Liens of a lessor with respect to an operating lease of
equipment or machinery; and
(n) Any other liens or encumbrances as the Required Lenders may
approve in writing from time to time.
"Person" shall mean a corporation, an association, a joint venture, a
partnership, limited liability company, an organization, a business, an
individual, a trust or a government or political subdivision thereof or any
government agency or any other legal entity.
"Prime Rate" shall mean the per annum interest rate publicly announced
from time to time by First Union from its principal office in Charlotte, North
Carolina, to be its Prime Rate, which may not necessarily be its best lending
rate, as adjusted to conform to changes as of the opening of business on the
date of any such change in the Prime Rate. In the event First Union shall
abolish or abandon the practice of announcing its Prime Rate or should the same
be unascertainable, the Agent shall designate a comparable reference rate that,
upon the Borrower's consent (which shall not be unreasonably withheld), shall be
deemed to be the Prime Rate under this Credit Agreement and the other Loan
Documents.
"Pro Rata Share" of any amount shall mean, with respect to any Lender
at any time, the product of (i) such amount, multiplied by (ii) such Lender's
Revolving Credit Percentage.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or
(ii) Section 4975(c) of the Internal Revenue Code that is not exempt by reason
of Section 4975(c) or 4975(d).
"Projections" shall mean the financial projections delivered to the
Agent by the Borrower pursuant to SECTION 4.5(B) hereof.
"Purchasing Lender" shall have the meaning assigned to such term in
SECTION 2.17.
"Realty" shall mean all of the right, title and interest of the
Borrower or any of its Subsidiaries in and to land, improvements and fixtures,
including any leasehold interests (whether as lessor or lessee).
"Refunded Swingline Loans" shall have the meaning given to such term in
SECTION 2.2(G).
"Register" shall have the meaning given to such term in
SECTION 10.5(C).
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 207, or any successor or other regulation
hereafter promulgated by said Board to replace the prior Regulation G and having
substantially the same function.
21
"Regulation T" shall mean Regulation T promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 220, or any successor or
other regulation hereafter promulgated by said Board to replace the prior
Regulation T and having substantially the same function.
"Regulation U" shall mean Regulation U promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any successor or
other regulation hereafter promulgated by said Board to replace the prior
Regulation U and having substantially the same function.
"Regulation X" shall mean Regulation X promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 224, or any successor or
other regulation hereafter promulgated by said Board to replace the prior
Regulation X and having substantially the same function.
"Reimbursement Obligation" shall have the meaning assigned to such term
in SECTION 2.18(D).
"Replaced Lender" shall have the meaning assigned to such term in
SECTION 2.19.
"Replacement Effective Date" shall have the meaning assigned to such
term in SECTION 2.19.
"Replacement Lender" shall have the meaning assigned to such term in
SECTION 2.19.
"Reportable Event" shall mean a reportable event as defined in Section
4043(b) of ERISA (other than an event for which notice is waived under the ERISA
regulations).
"Required Lenders" shall mean, at any time, the Lenders owning or
holding 51% or more of the sum of the then aggregate principal amount of the
Revolving Credit Commitments then outstanding (or after the termination of the
Commitments, the aggregate at such time of all outstanding Loans and Letter of
Credit Outstandings). For purposes of this definition, the Letter of Credit
Outstandings shall be considered to be owed to the Lenders according to their
Revolving Credit Percentages.
"Requirement of Law" means, as to any Person, the charter, articles or
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any statute, law, treaty, rule, regulation, order,
decree, writ, injunction or determination of any arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reserve Requirement" shall mean, with respect to any Interest Period,
the reserve percentage (expressed as a decimal) applicable two (2) Business Days
before the first day of such Interest Period determined by the Agent to be in
effect on such day, as provided by the Board of Governors of the Federal Reserve
System (or any successor governmental body), applied for determining the maximum
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to the Lenders under Regulation D
with respect to "Eurocurrency liabilities" within the meaning of Regulation D,
or under any similar or successor regulation with respect to Eurocurrency
liabilities or Eurocurrency funding.
"Revolving Credit Commitment" shall mean, with respect to any Lender at
any time, the amount set forth under such Lender's name on its signature page
hereto under the caption
22
"Revolving Credit Commitment" or, if the Borrower has converted End Loaded Lease
Commitments into Revolving Credit Commitments pursuant to SECTION 2.9(D) or, if
such Lender has entered into one or more Assignment and Acceptances, the amount
set forth for such Lender at such time in the Register maintained by the Agent
pursuant to SECTION 10.5(C) as such Lender's "Revolving Credit Commitment," as
such amount may be reduced at or prior to such time pursuant to the terms
hereof.
"Revolving Credit Facility" shall mean the revolving line of credit
established by the Lenders under SECTION 2.1(B).
"Revolving Credit Facility Maturity Date" shall mean March 31, 2003.
"Revolving Credit Facility Termination Date" shall mean such earlier
date of March 31, 2003, or termination of the Total Revolving Credit Commitment
in accordance with SECTION 2.4(D) or SECTION 8.1.
"Revolving Credit Loans" shall have the meaning assigned to such term
in SECTION 2.1(B).
"Revolving Credit Notes" shall mean the promissory notes of the
Borrower in substantially the form of EXHIBIT A-1, executed and delivered to the
Lenders with Revolving Credit Commitments pursuant to SECTION 2.3(B) or, in
connection with conversions of End Loaded Lease Commitments into Revolving
Credit Commitments, pursuant to SECTION 2.9(D) or, in connection with an
Assignment and Acceptance, pursuant to SECTION 10.5(D), together with any
amendments, modifications and supplements thereto and restatements thereof, in
whole or in part.
"Revolving Credit Percentage" shall mean, with respect to any Lender at
any time, a fraction (expressed as a percentage) the numerator of which is the
Revolving Credit Commitment of such Lender at such time and the denominator of
which is the Total Revolving Credit Commitment at such time; provided that if
the Revolving Credit Percentage of any Lender is to be determined after the
Revolving Credit Commitments have been terminated, then such Revolving Credit
Percentage shall be determined immediately prior (and without giving effect) to
such termination.
"Scheduled Principal Payments" shall mean all scheduled principal
payments on long-term Debt due and payable in the subsequent four consecutive
fiscal quarters, including, without limitation, the aggregate principal amount
of the Loans due during such period under SECTION 2.5(C) (as such amounts may
have been previously adjusted in accordance with the terms of this Agreement as
a result of prior prepayments on the Loans, including adjustments made pursuant
to SECTION 2.5(A)).
"Security and Pledge Agreement" shall mean the Amended and Restated
Security and Pledge Agreement, dated as of the date hereof, between the
Borrower, the Guarantors and the Agent, whereby the Borrower and the Guarantors
have granted to the Agent a security interest in certain Collateral described
therein as security for the Credit Obligations of the Borrower and the Guaranty
Obligations of the Guarantors, together with any amendments, accessions,
modifications and supplements thereto, any replacements, renewals, extensions,
restatements and confirmations thereof, and any substitutes therefor, in whole
or in part.
"Selling Lender" shall have the meaning assigned to such term in
SECTION 2.17.
"Senior Officer" shall mean any officer or director of the Borrower
(including, without
23
limitation, the Chief Executive Officer, Chief Financial Officer, Vice
President-Controller, Vice President-Finance and in-house General Counsel) or
any Subsidiary, or the Chief Executive Officer, Chief Financial Officer or the
Chief Nursing Officer of any Facility.
"Solvent" shall mean, as to any Person on any particular date, that
such Person (i) has capital reasonably sufficient to carry on its business as
presently conducted and all business in which it is about to engage, (ii) is
able to pay its debts as they mature, (iii) owns property having a fair saleable
value on a going concern basis that is greater than the amount required to pay
its probable liability on existing debts as they mature (including known
reasonable contingencies and contingencies that should be included in notes of
the financial statements of such Person pursuant to Generally Accepted
Accounting Principles considering all financing alternatives and potential asset
sales reasonably available to such Person), and (iv) does not intend to, and
does not believe that it will, incur debts or probable liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Stated Amount" shall mean, with respect to any Letter of Credit at any
time, the maximum amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).
"Stock" shall mean all shares, options, interests or other equivalents
(howsoever designated) of or in a corporation, whether voting or nonvoting,
including, without limitation, common stock, warrants, preferred stock,
convertible debentures and all agreements, instruments and documents
convertible, in whole or in part, into any one or more or all of the foregoing.
"Subordinated Debt" shall mean unsecured Debt of the Borrower or any of
its Subsidiaries that is expressly subordinated and made junior to the payment
and performance of the Credit Obligations and the Guaranty Obligations on terms
(including, without limitation, covenants, terms of subordination and payment
terms) approved in writing by the Required Lenders, including without limitation
the Intercompany Management Agreements.
"Subsidiary" shall mean any corporation of which more than fifty
percent (50%) of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors, or other entity of which more than 50% of
the Interests or voting power, is at the time, directly or indirectly, owned by
any Person or one or more of its Subsidiaries (irrespective of whether, at the
time, the ownership interests or Stock of any other class or classes of such
entity or corporation shall have or might have voting power by reason of the
happening of any contingency). When used without reference to a parent, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of the Borrower.
"Swap Agreement" shall mean any and all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance or other hedging arrangements and all other similar agreements or
arrangements between the Borrower and any Lender designed to protect against
fluctuations in interest rates.
"Swingline Commitment" shall mean $5,000,000 or, if less, the aggregate
Revolving Credit Commitments at the time of determination, as such amount may be
reduced at or prior to such time pursuant to the terms hereof.
"Swingline Lender" shall mean First Union in its capacity as maker of
Swingline Loans, and its successors in such capacity.
"Swingline Loans" shall have the meaning given to such term in SECTION
2.1(C).
24
"Swingline Maturity Date" shall mean the date that is five (5) Business
Days prior to the Revolving Credit Facility Maturity Date.
"Swingline Note" shall mean the promissory note of the Borrower in
substantially the form of EXHIBIT A-2, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Target" shall have the meaning assigned to such term in SECTION
5.12(C)(I).
"Taxes" shall have the meaning assigned to such term in
SECTION 2.12(A).
"Total Commitment" shall mean, at any time, the sum of all Commitments
at such time.
"Total Revolving Credit Commitment" shall mean, at any time, the sum of
the Revolving Credit Commitments of all Lenders at such time.
"Total Unutilized Revolving Credit Commitment" shall mean, at any time,
the sum of the Unutilized Revolving Credit Commitments of all Lenders at such
time.
"Trust" shall mean PHC Real Estate Trust 1998-1, a single purpose
grantor trust organized under the laws of the State of Utah to consummate the
transactions contemplated by the End Loaded Lease Facility, including, without
limitation, transactions to purchase, own and improve realty pursuant to the End
Loaded Lease Facility.
"Type" shall have the meaning assigned to such term in SECTION 2.2(A).
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code as the same may, from time to time, be in effect in the State of North
Carolina; provided, however, in the event that, by reason of the mandatory
provisions of law, any or all of the attachment, perfection or priority of the
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than North Carolina, the term "Uniform
Commercial Code" or "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
"Unutilized End Loaded Lease Commitment" shall mean, with respect to
any Lender at any time, the End Loaded Lease Commitment of such Lender less the
aggregate principal amount of all End Loaded Lease Loans made by such Lender
under the End Loaded Lease Credit Agreement that are outstanding at such time.
"Unutilized Revolving Credit Commitment" shall mean, with respect to
any Lender at any time, such Lender's Revolving Credit Commitment at such time
less the sum of (i) the aggregate principal amount of all Revolving Credit Loans
made by such Lender that are outstanding at such time and (ii) such Lender's Pro
Rata Share (calculated based on its Revolving Credit Percentage) of all Letter
of Credit Outstandings at such time. The Unutilized Revolving Credit Commitment
of the Swingline Lender shall not be reduced by the amount of any Swingline
Loans outstanding at any time.
"Unutilized Swingline Commitment" shall mean, with respect to the
Swingline Lender at any time, the Swingline Commitment at such time less the
aggregate principal amount of all Swingline Loans that are outstanding at such
time.
25
1.2. Accounting Terms. Any accounting terms used in this Agreement that
are not specifically defined shall have the meanings customarily given them in
accordance with Generally Accepted Accounting Principles; provided, however,
that, in the event that changes in Generally Accepted Accounting Principles
shall be mandated by the Financial Accounting Standards Board, or any similar
accounting body of comparable standing, or shall be recommended by the
Borrower's certified public accountants, to the extent that such changes would
modify or could modify such accounting terms or the interpretation or
computation thereof, such changes shall be followed in defining such accounting
terms only from and after the date this Agreement shall have been amended to the
extent necessary to reflect any such changes in the financial covenants and
other terms and conditions of this Agreement. In the event of any such changes,
the Borrower, the Agent and the Required Lenders shall endeavor in good faith to
promptly agree to appropriate amendments hereto.
1.3. Singular/Plural. Unless the context otherwise requires, words in
the singular include the plural and words in the plural include the singular.
1.4. Other Terms. All other terms contained in this Agreement shall,
when the context so indicates, have the meanings provided for by the Uniform
Commercial Code of the State of North Carolina to the extent the same are used
or defined therein.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS;
LETTERS OF CREDIT
2.1. The Loans.
(a) The aggregate principal amount of all Loans (as defined in the
Original Credit Agreement) made pursuant to the Original Credit Agreement and
outstanding on the Amendment Effective Date (collectively, the "Existing Loans")
is $45,000,000. On the Amendment Effective Date, and after giving effect to the
concurrent assignment and purchase of a portion of the Existing Loans among the
Lenders in accordance with SECTION 2.17, the aggregate outstanding principal
amount of all Existing Loans shall automatically be converted to an equivalent
principal amount of Revolving Credit Loans hereunder, made by the Lenders
ratably in accordance with their respective Commitments, and for all purposes of
this Agreement shall be deemed to be Loans hereunder and entitled to the
benefits of (and subject to the terms of) this Agreement and the other Loan
Documents. All such Loans hereunder shall be of the same Type, and shall have
the same Interest Period, as the corresponding Existing Loans.
(b) Each Lender having a Revolving Credit Commitment severally
agrees, subject to and on the terms and conditions of this Agreement, to make
loans (each, a "Revolving Credit Loan" and collectively, the "Revolving Credit
Loans") to the Borrower, from time to time on any Business Day during the period
from the date hereof to the Revolving Credit Facility Termination Date, provided
that (i) the aggregate principal amount of Revolving Credit Loans at any time
outstanding for any Lender shall not exceed the difference between (1) such
Lender's Revolving Credit Commitment at such time less (2) such Lender's Pro
Rata Share (calculated based on its Revolving Credit Percentage) of the
aggregate Letter of Credit Outstandings at such time (exclusive of
26
Reimbursement Obligations that are repaid with the proceeds of, and
simultaneously with the incurrence of, Revolving Credit Loans) and (ii) no
Borrowing of Revolving Credit Loans shall be made if, immediately after giving
effect thereto, the aggregate principal amount of Revolving Credit Loans, Letter
of Credit Outstandings (exclusive of Reimbursement Obligations that are repaid
with the proceeds of, and simultaneously with, the incurrence of Revolving
Credit Loans) and Swingline Loans (excluding the aggregate amount of any
Swingline Loans to be repaid with proceeds of Revolving Credit Loans made
pursuant to such Borrowing) outstanding at such time would exceed the Total
Revolving Credit Commitment, and (iii) no advance of any Borrowing of Revolving
Credit Loans shall be required if, immediately after giving effect thereto, a
Default or Event of Default exists. Subject to and on the terms and conditions
of this Agreement, the Borrower may borrow, repay and reborrow Revolving Credit
Loans until the Revolving Credit Facility Termination Date.
(c) The Swingline Lender agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a "Swingline Loan," and
collectively, the "Swingline Loans") to the Borrower, from time to time on any
Business Day during the period from the Amendment Effective Date to but not
including the Swingline Maturity Date (or, if earlier, the Revolving Credit
Facility Termination Date), in an aggregate principal amount not exceeding the
Swingline Commitment, notwithstanding that the aggregate principal amount of
Swingline Loans outstanding at any time, when added to the aggregate principal
amount of the Revolving Credit Loans made by the Swingline Lender in its
capacity as a Lender outstanding at such time and its Letter of Credit
Outstandings at such time, may exceed its Revolving Credit Commitment at such
time; provided, however, that no Borrowing of Swingline Loans shall be made if,
immediately after giving effect thereto, the sum of the aggregate principal
amount of Revolving Credit Loans, Letter of Credit Outstandings (exclusive of
Reimbursement Obligations that are repaid with the proceeds of, and
simultaneously with, the incurrence of Revolving Credit Loans), and Swingline
Loans (excluding the aggregate amount of any Swingline Loans to be repaid with
proceeds of Revolving Credit Loans made pursuant to such Borrowing) outstanding
at such time would exceed the Total Revolving Credit Commitment. Subject to and
on the terms and conditions of this Agreement, the Borrower may borrow, repay
(including by means of a Borrowing of Revolving Credit Loans pursuant to SECTION
2.2(B)) and reborrow Swingline Loans.
2.2. Borrowings.
(a) The Loans (other than the Swingline Loans) shall, at the
option of the Borrower and subject to the terms and conditions of this
Agreement, be either ABR Loans or LIBOR Loans (each such type of Loan, a
"Type"), provided that (i) all Loans comprising the same Borrowing shall, unless
otherwise specifically provided herein, be of the same Type and (ii) the
Swingline Loans shall be made and maintained as ABR Loans at all times.
(b) In order to make a Borrowing (other than continuations of
outstanding Loans which shall be made pursuant to SECTION 2.9, mandatory
Borrowings of Revolving Credit Loans pursuant to SECTION 2.18(E), Borrowings of
Swingline Loans pursuant to SECTION 2.2(F), and Borrowings for the purpose of
repaying Refunded Swingline Loans, which shall be made pursuant to SECTION
2.2(G)), the Borrower will give the Agent written notice (by telecopier or
otherwise), not later than 12:00 noon, Charlotte, North Carolina local time, at
least three (3) Business Days prior to each Borrowing to be comprised of LIBOR
Loans and at least one (1) Business Day prior to each Borrowing to be comprised
of ABR Loans; provided, however, that requests for the Borrowing of any
Revolving Credit Loans to be made on the Amendment Effective Date may, at the
discretion of the Agent, be given later than the times specified hereinabove.
Each such notice (each, a "Notice of Borrowing") shall be irrevocable, shall be
given in the form of EXHIBIT B-1 and shall be appropriately completed to specify
(i) the aggregate principal amount and Type of the Loans to be made pursuant to
such Borrowing (and, in the case of a Borrowing of LIBOR Loans, the initial
Interest Period to be applicable thereto), (ii) the purpose and proposed use of
the proceeds of the Borrowing, and (iii) the requested date of the Borrowing
(the "Borrowing Date"), which shall be a Business Day.
27
Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of each Borrowing
hereunder (x) in the case of Borrowings of Revolving Credit Loans
comprised of ABR Loans (excluding Borrowings for the purpose of
repaying Refunded Swingline Loans, and mandatory Borrowings of
Revolving Credit Loans pursuant to SECTION 2.18(E)), shall not be less
than $1,000,000 and, if greater, shall be in an integral multiple of
$500,000 in excess thereof, (y) in the case of Borrowings of Swingline
Loans, shall not be less than $250,000 and, if greater, shall be in an
integral multiple of $100,000 in excess thereof, and (z) in the case of
Borrowings comprised of LIBOR Loans, shall not be less than $3,000,000
and, if greater, shall be in an integral multiple of $1,000,000 in
excess thereof (or, in all cases of a Borrowing of Revolving Credit
Loans, if less, in the amount of the Total Unutilized Revolving Credit
Commitment);
(ii) if the Borrower shall have failed to designate
the Type of Loans comprising a Borrowing, the Borrower shall be deemed
to have requested a Borrowing comprised of ABR Loans;
(iii) if the Borrower shall have failed to select the
duration of the Interest Period to be applicable to any Borrowing of
LIBOR Loans, then the Borrower shall be deemed to have selected an
Interest Period with a duration of one month; and
(iv) LIBOR Loans under the Revolving Credit Facility
may not be outstanding under more than five (5) separate Interest
Periods at any one time.
(c) Upon its receipt of a Notice of Borrowing, the Agent will
promptly notify each Lender of the proposed Borrowing. Not later than 2:00 p.m.,
Charlotte time, on the requested Borrowing Date, each such Lender will make
available to the Agent at its office referred to in SECTION 10.4 (or at such
other location as the Agent may designate) an amount, in Dollars and in
immediately available funds, equal to the amount of the Loan to be made by such
Lender. To the extent the relevant Lenders have made such amounts available to
the Agent as provided hereinabove, the Agent will make the aggregate of such
amounts available to the Borrower in accordance with subsection (D) below and in
like funds as received by the Agent. Each Lender may, at its option, make and
maintain any LIBOR Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make or maintain such LIBOR Loan, provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement; provided, further, that the
Borrower shall not be responsible for costs arising under SECTIONS 2.11, 2.12,
2.13 or otherwise payable hereunder resulting from any such transfer of its
Loans to the extent such costs would not otherwise be applicable to such Lender
in the absence of such transfer.
(d) The Borrower hereby authorizes the Agent to disburse the
proceeds of each Borrowing in accordance with the terms of any written
instructions from any of the Authorized Officers, provided that the Agent shall
not be obligated under any circumstances to forward amounts to any account not
listed in an Account Designation Letter. The Borrower may at any time deliver to
the Agent an Account Designation Letter listing any additional accounts or
deleting any accounts listed in a previous Account Designation Letter.
(e) Unless the Agent has received, prior to 12:00 noon, Charlotte
time, on the relevant Borrowing Date, written notice from a Lender that such
Lender will not make available to the Agent such Lender's ratable portion, if
any, of the relevant Borrowing, the Agent may assume that such Lender has made
such portion available to the Agent in immediately
28
available funds on such Borrowing Date in accordance with subsection (C) above,
and the Agent may, in reliance upon such assumption, make a corresponding amount
available to the Borrower on such Borrowing Date. If and to the extent that such
Lender shall not have made such portion available to the Agent, and the Agent
shall have made such corresponding amount available to the Borrower, such
Lender, on the one hand, and the Borrower, on the other, severally (but without
duplication of payments made by the applicable Lender) agree to pay to the Agent
forthwith on demand such corresponding amount, together with interest thereon
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, (i) in the case of such Lender, at
the Federal Funds Rate, and (ii) in the case of the Borrower, at the rate of
interest applicable at such time to Loans comprising such Borrowing, as
determined under the provisions of SECTION 2.6. If such Lender shall repay to
the Agent such corresponding amount, such amount shall constitute such Lender's
Loan as part of such Borrowing for purposes of this Agreement and the Borrower
shall have no further obligation to make any repayment of such Borrowing
pursuant to this SECTION 2.2(E). The failure of any Lender to make any Loan
required to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Loan as part of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender as part of any
Borrowing.
(f) In order to make a Borrowing of a Swingline Loan, the Borrower
will give the Agent and the Swingline Lender written notice not later than 12:00
noon, Charlotte time, on the Business Day of such Borrowing. Each such notice
(each, a "Notice of Swingline Borrowing") shall be irrevocable, shall be given
in the form of EXHIBIT B-4 and shall specify (i) the principal amount of the
Swingline Loan to be made pursuant to such Borrowing (which shall not be less
than $250,000 and, if greater, shall be in an integral multiple of $100,000 in
excess thereof (or, if less, in the amount of the Unutilized Swingline
Commitment)) and (ii) the requested Borrowing Date, which shall be a Business
Day. Not later than 2:00 p.m., Charlotte time, on the requested Borrowing Date,
the Swingline Lender will make available to the Agent at its office referred to
in SECTION 10.4 (or at such other location as the Agent may designate) an
amount, in Dollars and in immediately available funds, equal to the amount of
the requested Swingline Loan. The Agent will make such amount available to the
Borrower in accordance with SECTION 2.2(C). Subject to the terms and conditions
of this Agreement, the Swingline Lender may at any time (whether or not an Event
of Default has occurred and is continuing) in its sole and absolute discretion,
and is hereby authorized and empowered by the Borrower to, cause a Borrowing of
Swingline Loans not in excess of the Swingline Commitment to be made for the
purpose of repaying any outstanding principal and interest amounts under the
Cash Management Line of Credit by delivering to the Borrower, not later than
12:00 noon, Charlotte time, on the Business Day of such Borrowing, a notice
(which shall be deemed to be a Notice of Swingline Borrowing given by the
Borrower but not a new representation) requesting that the Swingline Lender make
Swingline Loans on such Borrowing Date in an aggregate amount not to exceed the
outstanding principal and interest amounts under the Cash Management Line of
Credit; provided, that it shall be a condition precedent to any borrowing under
the Cash Management Line that no Default or Event of Default shall have occurred
and be continuing under this Agreement (which condition shall be deemed waived
upon and subject to the conditions of a waiver of such Default or Event of
Default pursuant to the terms of this Agreement).
(g) With respect to any outstanding Swingline Loans, the Swingline
Lender may at any time (whether or not an Event of Default has occurred and is
continuing) in its sole and absolute discretion, and is hereby authorized and
empowered by the Borrower to, cause a Borrowing of Revolving Credit Loans to be
made for the purpose of repaying such Swingline Loans by delivering to each
other Lender (on behalf of, and with a copy to, the Borrower), not later than
12:00 noon, Charlotte time, one (1) Business Day prior to the proposed Borrowing
Date therefor, a notice (which shall be deemed to be a Notice of Borrowing given
by the
29
Borrower but not a new representation) requesting the Lenders to make Revolving
Credit Loans (which shall be made initially as ABR Loans) on such Borrowing Date
in an aggregate amount equal to the amount of such Swingline Loans (the
"Refunded Swingline Loans") outstanding on the date such notice is given that
the Swingline Lender requests to be repaid. Not later than 2:00 p.m., Charlotte
time, on the requested Borrowing Date, each Lender (other than the Swingline
Lender) will make available to the Agent at its office referred to in SECTION
10.4 (or at such other location as the Agent may designate) an amount, in
Dollars and in immediately available funds, equal to the amount of the Revolving
Loan to be made by such Lender. To the extent the Lenders have made such amounts
available to the Agent as provided hereinabove, the Agent will make the
aggregate of such amounts available to the Swingline Lender in like funds as
received by the Agent, which shall apply such amounts in repayment of the
Refunded Swingline Loans. Notwithstanding any provision of this Agreement to the
contrary, on the relevant Borrowing Date, the Refunded Swingline Loans
(including the Swingline Lender's ratable share thereof, in its capacity as a
Lender) shall be deemed to be repaid with the proceeds of the Revolving Credit
Loans made as provided above (including a Revolving Loan deemed to have been
made by the Swingline Lender), and such Refunded Swingline Loans deemed to be so
repaid shall no longer be outstanding as Swingline Loans but shall be
outstanding as Revolving Credit Loans. If any portion of any such amount repaid
(or deemed to be repaid) to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in any bankruptcy, insolvency
or similar proceeding or otherwise, the loss of the amount so recovered shall be
shared ratably among all the Lenders in the manner contemplated by SECTION
2.2(H).
(h) If, as a result of any bankruptcy, insolvency or similar
proceeding with respect to the Borrower, Revolving Credit Loans are not made
pursuant to subsection (G) above in an amount sufficient to repay any amounts
owed to the Swingline Lender in respect of any outstanding Swingline Loans, or
if the Swingline Lender is otherwise precluded for any reason from giving a
notice on behalf of the Borrower as provided for hereinabove, the Swingline
Lender shall be deemed to have sold without recourse, representation or
warranty, and each Lender shall be deemed to have purchased and hereby agrees to
purchase, a participation in such outstanding Swingline Loans in an amount equal
to its ratable share (based on the proportion that its Revolving Credit
Commitment bears to the Total Revolving Credit Commitments at such time) of the
unpaid amount thereof together with accrued interest thereon. Upon one (1)
Business Day's prior notice from the Swingline Lender, each Lender (other than
the Swingline Lender) will make available to the Agent at its office referred to
in SECTION 10.4 (or at such other location as the Agent may designate) an
amount, in Dollars and in immediately available funds, equal to its
participation. To the extent the Lenders have made such amounts available to the
Agent as provided hereinabove, the Agent will make the aggregate of such amounts
available to the Swingline Lender in like funds as received by the Agent. In the
event any such Lender fails to make available to the Agent the amount of such
Lender's participation as provided in this subsection (H), the Swingline Lender
shall be entitled to recover such amount on demand from such Lender, together
with interest thereon for each day from the date such amount is required to be
made available for the account of the Swingline Lender until the date such
amount is made available to the Swingline Lender at the Federal Funds Rate.
Promptly following its receipt of any payment by or on behalf of the Borrower in
respect of a Swingline Loan, the Swingline Lender will pay to each Lender that
has acquired a participation therein such Lender's ratable share of such
payment.
(i) Notwithstanding any provision of this Agreement to the
contrary, the obligation of each Lender (other than the Swingline Lender) to
make Revolving Credit Loans for the purpose of repaying any Refunded Swingline
Loans pursuant to subsection (G) above and each such Lender's obligation to
purchase a participation in any unpaid Swingline Loans pursuant to subsection
(H) above shall be absolute and unconditional and shall not be affected
30
by any circumstance or event whatsoever, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right that such Lender may
have against the Swingline Lender, the Agent, the Borrower or any other Person
for any reason whatsoever, (ii) the occurrence or continuance of any Default or
Event of Default, (iii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower or any of its Subsidiaries, or (iv) any breach of this Agreement by any
party hereto.
2.3. Notes.
(a) The Loans made by each Lender shall be evidenced (i) if
Revolving Credit Loans, by a Revolving Credit Note appropriately completed in
substantially the form of EXHIBIT A-1, and (ii) if Swingline Loans, by a
Swingline Note appropriately completed in substantially the form of EXHIBIT A-2.
(b) The Revolving Credit Note issued to each Lender with a
Revolving Credit Commitment shall (i) be executed by the Borrower, (ii) be
payable to the order of such Lender, (iii) be dated as of the Amendment
Effective Date (or, in the case of Revolving Credit Notes issued pursuant to an
Assignment and Acceptance, as of the date thereof), (iv) be in a stated
principal amount equal to such Lender's Revolving Credit Commitment, (v) bear
interest in accordance with the provisions of SECTION 2.6, as the same may be
applicable to the Revolving Credit Loans made by such Lender from time to time,
and (vi) be entitled to all of the benefits of this Agreement and the other Loan
Documents and subject to the provisions hereof and thereof.
(c) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline Lender,
(iii) be dated as of the Amendment Effective Date, (iv) be in a stated principal
amount equal to the Swingline Commitment, (v) bear interest in accordance with
the provisions of SECTION 2.6, as the same may be applicable to the Swingline
Loans made by the Swingline Lender from time to time, and (vi) be entitled to
all of the benefits of this Agreement and the other Loan Documents and subject
to the provisions hereof and thereof.
(d) Each Lender will record on its internal records the amount of
each Loan made by it and each payment received by it in respect thereof and
will, in the event of any transfer of any of its Notes, either endorse on the
reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount of the Loans evidenced thereby as of
the date of transfer or provide such information on Annex I to the Assignment
and Acceptance relating to such transfer; provided, however, that the failure of
any Lender to make any such recordation or provide any such information, or any
error in such recordation or information, shall not affect the Borrower's
obligations in respect of such Loans. The register maintained by the Agent shall
be deemed correct absent manifest error.
(e) The Notes shall be issued in renewal, amendment, rearrangement
and restatement of, and not in novation, discharge or satisfaction of, the Notes
(as defined in the Original Credit Agreement) evidencing the Existing Loans.
2.4. Termination and Reduction of Commitments and Swingline
Commitment.
(a) The Revolving Credit Commitment of each Lender shall be
automatically and permanently terminated on the Revolving Credit Facility
Termination Date unless sooner terminated pursuant to subsection 2.4(d) below or
SECTION 10.5.
31
(b) The Swingline Commitment shall be automatically and
permanently terminated on the Swingline Maturity Date unless sooner terminated
pursuant to subsection 2.4(d) below or SECTION 10.5.
(c) On each date set forth below, the Total Revolving Credit
Commitments shall automatically be permanently reduced by the amount set forth
below opposite such date (such amounts being subject to reduction as set forth
in subsection (e) below):
Amount of Reduction in
Date Aggregate Commitments
---- ----------------------
March 31, 2001 $25,000,000
June 30, 2001 $25,000,000
September 30, 2001 $25,000,000
December 31, 2001 $25,000,000
March 31, 2002 $25,000,000
June 30, 2002 $25,000,000
September 30, 2002 $25,000,000
December 31, 2002 $25,000,000
March 31, 2003 All Remaining Total
Revolving Credit Commitments
(d) At any time and from time to time, upon at least five (5)
Business Days' prior written notice to the Agent (and, in the case of a
termination or reduction of the Unutilized Swingline Commitment, the Swingline
Lender), the Borrower may, without premium or penalty, terminate in whole or
reduce in part the Total Unutilized Revolving Credit Commitment or the
Unutilized Swingline Commitment, provided that any such partial reduction shall
be in an aggregate amount of not less than $5,000,000 ($1,000,000 in the case of
the Unutilized Swingline Commitment) or, if greater, in multiples of $1,000,000
in excess thereof. The amount of any termination or reduction made under this
subsection (D) may not thereafter be reinstated.
(e) Each reduction of the Total Revolving Credit Commitment under
this SECTION 2.4 shall be applied ratably among the Lenders according to their
respective Revolving Credit Commitments and shall be applied to reduce the
scheduled reduction amounts set forth in the table in subsection (c) above
ratably in accordance with their respective Dollar amounts. After any such
reduction, the fee provided in SECTIONS 2.7(B) shall be calculated with respect
to the reduced Commitments. Notwithstanding any provision of this Agreement to
the contrary, any reduction of the Total Revolving Credit Commitments pursuant
to this SECTION 2.4 that has the effect of reducing the Total Revolving Credit
Commitments to an amount less than the amount of the Swingline Commitment at
such time shall result in an automatic corresponding reduction of the Swingline
Commitment to the amount of the Total Revolving Credit Commitments (as so
reduced), without any further action on the part of the Borrower or the
Swingline Lender.
2.5. Payments; Voluntary, Mandatory.
(a) At any time and from time to time, the Borrower shall have the
right to voluntarily prepay the Loans, in whole or in part, without premium or
penalty (except as provided in clause (III) below), upon written notice to the
Agent given not later than 12:00 noon, Charlotte time, (x) at least three (3)
Business Days prior to each intended prepayment of any Loans that are LIBOR
Loans and (y) at least one (1) Business Day prior to each intended prepayment of
any Loans that are ABR Loans; provided that Swingline Loans may be prepaid on a
same day basis; provided further that (i) each partial voluntary
prepayment of Revolving Credit Loans shall be in an aggregate principal amount
of not less than $1,000,000 or, if
32
greater, an integral multiple of $1,000,000 in excess thereof, and each partial
voluntary prepayment of Swingline Loans shall be in an aggregate principal
amount of not less than $100,000, or if greater, an integral multiple thereof,
(ii) no partial voluntary prepayment of LIBOR Loans made pursuant to any single
Borrowing shall reduce the aggregate outstanding principal amount of the
remaining LIBOR Loans under such Borrowing to less than $3,000,000 or to any
greater amount not an integral multiple of $1,000,000 in excess thereof, and
(iii) unless made together with all amounts required under SECTION 2.13 to be
paid as a consequence of such prepayment, a prepayment of a LIBOR Loan may be
made only on the last day of the Interest Period applicable thereto. Each such
notice shall specify the proposed date of such prepayment and the aggregate
principal amount and the Types of the Loans to be prepaid (and, in the case of
LIBOR Loans, the Interest Period of the Borrowing pursuant to which made), and
shall be irrevocable and shall bind the Borrower to make such prepayment on the
terms specified therein. During the continuance of any Event of Default, all
prepayments pursuant to this subsection (A) shall be applied, first, to the
Swingline Loans, and second, after payment in full of the Swingline Loans, to
the Revolving Credit Loans as determined by the Agent. Each prepayment of the
Revolving Credit Loans made pursuant to this subsection (A) shall be applied to
reduce the aggregate outstanding principal amount of the Revolving Credit Loans
ratably among the Lenders holding Revolving Credit Loans in proportion to the
principal amount held by each. In the absence of an Event of Default, voluntary
prepayments pursuant to this subsection (A) shall be applied as specified by the
Borrower in the applicable prepayment notice. Loans prepaid pursuant to this
subsection (A) may be reborrowed, subject to the terms and conditions of this
Agreement.
(b) Except to the extent due or made sooner pursuant to the
provisions of this Agreement, the Borrower will repay the aggregate outstanding
principal amount of the Revolving Credit Loans in full on the Revolving Credit
Facility Maturity Date. Except to the extent due or made sooner pursuant to the
provisions of this Agreement, the Borrower will repay the aggregate outstanding
principal amount of the Swingline Loans in full on the Swingline Maturity Date.
(c) In the event that, at any time (including on any date set
forth in the table in SECTION 2.4(C)), the sum of (i) the aggregate principal
amount of the Revolving Credit Loans outstanding on any date (after giving
effect to all repayments thereof on such date), (ii) the aggregate Letter of
Credit Outstandings at such time (after giving effect to all repayments thereof
on such date), and (iii) the aggregate Swingline Loans outstanding at such time
(excluding the aggregate amount of any Swingline Loans to be repaid with
proceeds of Revolving Credit Loans made on the date of determination after
giving effect to all repayments on such date) at such time exceeds the lesser of
the Total Revolving Credit Commitment at such time (after giving effect to any
termination or reduction thereof as of such date), the Borrower will immediately
repay the principal amount of the Swingline Loans in the amount of such excess
and, to the extent of any excess remaining after prepayment in full of
outstanding Swingline Loans, the Borrower will immediately prepay the
outstanding principal amount of the Revolving Credit Loans in the amount of such
excess; provided, however, such payment shall be accompanied by all amounts
required under SECTION 2.13 if applied to a LIBOR Loan and such payment is not
made on the last day of the Interest Period applicable thereto, and (B) to the
extent such excess amount required to be repaid is greater than the aggregate
principal amount of the Swingline Loans and Revolving Credit Loans outstanding
immediately prior to the application of such repayment, the amount so repaid
shall be retained by the Agent and held in the Cash Collateral Account as
security for the Borrower's Credit Obligations, as more particularly described
in SECTION 2.18(I), and thereupon such cash shall be deemed to reduce the
aggregate Reimbursement Obligations by an equivalent amount.
33
(d) On the date of receipt by the Borrower or any of its
Subsidiaries of any net cash proceeds from any issuance of equity securities
(other than an immaterial amount of equity securities issued pursuant to
employee benefit and deferred compensation plans of the Borrower or any of its
Subsidiaries) or debt securities (other than Debt expressly permitted by SECTION
6.2 hereof or for which consent of the Required Lenders was obtained), the
Borrower shall make a mandatory repayment of principal of the Revolving Credit
Loans (as set forth in subsection (G) below) in an amount equal to seventy-five
percent (75%) of net proceeds from the issuance of equity securities and one
hundred percent (100%) of net cash proceeds from the issuance of debt securities
(in each case, net of any underwriting discounts and commissions and other
reasonable costs associated with such issuance).
(e) On the date of receipt by the Borrower or any of its
Subsidiaries of any net cash proceeds from any sale or disposition of assets in
any transaction or series of related transactions causing receipt of net cash
proceeds in excess of $250,000 per sale or disposition or $2,000,000 in the
aggregate, other than sales or dispositions permitted under clauses (i), (ii),
(iv) (subject to the above-mentioned $250,000 per sale limitation) and (v) of
Section 6.5 or the sale of permitted temporary overnight investments or any
other investment products sold to the Borrower by any Lender or any Affiliate
thereof, the Borrower shall make a mandatory repayment of principal of the
Revolving Credit Loans (as set forth in subsection (G) below) in an amount equal
to one-hundred percent (100%) of such net cash proceeds.
(f) On the date of receipt by the Borrower or any of its
Subsidiaries of any cash prepayment received in reduction of the principal
balance of the Palestine Limited Partnership Note, the Borrower shall make a
mandatory repayment of principal of the Revolving Credit Loans (as set forth in
subsection (g) below) in an amount equal to one hundred percent (100%) of such
payment.
(g) Each prepayment of the Loans made pursuant to subsections (D),
(E) and (F) above shall be applied to reduce the aggregate outstanding principal
amount of the Revolving Credit Loans, ratably among the Lenders holding
Revolving Credit Loans in proportion to the principal amount held by each. Each
payment or prepayment of a LIBOR Loan made pursuant to the provisions of this
SECTION 2.5 on a day other than the last day of the Interest Period applicable
thereto shall be made together with all amounts required under SECTION 2.13 to
be paid as a consequence thereof.
2.6. Interest.
(a) The Borrower will pay interest in respect of the unpaid
principal amount of each Loan, from the date of Borrowing thereof until such
principal amount shall be paid in full, (i) at the Alternate Base Rate, as in
effect from time to time, during such periods as such Loan is an ABR Loan, or
(ii) at the Adjusted LIBOR Rate, as in effect from time to time, during such
periods as such Loan is a LIBOR Loan.
(b) Any principal amounts of the Loans not paid when due and, to
the greatest extent permitted by law, all interest accrued on the Loans and all
other fees and amounts hereunder not paid when due (whether at maturity,
pursuant to acceleration or otherwise), shall bear interest at a rate per annum
equal to the rate otherwise applicable to such Loan plus two percentage points
(2.0%), and such default interest shall be payable on demand; provided, however,
that if the Required Lenders waive such Default, the Loans will continue to bear
interest at a rate per annum equal to the rate applicable to such Loan. Further,
but without duplication of the foregoing, during the existence of any Event of
Default in response to which the Lenders do not grant a waiver but do not elect
to declare the outstanding principal amounts of the Loans immediately due and
payable, if required by the Required Lenders, the Borrower will pay interest on
the dates provided pursuant to subsection (c), below, in respect of the
34
unpaid principal amount of each Loan, from the date the Event of Default first
exists until it is cured or waived, at a rate per annum equal to the rate
otherwise applicable to such Loan plus two percentage points (2.0%) and such
interest shall be payable on demand. To the greatest extent permitted by law,
interest shall continue to accrue after the filing by or against the Borrower of
any petition seeking any relief in bankruptcy or under any act or law pertaining
to insolvency or debtor relief, whether state, federal or foreign.
(c) Accrued (and theretofore unpaid) interest shall be payable as
follows:
(i) in respect of each ABR Loan (including any
ABR Loan or portion thereof paid or prepaid pursuant to the provisions
of SECTION 2.5, except as provided hereinbelow), in arrears on the
first Business Day of each successive January, April, July and October,
beginning with the first such day to occur after the Amendment
Effective Date; provided, that in the event the Loans are repaid or
prepaid in full and the Total Commitment has been terminated, then
accrued interest in respect of all ABR Loans shall be payable together
with such repayment or prepayment on the date thereof;
(ii) in respect of each LIBOR Loan (including any
LIBOR Loan or portion thereof paid or prepaid pursuant to the
provisions of SECTION 2.5, except as provided hereinbelow), in arrears,
on the last Business Day of the Interest Period applicable thereto
(subject to the provisions of clause (IV) in SECTION 2.8); provided,
that in the event all LIBOR Loans made pursuant to a single Borrowing
are repaid or prepaid in full, then accrued interest in respect of such
LIBOR Loans shall be payable together with such repayment or prepayment
on the date thereof; and
(iii) in respect of any Loan, at maturity (whether
pursuant to acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Loan
Document shall be deemed to establish or require the payment of interest to any
Lender in an amount in excess of the maximum amount permitted by applicable law.
If the amount of interest or other charges payable for the account of any Lender
on any payment date would exceed the maximum amounts permitted by applicable law
to be charged by such Lender, the amount of interest payable for its account on
such payment date shall be automatically reduced to such maximum permissible
amounts. In the event of any such reduction affecting any Lender, if from time
to time thereafter the amount of interest payable for the account of such Lender
on any interest payment date would be less than the maximum amounts permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent payment date shall be automatically increased
to such maximum permissible amount, provided that at no time shall the aggregate
amount by which interest paid for the account of any Lender has been increased
pursuant to this sentence exceed the aggregate amount by which interest paid for
its account has theretofore been reduced pursuant to the previous sentence. The
parties hereto understand and believe that if Tennessee or Delaware law were to
apply, this lending transaction complies with the usury laws of the State of
Tennessee or Delaware. If at any time, any amount of interest or other charges
actually paid by the Borrower on or with respect to any Loan is determined to be
in excess of the maximum amount permitted by applicable law, such excess amount
shall be credited as a prepayment of the outstanding principal balance of the
applicable Loan as of the date paid or, if such Loan has been paid in full,
refunded to the Borrower.
(e) The Agent shall promptly notify the Borrower and the Lenders
upon determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant
35
Notice of Borrowing or Notice of Conversion/Continuation; provided, however,
that the failure of the Agent to provide the Borrower or the Lenders with any
such notice shall neither affect any obligations of the Borrower or the Lenders
hereunder nor result in any liability on the part of the Agent to the Borrower
or any Lender. Each such determination (including each determination of the
Reserve Requirement in connection with a Borrowing of LIBOR Loans) shall, absent
manifest error, be final, conclusive and binding on all parties hereto.
2.7. Fees. The Borrower agrees to pay:
(a) To First Union Capital Markets, for its own account, on the
date of this Agreement, the fees described in the Fee Letter, in the amounts set
forth therein as due and payable on the date of this Agreement and to the extent
not theretofore paid to First Union Capital Markets;
(b) To the Agent, for the account of each Lender with a Revolving
Credit Commitment, a commitment fee per annum for the period from the date of
this Agreement to the Revolving Credit Facility Termination Date at the rate per
annum as determined under the following matrix with reference to the ratio of
Consolidated Adjusted Debt to Annualized Consolidated EBITDAR, applied to the
average daily Unutilized Revolving Credit Commitment of such Lender, payable in
arrears (i) on the first Business Day of each successive January, April, July
and October, beginning with July 1, 1998, and (ii) on the Revolving Credit
Facility Termination Date:
Ratio of Consolidated Adjusted
Debt to Annualized Consolidated EBITDAR Fee Percentage
- --------------------------------------- --------------
Greater than or equal to
4.0 to 1.0 0.500%
Less than 4.0 to 1.0
but greater than or equal to
3.5 to 1.0 0.375%
Less than 3.5 to 1.0
but greater than or
equal to 2.5 to 1.0 0.3125%
Less than 2.5 to 1.0 0.250%
From the Amendment Effective Date until the fifth (5) Business Day
after receipt by the Agent of the financial statement for the fiscal quarter
ended March 31, 1998 pursuant to SECTION 5.1(A) below (together with a
Compliance Certificate), the fee percentage shall be 0.250%. The fee percentage
shall be reset from time to time as the calculation of Applicable Margin changes
as set forth herein.
(c) To the Agent, for the account of each L/C Participant, a
letter of credit fee in respect of each Letter of Credit for the period from the
date of its issuance to the date of its termination, at a rate per annum equal
to the Applicable Margin for LIBOR Loans in effect from time to time during such
period, on the daily average Stated Amount thereof, payable in arrears (i) on
the first Business Day of each successive January, April, July and October,
beginning with the first such day to occur after the Amendment Effective Date,
and (ii) on the later of the Revolving Credit Facility Termination Date or the
date of termination of the last outstanding Letter of Credit;
36
(d) To the Issuing Bank, for its own account, a facing fee in
respect of each Letter of Credit for the period from the date of its issuance to
the date of its termination, at a rate per annum equal to 0.125%, on the face
amount thereof, payable in arrears (i) on the first Business Day of each
successive January, April, July and October, beginning with the first such day
to occur after the Amendment Effective Date, and (ii) on the later of the
Revolving Credit Facility Termination Date or the date of termination of the
last outstanding Letter of Credit;
(e) To the Issuing Bank, for its own account, such commissions,
issuance fees, transfer fees and other fees and charges incurred in connection
with the issuance and administration of each Letter of Credit as are customarily
charged from time to time by the Issuing Bank for the performance of such
services in connection with similar letters of credit, or as may be otherwise
agreed to by the Borrower; and
(f) To the Agent, for its own account, the annual administrative
fees provided in the Fee Letter, on the terms, in the amounts and at the times
set forth therein.
2.8. Interest Periods. Concurrently with the giving of any Notice
of Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
comprised of LIBOR Loans, the Borrower shall have the right to elect, pursuant
to such notice, the interest period (each, an "Interest Period") to be
applicable to such LIBOR Loans, which Interest Period shall, at the option of
the Borrower, be a one, two, or three month period (subject to SECTION 2.11);
provided, however, that:
(i) all LIBOR Loans comprising a single
Borrowing shall at all times have the same Interest Period;
(ii) the initial Interest Period for any LIBOR
Loan shall commence on the date of the Borrowing of such Loan
(including the date of any continuation of, or conversion into, such
LIBOR Loan), and each successive Interest Period applicable to such
LIBOR Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) the Borrower may not select any Interest
Period that expires after the Revolving Credit Facility Maturity Date;
(iv) if any Interest Period otherwise would
expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless such next succeeding
Business Day falls in another calendar month, in which case such
Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period with respect to Revolving
Credit Loans that are to be maintained as LIBOR Loans may be selected
that would end after a scheduled date for repayment of principal of the
Revolving Credit Loans (including any date of a scheduled mandatory
reduction of the aggregate Commitments) occurring on or after the first
day of such Interest Period unless, immediately after giving effect to
such selection, the sum of (y) the aggregate principal amount of
Revolving Credit Loans that are ABR Loans or that have Interest Periods
expiring on or before such principal repayment date, plus (z) the Total
Unutilized Revolving Credit Commitment as of such date, equals or
exceeds the principal amount required to be paid on such principal
repayment date;
37
(vi) if any Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month
during which such Interest Period would otherwise expire, such Interest
Period shall expire on the last Business Day of such calendar month;
and
(vii) if, upon the expiration of any Interest
Period applicable to a Borrowing of LIBOR Loans, the Borrower shall
have failed to elect a new Interest Period to be applicable to such
LIBOR Loans, then the Borrower shall be deemed to have elected to
convert such LIBOR Loans into ABR Loans as of the expiration of the
then current Interest Period applicable thereto.
2.9. Conversions and Continuations.
(a) The Borrower shall have the right, on any Business Day to
elect (i) to convert all or a portion of the outstanding principal amount of any
ABR Loans into LIBOR Loans, or to convert any LIBOR Loans the Interest Periods
for which end on the same day into ABR Loans, or (ii) to continue all or a
portion of the outstanding principal amount of any LIBOR Loans the Interest
Periods for which end on the same day for an additional Interest Period,
provided that (i) any such conversion of LIBOR Loans into ABR Loans shall
involve an aggregate principal amount of not less than $1,000,000 or, if
greater, an integral multiple of $500,000 in excess thereof; (ii) any such
conversion of ABR Loans into, or continuation of, LIBOR Loans shall involve an
aggregate principal amount of not less than $3,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof; (iii) no partial conversion
of LIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding
principal amount of such LIBOR Loans to less than $3,000,000 or to any greater
amount not an integral multiple of $1,000,000 in excess thereof, (iv) no such
conversion or continuation shall be permitted with regard to any ABR Loans that
are Swingline Loans, and (v) no conversion of ABR Loans into LIBOR Loans or
continuation of LIBOR Loans into a new Interest Period shall be permitted during
the continuance of a Default or Event of Default. If a LIBOR Loan is converted
into a ABR Loan on any day other than the last day of the Interest Period
applicable thereto, the Borrower will pay, upon such conversion, all amounts
required under SECTION 2.13 to be paid as a consequence thereof.
(b) The Borrower shall make each such election by giving the Agent
written notice not later than 12:00 noon, Charlotte time, three (3) Business
Days prior to the effective date of any conversion of ABR Loans into, or
continuation of, LIBOR Loans and one (1) Business Day prior to the effective
date of any conversion of LIBOR Loans into ABR Loans. Each such notice (each, a
"Notice of Conversion/Continuation") shall be irrevocable, shall be given in the
form of EXHIBIT B-2 and shall specify (x) the date of such conversion or
continuation (which shall be a Business Day), (y) in the case of a conversion
into, or a continuation of, LIBOR Loans, the Interest Period to be applicable
thereto, and (z) the aggregate amount and Type of the Loans being converted or
continued. Upon the receipt of a Notice of Conversion/Continuation, the Agent
will promptly notify each Lender of the proposed conversion or continuation. In
the event that the Borrower shall fail to deliver a Notice of Conversion/
Continuation as provided herein with respect to any outstanding LIBOR Loans,
such LIBOR Loans shall automatically be converted to ABR Loans upon the
expiration of the then current Interest Period applicable thereto (unless repaid
pursuant to the terms hereof).
(c) The Borrower shall have a one-time option, exercisable on any
Business Day, to convert Unutilized End Loaded Lease Commitments under the End
Loaded Lease Credit Agreement to Revolving Credit Commitments under this
Agreement on a pro rata basis among the Lenders; provided, that (i) any such
conversion shall involve aggregate Unutilized End Loaded Lease Commitments of
not less than $5,000,000 or, if greater, an integral multiple of $5,000,000 in
excess thereof and (ii) no such conversion shall be permitted during the
38
continuance of a Default or an Event of Default. The Borrower shall exercise
such option by giving the Agent written notice not later than 12:00 noon,
Charlotte time, fifteen (15) Business Days prior to the effective date of any
conversion of Unutilized End Loaded Lease Commitments to Revolving Credit
Commitments. Such notice (the "Notice of Commitment Conversion") shall be
irrevocable, shall be given in the form of EXHIBIT B-3 and shall specify (x) the
date of such conversion (which will be a Business Day) and (y) the amount of
Unutilized End Loaded Lease Commitments being converted.
(d) The Notice of Commitment Conversion shall be accompanied by
new Revolving Credit Notes and End Loaded Lease Notes executed by the Borrower
at its own expense, dated the date of conversion and reflecting the changes in
the End Loaded Lease Commitments and Revolving Credit Commitments of the
Lenders. Upon receipt of the Notice of Commitment Conversion and the new
Revolving Credit Notes and End Loaded Lease Notes from the Borrower, the Agent
will (i) accept such Notice of Commitment Conversion, (ii) record the
information contained therein in the Register and in the register maintained by
the Agent pursuant to Section 9.9(a) of the End Loaded Lease Credit Agreement,
and (iii) promptly notify each Lender of the proposed conversion and request
that the Revolving Credit Notes and the End Loaded Lease Notes then held by the
Lenders be returned to the Agent. Upon receipt by the Agent of the Revolving
Credit Notes and the End Loaded Lease Notes provided by any Lender pursuant to
clause (iii) above, the Agent shall deliver the new Revolving Credit Notes and
End Loaded Lease Notes to such Lender in exchange for the surrendered notes and
shall forward the surrendered notes to the Borrower for cancellation.
2.10. Method of Payments; Computations.
(a) All payments by the Borrower hereunder shall be made without
setoff, counterclaim or other defense, in Dollars and in immediately available
funds to the Agent, for the account of the Lenders or the Swingline Lender, as
the case may be (except as otherwise expressly provided herein as to payments
required to be made directly to the Issuing Bank and the Lenders) at its office
referred to in SECTION 10.4, prior to 12:00 noon, Charlotte time, on the date
payment is due. Any payment made as required hereinabove, but after 12:00 noon,
Charlotte time, shall be deemed to have been made on the next succeeding
Business Day. If any payment falls due on a day that is not a Business Day, then
such due date shall be extended to the next succeeding Business Day (except that
in the case of LIBOR Loans to which the provisions of clause (IV) in SECTION 2.8
are applicable, such due date shall be the next preceding Business Day), and
such extension of time shall then be included in the computation of payment of
interest, fees or other applicable amounts at the applicable rate in effect
immediately prior to such extension.
(b) The Agent will distribute to the Lenders like amounts relating
to payments made to the Agent for the account of the Lenders as follows: (i) if
the payment is received by 12:00 noon, Charlotte time, in immediately available
funds, the Agent will make available to each relevant Lender on the same date,
by wire transfer of immediately available funds, such Lender's ratable share of
such payment (based on the percentage that the amount of the relevant payment
owing to such Lender bears to the total amount of such payment owing to all of
the relevant Lenders), and (ii) if such payment is received after 12:00 noon,
Charlotte time, or in other than immediately available funds, the Agent will
make available to each such Lender its ratable share of such payment by wire
transfer of immediately available funds on the next succeeding Business Day (or
in the case of uncollected funds, as soon as practicable after collected). If
the Agent shall not have made a required distribution to the appropriate Lenders
as required hereinabove after receiving a payment for the account of such
Lenders, the Agent will pay to each such Lender, on demand, its ratable share of
such payment with interest thereon at the Federal Funds Rate for each day from
the date such amount was required to be
39
disbursed by the Agent until the date repaid to such Lender. The Agent will
distribute to the Issuing Bank like amounts relating to payments made to the
Agent for the account of the Issuing Bank in the same manner, and subject to the
same terms and conditions, as set forth hereinabove with respect to
distributions of amounts to the Lenders.
(c) Unless the Agent shall have received written notice from the
Borrower prior to the date on which any payment of principal, interest or fees
under SECTION 2.7 is due to any Lender hereunder that such payment will not be
made in full, the Agent may assume that the Borrower has made such payment in
full to the Agent on such date, and the Agent may, in reliance on such
assumption, but shall not be obligated to, cause to be distributed to such
Lender on such due date an amount equal to the amount then due to such Lender.
If and to the extent the Borrower shall not have so made such payment in full to
the Agent, and without limiting the obligation of the Borrower to make such
payment in accordance with the terms hereof, such Lender shall repay to the
Agent forthwith on demand such amount so distributed to such Lender, together
with interest thereon for each day from the date such amount is so distributed
to such Lender until the date repaid to the Agent, at the Federal Funds Rate.
(d) With respect to each payment hereunder, except as specifically
provided otherwise herein or in any of the other Loan Documents, the Borrower
may designate by written notice to the Agent prior to or concurrently with such
payment the Types of Loans that are to be paid, repaid or prepaid, provided that
(i) unless made together with all amounts required under SECTION 2.13 to be paid
as a consequence thereof, a prepayment of a LIBOR Loan may be made only on the
last day of the Interest Period applicable thereto, and (ii) each payment on
account of any Credit Obligations to or for the account of any one or more
Lenders shall be apportioned ratably among such Lenders in proportion to the
amounts of such Credit Obligations owed to them. In the absence of any such
designation by the Borrower, or if an Event of Default has occurred and is
continuing, the Agent shall make such designation as the Required Lenders may
direct, subject to the foregoing and to the other provisions of this Agreement.
(e) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of 360 days and the actual number of days (including the first day,
but excluding the last day) elapsed; provided, however, that interest calculated
with respect to the Base Rate shall be computed on the basis of a 365/366-day
year and the actual days elapsed.
2.11. Increased Costs, Change in Circumstances, Etc.
(a) If, at any time after the Amendment Effective Date and from
time to time, the adoption or modification of any applicable law, rule or
regulation, or any interpretation or administration thereof by any Governmental
Authority or central bank (whether or not having the force of law) charged with
the interpretation, administration or compliance of the Lenders with any of such
requirements, shall, subject to the provisions of SECTION 2.12 which shall be
controlling as to the matters covered thereby:
(i) subject any Lender to, or increase the net
amount of, any tax, impost, duty, charge or withholding with respect to
any amount received or to be received hereunder in connection with
LIBOR Loans (other than taxes imposed on net income or profits of, or
any branch or franchise tax applicable to, such Lender or a Lending
Office of such Lender);
40
(ii) change the basis of taxation of payments to
any Lender in connection with LIBOR Loans (other than changes in taxes
on the net income or profits of, or any branch or franchise tax
applicable to, such Lender or a Lending Office of such Lender);
(iii) impose, increase or render applicable any
reserve (other than the Reserve Requirement), capital adequacy, special
deposit or similar requirement against assets of, deposits with or for
the account of, or loans, credit or commitments extended by, any Lender
or a Lending Office of such Lender; or
(iv) impose on any Lender or in the London
interbank Eurodollar market any other condition or requirement (other
than taxes imposed on net income or profits of, or any branch or
franchise tax applicable to, such Lender or a Lending Office of such
Lender, and other than the Reserve Requirement to the extent otherwise
taken into account in the determination of LIBOR Rates) affecting this
Agreement or LIBOR Loans;
and the result of any of the foregoing is to increase the costs to any Lender of
agreeing to make, making, funding or maintaining any LIBOR Loans or to reduce
the yield or rate of return of such Lender on any LIBOR Loans to a level below
that which such Lender could have achieved but for the adoption or modification
of any such requirements, the Borrower will, within fifteen (15) days after
delivery to the Borrower by such Lender of written demand therefor (with a copy
thereof to the Agent), pay to such Lender such additional amounts relating or
directly corresponding to the Loans as shall compensate such Lender for such
increase in costs or reduction in return.
(b) If, at any time after the Amendment Effective Date and from
time to time, the adoption or modification of any applicable federal, state or
local law, rule or regulation regarding any Lender's required level of capital
(including any allocation of capital requirements or conditions, but excluding
federal, state or local income tax liability), or the implementation of any such
requirements previously adopted but not implemented prior to the Amendment
Effective Date, or any interpretation or administration thereof by any
Governmental Authority (whether or not having the force of law) charged with the
interpretation, administration or compliance of such Lender with any of such
requirements, has or would have the effect of reducing the rate of return on
such Lender's capital as a consequence of its Commitments, Loans or
participations in Letters of Credit hereunder to a level below that which such
Lender could have achieved but for such adoption, modification, implementation
or interpretation (taking into account such Lender's policies with respect to
capital adequacy), the Borrower will, within fifteen (15) days after delivery to
the Borrower by such Lender of written demand therefor (with a copy thereof to
the Agent), pay to such Lender such additional amounts as will compensate such
Lender for such reduction in return.
(c) If, on or prior to the first day of any Interest Period, by
reason of changes arising after the date of this Agreement generally affecting
the London interbank Eurodollar market, (i) the Agent shall have determined that
Dollar deposits in the amount of any Lender's required LIBOR Loan pursuant to
such Borrowing are not generally available in the London interbank Eurodollar
market or that the rate at which such Dollar deposits are being offered will not
adequately and fairly reflect the cost to such Lender of making or maintaining
its LIBOR Loan during such Interest Period or (ii) the Agent shall have
determined that adequate and reasonable means do not exist for ascertaining the
applicable LIBOR Rate for such Interest Period, the Agent will forthwith so
notify the Borrower and the Lenders, whereupon the obligation of (y) in the case
of clause (I) above, each such affected Lender, and (z) in the case of clause
(II) above, all Lenders, in each case to make, to convert ABR Loans into, or to
continue, LIBOR Loans shall be suspended (including pursuant to the Borrowing to
which such Interest Period applies), and any Notice of Borrowing or Notice of
Conversion/Continuation
41
given at any time thereafter with respect to LIBOR Loans shall be deemed to be a
request for ABR Loans (but in the case of clause (I) above, only to the extent
of such affected Lender's Pro Rata Share thereof) until the Agent or the
affected Lender, as the case may be, shall have determined that the
circumstances giving rise to such suspension no longer exist (and the affected
Lender, if making such determination, shall have so notified the Agent), and the
Agent shall have so notified the Borrower and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at
any time after the Amendment Effective Date and from time to time, the adoption
or modification of any applicable law, rule or regulation, or any interpretation
or administration thereof by any Governmental Authority or central bank (whether
or not having the force of law) charged with the interpretation, administration
or compliance of any Lender with any of such requirements, has or would have the
effect of making it unlawful for such Lender to honor its obligation to make
LIBOR Loans or to continue to make or maintain LIBOR Loans, such Lender will
forthwith so notify the Agent and the Borrower, whereupon (i) each of such
Lender's outstanding LIBOR Loans shall automatically, on the expiration date of
the Interest Period applicable thereto or, to the extent any such LIBOR Loan may
not lawfully be maintained as a LIBOR Loan until such expiration date (subject
to payment as may be required by SECTION 2.13), upon such notice, be converted
into a ABR Loan and (ii) the obligation of such Lender to make, to convert ABR
Loans into, or to continue, LIBOR Loans shall be suspended, and any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall, as to such Lender, be deemed to be a request for
ABR Loans, until such Lender shall have determined that the circumstances giving
rise to such suspension no longer exist and shall have so notified the Agent,
and the Agent shall have so notified the Borrower.
(e) Determinations by the Agent or any Lender for purposes of this
Section of any increased costs, reduction in return, market contingencies,
illegality or any other matter shall, absent manifest error, be conclusive,
provided that such determinations are made in good faith. Each Lender agrees
that, upon the occurrence of any event giving rise to the operation of this
Section with respect to such Lender, it will, if requested by the Borrower and
to the extent permitted by law, endeavor in good faith to designate another
Lending Office for its LIBOR Loans, but only if such designation would make it
lawful for such Lender to continue to make or maintain LIBOR Loans hereunder;
provided that such designation is made on such terms that such Lender, in its
good faith determination, suffers no increased cost or economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of this Section.
(f) Each demand for payment under this Section shall be preceded
by a notice to the Borrower of such anticipated demand, which notice shall
specify in reasonable detail the basis for such demand, but the failure to
provide such advance notice shall not relieve the Borrower of any of its
obligations hereunder. Nothing in this Section shall be construed or so operate
as to require the Borrower to pay any interest, fees, costs or charges in excess
of that permitted by applicable law. Notwithstanding the foregoing, all demands
for payment under this SECTION 2.11 must be made on the Borrower within one
hundred twenty (120) days after the relevant Lender obtains actual knowledge
that such Lender is entitled to such payment.
2.12. Taxes.
(a) So long as the applicable Lender shall have complied with the
provisions of SECTION 2.12(C) hereof, any and all payments by the Borrower
hereunder or under any Note shall be made, in accordance with the terms hereof
and thereof, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto (other than taxes imposed on net income or
42
profits of, or any branch or franchise taxes applicable to, the Agent, the
Issuing Bank or any Lender) (y) by the jurisdiction under the laws of which the
Agent, the Issuing Bank or such Lender, as the case may be, is organized or any
political subdivision thereof and (z) in the case of each Lender, by the
jurisdiction in which any Lending Office of such Lender is located or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to the Agent, the
Issuing Bank or any Lender, so long as the applicable Lender shall have complied
with the provisions of SECTION 2.12(C) hereof, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section),
the Agent, the Issuing Bank or such Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower will make such deductions, and (iii) the Borrower will pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. If and to the extent that any Lender
subsequently shall be refunded or otherwise recover all or any part of such
deduction, it shall refund to the Borrower the amount so recovered.
(b) So long as the applicable Lender shall have complied with the
provisions of SECTION 2.12(C), the Borrower will indemnify the Agent, the
Issuing Bank and each Lender for the full amount of Taxes (including, without
limitation, any Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by the Agent, the Issuing Bank or such Lender, as the case may be,
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date the Agent, the Issuing Bank or any Lender, as the case may be, makes
written demand therefor and delivers to the Borrower the original receipt of
Taxes paid by it or an invoice from the relevant taxing authority regarding such
Taxes. Within thirty (30) days after the date of any payment of Taxes pursuant
to this Section, the Borrower will furnish to the Agent, the Issuing Bank or the
relevant Lender, as the case may be, the original or a certified copy of a
receipt or other relevant documentation evidencing payment thereof; provided
that demand therefor must be made on the Borrower within one hundred twenty
(120) days after the Issuing Bank's or relevant Lender's actual knowledge that
such Lender is entitled to such payment. If and to the extent that any Lender
subsequently shall be refunded or otherwise recover all or any part of such
payment of taxes, it shall refund to the Borrower the amount so recovered.
(c) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Internal Revenue Code, and such Lender is entitled to
an exemption (or is exempt) from United States withholding tax under Section
1441 or 1442 of the Internal Revenue Code, such Lender will deliver to the Agent
and the Borrower:
(i) if such Lender is entitled to claim an
exemption from, or a reduction of, withholding tax under a United
States tax treaty, properly completed IRS Forms 1001 and W-8 before the
payment of any interest in the first calendar year, and before the
payment of any interest in each third succeeding calendar year, during
which interest may be paid to such Lender under this Agreement;
(ii) if such Lender is entitled to claim that
interest paid under this Agreement is exempt from United States
withholding tax because it is effectively connected with a United
States trade or business of such Lender, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is
due in the first taxable year of such Lender, and in each succeeding
taxable year of such Lender, during which interest may be paid to such
Lender under this Agreement, and IRS Form W-9; and
43
(iii) such other form or forms as may be required
under the Internal Revenue Code or other laws of the United States as a
condition to exemption from, or reduction of, United States withholding
tax.
Each Lender as of the Amendment Effective Date, and each assignee under
any Assignment and Acceptance (as of the date thereof), that is a "foreign
corporation, partnership or trust" as described herein must be eligible to claim
a complete exemption and must provide applicable forms to the Borrower as
required by this SECTION 2.12. Each such Lender will promptly notify the Agent
and the Borrower of any changes in circumstances that would modify or render
invalid any claimed exemption or reduction.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required under subsection
(C) above are not executed, completed and/or delivered to the Agent, then the
Agent may withhold from any interest payment to such Lender not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax. For purposes of this Section, a distribution hereunder by the Agent to or
for the account of any Lender shall be deemed a payment by the Borrower.
(e) If the IRS or any other Governmental Authority, domestic or
foreign, asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (whether because the
appropriate form was not delivered or was not properly executed, completed
and/or delivered, because such Lender failed to notify the Agent of a change in
circumstances that rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this subsection (E),
together with all costs, expenses and reasonable attorneys' fees incurred or
paid in connection therewith.
(f) If at any time the Borrower requests any Lender to deliver any
forms other than documentation pursuant to subsection (C) above, then the
Borrower shall, upon demand of such Lender, reimburse such Lender for any
reasonable costs or expenses incurred by such Lender in the preparation or
delivery of such forms or other documentation.
(g) Each Lender agrees that, if the Borrower is required to pay
additional amounts to or for the account of any Lender pursuant to subsection
(A) or (B) above, then such Lender will, to the extent permitted by law,
endeavor in good faith to designate another Lending Office for its LIBOR Loans,
but only if such designation would make it lawful for such Lender to continue to
make or maintain LIBOR Loans hereunder; provided that such designation is made
on such terms that such Lender, in its good faith determination, suffers no
increased cost or economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of this
Section.
2.13. Compensation. The Borrower will compensate each Lender upon
demand for all losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund or
maintain LIBOR Loans, but excluding loss of anticipated profit with respect to
any Loans) that such Lender may sustain (i) if for any reason (other than a
default by Agent or such Lender) a Borrowing of, or conversion of or into, LIBOR
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion/Continuation, (ii) if
44
any repayment, prepayment or conversion of any LIBOR Loan occurs on a date other
than the last day of an Interest Period applicable thereto (including as a
consequence of conversion of LIBOR Loans pursuant to SECTION 2.11(D) or
acceleration of the maturity of such Loans pursuant to SECTION 8.1), (iii) if
any prepayment of any of its LIBOR Loans is not made on any date specified in a
notice of prepayment given by the Borrower, or (iv) as a consequence of any
other failure by the Borrower to make any payments with respect to LIBOR Loans
when due hereunder; provided, however, such Lender must make such demand for
payment on the Borrower within one hundred twenty (120) days after such Lender
obtains actual knowledge that such Lender is entitled to such payment.
Calculation of all amounts payable to a Lender under this Section shall be made
as though such Lender had actually funded its relevant LIBOR Loan through the
purchase of a Eurodollar deposit bearing interest at the LIBOR Rate in an amount
equal to the amount of such LIBOR Loan, having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore Lending Office of such Lender to a Lending Office of such
Lender in the United States; provided, however, that each Lender may fund each
of its LIBOR Loans in any manner it sees fit and the foregoing assumption shall
be utilized only for the calculation of amounts payable under this Section.
Determinations by any Lender for purposes of this Section of any such losses,
expenses or liabilities shall, absent manifest error, be conclusive, provided
that such determinations are made in good faith.
2.14. Use of Proceeds. The proceeds of the Loans shall be used by
the Borrower (i) to consummate the amendment and restatement of this Agreement
as set forth herein, (ii) to finance Permitted Acquisitions of Facilities
pursuant to this Agreement, (iii) to pay reasonable fees and expenses in
connection herewith and with such Permitted Acquisitions; (iv) to provide
working capital for the Borrower and its Subsidiaries; and (v) for general
corporate purposes.
2.15. Recovery of Payments.
(a) The Borrower agrees that to the extent the Borrower makes a
payment or payments to or for the account of the Agent, the Lenders or the
Issuing Bank, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, the Credit Obligation intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been received.
(b) If any amounts distributed by the Agent to a Lender are
subsequently returned or repaid by the Agent to the Borrower or its
representative or successor in interest, whether by court order or by settlement
approved by the Lender in question, such Lender will, promptly upon receipt of
notice thereof from the Agent, pay the Agent such amount. If any such amounts
are recovered by the Agent from the Borrower or its representative or successor
in interest, the Agent shall redistribute such amounts to the Lenders on the
same basis as such amounts were originally distributed.
2.16. Pro Rata Treatment.
(a) Except for Swingline Loans, all funding of Borrowings,
continuations and conversions of Loans shall be made by the Lenders pro rata on
the basis of their relative Revolving Credit Commitments (in the case of initial
funding of Revolving Credit Loans) or Loans (in the case of continuations and
conversions of Revolving Credit Loans), as applicable from time to time.
45
(b) Each Lender agrees that if it shall receive any amount
hereunder (whether by voluntary payment, realization upon security, exercise of
the right of setoff or banker's lien, counterclaim or cross action, or
otherwise, applicable to the payment of any of the Credit Obligations that
exceeds its ratable share (according to the proportion of (i) the amount of such
Credit Obligations due and payable to such Lender at such time to (ii) the
aggregate amount of such Credit Obligations due and payable to all Lenders at
such time) of payments on account of such Credit Obligations then or therewith
obtained by all the Lenders to which such payments are required to have been
made, such Lender shall forthwith purchase from the other Lenders such
participations in such Credit Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery,
together with an amount equal to such other Lender's ratable share (according to
the proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to the provisions of this subsection
may, to the fullest extent permitted by law, exercise any and all rights of
payment (including, without limitation, setoff, banker's lien or counterclaim)
with respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this subsection applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled under this
subsection to share in the benefits of any recovery on such secured claim.
2.17. Sale and Assignment of Existing Loans.
(a) Each of the Original Lenders party hereto that is selling
Existing Loans pursuant to this SECTION 2.17 (each, a "Selling Lender," and
collectively, the "Selling Lenders") hereby represents and warrants to (i) each
of the Lenders party hereto that is not an Original Lender, and (ii) each other
Original Lender party hereto that is purchasing Existing Loans pursuant to this
SECTION 2.17 (the Lenders described under (i) and (ii), each, a "Purchasing
Lender," and collectively, the "Purchasing Lenders"), that it is the legal and
beneficial owner of the interest in the Existing Loans being assigned by it
hereunder and that such interest is free and clear of any adverse claim. In
order to give effect to the assignment to the Purchasing Lenders of their
respective Pro Rata Shares of the Existing Loans to be concurrently converted to
Revolving Credit Loans hereunder as of the Amendment Effective Date, all as
contemplated hereunder, each Selling Lender shall and does hereby sell and
assign to each Purchasing Lender, without recourse, representation or warranty
(except as set forth in the first sentence of this subsection (a)), and each
Purchasing Lender shall and does hereby purchase and assume from each Selling
Lender, a portion of all of the rights and obligations of each Selling Lender
with respect to such Existing Loans converted to Revolving Credit Loans
hereunder as of the Amendment Effective Date and to each of the Loan Documents,
in each case in the amounts set forth in Annex 1 hereto (the "Assigned Rights"),
such that after giving effect to such sale and assignment, the Lenders shall own
the Existing Loans converted to Revolving Credit Loans hereunder in proportion
to their respective Revolving Credit Commitments. Upon payment by the Purchasing
Lenders to the Selling Lenders of the amounts calculated by the Agent pursuant
to subsection (b) below, each Lender shall be entitled to its respective Pro
Rata Share of (y) all interest on and any fees in respect of the Revolving
Credit Loans and Revolving Credit Commitments which accrue on and after the
Amendment Effective Date and (z) all payments of principal made on the Revolving
Credit Loans attributable to such Lender that occur after the Amendment
Effective Date.
46
(b) Pursuant to the sale and assignment of the Assigned Rights to
the Purchasing Lenders under this SECTION 2.17, each Selling Lender is entitled
to receive a payment from each Purchasing Lender in an amount equal to the
portion of such Selling Lender's Existing Loans representing the Assigned Rights
ratably purchased by each Purchasing Lender. In order to facilitate and give
effect to the sale and assignment of the Assigned Rights, each of the Selling
Lenders and Purchasing Lenders agrees that (i) the Agent shall calculate the
amount owing to the Selling Lenders and to be paid or funded by the Purchasing
Lenders, (ii) each of the Purchasing Lenders shall pay or fund, as the case may
be, to the Agent the amount specified by the Agent in writing to such Purchasing
Lender, and (iii) the Agent shall, to the extent such payments or fundings are
actually made, apply such amounts ratably to pay the amount owed to the Selling
Lenders.
2.18. Letters of Credit.
(a) Subject to and upon the terms and conditions herein set forth,
so long as no Default or Event of Default has occurred and is continuing, the
Issuing Bank will, at any time and from time to time on and after the Amendment
Effective Date and prior to the Revolving Credit Facility Termination Date, and
upon request by the Borrower in accordance with the provisions of SECTION
2.18(B), issue for the account of the Borrower one or more irrevocable standby
letters of credit denominated in Dollars and in a form customarily used or
otherwise approved by the Issuing Bank (together with all amendments,
modifications and supplements thereto, substitutions therefor and renewals and
restatements thereof, collectively, the "Letters of Credit"). Notwithstanding
the foregoing:
(i) No Letter of Credit shall be issued the
Stated Amount upon issuance of which (i) when added to all other Letter
of Credit Outstanding at such time, would exceed $5,000,000 or (ii)
when added to all other Letter of Credit Outstanding at such time
(exclusive of Reimbursement Obligations that are repaid with the
proceeds of, and simultaneously with the incurrence of, Revolving
Credit Loans) and the aggregate principal amount of all Revolving
Credit Loans and Swingline Loans then outstanding, would exceed the
Total Revolving Credit Commitment at such time;
(ii) No Letter of Credit shall be issued that by
its terms expires more than one (1) year after its date of issuance or
the Revolving Credit Facility Maturity Date, whichever is earliest;
provided, however, that a Letter of Credit may, if requested by the
Borrower and approved by the Issuing Bank, provide by its terms, and on
terms acceptable to the Issuing Bank, for renewal for successive
periods of one year or less, unless and until the Issuing Bank shall
have delivered a notice of nonrenewal to the beneficiary of such Letter
of Credit; and
(iii) The Issuing Bank shall be under no
obligation to issue any Letter of Credit if, at the time of such
proposed issuance, (A) any order, judgment or decree of any
Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing such Letter of Credit,
or any Requirement of Law applicable to the Issuing Bank or any request
or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated) not in effect on the
Amendment Effective Date, or any unreimbursed loss, cost or expense
that was not applicable, in effect or known to the Issuing Bank as of
the Amendment Effective Date
47
and that the Issuing Bank in good faith deems material to it, or (B)
the Issuing Bank shall have actual knowledge, or shall have received
notice from any Lender, prior to the issuance of such Letter of Credit
that one or more of the conditions specified in SECTION 3.3 are not
then satisfied or that the issuance of such Letter of Credit would
violate the provisions of subsection (I) above unless the Required
Lenders otherwise authorize the Issuing Bank to issue such Letter of
Credit.
(b) Whenever the Borrower desires the issuance of a Letter of
Credit, the Borrower will notify the Issuing Bank (with copies to the Agent) in
writing, by 12:00 noon, Charlotte, North Carolina local time, at least three (3)
Business Days (or such shorter period as is acceptable to the Issuing Bank in
any given case) prior to the requested date of issuance thereof. Each such
request (each, a "Letter of Credit Request") may not be revoked at any time
after the Issuing Bank has completed processing and issued the Letter of Credit,
shall be given in the form of EXHIBIT B-5 and shall be appropriately completed
to specify (i) the proposed date of issuance (which shall be a Business Day),
(ii) the proposed Stated Amount and expiry date of the Letter of Credit, and
(iii) the name and address of the proposed beneficiary or beneficiaries of the
Letter of Credit. The Borrower will also complete any application procedures and
documents reasonably required by the Issuing Bank in connection with the
issuance of any Letter of Credit, it being understood that in the event of any
conflict between such documents and the Loan Documents, the Loan Documents shall
control. The Agent will, promptly upon its receipt thereof, notify each Lender
of the Letter of Credit Request. Upon its issuance of any Letter of Credit, the
Issuing Bank will promptly notify each Lender of such issuance and will notify
each Lender with a Revolving Credit Commitment of the amount of its
participation therein under SECTION 2.18(C).
(c) Immediately upon the issuance of any Letter of Credit, the
Issuing Bank shall be deemed to have sold and transferred to each Lender with a
Revolving Credit Commitment, and each such Lender (each, in such capacity, an
"L/C Participant") shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, pro rata to the extent of its Revolving
Credit Percentage at such time, in such Letter of Credit, each drawing made
thereunder, and the obligations of the Borrower under this Agreement with
respect thereto and any security therefor (including the Collateral) or guaranty
pertaining thereto; provided, however, that the fees and other charges relating
to Letters of Credit described in SECTIONS 2.7(D) and (E) shall be payable
directly to the Issuing Bank as provided therein, and the L/C Participants shall
have no right to receive any portion thereof. Upon any change in the Revolving
Credit Commitments of any of the Lenders pursuant to SECTION 10.5, with respect
to all outstanding Letters of Credit and Reimbursement Obligations there shall
be an automatic adjustment to the participations pursuant to this Section to
reflect the new Revolving Credit Percentages of the assigning Lender and the
Eligible Assignee.
(d) The Borrower hereby agrees to reimburse the Issuing Bank by
making payment to the Agent, for the account of the Issuing Bank, in immediately
available funds, for any payment made by the Issuing Bank under any Letter of
Credit (each such amount so paid until reimbursed, together with interest
thereon payable as provided hereinbelow, a "Reimbursement Obligation")
immediately after, and in any event on the date of, such payment, together with
interest on the amount so paid by the Issuing Bank, to the extent not reimbursed
prior to 2:00 p.m., Charlotte, North Carolina local time, on the date of such
payment or disbursement, (i) for the period from the date of the payment to the
date of receipt by the Borrower from the Issuing Bank of notice of such payment,
at the Alternate Base Rate as in effect from time to time during such period,
and (ii) for the period from the date of receipt by the Borrower from the
Issuing Bank of notice of such payment to the date the Reimbursement Obligation
created thereby is satisfied, at the Alternate Base Rate as in effect from time
to time
48
during such period plus two percentage points (2.0%), such interest also to be
payable on demand. The Borrower hereby authorizes and directs the Agent to, and
the Agent shall, pay the Issuing Bank all Reimbursement Obligations payable
hereunder by applying any funds then held in the Cash Collateral Account
established pursuant to SECTION 2.18(I), and if such funds shall be insufficient
to satisfy such Reimbursement Obligation in full, by drawing such amounts under
the Revolving Credit Facility (to the extent of availability thereunder) as of
the due dates of such Reimbursement Obligations, but the failure of the Agent to
so pay the Issuing Bank by drawing under the Revolving Credit Facility will not
affect the Borrower's obligations to pay the Reimbursement Obligations.
Notwithstanding any such draw against the Revolving Credit Facility, the Agent
shall provide the notices to the Borrower required by this SECTION 2.18(D). The
Issuing Bank will provide the Agent and the Borrower with prompt notice of any
payment or disbursement made under any Letter of Credit, although the failure to
give, or any delay in giving, any such notice shall not release, diminish or
otherwise affect the Borrower's obligations under this Section or any other
provision of this Agreement.
(e) In the event that the Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have satisfied in a timely manner in
full its Reimbursement Obligation to the Issuing Bank pursuant to SECTION
2.18(D), and to the extent that any amounts then held in the Cash Collateral
Account established pursuant to SECTION 2.18(I) shall be insufficient to satisfy
such Reimbursement Obligation in full, the Issuing Bank will promptly notify the
Agent, and the Agent will promptly notify each L/C Participant, of such failure.
If the Agent gives such notice prior to 11:00 a.m., Charlotte, North Carolina
local time, on any Business Day to any L/C Participant, such L/C Participant
will make available to the Agent, for the account of the Issuing Bank, its Pro
Rata Share (calculated with respect to its Revolving Credit Percentage) of the
amount of such payment on such Business Day in immediately available funds. If
the Agent gives such notice after 11:00 a.m., Charlotte, North Carolina local
time, on any Business Day to any such L/C Participant, such L/C Participant
shall make its Pro Rata Share of such amount available to the Agent on the next
succeeding Business Day. If and to the extent such L/C Participant shall not
have so made its Pro Rata Share of the amount of such payment available to the
Agent, such L/C Participant agrees to pay to the Agent, for the account of the
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Agent, at
the Federal Funds Rate. The failure of any L/C Participant to make available to
the Agent its Pro Rata Share of any payment under any Letter of Credit shall not
relieve any other L/C Participant of its obligation hereunder to make available
to the Agent its Pro Rata Share of any payment under any Letter of Credit on the
date required, as specified above, but no L/C Participant shall be responsible
for the failure of any other L/C Participant to make available to the Agent such
other L/C Participant's Pro Rata Share of any such payment. Each such payment by
an L/C Participant under this SECTION 2.18(E) of its Pro Rata Share of an amount
paid by the Issuing Bank shall constitute a Revolving Credit Loan by such Lender
(the Borrower being deemed to have given a timely Notice of Borrowing therefor)
and shall be treated as such for all purposes of this Agreement; provided that
for purposes of determining the available unused portion of the Total Revolving
Credit Commitment immediately prior to giving effect to the application of the
proceeds of such Revolving Credit Loans, the Reimbursement Obligation being
satisfied thereby shall be deemed not to be outstanding at such time.
(f) Whenever the Issuing Bank receives a payment in respect of a
Reimbursement Obligation as to which the Agent has received, for the account of
the Issuing Bank, any payments from the L/C Participants pursuant to SECTION
2.18(E), the Issuing Bank will promptly pay to the Agent, and the Agent will
promptly pay to each L/C Participant that has paid its Pro Rata Share thereof,
in immediately available funds, an amount equal to such L/C Participant's
ratable share (based on the proportionate amount funded by such L/C Participant
to the aggregate amount funded by all L/C Participants) of such Reimbursement
Obligation.
49
(g) The Reimbursement Obligations of the Borrower, and the
obligations of the L/C Participants to make payments to the Agent, for the
account of the Issuing Bank, with respect to Letters of Credit, shall be
irrevocable, shall remain in effect until the Issuing Bank shall have no further
obligations to make any payments or disbursements under any circumstances with
respect to any Letter of Credit, and, except to the extent resulting from any
gross negligence or willful misconduct on the part of the Issuing Bank as
finally determined by a court of competent jurisdiction and not subject to any
appeal (or pursuant to arbitration as set forth in SECTION 10.3(B)), shall not
be subject to counterclaim, setoff or other defense or any other qualification
or exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) Any lack of validity or enforceability of
this Agreement, any of the other Loan Documents or any documents or
instruments relating to any Letter of Credit;
(ii) Any change in the time, manner or place of
payment of, or in any other term of, all or any of the Credit
Obligations in respect of any Letter of Credit, whether or not the
Borrower has notice or knowledge thereof;
(iii) The existence of any claim, setoff, defense
or other right that the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting),
the Agent, the Issuing Bank, any Lender or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated hereby or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named
in any such Letter of Credit);
(iv) Any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect, any errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, telecopier or otherwise, or any errors in translation or in
interpretation of technical terms, other than due to the Issuing Bank's
gross negligence or willful misconduct;
(v) Any defense based upon the failure of any
drawing under a Letter of Credit to conform to the terms of the Letter
of Credit (the Issuing Bank's sole obligation, in determining whether
to pay under any Letter of Credit, being to examine documents required
to be delivered under such Letter of Credit in good faith and without
gross negligence to ascertain that such documents appear on their face
to comply with the terms of such Letter of Credit), any non-application
or misapplication by the beneficiary or any transferee of the proceeds
of such drawing or any other act or omission of such beneficiary or
transferee in connection with such Letter of Credit;
(vi) The exchange, release, surrender or
impairment of any Collateral or other security for the Credit
Obligations;
(vii) The occurrence of any Default or Event of
Default; or
(viii) Subject to the Issuing Bank's obligation set
forth in the parenthetical in clause (V) above, any other circumstance
or event whatsoever, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, the Borrower or a Guarantor.
50
None of the foregoing shall impair, prevent or otherwise affect any of the
rights and powers granted to the Issuing Bank hereunder. Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall be binding upon the Borrower and each L/C Participant and
shall not create or result in any liability of the Issuing Bank to the Borrower
or any L/C Participant. It is expressly understood and agreed that, for purposes
of determining whether a wrongful payment under a Letter of Credit resulted from
the Issuing Bank's gross negligence or willful misconduct, (i) the Issuing
Bank's acceptance of documents that appear on their face to comply with the
terms of such Letter of Credit, without responsibility for further
investigation, regardless of any notice or information to the contrary, (ii) the
Issuing Bank's exclusive reliance on the documents presented to it under such
Letter of Credit as to any and all matters set forth therein, including the
amount of any draft presented under such Letter of Credit, whether or not the
amount due to the beneficiary thereunder equals the amount of such draft and
whether or not any document presented pursuant to such Letter of Credit proves
to be insufficient in any respect (so long as such document appears on its face
to comply with the terms of such Letter of Credit), and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever, and (iii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute gross
negligence or willful misconduct of the Issuing Bank.
(h) If at any time after the Amendment Effective Date the Issuing
Bank or any L/C Participant determines that the introduction of or any change in
any applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by the Issuing
Bank or any L/C Participant with any request or directive by any such authority
(whether or not having the force of law) shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement against
Letters of Credit issued by the Issuing Bank or participated in by any L/C
Participant or (ii) impose on the Issuing Bank or any L/C Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit, and the result of any of the foregoing is to increase the cost to the
Issuing Bank or L/C Participant of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable by
the Issuing Bank or such L/C Participant hereunder or reduce the rate of return
on its capital with respect to Letters of Credit, then the Borrower will, within
fifteen (15) days after delivery to the Borrower by the Issuing Bank or such L/C
Participant of written demand therefor (with a copy thereof to the Agent), pay
to the Issuing Bank or such L/C Participant such additional amounts as shall
compensate the Issuing Bank or such L/C Participant for such increase in costs
or reduction in return; provided that such demand must be made on the Borrower
within one hundred twenty (120) days after the Issuing Bank or relevant L/C
Participant obtains actual knowledge that such Issuing Bank or L/C Participant
is entitled to such payment. A certificate submitted to the Borrower by the
Issuing Bank or such L/C Participant, as the case may be (a copy of which
certificate shall be sent by the Issuing Bank or such L/C Participant to the
Agent), setting forth the basis for the determination of such additional amount
or amounts necessary to compensate the Issuing Bank or such L/C Participant as
aforesaid, shall be conclusive and binding on the Borrower absent manifest error
provided it is made in good faith.
(i) At any time and from time to time (i) during the continuance
of an Event of Default, the Agent, at the direction, or with the consent, of the
Required Lenders, may require the Borrower to deliver to the Agent such
additional amount of cash as is equal to the difference between the aggregate
Stated Amount of all Letters of Credit at any time outstanding (whether
51
or not any beneficiary under any Letter of Credit shall have drawn or be
entitled at such time to draw thereunder) and the amount then on deposit in the
Cash Collateral Account (as hereinafter defined) and (ii) in the event of a
repayment under SECTION 2.5(C), the Agent will retain such amount as may then be
required to be retained under the proviso in SECTION 2.5(C), such amount in each
case under clauses (I) and (II) above to be held by the Agent in a cash
collateral account (the "Cash Collateral Account") as security for, and for
application to, the Borrower's Reimbursement Obligations. The Borrower hereby
grants to the Agent, for the benefit of the Issuing Lender and the Lenders, a
lien upon and security interest in the Cash Collateral Account and all amounts
held therein from time to time as security for Letter of Credit Outstanding, and
for application to the Borrower's Reimbursement Obligations as and when the same
shall arise. The Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest on the
investment of such amounts in Cash Investments, which investments shall be made
at the direction of the Borrower (unless a Default or Event of Default shall
have occurred and be continuing, in which case the determination as to
investments shall be made at the option and in the discretion of the Agent),
amounts in the Cash Collateral Account shall not bear interest. Interest and
profits, if any, on such investments shall accumulate in such account. In the
event of a drawing, and subsequent payment by the Issuing Bank, under any Letter
of Credit at any time during which any amounts are held in the Cash Collateral
Account, the Agent will deliver to the Issuing Bank an amount equal to the
Reimbursement Obligation created as a result of such payment (or, if the amounts
so held are less than such Reimbursement Obligation, all of such amounts) to
reimburse the Issuing Bank therefor. Any amounts remaining in the Cash
Collateral Account after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Bank for all of its obligations thereunder
shall be held by the Agent, for the benefit of the Borrower, with such amounts
to be applied against the Credit Obligations in such order and manner (x) as the
Borrower may direct in the absence of a Default or an Event of Default and (y)
otherwise, as the Agent may direct; provided, however, that the Cash Collateral
Account shall not be subject to setoff except with the consent of the Required
Lenders provided in SECTION 8.2. If the Borrower is required to provide cash
collateral pursuant to SECTION 2.5(C), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower on demand, provided that after
giving effect to such return (i) the sum of (x) the aggregate principal amount
of all Revolving Credit Loans, Letter of Credit Outstanding and Swingline Loans
outstanding at such time would not exceed the lesser of the Total Revolving
Credit Commitments at such time or the Revolving Credit Borrowing Availability
and (ii) no Default or Event of Default shall have occurred and be continuing at
such time. If the Borrower is required to provide cash collateral as a result of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrower promptly after all Events of Default have been
waived. Notwithstanding anything to the contrary contained herein, Agent may,
without notice to the Borrower, sell or liquidate any of the foregoing
investments at any time if the proceeds thereof are required for any release of
funds permitted or required hereunder, and Agent shall not be liable or
responsible for any loss, cost or penalty resulting from any such sale or
liquidation. With respect to any funds received by Agent for deposit into the
Cash Collateral Account after 10:00 a.m., Charlotte, North Carolina, time, the
Agent shall not be required to invest such funds or to effect such investment
instruction until the following Business Day.
(j) Notwithstanding any termination of the Commitments or
repayment of the Loans, or both, the obligations of the Borrower under this
SECTION 2.18 shall remain in full force and effect until the Issuing Bank and
the L/C Participants shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit.
52
2.19. Replacement of Lenders. The Borrower may, at any time and so long
as no Default or Event of Default has then occurred and is continuing, replace
any Lender (a) that has requested additional amounts from the Borrower under
SECTION 2.12, SECTION 2.11(A) or SECTION 2.11(B) or the obligation of which to
make or maintain LIBOR Loans has been suspended under SECTION 2.11(D) by written
notice to such Lender and the Agent given not more than thirty (30) days after
any such event. Within sixty (60) days of such notice, the Borrower shall give
written notice to such Lender and the Agent identifying one or more Persons each
of which qualifies as an Eligible Assignee and shall be reasonably acceptable to
the Agent (each, a "Replacement Lender," and collectively, the "Replacement
Lenders") to replace such Lender (the "Replaced Lender"), provided that (i) the
second notice from the Borrower to the Replaced Lender and the Agent provided
for hereinabove shall specify an effective date for such replacement (the
"Replacement Effective Date"), which shall be at least five (5) Business Days
after such notice is given, (ii) as of the relevant Replacement Effective Date,
each Replacement Lender shall enter into an Assignment and Acceptance with the
Replaced Lender pursuant to SECTION 10.5(A) (but shall not be required to pay
the processing fee otherwise payable to the Agent pursuant to SECTION 10.5(A)),
pursuant to which such Replacement Lenders collectively shall acquire, in such
proportion among them as they may agree with the Borrower and the Agent, all
(but not less than all) of the Commitments, End Loaded Lease Commitments,
outstanding Loans and End Loaded Lease Loans of the Replaced Lender, and, in
connection therewith, shall pay to the Replaced Lender, as the purchase price in
respect thereof, an amount equal to the sum as of the Replacement Effective Date
(without duplication) of (y) the unpaid principal amount of, and all accrued but
unpaid interest on, all outstanding Loans and End Loaded Lease Loans of the
Replaced Lender and (z) the Replaced Lender's ratable share of all accrued but
unpaid fees owing to the Replaced Lender hereunder and under the End Loaded
Lease Credit Agreement, and (iii) all other obligations of the Borrower owing to
the Replaced Lender (other than those specifically described in clause (ii)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid), including, without limitation, amounts payable under
SECTION 2.13 as a result of the actions required to be taken under this Section,
shall be paid in full by the Borrower to the Replaced Lender on or prior to the
Replacement Effective Date.
ARTICLE III
CONDITIONS OF BORROWING
3.1. Conditions of Loans under Original Credit Agreement. The
obligation of each Lender to make Loans in connection with the initial Borrowing
(as such terms are defined in the Original Credit Agreement) under the Original
Credit Agreement was subject to the satisfaction of the conditions precedent set
forth in Sections 3.1 and 3.2 of the Original Credit Agreement, which conditions
have heretofore been satisfied.
3.2. Conditions to Effectiveness. The effectiveness of this
Agreement and the amendment and restatement of the Original Credit Agreement
effected hereby is subject to the satisfaction of the condition set forth in the
last sentence of SECTION 10.14 and the following conditions precedent:
3.2.1. Executed Loan Documents.
(a) Loan Documents. The Notes and all other Loan Documents to be
executed on or prior to the Amendment Effective Date shall have been duly
authorized, executed and delivered to the appropriate Lenders and the Swingline
Lender by the Borrower, in form and substance satisfactory to the Lenders, shall
be in full force and effect and no Default shall exist thereunder, each Lender
and the Swingline Lender shall have received its original Notes and a copy of
each other Note, and the Agent shall have received a copy of each Note.
53
(b) Security and Pledge Agreement. The Security and Pledge
Agreement shall have been duly authorized, executed and delivered to the Agent
and each Lender by the Borrower and the Guarantors, together with, to the extent
not previously delivered, all certificates for the Stock being pledged
thereunder and duly executed undated stock powers for each such certificate, and
together with, to the extent not previously delivered, all promissory notes
(duly endorsed in blank), initial transaction statements and other documents
requested by the Agent and the Lenders to perfect the security interests granted
therein. The Security and Pledge Agreement shall be in full force and effect and
no Default shall exist thereunder, and the Agent and each Lender shall have
received a fully executed original thereof.
(c) Guaranty Documents. Each Subsidiary of the Borrower (other
than The Woodrum Group, Inc. and InProNet, Inc.) existing as of the Amendment
Effective Date shall have duly authorized, executed and delivered to the Agent
and each Lender a Guaranty Agreement and the other Guaranty Documents in form
and substance satisfactory to the Lenders, each such document shall be in full
force and effect and no Default shall exist thereunder, and the Agent and each
Lender shall have received a fully executed original thereof.
(d) Financing Statements. Financing Statements and all other
filings or recordations necessary to perfect the security interest of the Agent,
on behalf of the Lenders, in the Collateral shall have been filed, and the Agent
shall have received confirmation in a form acceptable to the Lenders that such
security interest constitutes a valid and perfected first priority security
interest therein to the extent such security interest can be perfected by filing
a financing statement, subject only to Permitted Liens.
(e) Mortgages; Title Insurance. Amended and Restated Mortgages
shall have been duly authorized, executed and delivered by the Borrower and the
Guarantors (as applicable), shall have been recorded, registered and filed in a
manner acceptable to the Agent, shall be in full force and effect and no default
shall exist thereunder, and the Agent shall have received fully executed copies
thereof, and each Lender shall have received a photocopy thereof. To the extent
not previously delivered, the Agent, for the benefit of the Lenders, shall have
received policies of title insurance or title insurance binders in form and
substance satisfactory to the Agent, from title insurance companies duly
licensed to do business in the states where the Realty is located, selected by
the Borrower and acceptable to the Agent, in amounts satisfactory to the Agent
but not to exceed the fair market value of the Realty, on standard ALTA (1992)
Loan Policy forms, with respect to each tract of Realty being encumbered by the
liens of the Mortgages, all premiums thereon shall have been paid, and the
policy shall insure that the Mortgages constitute valid, enforceable first
priority liens on the Realty, free and clear from all title defects and
encumbrances whatsoever except for and subject to Permitted Liens, and with such
exceptions as are acceptable to the Agent, and shall include revolving credit
endorsements, variable rate endorsements and such other endorsements as the
Agent may request, to the extent available in the applicable jurisdictions. Such
title insurance policies (or binders, as the case may be) with respect to the
Realty may not contain general survey exceptions except with the Agent's prior
written consent. To the extent title insurance policies (or binders, as the case
may be) have been previously delivered to the Agent, this CLAUSE (E) shall only
require (with respect to title insurance) (i) an endorsement to such title
insurance (or binders, as the case may be) insuring that the amended and
restated Mortgages constitute valid enforceable, first priority liens on the
Realty, free and clear from all title defects and encumbrances whatsoever except
from and subject to Permitted Liens and with such exceptions as are acceptable
to the Agent and (ii) payment of premiums thereon.
54
(f) Surveys. To the extent not previously delivered, the Agent
shall have received a metes-and-bounds survey of each tract or parcel of the
Realty being encumbered by the lien of the Mortgages, in form and substance
satisfactory to the Agent.
(g) Environmental Assessments. To the extent not previously
delivered, the Agent shall have received an environmental assessment with
respect to each tract or parcel of the Realty, in form and substance
satisfactory to the Agent.
(h) Landlord Consents. To the extent not previously delivered or
waived, a Landlord Consent with respect to each of the Facility Leased
Properties shall have been duly authorized, executed and delivered to the Agent
by the tenant and the landlord with respect thereto, shall be in full force and
effect and no Default shall exist thereunder, shall be recorded, registered and
filed in the appropriate real estate records in a manner acceptable to the
Agent, and the Agent shall have received a fully executed copy thereof.
(i) Certain Subordinated Debt. To the extent not previously
subordinated, the obligations of the Borrower and its Subsidiaries under the
Intercompany Management Agreements existing as of the Amendment Effective Date
shall be subordinated to the Credit Obligations and the Guaranty Obligations on
terms acceptable to the Lenders in their sole discretion.
3.2.2. Closing Certificates; Etc.
(a) Certificate of the Borrower. The Agent and each Lender shall
have received a certificate dated as of the Amendment Effective Date from the
Chief Executive Officer, Chief Financial Officer, Vice President-Finance or Vice
President-Controller of the Borrower, in form and substance satisfactory to the
Lenders, to the effect that, to their knowledge, (i) all representations and
warranties of the Borrower contained in this Agreement and the other Loan
Documents are true, correct and complete in all material respects as of the
Amendment Effective Date, (ii) neither the Borrower nor any of its Subsidiaries
is in violation of any of the covenants contained in this Agreement and the
other Loan Documents, (iii) after giving effect to the transactions contemplated
by this Agreement, no Default or Event of Default has occurred and is
continuing, and (iv) the Borrower has satisfied each of the conditions set forth
in this Section to be satisfied by the Borrower.
(b) Secretaries' Certificates. The Agent and each Lender shall
have received a certificate dated as of the Amendment Effective Date from the
Secretary or an Assistant Secretary of the Borrower and each Guarantor, in form
and substance satisfactory to the Lenders, certifying: (i) that the articles or
certificate of incorporation delivered to the Agent and each Lender in
connection with the closing of the Original Credit Agreement are in full force
and effect on the Amendment Effective Date and have not been amended since
December 17, 1996 (or if such articles or certificate of incorporation have been
amended thereafter, that attached thereto is a copy of such articles or
certificate of incorporation and all amendments thereto, certified as of a
recent date by the Secretary of State (or other equivalent officer) of the
relevant state of incorporation, which documents have not been amended since
such date of certification); (ii) that the bylaws delivered to the Agent and
each Lender in connection with the closing of the Original Credit Agreement are
in full force and effect on the Amendment Effective Date and have not been
amended since December 17, 1996 (or if such bylaws have been amended thereafter,
that attached thereto is a copy of such bylaws and all amendments thereto);
(iii) that attached thereto is a true and complete copy of resolutions adopted
by the Board of Directors and stockholders (if necessary) of such corporation,
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents, as applicable; and (iv) as to the incumbency and
genuineness of the signature of each officer of such corporation executing this
Agreement or any of the other Loan Documents and authorized
55
to request any Borrowing, as applicable. The Agent and each Lender shall also
have received a similar certificate dated as of the Amendment Effective Date
from the General Partner of the Palestine Limited Partnership and the General
Partner of Mexia Principal Healthcare Limited Partnership, respectively, in form
and substance satisfactory to the Agent.
(c) Certificates of Existence or Good Standing. The Agent and each
Lender shall have received (i) long-form certificates as of a recent date of the
good standing or existence of the Borrower and each Guarantor under the laws of
its state of incorporation or organization and each state where the Borrower and
each Guarantor is qualified to transact business, and (ii) where reasonably
available, certificates as of a recent date from the department of revenue or
other appropriate Governmental Authority of each such state indicating that the
Borrower or such Guarantor, as appropriate, has filed all required tax returns
and owes no delinquent taxes.
(d) Opinion of Counsel to the Borrower and the Guarantors. The
Agent and each Lender shall have received the favorable opinions of Tonkon,
Torp, Galen, Marmaduke & Booth, Oregon counsel to the Borrower, Waller Lansden,
Dortch & Davis, Tennessee counsel to the Borrower and the Guarantors, Faegre &
Benson LLP, Colorado counsel to the Borrower and the Guarantors, Donohoe,
Jamerson & Carroll, Texas counsel to the Borrower and the Guarantors, Argue
Pearson Harbison & Myers, LLP, California counsel to the Borrower and the
Guarantors, Barnes & Thornburg, Indiana counsel to the Borrower and the
Guarantors, each such opinion to be addressed to the Agent, for the benefit of
the Lenders, the Issuing Bank and each Lender, and in form and substance
satisfactory to the Agent and each Lender.
(e) UCC Search. The Agent and each Lender shall have received the
results of a search of all filings made against the Borrower and each Guarantor
under the Uniform Commercial Code as in effect in any state in which any assets
of any Borrower or any Guarantor are located, indicating that the Collateral is
free and clear of any liens or encumbrances except for Permitted Liens or for
which UCC-3 termination statements are being delivered.
(f) Insurance. The Agent shall have received certificates, and
certified copies of policies, of insurance, in form and substance satisfactory
to the Agent, upon the Collateral and the business of the Borrower and each
Guarantor, with the additional insured, mortgagee and loss payable clauses and
endorsements required by Section 5.4.
(g) Termination of Golder, Thoma Agreement. The Professional
Services Agreement between the Borrower and GTCR Fund IV shall have been
terminated and of no further force or effect.
3.2.3. Consents; No Adverse Change.
(a) Consents and Approvals. All necessary approvals,
authorizations and consents, if any are required, of any Person and all
Governmental Authorities having jurisdiction with respect to the Collateral and
the transactions contemplated by this Agreement shall have been obtained.
(b) No Injunction, Etc. No action, proceeding, investigation,
claim, regulation or legislation shall have been instituted, threatened or
proposed before any court or other Governmental Authority to enjoin, restrain or
prohibit, or to obtain substantial damages in respect of, or that is related to
or arises out of this Agreement or the consummation of the transactions
contemplated hereby or that, in the Required Lenders' discretion, would make
inadvisable the consummation of the transactions contemplated by this Agreement.
56
(c) No Material Adverse Change. Since the date of the most recent
audited Financial Statements of the Borrower and each Guarantor, there shall not
have occurred any Material Adverse Change or any event, condition or state of
facts that could reasonably be expected to have a Material Adverse Effect, other
than as specifically contemplated by this Agreement.
(d) Event of Default. No Default or Event of Default shall have
occurred and be continuing.
3.2.4. Financial Matters.
(a) Financial Statements. The Lenders shall have received the
Financial Statements from the Borrower, in form and substance satisfactory to
the Lenders.
(b) Financial Condition Certificate. The Agent and each Lender
shall have received a Financial Condition Certificate together with the
attachments required thereby (including, without limitation, the Projections),
all in substantially the form of EXHIBIT E.
(c) Taxes. All taxes, fees and other charges then due in
connection with the execution, delivery, recording, filing and registration of
any of the Loan Documents shall have been paid by the Borrower.
3.2.5. End Loaded Lease Facility Documentation. All documentation
under the End Loaded Lease Facility shall be satisfactory in form and substance
to the Agent and the Lenders.
3.2.6. Miscellaneous. (a) Disbursement Instructions; Account
Designation Letter. The Agent shall have received an Account Designation Letter,
together with written instructions from an Authorized Officer of the Borrower,
including wire transfer information, directing the payment of the proceeds of
Loans to be made hereunder on the Amendment Effective Date. If any Debt is being
refinanced or otherwise paid off on the Amendment Effective Date with the
proceeds of the Loans, the funds required for such payoff shall be earmarked by
the Agent for the benefit of the refinanced lender and shall be paid directly
from the Agent to the refinanced lender pursuant to a payoff letter under which
the refinanced lender agrees to release any and all liens on the assets of the
Borrower and its Subsidiaries upon payment in full.
(b) Proceedings and Documents. The Agent and the Lenders shall
have received copies of all other documents, certificates, opinions, instruments
and other evidence as each may reasonably request, in form and substance
reasonably satisfactory to the Agent and the Lenders, with respect to the
transactions contemplated by this Agreement and the taking of all actions in
connection therewith.
3.3 Conditions to All Loans and Advances. The obligation of the
Lenders to make any Loan hereunder (including any Loans made on the Amendment
Effective Date, but excluding Revolving Loans made for the purpose of repaying
Refunded Swingline Loans or to fund Reimbursement Obligations) and the
obligation of the Issuing Bank to issue any Letters of Credit are subject to the
continued validity of all Loan Documents and the satisfaction of the following
conditions precedent on the relevant Borrowing Date:
(a) Each of the representations and warranties made by the
Borrower contained in ARTICLE IV shall be true and correct on and as of such
Borrowing Date with the same effect as if made on and as of the Borrowing Date,
except to the extent the facts upon which such representation and warranty are
based may be changed as a result of transactions or occurrences permitted or
contemplated hereby or such representation or warranty relates solely to a prior
date;
57
(b) No Default or Event of Default shall have occurred on the
Borrowing Date or after giving effect to the Loans to be made or Letters of
Credit to be issued on such Borrowing Date; and
(c) Since the date of the most recent audited consolidated
financial statements of the Borrower, to the knowledge of the Borrower, there
shall not have occurred any Material Adverse Change or a Material Adverse
Effect, other than as specifically contemplated by this Agreement.
3.4 Waiver of Conditions Precedent. If any Lender makes any Loan
hereunder, or if the Issuing Bank issues any Letter of Credit, prior to the
fulfillment of any of the conditions precedent set forth in this ARTICLE III,
the making of such Loan or the issuance of such Letter of Credit shall
constitute only an extension of time for the fulfillment of such condition and
not a waiver thereof, and unless the Required Lenders indicate otherwise in
writing, the Borrower shall thereafter use its best efforts to fulfill each such
condition promptly.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement, to
make the Loans and to continue to make the Loans, and to induce the Issuing Bank
to issue, and the Lenders to participate in, the Letters of Credit, the Borrower
makes the following warranties and representations to the Agent, the Issuing
Bank and each Lender on the date hereof and on the date of each Borrowing
(except to the extent any such representation or warranty relates solely to a
prior date and except to the extent that the facts upon which such
representation or warranty is based have changed as a result of a transaction or
occurrence permitted or contemplated by this Agreement), after giving effect to
the transactions contemplated hereby, except as specifically provided otherwise:
4.1. Corporate Organization and Power; Capital Structure. (a) The
Borrower and each of its Subsidiaries (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (ii) is qualified to do business and is in good standing in every
other jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified and where the failure to be so
qualified could reasonably be expected to have a Material Adverse Effect, which
jurisdictions as of the Amendment Effective Date are set forth on SCHEDULE
4.1(A); (iii) except as set forth on SCHEDULE 4.2 and except for Subsidiaries
acquired or created after the Amendment Effective Date in compliance with
SECTIONS 5.12 and 6.7, has no Subsidiaries or Affiliates (other than its
officers, directors and shareholders) and, except for investments made in
compliance with SECTION 6.7, is not a partner or joint venturer in any
partnerships or joint ventures; (iv) has the corporate power to own and give a
lien on and security interest in its Collateral and to engage in the
transactions contemplated hereby; and (v) has the full corporate power,
authority and legal right to execute and deliver this Agreement and the other
Loan Documents to which it is a party and to perform and observe the terms and
provisions thereof. Neither the Borrower nor any of its Subsidiaries has, during
the preceding five (5) years, been known as or used any other corporate,
fictitious or trade names in the United States other than as set forth on
SCHEDULE 4.1(A).
58
(b) The authorized capital stock of the Borrower consists of
twenty-five thousand (25,000) shares of Series A Senior Preferred Stock, no par
value, of which zero (0) shares are issued and outstanding, fifty thousand
(50,000) shares of Series B Junior Preferred Stock, no par value, of which zero
(0) shares are issued and outstanding, one hundred thousand (100,000) shares of
Preferred Stock, par value $0.01 per share, of which zero (0) shares are issued
and outstanding and twenty-five million (25,000,000) shares of Common Stock, par
value $0.01 per share, of which twelve million three hundred- four thousand
seven hundred sixty-eight (12,304,768) shares are issued and outstanding. All of
the outstanding capital stock of the Borrower is duly and validly issued, fully
paid and non-assessable and was offered, issued and sold in compliance with all
federal and state securities laws applicable to the Borrower. None of the
outstanding capital stock of the Borrower has been issued in violation of any
preemptive or other rights of its shareholders. The Borrower does not have
outstanding any securities or other rights which are either by their terms or by
contract convertible or exchangeable into capital stock of or other equity
interest in the Borrower, as the case may be nor any preemptive or similar
rights to subscribe for or to purchase, or any options or warrants or agreements
for the purchase or issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock or other
equity interest or securities convertible into its capital stock or other equity
interest, except, as set forth on SCHEDULE 4.1(B).
4.2. Subsidiaries. SCHEDULE 4.2 contains a complete and accurate
list of the Subsidiaries of the Borrower as of the Amendment Effective Date
showing, as to each Subsidiary, the number of shares of Stock or other Interests
and the owner of each class of Stock or other Interests authorized and
outstanding. Except as set forth on SCHEDULE 4.2, all of such issued and
outstanding shares of Stock or other Interests of all of such of Borrower's
Subsidiaries that are owned by the Borrower or its Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, and are owned
by the Borrower or its Subsidiaries, free and clear of any liens, charges,
encumbrances, security interests, claims or restrictions of any nature
whatsoever, except for liens in favor of the Agent, for the benefit of the
Lenders, granted under the Loan Documents, and there are no other equity
securities of any such Subsidiaries issued and outstanding or reserved for any
purpose.
4.3. Enforceability of Loan Documents; Compliance with Other
Instruments. Except as set forth on SCHEDULE 4.3, each of the Loan Documents to
which the Borrower or any Guarantor is a party, as the case may be, has been
duly authorized by all necessary corporate action on the part of the Borrower or
such Guarantor, has been validly executed and delivered by the Borrower or such
Guarantor and is the legal, valid and binding obligation of the Borrower or such
Guarantor, enforceable against the Borrower or such Guarantor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general principles of equity. Neither the Borrower nor
any of its Subsidiaries is in default with respect to any indenture, loan
agreement, mortgage, lease, deed or similar agreement to which it is a party or
by which it, or any of its property, is bound which default could reasonably be
expected to have a Material Adverse Effect. Neither the execution, delivery or
performance of the Loan Documents by the Borrower and the Guarantors, nor
compliance by the Borrower and the Guarantors therewith: (a) conflicts or will
conflict with or results or will result in any breach of, or constitutes or will
constitute with the passage of time or the giving of notice or both, a default
under, (i) any Requirement of Law or (ii) any material agreement or instrument
to which the Borrower or any Guarantor is a party or by which it, or any of its
property, is bound or (b) results or will result in the creation or imposition
of any lien, charge or encumbrance upon the properties of the Borrower or any of
its Subsidiaries pursuant to any such agreement or instrument, except for
Permitted Liens.
59
4.4. Governmental Authorization.
(a) No authorization, consent or approval of, or declaration or
filing with, any Governmental Authority is required for the valid execution and
delivery by the Borrower and its Subsidiaries of the Loan Documents to which
they are a party or the consummation by the Borrower and its Subsidiaries of the
loan transactions contemplated hereby and thereby, including repayment of the
Credit Obligations and pledging the Collateral, except for the filing and
recording of the Financing Statements, the Mortgages, the Landlord Consents and
collateral assignments of registered trademarks, patents and copyrights which
constitute Collateral, and except for filings and notices unrelated to
perfection of security interests and liens in Collateral and required to be made
or given by the Borrower and its Subsidiaries after the Amendment Effective Date
in the ordinary conduct of their business operations. The Borrower and its
Subsidiaries have, and are in good standing with respect to, all governmental
approvals, permits, certificates, inspections, consents and franchises necessary
to continue to conduct business as heretofore conducted and to own or lease and
operate its properties as now owned or leased by it where the failure to have
and maintain the same could reasonably be expected to have a Material Adverse
Effect.
(b) The Borrower and each of its Subsidiaries has, to the extent
applicable, (i) obtained (or been duly assigned) all required certificates of
need or determinations of need, as required by the relevant state Governmental
Authority, for the ownership and operation of their businesses as currently
operated; and (ii) obtained and maintains in good standing all licenses required
by any Requirement of Law or required based on the operation of the applicable
business, where the failure to have and maintain the same could reasonably be
expected to have a Material Adverse Effect.
(c) Each professional employee, officer and director of the
Borrower and its Subsidiaries providing professional services to patients of the
Borrower or any such Subsidiary is duly licensed (where license is required) by
each state or state agency or commission, or any other governmental agency
having jurisdiction over the provisions of such services by such employee,
officer or director, in which the Borrower or any of its Subsidiaries is
located, required to enable such employee, officer or director to provide the
professional services necessary to enable the Borrower or such Subsidiary to
operate as currently operated and as presently contemplated to be operated
except to the extent the failure to have such a license could not reasonably be
expected to have a Material Adverse Effect. All such required licenses are in
full force and effect on the date hereof and have not been revoked or suspended
or otherwise limited except to the extent such resolution, suspension or
limitation could not reasonably be expected to have a Material Adverse Effect.
Each physician retained or otherwise engaged as an independent contractor by the
Borrower or any of its Subsidiaries possesses a valid narcotics number issued by
the United States Drug Enforcement Administration and a valid state narcotics
registration if required by any Requirement of Law or by the nature of the
services provided by such physician.
4.5. Financial Statements.
(a) The Borrower has heretofore furnished to each Lender copies of
the Financial Statements. The Financial Statements have been prepared in
accordance with Generally Accepted Accounting Principles (subject, with respect
to the unaudited Financial Statements, to the absence of notes required by
Generally Accepted Accounting Principles and to normal year-end audit
adjustments) and present fairly in all material respects the financial position
of the Persons covered thereby on a consolidated basis as of the dates thereof
and the consolidated results of operations of the Persons covered thereby for
the periods then ended. Except as fully reflected in the most recent Financial
Statements and the notes thereto, as of the Amendment Effective Date, and taking
into account the Loans to be made on the Amendment Effective Date and the other
transactions contemplated by the Loan Documents, there will be
60
no material liabilities or obligations with respect to the Borrower or any of
its Subsidiaries of any nature whatsoever (whether absolute, contingent or
otherwise and whether or not due). Since the date of the most recent Financial
Statements, there has been no Material Adverse Change. Neither the Borrower nor
any of its Subsidiaries has directly or indirectly declared, ordered, paid, made
or set apart any amounts or property for any dividend, share acquisition or
other distribution, or agreed to do so, except as permitted by SECTION 6.8.
(b) The Borrower has prepared, and has heretofore furnished to
each Lender copies of, annual projected balance sheets and statements of income
and cash flows of the Borrower and its Subsidiaries for the three-year period
commencing on the date set forth therein (the "Projections"). In the opinion of
the Borrower's management, the assumptions used in preparation of the
Projections were reasonable when made and are reasonable as of the Amendment
Effective Date. The Projections have been prepared in good faith by the
executive and financial personnel of the Borrower in light of the historical
financial performance and the financial and operating condition of the Borrower
and its Subsidiaries prior to the Amendment Effective Date, give effect to the
transactions contemplated by the Loan Documents, the End Loaded Lease Facility
and the Borrower's initial public equity offering and, in the opinion of the
Borrower's management, represent, as of the Amendment Effective Date, a
reasonable estimate of the future performance and financial condition of the
Borrower and its Subsidiaries, subject to the uncertainties and approximations
inherent in any projections and without representation or warranty that such
projected performance and financial condition will actually be achieved, it
being acknowledged by the Lenders and the Agent that the actual results may
differ from the projected results and the differences may be material.
4.6. Solvency. (i) On the Amendment Effective Date, prior to the
transactions contemplated by this Agreement, the Borrower and each of its
Subsidiaries (taking into account rights of contribution) is, and the Borrower
and its Subsidiaries, on a consolidated basis are, Solvent, and (ii) after
giving effect to the transactions contemplated hereby, the Borrower and each of
its Subsidiaries (taking into account rights of contribution) will be Solvent,
and the Borrower and its Subsidiaries on a consolidated basis will be Solvent.
4.7. Places of Business. SCHEDULE 4.7 lists, as of the Amendment
Effective Date, (i) the chief executive office and places of business (including
county or town designation), as provided in the Uniform Commercial Code, of the
Borrower and each of its Subsidiaries, (ii) the locations at which the Borrower
and each of its Subsidiaries maintains, or presently intends to maintain,
billing and related records relating to Accounts Receivable, and (iii) all
locations where personal property valued at $100,000 or more in the aggregate of
the Borrower and each of its Subsidiaries is presently maintained.
4.8. Leased Properties. SCHEDULE 4.8 lists, as of the Amendment
Effective Date, (i) all material real property leased by the Borrower or any of
its Subsidiaries, and (ii) all personal property leased by the Borrower or any
of its Subsidiaries requiring lease payments in excess of $100,000 per year,
including in each case the name of the lessors and a description of the
locations of such property. The Borrower and each of its Subsidiaries enjoys
peaceful and undisturbed possession under all of its real property leases, and
all such leases are valid and in full force and effect. The Borrower has
delivered complete and accurate copies of all such leases to the Agent and the
Lenders.
4.9. Realty. SCHEDULE 4.9 lists all real property owned as of the
Amendment Effective Date by the Borrower or any of its Subsidiaries.
61
4.10. Assets for Conduct of Business. The Borrower and each of its
Subsidiaries possesses adequate assets, licenses, patents, copyrights,
trademarks and trade names necessary to continue to conduct its business
substantially as heretofore conducted without any material conflict with the
rights of other Persons.
4.11. Insurance. SCHEDULE 4.11 accurately summarizes all insurance
policies or programs of the Borrower and its Subsidiaries in effect as of the
Amendment Effective Date, and indicates the insurer's name, policy number,
expiration date, amount of coverage, type of coverage, exclusions and
deductibles, and also indicates any self-insurance program that is in effect.
4.12. Ownership of Properties. Except as set forth on SCHEDULE 4.12,
(a) each of the Borrower and its Subsidiaries has good and marketable title to
all real property owned by it, holds interests as lessee under valid leases in
full force and effect with respect to all leased real and material personal
property used in connection with its business, and has good title to all of its
other properties and assets, including, without limitation, the assets reflected
in the most recent Financial Statements (except as sold or otherwise disposed of
since the date thereof in the ordinary course of business), in each case free
and clear of all liens, claims or encumbrances other than Permitted Liens; and
(b) other than the Financing Statements in favor of the Agent and protective
filings with respect to operating leases that may be filed after the Amendment
Effective Date or with respect to Permitted Liens, no financing statement that
names the Borrower or any of its Subsidiaries as debtor has been filed and is
still in effect, and neither the Borrower nor any of its Subsidiaries has signed
any other financing statement or any security agreement authorizing any secured
party thereunder to file any such financing statement.
4.13. First Priority. The provisions of the Loan Documents (whether
executed and delivered prior to or on the Amendment Effective Date or
thereafter), are and will be effective to create in favor of the Agent, for the
benefit of the Lenders, upon the proper filing of all Financing Statements and
other recordations contemplated thereunder in the jurisdictions and locations
contemplated thereby (or, in the case of the Pledge Agreement, the possession by
the Agent of certificates evidencing the securities pledged thereby without
notice of an adverse claim or, in the case of motor vehicles, the endorsement of
certificates of title), a valid and enforceable first priority perfected
security interest in and lien upon all right, title and interest of the Borrower
and its Subsidiaries in the Collateral described therein, subject only to
Permitted Liens, and except as and to the extent the Agent's liens cannot be
perfected by filing under the Uniform Commercial Code. Upon (i) delivery and
continued possession by the Agent, without notice of adverse claim, of
certificates evidencing the securities pledged pursuant to the Security and
Pledge Agreement, (ii) endorsement and delivery to the Agent of certificates of
title for motor vehicles, and (iii) the filing of collateral assignments of
patents and trademarks with the U.S. Patent and Trademark Office, the Agent
shall have a valid and enforceable first priority security interest in and lien
upon all right, title and interest of the Borrower and its Subsidiaries in such
Collateral, subject only to Permitted Liens.
4.14. Litigation; Government Regulation. Except as set forth in
SCHEDULE 4.14, (a) there are no judgments, injunctions or similar orders or
decrees and no actions, suits, investigations or proceedings pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Subsidiaries or its business that could reasonably be expected to have a
Material Adverse Effect, or that question the validity of this Agreement or any
of the Loan Documents, at law or in equity before any applicable court,
arbitrator or Governmental Authority with appropriate jurisdiction, and (b)
neither the Borrower nor any of its Subsidiaries is in violation of or in
default under any Requirement of Law where such violation could reasonably be
expected to have a Material Adverse Effect.
62
4.15. Taxes. Except as set forth in SCHEDULE 4.15, neither the
Borrower nor any of its Subsidiaries is delinquent in the payment of any taxes
that have been levied or assessed by any Governmental Authority against it or
its assets where such delinquency could reasonably be expected to have a
Material Adverse Effect. Except as set forth in SCHEDULE 4.15, as of the
Amendment Effective Date, each of the Borrower and its Subsidiaries (a) has
timely filed all tax returns that are required by law to be filed prior to the
date hereof, and has paid all taxes shown on said returns and all other
assessments or fees levied upon it or upon its properties to the extent that
such taxes, assessments or fees have become due, and if not due, such taxes have
been adequately provided for and sufficient reserves therefor established on its
books of account, in each case where the failure to do so could reasonably be
expected to have a Material Adverse Effect, and (b) is current with respect to
payment of all federal and state withholding taxes, social security taxes and
other payroll taxes, in each case where the failure to do so could reasonably be
expected to have a Material Adverse Effect.
4.16. ERISA; Employee Benefits.
(a) SCHEDULE 4.16 lists, as of the Amendment Effective Date, all
Employee Plans and Pension Plans ("Plans") maintained or sponsored by the
Borrower and its Subsidiaries or to which the Borrower or any of its
Subsidiaries is obligated to contribute and separately identifies all Qualified
Plans (as defined below) and all Multiemployer Plans. The Borrower has delivered
true and correct copies of all such Plans to the Agent.
(b) Each such Plan is in compliance with the applicable provisions
of ERISA, the Internal Revenue Code and other federal or state law, including
all requirements under the Internal Revenue Code or ERISA for filing reports
(which are true and correct in all material respects as of the date filed), the
noncompliance with which could reasonably be expected to have a Material Adverse
Effect, and benefits have been paid in accordance with the provisions of each
such Plan.
(c) The form of each Plan intended to be qualified under Section
401 of the Internal Revenue Code ("Qualified Plan") to the knowledge of the
Borrower qualifies under Section 401 of the Internal Revenue Code, and the
trusts created thereunder are, to the knowledge of the Borrower, exempt from tax
under the provisions of Section 501 of the Internal Revenue Code, and to the
knowledge of the Borrower nothing has occurred that would cause the loss of such
qualification or tax-exempt status.
(d) There is no outstanding liability under Title IV of ERISA with
respect to any Plan maintained or sponsored by the Borrower and its Subsidiaries
(as to which the Borrower or any of its Subsidiaries is or may be liable), nor
with respect to any Plan to which any of the Borrower or its Subsidiaries
(wherein the Borrower or any of its Subsidiaries is or may be liable)
contributes or is obligated to contribute that could reasonably be expected to
have a Material Adverse Effect.
(e) None of the Qualified Plans subject to Title IV of ERISA has
any unfunded benefit liability as defined in Section 4001(a)(18) of ERISA (as to
which the Borrower or any of its Subsidiaries is or may be liable) that could
reasonably be expected to have a Material Adverse Effect.
(f) No Plan maintained or sponsored by the Borrower or any of its
Subsidiaries provides medical or other welfare benefits or extends coverage
relating to such benefits beyond the date of a participant's termination of
employment with the Borrower or such Subsidiary, except to the extent required
by Section 4980B of the Internal Revenue Code and at the sole expense of the
participant or the beneficiary of the participant to the fullest extent
permissible under such Section of the Internal Revenue Code. The Borrower and
its Subsidiaries have
63
complied in all material respects with the notice and continuation coverage
requirements of Section 4980B of the Internal Revenue Code.
(g) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan maintained or sponsored by the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is obligated to
contribute.
(h) As of the Amendment Effective Date, there are no pending or,
to the knowledge of the Borrower, threatened claims, actions or lawsuits, other
than routine claims for benefits in the usual and ordinary course, asserted or
instituted against (i) any Plan maintained or sponsored by the Borrower and its
Subsidiaries or their assets, or (ii) any fiduciary with respect to any Plan for
which the Borrower or any of its Subsidiaries may be directly or indirectly
liable, through indemnification obligations or otherwise.
(i) Neither the Borrower nor any of its Subsidiaries has incurred
or, to the knowledge of the Borrower, reasonably expects to incur (i) any
liability (and no event has occurred that, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan or (ii) any liability under
Title IV of ERISA (other than premiums due and not delinquent under Section 4007
of ERISA) with respect to a Plan.
(j) Neither the Borrower nor any of its Subsidiaries has engaged,
directly or indirectly, in a nonexempt prohibited transaction (as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA) in connection
with any Plan that could reasonably be expected to have a Material Adverse
Effect.
4.17. Compliance with Laws. The Borrower and each of its
Subsidiaries has duly complied with, and the Collateral and their business
operations and leaseholds are in compliance with, all Requirements of Law,
including, without limitation, all federal and state securities laws, OSHA, and
Titles XVIII and XIX of the Social Security Act (42 U.S.C. ss.ss. 1395 et seq.
and ss.ss. 1396 et seq., respectively, as amended from time to time), the
Bloodborne Pathogens Standard, the Medicare Regulations, the Medicaid
Regulations and the MediCal Regulations, except to the extent that noncompliance
could not reasonably be expected to have a Material Adverse Effect; provided,
that with respect to compliance with Environmental Laws, this representation
shall be made to the best of Borrower's knowledge to the extent and solely to
the extent that representations made pursuant to SECTION 4.18 regarding
compliance with Environmental Laws are so qualified.
4.18. Environmental Matters. Except as could not reasonably be
expected to result in a Material Adverse Effect:
(a) Except as reflected in SCHEDULE 4.18 (i) no Hazardous Material
is or has been generated, used, released, treated, disposed of or stored, or
otherwise located, in, on or under the Realty (or any portion thereof), and no
part of the Realty or other property owned, leased or operated by the Borrower
or its Subsidiaries (now or in the past), including without limitation the soil
and groundwater located thereon and thereunder, has been contaminated by any
Hazardous Material; (ii) no improvements on the Realty contain any asbestos or
substances containing asbestos; (iii) none of the Realty has been the subject of
a remedial action; and (iv) to the best of the Borrower's knowledge, the
foregoing statements are true and correct with respect to all of the real
property adjoining any of the Realty.
64
(b) To the best of the Borrower's knowledge, no portion of the
Realty has been used as or for a mine, a landfill, a dump or other disposal
facility, a gasoline service station, or a petroleum products storage facility,
and none of the Realty or other property owned, leased or operated by the
Borrower or its Subsidiaries (now or in the past) has, pursuant to any
Environmental Law, been placed on the "National Priorities List" or "CERCLIS
List" (or any similar federal, state or local list) of sites subject to possible
environmental problems.
(c) Except as set forth in SCHEDULE 4.18, there are no underground
storage tanks situated on the Realty and, to the best of the knowledge of the
Borrower, no underground storage tanks have ever been situated on the Realty.
(d) Except as set forth in SCHEDULE 4.18, all activities and
operations of the Borrower and its Subsidiaries meet the requirements of all
applicable Environmental Laws, Borrower and its Subsidiaries have not violated
any Environmental Law in the past, and the Realty has never been the site of a
violation of any Environmental Law.
(e) Except as set forth on SCHEDULE 4.18, neither the Borrower nor
its Subsidiary has sent a Hazardous Material to a site which, pursuant to any
Environmental Law, (1) has been placed on the "National Priorities List" or
"CERCLIS List" (or any similar federal, state or local list) of sites subject to
possible environmental problems, or (2) is subject to or the source of a claim,
an administrative order or other request to take "response," "removal,"
"corrective" or "remedial" action, as defined in any Environmental Law, or to
pay for or contribute to the costs of cleaning up the site.
(f) Neither the Borrower nor any of its Subsidiaries is involved
in any suit or proceeding and or has received any notice from any Governmental
Authority or other third party, with respect to a release or threat of release
of any Hazardous Material, or violation or alleged violation of any
Environmental Law, and neither the Borrower nor any of its Subsidiaries has
received notice of any claim from any person or entity relating to property
damage or to personal injuries from exposure to any Hazardous Material.
(g) The Borrower and its Subsidiaries have timely filed all
reports required to be filed, has acquired all necessary certificates, approvals
and permits, and have generated and maintained in all material respects all
required data, documentation and records required under all Environmental Laws.
4.19. Margin Securities.
(a) Neither the Borrower nor any of its Subsidiaries owns any
"margin stock" within the meaning of Regulation U. None of the proceeds of the
Loans will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin stock, maintaining, reducing or retiring any Debt that was
originally incurred to purchase or carry margin stock or for any other purpose
that would violate Regulation G, Regulation U, Regulation T or Regulation X or
any other regulation of the Board of Governors of the Federal Reserve System, as
the same may be in effect from time to time, or for any purpose that would
violate the Exchange Act.
(b) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds of the Loans) will
violate or result in a violation of Section 7 of the Exchange Act. Neither the
Borrower nor any of its Subsidiaries owns or intends to carry or purchase
directly or indirectly any "margin security" within the meaning of the Exchange
Act.
4.20. Full Disclosure. None of the Loan Documents or any other
written statements furnished to the Agent or any Lender by or on behalf of the
Borrower or any of its Subsidiaries in connection with the Loan Documents
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein or herein, in light of
the circumstances under which they were made, not misleading.
65
4.21. Contracts; Labor Disputes. Neither the Borrower nor any of its
Subsidiaries is a party to any contract or agreement, or subject to any charge,
corporate restriction, judgment, injunction, decree, rule, regulation or order
of any court or other Governmental Authority, that has or could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries is a party to, and there is not pending or, to the Borrower's
knowledge, threatened, any labor dispute, strikes, lock-out, grievance, work
stoppage or walkouts relating to any labor contract to which the Borrower or any
of its Subsidiaries is a party that has or could reasonably be expected to have
a Material Adverse Effect.
4.22. Reimbursement from Third Party Payors. The accounts receivable
of the Borrower and its Subsidiaries have been and will continue to be adjusted
to reflect reimbursement policies of third party payors such as Medicare,
Medicaid, MediCal, Blue Cross/Blue Shield, private insurance companies, health
maintenance organizations, preferred provider organizations, managed care
systems and other third party payors, including, without limitation, adjustments
under any capitation arrangement, fee schedule, discount formula or cost-based
reimbursement.
4.23. Fraud and Abuse. Neither the Borrower nor any Subsidiary, nor
any of its stockholders, officers or directors, acting on behalf of the Borrower
or any Subsidiary, have engaged on behalf of Borrower or any Subsidiary in any
of the following: (i) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any applications for any
benefit or payment under Medicare, Medicaid or MediCal programs; (ii) knowingly
and willfully making or causing to be made any false statement or representation
of a material fact for use in determining rights to any benefit or payment under
Medicare, Medicaid or MediCal programs; (iii) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment under Medicare, Medicaid or MediCal programs on its
own behalf or on behalf of another, with intent to secure such benefit or
payment fraudulently; (iv) knowingly and willfully making or causing to be made
a payment, directly or indirectly, to a physician as an inducement to reduce or
limit services provided with respect to individuals who are entitled to any
benefit or payment under Medicare, Medicaid or MediCal programs and are under
the direct care of the physician; (v) knowingly and willfully soliciting or
receiving any remuneration (including any kickback, bribe or rebate), directly
or indirectly, overtly or covertly, in cash or in kind or offering or paying
such remuneration (a) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare, Medicaid or MediCal, or (b)
in return for purchasing, leasing or ordering or arranging for or recommending
the purchasing, leasing or ordering of any good, facility, service, or item for
which payment may be made in whole or in part by Medicare, Medicaid or MediCal;
(vi) knowingly and willfully offering or paying any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind to any person to induce such person (x) to refer an individual
to a person for the furnishing or arranging for the furnishing of any item or
service for which payment may be made in whole or in part by Medicare, Medicaid
or MediCal, or (y) to purchase, lease, order, or arrange for or recommend
purchasing, leasing, or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare, Medicaid or MediCal. With
respect to this Section, knowledge by any employees, representatives and agents
of the Borrower or a Subsidiary of any of the events described in this Section
shall not be imputed to the Borrower or such Subsidiary unless such knowledge
was obtained or learned by a Senior Officer in his or her official capacity as a
Senior Officer of the Borrower or such Subsidiary. No activity of the Borrower
or any Subsidiary shall be considered to be a breach of this Section, except in
the case of an intentional violation thereof, until the Borrower or such
Subsidiary has received notification, written or oral, by a
66
Governmental Authority of competent jurisdiction as to any such violation. In
addition, neither the Borrower nor any Subsidiary shall be considered to have
breached this section so long as (a) they shall have taken such actions
(including implementation of appropriate internal controls) as may be reasonably
necessary to avoid such breaches and (b) such breaches, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.24. Event of Default. No Default or Event of Default has occurred
and is continuing.
4.25. Single Business Enterprise. The Borrower and the Guarantors
operate, and intend to operate, as a single business enterprise. Although
separate entities, the Borrower and the Guarantors operate under a common
business plan. Each of the Borrower and the Guarantors will accordingly benefit
from the financing arrangement established by this Agreement. The Borrower
acknowledges that the Agent and the Lenders are relying on the agreement by each
Guarantor to execute and deliver the Guaranty Documents in committing to the
Facilities.
ARTICLE V
AFFIRMATIVE COVENANTS
Until payment in full of all Credit Obligations and the termination of
the Lenders' obligation to make Loans and the Issuing Bank's obligation, on
behalf of the Lenders, to issue Letters of Credit, the Borrower covenants and
agrees that:
5.1. Financial and Business Information about the Borrower. The
Borrower shall deliver to the Agent and the Lenders:
(a) Within forty-five (45) days after the close of each of the
first three fiscal quarters of each fiscal year of the Borrower, beginning with
the current fiscal quarter, an unaudited consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the close of such fiscal
quarter, and unaudited consolidated and consolidating statements of income, and
consolidated retained earnings and cash flows for the Borrower and its
Subsidiaries for the fiscal quarter then ended and for that portion of the
fiscal year then ended, in each case beginning with the fiscal quarter ending
March 31, 1998 setting forth comparative figures for the corresponding fiscal
quarter in the preceding fiscal year, and in each case setting forth comparable
budgeted figures for the fiscal quarter then ended, together with a breakdown of
such income statements per hospital, all prepared in accordance with Generally
Accepted Accounting Principles (subject to the absence of notes required by
Generally Accepted Accounting Principles and subject to normal and reasonable
year-end audit adjustments) applied on a basis consistent with that of the
preceding quarter or containing disclosure of the effect on the financial
position or results of operation of any change in the application of accounting
principles and practices during the quarter, and certified by the Chief
Executive Officer, Chief Financial Officer, Vice President-Finance or Vice
President-Controller of the Borrower to be true and accurate in all material
respects (subject to normal and reasonable year-end audit adjustments);
(b) As soon as practicable and in any event within one hundred
(100) days after the close of any fiscal year of the Borrower, beginning with
the close of the current fiscal year, an audited consolidated balance sheet and
unaudited consolidating balance sheet of the Borrower and its Subsidiaries as of
the close of such fiscal year, audited consolidated and
67
unaudited consolidating statements of income and audited consolidated retained
earnings and cash flows for the Borrower and its Subsidiaries for the fiscal
year then ended, in each case beginning with the fiscal year ending December 31,
1997 setting forth unaudited comparative figures for the preceding fiscal year
and in each case, setting forth comparable budgeted figures for the fiscal year
then ended, including the notes to each, audited (except as previously noted) by
a nationally recognized, "Big Six" independent certified public accountant or
other independent certified public accountant reasonably acceptable to the
Required Lenders, and together with a breakdown of such income statements per
hospital, all such audited statements prepared in accordance with Generally
Accepted Accounting Principles applied on a basis consistent with those of the
preceding year or containing disclosure of the effect on the financial position
or results of operations of any change in the application of accounting
principles and practices during the year, certified by the Chief Executive
Officer, Chief Financial Officer, Vice President-Finance or Vice
President-Controller of the Borrower to be true and accurate in all material
respects, and, with respect to audited statements, accompanied by a report
thereon by such certified public accountants, containing an opinion that is not
qualified in any materially negative respect, including as to going concern or
scope of audit;
(c) Concurrently with the delivery of the financial statements
described in subsection (B) above, a letter from the independent certified
public accountants that, based on the independent certified public accountant's
examination of the financial statements of the Borrower and its Subsidiaries,
the accountants did not obtain knowledge of the occurrence or existence of any
Default or Event of Default, or a statement specifying the nature and period of
existence of any such condition or event disclosed by their examination;
provided, however, that such accountants shall not be liable to anyone by reason
of their failure to obtain knowledge of any Event of Default or Default that
would not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards;
(d) Concurrently with the delivery of the financial statements
described in subsections (A) and (B) above, a Compliance Certificate with
respect to the period covered by the financial statements then being delivered,
together with an Interest Rate Calculation Worksheet and a Covenant Compliance
Worksheet reflecting the computation of the financial covenants set forth in
ARTICLE VI as of the last day of the period covered by such financial
statements;
(e) As soon as practicable and in any event within thirty (30)
days after the close of each fiscal year of the Borrower, beginning with the
current fiscal year, an annual operating budget and capital budget prepared on a
quarterly basis for the Borrower and its Subsidiaries on a consolidated basis,
in form and detail reasonably acceptable to the Agent, including, without
limitation, a breakdown per hospital;
(f) Promptly upon their becoming available, copies of (i) all
financial statements, material reports and proxy statements that the Borrower or
any of its Subsidiaries shall send or make available generally to its
stockholders, (ii) all registration statements and prospectuses that the
Borrower or any of its Subsidiaries shall render to or file with the Securities
and Exchange Commission, the National Association of Securities Dealers or any
national securities exchange, (iii) all material reports and other statements
(other than routine reports prepared in the ordinary course of business that
would not result in any adverse action) that the Borrower or any of its
Subsidiaries may render to or file with any other Governmental Authority,
including, without limitation, the Environmental Protection Agency, OSHA and
state environmental and health authorities and agencies, and (iv) all press
releases and other statements that the Borrower or any of its Subsidiaries shall
make available generally to the public concerning developments in the business
of the Borrower or any of its Subsidiaries, other than press releases or
statements issued in the ordinary course of business;
68
(g) Promptly after review by the Borrower's Board of Directors,
but in any event within thirty (30) days after the Borrower's receipt thereof,
copies of any management letters from certified public accountants;
(h) Upon request by the Agent, but no more frequently than
quarterly (except during the continuance of an Event of Default), concurrently
with each delivery of the financial statements described in subsections (A) and
(B), an aging of the Accounts of the Borrower on a consolidated basis as of the
end of such fiscal quarter;
(i) Concurrently with each delivery of the financial statements
described in subsection (A) and (B), a statistical summary of management
contracts between the Borrower or any of its Subsidiaries and hospitals and
other healthcare facilities;
(j) Promptly upon the reasonable request therefor, copies of any
annual report required to be filed under ERISA in connection with any Employee
Plan and such other additional information about any Employee Plan as may be
reasonably requested;
(k) Promptly after receipt, copies of any environmental
assessments or audits on properties owned, operated or leased by the Borrower or
its Subsidiaries; and
(l) Upon the Agent's or any Lender's request, such other
information about the Collateral or the financial condition and operations of
the Borrower and its Subsidiaries as the Agent or any Lender may from time to
time reasonably request.
5.2. Notice of Certain Events. The Borrower shall promptly, but in
no event later than five (5) Business Days after a Senior Officer of the
Borrower obtains knowledge thereof, give written notice to the Agent and the
Lenders of:
(a) Any litigation or proceeding brought against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a Material
Adverse Effect;
(b) Any written notice of a violation of a Requirement of Law
received by the Borrower or any of its Subsidiaries from any Governmental
Authority that, if such violation were established and not promptly corrected,
could reasonably be expected to have a Material Adverse Effect;
(c) Any attachment, judgment, lien, levy or order in excess of
$500,000 that may be placed on or assessed against the Borrower or any of its
Subsidiaries or any of the Collateral, except for Permitted Liens;
(d) Any Default or Event of Default; provided that the notice
period provided above shall not be deemed to be a cure period or extension for
any Default or Event of Default;
(e) Receipt by any Borrower or any of it Subsidiaries of (i) any
notice of loss of Joint Commission on Accreditation of Healthcare Organizations
accreditation, loss of participation under any material reimbursement program or
loss of applicable health care licenses at any facility owned or lease or
managed by the Borrower or any of its Subsidiaries; and (ii) any other material
deficiency notice, compliance order or adverse report issued by any Governmental
Authority or accreditation commission having jurisdiction over licensing,
accreditation or operation of any such facility or by any Governmental Authority
or private insurance company pursuant to a provider agreement, which, if not
promptly complied with or cured, could result in the suspension or forfeiture of
any license, certification, or accreditation
69
necessary for any such facility to carry on its business as then conducted or
the suspension or termination of any insurance or reimbursement program
available to the facility;
(f) Receipt or delivery by the Borrower or any of its Subsidiaries
of any material notice (including without limitation any first refusal, put or
call notice) pursuant to the Palestine Limited Partnership Agreement or any
other material shareholder, partnership, operating or similar agreement;
(g) Any default or event of default under any lease relating to
the Leased Properties under which the Borrower or any Subsidiary is lessee which
could reasonably be expected to have a Material Adverse Effect; or
(h) Any default or event of default under any agreement or
instrument to which the Borrower or any of its Subsidiaries is a party or by
which the Borrower or any of its Subsidiaries, or any of their property, is
bound, the termination of which could reasonably be expected to have a Material
Adverse Effect.
5.3. Corporate Existence and Maintenance of Properties. The
Borrower shall, and shall cause each of its Subsidiaries to:
(a) Maintain and preserve in full force and effect its corporate
existence, except as otherwise permitted by SECTION 6.1, and all material
rights, privileges and franchises; provided, however, that the Borrower may
permit the liquidation or dissolution of any of its Subsidiaries (and any such
Subsidiary may suffer such liquidation or dissolution) if, at the time of such
liquidation or dissolution, such Subsidiary has no assets, engages in no
business and otherwise has no activities other than activities related to the
maintenance of its corporate existence and good standing; provided, further,
however that the Borrower may sell, divest or transfer any assets or its
ownership of Telplan, Inc. without respect to the provisions hereof;
(b) Conduct its business in an orderly and efficient manner, keep
its properties in good working order and condition (normal wear and tear
excepted) and from time to time make all needed repairs to, renewals of or
replacements of its properties (except to the extent that any of such properties
are obsolete or are being replaced) so that the efficiency of its business
operations shall be maintained and preserved; and
(c) File or cause to be filed in a timely manner all reports,
applications, estimates and licenses required by any Governmental Authority
that, if not timely filed, could reasonably be expected to have a Material
Adverse Effect.
5.4. Maintenance of Insurance.
(a) The Borrower will, and will cause each of its Subsidiaries to,
maintain and pay for insurance upon all of its assets and properties, including
the Collateral, wherever located, and all real property owned or leased by it,
in such amounts and against such risks as is customarily maintained by similar
businesses in similar locations, and will (if not previously delivered), at the
Amendment Effective Date, deliver certificates of such insurance to the Agent
with satisfactory loss payable endorsements naming the Agent as an additional
loss payee, additional insured and/or mortgagee thereunder, as its interests may
appear, as appropriate. Within thirty (30) days after the Amendment Effective
Date, the Borrower shall deliver (if not previously delivered) to the Agent
certified copies of the original policies of all insurance on the Collateral.
70
(b) Each such policy of insurance shall contain a clause requiring
the insurer to give not less than thirty (30) days (or ten (10) days for
nonpayment) prior written notice to the Agent before any cancellation of the
policies for any reason whatsoever. The Borrower hereby directs, and will cause
each of its Subsidiaries to direct, all insurers under policies of property and
casualty insurance on the Collateral to pay all proceeds payable thereunder
directly to the Agent when such proceeds, on an aggregate basis for any claim or
series of related claims, exceed $1,000,000. The Agent, on behalf of the
Lenders, shall hold all such proceeds for the account of the Borrower and its
Subsidiaries. So long as no Default or Event of Default has occurred and is
continuing, the Agent shall immediately deliver to the Borrower any insurance
proceeds received by the Agent in the amount of $1,000,000 or less, in the
aggregate, for any claim or series of related claims. So long as no Default or
Event of Default has occurred and is continuing, the Agent shall, at the
Borrower's request, disburse proceeds in excess of $1,000,000 for the purpose of
replacing or repairing destroyed or damaged assets, as and when required to be
paid and upon presentation of evidence satisfactory to the Agent of such repair
estimates and other documents as the Agent may reasonably request, or, if the
Borrower has not requested any such disbursement for one hundred twenty (120)
consecutive days, shall apply such proceeds in whole or in part as a prepayment
of the Loans in accordance with SECTION 2.5(A). If an Event of Default has
occurred and is continuing, the Borrower hereby irrevocably makes, constitutes
and appoints the Agent (and all officers, employees or agents designated by the
Agent) as its true and lawful agent (and attorney-in-fact) for the purpose of
making, settling and adjusting claims under such policies of insurance,
endorsing its name or the name of any Subsidiary on any check, draft, instrument
or other item or payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect to such policies of
insurance.
(c) If the Borrower or any of its Subsidiaries fails to obtain and
maintain any of the policies of insurance required to be maintained hereunder or
to pay any premium in whole or in part, then the Agent may, at the Borrower's
expense, without waiving or releasing any obligation or Default by the Borrower
hereunder, procure the same, but shall not be required to do so. All sums so
disbursed by the Agent, including reasonable attorneys' fees, court costs,
expenses and other charges related thereto, shall be payable on demand by the
Borrower to the Lenders and shall be additional Credit Obligations hereunder,
secured by the Collateral.
(d) Upon the reasonable request of the Agent from time to time,
the Borrower shall deliver to the Agent evidence that the insurance required to
be maintained pursuant to this Agreement is in effect.
5.5. Maintenance of Books and Records; Inspection.
(a) The Borrower shall, and shall cause each of its Subsidiaries
to, maintain adequate books, accounts and records, and prepare all financial
statements required under this Agreement in accordance with Generally Accepted
Accounting Principles and in material compliance with all Requirements of Law.
(b) The Borrower shall, and shall cause each of its Subsidiaries
to, permit employees or agents of the Agent (or any Lender, at the Lenders'
expense), during normal business hours upon reasonable notice to inspect its
properties and to examine or audit its books, records, reports, accounts and
other papers and make copies and memoranda of them, and to discuss its affairs,
finances and accounts with its officers and employees and, with advance written
approval of the Chief Executive Officer, Chief Financial Officer, Vice
President-Finance or Vice President-Controller of the Borrower (which approval
shall not be unreasonably withheld), the independent public accountants of the
Borrower and its Subsidiaries (and by this provision the Borrower and each of
its Subsidiaries authorizes said accountants to discuss the finances and affairs
of the Borrower or such Subsidiary), all at such reasonable times and as
71
often as may be reasonably requested without undue interference in the business
and operations of the Borrower and its Subsidiaries.
5.6. Compliance with ERISA. The Borrower shall, and shall cause
each of its Subsidiaries to make timely payment of contributions required to
meet the minimum funding standards set forth in ERISA with respect to any
Employee Plan. The Employee Plans of the Borrower and each of its Subsidiaries
shall be operated in such a manner that neither the Borrower nor any Subsidiary
will incur any tax liability under Section 4980B of the Internal Revenue Code or
any liability to any qualified beneficiary as defined in Section 4980B that
could reasonably be expected to have a Material Adverse Effect.
5.7. Payment of Taxes. The Borrower shall, and shall cause each of
its Subsidiaries to, pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties would attach
thereto, and all lawful claims that, if unpaid, might become a material lien or
charge upon any of its properties; provided, however, that the Borrower or any
of its Subsidiaries may in good faith by appropriate proceedings and with due
diligence contest any such tax, assessment, charge, levy or claim if the
Borrower or such Subsidiary establishes reserves therefor in accordance with
Generally Accepted Accounting Principles.
5.8. Compliance with Laws. The Borrower shall, and shall cause each
of its Subsidiaries to, (i) have all licenses, permits, certifications approvals
and authorizations required by Governmental Authorities necessary to the
ownership, occupation or use of its properties or the conduct of its business,
and maintain the same at all times in full force and effect, except to the
extent that a failure to have or maintain the same could not reasonably be
expected to have a Material Adverse Effect, and (ii) comply with all
Requirements of Law in respect of the conduct of its business, the ownership of
its property and the Collateral, including, without limitation, Titles XVIII and
XIX of the Social Security Act, Medicare Regulations, Medicaid Regulations,
MediCal Regulations, ERISA, OSHA and the Bloodborne Pathogens Standard, other
than those the failure to comply with which could not reasonably be expected to
have a Material Adverse Effect.
5.9. Name Change. The Borrower shall notify the Agent and the
Lenders at least fifteen (15) days prior to the effective date of any change of
the name of the Borrower or any of its Subsidiaries, and prior to such effective
date the Borrower or such Subsidiary shall execute any amended or new Financing
Statements and other Loan Documents necessary to maintain and continue the
perfected security interest of the Agent in all of the Collateral and shall take
such other actions and execute such documents as the Agent shall reasonably
request.
5.10. Disbursement of Proceeds by the Borrower.
(a) At the request of the Agent, the Borrower shall obtain an
intercompany promissory note with respect to advances of any portion of the
Loans to any Subsidiary of the Borrower and any other amounts owing from any
Subsidiary of the Borrower to the Borrower from time to time, and shall promptly
thereafter grant to the Agent a first priority perfected security interest in
such promissory note as security for the Credit Obligations. Notwithstanding the
foregoing, the Borrower shall obtain, at or prior to the advance of any portion
of the Loans to any Non-Wholly Owned Subsidiary, an intercompany promissory note
with respect to advances of any portion of the Loans to any Non-Wholly Owned
Subsidiary and any other amounts owing from any Non-Wholly Owned Subsidiary of
the Borrower to the Borrower from time to time and shall promptly thereafter
grant to the Agent a first priority security interest in such promissory note as
security for the Credit Obligations.
72
(b) If any Subsidiary becomes a debtor under the Bankruptcy Code,
the Agent, on behalf of the Lenders, is authorized, but not required, to file
proofs of claim with respect to such intercompany Debt on behalf of the Borrower
and vote the rights of the Borrower in any plan of reorganization with regard to
any Debt owed by such Subsidiary to the Borrower. The Agent, on behalf of the
Lenders, is further empowered to demand, sue for, collect and receive every
payment and distribution on such Debt owing to the Borrower in such Subsidiary's
bankruptcy proceeding.
5.11. Creation or Acquisition of New Subsidiaries. The Borrower and
its Subsidiaries may from time to time create or acquire new Subsidiaries
subject to the terms of this Agreement, provided that (i) each new Subsidiary
having assets with a gross value (determined in accordance with Generally
Accepted Accounting Principles) in excess of $100,000 (or upon obtaining assets,
including but not limited to the proceeds of Investments, loans, or other
distributions from the Borrower or another Subsidiary, in excess of $100,000 in
the case of an existing Subsidiary which previously had assets with a gross
value less than $100,000) will execute and deliver to the Agent (with sufficient
copies for each Lender) an amendment or accession to the Guaranty Agreement
(pursuant to which such new Subsidiary shall become a party thereto), an
amendment or accession to the Security and Pledge Agreement, Financing
Statements, certificates of title, stock certificates and other documents
reasonably required by the Agent, all in form and substance satisfactory to the
Agent, pursuant to which such new Subsidiary shall secure its obligations under
the Guaranty Agreement by first priority, perfected security interests in all
Stock, Interests and promissory notes owned by such Subsidiary, subject only to
Permitted Liens, (ii) the Borrower and/or the other Guarantors will execute and
deliver to the Agent (with sufficient copies for each Lender) an amendment or
supplement to the Security and Pledge Agreement, in form and substance
satisfactory to the Agent, pursuant to which all of the Stock or Interests of
such new Subsidiary that is directly or indirectly owned by the Borrower shall
be pledged to the Agent under the Security and Pledge Agreement, together with
the certificates representing such Stock or Interests and stock powers duly
executed in blank, and (iii) the Borrower will cause each such new Subsidiary to
execute and deliver, and will cause to be delivered, all documentation of the
type described in SECTIONS 3.2.2(B) and 3.2.2(C) and 3.2.2(D) as such new
Subsidiary would have had to deliver were it a Subsidiary on the Amendment
Effective Date.
5.12. Certain Permitted Acquisitions; Asset Purchases.
(a) Subject to the remaining provisions of this SECTION 5.12
applicable thereto and subject to the definition of "Permitted Acquisitions"
herein, the Borrower and its Subsidiaries may from time to time after the
Amendment Effective Date effect Permitted Acquisitions, so long as with respect
to each Permitted Acquisition, no Default or Event of Default is in existence at
the time of the consummation of such Permitted Acquisition or would exist after
giving effect thereto.
(b) At the time of each Permitted Acquisition involving the
creation or acquisition of a Subsidiary or the acquisition of Stock or other
Interest of any Person, the Borrower and the Guarantors shall have complied with
SECTION 5.11.
(c) Not less than ten (10) Business Days prior to the consummation
of any Permitted Acquisition of $5,000,000 or greater or requiring approval of
the Required Lenders, the Borrower shall deliver to the Agent and each Lender
the following items, each in form and substance reasonably satisfactory to the
Agent:
(i) a description of the material terms of such
Permitted Acquisition (including, without limitation a description of
the acquisition, a description of the acquiror,
73
the Acquisition Amount and method and structure of payment), of each
facility, Person, business, lease or asset that is the subject of such
Acquisition, (each, a "Target"), together with the most current draft
of the acquisition or other purchase or lease agreement;
(ii) historical financial statements of each
Target (if applicable) for the two (2) most recent fiscal years
available and for any interim periods since the most recent fiscal
year-end for which such interim statements are available;
(iii) projected revenue and EBITDAR contribution
levels for the Target for a three-year period following the
consummation of such Permitted Acquisition or such asset purchase or
lease, together with any appropriate statement of assumptions and pro
forma adjustments and including a detailed report of expense
adjustments requested by the Borrower; and
(iv) a description of all Debt and liens being
assumed in connection with such Permitted Acquisition.
(d) The Borrower will deliver to the Agent and each Lender (i)
copies of any material modifications or supplements to the draft agreements
submitted pursuant to CLAUSE (C)(I) above prior to the closing of the
Acquisition and (ii) a copy of the fully executed acquisition or other purchase
or lease agreement (including schedules and exhibits thereto) within sixty (60)
days after the closing thereof, except as set forth in subsection (E) below.
(e) Within thirty (30) days after the end of each fiscal quarter,
the Borrower will deliver to the Agent and each Lender the documents required by
subsections (C)(I), (C)(II) and (D) above for each Permitted Acquisition of less
than $5,000,000 that does not require the consent of the Required Lenders.
(f) No Acquisition may be effected unless:
(i) calculations are made by the Borrower of compliance
with the covenants contained in SECTIONS 6.9 through 6.16, inclusive,
for the most recent calculation period ended immediately prior to the
date of such Acquisition, on a pro forma basis as if the Acquisition
had occurred on the first day of such period, and shall show that all
such covenants will be complied with, giving effect to the pro forma
consolidation of the business acquired, and if such Acquisition is
$2,500,000 or greater or requires approval of the Required Lenders,
such calculations shall be reasonably satisfactory to the Agent;
(ii) the Borrower in good faith believes that the
financial covenants contained in such SECTIONS 6.9 through 6.16,
inclusive, will continue to be met on a quarterly basis for the one
year period following the date of the consummation of the Acquisition
on a quarterly basis;
(iii) prior to the consummation of the Acquisition of
$2,500,000 or greater or that requires consent of the Required Lenders,
the Borrower shall furnish the Agent and the Lenders with an officer's
certificate executed by an Authorized Officer of the Borrower,
certifying to the best of his knowledge as to compliance with the
requirements of preceding clauses (I) and (II) and SECTION 5.12(C), and
containing the pro forma calculations required by the preceding clause
(I); and
74
(iv) except for Acquisitions for which the Acquisition
Amounts are within the Dollar limits set forth in the definition of
"Permitted Acquisitions" herein, the Required Lenders shall have
consented thereto in writing.
(g) The consummation of each Permitted Acquisition, shall be
deemed to be a representation and warranty by the Borrower that all conditions
to be satisfied by the Borrower hereon have been satisfied, that the same is
permitted in accordance with the terms of this Agreement and that the
information submitted by the Borrower pursuant to subsections (C) through (F)
above, as appropriate, is true and correct in all material respects as of the
date such certificate is given, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, for purposes of SECTIONS 3.3 and 7.1.
5.13. Lease of Realty. Subject to SECTION 6.15 hereof, promptly, and
in any event within ten (10) days after any lease of any Realty by the Borrower
or any Subsidiary, the Borrower will deliver a Landlord Consent with respect to
each Facility Leased Property.
5.14. Further Assurances. The Borrower shall, and shall cause each
of its Subsidiaries to, make, execute, endorse, acknowledge and deliver to the
Agent and the Lenders any amendments, restatements, modifications or supplements
hereto and any other agreements, instruments or documents, and take any and all
such other actions, as may from time to time be reasonably requested by the
Agent or the Lenders to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Lenders and the Agent under
this Agreement and the other Loan Documents.
5.15. Cash Deposits. Commencing ninety (90) days after the Amendment
Effective Date, all cash in excess of ten percent (10%) of the aggregate amount
of all cash of the Borrower and its Subsidiaries (excluding deposits in transit)
shall be consolidated no less frequently than once a week in an account or
accounts maintained with one or more Lenders.
5.16. Year 2000. The Borrower shall use its best commercial efforts
to assure that the Borrower's and its Subsidiaries' computer based systems are
able to operate and effectively process data including dates on and after
January 1, 2000. At the request of the Agent, the Borrower shall provide the
Agent assurance acceptable to the Agent of the Borrower's and its Subsidiaries'
year 2000 capability.
5.17. Updates to Schedules. Should any of the information or
disclosures provided on any of the Schedules attached hereto (other than
Schedules relating solely to representations and warranties made as of the
Amendment Effective Date or any other specific date) become outdated or
incorrect in any material respect, the Borrower shall promptly provide the Agent
in writing such revisions or updates to such Schedules as may be necessary or
appropriate to update or correct the same; provided, however, that the Schedules
will be deemed automatically updated without any further action on the part of
the Borrower, the Agent, or the Required Lenders with respect to information
provided by the Borrower in writing to the Agent in connection with a Permitted
Acquisition, so long as the Borrower indicates to the Agent that such
information is intended to update the Schedules; and provided, further, that no
Schedule shall be deemed to have been amended, modified or superseded by any
such correction or update that would disclose the occurrence of an event or
condition which constitutes a Default or Event of Default, nor shall any breach
of warranty or representation resulting from the inaccuracy or incompleteness of
any such Schedule be deemed to have been cured thereby, unless such inaccuracy
or incompleteness is the result of transactions or events expressly permitted
hereunder (including Permitted Acquisitions) or unless the Required Lenders, in
their sole and absolute discretion, shall have accepted in writing such
revisions or updates to such Schedule.
75
5.18. Use of Proceeds. The Borrower shall use the proceeds of any Loans
made by the Lenders to the Borrower pursuant to this Agreement for legal and
proper corporate uses, duly authorized by the Board of Directors of the
Borrower, consistent with all applicable laws and statutes, as in effect from
time to time.
ARTICLE VI
NEGATIVE COVENANTS
Until payment in full of the Credit Obligations and termination of the
Lenders' obligation to make Loans and the Issuing Bank's obligation, on behalf
of the Lenders, to issue Letters of Credit, the Borrower covenants and agrees
that it will not, and will not permit any of its Subsidiaries to, individually
or in the aggregate:
6.1. Merger, Consolidation. Except as permitted by SECTION 5.3,
liquidate, wind up or dissolve, or enter into any consolidation, merger or other
combination, or agree to do any of the foregoing; provided, however, that:
(i) the Borrower may merge or consolidate with another
Person so long as (x) the Borrower is the surviving corporation, (y) if
such merger or consolidation is in connection with a Permitted
Acquisition, the applicable conditions of SECTIONS 5.11 and 5.12 shall
be satisfied, and (z) immediately after giving effect thereto, no
Default or Event of Default would exist; and
(ii) any Subsidiary may merge or consolidate with another
Person so long as (w) the Person surviving such merger or consolidation
is the Borrower or a Guarantor, (y) if such merger or consolidation is
in connection with a Permitted Acquisition, the applicable conditions
of SECTIONS 5.11 and 5.12 shall be satisfied, and (z) immediately after
giving effect thereto, no Default or Event of Default would exist.
6.2. Debt. Create, incur, assume or suffer to exist any Debt other
than:
(i) Debt incurred pursuant to this Agreement and the other
Loan Documents;
(ii) Debt in an aggregate principal amount not in excess of
$35,000,000 incurred pursuant to the End Loaded Lease Facility.
(iii) Debt existing on the date hereof as set forth in
SCHEDULE 6.2 attached hereto; provided that the Debt is not increased
above the amount then outstanding;
(iv) accrued expenses, current trade payables and other
current liabilities arising in the ordinary course of business and not
incurred through the borrowing of money;
(v) unsecured intercompany Debt (x) of any Subsidiary to the
Borrower, (y) of any Subsidiary to a Guarantor, and (z) of the Borrower
to any Guarantor, provided that any such Debt under this clause (V) is
incurred in the ordinary course of business and, if requested by the
Agent or required pursuant to SECTION
76
5.10(A), is evidenced by one or more promissory notes pledged to the
Agent pursuant to the Security and Pledge Agreement, is payable on
demand and, is fully subordinated in right of payment to the Credit
Obligations and the Guaranty Obligations, as applicable; and provided
further, that intercompany Debt for money borrowed by the Palestine
Limited Partnership shall not exceed those obligations evidenced by the
Palestine Limited Partnership Note and that all other intercompany Debt
owed by Palestine Limited Partnership shall not exceed amounts
currently payable pursuant to the Hospital Management Agreement dated
in or about June, 1996, between Palestine-Principal, Inc., a Tennessee
corporation, and the Palestine Limited Partnership, as such agreement
may be amended, supplemented or renewed from time to time in compliance
with SECTION 6.25 hereof.
(vi) Contingent Obligations permitted by SECTION 6.3;
(vii) Debt of the Borrower under any Swap Agreement relating
to the Debt incurred under this Agreement; provided that the notional
amount of all such agreements at any time shall not exceed the
aggregate amount of the Commitments at such time;
(viii) Debt assumed or incurred in connection with a Permitted
Acquisition to the extent such Debt is (i) approved by and, if required
by the Required Lenders, subordinated on terms acceptable to the
Required Lenders or (ii) permitted pursuant to clause (xii) of this
SECTION 6.2;
(ix) Debt with respect to financed insurance premiums not
past due;
(x) unsecured Subordinated Debt;
(xi) Capital Lease Obligations for a Facility lease, which
Capital Lease Obligations were assumed or incurred as a Permitted
Acquisition;
(xii) Debt in an aggregate principal amount not in excess of
$5,000,000 incurred by the Borrower pursuant to the Cash Management
Line of Credit; and
(xiii) other Debt (including, without limitation, Debt secured
by purchase money liens described in clause (E) of the definition of
Permitted Liens and Capital Lease Obligations) in an aggregate
principal amount at any time outstanding not to exceed $7,500,000 for
the Borrower and its Subsidiaries.
6.3. Contingent Obligations. Create, incur, assume or suffer to exist
any Contingent Obligation other than:
(i) endorsements of instruments or items of payment for
deposit or collection in the ordinary course of business;
(ii) Contingent Obligations incurred pursuant to the Loan
Documents;
(iii) Contingent Obligations consisting of the
indemnification by the Borrower or any of its Subsidiaries of (x) the
officers, directors, employees and agents of the Borrower or such
Subsidiary, to the extent permissible under the corporation law of the
jurisdiction in which the Borrower or such Subsidiary is organized, (y)
commercial banks, investment bankers and other independent consultants
or professional advisors
77
pursuant to agreements relating to the underwriting of the Borrower's
or such Subsidiary's securities or the rendering of banking or
professional services to the Borrower or such Subsidiary and (z)
landlords, licensors, licensees and other parties pursuant to
agreements entered into in the ordinary course of business by the
Borrower or such Subsidiary;
(iv) customary indemnification obligations of the Borrower
and its Subsidiaries incurred in connection with Permitted Acquisitions
made in compliance with SECTION 5.12;
(v) unsecured amounts payable under earnouts, approved by
and subordinated on terms acceptable to the Required Lenders, and other
contingent obligations, in each case incurred by any Borrower or any
Subsidiary in connection with a Permitted Acquisition, whether or not
earned or matured;
(vi) performance, appeal and bid bonds and pledges and
deposits pursuant to workers' compensation and similar requirements, in
each case to the extent permitted under the definition of "Permitted
Liens" contained herein;
(vii) obligations under Letters of Credit issued under
SECTION 2.18;
(viii) Contingent Obligations described on SCHEDULE 6.3
attached hereto, without giving effect to any increases thereof without
the written consent of the Required Lenders;
(ix) guarantees by the Borrower or any of its Subsidiaries
of obligations of the Borrower or its Subsidiaries under leases
permitted hereunder;
(x) guarantees by the Borrower or any of its Subsidiaries
of any other Debt permitted under SECTION 6.2 and guaranties permitted
by SECTION 6.7;
(xi) guarantees by the Borrower or any of its Subsidiaries
of physician compensation to the extent such guarantees under Generally
Accepted Accounting Principles would not be reflected as a specific
Dollar amount on the liability side of such Person's balance sheet;
(xii) other Contingent Obligations not to exceed $2,000,000
at any time.
6.4. Liens and Encumbrances. Create, assume or suffer to exist any deed
of trust, mortgage or encumbrance, lien (including a lien of attachment,
judgment or execution) or security interest (including the interest of a
conditional seller of goods) securing a charge or obligation, in or on any of
its property, real or personal, whether now owned or hereafter acquired, except
for Permitted Liens.
6.5. Disposition of Assets. Sell, lease, transfer, convey or otherwise
dispose of any of its assets or property, including, without limitation, the
Collateral, except for (i) sales of inventory in the ordinary course of
business; (ii) the sale of worn out or obsolete equipment for fair market value
or the exchange of used or obsolete equipment for replacement equipment; (iii)
the sale of permitted temporary or overnight investments; (iv) dispositions not
otherwise permitted by this SECTION 6.5, not exceeding $2,000,000 in the
aggregate, for the Borrower and its Subsidiaries, for any fiscal year; (v) any
sale, lease, transfer or conveyance from one Subsidiary to another Subsidiary or
to the Borrower, or from the Borrower to any Subsidiary, in
78
accordance with SECTION 6.6, provided that, immediately after giving effect
thereto, no Default or Event of Default would exist; and provided, further, that
no sale, lease, transfer, conveyance or other disposition of Collateral may be
made from a Subsidiary existing on the Amendment Effective Date to any
Subsidiary created or acquired after the Amendment Effective Date unless such
sale, lease, transfer, conveyance or other disposition falls within the
$2,000,000 basket set forth in clause (iv) above; (vi) the sale of any
investment products sold to the Borrower by any Lender or any Affiliate thereof;
(vii) the sale, divestiture or transfer of any assets of, or the Borrower's
ownership interest in, Telplan, Inc.; and (viii) dispositions made in compliance
with the terms of the End Loaded Lease Facility of property (y) financed with
the proceeds of the End Loaded Lease Facility or (z) conveyed to the Trust by
the Borrower or any Subsidiary.
6.6. Transactions with Related Persons. Except for Subordinated Debt
and except as set forth on SCHEDULE 6.6 or as expressly permitted by SECTIONS
5.12, 6.1, 6.2, 6.3(II, III, VII, VIII and IX), 6.5, 6.7, 6.8, 6.17 and 6.20 or
otherwise contemplated by this Agreement, directly or indirectly make any loan
or advance to, or purchase, assume or guarantee any Debt to or from, any of its
officers, directors, stockholders or Affiliates, or subcontract any operations
to any Affiliate, or enter into any other transaction with any Affiliate, except
(a) in the ordinary course of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and (b) upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
6.7. Restricted Investments. Except as otherwise permitted in SECTIONS
6.2, 6.3, 6.5 and 6.8, directly or indirectly, purchase, own, invest in or
otherwise acquire any capital stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or become a
partner or joint venturer in any partnership or joint venture, or consummate an
Acquisition, or make a commitment or otherwise agree to do any of the foregoing,
other than:
(a) Cash Investments;
(b) loans and advances to employees for reasonable travel, moving
and business expenses incurred in the ordinary course of
business;
(c) Accounts owing to the Borrower or any of its Subsidiaries
created in the ordinary course of business and payable in
accordance with customary terms prevailing in the industry;
(d) prepaid expenses incurred in the ordinary course of business;
(e) loans, advances, or extensions of credit to, guaranties of and
investments existing as of the Amendment Effective Date in
corporations, partnerships and other Persons as of the
Amendment Effective Date as set forth on SCHEDULE 6.7;
(f) investments in Subsidiaries and Permitted Acquisitions made in
accordance with terms of this Agreement, including SECTIONS
5.11 and 5.12;
(g) investments by the Borrower under any Swap Agreement relating
to the Debt incurred under this Agreement; provided that the
notional amount of all such Swap Agreements at any time shall
not exceed the aggregate amount of the Commitments at such
time;
79
(h) physician loans, guaranties and similar obligations incurred
in connection with the recruitment of physicians in the
ordinary course of business and customary for hospitals
similar to those operated by the Borrower and its
Subsidiaries;
(i) loans or advances from a Subsidiary to the Borrower or to
another Subsidiary that is a Guarantor or from the Borrower to
a Subsidiary that is a Guarantor so long as the requirements
of SECTION 5.10(A) and SECTION 6.2(V) are satisfied;
(j) loans, advances and extensions of credit acquired in
connection with a disposition of assets permitted by SECTION
6.5 hereof;
(k) notes and other investments received in connection with
bankruptcy in settlement of claims;
(l) temporary or overnight investments and any other investment
products sold to the Borrower by any Lender or any Affiliate
thereof; and
(m) any other investments which are not described in clauses (A)
through (L) above, not to exceed during the term of the Loans,
$2,000,000 in the aggregate at any one time outstanding.
6.8. Restricted Payments; Certain Distributions; Preferred Stock.
(a) Declare or pay any dividends or distributions upon any of its Stock
or Interest (other than dividends paid in Stock of the Borrower and dividends or
distributions paid or payable by a Subsidiary to the Borrower or another
Subsidiary), except as set forth on SCHEDULE 6.8; or
(b) purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its Stock or other Interests, any shares of Stock or
other Interests of any Affiliate or any option, warrant or other right to
acquire shares of its Stock or Stock or other Interests of any Affiliate (other
than purchases, redemptions, retirements and other acquisitions by a Subsidiary
of shares, Interests, options, warrants or other rights issued thereby held by
the Borrower or another Subsidiary), except the Palestine Limited Partnership
may purchase the partnership interests (or a portion thereof) of Mother Frances
Hospital Regional Health Care Center under the Palestine Limited Partnership
Agreement so long as no Default or Event of Default then exists or would result
immediately after giving effect thereto; or
(c) make any distribution of cash, property or assets other than Stock
among the holders of shares of its Stock (other than distributions made by
Subsidiaries to the Borrower or another Subsidiary); or
(d) enter into or amend any agreement relating to any of the foregoing
(excluding agreements relating only to Subsidiaries with the Borrower or another
Subsidiary) including without limitation any agreement restricting or imposing
requirements regarding the payment of dividends and distributions; or
(e) issue any preferred stock or other equity with redemption features
without the consent of the Required Lenders.
80
6.9. Consolidated Adjusted Debt to Annualized Consolidated EBITDAR.
Permit the ratio of Consolidated Adjusted Debt to Annualized Consolidated
EBITDAR to be greater than 4.5 to 1.0 as of the end of any fiscal quarter,
beginning with the fiscal quarter ending March 31, 1998 to and including the
fiscal quarter ending December 31, 1998; and to be greater than 5.0 to 1.0 for
any fiscal quarter thereafter; provided, that not withstanding the foregoing, if
the Borrower completes a subordinated debt offering in an aggregate principal
amount greater than or equal to $75,000,000 at any time prior to December 31,
1998, then the Borrower shall not permit the ratio of Consolidated Adjusted Debt
to Annualized Consolidated EBITDA to be greater than 5.0 to 1.0 for any period
following the completion of such offering.
6.10. Consolidated Adjusted Senior Debt to Annualized Consolidated
EBITDAR. Permit the ratio of Consolidated Adjusted Senior Debt to Annualized
Consolidated EBITDAR to be greater than 4.5 to 1.0 as of the end of any fiscal
quarter, beginning with the fiscal quarter ending March 31, 1998 to and
including the fiscal quarter ending December 31, 1998; to be greater than 4.0 to
1.0 for any fiscal quarter thereafter through the fiscal quarter ending March
31, 2000; and to be greater than 3.50 to 1.0 for any fiscal quarter thereafter;
provided, that notwithstanding the foregoing, if the Borrower completes a
subordinated debt offering in an aggregate principal amount greater than or
equal to $75,000,000 at any time prior to December 31, 1998, then the Borrower
shall not permit the ratio of Consolidated Adjusted Senior Debt to Annualized
Consolidated EBITDAR to be greater than 4.0 to 1.0 for any period following the
completion of such offering through the quarter ending March 31, 2000; and to be
greater than 3.5 to 1.0 for any fiscal quarter thereafter.
6.11. Joint Venture EBITDAR. Permit Annualized Joint Venture EBITDAR as
of the end of any fiscal quarter beginning with the fiscal quarter ending
December 31, 1997 to exceed an amount equal to twenty percent (20%) of
Annualized Consolidated EBITDAR as of the end of such fiscal quarter.
6.12. Minimum Net Worth. Permit Consolidated Net Worth to be less than
$84,000,000 as of the end of any fiscal quarter beginning with the fiscal
quarter ending on December 31, 1997; plus eighty-five percent (85%) of
Consolidated Net Income (but excluding any net loss) for all periods from and
after April 1, 1998; plus ninety percent (90%) of the aggregate amount of all
increases in the stated capital and additional paid in capital accounts of the
Borrower resulting from the issuance of equity securities or other capital
investments after the Amendment Effective Date.
6.13. Fixed Charge Coverage. Permit the ratio of Annualized
Consolidated EBITDAR to Fixed Charges to be less than or equal to 1.2 to 1.0 for
any fiscal quarter beginning with the fiscal quarter ending December 31, 1997.
6.14. Capital Expenditures. Permit Capital Expenditures (excluding, for
measurement dates on or prior to September 30, 1998, aggregate acquisition
expenditures and current building programs incurred on or prior to December 31,
1997 at Parkview Regional Hospital, Mexia, Texas and Colorado Plains Medical
Center, Fort Morgan, Colorado, not to exceed $3,200,000) for the four (4)
consecutive fiscal quarters ending on the last day of any fiscal quarter
beginning with the fiscal quarter ending December 31, 1997 to exceed five
percent (5%) of Consolidated Net Revenues for the four (4) consecutive fiscal
quarters then ending.
6.15. Landlord Consents. Permit Annualized Non-Landlord Consent EBITDAR
as of the end of any fiscal quarter beginning with the fiscal quarter ending
December 31, 1997 to exceed an amount equal to ten percent (10%) of Annualized
Consolidated EBITDAR as of the end of such fiscal quarter.
81
6.16. Parkview Regional Hospital/EBITDAR to Facility Rent Expense.
Permit the ratio of EBITDAR of Parkview Regional Hospital to Facility Rent
Expense of Parkview Regional Hospital to be less than 1.75 to 1.0 at any time.
6.17. Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any of its Subsidiaries of any
asset that has been sold or transferred by the Borrower or such Subsidiary to
such Person, except that (a) the Borrower or any of its Subsidiaries between
themselves may enter any sale and leaseback so long as the provisions of SECTION
6.6 are satisfied, (b) the Borrower or any of its Subsidiaries may enter into a
sale and leaseback transaction regarding the purchase and subsequent sale and
leaseback of new equipment and machinery so long as the Borrower complies with
the covenants set forth in SECTIONS 6.2(XII), 6.6, 6.9, 6.10, 6.11, 6.12, 6.13,
6.14 and 6.15 and there is otherwise no Default or Event of Default, (c) the
Borrower may enter into a sale and leaseback transaction regarding the
Headquarters Building, Portland, Multnomah County, Oregon upon fair and
reasonable terms in an arm's length transaction so long as (i) the Borrower
complies with the covenants set forth in SECTION 6.2(XII), 6.6, 6.9, 6.10, 6.11,
6.12, 6.13, 6.14, 6.15 and 6.16, (ii) there is otherwise no Default or Event of
Default, (iii) in connection with such transaction, the Borrower delivers a
Landlord Consent to the Agent and such other items described in SECTION 3.2 that
would have been required had such Realty been leased on the Amendment Effective
Date, and such other documents relating to such Realty as the Required Lenders
shall reasonably request and (d) the Borrower may enter into a sale and
leaseback pursuant to the End Loaded Lease Facility of property transferred
under SECTION 6.5(VIII).
6.18. New Business. Engage in any business other than businesses
primarily within the Line of Business or make any material change in any of its
business objectives, purposes and operations that could reasonably be expected
to result in a Material Adverse Effect.
6.19. Subsidiaries or Partnerships. Except as otherwise permitted by
the terms of this Agreement (including but not limited to SECTIONS 5.11, 5.12
and 6.7 hereof), (a) become a partner or joint venturer in any partnership or
joint venture, or (b) create or acquire any new Subsidiary.
6.20. Management Contracts. Enter into any agreements whereby the
management or control of its business as a whole or the business of any Facility
as a whole shall be delegated to or placed in any persons other than its
governing body and officers, the Borrower or one of the Borrower's Subsidiaries,
other than the Intercompany Management Agreements. All Intercompany Management
Agreements existing as of the Amendment Effective Date are described on SCHEDULE
6.20.
6.21. Limitation on Certain Restrictions. Directly or indirectly create
or otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (a) the ability of the Borrower and its Subsidiaries to perform
and comply with their obligations under the Loan Documents or (b) the ability of
any Subsidiary of the Borrower to make any dividend payments or other
distributions in respect of its capital stock, to repay Debt owed to the
Borrower or any other Subsidiary, to make loans or advances to the Borrower or
any other Subsidiary, or to transfer any of its assets or properties to the
Borrower or any other Subsidiary, in each case other than such restrictions or
encumbrances existing under or by reason of (i) the Loan Documents, (ii)
applicable Requirements of Law and (iii) customary non-assignment and no-sale
provisions in any lease governing a leasehold interest or any installment
purchase agreement governing purchase money Debt.
82
6.22. No Other Negative Pledges. Directly or indirectly permit, enter
into or suffer to exist any agreement or restriction that prohibits or
conditions the creation, incurrence or assumption of any lien, security interest
or other encumbrance upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or agree to do any of the foregoing,
other than as set forth in this Credit Agreement and the other Loan Documents.
6.23. Hazardous Wastes. Violate any Environmental Law or permit any
Hazardous Material to be brought onto any of the Realty or any other property
owned, leased or operated by the Borrower or its Subsidiaries, if the results
thereof could reasonably be expected to have a Material Adverse Effect. If any
material Hazardous Material is brought or found thereon or therein, except as
may be permitted above (and then only in compliance with all applicable
Environmental Laws), Borrower, at its expense, shall immediately remove it, with
proper disposal, and perform all required environmental response, removal,
corrective and remedial actions in a diligent manner and in accordance with all
Environmental Laws, the Borrower's obligations hereunder to survive any
foreclosure of any Mortgage or other deed of trust or mortgage. The Borrower
shall promptly, after any officer of either of the Borrower learns or obtains
knowledge of the occurrence thereof, give written notice to the Agent of receipt
of any written notice of any material violation or noncompliance, order or
request for information from any Governmental Agency with respect to any
Environmental Law, and shall promptly remedy any breach of any Environmental Law
by the Borrower or its Subsidiaries. Agent shall have the right (at the expense
of the Borrower during the continuance of an Event of Default or if required by
any Governmental Authority regulating the Agent) to enter upon the Realty or
other property owned, leased or operated by the Borrower or its Subsidiaries, or
any part thereof (through its employees and/or agents), to verify compliance by
the Borrower and its Subsidiaries with the terms of this Agreement and to
conduct such environmental assessments and audits as Agent shall deem advisable
to facilitate such verification; provided, however, BORROWER AND ITS
SUBSIDIARIES HEREBY ACKNOWLEDGE THAT ALL HAZARDOUS MATERIAL HANDLING PRACTICES
AND ENVIRONMENTAL PRACTICES AND PROCEDURES ARE THE SOLE RESPONSIBILITY OF THE
BORROWER AND ITS SUBSIDIARIES, AND THE BORROWER AND ITS SUBSIDIARIES HAVE FULL
DECISION-MAKING POWER WITH RESPECT THERETO. BORROWER AND ITS SUBSIDIARIES
FURTHER ACKNOWLEDGE THAT NEITHER THE AGENT NOR ANY LENDER IS AN ENVIRONMENTAL
CONSULTANT, ENGINEER, INVESTIGATOR OR INSPECTOR OF ANY TYPE WHATSOEVER. NO ACT
(OR DECISION NOT TO ACT) OF THE AGENT OR ANY LENDER RELATED TO THIS AGREEMENT OR
ANY LOAN DOCUMENT SHALL GIVE RISE TO ANY OBLIGATION OR LIABILITY ON THE PART OF
THE AGENT OR ANY LENDER WITH RESPECT TO ENVIRONMENTAL MATTERS. IN NO EVENT SHALL
ANY INFORMATION OBTAINED FROM THE AGENT OR ANY LENDER OR THEIR RESPECTIVE AGENTS
PURSUANT TO THIS AGREEMENT OR ANY LOAN DOCUMENT CONCERNING THE ENVIRONMENTAL
CONDITION OF THE REALTY OR OTHER PROPERTY BE CONSIDERED BY THE BORROWER OR ANY
SUBSIDIARY (OR ANY OTHER RECIPIENT OF SAID INFORMATION) AS CONSTITUTING LEGAL OR
ENVIRONMENTAL CONSULTING, ENGINEERING, INVESTIGATING OR INSPECTING ADVICE, AND
NEITHER THE BORROWER NOR ANY OF ITS SUBSIDIARIES (NOR ANY OTHER RECIPIENT OF
SAID INFORMATION) SHALL RELY ON SAID INFORMATION. THE RESPONSIBILITY FOR
COMPLIANCE WITH ENVIRONMENTAL LAWS RESTS SOLELY WITH THE BORROWER AND ITS
SUBSIDIARIES.
6.24. Fiscal Year. Change its fiscal year from a calendar year ending
December 31.
83
6.25. Amendments; Prepayments of Debt, Etc. (a) Amend in any respect
the certificate or articles of incorporation, bylaws, partnership agreement,
operating agreement or similar governing document of the Borrower or any of its
Subsidiaries (other than to permit a name change or other immaterial amendment
not inconsistent with this Agreement), any Intercompany Management Agreement,
any shareholder agreement (to the extent such amendment would impose any
obligation on the Borrower or any of its Subsidiaries inconsistent with this
Agreement), or (b) except with respect to the Debt created under the Loan
Documents, customary trade discounts, purchase money Debt, Capital Leases,
financed insurance premiums, Swap Agreements and permitted intercompany Debt,
make any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including, without limitation, by way of depositing
with any trustee with respect thereto money or securities before due for the
purpose of paying when due), or exchange, any Debt.
6.26. Location of Assets; Places of Business. Without thirty (30) days'
prior written notice to the Agent and the execution and delivery of Financing
Statements reasonably satisfactory to the Agent, (i) maintain any Inventory or
Equipment that constitutes Collateral (other than items in transit or under
repair) at any location other than the locations set forth on SCHEDULE 4.7 or
(ii) change its principal place of business to a location other than that set
forth on SCHEDULE 4.7.
6.27. Account Documents. Without thirty (30) days' prior written notice
to the Agent and the execution and delivery of Financing Statements reasonably
satisfactory to the Agent, remove the billing and related records relating to
Accounts from the locations set forth on SCHEDULE 4.7.
6.28. No Inconsistent Transactions or Agreements. Enter into any
transaction or agreement, or enter into any amendment or other modification to
any currently existing agreement, that by its terms prohibits or materially
restricts the ability of the Borrower to pay the principal of or interest on the
Loans.
6.29. Fraud and Abuse. Neither the Borrower nor any Subsidiary, nor any
of its stockholders, officers or directors, acting on behalf of the Borrower or
any Subsidiary, shall engage on behalf of Borrower or any Subsidiary in any of
the following: (i) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any applications for any
benefit or payment under Medicare, Medicaid or MediCal programs; (ii) knowingly
and willfully making or causing to be made any false statement or representation
of a material fact for use in determining rights to any benefit or payment under
Medicare, Medicaid or MediCal programs; (iii) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment under Medicare, Medicaid or MediCal programs on its
own behalf or on behalf of another, with intent to secure such benefit or
payment fraudulently; (iv) knowingly and willfully making or causing to be made
a payment, directly or indirectly, to a physician as an inducement to reduce or
limit services provided with respect to individuals who are entitled to any
benefit or payment under Medicare, Medicaid or MediCal programs and are under
the direct care of the physician; (v) knowingly and willfully soliciting or
receiving any remuneration (including any kickback, bribe or rebate), directly
or indirectly, overtly or covertly, in cash or in kind or offering or paying
such remuneration (a) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare, Medicaid or MediCal, or (b)
in return for purchasing, leasing or ordering or arranging for or recommending
the purchasing, leasing or order of any good, facility, service, or item for
which payment may be made in whole or in part by Medicare, Medicaid or MediCal;
or (vi) knowingly and willfully offering or paying any remuneration (including
any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind to any person to induce such person (x) to refer an individual
to a person for the furnishing or arranging for the furnishing of
84
any item or service for which payment may be made in whole or in part by
Medicare, Medicaid or MediCal, or (y) to purchase, lease, order, or arrange for
or recommend purchasing, leasing, or ordering any good, facility, service, or
item for which payment may be made in whole or in part by Medicare, Medicaid or
MediCal. With respect to this Section, knowledge by any employees,
representatives and agents of the Borrower or a Subsidiary of any of the events
described in this Section shall not be imputed to the Borrower or such
Subsidiary unless such knowledge was obtained or learned by a Senior Officer in
his or her official capacity as a Senior Officer of the Borrower or such
Subsidiary. Neither the Borrower nor any Subsidiary shall be considered to have
breached this Section, except in the case of an intentional violation thereof,
until the Borrower or such Subsidiary has received notification, written or
oral, by a Governmental Authority of competent jurisdiction as to any such
violation. In addition, neither the Borrower nor any Subsidiary shall be
considered to have breached this Section so long as (a) they shall have taken
such actions (including implementation of appropriate internal controls) as may
be reasonably necessary to avoid such breaches and (b) such breaches,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
6.30. Compliance with ERISA. (a) Take any action or fail to take any
action, the result of which action or inaction could be a liability of the
Borrower or any of its Subsidiaries to the pension Benefit Guaranty Corporation
or to a Multiemployer Plan or (ii) participate in any Prohibited Transaction
that could subject the Borrower or any of its Subsidiaries to any civil penalty
under ERISA or tax under the Internal Revenue Code, in each case that could
reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) The Borrower (i) fails to pay any principal amount of the Credit
Obligations when due, or (ii) fails to pay any interest and fees on the Credit
Obligations within two (2) Business Days after the due date thereof;
(b) The Borrower or any of its Subsidiaries fails or neglects to
observe, perform or comply with any term, provision, condition or covenant
contained in SECTION 5.3(A), 5.12, 5.13 or ARTICLE VI;
(c) The Borrower or any of its Subsidiaries fails or neglects to
observe, perform or comply with any term, provision, condition or covenant
contained in SECTION 5.1, 5.2(C), 5.2(E), 5.2(F) or 2.13, and the same is not
cured to the Required Lenders' satisfaction within fifteen (15) days after the
earlier of (i) written notice to the Borrower by the Agent of the existence of
such Default, or (ii) the date on which the Borrower or such Subsidiary acquires
knowledge thereof;
(d) The Borrower or any of its Subsidiaries fails or neglects to
observe, perform or comply with any term, provision, condition or covenant
contained herein except those specified in subsections (A), (B) and (C) above,
and the same is not cured to the Required Lenders' satisfaction within thirty
(30) days after the earlier of (i) written notice to the Borrower by the Agent
of the existence of such Default, or (ii) the date on which the Borrower or such
Subsidiary acquires knowledge thereof;
85
(e) If any representation or warranty made in writing by or on behalf
of the Borrower or any of its Subsidiaries in this Agreement, in the other Loan
Documents or in any other agreement now existing or hereafter executed between
the Borrower or any of its Subsidiaries and the Agent or any Lender shall prove
to have been false or misleading in any material respect when made;
(f) The occurrence of any default or event of default on the part of
the Borrower or any of its Subsidiaries (including specifically, but without
limitation, defaults due to nonpayment) under the terms of any agreement,
document or instrument (including without limitation any Swap Agreement, or any
other similar agreement with any other Person, and any Operative Agreement (as
defined by reference in the definition of End Loaded Lease Facility herein)
under the End Loaded Lease Facility) pursuant to which the Borrower or such
Subsidiary has incurred any Debt (other than the Credit Obligations) in excess
of $1,000,000, which default or event of default would permit acceleration of
such Debt and which is not cured within any applicable grace or cure period;
(g) (i) The termination of any hospital lease agreement; or (ii) the
termination of any other agreement, contract or instrument to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its properties
are bound where such termination could reasonably be expected to result in a
Material Adverse Effect;
(h) The occurrence of an event of default under any of the Material
Loan Documents (other than a Landlord's Consent) or in any other agreement now
existing or hereafter executed evidencing or securing any of the Credit
Obligations, taking into account any applicable grace or cure provisions
thereof;
(i) The occurrence of an event of default under the Participation
Agreement, the Lease, each applicable Ground Lease, the Agency Agreement, the
Credit Agreement, the Notes, the Trust Agreement, the Certificates, the Security
Agreement and each applicable Mortgage Instrument (each as defined in the
Participation Agreement) under the End Loaded Lease Facility or in any other
agreement now existing or hereafter executed evidencing or securing any of the
obligations of the Trust, the Borrower or its Subsidiaries under such Operative
Documents (other than due to the Agent's or any Lender's failure to file a
continuation statement), taking into account any applicable grace or cure
provisions thereof;
(j) The occurrence of any uninsured damage to or loss, theft or
destruction of the Collateral or other assets of the Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect;
(k) The filing by the Borrower or any of its Subsidiaries (with assets
having a value of $250,000 or more) of any voluntary petition seeking
liquidation, reorganization, arrangement, readjustment of debts or for any other
relief under the Bankruptcy Code or under any other act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign, now or hereafter
existing;
(l) The filing against the Borrower or any of its Subsidiaries (with
assets having a value of $250,000 or more) of any involuntary petition seeking
liquidation, reorganization, arrangement, readjustment of debts or for any other
relief under the Bankruptcy Code or under any other act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign, now or hereafter
existing, which petition is not dismissed discharged, stayed or bonded within
sixty (60) days after the date of filing;
86
(m) A custodian, trustee, receiver or assignee for the benefit of
creditors is appointed or takes possession of the Collateral or any other assets
of the Borrower or any of its Subsidiaries (with assets having a value of
$250,000 or more) which appointment continues undischarged, undismissed,
unstayed or unbonded for 60 days or more;
(n) The Borrower or any of its Subsidiaries (with assets having a value
of $250,000 or more) ceases, or the Borrower and its Subsidiaries, on a
consolidated basis, cease, to be Solvent (taking into account any rights of
contribution);
(o) A notice of lien, levy or assessment is filed of record against any
portion of the assets of the Borrower or any of its Subsidiaries by the United
States, or any department, agency or instrumentality thereof, or by any other
Governmental Authority or any other Person, including, without limitation, the
Pension Benefit Guaranty Corporation, or if any taxes or debts owing at any time
or times hereafter to any one of them becomes a lien or encumbrance (other than
a Permitted Lien) upon the Collateral or any other asset of the Borrower or any
of its Subsidiaries, and the same is not dismissed, released, bonded or
discharged within five (5) days after the same becomes a lien or encumbrance or,
in the case of ad valorem taxes, prior to the last day when payment may be made
without penalty and, if bonded, such bond (or a replacement bond) shall not
continue in effect at all times until such judgment is dismissed or discharged,
and any such event could reasonably be expected to have a Material Adverse
Effect;
(p) The entry of judgments or the issuance of warrants of attachment,
execution or similar process against the Borrower or any of its Subsidiaries or
any of their assets of $500,000 or more in the aggregate in excess of the
proceeds of insurance available therefor, which shall not be paid, dismissed,
discharged, stayed pending appeal or bonded within fifteen (15) days after entry
and, if bonded, such bond (or a replacement bond) shall not continue in effect
at all times until such judgment is dismissed or discharged;
(q) The occurrence of any of the following events: (i) the happening of
a Reportable Event that could give rise to liability (that is not waived by the
Pension Benefit Guaranty Corporation or by the Required Lenders, or if such
liability can be avoided by any corrective action of the Borrower, such
corrective action is not completed within ninety (90) days after the occurrence
of such Reportable Event) with respect to any Pension Plan; (ii) the termination
of any Pension Plan in a "distress termination" under the provisions of Section
4041 of ERISA; (iii) the appointment of a trustee by an appropriate United
States District Court to administer any Pension Plan; (iv) the institution of
any proceedings by the Pension Benefit Guaranty Corporation to terminate any
Pension Plan or to appoint a trustee to administer any such plan; and (v) the
failure of the Borrower to notify the Lenders promptly upon receipt by the
Borrower of any notice of the institution of any proceeding or any other actions
that may result in the termination of any such plan;
(r) (i) The guaranty given by any Guarantor of the Borrower under the
Guaranty Agreement shall, for any reason other than the satisfaction in full of
all Credit Obligations and termination of this Agreement or the release of such
Subsidiary from its Guaranty Obligations under the Guaranty Agreement in
accordance with the terms thereof, cease to be in full force and effect at any
time or is declared to be null and void or (ii) any such Subsidiary denies that
it has any further liability under the Guaranty Agreement or gives notice to
such effect, and such denial or notice is not revoked within one Business Day
after the earlier of (A) receipt by the Borrower of notice from the Agent or any
Lender of such denial or notice or (B) the Borrower becomes aware of such denial
or notice being made or given, as the case may be;
(s) The occurrence of a Change of Control;
87
(t) Martin S. Rash or Richard D. Gore shall cease to be the Chief
Executive Officer and Chief Financial Officer, respectively, of the Borrower or
involved in the day-to-day operations of the Borrower and its Subsidiaries, and
within 120 days following the cessation of their respective involvement, the
relevant executive is not succeeded by a chief executive officer or chief
financial officer, as applicable, reasonably acceptable to the Required Lenders;
or
(u) The Borrower or any Subsidiary, to the extent, if any, presently
participating or required by law to participate, in Medicaid, Medicare or
MediCal programs shall fail to be eligible for any reason to participate in
Medicaid, Medicare or MediCal programs or to accept assignments or rights to
reimbursement under Medicaid Regulations, Medicare Regulations or MediCal
Regulations, such failure could reasonably be expected to have a Material
Adverse Effect, and such failure shall also continue beyond the completion of
any appeal process diligently pursued by the Borrower or such Subsidiary in good
faith.
ARTICLE VIII
RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT
8.1. Remedies; Termination of Commitments, Acceleration, Etc. Upon and
at any time after the occurrence and during the continuance of any Event of
Default, the Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:
(a) Declare the Revolving Credit Commitments of each Lender, the
Swingline Commitment of the Swingline Lender, and the Issuing Bank's obligation
to issue Letters of Credit, to be terminated, whereupon the same shall terminate
(provided that, upon the occurrence of an Event of Default with respect to the
Borrower pursuant to SECTIONS 7.1(K), (L) or (M), all of the Revolving Credit
Commitments and the Swingline Commitment, together with the Issuing Bank's
obligation to issue Letters of Credit, shall automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans, all unpaid interest accrued thereon, and all other amounts payable under
this Agreement, the Notes and the other Loan Documents to be immediately due and
payable, whereupon such outstanding principal amounts, accrued interest and
other such amounts shall become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower (provided that, upon the occurrence of an Event of Default with respect
to the Borrower pursuant to SECTIONS 7.1(K), (L) or (M), all such outstanding
principal amounts, accrued interest and other such amounts shall automatically
become immediately due and payable);
(c) Direct the Borrower to deliver (and the Borrower hereby agrees,
upon receipt of notice of such direction from the Agent, to deliver) to the
Agent from time to time such additional amount of cash as is equal to the
difference between the aggregate Stated Amount of all Letters of Credit then
outstanding (whether or not any beneficiary under any Letter of Credit shall
have drawn or be entitled at such time to draw thereunder) and the amount then
on deposit in the Cash Collateral Account, such amount to be held by the Agent
in the Cash Collateral Account as security for the Borrower's Reimbursement
Obligations as described in SECTION 2.18(I); and
88
(d) Exercise all rights and remedies available to it under this
Agreement, the other Loan Documents and applicable law.
8.2. Right of Setoff. Upon the occurrence and during the continuance
of, and prior to any express written waiver by the Required Lenders of, an Event
of Default, the Agent and each Lender may, and are hereby authorized by the
Borrower, at any time and from time to time, to the fullest extent permitted by
applicable law, without advance notice to the Borrower (any such notice being
expressly waived by the Borrower) and irrespective of demand for payment, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held in other than a fiduciary account and any
other indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any or all of the Credit Obligations now or
hereafter existing, whether or not such Credit Obligations have matured. The
Agent agrees to notify the Borrower after any such setoff or application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Agent and each Lender under this
SECTION 8.2 are in addition to the other rights and remedies (including other
rights of setoff) that such Lender may have. NOTWITHSTANDING THE FOREGOING,
NEITHER THE AGENT NOR ANY LENDER SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY
RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR
PROPERTY OF THE BORROWER HELD BY THE AGENT OR ANY LENDER, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE REQUIRED LENDERS, AND ANY LENDER VIOLATING THIS PROVISION
SHALL INDEMNIFY THE AGENT AND THE OTHER LENDERS FROM ANY AND ALL COSTS,
EXPENSES, LIABILITIES AND DAMAGES RESULTING THEREFROM. The contractual
restriction on the exercise of setoff rights provided in the foregoing sentence
is solely for the benefit of the Agent and the Lenders and may not be enforced
by the Borrower.
8.3. Rights and Remedies Cumulative; Non-Waiver; Etc. The enumeration
of the Agent's and the Lenders' rights and remedies set forth in this Agreement
is not intended to be exhaustive, and the exercise by the Agent or any Lender of
any right or remedy shall not preclude the exercise of any other rights or
remedies, all of which shall be cumulative, and shall be in addition to any
other right or remedy given hereunder, under the Loan Documents or under any
other agreement between the Borrower or any of its Subsidiaries and the Agent or
the Lenders or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower or any of its
Subsidiaries and the Agent or the Lenders or their agents or employees shall be
effective to change, modify or discharge any provision of this Agreement or any
of the other Loan Documents or to constitute a waiver of any Event of Default.
ARTICLE IX
THE AGENT
9.1. Appointment. Each Lender hereby irrevocably appoints and
authorizes First Union to act as Agent hereunder and under the other Loan
Documents and to take such actions as agent on its behalf hereunder and under
the other Loan Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Agent by the terms hereof or
thereof, together with such other powers and duties as are reasonably incidental
thereto.
89
9.2. Nature of Duties. The Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Loan Documents. The Agent shall not have, by reason of this Agreement or
any other Loan Document, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
or liabilities in respect of this Agreement or any other Loan Document except as
expressly set forth herein or therein. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care. The
Agent shall be entitled to consult with legal counsel, independent public
accountants and other experts selected by it with respect to all matters
pertaining to this Agreement and the other Loan Documents and its duties
hereunder and thereunder and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts. The Lenders hereby acknowledge that the Agent shall not
be under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be requested in writing to do so by the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders).
9.3. Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action taken or omitted to be taken by it or such Person under or
in connection with the Loan Documents, except for its or such Person's own gross
negligence or willful misconduct, (ii) responsible in any manner to any Lender
for any recitals, statements, information, representations or warranties herein
or in any other Loan Document or in any document, instrument, certificate,
report or other writing delivered in connection herewith or therewith, for the
execution, effectiveness, genuineness, validity, enforceability or sufficiency
of this Agreement or any other Loan Document, or for the financial condition of
the Borrower, its Subsidiaries or any other Person, or (iii) required to
ascertain or make any inquiry concerning the performance or observance of any of
the terms, provisions or conditions of this Agreement or any other Loan Document
or the existence or possible existence of any Default or Event of Default, or to
inspect the properties, books or records of the Borrower or any of its
Subsidiaries.
9.4. Reliance by the Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any notice, statement, consent or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons. The Agent may deem and treat each Lender as the owner of its interest
hereunder for all purposes hereof unless and until a written notice of the
assignment, negotiation or transfer thereof shall have been given to the Agent
in accordance with the provisions of this Agreement. The Agent shall be entitled
to refrain from taking or omitting to take any action in connection with this
Agreement or any other Loan Document (i) if such action or omission would, in
the reasonable opinion of the Agent, violate any applicable law or any provision
of this Agreement or any other Loan Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking, continuing to take or omitting to take
any such action. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against the Agent as a result of the Agent's acting or
refraining from acting hereunder or under any other Loan Document in accordance
with the instructions of the Required Lenders (or, where a higher percentage of
the Lenders is expressly required
90
hereunder, such Lenders), and such instructions and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders (including all
subsequent Lenders).
9.5. Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representation
or warranty to it and that no act by the Agent or any such Person hereafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that (i) it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) it will, independently and without reliance upon
the Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action hereunder and under the
other Loan Documents and to make such investigation as it deems necessary to
inform itself as to the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries.
Except as expressly provided in this Agreement and the other Loan Documents, the
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other condition or
creditworthiness of the Borrower, its Subsidiaries or any other Person that may
at any time come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
9.6. Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the Agent
shall have received written notice from the Borrower or a Lender referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent will give notice thereof to the Lenders as soon as
reasonably practicable; provided, however, that if any such notice has also been
furnished to the Lenders, the Agent shall have no obligation to notify the
Lenders with respect thereto. The Agent shall (subject to SECTIONS 9.4 and 10.8)
take such action with respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action (except for
those actions specified in SECTION 8.1(A), (B), (C) OR (D)), with respect to
such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders. Each Lender shall promptly give the Agent such a
notice upon its actual knowledge of a Default or an Event of Default; provided,
however, that the failure of any Lender to deliver such notice shall not, in the
absence of gross negligence or willful misconduct, affect its rights hereunder
or under the other Loan Documents. Each Lender agrees that the rights and
remedies granted under this Agreement and the other Loan Documents shall be
exercised solely by the Agent, at the direction or with the consent of the
Required Lenders, and that no Lender shall have any right individually to
exercise any such right or remedy except to the extent, if any, expressly
provided herein or therein.
9.7. Indemnification. To the extent the Agent is not reimbursed by or
on behalf of the Borrower, and without limiting the obligation of the Borrower
to do so, the Lenders agree (i) to indemnify the Agent and its officers,
directors, employees, agents, attorneys-in-fact and Affiliates, ratably in
proportion to their percentages as used in determining the Required Lenders as
of the date of determination, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses (including,
91
without limitation, reasonable attorneys' fees and expenses) or disbursements of
any kind or nature whatsoever that may at any time (including at any time
following the repayment in full of the Loans and the termination of the
Commitments) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing, and (ii) to reimburse the Agent upon
demand, ratably in proportion to their percentages as used in determining the
Required Lenders as of the date of determination, for any reasonable expenses
incurred by the Agent in its capacity as Agent in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether through renegotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents
(including, without limitation, reasonable attorneys' fees and expenses and
compensation of agents and employees paid for services rendered on behalf of the
Lenders); provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, reasonable expenses or disbursements to the extent resulting from
the gross negligence or willful misconduct of the party to be indemnified.
9.8. The Agent in its Individual Capacity. With respect to its
Commitments, the Loans made by it, the Letters of Credit issued or participated
in by it and the Notes issued to it, the Agent in its individual capacity and
not as Agent shall have the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though it were not performing the
agency duties specified herein; and the terms "Lenders," "Required Lenders,"
"holders of Notes" and any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, make investments in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or any of their Affiliates
as if the Agent were not performing the agency duties specified herein, and may
accept fees and other consideration from any of them for services in connection
with this Agreement and otherwise without having to account for the same to the
Lenders.
9.9. Successor Agent. The Agent may resign at any time by giving thirty
(30) days' prior written notice to the Borrower and the Lenders. Upon any such
notice of resignation and with the prior consent of the Borrower, which consent
shall not be unreasonably withheld, the Required Lenders will appoint prior to
the effectiveness of the retiring Agent's resignation from among the Lenders a
successor to the Agent (provided that the Borrower's consent shall not be
required in the event a Default or Event of Default shall have occurred and be
continuing). If no successor to the Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within such thirty
(30)-day period, then the retiring Agent may, on behalf of the Lenders and after
consulting with the Lenders and the Borrower, appoint a successor Agent from
among the Lenders. Upon the acceptance of any appointment as Agent by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Agent's
resignation as Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent. If no
successor to the Agent has accepted appointment as Agent by the thirtieth (30th)
day following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective, and the Lenders shall
thereafter perform all of the duties of the Agent hereunder and under the other
Loan Documents until such time, if any, as the Required Lenders appoint a
successor Agent as provided for hereinabove.
92
9.10. Collateral Matters.
(a) The Agent is hereby authorized on behalf of the Lenders, without
the necessity of any notice to or further consent from the Lenders, from time to
time (but without any obligation) to take any action with respect to the
Collateral and the Security Documents that may be necessary to perfect and
maintain perfected the Liens upon the Collateral granted pursuant to the
Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments, termination or expiration of
all outstanding Letters of Credit and payment in full of all of the Credit
Obligations and termination of the End Loaded Lease Facility, (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition expressly permitted hereunder or under any other Loan Document or to
which the Required Lenders have consented or (iii) otherwise pursuant to and in
accordance with the provisions of any applicable Loan Document. Upon request by
the Agent at any time, the Lenders will confirm in writing the Agent's authority
to release Collateral pursuant to this subsection (B).
9.11. Issuing Bank and Swingline Lender. The provisions of this ARTICLE
IX (other than SECTION 9.9) shall apply to the Issuing Bank and the Swingline
Lender mutatis mutandis to the same extent as such provisions apply to the
Agent.
ARTICLE X
MISCELLANEOUS
10.1. Survival.
(a) The representations and warranties made by or on behalf of the
Borrower or any of its Subsidiaries in this Agreement and in each other Loan
Document shall survive the execution and delivery of this Agreement and each
such other Loan Document. Notwithstanding any other provision herein or anything
provided or implied by law to the contrary, no termination or cancellation
(regardless of cause or procedure) of the Commitments, this Agreement or any of
the other Loan Documents shall in any way affect or impair the rights and
obligations of the parties hereto with respect to any of the provisions of (i)
SECTION 10.3, (ii) SECTION 2.15 or (iii) this Agreement and the other Loan
Documents relating to indemnification or payment of costs and expenses,
including, without limitation, all of the provisions of SECTIONS 2.11(A),
2.11(B), 2.12, 2.13, 2.18(H), 9.7, 10.6 and 10.7, and, in each case, such
provisions shall survive any such termination or cancellation and the making and
repayment of the Loans.
(b) The Borrower, the Agent and the Lenders agree that: (i) ARTICLES IV
and V and the other applicable provisions of this Credit Agreement are intended
as the Agent's (on behalf of the Lenders) written request for information (and
the Borrower's response) concerning the environmental condition of the real
property; and (ii) each provision in this Credit Agreement (together with any
indemnity applicable to a breach of any such provision) with respect to the
environmental condition of the Realty is intended to be an "environmental
provision" and as such it is expressly understood that the Borrower's duty to
indemnify the Agent and the Lenders as specified hereunder shall survive the
termination or cancellation of the Commitments or this Agreement and the making
and repayment of the Loans.
93
10.2. Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE
DEEMED TO HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN NORTH CAROLINA AND SHALL
BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED,
IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS)
OF THE STATE OF NORTH CAROLINA; PROVIDED THAT EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OR
RULES DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS") AND, AS TO MATTERS NOT GOVERNED THEREBY, THE INTERNAL LAWS OF THE
STATE OF THE DOMICILE OF THE ISSUING BANK. AS PART OF THE CONSIDERATION FOR NEW
VALUE THIS DAY RECEIVED, THE BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE COURT WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT
LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY
PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, OR ANY PROCEEDING TO WHICH THE AGENT, THE ISSUING BANK, ANY LENDER OR
THE BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE ISSUING BANK, ANY LENDER OR THE
BORROWER. THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE
RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER
WAIVES ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE
BORROWER CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED
MAIL DIRECTED TO BORROWER (ATTENTION: GENERAL COUNSEL) AT ITS ADDRESS SET FORTH
HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT THEREOF OR FIFTEEN (15) DAYS AFTER DEPOSIT IN THE
UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
10.3. Arbitration; Remedies.
(a) Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any of the Loan
Documents ("Disputes") between or among parties hereto or thereto shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims
brought as class actions, claims arising from documents executed in the future,
or claims arising out of or connected with the transactions contemplated by this
Agreement or any of the Loan Documents. Arbitration shall be conducted under and
governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the "AAA"), as in
effect from time to time, and Title 9 of the U.S. Code, as amended. All
arbitration hearings shall be conducted in Charlotte, North Carolina. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall
be applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall
94
apply to any Dispute. A judgment upon the award may be entered in any court
having jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted, or if such person is not available, the single arbitrator may be a
licensed attorney. Notwithstanding the foregoing, this arbitration provision
does not apply to Disputes under or related to any interest rate protection
agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
Borrower and the Agent, on behalf of the Lenders, agree to preserve, without
diminution, certain remedies, more particularly described below, that any party
hereto may employ or exercise freely, independently or in connection with an
arbitration proceeding or after an arbitration action is brought. The Agent, on
behalf of the Lenders, and the Borrower shall have the right to proceed in any
court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale granted
under any Loan Documents or under applicable law or by judicial foreclosure and
sale, including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, setoff,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of any arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
The Borrower and the Agent, on behalf of the Lenders, agree that they
shall not have a remedy of punitive or exemplary damages against the other in
any Dispute and hereby waive any right or claim to punitive or exemplary damages
they have now or which may arise in the future in connection with any Dispute
whether the Dispute is resolved by arbitration or judicially.
10.4. Notice. All notices and other communications provided for
hereunder shall be in writing (including facsimile transmission) and mailed,
telecopied or delivered to the party to be notified at the following addresses
(provided, however, that Syndication Agency Services of First Union National
Bank will not receive copies of regular financial reports and the attorneys
listed below will receive neither regular financial reports nor the business
information submitted to the Agent and the Lenders):
If to Borrower: Province Healthcare Company
105 Westwood Place, Suite 400
Brentwood, Tennessee 37027
Attention: Vice President - Finance
Telephone: (615) 370-1377
Telecopy: (615) 370-1259
with a copy (which
copy shall not
constitute notice) to: Waller Lansden Dortch & Davis, PLLC
Nashville City Center
511 Union Street, Suite 2100
Nashville, Tennessee 37219-1760
Attention: Ralph W. Davis
Telephone: (615) 252-2481
Telecopy: (615) 244-6804
95
If to the Agent
or the Issuing Bank: First Union National Bank
One First Union Center, TW-10
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telephone: (704) 374-2698
Telecopy: (704) 383-0288
with a copy to: First Union National Bank
150 Fourth Avenue North
2nd Floor
Nashville, Tennessee 37219
Attention: Carolyn Hannon
Telephone: (615) 251-9374
Telecopy: (615) 251-9247
with a copy to: First Union National Bank
One First Union Center, 5th Floor
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Valerie Cline
Telephone: (704) 383-6237
Telecopy: (704) 383-9144
with a copy to: Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street
Suite 1900
Charlotte, North Carolina 28246
Attention: Stokely G. Caldwell, Jr.
Telephone: (704) 377-8332
Telecopy: (704) 378-4000
If to any Lender: At the address set forth on its
signature page hereto.
or to such other address as any party may designate for itself by like notice to
all other parties hereto. All such notices and communications shall be deemed to
have been given (i) if mailed as provided above by any method other than
overnight delivery service, on the third Business Day after deposit in the
mails, postage prepaid, (ii) if transmitted by overnight delivery service or
telecopied, when delivered for overnight delivery or transmitted by telecopier,
respectively, with appropriate confirmation of delivery, or (iii) if delivered
by hand, upon delivery; provided that notices and communications to the Agent
shall not be effective until received by the Agent.
All wire transfers to the Agent shall be sent to First Union National
Bank, ABA Routing #053000219, to the credit of First Union National Bank,
Charlotte, North Carolina, Attention: Syndication Agency Services, G/L #465906,
RC #5007, RE: Province Healthcare Company, unless otherwise instructed by the
Agent.
10.5. Assignments, Participations.
96
(a) With the prior consent of the Agent and the Borrower, which consent
shall not be unreasonably withheld (except in the case of a Default or Event of
Default in which case no consent of the Borrower shall be required), each Lender
may assign to one or more other Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the outstanding Loans made by it and the Note or
Notes held by it); provided, however, that (i) each such assignment shall be of
an equal, pro rata percentage of such Lender's rights and obligations (including
its Commitments and its End Loaded Lease Commitment) under this Agreement and
the End Loaded Lease Credit Agreement, (ii) except in the case of an assignment
to an Affiliate of such Lender or a Person that, immediately prior to such
assignment, was a Lender, (1) the amount of the Commitments of such assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to each such assignment)
shall in no event be less than the lesser of (y) the aggregate Commitments of
such Lender immediately prior to such assignment or (z) $5,000,000, and (2) the
amount of the Swingline Commitment being assigned pursuant to any such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than Swingline Commitment,
(iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to
each such assignment will execute and deliver to the Agent, for its acceptance
and recording in the Register, an Assignment and Acceptance, together with any
Note or Notes subject to such assignment, and will pay a processing fee of
$3,000 to the Agent for its own account, and (v) the assignee shall prepare and
deliver to the Agent (for delivery to the Borrower) any forms and other
documents required by SECTION 2.12(C). Upon such execution, delivery, acceptance
and recording of the Assignment and Acceptance, from and after the effective
date specified therein (a) the assignee thereunder shall be deemed a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of such Lender hereunder with respect thereto, and (b) the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
such assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other, and with the other parties hereto, as follows: (i) other than as may be
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished hereto or pursuant
thereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of its Subsidiaries of any of their obligations under this
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee has received a copy of
this Agreement, together with copies of the Financial Statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement; (iv) such assignee will,
independently and without reliance upon the Agent, the assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder, as are specifically delegated to
or required of the Agent by the terms hereof or
97
thereof and such other powers as are reasonably incidental thereto; and (vii)
such assignee will perform in accordance with their terms all of the obligations
that by the terms of this Agreement are required to be performed by it as a
Lender.
(c) The Agent will maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Issuing Bank or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent will, if such Assignment and Acceptance has been
completed and is in substantially the form of EXHIBIT D, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give notice thereof to the Borrower. Within five (5) Business
Days after its receipt of such notice, the Borrower, at its own expense, will
execute and deliver to the Agent in exchange for the surrendered Note or Notes a
new Note or Notes to the order of such assignee in an amount equal to the
Commitment or Commitments assumed by it pursuant to such Assignment and
Acceptance and, to the extent the assigning Lender has retained its Commitments
hereunder, a new Note or Notes to the order of the assigning Lender in an amount
equal to the Commitment or Commitments retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the forms of EXHIBITS A-1 and A-2, as appropriate.
(e) Each Lender may sell to one or more other Persons participations in
any portion comprising less than all of its rights and obligations under this
Agreement (including, without limitation, a portion of its Commitments, the
outstanding Loans made by it and the Note or Notes held by it); provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower, the Issuing Bank, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, (iv)
any such participation shall be in an amount of not less than $5,000,000, (v) no
Lender shall sell any participation that, when taken together with all other
participations, if any, sold by such Lender, covers all of such Lender's rights
and obligations under this Agreement (including, without limitation, all of its
Commitments, the outstanding Loans made by it and the Note or Notes held by it),
(vi) each such participation shall be of an equal, pro rata percentage of such
Lender's rights and obligations (including its Commitments), (vii) no Lender
shall permit any participant to have any voting rights or any right to control
the vote of such Lender with respect to any amendment, modification, waiver,
consent or other action hereunder or under any other Loan Document except as to
actions of the type described in SECTION 10.8(A), and (viii) the parties to each
such participation shall pay a processing fee of $3,000 to the Agent for its own
account. In the case of a participation, the participant shall not have any
rights under this Agreement or any of the other Loan Documents, the
participant's rights against the granting Lender in respect of such
participation to be those set forth in the participation agreement, and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation; provided, however, that each such participant
shall have the rights of a Lender for purposes of SECTIONS 2.11(A),
98
2.11(B), 2.12, 2.13 and 8.2, and shall be entitled to the benefits thereof, to
the extent that the Lender selling such participation would be entitled to such
benefits if the participation had not been sold.
(f) With the prior consent of the Required Lenders and the Borrower,
which consent shall not be unreasonably withheld, the Issuing Bank may assign
all, but not less than all, of its rights and obligations as Issuing Bank under
this Agreement, including, without limitation, its commitment to issue Letters
of Credit, to any Eligible Assignee, and upon acceptance of such assignment, the
successor Issuing Bank shall succeed to such rights and obligations and the
assigning Issuing Bank shall be discharged therefrom.
(g) The Agent, the Issuing Bank and each Lender may, in connection with
any assignment or participation or proposed assignment or participation pursuant
to this Section, disclose to the assignee or participant, or proposed assignee
or participant, any information relating to the Borrower and its Subsidiaries
furnished to it by or on behalf of any other party hereto, provided that such
assignee or participant or proposed assignee or participant agrees in writing to
the Agent, the Issuing Bank or such Lender, as the case may be, to keep such
information confidential to the same extent required of the Lenders under
SECTION 10.17.
(h) Nothing in this Agreement or the other Loan Documents shall
prohibit any Lender or participant from pledging or assigning its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the outstanding Loans made by it and the Note or
Notes held by it, including Collateral therefor) to any Federal Reserve Bank in
accordance with applicable law.
10.6. Fees and Expenses. Whether or not the transactions contemplated
by this Agreement shall be consummated, the Borrower shall be obligated:
(a) to pay or reimburse the Agent upon demand and after notice in
accordance with SECTION 10.4 for all reasonable expenses (including, without
limitation, reasonable attorneys' fees, but excluding salaries of the Agent's
regularly employed personnel and overhead) incurred or paid by the Agent in
connection with: (i) the preparation, execution, delivery, interpretation,
modification, amendment or termination of this Agreement or the other Loan
Documents or any consent or waiver requested by the Borrower hereunder or
thereunder; (ii) upon the occurrence and during the continuance of any Event of
Default, charges for appraisers, examiners, environmental consultants, auditors
or similar Persons whom the Agent may engage with respect to rendering opinions
concerning the financial condition of the Borrower and its Subsidiaries; and
(iii) upon the occurrence and during the continuance of any Event of Default,
any commercially reasonable attempt to inspect, verify, protect, preserve,
collect, sell, liquidate or otherwise dispose of the Collateral or any other
assets of the Borrower or any Guarantor;
(b) to pay or reimburse the Agent and each Lender upon demand and after
notice in accordance with SECTION 10.4 for all reasonable expenses (including,
without limitation, reasonable attorneys' fees, but excluding salaries of the
Agent's or such Lender's regularly employed personnel and overhead) incurred or
paid by the Agent or such Lender in connection with: (i) any litigation,
contest, dispute, suit or proceeding or action (whether instituted by the Agent,
the Lenders, or any of them, the Borrower or any other Person) in any way
relating to this Agreement or the other Loan Documents (other than a dispute
solely between or among the Lenders or the Lenders and the Agent); (ii) any
attempt by the Agent or such Lender to enforce any of its rights against the
Borrower or any other Person that may be obligated to the Agent or such Lender
by virtue of this Agreement or the other Loan Documents; and (iii) any
refinancing or restructuring of the credit arrangement provided under this
Agreement in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding;
99
(c) to pay and hold the Agent and each Lender harmless from and against
any and all liability and loss with respect to or resulting from the nonpayment
or delayed payment of any and all intangibles, documentary stamp and other
similar taxes, fees and excises, if any, including any interest and penalties,
that may be, or be determined to be, payable in connection with the transactions
contemplated by this Agreement and the other Loan Documents or in any
modification hereof or thereof; and
(d) to pay and hold the Agent and each Lender harmless from and against
any and all finder's or brokerage fees and commissions that may be payable in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, other than any fees or commissions of finders or brokers engaged
by the Agent or any Lender.
10.7. Indemnification. From and at all times after the date of this
Agreement, and in addition to the costs and expenses payable under SECTION 10.6
and all of the Agent's and the Lenders' other rights and remedies against the
Borrower, the Borrower agrees to indemnify and hold harmless the Agent, the
Issuing Bank and each Lender and each of their directors, officers, employees,
agents and their Affiliates (each, an "Indemnified Person") against any and all
claims, losses, damages, liabilities, costs and expenses of any kind or nature
whatsoever, including, without limitation, reasonable attorneys' fees,
reasonable costs and expenses (collectively, "Indemnified Costs") incurred by or
asserted against any such Indemnified Person from and after the date hereof,
whether direct or indirect, as a result of or arising from or in any way
relating to any suit, action or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, asserting a claim
for any legal or equitable remedy under any statute or regulation, including,
without limitation, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or enforcement of this
Agreement or the other Loan Documents or any of the transactions contemplated
herein or therein, and including, without limitation, Environmental Claims,
whether or not such Indemnified Person is a party to any such action, proceeding
or suit or the target of any such inquiry or investigation; provided, however,
that no Indemnified Person shall have the right to be indemnified hereunder for
any Indemnified Costs resulting from the gross negligence or willful misconduct
of such Indemnified Person (as finally determined by a court of competent
jurisdiction or pursuant to arbitration as set forth in SECTION 10.3) or
resulting from any dispute solely between or among the Lenders or the Lenders
and the Agent. Without limiting the generality of the foregoing, the Indemnified
Costs with respect to Environmental Claims shall include, without limitation,
amounts paid in settlement of claims, all consultant and expert fees and
expenses of any Indemnified Person incurred in connection with any investigation
of site conditions, any abatement, cleanup, remediation, removal or restoration
work, or liability for any damages or injuries of any Person or to land, air,
water or other natural resources. All of the foregoing losses, damages, costs
and expenses of any Indemnified Person shall be payable by the Borrower within
thirty (30) days after demand, and shall be additional Credit Obligations
hereunder. In the event that the foregoing indemnity is unavailable or
insufficient to hold each Indemnified Person harmless, then the Borrower will
contribute to amounts paid or payable by such Indemnified Persons in respect of
their losses, claims, damages or liabilities in such proportions as
appropriately reflect the relative benefits received by and fault of the
Borrower and such Indemnified Persons in connection with the matters as to which
such losses, claims, damages or liabilities relate and other equitable
considerations. Any Indemnified Party may submit a claim for indemnification
hereunder by delivering written notice of such claim to the Borrower and, unless
the claimant is the Agent, to the Agent, and such notice shall describe in
reasonable detail the basis for the claim, the amount or estimated amount of the
claim, and such other information as the Borrower or the Agent shall reasonable
request.
100
10.8. Amendments, Waivers, Etc. Except as may be otherwise specifically
set forth in this Agreement or the other Loan Documents, neither this Agreement
nor any other Loan Document nor any provision hereof or thereof may be amended,
modified, waived, discharged or terminated, and no consent to any departure by
the Borrower from any provision hereof or thereof may be given, except in a
writing signed by the Required Lenders; provided, however, that:
(a) no such amendment, modification, waiver, discharge, termination or
consent shall, without the consent of each Lender holding Credit Obligations
directly affected thereby, (i) reduce the principal amount of, or rate of
interest on, any Loan, or reduce any fees or other Credit Obligations (other
than fees payable to the Agent for its own account) or any obligations of any
Person now or hereafter primarily or contingently liable with respect to the
Credit Obligations or (ii) postpone any date fixed for any payment of principal,
interest (other than additional interest payable under SECTION 2.6(B) during the
continuance of an Event of Default), fees (other than fees payable to the Agent
for its own account) or any other Credit Obligations;
(b) no such amendment, modification, waiver, discharge, termination or
consent shall, without the consent of all Lenders, (i) increase the Commitments
of any Lender (it being understood that a waiver of any Default or Event of
Default or of any mandatory reduction in the Total Commitments shall not
constitute such an increase), (ii) change the definition of "Required Lenders"
or otherwise change the number or percentage of Lenders that shall be required
for the Lenders or any of them to take or approve, or direct the Agent to take,
any action hereunder, (iii) amend, modify or waive any of the provisions for
extending, or take action to extend, the term of the Revolving Credit Facility,
(iv) affect the obligation of the Lenders having Revolving Credit Commitments to
become L/C Participants, (v) amend any provision of this SECTION 10.8, (vi)
release all or substantially all of the Collateral or (vii) consent to the
assignment or transfer by the Borrower, or by any other Person now or hereafter
primarily or contingently liable with respect to the Credit Obligations, of any
of its rights and obligations under this Agreement or any of the other Loan
Documents;
(c) no provision relating to the rights or obligations of the Swingline
Lender or the Issuing Bank under this Agreement or any of the other Loan
Documents may be amended, modified or waived without the consent of such Person;
and
(d) no provision relating to the rights or obligations of the Agent
under this Agreement or any of the other Loan Documents may be amended, modified
or waived without the consent of the Agent.
10.9. Rights and Remedies Cumulative, Non-Waiver, Etc. The enumeration
of the Agent's and the Lenders' rights and remedies set forth in this Agreement
and the other Loan Documents is not intended to be exhaustive, and the exercise
by the Agent or any Lender of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative, and
shall be in addition to any other right or remedy given hereunder, under the
other Loan Documents or under any other agreement between the Borrower and the
Lenders, or any of them (or the Agent on their behalf), or that may now or
hereafter exist in law or in equity or by suit or otherwise. No delay or failure
to take action on the part of the Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between any of the Borrower and the Agent or the Lenders or their agents or
employees shall be effective to change, modify or discharge any provision of
this Agreement or to constitute a waiver of any Event of Default. No
101
notice to or demand upon the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of the Agent or any Lender to exercise any
right or remedy or take any other or further action in any circumstances without
notice or demand.
10.10. Binding Effect, Assignment. All of the terms of this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
successors and assigns of the Borrower, the Agent, the Issuing Bank and each
Lender; provided, however, that (i) the Borrower may not sell, assign or
transfer this Agreement or any portion hereof or thereof, including, without
limitation, any of its rights, title, interests, remedies, powers and duties
hereunder or thereunder and (ii) any assignees and participants of the Lenders
and any successor Issuing Bank shall have such rights and obligations with
respect to this Agreement and the other Loan Documents as are provided for in
and pursuant to SECTION 10.5.
10.11. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
10.12. Entire Agreement. THIS AGREEMENT AND THE LOAN DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED CONTEMPORANEOUSLY HEREWITH EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF, INCLUDING WITHOUT LIMITATION THE COMMITMENT LETTER. THIS
AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS AND THE INSTRUMENTS AND DOCUMENTS
EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
10.13. Interpretation. The captions to the various sections and
subsections of this Agreement have been inserted for convenience only and shall
not limit or affect any of the terms hereof. Unless the context otherwise
requires, words in the singular include the plural and words in the plural
include the singular, and the use of any gender shall be applicable to all
genders.
10.14. Counterparts; Effectiveness. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which shall together constitute one and the same
instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
10.15. Conflict of Terms. The Exhibits and Schedules hereto and the
other Loan Documents are incorporated in this Agreement by this reference
thereto. Except as otherwise provided in this Agreement and except as otherwise
provided in the other Loan Documents, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision of the other
Loan Documents, the provision contained in this Agreement shall control.
10.16. Injunctive Relief. The Borrower recognizes that in the event it
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to the
Agent and the Lenders. The Borrower therefore
102
agrees that the Agent and the Lenders, if the Agent so requests, shall be
entitled to temporary and permanent injunctive relief without the necessity of
proving actual damages in any case where a remedy at law, in the reasonable good
faith opinion of the Required Lenders, may prove to be inadequate relief.
10.17. Confidentiality. Each Lender agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all nonpublic confidential information provided in connection with this
Agreement or any other Loan Document and agrees and undertakes that it shall not
use any such information for any purpose or in any manner other than pursuant to
the terms contemplated by this Agreement. Any Lender may disclose such
information (i) at the request of any bank regulatory authority or in connection
with an examination of such Lender by any such authority, (ii) pursuant to
subpoena or other court process, (iii) when required to do so in accordance with
the provisions of any applicable law, (iv) at the express direction of any
agency of any State of the United States of America or of any other jurisdiction
in which such Lender conducts its business or (v) to such Lender's independent
auditors and other professional advisors that have a reasonable need or basis
for access thereto. The Lenders agree to use reasonable efforts to notify the
Borrower within a reasonable period of time prior to any such disclosure, except
no Lender shall be required to notify the Borrower of disclosures pursuant to a
bank examination or audit. Notwithstanding the foregoing, the Borrower agrees
and consents to the Agent's disclosure of information relating to this
transaction to Gold Sheets and other similar bank trade publications. Such
information will consist of deal terms and other information customarily found
in such publications.
10.18. Effect of Amendment and Restatement. This Agreement amends and
restates the Original Credit Agreement in its entirety; provided, however, that
the provisions of the Original Credit Agreement and the other Credit Documents
relating to indemnification or payment of fees, costs and expenses for the
benefit of the Agent and the Lenders (in each case, as defined in the Original
Credit Agreement), including, without limitation, the provisions of SECTIONS
2.11(A), 2.11(B), 2.12, 2.13, 2.18(H), 9.7, 10.6 and 10.7 of the Original Credit
Agreement, shall survive the effectiveness of this Agreement and the amendment
and restatement of the Original Credit Agreement effected hereby; provided,
further, however, that the Original Credit Agreement remains in full force and
effect until the Amendment Effective Date. Upon the effectiveness of this
Agreement, (i) all Existing Loans (if any) shall be deemed to be Revolving
Credit Loans hereunder, shall be evidenced by the Revolving Credit Notes and
shall be entitled to all of the benefits of this Agreement and the other Loan
Documents, and (ii) all other Loan Documents, instruments, certificates,
financial statements and other documents executed or delivered by or on behalf
of the Borrower or any of its Subsidiaries pursuant to the Original Credit
Agreement at any time prior to the effectiveness of this Agreement shall be
deemed to have been executed or delivered pursuant to this Agreement.
[Signature page to follow]
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their corporate names by their duly authorized corporate officers as
of the date first above written.
PROVINCE HEALTHCARE COMPANY
By: /s/ CHRISTOPHER T. HANNON
----------------------------------------
Name: Christopher T. Hannon
-----------------------------------
Title: Vice President of Finance
----------------------------------
FIRST UNION NATIONAL BANK,
AS AGENT AND AS ISSUING BANK
By: /s/ JOSEPH H. TOWELL
----------------------------------------
Name: Joseph H. Towell
-----------------------------------
Title: Senior Vice President
----------------------------------
(signatures continued)
104
FIRST UNION NATIONAL BANK
By: /s/ JOSEPH H. TOWELL
----------------------------------------
Name: Joseph H. Towell
-----------------------------------
Title: Senior Vice President
----------------------------------
Revolving Credit Commitment: $23,460,127
Address:
First Union National Bank
One First Union Center, DC-5
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Healthcare Finance Group
Telephone: (704) 383-7121
Telecopy: (704) 383-9144
First Union National Bank
150 Fourth Avenue North
2nd Floor
Nashville, Tennessee 37219
Attention: Carolyn Hannon
Telephone: (615) 251-9374
Telecopy: (615) 251-9247
Wiring Instructions:
First Union National Bank
Charlotte, North Carolina
ABA# 053000219
For further credit to:
Syndication Agency Services
GL# 465906
RC# 5007
Reference: Province Healthcare Company
(signatures continued)
105
BANQUE PARIBAS
By: /s/ ROGER MAY
----------------------------------------
Name: Roger May
-----------------------------------
Title: AVP
----------------------------------
By: /s/ LARRY ROBINSON
----------------------------------------
Name: Larry Robinson
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $22,547,789
Lending Office, Hand Delivery Address
and Mailing Address:
Banque Paribas Houston Agency
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telephone: (713) 659-4811
Telecopy: (713) 659-5234
Attention: Glenn Mealey
Wiring Instructions:
Bankers Trust Company New York
ABA # 021001033
For Account 04202195 - Banque Paribas
New York
For further credit to:
Acct. # 2144-001545 - Banque Paribas
Houston Agency
Reference: Province Healthcare Company
Loan Operations Activity Contact:
Banque Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telephone: (713) 659-4811
Telecopy: (713) 659-5305
Primary Contact: Leah Evans-Hughes
Secondary Contact: Kim Miller
(signatures continued)
106
Banque Paribas Houston Agency
Letter of Credit Activity Contact:
Primary Contact:
Bank Paribas New York
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telephone: (713) 659-4811
Telecopy: (713) 659-3832
Telex: 166514 or 166343
Primary Contact: Cheryl Johnson
Secondary Contact: Melissa Health
Wiring Instructions for Letter of Credit Activity:
Bankers Trust Company, New York
ABA # 021001033
For Acct. # 04-204254 - Banque Paribas Houston Agency
(signatures continued)
107
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ JOHN OBERLE
----------------------------------------
Name: John Oberle
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $20,853,447
Lending Office, Hand Delivery Address
and Mailing Address:
Credit Lyonnais
1301 Avenue of the Americas
New York, New York 10019
Telephone: (212) 261-7791
Telecopy: (212) 261-3440
Attention: Martin D. Golden
Wiring Instructions:
Credit Lyonnais
New York, New York
ABA # 0260-0807-3
Acct. # 01-88179-3701
Attention: Loan Servicing
Reference: Province Healthcare Company
(signatures continued)
108
NATIONSBANK OF TENNESSEE, N.A.
By: /s/ ELIZABETH L. KNOX
----------------------------------------
Name: Elizabeth L. Knox
-----------------------------------
Title: Senior Vice President
----------------------------------
Revolving Credit Commitment: $20,853,447
Lending Office, Hand Delivery Address
and Mailing Address:
NationsBank of Tennessee, N.A.
1 NationsBank Plaza
TN1 100 04 17
Nashville, Tennessee 37239-1697
Telephone: (615) 749-3918
Telecopy: (615) 749-4951
Attention: Elizabeth Knox, SVP
Wiring Instructions:
NationsBank of Tennessee, N.A.
Nashville, TN
ABA # 064000020
Cr. GL 136621-0082
Specialized Loan Support
Attn: Lareen Matthews
Reference: Province Healthcare Company
(signatures continued)
109
AMSOUTH BANK
By: /s/ CATHY M. WIND
----------------------------------------
Name: Cathy M. Wind
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $17,377,872
Lending Office, Hand Delivery Address
and Mailing Address:
AmSouth Bank
333 Union Street, Suite 200
Nashville, Tennessee 37201
Telephone: (615) 291-5268
Telecopy: (615) 291-5257
Attention: Cathy Wind
Wiring Instructions:
AmSouth Bank
ABA # 062000019
Attn: Kristi Mann (notify at 205-801-0250)
Reference: Province Healthcare Company
(signatures continued)
110
FIRST AMERICAN NATIONAL BANK
By: /s/ SANDY HAMRICK
----------------------------------------
Name: Sandy Hamrick
-----------------------------------
Title: Senior Vice President
----------------------------------
Revolving Credit Commitment: $13,033,404
Lending Office, Hand Delivery Address
and Mailing Address:
First American Center
2nd Floor - Healthcare Division
Nashville, Tennessee 37237-0203
Telephone: (615) 748-2191
Telecopy: (615) 748-8480
Attention: Sandy Hamrick
Wiring Instructions:
First American National Bank
Nashville, Tennessee
ABA #: 064000017
For further credit to:
WTCA# 901256
Attention: Frenisa Joy (615-365-5683)
Reference: Province Healthcare Company
(signatures continued)
111
KEY CORPORATE CAPITAL, INC.
By: /s/ CHARLES J. SHOOP
----------------------------------------
Name: Charles J. Shoop
-----------------------------------
Title: AVP
----------------------------------
Revolving Credit Commitment: $17,377,872
Lending Office, Hand Delivery Address
and Mailing Address:
KeyBank, N.A.
525 Vine Street, 6th Floor
Cincinnati, Ohio 45202
Telephone: (513) 762-8292
Telecopy: (513) 762-8450
Attention: Charlie Shoop
Wiring Instructions:
KeyBank, N.A.
ABA # 041001039
Commercial Loan Operations
Acct. # 3057
Attn: Gina Iannaggi (216-689-3580)
Reference: Province Healthcare Company
(signatures continued)
112
LEHMAN COMMERCIAL PAPER INC.
By: /s/ MICHELE SWANSON
----------------------------------------
Name: Michele Swanson
-----------------------------------
Title: Authorized Signatory
----------------------------------
Revolving Credit Commitment: $17,377,872
Lending Office:
Lehman Commercial Paper Inc.
c/o Bankers Trust Company
Corporate Trust & Agency Group, Loan Services
4 Albany Street, 7th Floor
New York, New York 10006
Telephone: (212) 250-7262
Telecopy: (212) 250-6151
Attention: Chris Wahl
and
Lehman Commercial Paper Inc.
101 Hudson Street, 30th Floor
Jersey City, New Jersey 07302
Telephone: (201) 524-4518
Telecopy: (201) 524-5847
Attention: Tom Wilson
With copies of modifications to
Credit Agreement and financial
information only to:
Michele Swanson
Lehman Commercial Paper Inc.
3 World Financial Center, 10th Floor
New York, New York 10285
Telephone: (212) 526-0330
Telecopy: (212) 528-0819
Lehman Commercial Paper Inc.
Wiring Instructions:
Bankers Trust ABA # 021-001-033 For
further credit to:
Favor NY Ltd. Loan Services / Lehman
Acct. # 01-442-898
Attention: Chris Wahl
(signatures continued)
113
NATIONAL CITY BANK OF KENTUCKY
By: /s/ RODERIC M. BROWN
----------------------------------------
Name: Roderic M. Brown
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $17,377,872
Lending Office, Hand Delivery Address
and Mailing Address:
National City Bank of Kentucky
101 South Fifth Street
Louisville, Kentucky 40202
Telephone: (502) 581-4369
Telecopy: (502) 581-4424
Attention: Roderic M. Brown
Wiring Instructions:
National City Bank of Kentucky
ABA # 083000056
For further credit to:
G/L # 151804
Commercial Loan Department
Reference: Province Healthcare Company
(signatures continued)
114
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ALBERT W. KELLEY
----------------------------------------
Name: Albert W. Kelley
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $17,377,872
Lending Office, Hand Delivery Address
and Mailing Address:
Union Bank of California
445 South Figueroa Street, 16th Floor
Los Angeles, California 90071
Telephone: (213) 236-4284
Telecopy: (213) 236-7814
Attention: Albert W. Kelley, VP
Wiring Instructions:
Union Bank of California
ABA # 1220-00496
For further credit to:
Acct. # 070196431
Attn: Wire Clearing Account
Reference: Province Healthcare Company
(signatures continued)
115
FLEET NATIONAL BANK
By: /s/ MARYANN S. SMITH
----------------------------------------
Name: MaryAnn S. Smith
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $17,377,872
Lending Office, Hand Delivery Address
and Mailing Address:
Fleet National Bank
75 State Street, MA BOF 04 A
Boston, Massachusetts 02109
Telephone: (617) 346-1594
Telecopy: (617) 346-0610
Attention: Maryann S. Smith
Wiring Instructions:
Fleet National Bank
ABA # 011000138
G/L # 1510351-03156
Reference: Province Healthcare Company
(signatures continued)
116
MELLON BANK, N.A.
By: /s/ MARSHA WICKER
----------------------------------------
Name: Marsha Wicker
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $13,033,404
Lending Office, Hand Delivery Address
and Mailing Address:
Mellon Bank, N.A.
One Mellon Bank Center, Room 151-0370
Pittsburgh, Pennsylvania 15258-0001
Telephone: (412) 234-4458
Telecopy: (412) 236-0287
Attention: Scott Hennessee, Vice President
Wiring Instructions:
Mellon Bank, N.A.
ABA # 0430-0026-1
Acct. # 990873800
Attn: Dan Steele
Reference: Province Healthcare Company
(signatures continued)
117
CORESTATES BANK, N.A.
By: /s/ ELIZABETH D. MORRIS
----------------------------------------
Name: Elizabeth D. Morris
-----------------------------------
Title: Vice President
----------------------------------
Revolving Credit Commitment: $6,951,149
Lending Office, Hand Delivery Address
and Mailing Address:
CoreStates Bank, N.A.
1339 Chestnut Street
FC 1-8-3-22
Philadelphia, Pennsylvania 19101
Telephone: (215) 786-7275
Telecopy: (215) 973-2738
Attention: Liz Morris
Wiring Instructions:
CoreStates Bank, N.A.
ABA # 031000011
A/C# 132-0452
Commercial Loan Services RC 2490
Reference: Province Healthcare Company
118
Annex 1 to Amended and Restated
Credit Agreement
First Union National Bank, as Agent
Province Healthcare Company
March 30, 1998 / $225,000,000
-----------------------------------
================================================================================================================================
EXISTING LOANS EXISTING LOANS AMOUNT
(PRIOR TO (AFTER PURCHASED
LENDER AGREEMENT) ASSIGNMENTS) (SOLD) PRO RATA SHARE COMMITMENT
- --------------------------------------------------------------------------------------------------------------------------------
First Union National Bank $ 6,750,000 $4,692,025.49 ($2,057,974.51) 10.4267233067% $ 23,460,127
- --------------------------------------------------------------------------------------------------------------------------------
AmSouth Bank $ 6,075,000 $3,475,574.44 ($2,599,425.56) 7.7234987467% $ 17,377,872
- --------------------------------------------------------------------------------------------------------------------------------
Lehman Commercial Paper Inc. $ 5,625,000 $3,475,574.44 ($2,149,425.56) 7.7234987467% $ 17,377,872
- --------------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais New York Branch $ 5,175,000 $4,170,689.32 ($1,004,310.68) 9.2681984933% $ 20,853,447
- --------------------------------------------------------------------------------------------------------------------------------
Banque Paribas Houston Agency $ 4,500,000 $4,509,557.83 $ 9,557.83 10.0212396222% $ 22,547,789
- --------------------------------------------------------------------------------------------------------------------------------
Key Bank of Oregon $ 4,500,000 $ 0 0% 7.7234987467% $ 0
- --------------------------------------------------------------------------------------------------------------------------------
Key Corporate Capital Inc. $ 0 $3,475,574.44 $ 3,475,574.44 7.7234987467% $ 17,377,872
- --------------------------------------------------------------------------------------------------------------------------------
National City Bank of Kentucky $ 4,500,000 $3,475,574.44 ($1,024,425.56) 7.7234987467% $ 17,377,872
- --------------------------------------------------------------------------------------------------------------------------------
Union Bank of California $ 4,500,000 $3,475,574.44 ($1,024,425.56) 7.7234987467% $ 17,377,872
- --------------------------------------------------------------------------------------------------------------------------------
First American National Bank $ 3,375,000 $2,606,680.83 ($ 768,319.17) 5.7926240578% $ 13,033,404
- --------------------------------------------------------------------------------------------------------------------------------
Nationsbank of Tennessee, N.A. $ 0 $4,170,689.32 $ 4,170,689.32 9.2681984933% $ 20,853,477
- --------------------------------------------------------------------------------------------------------------------------------
Corestates Bank, N.A $ 0 $1,390,229.77 $ 1,390,229.77 3.0893994978% $ 6,951,149
- --------------------------------------------------------------------------------------------------------------------------------
Fleet National Bank $ 0 $3,475,574.44 $ 3,475,574.44 7.7234987467% $ 17,377,872
- --------------------------------------------------------------------------------------------------------------------------------
Mellon Bank, N.A $ 0 $2,606,680.83 $ 2,606,680.83 5.7926240578% $ 13,033,404
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL $45,000,000 $ 45,000,000 100.0000% $225,000,000
================================================================================================================================
The Schedules and Exhibits to the Amended and Restated Credit Agreement are on
file at the Company's offices in Nashville, TN.