<Page>
EXHIBIT 10.3
EXECUTION COPY
================================================================================
CREDIT AGREEMENT
dated as of March 27, 2003,
among
AMERIPATH, INC.,
AMERIPATH HOLDINGS, INC.,
THE LENDERS NAMED HEREIN,
and
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent and Collateral Agent
--------------------
CREDIT SUISSE FIRST BOSTON
and
DEUTSCHE BANK SECURITIES, INC.,
as Joint Bookrunners and Joint Lead Arrangers
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i
TABLE OF CONTENTS
<Table>
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms..........................................................................2
SECTION 1.02. Terms Generally.......................................................................27
SECTION 1.03. Pro Forma Calculations................................................................27
SECTION 1.04. Classification of Loans and Borrowings................................................27
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments...........................................................................28
SECTION 2.02. Loans.................................................................................28
SECTION 2.03. Borrowing Procedure...................................................................30
SECTION 2.04. Evidence of Debt; Repayment of Loans..................................................30
SECTION 2.05. Fees..................................................................................31
SECTION 2.06. Interest on Loans.....................................................................32
SECTION 2.07. Default Interest......................................................................32
SECTION 2.08. Alternate Rate of Interest............................................................33
SECTION 2.09. Termination and Reduction of Commitments..............................................33
SECTION 2.10. Conversion and Continuation of Borrowings.............................................34
SECTION 2.11. Repayment of Term Borrowings..........................................................35
SECTION 2.12. Optional Prepayments..................................................................36
SECTION 2.13. Mandatory Prepayments.................................................................37
SECTION 2.14. Reserve Requirements; Change in Circumstances.........................................38
SECTION 2.15. Change in Legality....................................................................39
SECTION 2.16. Indemnity.............................................................................40
SECTION 2.17. Pro Rata Treatment....................................................................40
SECTION 2.18. Sharing of Setoffs....................................................................40
SECTION 2.19. Payments..............................................................................41
SECTION 2.20. Taxes.................................................................................41
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate...............43
SECTION 2.22. Swingline Loans.......................................................................44
SECTION 2.23. Letters of Credit.....................................................................45
SECTION 2.24. Increase in Revolving Credit Commitments..............................................50
</Table>
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ii
<Table>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers..................................................................51
SECTION 3.02. Authorization.........................................................................51
SECTION 3.03. Enforceability........................................................................51
SECTION 3.04. Governmental Approvals................................................................52
SECTION 3.05. Financial Statements..................................................................52
SECTION 3.06. No Material Adverse Change............................................................52
SECTION 3.07. Title to Properties; Possession Under Leases..........................................53
SECTION 3.08. Subsidiaries..........................................................................53
SECTION 3.09. Litigation; Compliance with Laws......................................................53
SECTION 3.10. Agreements............................................................................54
SECTION 3.11. Federal Reserve Regulations...........................................................55
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act............................55
SECTION 3.13. Use of Proceeds.......................................................................55
SECTION 3.14. Tax Returns...........................................................................55
SECTION 3.15. No Material Misstatements.............................................................55
SECTION 3.16. Employee Benefit Plans................................................................55
SECTION 3.17. Environmental Matters.................................................................56
SECTION 3.18. Insurance.............................................................................56
SECTION 3.19. Security Documents....................................................................56
SECTION 3.20. Location of Real Property and Leased Premises.........................................57
SECTION 3.21. Labor Matters.........................................................................57
SECTION 3.22. Solvency..............................................................................57
SECTION 3.23. Senior Indebtedness...................................................................58
SECTION 3.24. Fraud and Abuse.......................................................................58
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. All Credit Events.....................................................................58
SECTION 4.02. First Credit Event....................................................................59
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Existence; Businesses and Properties..................................................62
SECTION 5.02. Insurance.............................................................................63
SECTION 5.03. Taxes.................................................................................64
SECTION 5.04. Financial Statements, Reports, etc....................................................64
SECTION 5.05. Litigation and Other Notices..........................................................66
</Table>
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iii
<Table>
SECTION 5.06. Information Regarding Collateral......................................................66
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.............................67
SECTION 5.08. Use of Proceeds.......................................................................67
SECTION 5.09. Further Assurances....................................................................67
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness..........................................................................68
SECTION 6.02. Liens.................................................................................70
SECTION 6.03. Sale and Lease-Back Transactions......................................................72
SECTION 6.04. Investments, Loans and Advances.......................................................72
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.............................75
SECTION 6.06. Restricted Payments; Restrictive Agreements...........................................75
SECTION 6.07. Transactions with Affiliates..........................................................77
SECTION 6.08. Business of Holdings, Borrower and Subsidiaries.......................................78
SECTION 6.09. Other Indebtedness and Agreements.....................................................78
SECTION 6.10. Capital Expenditures..................................................................78
SECTION 6.11. Interest Coverage Ratio...............................................................79
SECTION 6.12. Fixed Charge Coverage Ratio...........................................................79
SECTION 6.13. Maximum Leverage Ratio................................................................80
SECTION 6.14. Fiscal Year...........................................................................81
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices ..............................................................................86
SECTION 9.02. Survival of Agreement ................................................................86
SECTION 9.03. Binding Effect .......................................................................87
SECTION 9.04. Successors and Assigns ...............................................................87
SECTION 9.05. Expenses; Indemnity ..................................................................91
SECTION 9.06. Right of Setoff.......................................................................93
</Table>
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<Table>
SECTION 9.07. Applicable Law........................................................................93
SECTION 9.08. Waivers; Amendment....................................................................93
SECTION 9.09. Interest Rate Limitation..............................................................94
SECTION 9.10. Entire Agreement......................................................................95
SECTION 9.11. Waiver of Jury Trial..................................................................95
SECTION 9.12. Severability..........................................................................95
SECTION 9.13. Counterparts..........................................................................95
SECTION 9.14. Headings..............................................................................96
SECTION 9.15. Jurisdiction; Consent to Service of Process...........................................96
SECTION 9.16. Confidentiality.......................................................................96
SECTION 9.17. Release of Contingent Note Reserve....................................................97
</Table>
SCHEDULES
Schedule 1.01(a) Subsidiary Guarantors
Schedule 1.01(b) Contingent Notes
Schedule 2.01 Lenders and Commitments
Schedule 3.02 Authorization
Schedule 3.04 Government Approvals
Schedule 3.08 Subsidiaries
Schedule 3.09(a) Litigation
Schedule 3.09(c) Licenses and Certifications
Schedule 3.09(e) Stark II
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19 Filing Offices
Schedule 3.20 Leased Property
Schedule 3.24 Fraud and Abuse
Schedule 4.02(a) Other Local Counsel
Schedule 6.01(a) Certain Outstanding Indebtedness on Closing Date
Schedule 6.01(o) Certain Outstanding Indebtedness on Closing Date
Schedule 6.02 Liens Existing on Closing Date
Schedule 6.04 Existing Investments
Schedule 6.06 Restricted Payments
Schedule 6.07 Transactions with Affiliates
EXHIBITS
EXHIBIT A Form of Administrative Questionnaire
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Form of Borrowing Request
EXHIBIT D Form of Guarantee and Collateral Agreement
EXHIBIT E Form of Perfection Certificate
EXHIBIT F-l Form of Opinion of Reboul, MacMurray, Hewitt & Maynard
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v
EXHIBIT F-2 Form of Local Counsel Opinion
EXHIBIT G Form of Subordination Provisions
<Page>
CREDIT AGREEMENT dated as of March 27, 2003 among
AMERIPATH, INC., a Delaware corporation (the
"BORROWER"), AMERIPATH HOLDINGS, INC., a Delaware
corporation ("HOLDINGS"), the Lenders (as defined in
Article I), and CREDIT SUISSE FIRST BOSTON, a bank
organized under the laws of Switzerland, acting through
its Cayman Islands branch, as administrative agent (in
such capacity, the "ADMINISTRATIVE AGENT") and as
collateral agent (in such capacity, the "COLLATERAL
AGENT") for the Lenders.
Pursuant to the Agreement and Plan of Merger (the "MERGER AGREEMENT") dated
as of December 8, 2002, by and among Holdings, Amy Acquisition Corp., a Delaware
corporation ("MERGER SUB") and the Borrower, Holdings will acquire the Borrower
in an acquisition transaction (the "ACQUISITION") in which Merger Sub will be
merged with and into the Borrower, and each existing share of common stock of
the Borrower (other than shares held by the Permitted Investors or dissenting
stockholders that properly exercise their appraisal rights) will be converted
into the right to receive $21.25 in cash. The aggregate amount of consideration
to be paid pursuant to the Merger Agreement in respect of such shares and to the
existing holders of the Borrower's options and warrants is approximately
$629,300,000 (the "CASH MERGER CONSIDERATION").
The Borrower has requested the Lenders to extend credit in the form of (a)
Term Loans (such term and each other capitalized term used but not defined in
this introductory statement having the meaning given it in Article I) on the
Closing Date, in an aggregate principal amount not in excess of $225,000,000,
and (b) Revolving Loans at any time and from time to time prior to the Revolving
Credit Maturity Date, in an aggregate principal amount at any time outstanding
not in excess of $65,000,000. The Borrower has requested the Swingline Lender to
extend credit, at any time and from time to time prior to the Revolving Credit
Maturity Date, in the form of Swingline Loans, in an aggregate principal amount
at any time outstanding not in excess of $10,000,000. The Borrower has requested
the Issuing Bank to issue Letters of Credit, in an aggregate face amount at any
time outstanding not in excess of $20,000,000, to support payment obligations
incurred in the ordinary course of business by the Borrower and its
Subsidiaries. The proceeds of the Term Loans are to be used solely (a) to pay
the Cash Merger Consideration, (b) to refinance all amounts outstanding and due
under the Existing Credit Agreement and (c) to pay fees and expenses incurred in
connection with the Transactions in an aggregate amount not to exceed
$38,000,000. The proceeds of the Revolving Loans and the Swingline Loans are to
be used solely for general corporate purposes.
The Lenders are willing to extend such credit to the Borrower and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ACQUIRED ENTITY" shall have the meaning assigned to such term in Section
6.04(g).
"ADDITIONAL SELLER NOTES" shall mean unsecured, Subordinated contingent
notes issued by the Borrower or any Subsidiary Guarantor, and any earn-out
obligations incurred by the Borrower or any Subsidiary Guarantor (whether or not
represented by actual notes), in each case to the seller (or any of its
Affiliates) in connection with any Permitted Acquisition, the subordination
provisions of which are no less favorable in any material respect to the Lenders
than those set forth in Exhibit G. For purposes of this Agreement, the aggregate
outstanding amount of any Additional Seller Notes at any time shall be the
Midpoint Amount of such notes certified by the Borrower pursuant to Section
6.04(g)(v).
"ADDITIONAL SUBORDINATED DEBT" shall mean unsecured, subordinated
Indebtedness of Holdings, the Borrower or any Subsidiary Guarantor (i) that
requires no scheduled payment of principal prior to a date that is one year
after the Term Loan Maturity Date and (ii) the subordination provisions and
other non-pricing terms and conditions of which are no less favorable to the
Lenders than the analogous provisions of the Subordinated Notes (or, if issued
by Holdings, than the analogous provisions (including the pay-in-kind
provisions) of the Holdings Subordinated Notes.
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum equal to the product of (a)
the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such term in
Section 2.05(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative Questionnaire
in the form of Exhibit A, or such other form as may be supplied from time to
time by the Administrative Agent.
"AFFILIATE" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; PROVIDED, HOWEVER, that, for purposes of Section 6.07, the term
"AFFILIATE" shall also include (i) any person that directly or indirectly owns
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5% or more of any class of Equity Interests of the person specified or (ii) any
person that is an officer or director of the person specified.
"AFFILIATED PRACTICE" shall mean any physician-owned professional
organization, association or corporation that employs or contracts with
physicians engaged in a pathology practice and has entered into a Management
Services Agreement with the Borrower or any Subsidiary.
"AGGREGATE REVOLVING CREDIT EXPOSURE" shall mean the aggregate amount of
the Lenders' Revolving Credit Exposures.
"ALLOWABLE AMOUNT" shall mean, with respect to any fiscal year, beginning
with the fiscal year ending December 31, 2004:
(a) if the Leverage Ratio at me end of the preceding fiscal year shall have
been greater than 3.00 to 1.00, the least of (i) $6,700,000, (ii) the Borrower's
Portion of Excess Cash Flow and (iii) the Pro Forma Allowable Amount; and
(b) if the Leverage Ratio at the end of the preceding fiscal year shall
have been less than or equal to 3.00 to 1.00, the least of (i) $ 10,000,000,
(ii) the Borrower's Portion of Excess Cash Flow and (iii) the Pro Forma
Allowable Amount.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. If the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"APPLICABLE PERCENTAGE" shall mean, for any day, (a) with respect to any
Eurodollar Term Loan, 4,50%, (b) with respect to any ABR Term Loan, 3.50%, and
(c) with respect to any Eurodollar Revolving Loan or ABR Revolving Loan, as the
case may be, the applicable percentage set forth below under the caption
"Eurodollar Spread--Revolving Loans" or "ABR Spread--Revolving Loans", as the
case may be, based upon the Leverage Ratio as of the relevant date of
determination:
<Table>
<Caption>
EURODOLLAR ABR
SPREAD- SPREAD-
REVOLVING REVOLVING
LEVERAGE RATIO LOANS LOANS
-----------------------------------------------------------
Category 1 3.50% 2.50%
-----------------------------------------------------------
</Table>
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<Table>
<Caption>
EURODOLLAR ABR
SPREAD- SPREAD-
REVOLVING REVOLVING
LEVERAGE RATIO LOANS LOANS
---------------------------------------------------------------
Greater than 4.00 to 1.00
---------------------------------------------------------------
CATEGORY 2 3.25% 2.25%
Greater than 3.50 to 1.00,
but less than or equal to
4.00 to 1.00
---------------------------------------------------------------
CATEGORY 3 3.00% 2.00%
Greater than 3.00 to 1.00,
but less than or equal to
3.50 to 1.00
---------------------------------------------------------------
CATEGORY 4 2.75% 1.75%
Less than or equal to 3.00
to 1.00
---------------------------------------------------------------
</Table>
Each change in the Applicable Percentage resulting from a change in the
Leverage Ratio shall be effective with respect to all Loans and Letters of
Credit outstanding on and after the date of delivery to the Administrative Agent
of the financial statements and certificates required by Section 5.04(a) or (b)
and Section 5.04(d) or (e), respectively, indicating such change until the date
immediately preceding the next date of delivery of such financial statements and
certificates indicating another such change. Notwithstanding the foregoing,
until the Borrower shall have delivered the financial statements and
certificates required by Section 5.04(a) or (b) and Section 5.04(d) or (c),
respectively, for the period ended September 30, 2003, the Leverage Ratio shall
be deemed to be in Category 1 for purposes of determining the Applicable
Percentage. In addition, (a) at any time during which the Borrower has failed to
deliver the financial statements and certificates required by Section 5.04(a) or
(b) and Section 5.04(d) or (e), respectively, or (b) at any time after the
occurrence and during the continuance of an Event of Default, the Leverage Ratio
shall be deemed to be in Category 1 for purposes of determining the Applicable
Percentage.
"ASSET SALE" shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by Holdings, the Borrower or any of
the Subsidiaries to any person other than the Borrower or any Subsidiary
Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than
directors' qualifying shares) or (b) any other assets of Holdings, the Borrower
or any of the Subsidiaries (other than (i) inventory, damaged, obsolete or worn
out assets, scrap and Permitted Investments, in each case disposed of in the
ordinary course
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of business, (ii) non-exclusive licenses or sublicenses to use the patents,
trade secrets, know-how and other intellectual property of Holdings, the
Borrower or any Subsidiary to the extent such license does not interfere with
the business of Holdings, the Borrower or any Subsidiary or (iii) dispositions
between or among Foreign Subsidiaries).
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent, in
the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"BOARD" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"BORROWER'S PORTION OF EXCESS CASH FLOW" shall mean, at any date of
determination, the amount of Excess Cash Flow for the preceding fiscal year of
the Borrower (or, in the case of the fiscal year ending on December 31, 2003,
the portion thereof commencing on the Closing Date and ending on such date), and
ending prior to the date of determination that (a) was not or is not required to
be applied to the prepayment of Term Loans as described in Section 2.13(d) and
(b) has not been utilized on or prior to the date of determination to make a
Restricted Payment pursuant to Section 6.06(a)(iv).
"BORROWING" shall mean (a) Loans of the same Class and Type made, converted
or continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect, or (b) a Swingline Loan.
"BARROWING REQUEST" shall mean a request by the Borrower in accordance with
the terms of Section 2.03 and substantially in the form of Exhibit C, or such
other form as shall be approved by the Administrative Agent.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
PROVIDED, HOWEVER, that when used in connection with a Eurodollar Loan, the term
"BUSINESS DAY" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, without duplication, (a)
the additions to property, plant and equipment and other capital expenditures of
the Borrower and its consolidated Subsidiaries that are (or should be) set forth
in a consolidated statement of cash flows of the Borrower for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations or Synthetic
Lease Obligations incurred by the Borrower and its consolidated Subsidiaries
during such period, but excluding in each case (i) any such expenditure made to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such
property, to the extent such expenditure is made with insurance proceeds,
condemnation awards or damage recovery proceeds relating to any such damage,
loss, destruction or condemnation and (ii) any such expenditures made with the
cash proceeds of any Asset Sale to the extent such proceeds are reinvested
within the period required by the definition of "Net Cash Proceeds". For
purposes of determining the Fixed Charge Coverage Ratio for the periods ended on
June 30, 2003 and September 30, 2003, Capital
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Expenditures will BE deemed to be equal to (i) for the fiscal quarter ended
September 30, 2002, $2,122,000 and (ii) for the fiscal quarter ended December
31, 2002, $2,867,000.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CHAMPUS" shall mean the United States Department of Defense Civilian
Health and Medical Program of the Uniformed Services.
A "CHANGE IN CONTROL" shall mean any of the following events:
(a) prior to the initial Public Equity Offering, the Permitted Investors
shall fail to own, directly or indirectly, beneficially and of record, and have
the right to vote Equity Interests in Holdings representing at least 51% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of Holdings;
(b) after the initial Public Equity Offering, (i) the Permitted Investors
shall fail to own, directly or indirectly, beneficially and of record, and have
the right to vote Equity Interests in Holdings representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of Holdings or (ii) any "person" or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) other than the Permitted
Investors becomes, directly or indirectly, the beneficial owner of Equity
Interests in Holdings representing more than 25% of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests of
Holdings;
(c) after the initial Public Equity Offering, during any period of two
consecutive years, individuals who at the beginning of such period constituted
the board of directors of Holdings (together with any new directors whose
election was approved by a majority of the directors then in office who were
either directors at the beginning of such period or whose election was
previously so approved) cease for any reason to have a majority of the total
voting power of the board of directors of Holdings;
(d) the occurrence of any change in control or similar event (however
denominated) with respect to Holdings or the Borrower under and as defined in
any indenture or agreement in respect of Material Indebtedness to which
Holdings, the Borrower or a Subsidiary is a party; or
(e) Holdings shall cease to directly own, beneficially and of record, 100%
of the issued and outstanding Equity Interests of the Borrower.
"CHANGE IN LAW" shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or
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application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes
of Section 2.14, by any lending office of such Lender or by such Lender's or
Issuing Bank's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term
Loans or Swingline Loans and, when used in reference to any Commitment, refers
to whether such Commitment is a Revolving Credit Commitment, Term Loan
Commitment or Swingline Commitment.
"CLOSING DATE" shall mean March 27, 2003.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" shall mean all the "Collateral" as defined in any Security
Document.
"COMMITMENT" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment, Term Loan Commitment and Swingline Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in Section
2.05(a).
"CONFIDENTIAL INFORMATION MEMORANDUM" shall mean the Confidential
Information Memorandum of the Borrower dated January 2003.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
(iv) any non-recurring fees, cash charges and other cash expenses (including
severance costs) made or incurred in connection with the Transactions that are
paid or otherwise accounted for within 90 days of the consummation of the
Transactions, (v) any extraordinary losses and (vi) any other non-cash charges
for such period (provided that any charges made or incurred in connection with
captive self-insurance reserves shall not be considered non-cash charges), and
minus (b) without duplication (i) all cash payments made during such period on
account of reserves, restructuring charges and other non-cash charges added to
Consolidated Net Income pursuant to clause (a)(vi) above in a previous period
and (ii) to the extent included in determining such Consolidated Net Income, any
extraordinary gains and all non-cash items of income for such period, all
determined on a consolidated basis in accordance with GAAP. For purposes of
determining the Fixed Charge Coverage Ratio, the Interest Coverage Ratio and the
Leverage Ratio as of or for the periods ended on June 30, 2003 and September 30,
2003, Consolidated EBITDA will be deemed to be equal to (i) for the fiscal
quarter ended September 30, 2002, $30,533,000 and (ii) for the fiscal quarter
ended December 31,2002, $23,151,000.
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"CONSOLIDATED FIXED CHARGES" shall mean, for any period, without
duplication, the sum of (a) Consolidated Interest Expense for such period and
(b) the aggregate amount of scheduled principal payments made during such period
in respect of long term Indebtedness of the Borrower and the Subsidiaries (other
than (i) payments made by the Borrower or any Subsidiary to the Borrower or any
Subsidiary and (ii) payments made in respect of Contingent Notes and Additional
Seller Notes), except to the extent refinanced with Indebtedness permitted by
Section 6.01. For purposes of determining the Fixed Charge Coverage Ratio for
the period of four consecutive quarters ending on June 30, 2003, September 30,
2003 and December 31, 2003, Consolidated Fixed Charges shall be deemed to be (a)
the Consolidated Fixed Charges for the fiscal quarter ended June 30, 2003,
multiplied by 4, (b) the Consolidated Fixed Charges for the two consecutive
fiscal quarters ended September 30, 2003, multiplied by 2 and (c) the
Consolidated Fixed Charges for the three consecutive fiscal quarters ended
December 31, 2003, multiplied by 4/3, respectively.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the sum of (a)
the interest expense (including imputed interest expense in respect of Capital
Lease Obligations and Synthetic Lease Obligations, but excluding amortization of
capitalized financing costs incurred in connection with the Transactions) of the
Borrower and the Subsidiaries for such period, plus (b) any interest accrued
during such period in respect of Indebtedness of the Borrower or any Subsidiary
that is required to be capitalized rather than included in consolidated interest
expense, minus (c) interest income of the Borrower and the Subsidiaries for such
period, in each case determined on a consolidated basis in accordance with GAAP.
For purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by the Borrower or any Subsidiary
with respect to interest rate Hedging Agreements. For purposes of determining
the Interest Coverage Ratio for the period of four consecutive quarters ending
on June 30, 2003, September 30, 2003 and December 31, 2003, Consolidated
Interest Expense shall be deemed to be (a) the Consolidated Interest Expense for
the fiscal quarter ended June 30, 2003, multiplied by 4, (b) the Consolidated
Interest Expense for the two consecutive fiscal quarters ended September 30,
2003, multiplied by 2 and (c) the Consolidated Interest Expense for the three
consecutive fiscal quarters ended December 31, 2003, multiplied by 4/3,
respectively.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income or
loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP (adjusted to reflect any charge, tax
or expense incurred or accrued by Holdings during such period (other than
interest expense in respect of the Holdings Subordinated Notes and Management
Fees) as though such charge, tax or expense had been incurred by the Borrower,
to the extent that the Borrower has made or would be entitled under the Loan
Documents to make any payment to or for the account of Holdings in respect
thereof); PROVIDED that there shall be excluded (a) the income of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by the Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, statute, rule or governmental regulation applicable to such Subsidiary,
except to the extent any such income is actually received by the Borrower or the
Subsidiary in the form of dividends, loans, fees or similar distributions, (b)
the income or loss of any person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any
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9
Subsidiary or the date that such person's assets are acquired by the Borrower or
any Subsidiary and (c) any gains attributable to sales of assets out of the
ordinary course of business.
"CONSOLIDATED PRACTICE" shall mean any Affiliated Practice, the accounts of
which are consolidated with the Borrower and its Subsidiaries in accordance with
GAAP.
"CONTINGENT NOTE RESERVE" shall mean the Accounts, the Accounts Collateral,
and any proceeds thereof and any funds and amounts deposited by Holdings with
the Accounts in connection therewith (as such terms are defined in the Custody
and Control Agreement).
"CONTINGENT NOTES" shall mean the unsecured contingent notes issued by the
Borrower and certain of the Subsidiaries in connection with acquisitions prior
to the Closing Date and any earn-out obligations incurred prior to the Closing
Date which are similar in nature thereto but which are not represented by actual
notes, all of which are set forth on Schedule 1.01(b).
"CONTRACT PROVIDER" shall mean any person or any employee, agent or
subcontractor of such person who provides professional health care services
under or pursuant to any contract with Holdings, the Borrower or any of the
Subsidiaries.
"CONTROL" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "CONTROLLING" and "CONTROLLED" shall have meanings correlative
thereto.
"CREDIT EVENT" shall have the meaning assigned to such term in Section
4.01.
"CURRENT ASSETS" shall mean, at any time, the consolidated current assets
(excluding cash and Permitted Investments but including Restricted Cash held for
the sole purpose of providing captive self-insurance benefits to the Borrower,
the Subsidiaries and the Affiliated Practices) of the Borrower and the
Subsidiaries.
"CURRENT LIABILITIES" shall mean, at any time, the consolidated current
liabilities of the Borrower and the Subsidiaries at such time, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness and
(b) outstanding Revolving Loans and Swingline Loans.
"CUSTODY AND CONTROL AGREEMENT" shall mean the Custody and Control
Agreement dated as of the date hereof among Holdings, the Collateral Agent and
Wachovia Bank, N.A., as Financial Intermediary.
"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DOLLARS" or "$" shall mean lawful money of the United States of America.
"DOMESTIC SUBSIDIARIES" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
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10
"ENVIRONMENTAL LAWS" shall mean all former, current and future Federal,
state, local and foreign laws (including common law), treaties, regulations,
rules, ordinances, codes, decrees, judgments, directives, orders (including
consent orders), and agreements issued, promulgated or entered into by or with
any Governmental Authority, in each case, relating to the environment, natural
resources, human health and safety or the presence, Release of, or exposure to,
Hazardous Materials, or the generation, manufacture, processing, distribution,
use, management, treatment, storage, transport, recycling or handling of, or the
arrangement for such activities with respect to, Hazardous Materials.
"ENVIRONMENTAL LIABILITY" shall mean all liabilities, obligations,
indemnities, damages, losses, claims, actions, suits, judgments, orders, fines,
penalties, fees, expenses and costs (including costs of administrative
proceedings or oversight, natural resource damages and investigation or
remediation costs), whether contingent or otherwise, directly or indirectly
arising out of or relating to (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the actual or alleged presence of, threatened Release or the
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"EQUITY INTERESTS" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity interests in any person.
"EQUITY ISSUANCE" shall mean any issuance or sale by Holdings, the Borrower
or any of their respective subsidiaries of any Equity Interests of Holdings, the
Borrower or any such subsidiary, as applicable, except in each case for (a) any
issuance or sale to Holdings, the Borrower or any Subsidiary, (b) any issuance
of directors' qualifying shares, (c) sales or issuances of common stock of
Holdings to (i) management, employees or consultants of Holdings, the Borrower,
any Subsidiary or any Managed Practice under any employment or similar
agreement, stock option or stock purchase plan or benefit plan in existence from
time to time or (ii) pursuant to an offering which shall be completed within 120
days following the Closing Date, (A) the total proceeds of which shall not
exceed $10,000,000 and (B) the total proceeds of which are used by Holdings to
repurchase or otherwise acquire its common stock from the Permitted Investors
pursuant to Section 6.06(ii)(B) and (d) any issuance of Equity Interests of
Holdings, the proceeds of which are contributed as common equity to the Borrower
to fund a portion of the purchase price of any Permitted Acquisition.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
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11
"ERISA EVENT" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the Borrower
or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (e) the
receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the adoption of any
amendment to a Plan that would require the provision of security pursuant to
Section 40l(a)(29) of the Code or Section 307 of ERISA; (g) the receipt by the
Borrower or any of its ERISA Affiliates of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the occurrence of a
"prohibited transaction" with respect to which Holdings, the Borrower or any of
the Subsidiaries is a "disqualified person" (within the meaning of Section 4975
of the Code) or with respect to which Holdings, the Borrower or any such
Subsidiary could otherwise be liable; or (i) any other event or condition with
respect to a Plan or Multiemployer Plan that could reasonably be expected to
result in liability of the Borrower or any Subsidiary.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Article
VII.
"EXCESS CASH FLOW" shall mean, for any fiscal year of the Borrower (or, in
the case of the fiscal year ended December 31, 2003, the portion thereof
commencing on the Closing Date and ending on such date), the excess of (a) the
sum, without duplication, of (i) Consolidated EBITDA for such fiscal year and
(ii) reductions to non-cash working capital of the Borrower and the Subsidiaries
for such fiscal year (I.E., the decrease, if any, in Current Assets minus
Current Liabilities from the beginning to the end of such fiscal year) over (b)
the sum, without duplication, of (i) the amount of any Taxes payable in cash by
the Borrower and the Subsidiaries with respect to such fiscal year, (ii)
Consolidated Interest Expense for such fiscal year payable in cash, (iii)
Capital Expenditures made in cash in accordance with Section 6.10 during such
fiscal year, except to the extent financed with the proceeds of Indebtedness
(other than Revolving Loans), equity issuances or other proceeds that would not
be included in Consolidated EBITDA, (iv) permanent repayments of Indebtedness
(other than mandatory prepayments of Loans under Section 2.13) made by the
Borrower and the Subsidiaries during such fiscal year, but only to the extent
that such prepayments by their terms cannot be reborrowed or redrawn and do not
occur in connection with a refinancing of all or any portion of such
Indebtedness, (v) additions to non-cash
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12
working capital for such fiscal year (I.E., the increase, if any, in Current
Assets minus Current Liabilities from the beginning to the end of such fiscal
year) and (vi) Restricted Payments pursuant to clause (ii) or (iii) of Section
6.06(a).
"EXCLUDED TAXES" shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.21(a)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.20(c), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.20(a).
"EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement dated as of
November 30, 2001, among the Borrower, certain Subsidiaries and Affiliates of
the Borrower, as guarantors, the lenders from time to time party thereto, Bank
of America, N.A., as administrative agent and First Union National Bank and
Salomon Smith Barney Inc., as co-syndication agents, as amended by Amendment No.
1 dated July 1, 2002.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for the day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEE LETTER" shall mean the Fee Letter dated December 6, 2002, among
Holdings, the Administrative Agent, Deutsche Bank AG Cayman Islands Branch and
Deutsche Bank Securities Inc.
"FEES" shall mean the Commitment Fees, the Administrative Agent Fees, the
L/C Participation Fees and the Issuing Bank Fees.
"FINANCIAL OFFICER" of any person shall mean the chief financial officer,
principal accounting officer, Treasurer or Controller of such person.
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13
"FIXED CHARGE COVERAGE RATIO" shall mean, for any period, the ratio of (a)
the sum of (i) Consolidated EBITDA for such period, minus (ii) Capital
Expenditures made in cash during such period (except to the extent financed with
the proceeds of Indebtedness (other than Revolving Loans), equity issuances or
other proceeds that would not be included in Consolidated EBITDA), minus (iii)
Taxes paid in cash by the Borrower and the Subsidiaries during such period
(including Taxes payable by Holdings, the funds for which were distributed by
the Borrower pursuant to Sections 6.06(a)(iii) and (iv)) ("Cash TAXES"), minus
(iv) payments made in respect of Contingent Notes and Additional Seller Notes
(other than payments in respect of the Contingent Notes, to the extent made with
funds on deposit in the Contingent Note Reserve) to (b) Consolidated Fixed
Charges for such period. For purposes of determining the Fixed Charge Coverage
Ratio for the period of four consecutive quarters ending on June 30, 2003,
September 30, 2003 and December 31, 2003, Cash Taxes shall be deemed to be (a)
the Cash Taxes for the fiscal quarter ended June 30, 2003, multiplied by 4, (b)
the Cash Taxes for the two consecutive fiscal quarters ended September 30, 2003,
multiplied by 2 and (c) the Cash Taxes for the three consecutive fiscal quarters
ended December 31, 2003, multiplied by 4/3, respectively.
"FOREIGN LENDER" shall mean any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis.
"GOVERNMENT PROGRAMS" shall mean (i) the Medicare and Medicaid Programs,
(ii) CHAMPUS and (iii) other similar foreign or domestic federal, state or local
reimbursement or governmental health care programs.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"GRANTING LENDER" shall have the meaning assigned to such term in Section
9.04(i).
"GUARANTEE" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation or (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation; PROVIDED, HOWEVER, that
<Page>
14
the term "GUARANTEE" shall not include endorsements for collection or deposit in
the ordinary course of business. The amount of any Guarantee of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which the Guarantee
is made and (b) the maximum amount for which such guaranteeing person may be
liable pursuant to the terms of the instrument embodying such Guarantee, unless
such primary obligation or the maximum amount for which such guaranteeing person
may be liable is not stated or determinable (or is limited to certain property
or the value thereof), in which case the amount of such Guarantee shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof or, with respect to any property, the fair market value of such property
or, if such fair market value is not readily determinable, the maximum value of
such property.
"GUARANTEE AND COLLATERAL AGREEMENT" shall mean the Guarantee and
Collateral Agreement, substantially in the form of Exhibit D, among the
Borrower, Holdings, the Subsidiaries party thereto and the Collateral Agent.
"GUARANTORS" shall mean Holdings and the Subsidiary Guarantors.
"HAZARDOUS MATERIALS" shall mean any chemical, material, substance or waste
that is prohibited, limited or regulated by or pursuant to any Environmental
Law, including infectious or medical waste, petroleum products or byproducts and
all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances.
"HEDGING AGREEMENT" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"HOLDINGS COMMON EQUITY CONTRIBUTION" shall mean the contribution by the
Permitted Investors of $292,300,000 of cash to Holdings in the form of common
equity, which cash shall be contributed to the Borrower as common equity.
"HOLDINGS COMMON EQUITY DOCUMENTS" shall mean all instruments, agreements
and other documents evidencing or governing the Holdings Common Equity
Contribution or providing for any other right in respect thereof.
"HOLDINGS SUBORDINATED NOTE CONTRIBUTION" shall mean the contribution by
the Permitted Investors of $67,000,000 of cash to Holdings in exchange for
Holdings Subordinated Notes on the Closing Date, which cash shall be used to
fund the Contingent Note Reserve.
"HOLDINGS SUBORDINATED NOTE DOCUMENTS" shall mean all instruments,
agreements and other documents evidencing or governing the Holdings Subordinated
Notes or providing for any other right in respect thereof.
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15
"HOLDINGS SUBORDINATED NOTES" shall mean (a) Holdings' 10% Senior
Subordinated Notes due 2014, in an initial aggregate principal amount of
$67,000,000 and (b) any Additional Subordinated Debt issued by Holdings pursuant
to Section 6.01(l).
"INCREMENTAL REVOLVING CREDIT ASSUMPTION AGREEMENT" shall mean an
Incremental Revolving Credit Assumption Agreement in form and substance
reasonably satisfactory to the Administrative Agent, among the Borrower, the
Administrative Agent and one or more Incremental Revolving Credit Lenders.
"INCREMENTAL REVOLVING CREDIT COMMITMENT" shall mean the commitment of any
Lender, established pursuant to Section 2.24, to make Revolving Loans to the
Borrower.
"INCREMENTAL REVOLVING CREDIT COMMITMENT AMOUNT" shall mean, at any time,
the excess, if any, of $10,000,000 over the aggregate amount of all Incremental
Revolving Credit Commitments established prior to such time pursuant to Section
2.24.
"INCREMENTAL REVOLVING CREDIT LENDER" shall mean a Lender with an
Incremental Revolving Credit Commitment.
"INDEBTEDNESS" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, but
limited to the fair market value of such property, (g) all Guarantees by such
person of Indebtedness of others, (h) all Capital Lease Obligations and
Synthetic Lease Obligations of such person, (i) all obligations of such person
as an account party in respect of letters of credit and (j) all obligations of
such person in respect of bankers' acceptances. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner. Notwithstanding the foregoing, in connection with the purchase
by the Borrower or any Subsidiary of any business, the term "Indebtedness" will
exclude post-closing payment adjustments to which the seller may become entitled
to the extent such payment is determined by a final closing balance sheet.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INTEREST COVERAGE RATIO" shall mean, for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR Loan
(including any Swingline Loan), the last Business Day of each March, June,
September and December, and (b)
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with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing,
and, in addition, the date of any prepayment of a Eurodollar Borrowing or
conversion of a Eurodollar Borrowing to an ABR Borrowing.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter (or 9 or 12
months thereafter if, at the time of the relevant Borrowing, all Lenders
participating therein agree to make an interest period of such duration
available), as the Borrower may elect; PROVIDED, HOWEVER, that if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day. Interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.
"ISSUING BANK" shall mean, as the context may require, (a) Credit Suisse
First Boston, in its capacity as the issuer of Letters of Credit hereunder, and
(b) any other Lender that may become an Issuing Bank pursuant to Section 2.23(i)
or 2.23(k), with respect to Letters of Credit issued by such Lender. The Issuing
Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of the Issuing Bank, in which case the term "Issuing Bank"
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.
"ISSUING BANK FEES" shall have the meaning assigned to such term in Section
2.05(c).
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
"L/C DISBURSEMENT" shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.
"L/C EXPOSURE" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time and (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Revolving Credit Lender at any time shall
equal its Pro Rata Percentage of the aggregate L/C Exposure at such time.
"L/C PARTICIPATION FEE" shall have the meaning assigned to such term in
Section 2.05(c).
"LENDERS" shall mean (a) the persons listed on Schedule 2.01 (other than
any such person that has ceased to be a party hereto pursuant to an Assignment
and Acceptance) and (b) any
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person that has become a party hereto pursuant to an Assignment and Acceptance.
Unless the context clearly indicates otherwise, the term "Lenders" shall include
the Swingline Lender.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.23.
"LEVERAGE RATIO" shall mean, on any date, the ratio of (a) the sum, without
duplication, of (i) Total Debt on such date, and (ii) the aggregate principal
amount of Additional Subordinated Debt of Holdings outstanding on such date, to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date.
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time), on the date that is two Business Days
prior to the commencement of such interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars (as set
forth by any service selected by the Administrative Agent that has been
nominated by the British Bankers' Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; PROVIDED that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the "LIBO
Rate" shall be the interest rate per annum determined by the Administrative
Agent to be the average of the rates per annum at which deposits in dollars
approximately equal in principal amount to such Eurodollar Borrowing are offered
for such relevant Interest Period to major banks in the London interbank market
in London, England by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the beginning of
such Interest Period.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"LOAN DOCUMENTS" shall mean this Agreement, the Letters of Credit and the
Security Documents.
"LOAN PARTIES" shall mean the Borrower and the Guarantors.
"LOANS" shall mean the Revolving Loans, the Term Loans and the Swingline
Loans.
"MANAGED PRACTICE" shall mean any Affiliated Practice, the accounts of
which are not consolidated with the Borrower and its Subsidiaries in accordance
with GAAP.
"MANAGEMENT AGREEMENT" shall mean a written management agreement approved
by the board of directors of Holdings.
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"MANAGEMENT FEE" shall mean the fees payable by Holdings to the Sponsor or
its Affiliates pursuant to a Management Agreement.
"MANAGEMENT SERVICES AGREEMENT" shall mean a long-term management agreement
entered into by the Borrower or any of its Subsidiaries with an Affiliated
Practice.
"MARGIN STOCK" shall have the meaning assigned to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect on the
business, assets, operations, condition (financial or otherwise) or prospects of
the Borrower and the Subsidiaries, taken as a whole, (b) material impairment of
the ability of the Borrower or any other Loan Party to perform any of its
material obligations under any Loan Document to which it is or will be a party
or (c) material impairment of the rights of or benefits available to the Lenders
under any Loan Document.
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings, the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $7,500,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of Holdings,
the Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that Holdings, the Borrower or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"MATERIAL SUBSIDIARIES" shall mean, with respect to a date of
determination, all Subsidiaries that, either individually or as a group in the
aggregate, (x) constitute more than 2.5% of the consolidated assets of the
Borrower and its Subsidiaries as of the end of the immediately preceding fiscal
quarter or (y) generate more than 2.5% of the consolidated revenues of the
Borrower and its Subsidiaries for the period of four consecutive fiscal quarters
ending as of the end of the immediately preceding fiscal quarter.
"MEDICARE AND MEDICAID PROGRAMS" shall mean the programs established under
Titles XVIII and XIX of the Social Security Act.
"MIDPOINT AMOUNT" shall mean, with respect to any Additional Seller Notes,
the aggregate amount that the Borrower projects that the issuer of such
Additional Seller Notes will ultimately actually have to pay in respect of such
Additional Seller Notes, it being understood that the Midpoint Amount shall be
within a range of projected contingent payments determined by the Borrower in
accordance with its past custom and practice.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of non-cash consideration initially received), net of (i)
selling expenses (including reasonable broker's fees or
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commissions, legal fees, transfer and similar taxes and the Borrower's good
faith estimate of income taxes paid or payable in connection with such sale),
(ii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations or purchase price adjustment
associated with such Asset Sale or any other liabilities retained by the
Borrower or any Subsidiary associated with the assets sold in such Asset Sale
(PROVIDED that, to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness for borrowed money which is secured by the asset sold in such Asset
Sale and which is required to be repaid with such proceeds (other than any such
Indebtedness assumed by the purchaser of such asset); PROVIDED, HOWEVER, that,
if (x) the Borrower shall deliver (A) a certificate of a Financial Officer to
the Administrative Agent at the time of receipt thereof if such proceeds are
greater than $1,000,000 or (B) the certificate required by Section 5.04(f) if
such proceeds are less than or equal to $1,000,000, setting forth the Borrower's
intent to reinvest such proceeds in productive assets of a kind then used or
usable in the business of the Borrower and its Subsidiaries (including assets
acquired in a Permitted Acquisition) within 270 days of receipt of such proceeds
and (y) no Default or Event of Default shall have occurred and shall be
continuing at the time of such certificate or at the time such proceeds are
contractually committed to be used, such proceeds shall not constitute Net Cash
Proceeds except to the extent not so used or contractually committed to be used
at the end of such 270-day period, at which time such proceeds shall be deemed
to be Net Cash Proceeds; and (b) with respect to any issuance or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all taxes
and customary fees, commissions, costs and other expenses incurred in connection
therewith.
"OBLIGATIONS" shall mean all obligations defined as "Obligations" in the
Guarantee and Collateral Agreement and the other Security Documents.
"OTHER TAXES" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"PERFECTION CERTIFICATE" shall mean the Perfection Certificate
substantially in the form of Exhibit E, prepared by the Borrower.
"PERMITTED ACQUISITION" shall have the meaning assigned to such term in
Section 6.04(g).
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof, or, in the case of such
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obligations held in the Contingent Note Reserve, maturing within three years
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days acquisition
thereof; from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard & Poor's Ratings
Service or from Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any Lender or any
other commercial bank organized under the laws of the United States of America
or any State thereof that has a combined capital and surplus and undivided
profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above;
(e) investments in "money market funds" within the meaning of Rule 2a-7 of
the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in clauses (a) through
(d) above; and
(f) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.
"PERMITTED INVESTORS" shall mean (i) the Sponsor and its Affiliates
(including any investment partnership under common Control with the Sponsor),
(ii) any officer, director, employee, partner, member or stockholder of the
manager or general partner of the foregoing persons, and (iii) any Related
Parties with respect to any of the foregoing persons. Except for a Permitted
Investor specifically identified by name, in determining whether Equity
Interests are owned by a Permitted Investor, only Equity Interests acquired by a
Permitted Investor in its described capacity will be treated as "beneficially
owned" by such Permitted Investor.
"PERSON" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
Governmental Authority or other entity.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
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"PRIME RULE" shall mean the fluctuating rate of interest per annum
determined from time to time by Credit Suisse First Boston as its prime rate in
effect at its principal office in New York City and notified to the Borrower.
"PRIVATE PROGRAMS" shall mean private non-governmental health care
programs, including any private health care insurance programs.
"PRO FORMA ALLOWABLE AMOUNT" shall mean, with respect to any fiscal year,
beginning with the fiscal year ending December 31, 2004, the maximum amount (if
any) that, if added to the amount of Consolidated Fixed Charges during the
preceding fiscal year, would not have resulted in a breach of Section 6.12 as of
the end of such preceding fiscal year.
"PRO FORMA BASIS" shall mean, with respect to compliance with any test or
covenant hereunder, compliance with such covenant or test after giving effect to
(a) any proposed Permitted Acquisition or (b) any Asset Sale of a Subsidiary or
operating entity for which historical financial statements presented in
accordance with GAAP for the relevant period are available (including pro forma
adjustments arising out of events which are directly attributable to the
proposed Permitted Acquisition or Asset Sale, are factually supportable and are
expected to have a continuing impact, in each case as determined on a basis
consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as
amended, as interpreted by the Staff of the Securities and Exchange Commission,
and as certified by a Financial Officer of the Borrower) using, for purposes of
determining such compliance, the historical financial statements of all entities
or assets so acquired or sold or to be acquired or sold (or, to the extent such
financial statements for any entity or assets so acquired or to be acquired are
not available or are not presented in accordance with GAAP, the due diligence
report prepared with respect to such entities or assets and satisfactory to the
Administrative Agent) and the consolidated financial statements of the Borrower
and its Subsidiaries which shall be reformulated as if such Permitted
Acquisitions or Asset Sale, and all other Permitted Acquisitions or Asset Sales
that have been consummated during the period, and any Indebtedness or other
liabilities incurred in connection with any such Permitted Acquisitions had been
consummated and incurred at the beginning of such period.
"PRO FORMA COMPLIANCE" shall mean, at any date of determination, that the
Borrower shall be in pro forma compliance with the covenants set forth in
Sections 6.1 1, 6.12 and 6.13 as of the date of such determination or the last
day of the most recent fiscal quarter-end, as the case may be (computed on the
basis of (a) balance sheet amounts as of such date, and (b) income statement
amounts for the most recently completed period of four consecutive fiscal
quarters for which financial statements shall have been delivered to the
Administrative Agent and calculated on a Pro Forma Basis in respect of the event
giving rise to such determination).
"PRO RATA PERCENTAGE" of any Revolving Credit Lender at any time shall mean
the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Pro Rata Percentages
shall be determined on the basis of the Revolving Credit Commitments most
recently in effect.
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"PUBLIC EQUITY OFFERING" shall mean an underwritten public offering of
common stock of, and by, Holdings pursuant to a registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act of 1933, as amended, which yields not less than $50,000,000 in Net Cash
Proceeds to Holdings.
"REGISTER" shall have the meaning assigned to such term in Section 9.04(d).
"REGULATION T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"RELATED FUND" shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"RELATED PARTIES" shall mean, with respect to any specified person at any
specified time:
(a) if a natural person, (i) any spouse, parent or lineal descendant
(including by adoption) of such person or (ii) the estate of such person during
any period in which such estate holds Equity Interests of Holdings or of the
Borrower for the benefit of any person referred to in clause (a)(i), and
(b) if a trust, corporation, partnership, limited liability company or
other entity, such person's Affiliates and the respective directors, officers,
employees, agents and advisors of such person and such person's Affiliates.
"RELEASE" shall mean any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.
"REPAYMENT DATE" shall have the meaning given such term in Section 2.11.
"REQUIRED LENDERS" shall mean, at any time, Lenders having Loans (excluding
Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit
Commitments and Term Loan Commitments representing more than 50% of the sum of
all Loans outstanding (excluding Swingline Loans), L/C Exposure, Swingline
Exposure and unused Revolving Credit Commitments and Term Loan Commitments at
such time.
"RESPONSIBLE OFFICER" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
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"RESTRICTED CASH" shall mean cash and Permitted Investments of the Borrower
and the Subsidiaries that (a) are subject to a Lien permitted under this
Agreement or otherwise subject to restrictions on withdrawal as permitted by
this Agreement and (b) would be shown as "restricted cash" (or with a similar
designation) on a consolidated balance sheet of the Borrower prepared in
accordance with GAAP.
"RESTRICTED INDEBTEDNESS" shall mean Indebtedness of Holdings, the Borrower
or any Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Equity Interests in Holdings, the Borrower or
any Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Holdings, the Borrower or any Subsidiary and (b) any payment in
cash in respect of the principal of, premium (if any) or interest on, or other
amounts in respect of, the Holdings Subordinated Notes.
"REVOLVING CREDIT BORROWING" shall mean a Borrowing comprised of Revolving
Loans.
"REVOLVING CREDIT COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09, (b) increased by the amount
of such Lender's Incremental Revolving Credit Commitment and (c) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. Unless the context shall otherwise require, after the
effectiveness of any Incremental Revolving Credit Commitment, the term
"Revolving Credit Commitment" shall include such Incremental Revolving Credit
Commitment.
"REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, PLUS the aggregate amount at such time of such Lender's
L/C Exposure, PLUS THe aggregate amount at such time of such Lender's Swingline
Exposure.
"REVOLVING CREDIT LENDER" shall mean a Lender with a Revolving Credit
Commitment or an outstanding Revolving Loan.
"REVOLVING CREDIT MATURITY DATE" shall mean March 27, 2009.
"REVOLVING LOANS" shall mean the revolving loans made by the Lenders to the
Borrower pursuant to clause (b) of Section 2.01.
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"ROLLOVER EQUITY CONTRIBUTION" shall mean the contribution by the Permitted
Investors to Holdings of the 1,534,500 shares of common stock of the Borrower
held by them prior to the Closing Date (with a value as of the Closing Date of
approximately $32,608,125).
"SECURED PARTIES" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"SECURITY DOCUMENTS" shall mean the Guarantee and Collateral Agreement, the
Custody and Control Agreement and each of the security agreements, mortgages and
other instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.09.
"SPC" shall have the meaning assigned to such term in Section 9.04(i).
"SPONSOR" shall mean Welsh, Carson, Anderson & Stowe IX, L.P.
"STARK II" means Section 1877 of the Social Security Act as set forth at
Section 1395nn of Title 42 of the United States Code, as amended, and the rules
and regulations issued thereunder.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject for
Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurodollar
Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in
Regulation D of the Board) and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"SUBORDINATED NOTES" shall mean the Borrower's 10.50% Senior Subordinated
Notes due 2013, in an initial aggregate principal amount of $275,000,000.
"SUBORDINATED NOTE DOCUMENTS" shall mean the indenture under which the
Subordinated Notes are issued and all other instruments, agreements and other
documents evidencing or governing the Subordinated Notes or providing for any
Guarantee or other right in respect thereof.
"SUBSIDIARY" shall mean, with respect to any person (herein referred to as
the "PARENT"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held (including, with respect to the Borrower, any
Consolidated Practice, but excluding any Managed Practice).
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"SUBSIDIARY" shall mean any subsidiary of the Borrower.
"SUBSIDIARY GUARANTOR" shall mean each Subsidiary listed on Schedule
1.01(a), and each other Subsidiary that is or becomes a party to the Guarantee
and Collateral Agreement.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender to
make loans pursuant to Section 2.22, as the same may be reduced from time to
time pursuant to Section 2.09 or Section 2.22.
"SWINGLINE EXPOSURE" shall mean at any time the aggregate principal amount
at such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"SWINGLINE LENDER" shall mean Credit Suisse First Boston, in its capacity
as lender of Swingline Loans hereunder.
"SWINGLINE LOAN" shall mean any loan made by the Swingline Lender pursuant
to Section 2.22.
"SYNTHETIC LEASE" shall mean, as to any person, any lease (including leases
that may be terminated by the lessee at any time) of any property (whether real,
personal or mixed) (a) that is accounted for as an operating lease under GAAP
and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such person is the lessor.
"SYNTHETIC LEASE OBLIGATIONS" shall mean, as to any person, an amount equal
to the capitalized amount of the remaining lease payments under any Synthetic
Lease that would appear on a balance sheet of such person in accordance with
GAAP if such obligations were accounted for as Capital Lease Obligations.
"SYNTHETIC PURCHASE AGREEMENT" shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Holdings, the Borrower
or any Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by any third party from a person other than Holdings,
the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness
of Holdings, the Borrower or a Subsidiary or (b) any payment (other than on
account of a permitted purchase by it of any Equity Interest or Restricted
Indebtedness) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Restricted Indebtedness of Holdings,
the Borrower or a Subsidiary; PROVIDED that no phantom stock or similar plan
providing for payments only to current or former directors, officers or
employees of Holdings, the Borrower or the Subsidiaries (or to their heirs or
estates) shall be deemed to be a Synthetic Purchase Agreement.
"TAXES" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges, liabilities or withholding imposed by any
Governmental Authority.
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"TERM BORROWING" shall mean a Borrowing comprised of Term Loans.
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Term Loan Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
"TERM LOAN MATURITY DATE" shall mean March 27, 2010.
"TERM LOANS" shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01.
"TOTAL DEBT" shall mean, at any time, the total Indebtedness of the
Borrower and the Subsidiaries at such time; PROVIDED, HOWEVER, that Total Debt
shall exclude (a) Indebtedness of the type described in clause (i) of the
definition of such term, except to the extent of any drawings thereunder not
reimbursed within one Business Day, and (b) Indebtedness in respect of
Contingent Notes outstanding at such time (i) to the extent that such
Indebtedness is not reflected as liabilities on the consolidated balance sheet
of the Borrower at such time or (ii) if so reflected, to the extent of the value
of all cash and Permitted Investments in the Contingent Note Reserve at such
time.
"TOTAL REVOLVING CREDIT COMMITMENT" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The
initial Total Revolving Credit Commitment is $65,000,000.
"TRANSACTIONS" shall mean, collectively, (a) the execution, delivery and
performance by Holdings, Merger Sub and the Borrower of the Merger Agreement,
(b) the execution, delivery and performance by the Loan Parties of the Loan
Documents to which they are a party and, in the case of the Borrower, the
initial Borrowings hereunder, (c) the execution, delivery and performance by the
Loan Parties of the Subordinated Note Documents and the Holdings Subordinated
Note Documents to which they are a party and, in the case of the Borrower and
Holdings, the issuance of the Subordinated Notes and the Holdings Subordinated
Notes, respectively, (d) the payment of the Cash Merger Consideration, (e) the
establishment of the Contingent Note Reserve, (f) the refinancing and
termination of the Existing Credit Agreement and (g) the payment of related fees
and expenses.
"TYPE", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "RATE" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.
"WHOLLY OWNED SUBSIDIARY" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the Equity Interests are, at the time
any determination is being made,
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owned, controlled or held by such person or one or more wholly owned
Subsidiaries of such person or by such person and one or more wholly owned
Subsidiaries of such person.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part 1 of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall"; and
the words "asset" and "property" shall be construed as having the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; PROVIDED, HOWEVER, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article
VI or any related definition to eliminate the effect of any change in GAAP
occurring after the date of this Agreement on the operation of such covenant (or
if the Administrative Agent notifies the Borrower that the Required Lenders wish
to amend Article VI or any related definition for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders. All references herein to
the "knowledge" of Holdings or the Borrower shall be deemed to refer to the
actual knowledge of any executive officer or Financial Officer of Holdings or
the Borrower.
SECTION 1.03. PRO FORMA CALCULATIONS. With respect to any period during
which any Permitted Acquisition or Asset Sale occurs as permitted pursuant to
the terms hereof, the Leverage Ratio, the Interest Coverage Ratio and the Fixed
Charge Coverage Ratio shall be calculated with respect to such period and such
Permitted Acquisition or Asset Sale on a Pro Forma Basis.
SECTION 1.04. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (E.G., a "Revolving
Loan") or by Type (E.G., a "Eurocurrency Loan") or by Class and Type (E.G., a
"Eurocurrency Revolving Loan"). Borrowings also may be classified and referred
to by Class (E.G., a "Revolving Borrowing") or by Type (E.G., a "Eurocurrency
Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving Borrowing").
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ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a Term Loan to the Borrower on the
Closing Date in a principal amount not to exceed its Term Loan Commitment, and
(b) to make Revolving Loans to the Borrower, at any time and from time to time
on or after the date hereof, and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in such Lender's Revolving Credit
Exposure exceeding such Lender's Revolving Credit Commitment. Within the limits
set forth in clause (b) of the preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of Term
Loans may not be reborrowed.
SECTION 2.02. LOANS. (a) Each Loan (other than Swingline Loans) shall be
made as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their applicable Commitments; PROVIDED, HOWEVER, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to Section 2.02(f), the Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) with respect to Eurodollar Loans, an
integral multiple of $1,000,000 and not less than $3,000,000 or (ii) with
respect to ABR Loans, (A) an integral multiple of $1,000,000 and not less than
$1,000,000 or (B) equal to the remaining available balance of the applicable
Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
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. Borrowings of more than one Type may be outstanding at the same time;
PROVIDED, HOWEVER, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than eight Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, in the case of a Eurodollar Borrowing, or 1:00 p.m., New
York City time, in the case of an ABR Borrowing, and the Administrative Agent
shall promptly transfer the amounts so received to an account designated by the
Borrower in the
<Page>
29
applicable Borrowing Request or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met, return
the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative 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 Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Credit
Maturity Date.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender's Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Lender and such payment shall be deemed to have reduced
the L/C Exposure), and the Administrative Agent will promptly pay to the Issuing
Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent will promptly pay to the Issuing Bank any amounts received
by it from the Borrower pursuant to Section 2.23(e) prior to the time that any
Revolving Credit Lender makes any payment pursuant to this paragraph (f); any
such amounts received by the Administrative Agent thereafter will be promptly
remitted by the Administrative Agent to the Revolving Credit Lenders that shall
have made such payments and to the Issuing Bank, as their interests may appear.
If any Revolving Credit Lender shall not have made its Pro Rata Percentage of
such L/C Disbursement available
<Page>
30
to the Administrative Agent as provided above, such Lender and the Borrower
severally agree to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable to Revolving Loans pursuant to Section
2.06(a), and (ii) in the case of such Lender, for the first such day, the
Federal Funds Effective Rate, and for each day thereafter, the Alternate Base
Rate.
SECTION 2.03. BORROWING PROCEDURE. In order to request a Borrowing (other
than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall hand deliver or fax
to the Administrative Agent a duly completed Borrowing Request (or shall make
such request by telephone promptly followed by the hand delivery or fax of a
duly completed Borrowing Request) (a) in the case of a Eurodollar Borrowing, not
later than 12:00 (noon), New York City time, three Business Days before a
proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than
12:00 (noon), New York City time, one Business Day before a proposed Borrowing.
Each Borrowing Request shall be irrevocable, shall be signed by or on behalf of
the Borrower and shall specify the following information: (i) whether the
Borrowing then being requested is to be a Term Borrowing or a Revolving Credit
Borrowing, and whether such Borrowing is to be a Eurodollar Borrowing or an ABR
Borrowing; (ii) the date of such Borrowing (which shall be a Business Day);
(iii) the number and location of the account to which funds are to be disbursed
(which shall be an account that complies with the requirements of Section
2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing is to be
a Eurodollar Borrowing, the Interest Period with respect thereto; PROVIDED,
HOWEVER, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. IF no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly advise
the applicable Lenders of any notice given pursuant to this Section 2.03 (and
the contents thereof), and of each Lender's portion of the requested Borrowing.
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the principal amount of each Term Loan of such Lender as
provided in Section 2.11 and (ii) the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Credit Maturity Date. The
Borrower hereby promises to pay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the Revolving Credit Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable
<Page>
31
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be PRIMA FACIE evidence of the existence and amounts of the
obligations therein recorded; PROVIDED, HOWEVER, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(e) Any Lender may request that Loans made by it hereunder be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to such Lender and its registered assigns and
in a form and substance reasonably acceptable to the Administrative Agent and
the Borrower. Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive such a promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.
SECTION 2.05. FEES. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on the last Business Day of March, June, September and
December in each year and on each date on which any Revolving Credit Commitment
of such Lender shall expire or be terminated as provided herein, a commitment
fee (a "COMMITMENT FEE") equal to 0.50% per annum on the daily difference
between the Revolving Credit Commitment of such Lender and the Revolving Credit
Exposure of such Lender (other than the Swingline Exposure) during the preceding
quarter (or other period commencing with the date hereof or ending with the
Revolving Credit Maturity Date or the date on which the Commitments of such
Lender shall expire or be terminated). All Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days. The
Commitment Fee due to each Lender shall commence to accrue on the date hereof
and shall cease to accrue on the date on which the Revolving Credit Commitment
of such Lender shall expire or be terminated as provided herein. For purposes of
calculating Commitment Fees only, no portion of the Revolving Credit Commitments
shall be deemed utilized under Section 2.17 as a result of outstanding Swingline
Loans.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administration fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "ADMINISTRATIVE AGENT FEES").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender, through
the Administrative Agent, on the last Business Day of March, June, September and
December of each year and on the date on which the Revolving Credit Commitment
of such Lender shall be terminated as provided herein, a fee (an "L/C
PARTICIPATION FEE") at a rate per annum equal to the Applicable Percentage from
time to time used to determine the interest rate on Revolving Credit Borrowings
comprised of Eurodollar Loans pursuant to Section 2.06, calculated on such
<Page>
32
Lender's Pro Rata Percentage of the daily aggregate L/C Exposure (excluding the
portion thereof attributable to unreimbursed L/C Disbursements) during the
preceding quarter (or other period commencing with the date hereof or ending
with the Revolving Credit Maturity Date or the date on which the Revolving
Credit Commitments of all Lenders shall have been terminated); PROVIDED that, if
such Lender continues to have any L/C Exposure after its Revolving Credit
Commitment terminates, then the L/C Participation Fee shall continue to accrue
(and be payable on demand) on such Lender's Pro Rata Percentage of the daily
aggregate L/C Exposure from and including the date on which its Revolving Credit
Commitment terminates to and including the date on which such Lender ceases to
have any L/C Exposure and (ii) to the Issuing Bank with respect to each Letter
of Credit issued by it, on the last Business Day of March, June, September and
December of each year and on the date on which all the Letters of Credit issued
by such Issuing Bank shall have been terminated or expired, (x) a fronting fee
equal to [ ]% per annum on the aggregate face amount of such Letter of Credit
outstanding during the preceding quarter (or other period commencing on the date
hereof or ending on the date that all such Letters of Credit have been
terminated or expired) and (y) the standard issuance and drawing fees specified
from time to time by the Issuing Bank (the "ISSUING BANK FEES"). All L/C
Participation Fees and Issuing Bank Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan,
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when the Alternate Base Rate
is determined by reference to the Prime Rate and over a year of 360 days at all
other times and calculated from and including the date of such Borrowing to but
excluding the date of repayment thereof) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable to the Administrative Agent on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for
each Interest Period or day within an Interest Period, as the case may be, shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. DEFAULT INTEREST. If the Borrower shall default in the
payment of any principal of or interest on any Loan or any other amount due
hereunder, by acceleration or otherwise, or under any other Loan Document, then,
until such defaulted amount shall have been
<Page>
33
paid in full, to the extent permitted by law, all amounts outstanding under this
Agreement and the other Loan Documents shall bear interest (after as well as
before judgment), payable on demand, (a) in the case of principal, at the rate
otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum
and (b) in all other cases, at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, when determined by reference to the Prime Rate and over a year of 360 days
at all other times) equal to the rate that would be applicable to an ABR
Revolving Loan plus 2.00% per annum.
SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or fax notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent under this Section 2.08 shall be
conclusive absent manifest error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The Term Loan
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
the Closing Date. The Revolving Credit Commitments, the Swingline Commitment and
the L/C Commitment shall automatically terminate on the Revolving Credit
Maturity Date. Notwithstanding the foregoing, all the Commitments shall
automatically terminate at 5:00 p.m., New York City time, on April 30, 2003, if
the initial Credit Event shall not have occurred by such time.
(b) Upon at least three Business Days' prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the Term
Loan Commitments or the Revolving Credit Commitments; PROVIDED, HOWEVER, that
(i) each partial reduction of the Term Loan Commitments or the Revolving Credit
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $3,000,000 and (ii) the Total Revolving Credit Commitment shall not be
reduced to an amount that is less than the sum of the Aggregate Revolving Credit
Exposure at the time.
(c) Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the Lenders in accordance with
their respective applicable Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Lenders, on the date of
each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.
<Page>
34
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. The Borrower shall
have the right at any time upon prior irrevocable notice to the Administrative
Agent (a) not later than 12:00 (noon), New York City time, one Business Day
prior to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing,
(b) not later than 12:00 (noon), New York City time, three Business Days prior
to conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, and (c) not later than 12:00 (noon), New York
City time, three Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Borrowing to another permissible Interest
Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings with Interest Periods ending on or prior to such Repayment Date
and (B) the ABR Term Borrowings would not be at least equal to the
principal amount of Term Borrowings to be paid on such Repayment Date; and
(viii) upon notice to the Borrower from the Administrative Agent given
at the request of the Required Lenders, after the occurrence and during the
continuance of a
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35
Default or Event of Default, no outstanding Loan may be converted into, or
continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the Borrowing
that the Borrower requests be converted or continued, (ii) whether such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR
Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion lo or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Eurodollar Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end
of the Interest Period applicable thereto (unless repaid pursuant to the terms
hereof), automatically be converted into an ABR Borrowing.
SECTION 2.11. REPAYMENT OF TERM BORROWINGS. (a) The Borrower shall pay to
the Administrative Agent, for the account of the Lenders, on the dates set forth
below, or if any such date is not a Business Day, on the next preceding Business
Day (each such date being called a "Repayment Date"), a principal amount of the
Term Loans (as adjusted from time to time pursuant to Sections 2.1l(b), 2.12
and 2.13(g)) equal to the amount set forth below for such date, together in each
case with accrued and unpaid interest on the principal amount to be paid to but
excluding the date of such payment:
<Table>
<Caption>
Repayment Date Amount
-------------- ------
June 30, 2003 $ 562,500
September 30, 2003 $ 562,500
December 31, 2003 $ 562,500
March 31, 2004 $ 562,500
June 30, 2004 $ 562,500
September 30, 2004 $ 562,500
December 31, 2004 $ 562,500
March 31, 2005 $ 562,500
June 30, 2005 $ 562,500
September 30, 2005 $ 562,500
December 31, 2005 $ 562,500
March 31, 2006 $ 562,500
June 30, 2006 $ 562,500
September 30, 2006 $ 562,500
December 31, 2006 $ 562,500
March 31, 2007 $ 562,500
June 30, 2007 $ 562,500
</Table>
<Page>
36
<Table>
<Caption>
Repayment Date Amount
-------------- ------
September 30, 2007 $ 562,500
December 31, 2007 $ 562,500
March 31, 2008 $ 562,500
June 30, 2008 $ 562,500
September 30, 2008 $ 562,500
December 31, 2008 $ 562,500
March 31, 2009 $ 562,500
June 30, 2009 $ 52,875,000
September 30, 2009 $ 52,875,000
December 31, 2009 $ 52,875,000
Term Loan Maturity Date $ 52,875,000
</Table>
(b) In the event and on each occasion that any Term Loan Commitments shall
be reduced or shall expire or terminate other than as a result of the making of
a Term Loan, the installments payable on each Repayment Date shall be reduced
pro rata by an aggregate amount equal to the amount of such reduction,
expiration or termination.
(c) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date, together with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of
payment.
(d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. OPTIONAL PREPAYMENTS. (a) The Borrower shall have the right
at any time and from time to time to prepay any Borrowing, in whole or in part,
upon at least three Business Days' prior written or fax notice (or telephone
notice promptly confirmed by written or fax notice) in the case of Eurodollar
Loans, or written or fax notice (or telephone notice promptly confirmed by
written or fax notice) at least one Business Day prior to the date of prepayment
in the case of ABR Loans, to the Administrative Agent before 12:00 (noon), New
York City time; PROVIDED, HOWEVER, that each partial prepayment shall be in an
amount that is (i) in the case of Eurodollar Loans, an integral multiple of
$1,000,000 and not less than $3,000,000, and (ii) in the case of ABR Loans, an
integral multiple of $1,000,000 and not less than $1,000,000.
(b) Optional prepayments of Term Loans shall be applied pro rata against
the remaining scheduled installments of principal due in respect of the Term
Loans.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.16 but otherwise without premium or penalty.
All prepayments under this Section 2.12 shall be accompanied by accrued and
unpaid interest on the principal amount to be prepaid to but excluding the date
of payment.
<Page>
37
SECTION 2.13. MANDATORY PREPAYMENTS. (a) In the event of any termination of
all the Revolving Credit Commitments, the Borrower shall, on the date of such
termination, repay or prepay all its outstanding Revolving Credit Borrowings and
all outstanding Swingline Loans and replace all outstanding Letters of Credit
and/or deposit an amount equal, to the L/C Exposure in a cash collateral account
established with the Administrative Agent for the benefit of the Secured
Parties. If as a result of any partial reduction of the Revolving Credit
Commitments the Aggregate Revolving Credit Exposure would exceed the Total
Revolving Credit Commitment after giving effect thereto, then the Borrower
shall, on the date of such reduction, repay or prepay Revolving Credit
Borrowings or Swingline Loans (or a combination thereof) and/or replace or cash
collateralize outstanding Letters of Credit in an amount sufficient to eliminate
such excess.
(b) Not later than the third Business Day following the receipt of Net Cash
Proceeds in respect of any Asset Sale, the Borrower shall apply 100% of the Net
Cash Proceeds received with respect thereto to prepay outstanding Term Loans in
accordance with Section 2.13(f); PROVIDED, HOWEVER that the Borrower shall not
be required to comply with this Section 2.13(b) with respect to the first
$500,000 of Net Cash Proceeds from Asset Sales received in each fiscal year.
(c) In the event and on each occasion that an Equity Issuance occurs, the
Borrower shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans in accordance with Section 2.13(f).
(d) No later than the earlier of (i) 100 days after the end of each fiscal
year of the Borrower, commencing with the fiscal year ending on December 31,
2003, and (ii) the third Business Day following the date on which the financial
statements with respect to such period are delivered pursuant to Section
5.04(a), the Borrower shall prepay outstanding Term Loans in accordance with
Section 2.13(f) in an aggregate principal amount equal to (A) 65% of Excess Cash
Flow for the fiscal year then ended if the Leverage Ratio at the end of such
fiscal year shall have been greater than 3.00 to 1.00 or (B) 50% of Excess Cash
flow for the fiscal year then ended if the Leverage Ratio at the end of such
fiscal year shall have been less than or equal to 3.00 to 1.00.
(e) In the event that any Loan Party or any subsidiary of a Loan Party
shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than Indebtedness for money borrowed permitted pursuant to Section
6.01 (other than Section 6.01 (m))), the Borrower shall, substantially
simultaneously with (and in any event not later than the third Business Day next
following) the receipt of such Net Cash Proceeds by such Loan Party or such
subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to prepay
outstanding Term Loans in accordance with Section 2.13(f).
(f) Mandatory prepayments of outstanding Term Loans under this Agreement
shall be applied pro rata against the remaining scheduled installments of
principal due in respect of the Term Loans under Section 2.11.
<Page>
38
(g) The Borrower shall deliver to the Administrative Agent, at the time of
each prepayment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least three days prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.14. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), in each
case, by an amount deemed by such Lender or the Issuing Bank to be material,
then the Borrower will pay to such Lender or the Issuing Bank, as the case may
be, upon demand such additional amount or amounts as will compensate such Lender
or the Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that any Change
in Law regarding capital adequacy has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made or participations in Letters of Credit
purchased by such Lender pursuant hereto or the Letters of Credit issued by the
Issuing Bank pursuant hereto to a level below that which such Lender or the
Issuing Bank or such Lender's or the Issuing Bank's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's or
the Issuing Bank's policies and the policies of such Lender's or the Issuing
Bank's holding company with respect to capital adequacy) by an amount deemed by
such Lender or the Issuing Bank to be material, then from time to time the
Borrower shall pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail the amount or amounts necessary to compensate such Lender or
the Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or
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the Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; PROVIDED
that the Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) above with respect to increased
costs or reductions with respect to any period prior to the date that is 120
days prior to such request if such Lender or the Issuing Bank knew or could
reasonably have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; PROVIDED FURTHER that the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any Change in Law within such 120-day period. The protection of this Section
shall be available to each Lender and the Issuing Bank regardless of any
possible contention of the invalidity or inapplicability of the Change in Law
that shall have occurred or been imposed.
SECTION 2.15. CHANGE IN LEGALITY. (a) Notwithstanding any other provision
of this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder
(or be continued for additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into Eurodollar Loans),
whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing
for an additional Interest Period) shall, as to such Lender only, be deemed
a request for an ABR Loan (or a request to continue an ABR Loan as such or
to convert a Eurodollar Loan into an ABR Loan, as the case may be), unless
such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the
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Interest Period then applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
SECTION 2.16. INDEMNITY. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a "BREAKAGE EVENT") or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include on amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth in reasonable detail any
amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Borrower and shall be conclusive absent
manifest error.
SECTION 2.17. PRO RATA TREATMENT. Except as provided below in this Section
2.17 with respect to Swingline Loans and as required under Section 2.15, each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees or the L/C
Participation Fees, each reduction of the Term Loan Commitments or the Revolving
Credit Commitments and each conversion of any Borrowing to or continuation of
any Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans or participations in L/C
Disbursements, as applicable). For purposes of determining the available
Revolving Credit Commitments of the Lenders at any time, each outstanding
Swingline Loan shall be deemed to have utilized the Revolving Credit Commitments
of the Lenders (including those Lenders which shall not have made Swingline
Loans) pro rata in accordance with such respective Revolving Credit Commitments.
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole dollar
amount.
SECTION 2.18. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such
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Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or L/C Disbursement as a result of which the unpaid portion
of its Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid portion of the Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Loans and L/C
Exposure of such other Lender, so that the aggregate unpaid amount of the Loans
and L/C Exposure and participations in Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid amount of all
Loans and L/C Exposure then outstanding as the amount of its Loans and L/C
Exposure prior to such exercise of banker's lien, setoff or counterclaim or
other event was to the amount of all Loans and L/C Exposure outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event; PROVIDED,
HOWEVER, that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower and Holdings expressly
consent to the foregoing arrangements and agree that any Lender holding a
participation in a Loan or L/C Disbursement deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower and Holdings to such Lender
by reason thereof as fully as if such Lender had made a Loan directly to the
Borrower in the amount of such participation.
SECTION 2.19. PAYMENTS. (a) The Borrower shall make each payment (including
principal of or interest on any Borrowing or any L/C Disbursement or any Fees or
other amounts) hereunder and under any other Loan Document not later than 12:00
(noon), New York City time, on the date when due in immediately available
dollars, without setoff, defense or counterclaim. Each such payment (other than
(i) Issuing Bank Fees, which shall be paid directly to the Issuing Bank, and
(ii) principal of and interest on Swingline Loans, which shall be paid directly
to the Swingline Lender except as otherwise provided in Section 2.2l(e)) shall
be made to the Administrative Agent at its offices at Eleven Madison Avenue, New
York, NY 10010, which shall promptly distribute to each Lender its pro rata
share (or other applicable share, as provided herein) of such payment.
(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.20. TAXES. (a) Any and all payments by or on account of any
obligation of the Borrower or any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; PROVIDED that if the Borrower or any Loan
Party shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
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making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent 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 or such Loan Party shall make such
deductions and (iii) the Borrower or such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnity the Administrative Agent and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender,
or by the Administrative Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower or any other Loan Party to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines that it has received
a refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.20, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.20 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); PROVIDED that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative
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Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall
not be construed to require the Administrative Agent or any Lender to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to the Borrower or any other person.
SECTION 2.21. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES; DUTY
TO MITIGATE. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank pursuant
to Section 2.20 or (iv) any Lender refuses to consent to any amendment, waiver
or other modification of any Loan Document requested by the Borrower that
requires the consent of a greater percentage of the Lenders than the Required
Lenders and such amendment, waiver or other modification is consented to by the
Required Lenders, the Borrower may, at its sole expense and effort (including
with respect to the processing and recordation fee referred to in Section
9.04(b)), upon notice to such Lender or the Issuing Bank and the Administrative
Agent, require such Lender or the Issuing Bank to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this Agreement
to an assignee that shall assume such assigned obligations (which assignee may
be another Lender, if a Lender accepts such assignment); PROVIDED that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z) the
Borrower or such assignee shall have paid to the affected Lender or the Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or the Issuing Bank, respectively, plus all
Fees and other amounts accrued for the account of such Lender or the Issuing
Bank hereunder (including any amounts under Section 2.14 and Section 2.16);
PROVIDED FURTHER that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or the Issuing Bank's
claim for compensation under Section 2.14 or notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause such
Lender or the Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender or the Issuing Bank pursuant to paragraph (b)
below), or if such Lender or the Issuing Bank shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or
event or shall withdraw its notice under Section 2.15 or shall waive its right
to further payments under Section 2.20 in respect of such circumstances or event
or shall consent to the proposed amendment, waiver, consent or other
modification, as the case may be, then such Lender or the Issuing Bank shall not
thereafter be required to make any such transfer and assignment hereunder.
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(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrower or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the
case may be, in the future. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender or the Issuing Bank in connection with
any such filing or assignment, delegation and transfer.
SECTION 2.22. SWINGLINE LOANS. (a) SWINGLINE COMMITMENT. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any time
and from time to time on and after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $10,000,000 in the aggregate
or (ii) the Aggregate Revolving Credit Exposure, after giving effect to any
Swingline Loan, exceeding the Total Revolving Credit Commitment. Each Swingline
Loan shall be in a principal amount that is an integral multiple of $100,000 and
in a minimum amount of $500,000. The Swingline Commitment may be terminated or
reduced from time to time as provided herein. Within the foregoing limits, the
Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder,
subject to the terms, conditions and limitations set forth herein.
(b) SWINGLINE LOANS. THE Borrower shall notify the Swingline Lender by fax,
or by telephone (confirmed by fax), not later than 2:00 p.m., New York City
time, on the day of a proposed Swingline Loan. Such notice shall be delivered on
a Business Day, shall be irrevocable and shall refer to this Agreement and shall
specify the requested date (which shall be a Business Day) and amount of such
Swingline Loan and the wire transfer instructions for the account of the
Borrower to which the proceeds of the Swingline Loan should be transferred. The
Swingline Lender shall promptly make each Swingline Loan by wire transfer to the
account specified in the such request.
(c) PREPAYMENT. The Borrower shall have the right at any time and from time
to time to prepay any Swingline Loan, in whole or in part, upon giving written
or fax notice (or telephone notice promptly continued by written, or fax notice)
to the Swingline Lender and to the Administrative Agent before 12:00 (noon), New
York City time on the date of prepayment at the Swingline Lender's address for
notices specified on Schedule 2.01.
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(d) INTEREST. Each Swingline Loan shall be an ABR Loan and, subject to the
provisions of Section 2.07, shall bear interest at the rate provided for the ABR
Revolving Loans as provided in Section 2.06(a).
(e) PARTICIPATIONS. The Swingline Lender may by written notice given to the
Administrative Agent not later than 11:00 a.m., New York City time, on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which the
Revolving Credit Lenders will participate. The Administrative Agent will,
promptly upon receipt of such notice, give notice to each Revolving Credit
Lender, specifying in such notice such Lender's Pro Rata Percentage of such
Swingline Loan or Loans. In furtherance of the foregoing, each Revolving Credit
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Revolving Credit Lender's Pro Rata Percentage of such
Swingline Loan or Loans. Each Revolving Credit Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Revolving Credit
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2,02(c) shall apply,
MUTATIS MUTANDIS, to the payment obligations of the Lenders) and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.
SECTION 2.23. LETTERS OF CREDIT. (a) GENERAL. The Borrower may request the
issuance of a Letter of Credit for its own account or for the account of any of
its Subsidiaries or Affiliated Practices (in which case the Borrower and such
Subsidiary or Affiliated Practice shall be co-applicants with respect to such
Letter of Credit), in a form reasonably acceptable to the Administrative Agent
and the Issuing Bank, at any time and from time to time while the Revolving
Credit Commitments remain in effect, PROVIDED that any Letters of Credit issued
hereunder shall be denominated in U.S. dollars and shall be payable on sight.
This Section shall not be construed to impose an obligation upon the Issuing
Bank to issue any Letter of Credit that is inconsistent with the terms and
conditions of this Agreement.
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(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN CONDITIONS.
(i) In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall
hand deliver or fax to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or extension, the date
on which such Letter of Credit is to expire (which shall comply with
paragraph (c) below), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. The Issuing Bank shall promptly
(i) notify the Administrative Agent in writing of the amount and expiry
date of each Letter of Credit issued by it and (ii) provide a copy of each
such Letter of Credit (and any amendments, renewals or extensions thereof)
to the Administrative Agent. A Letter of Credit shall be issued, amended,
renewed or extended only if, and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (i) the L/C Exposure shall not exceed
$20,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not
exceed the Total Revolving Credit Commitment.
(ii) The Issuing Bank shall provide Letter of Credit activity reports
to the Administrative Agent (A) monthly on the last Business Day of each
month and (B) weekly for the two weeks preceding the end of each fiscal
quarter, with the report for the last week of the fiscal quarter to be
delivered the Business Day prior to the Repayment Date for such fiscal
quarter.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date; PROVIDED, that a Letter of Credit may, upon the
request of the Borrower, include a provision whereby such Letter of Credit shall
be renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the date that is five Business Days prior to the Revolving
Credit Maturity Date) unless the Issuing Bank notifies the beneficiary thereof
at least 30 days prior to the then-applicable expiration date that such Letter
of Credit will not be renewed.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Pro Rata Percentage of the aggregate amount available to be
drawn under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender's Pro
Rata Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by the Borrower (or, if applicable, another party pursuant to its
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obligations under any other Loan Document) forthwith on the date due as provided
in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from the Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
the Borrower, any other party guaranteeing, or otherwise obligated with,
the Borrower, any Subsidiary or other Affiliate thereof or any other person
may at any time have against the beneficiary under any Letter of Credit,
the Issuing Bank, the Administrative Agent or any Lender or any other
person, whether in connection with this Agreement, any other Loan Document
or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a 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;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
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Without limiting the generality of the foregoing, it is expressly understood and
agreed that the absolute and unconditional obligation of the Borrower hereunder
to reimburse L/C Disbursements will not be excused by the gross negligence or
wilful misconduct of the Issuing Bank. However, the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
gross negligence or wilful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof; it
is understood that the Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in making any
payment under any Letter of Credit (i) 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 reliance on 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, if such document on its face appears to be in order, 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 (ii) 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 wilful
misconduct or gross negligence of the Issuing Bank.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the Borrower of such demand for payment and whether the Issuing Bank has made or
will make an L/C Disbursement thereunder; PROVIDED that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Credit Lenders with respect to any
such L/C Disbursement. The Administrative Agent shall promptly give each
Revolving Credit Lender notice thereof.
(h) INTERIM INTEREST. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of the Issuing Bank, for each day from and including
the date of such L/C Disbursement, to but excluding the earlier of the date of
payment by the Borrower or the date on which interest shall commence to accrue
thereon as provided in Section 2.02(f), at the rate per annum that would apply
to such amount if such amount were an ABR Revolving Loan.
(i) RESIGNATION OR REMOVAL OF THE ISSUING BANK. The Issuing Bank may resign
at any time by giving 30 days' prior written notice to the Administrative Agent,
the Lenders and the Borrower, and may be removed at any time by the Borrower by
notice to the Issuing Bank, the Administrative Agent and the Lenders. Subject to
the next succeeding paragraph, upon the
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acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the retiring
Issuing Bank and the retiring Issuing Bank shall be discharged from its
obligations to issue additional Letters of Credit hereunder. At the time such
removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any
appointment as the Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrower and the Administrative Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan Documents to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date; PROVIDED, HOWEVER, that the obligation to deposit such
cash shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (g) or (h) or Article VII. Such deposit shall be held by the Collateral
Agent as collateral for the payment and performance of the Obligations. The
Collateral Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits in Permitted Investments, which investments
shall be made at the option and sole discretion of the Collateral Agent, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall (i)
automatically be applied by the Administrative Agent to reimburse the Issuing
Bank, for L/C Disbursements for which it has not been reimbursed, (ii) be held
for the satisfaction of the reimbursement obligations of the Borrower for the
L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
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(k) ADDITIONAL ISSUING BANKS. The Borrower may, at any time and from time
to time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld) and such Lender, designate one or more additional Lenders
to act as an issuing bank under the terms of the Agreement. Any Lender
designated as an issuing bank pursuant to this paragraph (k) shall be deemed to
be an "Issuing Bank" (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters
of Credit, such term shall thereafter apply to the other Issuing Bank and such
Lender.
SECTION 2.24. INCREASE IN REVOLVING CREDIT COMMITMENTS. (a) The Borrower
may, by written notice to the Administrative Agent from time to time after the
Closing Date, request Incremental Revolving Credit Commitments in an amount not
to exceed the Incremental Revolving Credit Commitment Amount from one or more
Incremental Revolving Credit Lenders, which may include any existing Lender;
PROVIDED that each Incremental Revolving Credit Lender shall be subject to the
approval of the Administrative Agent, the Issuing Bank and the Swingline Lender
(which approvals shall not be unreasonably withheld). Each such notice shall set
forth (i) the amount of the Incremental Revolving Credit Commitments being
requested (which shall be in minimum increments of $1,000,000 and in a minimum
amount of $1,000,000 or equal to the remaining Incremental Revolving Credit
Commitment Amount) and (ii) the date on which such Incremental Revolving Credit
Commitments are requested to become effective (which shall not be (x) less than
10 days nor more than 60 days after the date of such notice or (y) later than
the third anniversary of the Closing Date).
(b) The Borrower and each Incremental Revolving Credit Lender shall execute
and deliver to the Administrative Agent an Incremental Revolving Credit
Assumption Agreement and such other documentation as the Administrative Agent
shall reasonably specify to evidence the Incremental Revolving Credit Commitment
of such Incremental Revolving Credit Lender. The Administrative Agent shall
promptly notify each Lender as to the effectiveness of each Incremental
Revolving Credit Assumption Agreement. Each of the parties hereto hereby agrees
that, upon the effectiveness of any Incremental Revolving Credit Assumption
Agreement, this Agreement shall be deemed amended to the extent (but only to the
extent) necessary to reflect the existence of the Incremental Revolving Credit
Commitment evidenced thereby.
(c) Each of the parties hereto hereby agrees that the Administrative Agent
may take any and all actions as may be reasonably necessary to ensure that,
after giving effect to any Incremental Revolving Credit Commitment pursuant to
this Section 2.24, the outstanding Revolving Loans (if any) are held by the
Revolving Credit Lenders in accordance with their new Pro Rata Percentages. This
may be accomplished at the discretion of the Administrative Agent (i) by
requiring the outstanding Revolving Loans to be prepaid with the proceeds of a
new Revolving Credit Borrowing or (ii) by causing the existing Revolving Credit
Lenders to assign portions of their outstanding Revolving Loans to Incremental
Revolving Credit Lenders. Any prepayment or assignment described in this
paragraph (c) shall be subject to indemnification by the Borrower pursuant to
Section 2.16, but otherwise without premium or penalty.
(d) Notwithstanding the foregoing, no Incremental Revolving Credit
Commitment shall become effective under this Section 2.24 unless on the date of
such effectiveness, the conditions set forth in paragraphs (b) and (c) of
Section 4.01 shall be satisfied and the Administrative Agent
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shall have received a certificate to that effect dated such date and executed by
a Financial Officer of the Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each of the
Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Holdings, the Borrower and each of the
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, except where the failure of
any such Subsidiary to be in good standing is due solely to an unfiled tax
return in its jurisdiction of organization for which a notice of extension has
been timely filed, PROVIDED that such failures to be in good standing,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, (b) has all requisite power and authority to own its
property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify could not reasonably be expected to result in a
Material Adverse Effect, and (d) has the power and authority to execute, deliver
and perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated hereby or thereby to which it is or will be
a party and, in the case of the Borrower, to borrow hereunder.
SECTION 3.02. AUTHORIZATION. The Transactions (a) have been duly authorized
by all requisite corporate and, if required, stockholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of Holdings, the Borrower or any Subsidiary, (B) any order of any
Governmental Authority or (C) any provision of any indenture, agreement or other
instrument to which Holdings, the Borrower or any Subsidiary is a party or by
which any of them or any of their property is or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate
or to require the prepayment, repurchase or redemption of any obligation under
any such indenture, agreement or other instrument or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Holdings, the Borrower or any
Subsidiary (other than any Lien created hereunder or under the Security
Documents), other than any such conflicts, violations, breaches, defaults or
rights referred to in clauses (b)(i) and (b)(ii) above that are set forth on
Schedule 3.02.
SECTION 3.03. ENFORCEABILITY. This Agreement has been duly executed and
delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms.
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SECTION 3.04. GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except (a) for the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (b) as have been made or obtained and are in full force and effect and
(c) those items listed on Schedule 3.04.
SECTION 3.05. FINANCIAL STATEMENTS. (a) The Borrower has heretofore
furnished to the Lenders (i) its consolidated balance sheet and related
statements of income, stockholders' equity and cash flows as of and for each of
the fiscal years ended December 31, 2000 and 2001, audited by and accompanied by
the opinion of Deloitte & Touche LLP, independent public accountants, and as of
and for the fiscal year ended December 31, 2002, audited by and accompanied by
the opinion of Ernst & Young, LLP, independent public accountants (which opinion
has not been qualified in any material respect) and (ii) its unaudited
consolidated balance sheet and related statements of income and cash flows as of
and for each fiscal month subsequent to December 31, 2002 ended 30 days before
the Closing Date. Such financial statements present fairly in all material
respects the financial condition and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such
periods. Such balance sheet and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet and statements of income, stockholder's equity
and cash flows as of and for the fiscal year ended December 31, 2002, prepared
giving effect to the Transactions as if they had occurred, with respect to such
balance sheet, on such date and, with respect to such other financial
statements, on the first day of the 12-month period ending on such date. Such
pro forma financial statements have been prepared in good faith by the Borrower,
based on the assumptions used to prepare the pro forma financial information
contained in the Confidential Information Memorandum (which assumptions are
believed by the Borrower on the date hereof and on the Closing Date to be
reasonable), are based on the best information available to the Borrower as of
the date of delivery thereof, accurately reflect all adjustments required to be
made to give effect to the Transactions and present fairly on a pro forma basis
the estimated consolidated financial position of the Borrower and its
consolidated Subsidiaries as of such date and for such period, assuming that the
Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. No event, change or condition has
occurred that has had, or could reasonably be expected to have, a material
adverse effect on the business, assets, operations, condition (financial or
otherwise) or prospects of Holdings, the Borrower and the Subsidiaries, taken as
a whole, since December 31, 2002; PROVIDED that the adoption of reductions in
Medicare reimbursement levels proposed by the Centers for Medicare and Medicaid
Services in July 2002 shall not constitute a material adverse change in the
financial condition or operations of Holdings, the Borrower and the
Subsidiaries, taken as a whole.
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SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. (a) Each of
Holdings, the Borrower and each of the Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material properties and
assets, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes. All such material properties and assets are
free and clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of Holdings, the Borrower and each of the Subsidiaries has
complied with all obligations under all material leases to which it is a party
and all such leases are in full force and effect, except where any such
noncompliance, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Each of Holdings, the Borrower
and each of the Subsidiaries enjoys peaceful and undisturbed possession under
all such material leases.
SECTION 3.08. SUBSIDIARIES. Schedule 3.08 sets forth as of the Closing Date
a list of all Subsidiaries and the percentage ownership interest of Holdings or
the Borrower therein. As of the Closing Date, the shares of Equity Interests so
indicated on Schedule 3.08 are fully paid and non-assessable and are owned by
Holdings or the Borrower, directly or indirectly, free and clear of all Liens
(other than Liens created under the Security Documents).
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS. (a) Except as set forth on
Schedule 3.09(a), there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting Holdings,
the Borrower or any Subsidiary, or, to the knowledge of Holdings or the
Borrower, any Managed Practice or Contract Provider, or any business, property
or rights of any such person (i) that involve any Loan Document or the
Transactions, (ii) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or
(iii) to revoke, withdraw or suspend any license, right or authorization, or to
terminate the participation of Holdings, the Borrower or any Subsidiary or, to
the knowledge of Holdings and the Borrower, any Managed Practice or Contract
Provider, in any Government Program or Private Program and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) None of Holdings, the Borrower or any of the Subsidiaries, or, to the
knowledge of Holdings or the Borrower, any Managed Practice or Contract
Provider, or any of their respective material properties or assets is in
violation of, nor will the continued operation of their material properties and
assets as currently conducted violate, any applicable law, rule or regulation
(including any applicable zoning, building, Environmental Law, ordinance, code
or approval or any building permits), or is in default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority, where
such violation or default could reasonably be expected to result in a Material
Adverse Effect.
(c) Except as set forth in Schedule 3.09(c), each of Holdings, the Borrower
and the Subsidiaries, and, to the knowledge of Holdings and the Borrower, the
Managed Practices and the Contract Providers, (i) is the holder of all valid
licenses and other rights and authorizations
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required by law, rule or regulation and necessary for the Borrower, the
Subsidiaries, the Managed Practices and the Contract Providers to operate their
respective businesses and to provide pathology services; and (ii) where
required, is certified for participation and reimbursement in the Government
Programs and has current provider agreements for the Government Programs in
which it participates and the Private Programs in which it participates, except
for any failures to comply with any of the foregoing requirements that have not
and could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
(d) Each facility operated by the Borrower, the Subsidiaries and, to the
knowledge of Holdings and the Borrower, the Managed Practices, charges rates and
bills for services in accordance with the applicable rules and regulations of
the Government Programs, except for any failures to comply that have not and
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(e) Except as set forth in Schedule 3.09(e) and except for referrals which
comply with (or are exempt from) the requirements of Stark II (i) no physician
who has a "financial relationship", as that term is defined in Stark II,
whether an investment or ownership interest or compensation arrangement (a
"FINANCIAL RELATIONSHIP") with Holdings, the Borrower or any Subsidiary
practices any medical specialty other than pathology and also refers patients to
the Borrower or any Subsidiary or, to the knowledge of Holdings and the
Borrower, any Managed Practice, (ii) to the knowledge of the Holdings and
Borrower, no physician who has a Financial Relationship with any Managed
Practice practices any medical specialty other than pathology and also refers
patients to the Borrower, any Subsidiary or any Managed Practice, (iii) no
physician having a Financial Relationship with Holdings, the Borrower or any
Subsidiary whose immediate family member has such a Financial Relationship with
Holdings, the Borrower or any Subsidiary directly or indirectly refers patients
or services to the Borrower or any Subsidiary or, to the knowledge of Holdings
and the Borrower, any Managed Practice, and (iv) to the knowledge of Holdings
and the Borrower, no physician having a Financial Relationship with any Managed
Practice whose immediate family member has such a Financial Relationship with
Holdings, the Borrower, any Subsidiary or any Managed Practice, directly or
indirectly refers patients or services to the Borrower, any Subsidiary or any
Managed Practice, except in each case for any failures to comply that have not
and could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
(f) The Borrower and the Subsidiaries, and, to the knowledge of Holdings
and the Borrower, the Managed Practices, have timely filed all reports and
billings required to be filed with respect to the Government Programs and the
Private Programs in which they participate, all fiscal intermediaries and other
third party payors and all such reports are complete and accurate in all
material respects and have been prepared in accordance with all applicable laws,
rules and regulations, except for any failures to comply with any of the
foregoing requirements that have not and would not be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.10. AGREEMENTS. (a) None of Holdings, the Borrower or any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
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(b) None of Holdings, the Borrower or any of the Subsidiaries is in default
in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. FEDERAL RESERVE REGULATIONS. (a) None of Holdings, the
Borrower or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
None of Holdings, the Borrower or any Subsidiary is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.13. USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
SECTION 3.14. TAX RETURNS. Each of the Holdings, the Borrower and each of
the Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed by it and has paid
or caused to be paid all taxes due and payable by it and all assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings and for which Holdings, the Borrower or such Subsidiary,
as applicable, shall have set aside on its books adequate reserves in accordance
with GAAP.
SECTION 3.15. NO MATERIAL MISSTATEMENTS. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Holdings or the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading; PROVIDED that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each of Holdings and the Borrower
represents only that it acted in good faith and utilized assumptions believed by
Holdings and the Borrower to be reasonable and due care in the preparation of
such information, report, financial statement, exhibit or schedule.
SECTION 3.16. EMPLOYEE BENEFIT PLANS. Each of the Borrower and each of its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and
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the Code and the regulations and published interpretations thereunder. No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in
material liability of the Borrower or any of its ERISA Affiliates. The present
value of all benefit liabilities under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the last annual valuation date applicable thereto, exceed the fair market
value of the assets of such Plan.
SECTION 3.17. ENVIRONMENTAL MATTERS. Except as set forth in Schedule 3.17
and except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of Holdings, the Borrower or any of the Subsidiaries (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received any request
for information pursuant to any Environmental Law or notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
SECTION 3.18. INSURANCE. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and its Subsidiaries have insurance in such amounts
and covering such risks and liabilities as are in accordance with normal
industry practice.
SECTION 3.19. SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement, upon execution and delivery thereof by the parties thereto, will
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Guarantee and Collateral Agreement) and the proceeds thereof and
(i) when the Pledged Collateral (as defined in the Guarantee and Collateral
Agreement) is delivered to the Collateral Agent, the Guarantee and Collateral
Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Pledged Collateral, in each case prior and superior in right to any other
person, and (ii) when financing statements in appropriate form are filed in the
offices specified on Schedule 3.19, the Lien created under the Guarantee and
Collateral Agreement will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral (other than Intellectual Property, as defined in the Guarantee and
Collateral Agreement) that may be perfected by filing, recording or registering
a financing statement, in each case prior and superior in right to any other
person, other than with respect to Liens expressly permitted by Section 6.02.
(b) Upon the recordation of the Guarantee and Collateral Agreement with the
United States Patent and Trademark Office and the United States Copyright
Office, together with the financing statements in appropriate form filed in the
offices specified on Schedule 3.19, the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Intellectual Property (as defined in the
Guarantee and Collateral Agreement) in which a security interest may be
perfected by
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filing in the United States and its territories and possessions, in each case
prior and superior in right to any other person (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the
United States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof).
SECTION 3.20. LOCATION OF REAL PROPERTY AND LEASED PREMISES. (a) On the
Closing Date, none of Holdings, the Borrower or any Subsidiary owns any real
property.
(b) Schedule 3.20 lists completely and correctly as of the Closing Date all
real property leased by the Borrower and the Subsidiaries and the addresses
thereof. The Borrower and the Subsidiaries, as the case may be, have valid
leasehold interests in all the real property set forth on Schedule 3.20.
SECTION 3.21. LABOR MATTERS. As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against Holdings, the Borrower or
any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened, or, to the knowledge of Holdings or the Borrower, against any
Managed Practice or Contract Provider. The hours worked by and payments made to
employees of Holdings, the Borrower and the Subsidiaries, and, to the knowledge
of Holdings or the Borrower, the Managed Practices and the Contract Providers,
have not been in violation of the Fair Labor Standards Act or any other
applicable federal, state, local or foreign law dealing with such matters. All
payments due from Holdings, the Borrower or any Subsidiary, or for which any
claim may be made against Holdings, the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary, or, to the knowledge of Holdings or the Borrower, any Managed
Practice or Contract Provider, is bound.
SECTION 3.22. SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of Holdings, the Borrower and the
Subsidiaries, taken as a whole, at a fair valuation, will exceed their debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of Holdings, the Borrower and the Subsidiaries,
taken as a whole, will be greater than the amount that will be required to pay
the probable liability of their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) Holdings, the Borrower and the Subsidiaries, taken as a whole, will
be able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
Holdings, the Borrower and the Subsidiaries, taken as a whole, will not have
unreasonably small capital with which to conduct the business in which they are
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
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SECTION 3.23. SENIOR INDEBTEDNESS. The Obligations constitute "Senior
Indebtedness" under and as defined in the Subordinated Note Documents and the
Holdings Subordinated Note Documents, and will constitute senior indebtedness
under, and be entitled to the benefit of the subordination provisions of, the
documentation relating to any Additional Subordinated Debt or any Additional
Seller Notes.
SECTION 3.24. FRAUD AND ABUSE. Except as would not reasonably be expected
to result in a Material Adverse Effect or as set forth on Schedule 3.24, to the
knowledge of Holdings and the Borrower, none of Holdings, the Borrower, any of
the Subsidiaries or any of the Managed Practices or any of their respective
officers, directors or Contract Providers has engaged in any activities that are
prohibited under the Government Programs in which they participate or that are
prohibited by binding rules of professional conduct, including, (i) knowingly
and wilfully making or causing to be made a false statement or a
misrepresentation of any material fact in any application for any benefit or
payment; (ii) knowingly and wilfully making or causing to be made any false
statement or a misrepresentation of any material fact for use in determining
rights to any benefit or payment; (iii) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to secure such benefit or payment fraudulently; (iv) knowingly and wilfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay such remuneration (A) in return for referring an individual to a
person for the furnishing or arranging for the furnishing of any item or service
for which payment may be made in whole or in part by any Government Program in
which they participate or other applicable third-party payors, or (B) in return
for purchasing, leasing or ordering or arranging for or recommending the
purchasing, leasing or ordering of any good, facility, service or item for which
payment may be made in whole or in part by any Government Program in which they
participate or other applicable third-party payors.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction or waiver of
the following conditions:
SECTION 4.01. ALL CREDIT EVENTS. On the date of each Borrowing, including
each Borrowing of a Swingline Loan and on the date of each issuance, amendment,
extension or renewal of a Letter of Credit (each such event being called a
"CREDIT EVENT"):
(a) The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) or, in the case of the issuance, amendment,
extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by Section
2.23(b) or, in
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the case of the Borrowing of a Swingline Loan, the Swingline Lender and the
Administrative Agent shall have received a notice requesting such Swingline Loan
as required by Section 2.22(b).
(b) Except in the case of a Borrowing that does not increase the aggregate
principal amount of Loans outstanding of any Lender, the representations and
warranties set forth in Article III hereof and in each other Loan Document shall
be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an earlier
date.
(c) No Event of Default or Default shall have occurred and be continuing.
(d) In the case of a Borrowing of a Revolving Loan or a Swingline Loan,
immediately after giving effect to such Borrowing and the use of proceeds
thereof, the aggregate amount of cash and Permitted Investments on hand at
Holdings, the Borrower and the Subsidiaries shall not exceed $10,000,000,
excluding for purposes hereof (i) cash and Permitted Investments held in the
Contingent Note Reserve, (ii) funds on deposit in any bank account and used for
current payroll purposes and (iii) Restricted Cash.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower and Holdings on the date of such Credit Event as to the
matters specified in paragraphs (b), (c) and (d) of this Section 4.01; PROVIDED,
HOWEVER, that the conversion or continuation of a Borrowing pursuant to Section
2.10 shall not constitute a "Credit Event" for purposes of this Section.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a written opinion of (i) Reboul, MacMurray, Hewitt
& Maynard, counsel for Holdings and the Borrower, in substantially the form
attached as Exhibit F-l, and (ii) each local counsel listed on Schedule 4.02(a),
in substantially the form attached as Exhibit F-2, in each case (A) dated the
Closing Date, (B) addressed to the Issuing Bank, the Administrative Agent and
the Lenders, and (C) covering such other matters relating to the Loan Documents
and the Transactions as the Administrative Agent shall reasonably request, and
Holdings and the Borrower hereby request such counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be reasonably
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation or other organizational document,
including all amendments thereto, of each Loan Party, certified as of a recent
date by the Secretary of State of the state of its organization, and a
certificate as to the good standing (if applicable) of each Loan Party as of a
recent date, from such Secretary of State; (ii) a certificate of the Secretary
or Assistant Secretary (if applicable) of
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each Loan Party dated the Closing Date and certifying (A) that attached thereto
is a true and complete copy of the by-laws of such Loan Party (if applicable to
such Loan Party) as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B) that
attached thereto is A true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party (if required for such Loan Party)
authorizing the execution, delivery and performance of the Loan Documents to
which such person is a party and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate or articles
of incorporation or other organizational document of such Loan Party have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party; (iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; and (iv) such other documents as the
Lenders, the Issuing Bank or the Administrative Agent may reasonably request.
(d) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) and
of Section 4.01.
(e) The Administrative Agent shall have received all Fees and other amounts
due and payable on or prior to the Closing Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Loan Document.
(f) The Security Documents shall have been duly executed by each Loan Party
that is to be a party thereto and shall be in full force and effect on the
Closing Date. The Collateral Agent on behalf of the Secured Parties shall have a
security interest in the Collateral of the type and priority described in each
Security Document.
(g) The Collateral Agent shall have received a Perfection Certificate with
respect to the Loan Parties dated the Closing Date and duly executed by a
Responsible Officer of the Borrower, and shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the states (or other jurisdictions) of formation
of such persons, in which the chief executive office of each such person is
located and in the other jurisdictions in which such persons maintain material
property, in each case as indicated on such Perfection Certificate, together
with copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence reasonably satisfactory to the Collateral
Agent that the Liens indicated in any such financing statement (or similar
document) would be permitted under Section 6.02 or have been or will be
contemporaneously released or terminated.
(h) The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section
5.02 and the applicable provisions of the Security Documents, each of which
shall be endorsed or otherwise amended to include a
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customary lender's loss payable endorsement and to name the Collateral Agent as
additional insured, in form and substance satisfactory to the Administrative
Agent and the Collateral Agent.
(i) The Acquisition shall have been, or substantially simultaneously with
the initial funding of Loans on the Closing Date shall be, consummated in
accordance with the Merger Agreement and applicable law, without giving effect
to any waiver of any material terms or conditions of the Merger Agreement not
approved by the Required Lenders and the Holdings Common Equity Contribution
shall have occurred. The Rollover Equity Contribution shall have occurred to the
reasonable satisfaction of the Lenders. The Administrative Agent shall have
received copies of the Merger Agreement and all certificates, opinions and other
documents delivered thereunder or in connection therewith, certified by a
Financial Officer of the Borrower as being complete and correct. The Lenders
shall be reasonably satisfied with any material changes to the capitalization,
structure and equity ownership of Holdings and the Borrower after giving effect
to the Transactions from those contemplated in the Merger Agreement.
(j) Holdings shall have received Net Cash Proceeds of not less than
$67,000,000 from the Holdings Subordinated Note Contribution, and such amount
shall equal the projected amount of remaining principal and interest payments on
the Contingent Notes as of the Closing Date (as determined in good faith by the
Lenders). Such Net Cash Proceeds shall have been used to fund the Contingent
Note Reserve substantially simultaneously with the initial funding of the Loans
on the Closing Date. The terms and conditions of the Holdings Subordinated Notes
and the provisions of the Holdings Subordinated Note Documents shall be in form
and substance reasonably satisfactory to the Lenders. The Lenders shall have
received accounting comfort with respect to the schedules and analyses
(including the projected amount of remaining principal and interest payments on
the Contingent Notes as of the Closing Date) relating to the Contingent Notes
provided to the Lenders by Holdings and the Borrower. The Administrative Agent
shall have received copies of the Holdings Subordinated Note Documents,
certified by a Financial Officer of Holdings as being complete and correct.
(k) The Borrower shall have received gross cash proceeds of not less than
$275,000,000 from the issuance of the Subordinated Notes. The terms and
conditions of the Subordinated Notes and the provisions of the Subordinated Note
Documents shall be in form and substance reasonably satisfactory to the Lenders.
The Administrative Agent shall have received copies of the Subordinated Note
Documents, certified by a Financial Officer of the Borrower as being complete
and correct.
(l) All principal, premium, if any, interest, fees and other amounts due or
outstanding under the Existing Credit Agreement shall have been paid in full,
the commitments thereunder terminated and all guarantees and security in support
thereof discharged and released, and the Administrative Agent shall have
received reasonably satisfactory evidence thereof. Immediately after giving
effect to the Transactions and the other transactions contemplated hereby, the
Borrower and the Subsidiaries shall have outstanding no Indebtedness or
preferred stock other than (a) Indebtedness outstanding under this Agreement,
(b) the Subordinated Notes, (c) the Contingent Notes and (d) Indebtedness set
forth on Schedule 6.01. Immediately after giving effect to the Transactions and
the other transactions contemplated hereby, Holdings shall have no
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outstanding Indebtedness or preferred stock other than (a) its Guarantee of the
Indebtedness outstanding under this Agreement and (b) the Holdings Subordinated
Notes.
(m) The Lenders shall have received the financial statements and opinion
referred to in Section 3.05, none of which shall demonstrate a material adverse
change in the financial condition of the Borrower from the forecasts previously
provided to the Lenders. Based on the pro forma financial statements referred to
in Section 3.05(b), the Leverage Ratio at December 31, 2002 (calculated on a pro
forma basis as described in Section 3.05(b)) shall have been less than 4.60 to
1.00
(n) The Lenders shall be reasonably satisfied in all respects with any tax
sharing arrangements among Holdings and its subsidiaries after giving effect to
the Transactions.
(o) All requisite Governmental Authorities shall have approved or consented
to the Transactions and the other transactions contemplated hereby to the extent
required, all applicable appeal periods shall have expired and there shall be no
litigation, governmental, administrative or judicial action that could
reasonably be expected to restrain, prevent or impose burdensome conditions on
the Transactions or the other transactions contemplated hereby. All requisite
third-party consents necessary for the consummation of the Acquisition shall
have been obtained except for those third-party consents where the failure to so
obtain such consents would not have a Material Adverse Effect.
(p) The Lenders shall be reasonably satisfied as to the amount and nature
of any environmental and employee health and safety exposures, including
Environmental Liabilities, to which the Borrower and the Subsidiaries may be
subject and the plans of the Borrower and the Subsidiaries to address such
exposure and Environmental Liabilities.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees with each Lender
that so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall have
been paid in full (other than contingent indemnification obligations to the
extent no claim giving rise thereto has been asserted) and all Letters of Credit
have been canceled or have expired and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, each of Holdings and the Borrower will, and will cause each of the
Subsidiaries to:
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.05.
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(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority (including all applicable
Government Programs and all state and federal anti-kickback, fraud and abuse and
Stark II requirements), whether now in effect or hereafter enacted; and at all
times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section 5.01 shall prevent
the Borrower from discontinuing the operation or maintenance of any of its
assets or properties if such discontinuance is, in the judgment of its board of
directors, desirable in the conduct of its business.
SECTION 5.02. INSURANCE. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance (which may include self-insurance pursuant to Section 6.04(h)),
to such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations, including medical
malpractice insurance, workers' compensation insurance, business interruption
insurance, public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
(b) Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender's loss payable endorsement, in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the Administrative Agent or the Collateral Agent of the occurrence of an Event
of Default, the insurance carrier shall pay all proceeds otherwise payable to
the Borrower or the Loan Parties under such policies directly to the Collateral
Agent; cause all such policies to provide that neither the Borrower, the
Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a "Replacement Cost Endorsement", without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver original or certified copies of all such
policies to the Collateral Agent; cause each such policy to provide that it
shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days' prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days' prior written
notice thereof by the insurer to the Administrative Agent and the Collateral
Agent; deliver to the Administrative Agent and the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of
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insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent and the
Collateral Agent) together with evidence satisfactory to the Administrative
Agent and the Collateral Agent of payment of the premium therefor.
(c) Notify the Administrative Agent and the Collateral Agent promptly
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.02 is taken out
by the Borrower; and promptly deliver to the Administrative Agent and the
Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. TAXES. Pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise that, if unpaid, might give rise to a Lien upon such
properties or any part thereof; PROVIDED, HOWEVER, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall have
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested
obligation, tax, assessment or charge and enforcement of a Lien.
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower, furnish to the Administrative Agent, which shall furnish to each
Lender:
(a) within 90 days after the end of each fiscal year, its consolidated
balance sheet and related statements of income, stockholders' equity and cash
flows showing the financial condition of the Borrower and its consolidated
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Subsidiaries during such year, together
with comparative figures for the immediately preceding fiscal year and for the
consolidated budget for such fiscal year, which financial statements shall be
audited by Ernst & Young, LLP or other independent public accountants of
recognized national standing and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal quarters
of each fiscal year, its consolidated balance sheet and related statements of
income, stockholders' equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, and comparative figures for the same periods in the immediately
preceding fiscal year, for the consolidated budget for such fiscal quarter and
for the consolidated budget for the then elapsed portion of the fiscal year, all
certified by one of its Financial Officers as fairly presenting the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on
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a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;
(c) within 30 days after the end of the first two fiscal months of each
fiscal quarter, its consolidated balance sheet and related statements of income
and cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries during such fiscal month and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(d) concurrently with any delivery of financial statements under paragraph
(a) above, (i) a certificate of the accounting firm opining on such statements
(which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) (x) setting forth computations in
reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Sections 6.06, 6.10, 6.11, 6.12 and
6.13 and (y) stating whether they obtained knowledge during the course of their
examination of such financial statements of any Event of Default or Default and
specifying the extent and nature thereof, insofar as the same related to any
financial accounting matters covered by their audit, and (ii) a certificate of a
Financial Officer of the Borrower (x) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto, (y) setting forth the calculations of
Excess Cash Flow and the Allowable Amount and (z) certifying that there has been
no change in the business activities, assets or liabilities of the Borrower or
Holdings, or if there has been any such change, describing such change in
reasonable detail and certifying that each of the Borrower and Holdings is in
compliance with Section 6.08;
(e) concurrently with any delivery of financial statements under paragraph
(b) or (c) above, a certificate of a Financial Officer of the Borrower (i)
setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants contained in
Sections 6.06, 6.10, 6.11, 6.12 and 6.13 and (ii) certifying that no Event of
Default or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto;
(f) concurrently with any delivery of financial statements under paragraph
(a) or (b) above, a certificate of a Financial Officer of the Borrower setting
forth the amount of Net Cash Proceeds from Asset Sales during the immediately
preceding fiscal quarter and the amount thereof that the Borrower intends to
reinvest in assets of a kind then used or usable in the business of the Borrower
and its Subsidiaries within 270 days of receipt of such proceeds in accordance
with the definition of "Net Cash Proceeds";
(g) within five Business Days of approval by the board of directors of the
Borrower, and in no event later than 30 days after the end of each fiscal year
of the Borrower, a detailed consolidated quarterly budget for such fiscal year
(including a projected consolidated balance
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sheet and related statements of projected operations and cash flows as of the
end of and for each fiscal quarter of such fiscal year and setting forth the
assumptions used for purposes of preparing such budget) and, promptly when
available, any significant revisions of such budget;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements, press releases and other materials
filed by Holdings, the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be;
(i) promptly after the receipt thereof by Holdings or the Borrower or any
Subsidiary, a copy of any "management letter" received by any such person from
its certified public accountants and the management's response thereto; and
(j) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Holdings, the Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.05. LITIGATION AND OTHER NOTICES. Furnish to the Administrative
Agent, the Issuing Bank and each Lender written notice of the following promptly
after Holdings or the Borrower obtains knowledge thereof:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken with
respect thereto;
(b) the filing or commencement of, or any threat or notice of intention of
any person to file or commence, any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, (i) against the
Borrower or any Affiliate thereof that could reasonably be expected to result in
a Material Adverse Effect or (ii) against Holdings, the Borrower, any of the
Subsidiaries, any Managed Practice or any Contract Provider to suspend, revoke
or terminate (or that may result in the termination of) its participation in the
Government Programs or the Private Programs; and
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and the Subsidiaries in an aggregate amount exceeding
$1,000,000; and
(d) any development specific to the Borrower, any Subsidiary, any Managed
Practice or any Contract Provider that is not a matter of general public
knowledge and that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect.
SECTION 5.06. INFORMATION REGARDING COLLATERAL. (a) Furnish to the
Administrative Agent prompt written notice of any change (i) in any Loan Party's
corporate name, (ii) in the jurisdiction of organization or formation of any
Loan Party, (iii) in any Loan Party's identity or corporate structure or (iv) in
any Loan Party's Federal Taxpayer Identification Number.
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Holdings and the Borrower agree not to effect or permit any change referred to
in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral. Holdings and the Borrower
also agree promptly to notify the Administrative Agent if any material portion
of the Collateral is damaged or destroyed.
(b) In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer setting forth the information required pursuant to Section 2
of the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section 5.06.
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS.
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. Each Loan Party will,
and will cause each of its subsidiaries to, permit any representatives
designated by the Administrative Agent, the Collateral Agent or any Lender to
visit and inspect the financial records and the properties of Holdings, the
Borrower or any Subsidiary at reasonable times and with reasonable notice and as
often as reasonably requested and to make extracts from and copies of such
financial records, and permit any representatives designated by the
Administrative Agent, the Collateral Agent or any Lender to discuss the affairs,
finances and condition of Holdings, the Borrower or any Subsidiary with the
officers thereof and independent accountants therefor, PROVIDED, that the
Borrower shall have the option to participate in and arrange or otherwise
coordinate any such discussion held by the Administrative Agent, the Collateral
Agent or any Lender with its independent auditors pursuant to this Section 5.06.
SECTION 5.08. USE OF PROCEEDS. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. FURTHER ASSURANCES. Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust) that may be required under applicable law, or that
the Required Lenders, the Administrative Agent or the Collateral Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests created or intended to be created
by the Security Documents. The Borrower will cause any subsequently acquired or
organized Domestic Subsidiary (other than any Consolidated Practice) to become a
Loan Party by executing the Guarantee and Collateral Agreement and each other
applicable Security Document in favor of the Collateral Agent. In addition, from
time to time, the Borrower will, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as the Administrative Agent, the Collateral Agent or the Required Lenders shall
designate (it being understood that it is the intent
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of the parties that the Obligations shall be secured by substantially all the
assets of the Borrower and its Domestic Subsidiaries (other than any
Consolidated Practice)) including real and other properties acquired subsequent
to the Closing Date. Notwithstanding the foregoing, in no event shall the
Borrower or any Domestic Subsidiary be required to pledge greater than 65% of
the total outstanding voting Equity Interests of any Foreign Subsidiary. Such
security interests and Liens will be created under the Security Documents and
other security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance satisfactory to the Administrative Agent and the
Collateral Agent, and the Borrower shall deliver or cause to be delivered to the
Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section 5.09. The Borrower agrees to
provide such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien. In
furtherance of the foregoing, the Borrower will give prompt notice to the
Administrative Agent of the acquisition by it or any of the Subsidiaries (other
than any Consolidated Practice) of any real property (or any interest in real
property) having a value in excess of $250,000.
ARTICLE VI
NEGATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document have been paid
in full (other than contingent indemnification obligations to the extent no
claim giving rise thereto has been asserted) and all Letters of Credit have been
cancelled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, neither
Holdings nor the Borrower will, nor will they cause or permit any of the
Subsidiaries to:
SECTION 6.01. INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness existing on the date hereof and set forth in Schedule
6.01 (a), and any extensions, renewals or replacements of such Indebtedness
to the extent the principal amount of such Indebtedness is not increased,
neither the final maturity nor the weighted average life to maturity of
such Indebtedness is decreased, such Indebtedness, if subordinated to the
Obligations, remains so subordinated on terms no less favorable to the
Lenders, and the original obligors in respect of such Indebtedness remain
the only obligors thereon;
(b) Indebtedness created hereunder and under the other Loan Documents;
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(c) intercompany Indebtedness of Holdings, the Borrower and the
Subsidiaries to the extent permitted by Section 6.04(c) or 6.04(h);
(d) Indebtedness of the Borrower or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital
assets, and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof; PROVIDED
that (i) such Indebtedness is incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this
Section 6.01(d), when combined with the aggregate principal amount of all
Capital Lease Obligations and Synthetic Lease Obligations incurred pursuant
to Section 6.01(e) shall not exceed $10,000,000 at any time outstanding;
(e) Capital Lease Obligations and Synthetic Lease Obligations in an
aggregate principal amount, when combined with the aggregate principal
amount of all Indebtedness incurred pursuant to Section 6.01(d), not in
excess of $10,000,000 at any time outstanding;
(f) Indebtedness owed to (including obligations in respect of letters
of credit for the benefit of) any person providing worker's compensation,
health, disability or other employee benefits or property, casualty or
liability insurance, pursuant to reimbursement or indemnification
obligations to such person, in each case incurred in the ordinary course of
business;
(g) Indebtedness in respect of performance bonds, bid bonds, appeal
bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business including those incurred to secure health,
safety and environmental obligations in the ordinary course of business;
(h) obligations under Hedging Agreements to the extent they constitute
Indebtedness;
(i) Indebtedness in respect of the Subordinated Notes not in excess of
$275,000,000;
(j) Indebtedness of Holdings in respect of the Holdings Subordinated
Notes issued on the Closing Date in an aggregate principal amount not to
exceed $67,000,000, together with any additional notes issued pursuant to
the terms and conditions of the Holdings Subordinated Notes as pay-in-kind
interest on such Holdings Subordinated Notes;
(k) Indebtedness in respect of the Contingent Notes;
(l) (i) Additional Subordinated Debt and Additional Seller Notes
incurred to finance any Permitted Acquisition (including the refinancing of
Indebtedness of the Acquired Entity and the payment of related fees and
expenses) and (ii) Indebtedness
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acquired or assumed by the Borrower or any Subsidiary in connection with
any Permitted Acquisition that existed at the time of such Permitted
Acquisition and was not created in connection therewith or in contemplation
thereof, PROVIDED that the aggregate outstanding amount of all Indebtedness
incurred pursuant to this Section 6.01(1) shall not at any time exceed
$37,500,000;
(m) Additional Subordinated Debt, 100% of the Net Cash Proceeds of
which is used to prepay, in whole or in part, outstanding Term Loans in
accordance with Section 2.13(c), in an aggregate outstanding amount not at
any time in excess of $225,000,000;
(n) Guarantees by the Borrower and its Subsidiaries with respect to
any Indebtedness of the Borrower or any of its Subsidiaries permitted
hereunder;
(o) Indebtedness existing on the date hereof and set forth in Schedule
6.01(o), but not any extensions, renewals or replacements of such
Indebtedness; and
(p) other unsecured Indebtedness of the Borrower or the Subsidiaries
in an aggregate principal amount not exceeding $10,000,000 at any time
outstanding.
SECTION 6.02. LIENS. Create, incur, assume or permit to exist any Lien on
any property or assets (including Equity Interests or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; PROVIDED that
such Liens shall secure only those obligations which they secure on the
date hereof and any extensions, renewals and replacements thereof permitted
hereunder;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; PROVIDED that (i)
such Lien is not created in contemplation of or in connection with such
acquisition and (ii) such Lien does not apply to any other property or
assets of the Borrower or any Subsidiary, PROVIDED that neither (x) the
aggregate fair market value of the property subject to all such Liens nor
(y) the aggregate outstanding liabilities secured by all such Liens shall
exceed $5,000,000 at any time;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03;
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(f) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(g) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(h) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(i) purchase money security interests in real property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or any Subsidiary; PROVIDED that (i) such
security interests secure Indebtedness permitted by Section 6.01, (ii) such
security interests are incurred, and the Indebtedness secured thereby is
created, within 90 days after such acquisition (or construction), (iii) the
Indebtedness secured thereby does not exceed the lesser of the cost or the
fair market value of such real property, improvements or equipment at the
time of such acquisition (or construction) and (iv) such security interests
do not apply to any other property or assets of the Borrower or any
Subsidiary;
(j) Liens arising out of judgments or awards in respect of which
Holdings, the Borrower or any of the Subsidiaries shall in good faith be
prosecuting an appeal or proceedings for review in respect of which there
shall be secured a subsisting stay of execution pending such appeal or
proceedings; PROVIDED that the aggregate amount of all such judgments or
awards (and any cash and the fair market value of any property subject to
such Liens) does not exceed $7,500,000 at any time outstanding;
(k) Liens created or deemed to exist by the establishment of trusts or
other similar arrangements in connection with self-insurance programs
permitted by Section 6.04(h);
(l) licenses, sublicenses, leases or subleases granted to others not
interfering in any material respect with the business of the Borrower or
any Subsidiary;
(m) any interest or title of a lessor or any Lien encumbering such
lessor's interest with respect to any lease to the Borrower or any
Subsidiary; and
(n) Liens not otherwise permitted hereunder (other than Liens securing
Indebtedness for money borrowed), PROVIDED that neither (x) the fair market
value of the property subject to such Liens nor (y) the outstanding
liabilities secured by such Liens shall exceed $2,500,000 in the aggregate
at any time.
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SECTION 6.03. SALE AND LEASE-BACK TRANSACTIONS. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred unless (a) the sale of such property is
permitted by Section 6.05 and (b) any Capital Lease Obligations, Synthetic Lease
Obligations or Liens arising in connection therewith are permitted by Sections
6.01 and 6.02, as the case may be.
SECTION 6.04. INVESTMENTS, LOANS AND ADVANCES. Purchase, hold or acquire
any Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) (i) investments by Holdings, the Borrower and the Subsidiaries
existing on the date hereof in the Equity interests of the Borrower and the
Subsidiaries and (ii) additional investments by Holdings, the Borrower and
the Subsidiaries in the Equity Interests of the Borrower and the Subsidiary
Guarantors; PROVIDED that any such Equity Interests held by a Loan Party
shall be pledged pursuant to the Guarantee and Collateral Agreement
(subject to the limitations applicable to voting stock of a Foreign
Subsidiary referred to therein);
(b) Permitted Investments;
(c) loans or advances made by the Borrower to any Subsidiary Guarantor
and made by any Subsidiary to Holdings, the Borrower or any Subsidiary
Guarantor; PROVIDED that all related promissory notes (if any) shall be
pledged to the Collateral Agent for the ratable benefit of the Secured
Parties pursuant to the Guarantee and Collateral Agreement;
(d) investments arising from transactions by the Borrower or its
Subsidiaries with customers or suppliers in the ordinary course of
business, including endorsements of negotiable instruments, debt
obligations and other investments received in connection with the
bankruptcy or reorganization of customers and suppliers and in settlement
of delinquent obligations of, and other disputes with, customers or
suppliers, arising in the ordinary course of business and in the exercise
of the reasonable business judgment of such Borrower or such Subsidiary;
(e) the Borrower and the Subsidiaries may make loans and advances in
the ordinary course of business to their respective employees so long as
the aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $2,500,000;
(f) the Borrower may enter into Hedging Agreements in the ordinary
course of business that are not speculative in nature;
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(g) the Borrower or any Subsidiary may acquire all or substantially
all the assets of a person or line of business of such person, or not less
than 100% of the Equity Interests of a person (any such person referred to
herein as the "ACQUIRED ENTITY"); PROVIDED that
(i) such acquisition was not preceded by an unsolicited tender
offer for such Equity Interests by, or proxy contest initiated by,
Holdings, the Borrower or any Subsidiary;
(ii) the Acquired Entity shall be a going concern and shall be in
a similar line of business as that of the Borrower and the
Subsidiaries as conducted during the current and most recent calendar
year;
(iii) the Acquired Entity is located in the United States of
America;
(iv) any Management Services Agreement executed and delivered in
connection with such acquisition shall provide that 100% of the net
income of the Acquired Entity (determined in accordance GAAP or in a
manner otherwise reasonably acceptable to the Administrative Agent) be
payable to the Borrower or a Subsidiary Guarantor;
(v) at the time of the execution and delivery of the definitive
acquisition agreement relating to such acquisition, the Borrower shall
have delivered to the Administrative Agent a compliance certificate
signed by a Financial Officer of the Borrower (A) demonstrating Pro
Forma Compliance (including, for purposes of this clause only, the
Midpoint Amount of any Additional Seller Notes to be incurred in
connection with such acquisition, in the calculation of Total Debt),
(B) attaching a true and complete copy of any due diligence report
provided to the board of directors of the Borrower with respect to
such acquisition, (C) attaching a true and complete copy of the
acquisition agreement (including all schedules, exhibits and
attachments) for such acquisition, (D) certifying the Midpoint Amount
of any Additional Seller Notes to be issued in connection with such
acquisition, (E) affirming that the representations and warranties set
forth in Article IV would be true and correct in all material respects
as of such date and after giving effect to such acquisition (except to
the extent such representations and warranties expressly relate to an
earlier date) and (F) certifying that, at the date of such certificate
and after giving effect to such acquisition, no Default or Event of
Default shall have occurred and be continuing;
(vi) on the date of such acquisition, the Borrower shall deliver to
the Administrative Agent a compliance certificate signed by a Financial
Officer of the Borrower (A) attaching a true and complete copy of any
amendments or other modifications to the acquisition agreement (including
all schedules, exhibits and attachments) for such acquisition, (B)
certifying that such acquisition has been consummated, in all material
respects, on the terms and conditions set forth in such
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documentation and C) certifying that such acquisition constitutes a
Permitted Acquisition;
(vii) if the acquisition involves an interest in a partnership and a
requirement that the Borrower or a Subsidiary be a general partner, the
general partner shall be a special purpose Subsidiary of the Borrower;
(viii) after giving effect to such acquisition, there must be at least
$20,000,000 of unused and available Revolving Credit Commitments;
(ix) the aggregate of the consideration paid in connection with such
acquisition and all other acquisitions pursuant to this Section 6.04(g)
(including any Indebtedness of the Acquired Entity that is repaid or
assumed by the Borrower or any Subsidiary in connection with or immediately
following such acquisition and the Midpoint Amount of any Additional Seller
Notes issued in connection with such acquisition) shall not in the
aggregate exceed $25,000,000 in the fiscal year ended December 31, 2003,
and $22,500,000 in any fiscal year thereafter (provided that an amount
equal to 50% of the unused aggregate amount of consideration permitted to
be paid in any fiscal year pursuant to this Section 6.04(g) (excluding any
amounts that were carried forward from the prior year) may be carried
forward to the next succeeding fiscal year) or $125,000,000 in the
aggregate;
(x) any Indebtedness issued in connection with such acquisition shall
be Additional Subordinated Debt or Additional Seller Notes;
(xi) any Indebtedness issued or assumed in connection with such
acquisition and all other acquisitions pursuant to this Section 6.04(g)
shall not in the aggregate exceed 30% of the aggregate of the consideration
paid in connection with such acquisition and all other acquisitions
pursuant to this Section 6.04(g) (including all Indebtedness of the
Acquired Entity that is assumed by the Borrower or any Subsidiary following
such acquisition); and
(xii) the Borrower shall comply, and shall cause the Acquired Entity
to comply, with the applicable provisions of Section 5.09 and the Security
Documents (any acquisition of an Acquired Entity meeting all the criteria
of this Section 6.04(g) being referred to herein as a "PERMITTED
ACQUISITION");
(h) the Borrower may make investments in and loans and advances to a
wholly owned Subsidiary established for the sole purpose of providing
self-insurance benefits to the Borrower, the Subsidiaries and the
Affiliated Practices in amounts equal to the actuarial self insurance
requirements of the Borrower, the Subsidiaries and the Affiliated Practices
and the general corporate overhead expenses of such captive insurance
Subsidiary;
(i) the Borrower may make payments, loans, advances to, and
investments in, Consolidated Practices in the ordinary course of business
and consistent with past
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practice in satisfaction of its obligations under any Management Services
Agreements; PROVIDED that any promissory notes evidencing any such loans or
advances shall be pledged to the Collateral Agent for the ratable benefit
of the Secured Parties pursuant to the Guarantee and Collateral Agreement;
(j) investments consisting of non-cash consideration received in
connection with a sale of assets permitted by Section 6.05; and
(k) in addition to investments permitted by paragraphs (a) through (j)
above, additional investments, loans and advances by the Borrower and the
Subsidiaries (determined without regard to any write-downs or write-offs of
such investments, loans and advances) not to exceed $15,000,000 at any time
outstanding.
SECTION 6.05. MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND ACQUISITIONS.
(a) Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all of the assets (whether now owned or hereafter acquired) of the
Borrower or less than all the Equity Interests of any Subsidiary, or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all
or any substantial part of the assets of any other person, except that if at the
time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing (i) any wholly owned Subsidiary
may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (ii) any wholly owned Subsidiary may merge into or
consolidate with any other wholly owned Subsidiary in a transaction in which the
surviving entity is a wholly owned Subsidiary and no person other than the
Borrower or a wholly owned Subsidiary receives any consideration (provided that
if any party to any such transaction is a Loan Party, the surviving entity of
such transaction shall be a Loan Party), (iii) any Consolidated Practice may
merge into a wholly owned Subsidiary or another Consolidated Practice in a
transaction in which no person other than the Borrower or a wholly owned
Subsidiary receives any consideration (provided that if any party to such
transaction is a Loan Party, the surviving entity of such transaction shall be
a Loan Party), (iv) any Subsidiary may merge into any third party in any Asset
Sale permitted by Section 6.05(b) and (v) the Borrower and the Subsidiaries may
make Permitted Acquisitions.
(b) Engage in any Asset Sale otherwise permitted under paragraph (a) above
unless (i) such Asset Sale is for consideration at least 75% of which is cash,
(ii) such consideration is at least equal to the fair market value of the assets
being sold, transferred, leased or disposed of and (iii) the fair market value
of all assets sold, transferred, leased or disposed of pursuant to this
paragraph (b) shall not exceed $5,000,000 in any fiscal year or $25,000,000 in
the aggregate.
SECTION 6.06. RESTRICTED PAYMENTS; RESTRICTIVE AGREEMENTS. (a) Declare or
make, or agree to declare or make, directly or indirectly, any Restricted
Payment (including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; PROVIDED, HOWEVER, that
(i) any Subsidiary may declare and pay dividends or make other
distributions ratably to its equity holders;
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(ii) so long as no Event of Default or Default shall have occurred and
be continuing or would result therefrom, (A) Holdings, the Borrower and any
of its Subsidiaries may repurchase or otherwise acquire Equity Interests of
Holdings, the Borrower or any of its Subsidiaries (or make dividends to
Holdings to consummate any such repurchase or other acquisition of Equity
Interests) from current or former employees, consultants, directors or
former directors of Holdings, the Borrower or any of its Subsidiaries (or
permitted transferees of such persons), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments
thereto) approved by Holding's board of directors under which such
individuals purchase or sell or are granted the option to purchase or sell
such Equity Interests; PROVIDED, HOWEVER, that the aggregate amount of such
repurchases and other acquisitions shall not exceed in any calendar year
the lesser of (x) the sum of $500,000 and the aggregate amount of
Restricted Payments permitted (but not made) in prior years pursuant to
this clause (iii) and (y) $2,500,000 and (B) Holdings may repurchase or
otherwise acquire its common stock from the Permitted Investors with the
proceeds of sales or issuances of its common stock to management, employees
or consultants of Holdings, the Borrower, the Subsidiaries or the Managed
Practices; PROVIDED, HOWEVER, that the aggregate amount of any such
repurchases or acquisitions shall not exceed $10,000,000 and such
repurchases or acquisitions shall be completed within 120 days following
the Closing Date;
(iii) the Borrower may make Restricted Payments to Holdings to be used
by Holdings solely to pay its franchise taxes and other fees required to
maintain its corporate existence and to pay for general corporate and
overhead expenses (including salaries and other compensation of employees)
incurred by Holdings the ordinary course of its business, PROVIDED,
HOWEVER, that such Restricted Payments shall not exceed $250,000 in any
calendar year;
(iv) the Borrower may make Restricted Payments to Holdings in an
amount necessary to pay the Tax liabilities of Holdings directly
attributable to (or arising as a result of) the operations of the Borrower
and the Subsidiaries; PROVIDED, HOWEVER, that (A) the amount of such
dividends shall not exceed the amount that the Borrower and the
Subsidiaries would be required to pay in respect of Federal, State and
local taxes were the Borrower and the Subsidiaries to pay such taxes as
stand-alone taxpayers and (B) all Restricted Payments made to Holdings
pursuant to this clause (iv) are used by Holdings for the purposes
specified herein within 20 days of the receipt thereof;
(v) the Borrower may make distributions in any fiscal year, beginning
with the fiscal year ended December 31, 2004, in an amount not to exceed
the Allowable Amount to Holdings so that Holdings may pay (A) regularly
scheduled interest on the Holdings Subordinated Notes, when and as due, in
an amount not to exceed 10% of the accreted value of the Holdings
Subordinated Notes, (B) principal of any Holdings Subordinated Notes issued
in lieu of cash interest on Holdings Subordinated Notes that was previously
due but not paid and (C) Management Fees, in an amount not to exceed
$1,000,000 in any fiscal year; PROVIDED, HOWEVER, that (1) no Default or
Event of Default shall have occurred and be continuing at the time of any
such payment or result therefrom, and (2)
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the Borrower shall not make any payment pursuant to this clause (v) prior
to the delivery of the financial statements and certificates required by
Sections 5.04(a) and 5.04(d) for the preceding fiscal year;
(vi) Holdings may repay the outstanding principal and accrued interest
on the Holdings Subordinated Notes pursuant to Section 9.17; and
(vii) payments to former stockholders of the Borrower in connection
with the exercise of appraisal rights under applicable law.
(b) Enter into, incur or permit to exist any agreement or other arrangement
that prohibits, restricts or imposes any condition upon (i) the ability of
Holdings, the Borrower or any Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets to secure the Obligations, or (ii) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any of its Equity Interests or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; PROVIDED that (A) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (B) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (C) clause (i) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (D) clause
(i) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof, (E) the foregoing shall not apply
to restrictions and conditions contained in agreements in effect on the Closing
Date and set forth or Schedule 6.06, (F) the foregoing shall not apply to
restrictions pursuant to Indebtedness of any person that becomes a Subsidiary
after the date hereof, PROVIDED that such Indebtedness exists at the time such
person becomes a Subsidiary and is not created in contemplation of or in
connection with such person becoming a Subsidiary, and (G) the foregoing shall
not apply to any restrictions or conditions imposed on any Consolidated Practice
by (and for the benefit of) the Borrower or any Subsidiary Guarantor.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. Except for transactions by or
among Loan Parties or identified on Schedule 6.07, sell or transfer any property
or assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that (a)
the Borrower or any Subsidiary may engage in any of the foregoing transactions
in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) dividends may be paid to
the extent provided in Section 6.06, (c) loans, investments and advances may be
made to the extent permitted by Sections 6.01 and 6.04, (d) the payment of
reasonable fees to directors of the Borrower or any Subsidiary who are not
employees of the Borrower or any Subsidiary, and compensation and employee
benefit arrangements paid to, and indemnity provided for the benefit of,
directors, officers or employees of the Borrower or its Subsidiaries in the
ordinary course of business, (e) any issuances of securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the
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funding of, employment agreements, stock options and stock ownership plans
approved by the Borrower's board of directors and (f) the Borrower or any
Subsidiary may provide services to, and perform its other obligations under, any
Management Services Agreement with any Affiliated Practice.
SECTION 6.08. BUSINESS OF HOLDINGS, BORROWER AND SUBSIDIARIES. (a) With
respect to Holdings, engage in any business activities or have any assets or
liabilities other than its ownership of the Equity Interests of the Borrower and
the Contingent Note Reserve and other assets and liabilities contemplated
hereunder and incidental thereto, including its liabilities under the Loan
Documents, the Subordinated Note Documents, the Holdings Subordinated Note
Documents, the Holdings Common Equity Documents and the Management Agreement.
(b) With respect to the Borrower and its Subsidiaries, engage at any time
in any business or business activity other than the business currently conducted
by them and business activities reasonably incidental thereto.
SECTION 6.09. OTHER INDEBTEDNESS AND AGREEMENTS. (a) Permit any waiver,
supplement, modification, amendment, termination or release of any indenture,
instrument or agreement in respect of any Contingent Notes or pursuant to which
any Material Indebtedness of Holdings, the Borrower or any of the Subsidiaries
is outstanding if the effect of such waiver, supplement, modification,
amendment, termination or release would materially increase the obligations of
the obligor or confer additional material rights on the holder of such
Indebtedness in a manner adverse to Holdings, the Borrower, any of the
Subsidiaries or the Lenders.
(b) (i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or offer or commit to pay, or
directly or indirectly (including pursuant to any Synthetic Purchase Agreement)
redeem, repurchase, retire or otherwise acquire for consideration, or set apart
any sum for the aforesaid purposes, any subordinated Indebtedness, other than
any prepayment of the Contingent Notes permitted by Section 9.17 or any
prepayment of the Holdings Subordinated Notes permitted by Section 6.06(a)(v)(B)
or Section 9.17, (ii) pay in cash any amount in respect of any Indebtedness or
preferred Equity Interests that may at the obligor's option be paid in kind or
in other securities, or (iii) so long as cash or Permitted Investments are held
in the Contingent Note Reserve, use any other funds to pay any amount in respect
of any Contingent Notes.
SECTION 6.10. CAPITAL EXPENDITURES. Permit the aggregate amount of Capital
Expenditures (excluding expenditures relating to the acquisition of fixed or
capital assets acquired in Permitted Acquisitions) made by the Borrower and the
Subsidiaries in any period set forth below to exceed the amount set forth below
for such period:
<Table>
<Caption>
PERIOD AMOUNT
------ ------
January 1, 2003 through December 31, 2003 $ 23,000,000
January 1, 2004 through December 31, 2004 $ 20,000,000
January 1, 2005 through December 31, 2005 $ 20,000,000
January 1, 2006 through December 31, 2006 $ 20,000,000
</Table>
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79
<Table>
January 1, 2007 through December 31, 2007 $ 20,000,000
January 1, 2008 through December 31, 2008 $ 21,000,000
January 1, 2009 through December 31, 2009 $ 23,000,000
Each fiscal year thereafter $ 25,000,000
</Table>
The amount of permitted Capital Expenditures set forth above in respect of any
fiscal year commencing with the fiscal year ending on December 31, 2004, shall
be increased (but not decreased) by (a) an amount equal to 50% of the unused
permitted Capital Expenditures for the immediately preceding fiscal year less
(b) an amount equal to unused Capital Expenditures carried forward to such
preceding fiscal year.
SECTION 6.11. INTEREST COVERAGE RATIO. Permit the Interest Coverage Ratio
for any period of four consecutive fiscal quarters, in each case taken as one
accounting period, ending during any period set forth below to be less than the
ratio set forth opposite such date or period below:
<Table>
<Caption>
DATE OR PERIOD RATIO
April 1, 2003 through September 30, 2003 2.00 to 1.00
October 1, 2003 through December 31, 2003 2.10 to 1.00
January 1, 2004 through March 31, 2004 2.20 to 1.00
April 1, 2004 through June 30, 2004 2.30 to 1.00
July 1, 2004 through September 30, 2004 2.35 to 1.00
October 1, 2004 through December 31, 2004 2.40 to 1.00
January 1, 2005 through March 31, 2005 2.50 to 1.00
April 1, 2005 through June 30, 2005 2.60 to 1.00
July 1, 2005 through September 30, 2005 2.70 to 1.00
October 1, 2005 through December 31, 2005 2.80 to 1.00
January 1, 2006 through March 31, 2006 2.90 to 1.00
April 1, 2006 through June 30, 2006 3.00 to 1.00
July 1, 2006 through September 30, 2006 3.15 to 1.00
October 1, 2006 through December 31, 2006 3.25 to 1.00
January 1, 2007 through March 31, 2007 3.35 to 1.00
April 1, 2007 through June 30, 2007 3.45 to 1.00
July 1, 2007 through September 30, 2007 3.65 to 1.00
October 1, 2007 through December 31, 2007 3.75 to 1.00
January 1, 2008 through March 31, 2008 3.85 to 1.00
April 1, 2008 through June 30, 2008 3.95 to 1.00
July 1, 2008 through September 30, 2008 4.15 to 1.00
October 1, 2008 through December 31, 2008 4.25 to 1.00
January 1, 2009 through March 31, 2009 4.35 to 1.00
April 1, 2009 through June 30, 2009 4.45 to 1.00
Thereafter 4.50 to 1.00
</Table>
SECTION 6.12. FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage
Ratio for any period of four consecutive fiscal quarters, in each case taken as
one accounting period,
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80
ending during any period set forth below to be the less than the ratio set forth
opposite such date or period below:
<Table>
<Caption>
Date or Period Ratio
-------------- -----
April 1, 2003 through September 30, 2003 1.15 to 1.00
October 1, 2003 through December 31, 2003 1.20 to 1.00
January 1, 2004 through March 31, 2004 1.30 to 1.00
April 1, 2004 through June 30, 2004 1.35 to 1.00
July 1, 2004 through December 31, 2004 1.40 to 1.00
January 1, 2005 through March 31, 2005 1.45 to 1.00
April 1, 2005 through June 30, 2005 1.50 to 1.00
July 1, 2005 through September 30, 2005 1.55 to 1.00
October 1, 2005 through December 31, 2005 1.65 to 1.00
January 1, 2006 through March 31, 2006 1.70 to 1.00
April 1, 2006 through June 30, 2006 1.75 to 1.00
July 1, 2006 through September 30, 2006 1.80 to 1.00
October 1, 2006 through March 31, 2007 1.90 to 1.00
April 1, 2007 through June 30, 2007 1.95 to 1.00
July 1, 2007 through September 30, 2007 2.00 to 1.00
October 1, 2007 through March 31, 2008 2.05 to 1.00
April 1, 2008 through September 30, 2008 2.10 to 1.00
Thereafter 2.15 to 1.00
</Table>
SECTION 6,13. MAXIMUM LEVERAGE RATIO. Permit the Leverage Ratio as of the
last day of any fiscal quarter ending during any period set forth below to be
greater than the ratio set forth opposite such period below:
<Table>
<Caption>
Date or Period Ratio
-------------- -----
April 1, 2003 through September 30, 2003 5.25 to 1.00
October 1, 2003 through December 31, 2003 5.15 to 1.00
January 1, 2004 through March 31, 2004 4.95 to 1.00
April 1, 2004 through June 30, 2004 4.65 to 1.00
July 1, 2004 through September 30, 2004 4.55 to 1.00
October 1, 2004 through December 31, 2004 4.45 to 1.00
January 1, 2005 through March 31, 2005 4.40 to 1.00
April 1, 2005 through June 30, 2005 4.00 to 1.00
July 1, 2005 through September 30, 2005 3.85 to 1.00
October 1,2005 through December 31,2005 3.75 to 1.00
January 1, 2006 through March 31, 2006 3.70 to 1.00
April 1, 2006 through June 30, 2006 3.35 to 1.00
July 1, 2006 through September 30, 2006 3.30 to 1.00
October 1, 2006 through December 31, 2006 3.20 to 1.00
January 1, 2007 through March 31, 2007 3.10 to 1.00
April 1, 2007 through June 30, 2007 2.80 to 1.00
July 1, 2007 through September 30, 2007 2.75 to 1.00
October 1, 2007 through December 31, 2007 2.70 to 1.00
</Table>
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81
<Table>
January 1, 2008 through March 31, 2008 2.60 to 1.00
April 1, 2008 through June 30, 2008 2.50 to 1.00
July 1, 2008 through September 30, 2008 2.40 to 1.00
October 1, 2008 through December 31, 2008 2.30 to 1.00
January 1, 2009 through March 31, 2009 2.20 to 1.00
April 1, 2009 through June 30, 2009 2.10 to 1.00
Thereafter 2.00 to l.00
</Table>
SECTION 6.14. FISCAL YEAR. With respect to Holdings and the Borrower,
change their fiscal year-end to a date other than December 31.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings or issuances of Letters of Credit
hereunder, or any representation, warranty, statement or information contained
in any report, certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan or
the reimbursement with respect to any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan or any
Fee or L/C Disbursement or any other amount (other than an amount referred to in
(b) above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of three
Business Days;
(d) default shall be made in the due observance or performance by Holdings,
the Borrower or any Subsidiary of any covenant, condition or agreement contained
in Section 5.01(a) (with respect to Holdings or the Borrower), 5.05 or 5.08 or
in Article VI;
(e) default shall be made in the due observance or performance by Holdings,
the Borrower or any Subsidiary of any covenant, condition or agreement contained
in any Loan Document (other than those specified in (b), (c) or (d) above) and
such default shall continue unremedied for a period of 20 days after notice
thereof from the Administrative Agent or any Lender to the Borrower;
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(f) (i) Holdings, the Borrower or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Material
Indebtedness, when and as the same shall become due and payable, after any
applicable grace period, or (ii) any other event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (after the giving of notice, if required, or
the expiration of any applicable grace period) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
PROVIDED that this clause (ii) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of Holdings, the Borrower or any Material Subsidiary, or of a
substantial part of the property or assets of Holdings, the Borrower or a
Material Subsidiary, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Borrower or any Material Subsidiary or for a substantial part of
the property or assets of Holdings, the Borrower or a Material Subsidiary or
(iii) the winding-up or liquidation of Holdings, the Borrower or any Material
Subsidiary; and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(h) Holdings, the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or File any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Material Subsidiary or for a substantial part of the property or
assets of Holdings, the Borrower or any Material Subsidiary; (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (vii) take any action for the purpose of effecting any of
the foregoing;
(i) one or more judgments for the payment of money in an aggregate amount
(in each case to the extent not paid or covered by insurance provided by a
carrier who has acknowledged coverage in writing and has the ability to perform)
in excess of $7,500,000 shall be rendered against Holdings, the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of Holdings, the Borrower or any Subsidiary to enforce any
such judgment;
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83
(j) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events, could reasonably
be expected to result in liability of the Borrower and its ERISA Affiliates in
an aggregate amount exceeding $7,500,000;
(k) any Guarantee under the Guarantee and Collateral Agreement for any
reason shall cease to be in full force and effect (other than in accordance with
its terms), or any Guarantor shall deny in writing that it has any further
liability under the Guarantee and Collateral Agreement (other than as a result
of the discharge of such Guarantor in accordance with the terms of the Loan
Documents, including in connection with such Guarantor ceasing to be a
Subsidiary of the Borrower pursuant to a transaction permitted by Section 6,05);
(l) any security interest purported to be created by any Security Document
shall cease to be, or shall be asserted by the Borrower or any other Loan Party
not to be, a valid, perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security interest in the
securities, assets or properties covered thereby, except to the extent that any
such loss of perfection or priority results from the failure of the Collateral
Agent to maintain possession of certificates representing securities pledged
under the Pledge Agreement and except to the extent that such loss is covered by
a lender's title insurance policy and the related insurer promptly after such
loss shall have acknowledged in writing that such loss is covered by such title
insurance policy;
(m) the Indebtedness under the Subordinated Notes, the Holdings
Subordinated Notes or the Additional Subordinated Debt or any Guarantees thereof
shall cease, for any reason, to be validly subordinated to the Obligations, as
provided in the Subordinated Note Documents, the Holdings Subordinated Note
Documents or the documents governing any Additional Subordinated Debt or any
Loan Party or any Affiliate of any Loan Party shall so assert; or
(n) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to Holdings or
the Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Holdings or the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby
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84
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent and the Collateral Agent (for purposes of this Article
VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the "Agents") its agent and authorizes the Agents to take such
actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
the Agents are hereby expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the rights of the
Secured Parties with respect thereto, as contemplated by and in accordance with
the provisions of this Agreement and the Security Documents.
The bank serving as the Administrative Agent and/or the Collateral Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except those expressly
set forth in the Loan Documents. Without limiting the generality of the
foregoing, (a) neither Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b)
neither Agent shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby that such Agent is required to exercise in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08), and (c) except
as expressly set forth in the Loan Documents, neither Agent shall have any duty
to disclose, nor shall it be liable for the failure to disclose, any information
relating to Holdings, the Borrower or any of the Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent and/or
Collateral Agent or any of its Affiliates in any capacity. Neither Agent shall
be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.08) or in the absence of its own gross negligence or wilful misconduct.
Neither Agent shall be deemed to have knowledge of any Default unless and until
written notice thereof is given to such Agent by Holdings, the Borrower or a
Lender, and neither Agent shall be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the
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validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper person. Each Agent may also rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by it. Each Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers by or through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders, the Issuing
Bank and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, with the consent of the Borrower (except during the continuance
of an Event of Default), not to be unreasonably withheld, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall 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. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while acting as Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
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86
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:
(a) if to the Borrower or Holdings, to it at 7289 Garden Road, Suite 200,
Riviera Beach, Florida 33404, Attention of Gregory A. Marsh (Fax No. (561)
841-8527);
(b) if to the Administrative Agent, to Credit Suisse First Boston, Eleven
Madison Avenue, New York, NY 10010, Attention of Agency Group (Fax No. (212)
325-8304); and
(c) if to a Lender, to it at its address (or fax number) set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrower or Holdings herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan
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87
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent, any Lender or the Issuing Bank.
SECTION 9.03. BINDING EFFECT. This Agreement shall become effective when it
shall have been executed by the Borrower, Holdings and the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, Holdings, the Administrative Agent,
the Collateral Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.
(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); PROVIDED,
HOWEVER, that (i) except in the case of an assignment (other than an assignment
of a Revolving Credit Commitment) to a Lender or an Affiliate or Related Fund of
a Lender, (x) the Borrower and the Administrative Agent (and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank and the Swingline
Lender) must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed); PROVIDED, HOWEVER, that the
consent of the Borrower shall not be required to any such assignment during the
continuance of any Event of Default, and (y) the amount of the Loan Commitment
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $1,000,000 (or, if less, the
entire remaining amount of such Lender's Loan Commitment), (ii) the parties to
each such assignment shall (A) electronically execute and deliver to the
Administrative Agent an Assignment and Acceptance via an electronic settlement
system acceptable to the Administrative Agent (which initially shall be
ClearPar, LLC) or (B) if no such system shall be acceptable to the
Administrative Agent, manually execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500 and (iii) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and applicable tax forms.
Upon acceptance and recording pursuant to paragraph (e) of this Section 9.04,
from and after the effective date specified in each Assignment and Acceptance,
(A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2,20 and 9.05, as well as to any Fees accrued
for its account and not yet paid).
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(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, 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 the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05(a) or delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such 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; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), if required, the processing
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and recordation fee referred to in paragraph (b) above, the applicable tax forms
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder) and, if required, the written consent of the Borrower, the
Swingline Lender, the Issuing Bank and the Administrative Agent to such
assignment, the Administrative Agent shall (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Lenders, the Issuing Bank and the
Swingline Lender. No assignment shall be effective unless it has been recorded
in the Register as provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but, with
respect to any particular participant, to no greater extent than the Lender that
sold the participation to such participant) and (iv) the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans or L/C
Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans, increasing
or extending the Commitments or releasing any Guarantor or all or substantially
all of the Collateral).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; PROVIDED that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
(h) Any Lender may (without the consent of the Borrower or the
Administrative Agent) at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender (including, if such Lender is a fund that
invests in bank loans, to a trustee for holders of obligations owed, or
securities issued, by such fund); PROVIDED that no such assignment shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto
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and any foreclosure or exercise of remedies by such assignee or trustee shall be
subject to the provisions of this Section 9.04 regarding assignments in all
respects.
(i) Notwithstanding anything to the contrary contained herein, any Lender
(a "GRANTING LENDER") may grant to a special purpose funding vehicle (an "SPC"
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; PROVIDED that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 9.04, any SPC
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC.
(j) Neither Holdings nor the Borrower shall assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(k) In the event that Standard & Poor's Ratings Service, Moody's Investors
Service, Inc., and Thompson's BankWatch (or InsuranceWatch Ratings Service, in
the case of Lenders that are insurance companies (or Best's Insurance Reports,
if such insurance company is not rated by Insurance Watch Ratings Service))
shall, after the date that any Lender becomes a Revolving Credit Lender,
downgrade the long-term certificate deposit ratings of such Lender, and the
resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a
Lender that is an insurance company (or B, in the case of an insurance company
not rated by Insurance Watch Ratings Service)), then the Issuing Bank shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, to replace (or to request the Borrower to
use its reasonable efforts to replace) such Lender with an assignee (in
accordance with and subject to the restrictions contained in paragraph (b)
above), and such Lender hereby
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agrees to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in paragraph (b) above) all its interests, rights
and obligations in respect of its Revolving Credit Commitment to such assignEE;
PROVIDED, HOWEVER, that (i) no such assignment shall conflict with any law, rule
and regulation or order of any Governmental Authority and (ii) the Issuing Bank
or such assignee, as the case may be, shall pay to such Lender in immediately
available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by such Lender hereunder and
all other amounts accrued for such Lender's account or owed to it hereunder.
SECTION 9.05. EXPENSES; INDEMNITY. (a) The Borrower and Holdings agree,
jointly and severally, to pay all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Collateral Agent, the Issuing Bank and the
Swingline Lender in connection with the syndication of the credit facilities
provided for herein and the preparation and administration of this Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated) or incurred by the
Administrative Agent, the Collateral Agent or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the fees, charges and disbursements of
Cravath, Swaine & Moore, counsel for the Administrative Agent and the Collateral
Agent, and, in connection with any such enforcement or protection, the fees,
charges and disbursements of any other counsel for the Administrative Agent, the
Collateral Agent or any Lender.
(b) The Borrower and Holdings agree, jointly and severally, to indemnify
the Administrative Agent, the Collateral Agent, each Lender, the Issuing Bank
and each Related Party of any of the foregoing persons (each such person being
called an "INDEMNITEE") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release of Hazardous Materials on any properly currently or formerly
owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to the Borrower or the Subsidiaries;
PROVIDED that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that Holdings and the Borrower fail to pay any amount
required to be paid by them to the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay
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to the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender's pro rata share (determined
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; PROVIDED that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender in its capacity as such. For
purposes hereof, a Lender's "pro rata share" shall be determined based upon its
share of the sum of the Aggregate Revolving Credit Exposure, outstanding Term
Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Holdings nor the
Borrower shall assert, and each hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) Promptly after receipt by an Indemnitee under this Section 9.05 of
notice of any claim or the commencement of any action, the Indemnitee shall
notify Holdings and the Borrower in writing of the claim or the commencement of
that action; PROVIDED, HOWEVER, that the failure to notify Holdings and the
Borrower shall not relieve it from any liability which it may have under this
Section 9.05 except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses or liability for fees
and expenses) by such failure; and, PROVIDED, FURTHER, that the failure to
notify Holdings and the Borrower shall not relieve it from any liability which
it may have to an Indemnitee otherwise than under this Section 9.05. If any such
claim or action shall be brought against an Indemnitee, and it shall notify
Holdings and the Borrower thereof, Holdings and the Borrower shall be entitled
to participate therein. It is understood that Holdings and the Borrower shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm of attorneys (in addition to any local counsel)
at any one time for all such Indemnitees, unless a bona fide conflict of
interest requires separate counsel for particular Indemnitees. Each Indemnitee,
as a condition of the indemnity agreements contained in this Section 9.05, shall
use all reasonable efforts to cooperate with Holdings and the Borrower in the
defense of any such action or claim. Holdings and the Borrower shall not be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, Holdings and the Borrower agree to indemnify and hold harmless any
Indemnitee from and against any loss or liability by reason of such settlement
or judgment. Holdings and the Borrower shall not, without the prior written
consent of the Indemnitee (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnitee is or could have been a party and indemnity could have been
sought hereunder by such Indemnitee unless such settlement includes an
unconditional release of such Indemnitee from all liability on claims that are
the subject matter of such proceeding.
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(f) If any Indemnitee makes a claim pursuant to this Section 9.05 for
payment of fees or expenses, such fees or expenses shall be paid even if
Holdings or the Borrower reserves the right to dispute or does dispute whether
Section 9.05 requires the payment of such expenses; however, such Indemnitee
shall promptly refund such amount to the extent that there is a final judicial
or arbitral determination that such Indemnitee was not entitled to
indemnification or contribution rights with respect to such payment pursuant to
the express terms of this Section 9.05.
(g) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section 9.05 shall be payable on written demand
therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower or Holdings against any of and all the
obligations of the Borrower or Holdings now or hereafter existing under this
Agreement and other Loan Documents held by such Lender. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED 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
PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE
DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE
(THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. WAIVERS; AMENDMENT. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would
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otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on the Borrower or Holdings in any case shall entitle the Borrower or Holdings
to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower, Holdings and the Required Lenders; PROVIDED, HOWEVER, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or L/C Disbursement, without the prior written consent of
each Lender affected thereby, (ii) increase or extend the Commitment or decrease
or extend the date for payment of any Fees of any Lender without the prior
written consent of such Lender, (iii) amend or modify the pro rata requirements
of Section 2.17, the provisions of Section 9.04(j), the provisions of this
Section or release any Guarantor (except that no consent is required to permit
the termination of any Guarantee of any Guarantor that ceases to be a Subsidiary
pursuant to a transaction permitted pursuant to Section 6.05) or all or
substantially all of the Collateral, without the prior written consent of each
Lender, (iv) change the provisions of any Loan Document in a manner that by its
terms adversely affects the rights in respect of payments due to Lenders holding
Loans of one Class differently from the rights of Lenders holding Loans of any
other Class without the prior written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each adversely
affected Class, (v) modify the protections afforded to an SPC pursuant to the
provisions of Section 9.04(i) without the written consent of such SPC, (vi)
amend, modify or waive compliance by Holdings or the Borrower with the
provisions of Section 6.11, 6.12 or 6.13 (or with the provisions of Section
4.01, as it relates to an Event of Default following a breach of the provisions
of Section 6.11, 6.12 or 6.13) without the prior written consent of Revolving
Lenders holding a majority in interest of the Revolving Credit Commitments or
(vii) reduce the percentage contained in the definition of the term "Required
Lenders" (it being understood that with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Lenders on substantially the same basis as the
Term Loan Commitments and Revolving Credit Commitments on the date hereof);
PROVIDED further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender hereunder or under any other Loan Document
without the prior written consent of the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender.
SECTION 9.09. INTEREST RATE LIMITATION. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be
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contracted for, charged, taken, received or reserved by the Lender holding such
Loan or participation in accordance with applicable law, the rate of interest
payable in respect of such Loan or participation hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan or participation but were not payable as a result of the
operation of this Section 9.09 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or participations or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.10. ENTIRE AGREEMENT. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any person (other
than the parties hereto and thereto, their respective successors and assigns
permitted hereunder (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders) any rights, remedies, obligations or liabilities under or
by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.13. COUNTERPARTS. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original
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but all of which when taken together shall constitute a single contract, and
shall become effective as provided in Section 9.03. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually signed counterpart of this Agreement.
SECTION 9.14. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each party
to this Agreement hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against the Borrower, Holdings or their respective
properties in the courts of any jurisdiction.
(b) Each party to this Agreement hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 9.16. CONFIDENTIALITY. (a) Each of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' officers, directors, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority or quasi-regulatory authority (such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (in which case the
Borrower shall be notified promptly thereof if permitted by applicable law), (d)
in connection with the exercise of any remedies hereunder or under the other
Loan Documents or any suit,
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action or proceeding relating to the enforcement of its rights hereunder or
thereunder, (e) subject to an agreement containing provisions substantially the
same as those of this Section 9.16, to (i) any actual or prospective assignee of
or participant in any of its rights or obligations under this Agreement and the
other Loan Documents or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower or any
Subsidiary or any of their respective obligations, (f) with the consent of the
Borrower or (g) to the extent such Information becomes publicly available other
than as a result of a breach of this Section 9.16. For the purposes of this
Section, "INFORMATION" shall mean all information received from or on behalf of
the Borrower or Holdings and related to the Borrower or Holdings or their
business, other than any such information that was available to the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to its disclosure by or on behalf of the Borrower or
Holdings. Any person required to maintain the confidentiality of Information as
provided in this Section 9.16 shall be considered to have complied with its
obligation to do so if such person has exercised the same degree of care to
maintain the confidentiality of such Information as such person would accord its
own confidential information, but in no event less than a reasonable degree of
care.
(b) Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative or other agent of such party) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to it relating to such tax treatment and tax structure, PROVIDED,
HOWEVER, that no party shall disclose any information relating to such tax
treatment or tax structure to the extent nondisclosure is necessary in order to
comply with applicable securities laws.
SECTION 9.17. RELEASE OF CONTINGENT NOTE RESERVE. (a) Notwithstanding any
other provision of this Agreement, cash on deposit in the Contingent Note
Reserve shall be released to Holdings and shall be promptly contributed to the
Borrower in the form of common equity to enable the Borrower to pay regularly
scheduled principal of and interest on the Contingent Notes, when and as due, on
a Business Day specified by the Borrower (a "CONTINGENT NOTE PAYMENT DATE") in
an amount specified by the Borrower (a "CONTINGENT NOTE PAYMENT AMOUNT") upon
satisfaction of the following conditions precedent: (i) the Borrower shall have
given written notice to the Administrative Agent and the Collateral Agent at
least five Business Days prior to the Contingent Note Payment Date, specifying
the proposed Contingent Note Payment Date and the Contingent Note Payment
Amount; (ii) no Default or Event of Default shall have occurred and be
continuing as of the Contingent Note Payment Date; and (iii) the Borrower shall
have provided to the Administrative Agent and the Collateral Agent a
certificate, dated the Contingent Note Payment Date and executed on behalf of
the Borrower by a Financial Officer of the Borrower, (A) confirming (x) any cash
on deposit in the Contingent Note Reserve released pursuant to this Section
9.17(a) shall be used to make a regularly scheduled payment of principal of
and/or interest on the Contingent Notes in the Contingent Note Payment Amount
within five Business Days of the Contingent Note Payment Date and (y) the
satisfaction of the condition precedent set forth in clause (ii) above and (B)
specifying the number and location of the account to which the Contingent Note
Payment Amount is to be disbursed.
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(b) Notwithstanding any other provision of this Agreement, any cash
interest earned on the cash and Permitted Investments held in Contingent Note
Reserve in accordance with the provisions of the Custody and Control Agreement
shall be released to Holdings to pay regularly scheduled interest on the
Holdings Subordinated Notes, when and as due, on a Business Day specified by the
Borrower (a "HOLDINGS INTEREST PAYMENT DATE") in an amount specified by the
Borrower (a "HOLDINGS INTEREST PAYMENT AMOUNT") upon satisfaction of the
following conditions precedent: (i) the Borrower shall have given written notice
to the Administrative Agent and the Collateral Agent at least five Business Days
prior to the Holdings Interest Payment Date, specifying the proposed Holdings
Interest Payment Date and the Holdings Interest Payment Amount; (ii) no Default
or Event of Default shall have occurred and be continuing as of the Holdings
Interest Payment Date; and (iii) the Borrower shall have provided to the
Administrative Agent and the Collateral Agent a certificate, dated the Holdings
Interest Payment Date and executed on behalf of the Borrower by a Financial
Officer of the Borrower, (A) confirming (x) any interest earnings on the
Contingent Note Reserve released pursuant to this Section 9.17(b) shall be used
to make a regularly scheduled payment of interest on the Holdings Subordinated
Notes in the Holdings Interest Payment Amount within five Business Days of the
Holdings Interest Payment Date and (y) the satisfaction of the condition
precedent set forth in clause (ii) above and (B) specifying the number and
location of the account to which the Holdings Interest Payment Amount is to be
disbursed.
(c) Notwithstanding any other provision of this Agreement or the Guarantee
and Collateral Agreement, following the payment in full of all principal of and
interest on the Contingent Notes, the Lien on the Contingent Note Reserve
created pursuant to the Guarantee and Collateral Agreement shall be released,
without representation, warranty or recourse of any nature, on a Business Day
specified by the Borrower (the "RELEASE DATE") upon satisfaction of the
following conditions precedent: (i) the Borrower shall have given written notice
to the Administrative Agent and the Collateral Agent at least five Business Days
prior to the Release Date, specifying the proposed Release Date, (ii) no Default
or Event of Default shall have occurred and be continuing as of the Release
Date; and (iii) the Borrower shall have provided to the Administrative Agent and
the Collateral Agent a certificate, dated the Release Date and executed on
behalf of the Borrower by a Financial Officer of the Borrower, confirming (x)
that the Contingent Notes shall have been paid in full or otherwise expired and
of no further force and effect and (y) the satisfaction of the condition
precedent set forth in clause (ii) above. If the Leverage Ratio as of the
Release Date shall be greater than 3.00 to 1.00, any funds remaining in the
Contingent Note Reserve shall be released to Holdings and shall be contributed
to the Borrower in the form of common equity, and if the Leverage Ratio as of
the Release Date shall be less than or equal to 3.00 to 1.00, any funds
remaining in the Contingent Note Reserve shall be released to Holdings and may
be used by Holdings to repay or prepay the outstanding principal of and accrued
interest on the Holdings Subordinated Notes.
(d) Notwithstanding any other provision of this Agreement or the Guarantee
and Collateral Agreement, if the Required Lenders consent to the prepayment of
any Contingent Note at a discount to the principal amount thereof, an amount of
cash on deposit in the Contingent Note Reserve shall be released to Holdings
(without representation, warranty or recourse of any nature, but free and clear
of the Lien created pursuant to the Guarantee and
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99
Collateral Agreement) and Holdings shall promptly contribute such funds to the
Borrower in the form of common equity to enable the Borrower to make such
prepayment.
(e) Without limiting the provisions of Section 9.05, the Borrower shall
reimburse the Administrative Agent, the Collateral Agent and the Lenders upon
demand for all reasonable costs and expenses, including the reasonable fees,
charges and disbursements of counsel, incurred by any of them in connection with
any action contemplated by this Section 9.17.
<Page>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMERIPATH, INC.,
by /s/ Gregory A. Marsh
-----------------------------------
Name: Gregory A. Marsh
Title: Chief Financial Officer
AMERIPATH HOLDINGS, INC.,
by
-----------------------------------
Name:
Title:
<Page>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMERIPATH, INC.,
by
-----------------------------------
Name:
Title:
AMERIPATH HOLDINGS, INC.,
by /s/ D. Scot Mackecy
-----------------------------------
Name: D. Scot Mackecy
Title: Vice President
<Page>
CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands branch,
individually and as Administrative
Agent, Collateral Agent, Swingline
Lender, and Issuing Bank
by /s/ Joseph Adipietro
-----------------------------------
Name: JOSEPH ADIPIETRO
Title: DIRECTOR
by /s/ Julia P. Kingsbury
-----------------------------------
Name: JULIA P. KINGSBURY
Title: VICE PRESIDENT
<Page>
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
by /s/ Diana F. Roife
-----------------------------------
Name: Diana F. Roife
Title: Vice President
by /s/ Scottye Lindsey
-----------------------------------
Name: Scottye Lindsey
Title: Vice President
<Page>
WACHOVIA BANK, NATIONAL ASSOCIATION
by /s/ Joyce Barry
-----------------------------------
Name: Joyce Barry
Title: Managing Director
<Page>
MERRILL LYNCH CAPITAL, a division of
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.
by /s/ Paula K. Berry
-----------------------------------
Name: Paula K. Berry
Title: Vice President