Exh. 10.3
[EXECUTION COPY]
FOURTH AMENDMENT AND RESTATEMENT
OF
CREDIT AGREEMENT
Dated as of June 12, 1998
among
INSIGHT HEALTH SERVICES CORP.,
as Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N. A.,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................1
1.1 Definitions..........................................................................................1
1.2 Computation of Time Periods.........................................................................22
1.3 Accounting Terms....................................................................................32
SECTION 2 CREDIT FACILITIES.....................................................................................23
2.1 Revolving Loans.....................................................................................23
2.2 Letter of Credit Subfacility........................................................................24
2.3 Acquisition Loans...................................................................................28
2.4 Tranche A Term Loan.................................................................................30
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................31
3.1 Default Rate........................................................................................31
3.2 Extension and Conversion............................................................................32
3.3 Prepayments.........................................................................................32
3.4 Termination and Reduction of Committed Amounts......................................................34
3.5 Fees................................................................................................35
3.6 Capital Adequacy....................................................................................36
3.7 Limitation on Eurodollar Loans......................................................................36
3.8 Illegality..........................................................................................37
3.9 Requirements of Law.................................................................................37
3.10 Treatment of Affected Loans........................................................................38
3.11 Taxes..............................................................................................38
3.12 Compensation.......................................................................................38
3.13 Pro Rata Treatment.................................................................................39
3.14 Sharing of Payments................................................................................40
3.15 Payments, Computations, Etc........................................................................41
3.16 Evidence of Debt...................................................................................42
3.17 Mandatory Assignment...............................................................................43
SECTION 4 GUARANTY..............................................................................................43
4.1 The Guaranty........................................................................................43
4.2 Obligations Unconditional...........................................................................43
4.3 Reinstatement.......................................................................................44
4.4 Certain Additional Waivers..........................................................................44
4.5 Remedies............................................................................................44
4.6 Rights of Contribution..............................................................................45
4.7 Continuing Guarantee................................................................................45
SECTION 5 CONDITIONS............................................................................................46
5.1 Closing Conditions..................................................................................46
5.2 Conditions to all Extensions of Credit..............................................................47
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................48
6.1 Financial Condition.................................................................................48
6.2 No Material Change..................................................................................48
6.3 Organization and Good Standing......................................................................48
6.4 Power; Authorization; Enforceable Obligations.......................................................49
6.5 No Conflicts........................................................................................49
6.6 No Default..........................................................................................49
6.7 Ownership...........................................................................................49
6.8 Indebtedness........................................................................................49
6.9 Litigation..........................................................................................49
6.10 Taxes..............................................................................................50
6.11 Compliance with Law................................................................................50
6.12 ERISA..............................................................................................50
6.13 Subsidiaries.......................................................................................51
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6.14 Governmental Regulations, Etc......................................................................51
6.15 Purpose of Loans and Letters of Credit.............................................................52
6.16 Environmental Matters..............................................................................52
6.17 Intellectual Property..............................................................................52
6.18 Solvency...........................................................................................53
6.19 Investments........................................................................................53
6.20 Location of Collateral.............................................................................53
6.21 Disclosure.........................................................................................53
6.22 No Burdensome Restrictions.........................................................................53
6.23 Brokers' Fees......................................................................................53
6.24 Labor Matters......................................................................................53
6.25 Nature of Business.................................................................................53
6.26 Year 2000 Compliance...............................................................................53
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................54
7.1 Information Covenants...............................................................................54
7.2 Preservation of Existence and Franchises............................................................56
7.3 Books and Records...................................................................................56
7.4 Compliance with Law.................................................................................56
7.5 Payment of Taxes and Other Indebtedness.............................................................56
7.6 Insurance...........................................................................................56
7.7 Maintenance of Property.............................................................................57
7.8 Performance of Obligations..........................................................................57
7.9 Use of Proceeds.....................................................................................57
7.10 Audits/Inspections.................................................................................57
7.11 Financial Covenants................................................................................58
7.12 Additional Credit Parties..........................................................................59
7.13 Pledged Assets.....................................................................................59
7.14 Upstreaming of Income from Joint Ventures..........................................................60
7.15 Further Assurances.................................................................................60
SECTION 8 NEGATIVE COVENANTS....................................................................................61
8.1 Indebtedness........................................................................................61
8.2 Liens...............................................................................................62
8.3 Nature of Business..................................................................................62
8.4 Consolidation, Merger, Dissolution, etc.............................................................62
8.5 Asset Dispositions..................................................................................63
8.6 Investments.........................................................................................63
8.7 Restricted Payments.................................................................................63
8.8 Prepayments of Indebtedness, etc....................................................................64
8.9 Transactions with Affiliates........................................................................64
8.10 Fiscal Year; Organizational Documents..............................................................64
8.11 Limitation on Restricted Actions...................................................................64
8.12 Ownership of Subsidiaries..........................................................................65
8.13 Sale Leasebacks....................................................................................65
8.14 Capital Expenditures...............................................................................65
8.15 No Further Negative Pledges........................................................................65
8.16 Operating Lease Obligations........................................................................65
8.17 No Foreign Subsidiaries............................................................................66
8.18 Joint Venture Operations...........................................................................66
SECTION 9 EVENTS OF DEFAULT.....................................................................................66
9.1 Events of Default...................................................................................66
9.2 Acceleration; Remedies..............................................................................68
SECTION 10 AGENCY PROVISIONS....................................................................................68
10.1 Appointment, Powers and Immunities.................................................................68
10.2 Reliance by Agent..................................................................................69
10.3 Defaults...........................................................................................69
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10.4 Rights as a Lender.................................................................................69
10.5 Indemnification....................................................................................69
10.6 Non-Reliance on Agent and Other Lenders............................................................70
10.7 Successor Agent....................................................................................70
SECTION 11 MISCELLANEOUS........................................................................................70
11.1 Notices............................................................................................70
11.2 Right of Set-Off; Adjustments......................................................................71
11.3 Benefit of Agreement...............................................................................72
11.4 No Waiver; Remedies Cumulative.....................................................................73
11.5 Expenses; Indemnification..........................................................................73
11.6 Amendments, Waivers and Consents...................................................................74
11.7 Counterparts.......................................................................................75
11.8 Headings...........................................................................................75
11.9 Survival...........................................................................................75
11.10 Governing Law; Submission to Jurisdiction; Venue..................................................75
11.11 Severability......................................................................................76
11.12 Entirety..........................................................................................76
11.13 Binding Effect; Termination; Acknowledgement......................................................76
11.14 Source of Funds...................................................................................77
11.15 Conflict..........................................................................................77
11.16 Confidentiality...................................................................................77
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SCHEDULES
Schedule 1.1A Joint Ventures
Schedule 1.1B Investments
Schedule 1.1C Liens
Schedule 1.1D GE Equipment
Schedule 2.1(a) Lenders
Schedule 3.3(b)(vii) Special Asset Dispositions
Schedule 5.2(c) Form of Legal Opinion of McDermott, Will & Emery
Schedule 5.1(d) Corporate Structure
Schedule 6.1(c) Absence of Undisclosed Liabilities
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.15 Funded Indebtedness to be Refinanced
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a)(i) Primary Real Properties
Schedule 6.20(a)(ii) Secondary Real Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places
of Business
Schedule 6.23 Broker's Fees
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.16 Existing Operating Leases
EXHIBITS
Exhibit 1.1A Form of Pledge Agreement
Exhibit 1.1B Form of Security Agreement
Exhibit 1.1C Form of Subordination Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(e) Form of Acquisition Loan Note
Exhibit 2.4(f) Form of Tranche A Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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FOURTH AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
THIS FOURTH AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT, dated as of June
12, 1998 (the "Amendment"), is by and among INSIGHT HEALTH SERVICES CORP., a
Delaware corporation (the "Borrower"), the Guarantors (as defined herein), the
Lenders (as defined herein) and NATIONSBANK, N. A., as Agent for the Lenders (in
such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent entered
into that certain Credit Agreement dated as of October 14, 1997 as amended by
the First Amendment to Credit Agreement dated as of November 17, 1997, the
Second Amendment to Credit Agreement dated as of December 19, 1997 and the Third
Amendment to Credit Agreement dated as of March 23, 1998 (the "Existing Credit
Agreement");
WHEREAS, the parties to the Existing Credit Agreement have agreed upon a
fourth amendment to the Existing Credit Agreement and for ease of reference have
agreed to set forth the entire agreement evidenced by the Existing Credit
Agreement as amended by such fourth amendment in this Amendment as a single
document;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means an acquisition by such
Person, to the extent not constituting a capital expenditure under
GAAP, of all or a majority of the Capital Stock or all or
substantially all of the Property of another Person, whether or not
involving a merger or consolidation with such Person.
"Acquisition Loan Commitment" means, with respect to each Lender,
the commitment of such Lender in an aggregate principal amount at any
time outstanding of up to such Lender's Acquisition Loan Commitment
Percentage of the Acquisition Loan Committed Amount, to make
Acquisition Loans in accordance with the provisions of Section 2.3(a).
"Acquisition Loan Commitment Percentage" means, for any Lender,
the percentage identified as its Acquisition Loan Commitment
Percentage on Schedule 2.1(a), as such percentage may be modified in
connection with any assignment made in accordance with the provisions
of Section 11.3.
"Acquisition Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.3(a).
"Acquisition Loan Unused Fee" shall have the meaning assigned to
such term in Section 3.5(a)(ii).
"Acquisition Loan Unused Fee Calculation Period" shall have the
meaning assigned to such term in Section 3.5(a)(ii).
"Acquisition Loans" shall have the meaning assigned to such term
in Section 2.3(a).
"Acquisition Note" or "Acquisition Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Acquisition Loans provided pursuant to Section 2.3(e), individually or
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collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other Person
(i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the Capital
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agency Services Address" means NationsBank, N. A.,
NC1-001-15-04, 101 North Tryon Street, Charlotte, North Carolina
28255, Attn: Agency Services, or such other address as may be
identified by written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement, dated
as of [April __, 1998], between the Agent and the Borrower, as
amended, modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(c).
"Amendment No. 4 Effective Date" means the date the conditions
set forth in Section 5.1 have been satisfied.
"Applicable Lending Office" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written
notice as the office by which its Eurodollar Loans are made and
maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, any
Acquisition Loan or any Tranche A Term Loan, the applicable rate of
the Revolving Unused Fee for any day for purposes of Section
3.5(a)(i), the applicable rate of the Acquisition Loan Unused Fee for
any day for purposes of Section 3.5(a)(ii), the applicable rate of the
Standby Letter of Credit Fee for any day for purposes of Section
3.5(b)(i) or the applicable rate of the Trade Letter of Credit Fee for
any day for purposes of Section 3.5(b)(ii), the appropriate applicable
percentage corresponding to the Senior Leverage Ratio in effect as of
the most recent Calculation Date:
Applicable
Applicable Applicable Applicable Percentage
Senior Percentage Percentage Applicable Percentage Applicable for
Pricing Leverage For Base For Percentage for Trade Percentage Acquisition
Level Ratio Rate Loans Eurodollar For Standby Letter of for Loan Unused
Loans Letter of Credit Fee Revolving Fees
Credit Fee Unused Fees
- -------- --------- ------------ ------------ ------------ ---------- ------------- --------------
Revolving Revolving
Loans, Loans,
Acquisition Acquisition
Loans and Loans and
Tranche A Tranche A
Term Loans Term Loans
------------ -------------
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I less than 0.75% 1.75% 1.75% 0.875% 0.375% 0.50%
or equal to
2.00 to 1.00
II greater than 1.00% 2.00% 2.00% 1.00% 0.50% 0.50%
2.00 to 1.00
but
less than
2.00 to 1.00
III greater than 1.25% 2.25% 2.25% 1.125% 0.50% 0.50%
2.50 to 1.00
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Borrower is required to provide the officer's
certificate in accordance with the provisions of Section 7.1(c) for
the most recently ended fiscal quarter of the Consolidated Parties;
provided, however, that (i) the initial Applicable Percentages shall
be based on Pricing Level I (as shown above) and shall remain at
Pricing Level I until the earlier of (i) the Calculation Date
occurring on September 30, 1998 or (ii) the date of any Permitted
Acquisition, and, thereafter, the Pricing Level shall be determined by
the Senior Leverage Ratio as of the last day of the most recently
ended fiscal quarter of the Consolidated Parties preceding the
applicable Calculation Date, and (ii) if the Borrower fails to provide
the officer's certificate to the Agency Services Address as required
by Section 7.1(c) for the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding the applicable
Calculation Date, the Applicable Percentage from such Calculation Date
shall be based on Pricing Level III until such time as an appropriate
officer's certificate is provided, whereupon the Pricing Level shall
be determined by the Senior Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties
preceding such Calculation Date. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentages shall be applicable to
all existing Loans as well as any new Loans made or issued.
"Application Period", in respect of any Asset Disposition, shall
have the meaning assigned to such term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a
Subsidiary) of any Consolidated Party, whether by sale, lease,
transfer or otherwise, other than (a) the sale of inventory in the
ordinary course of business for fair consideration, (b) the sale or
disposition of machinery and equipment no longer used or useful in the
conduct of such Person's business and (c) any Equity Transaction.
"Asset Disposition Prepayment Event" means, with respect to any
Asset Disposition other than an Excluded Asset Disposition, the
failure of the Borrower to apply (or cause to be applied) the Net Cash
Proceeds of such Asset Disposition to the purchase, acquisition or
construction of Eligible Assets during the Application Period for such
Asset Disposition.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii)
there shall be commenced against such Person an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action
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shall remain undismissed, undischarged or unbonded for a period of
ninety (90) consecutive days; or (iii) such Person shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
such Person or for any substantial part of its Property or make any
general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay
its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime
Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, except
that, when used in connection with a Eurodollar Loan, such day shall
also be a day on which dealings between banks are carried on in U.S.
dollar deposits in London, England.
"Calculation Date" has the meaning set forth in the definition of
"Applicable Percentage" set forth in this Section 1.1.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more
than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition,
(d) repurchase agreements with a bank or trust company (including any
of the Lenders) or recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or
fully guaranteed by the United States of America in which any Credit
Party shall have a perfected first priority security interest (subject
to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under
the Investment Company Act of 1940, as amended, which are administered
by
4
reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"Central Coast" means a direct or indirect Subsidiary of the
Borrower to be created subsequent to the Closing Date for the purpose
of operating a diagnostic imaging center project in California.
"Certificates of Designation" means a collective reference to the
Series B Certificate of Designation and the Series C Certificate of
Designation.
"Change of Control" means any of the following events: without
the prior written consent of the Required Lenders, (a) either the
Sponsor or GE shall transfer any Capital Stock in the Borrower in a
manner that requires approval of the Borrower's Board of Directors
pursuant to Section 6.14 of the Sponsor Investment Agreement or
Section 6.14 of the GE Investment Agreement, (b) any Person other than
the Sponsor or GE or two or more Persons other than the Sponsor or GE
acting in concert shall have acquired beneficial ownership, directly
or indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control
over, 33% or more of the Capital Stock of the Borrower, (c) during any
period of up to 24 consecutive months commencing after the Closing
Date, individuals who at the beginning of such 24 month period were
directors of the Borrower (together with any new director (i) whose
election by the Borrower's Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved or (ii) appointed
by the Sponsor and/or GE) cease for any reason to constitute a
majority of the directors of the Borrower then in office, (d) the
occurrence of (i) a breach by the Sponsor of Section 6.14 of the
Sponsor Investment Agreement or (ii) a breach by GE of Section 6.14 of
the GE Investment Agreement or (e) the occurrence of a "Change of
Control" under and as defined in the Subordinated Note Indenture. As
used herein, "beneficial ownership" shall have the meaning provided in
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
"Closing Date" means October 14, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means a collective reference to the collateral which
is identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" means a collective reference to the
Security Agreement, the Pledge Agreement, the Mortgage Instruments and
such other documents executed and delivered in connection with the
attachment and perfection of the Agent's security interests and liens
arising thereunder, including without limitation, UCC financing
statements and patent and trademark filings.
"Commitment" means (i) with respect to each Lender, the Revolving
Commitment of such Lender, the Acquisition Loan Commitment of such
Lender and the Tranche A Term Loan Commitment of such Lender and (ii)
with respect to the Issuing Lender, the LOC Commitment.
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP,
excluding capital expenditures incurred in connection with the buyout
of existing Operating Leases set forth on Schedule 8.16 hereto.
"Consolidated Cash Interest Expense" means, for any period, cash
interest expense (including the amortization of debt discount and
premium, the interest component under Capital Leases and the implied
interest component under Synthetic Leases) of the Consolidated Parties
on a consolidated basis for such period, as determined in accordance
with GAAP; provided, however, that, notwithstanding anything to the
5
contrary set forth in this Credit Agreement, (i) for any calculation
as of the fiscal quarter ending March 31, 1998 for the twelve-month
period then ended, Consolidated Cash Interest Expense shall be
determined based on Consolidated Cash Interest Expense for the
one-quarter period then ended multiplied by 4, (ii) for any
calculation as of the fiscal quarter ending June 30, 1998 for the
twelve-month period then ended, Consolidated Cash Interest Expense
shall be determined based on Consolidated Cash Interest Expense for
the two-quarter period then ended multiplied by 2 and (iii) for any
calculation as of the fiscal quarter ending September 30, 1998 for the
twelve-month period then ended, Consolidated Cash Interest Expense
shall be determined based on Consolidated Cash Interest Expense for
the three-quarter period then ended multiplied by 1.33.
"Consolidated Cash Taxes" means, for any period, the aggregate of
all taxes of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP, to the extent the same
are paid in cash during such period.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes, (C)
depreciation and amortization expense and (D) minority interests
(provided that minority interests shall not constitute more than 10%
of Consolidated EBITDA for any period), all as determined in
accordance with GAAP.
"Consolidated EBITDAR" means, for any period, the sum of (i)
Consolidated EBITDA for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for Consolidated Rental Expense, all as determined in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest
component under Synthetic Leases) of the Consolidated Parties on a
consolidated basis for such period, as determined in accordance with
GAAP; provided, however, that, notwithstanding anything to the
contrary set forth in this Credit Agreement, (i) for any calculation
as of the fiscal quarter ending March 31, 1998 for the twelve-month
period then ended, Consolidated Interest Expense shall be determined
based on Consolidated Interest Expense for the one-quarter period then
ended multiplied by 4, (ii) for any calculation as of the fiscal
quarter ending June 30, 1998 for the twelve-month period then ended,
Consolidated Interest Expense shall be determined based on
Consolidated Interest Expense for the two-quarter period then ended
multiplied by 2 and (iii) for any calculation as of the fiscal quarter
ending September 30, 1998 for the twelve-month period then ended,
Consolidated Interest Expense shall be determined based on
Consolidated Interest Expense for the three-quarter period then ended
multiplied by 1.33.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary, unusual items and gains or losses on Asset
Dispositions) after taxes for such period of the Consolidated Parties
on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Rental Expense" means, for any period, rental
expense under Operating Leases of the Consolidated Parties on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of the
end of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness (other than Funded
Indebtedness retired in connection with the Recapitalization) for the
applicable period ending on such date (including the principal
component of payments due on Capital Leases during the applicable
period ending on such date); it being understood that Scheduled Funded
Debt Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to Section 3.3.
6
"Consolidated Total Assets" means, at any time, total assets of
the Consolidated Parties on a consolidated basis at such time, as
determined in accordance with GAAP.
"Consolidated Working Capital" means, at any time, the excess of
(a) the sum of all amounts (other than cash, Cash Equivalents and bank
overdrafts) that would, in conformity with GAAP, be set forth opposite
the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Consolidated Parties at such time
over (ii) the sum of all amounts that would, in conformity with GAAP,
be set forth opposite the caption "total current liabilities" (or any
like caption) on a consolidated balance sheet of the Consolidated
Parties at such time, but excluding (a) the current portion of any
Funded Indebtedness, and (b) the current portion of deferred income
taxes.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Credit Agreement" means the Existing Credit Agreement as amended
and restated by this Amendment.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, the Collateral Documents and all other related
agreements and documents issued or delivered hereunder or thereunder
or pursuant hereto or thereto (in each case as the same may be
amended, modified, restated, supplemented, extended, renewed or
replaced from time to time), and "Credit Document" means any one of
them.
"Credit Parties" means a collective reference to the Borrower and
the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other
Credit Documents (including, but not limited to, any interest accruing
after the occurrence of a Bankruptcy Event with respect to any Credit
Party, regardless of whether such interest is an allowed claim under
the Bankruptcy Code) and (ii) all liabilities and obligations,
whenever arising, owing from the Borrower to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement.
"Debt Issuance" means the issuance of any Indebtedness for
borrowed money by any Consolidated Party.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day
of when due, (b) other than as set forth in (a) above, has failed to
pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when
due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of assets of which) a receiver, trustee or similar official has been
appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
7
"Effective Date" means the date on which the conditions set forth
in Section 5.2 of the Existing Credit Agreement to the making of the
initial Loans and/or the issuance of the initial Letter of Credit, as
applicable,were fulfilled (or waived in the sole discretion of the
Lenders) and on which the initial Loans were made and/or the initial
Letters of Credit were issued.
"Eligible Assets" means another business or any substantial part
of another business or other long-term assets, in each case, in, or
used or useful in, the same or a similar line of business as the
Consolidated Parties were engaged in on the Closing Date or any
reasonable extensions or expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) any Approved Fund; and (iv) any other Person approved by
the Agent and, unless an Event of Default has occurred and is
continuing at the time any assignment is effected in accordance with
Section 11.3, the Borrower (such approval not to be unreasonably
withheld or delayed by the Borrower and such approval to be deemed
given by the Borrower if no objection is received by the assigning
Lender and the Agent from the Borrower within five Business Days after
notice of such proposed assignment has been provided by the assigning
Lender to the Borrower); provided, however, that neither the Borrower
nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee. For the purposes of this definition, "Approved 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 which is managed or
advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party to
any Person which is not a Credit Party of (a) shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common control
with any Consolidated Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Sections 414(b) or (c) of
the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence
of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal
by any Consolidated Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or
the termination of a Multiple Employer Plan; (iii) the distribution of
a notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
of proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated
Party or any ERISA Affiliate from a Multiemployer Plan; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA
exist with respect to any Plan; or (vii) the adoption of an amendment
to any Plan requiring the provision of security to such Plan pursuant
to Section 307 of ERISA.
8
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the
quotient obtained by dividing (a) the Interbank Offered Rate for such
Eurodollar Loan for such Interest Period by (b) 1 minus the Eurodollar
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined,
or (ii) any category of extensions of credit or other assets which
include Eurodollar Loans. The Adjusted Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change
in the Eurodollar Reserve Requirement.
"Event of Default" means such term as defined in Section 9.1.
"Excess Cash Flow" means, with respect to any fiscal year period
of the Consolidated Parties on a consolidated basis, an amount equal
to (a) Consolidated EBITDA for such period minus (b) Consolidated
Capital Expenditures for such period minus (c) Consolidated Cash
Interest Expense for such period minus (d) Federal, state and other
income taxes actually paid by the Consolidated Parties on a
consolidated basis during such period minus (e) Consolidated Scheduled
Funded Debt Payments made during such period minus (f) total
consideration (including any assumption of liabilities (other than
current working capital liabilities not constituting Indebtedness),
but excluding consideration consisting of any Capital Stock of the
Borrower), fees and expenses actually paid by the Consolidated Parties
on a consolidated basis in connection with Permitted Acquisitions
during such period plus/minus (g) changes in Consolidated Working
Capital for such period.
"Excluded Asset Disposition" means any Asset Disposition by any
Consolidated Party to any Credit Party if (a) the Credit Parties shall
cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit
Parties to be in compliance with the terms of Section 7.13 after
giving effect to such Asset Disposition and (b) after giving effect
such Asset Disposition, no Default or Event of Default exists.
"Excluded Equity Issuance" means (1) any Asset Disposition and
(2) any Equity Issuance to the Sponsor or GE, including without
limitation the issuance and sale by the Borrower of preferred capital
stock pursuant to Section 2.1 of the GE Investment Agreement or
Section 2.1 of the Sponsor Investment Agreement.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, vice president,
chief financial officer or treasurer of such Person.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate charged to the Agent (in its individual capacity) on such day on
such transactions as determined by the Agent.
9
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the twelve month period ending
on such date, the ratio of (a) Consolidated EBITDAR for the applicable
period minus Consolidated Cash Taxes for the applicable period to (b)
Consolidated Cash Interest Expense for the applicable period plus
Consolidated Scheduled Funded Debt Payments for the applicable period
plus Consolidated Rental Expense for the applicable period.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clause (e), (f), (g), (i),
(k) and (m) of the definition of "Indebtedness" set forth in this
Section 1.1, (b) all Indebtedness of another Person of the type
referred to in clause (a) above secured by (or for which the holder of
such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (c) all Guaranty Obligations of such Person with respect to
Indebtedness of the type referred to in clause (a) above of another
Person and (d) Indebtedness of the type referred to in clause (a)
above of any partnership or unincorporated joint venture in which such
Person is legally obligated or has a reasonable expectation of being
liable with respect thereto.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms
of Section 1.3.
"GE" means General Electric Company, a New York corporation, and
its Affiliates.
"GE Equipment" shall have the meaning assigned to such term in
the definition of "MD Assets".
"GE Investment Agreement" means that certain Securities Purchase
Agreement dated as of October 14, 1997 by and among GE and the
Borrower.
"GE Payoff Letter" means the payoff letter dated October 14,
1997 delivered by GE to the Borrower and pursuant to which and GE
agrees to terminate the Master Debt Restructuring Agreement upon
payment by the Borrower to GE of certain indebtedness owing by the
Borrower to GE as of the date of such letter, all on the terms set
forth more fully therein.
"GE Registration Rights Agreement" means that certain
Registration Rights Agreement dated as of a date on or before the
Effective Date by and between the Borrower and GE.
"GE Warrant Agreement" means that certain Warrant Agreement dated
as of a date on or before the Effective Date by and between the
Borrower and GE.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of the Persons identified as a "Guarantor"
on the signature pages hereto and each Additional Credit Party which
may hereafter execute a Joinder Agreement, together with their
successors and permitted assigns, and "Guarantor" means any one of
them
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements
in the ordinary course of business of negotiable instruments for
deposit or collection) guaranteeing or intended to guarantee any
Indebtedness of any other Person in any manner, whether direct or
indirect, and including without limitation any obligation, whether or
not contingent, (i) to purchase any such Indebtedness or any Property
constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or
to maintain working capital, solvency or other balance sheet condition
of such other Person (including without limitation keep well
10
agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase
Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold
harmless the holder of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an
amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection agreement
or foreign currency exchange agreement between any Consolidated Party
and any Lender, or any Affiliate of a Lender.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money,
(b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to Property
purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in
the ordinary course of business), (d) all obligations of such Person
issued or assumed as the deferred purchase price of Property or
services purchased by such Person (other than trade debt incurred in
the ordinary course of business and due within six months of the
incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements,
(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, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations
of such Person under Hedging Agreements, (j) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all
preferred Capital Stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date occurring prior to the Maturity Date
for the Tranche A Term Loan, (l) the principal portion of all
obligations of such Person under Synthetic Leases, (m) for purposes of
any calculation made under the financial covenants set forth in
Section 7.11 (including without limitation for purposes of the
definitions of "Applicable Percentage" and "Pro Forma Basis" set forth
in Section 1.1), the Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint
venturer and (n) in the case of the Consolidated Parties for purposes
of any calculation made under the financial covenants set forth in
Section 7.11 (including without limitation for purposes of the
definitions of "Applicable Percentage" and "Pro Forma Basis" set forth
in Section 1.1) as of the end of any fiscal quarter of the
Consolidated Parties, the Indebtedness of any Person whose results of
operations would, in accordance with GAAP, be included in earnings of
unconsolidated Persons on an income statement of the Consolidated
Parties for any period ending on such fiscal quarter-end.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such rate
is not available, the term "Interbank Offered Rate" shall mean, for
any Eurodollar Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Interest Coverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the twelve month period ending
on such date, the ratio of (a) Consolidated EBITDA for such period to
(b) Consolidated Cash Interest Expense for such period.
11
"Interest Payment Date" means (a) as to Base Rate Loans, the last
day of each fiscal quarter of the Borrower and the Maturity Date, and
(b) as to Eurodollar Loans, the last day of each applicable Interest
Period and the Maturity Date, and in addition where the applicable
Interest Period for a Eurodollar Loan is greater than three months,
then also the date three months from the beginning of the Interest
Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date, (c) with
regard to the Acquisition Loans, no Interest Period shall extend
beyond any Principal Amortization Payment Date unless the portion of
Acquisition Loans comprised of Base Rate Loans together with the
portion of Acquisition Loans comprised of Eurodollar Loans with
Interest Periods expiring prior to the date such Principal
Amortization Payment is due, is at least equal to the amount of such
Principal Amortization Payment due on such date, (d) with regard to
the Tranche A Term Loans, no Interest Period shall extend beyond any
Principal Amortization Payment Date unless the portion of Tranche A
Term Loans comprised of Base Rate Loans together with the portion of
Tranche A Term Loans comprised of Eurodollar Loans with Interest
Periods expiring prior to the date such Principal Amortization Payment
is due, is at least equal to the amount of such Principal Amortization
Payment due on such date and (e) where an Interest Period begins on a
day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests
or other securities of such other Person or (b) any deposit with, or
advance, loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other
assets in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including, without
limitation, any Guaranty Obligations (including any support for a
letter of credit issued on behalf of such Person) incurred for the
benefit of such Person, but excluding any Restricted Payment to such
Person.
"Investment Agreements" means a collective reference to the GE
Investment Agreement and the Sponsor Investment Agreement.
"Investment Documents" means a collective reference to the
Investment Agreements, the Registration Rights Agreements, the Warrant
Agreements and the Certificates of Designation.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"Joint Venture" means an entity which meets the following
criteria:
(a) it was organized pursuant to an express joint venture,
partnership or limited liability company agreement;
(b) it is a venture among two or more Persons and, except
for purposes of the definition of "Indebtedness" set forth in
this Section 1.1, at least one of such Persons is, and one of
such Persons is not, the Borrower or a Wholly Owned Subsidiary of
the Borrower;
12
(c) it operates a business for profit in which there is a
joint proprietary interest in the subject matter;
(d) the venture involves a right of mutual control of the
subject of the enterprise;
(e) each of the venturers has contributed or will contribute
capital, materials, services or knowledge;
(f) each of the venturers has a right to share in the
profits of the venture; and
(g) each of the venturers has a duty to share in the losses
of the venture.
The term "Joint Venture" shall in any event include the Persons
identified on Schedule 1.1A.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any financing or similar statement or
notice filed under the Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or
notice statute, and any lease in the nature thereof); provided,
however, the term "Lien" in respect of any Property of any Person
shall not include any interest of title of a lessor (or any related
filing) under any Operating Lease of such Property under which such
Person is the lessee.
"Loan" or "Loans" means the Revolving Loans, the Acquisition
Loans and/or the Tranche A Term Loans (or a portion of any Revolving
Loan, any Acquisition Loan or any Tranche A Term Loan bearing interest
at the Adjusted Base Rate or the Adjusted Eurodollar Rate),
individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance
with all requirements for drawings referred to in such Letters of
Credit plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by the Issuing Lender but not theretofore reimbursed by
the Borrower.
"Master Debt Restructuring Agreement" means that certain Master
Debt Restructuring Agreement dated as of June 26, 1996 by and among
GE, the Borrower, American Health Services Corp., Maxum Health Corp.
and certain subsidiaries of Maxum Health Corp., as amended through the
Closing Date.
13
"Material Adverse Effect" means a material adverse effect on (i)
the condition (financial or otherwise), operations, business, assets,
liabilities or prospects of the Consolidated Parties taken as a whole,
(ii) the ability of the Credit Parties taken as a whole to perform any
material obligation under the Credit Documents or (iii) the material
rights and remedies of the Lenders under the Credit Documents.
"Maturity Date" means (i) as to the Revolving Loans and Letters
of Credit (and the related LOC Obligations) June 12, 2003, (ii) as to
the Tranche A Term Loan, June 12, 2004 and (iii) as to the Acquisition
Loans, June 12, 2004.
"MD Assets" means (i) the assets of Mountain Diagnostics
purchased or acquired by InSight Health Corp. pursuant to the Order
Confirming Sale of Certain Assets of the Estate of Mountain
Diagnostics, Inc. (Case No. BK-S-96-2500-RCJ) entered by the Honorable
R. Clive Jones of the United States Bankruptcy Court for the District
of Nevada on November 14, 1997 and (ii) the equipment described in
Schedule attached hereto (the "GE Equipment").
"Moody's" means Moody's Investors Service, Inc., or any successor
or assignee of the business of such company in the business of rating
securities.
"Mortgage Instruments" shall have the meaning assigned such term
in Section 5.2(c) of the Existing Credit Agreement.
"Mortgage Policies" shall have the meaning assigned such term in
Section 5.2(c) of the Existing Credit Agreement.
"Mountain Diagnostics" means Mountain Diagnostics, Inc., a Nevada
corporation.
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N. A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received by
the Consolidated Parties in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and (b) taxes paid or payable as a result thereof; it
being understood that "Net Cash Proceeds" shall include, without
limitation, any cash received upon the sale or other disposition of
any non-cash consideration received by the Consolidated Parties in any
Asset Disposition, Equity Issuance or Debt Issuance.
"Note" or "Notes" means the Revolving Notes, the Acquisition
Notes and/or the Tranche A Term Notes, individually or collectively,
as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i), Section 2.3(b)(i) or Section 2.4(b).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
14
"Open MRI" means Open MRI, Inc., a Delaware corporation and a
Wholly Owned Subsidiary of the Borrower.
"Other Taxes" means such term as is defined in Section 3.11.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means (a) an Acquisition by the Borrower
or any Wholly Owned Subsidiary of the Borrower for the fair market
value of the Capital Stock or Property acquired, provided that (i) the
Capital Stock or Property acquired in such Acquisition relates to a
line of business similar to the business of the Borrower or any of its
Wholly Owned Subsidiaries engaged in on the Closing Date, (ii) the
Agent shall have received all items in respect of the Capital Stock or
Property acquired in such Acquisition (and/or the seller thereof)
required to be delivered by the terms of Section 7.12 and/or Section
7.13, (iii) in the case of an Acquisition of the Capital Stock of
another Person, the board of directors (or other comparable governing
body) of such other Person shall have duly approved such Acquisition,
(iv) the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to such
Acquisition on a Pro Forma Basis, the Credit Parties shall be in
compliance with all of the covenants set forth in Section 7.11, (v)
the Agent shall be reasonably satisfied that, upon giving effect to
such Acquisition on a Pro Forma Basis, at least 80% of Consolidated
EBITDA for the 12 month period ended as of the most recent fiscal
quarter end preceding the date of such transaction with respect to
which the Agent has received the Required Financial Information shall
have been audited in accordance with GAAP by independent certified
public accountants of recognized national standing reasonably
acceptable to the Agent (whose opinion shall not be limited as to the
scope or qualified as to going concern status), it being acknowledged
and agreed that, for purposes of this clause (v), any portion of
Consolidated EBITDA attributable to any Person for any calculation
period shall be deemed to have been audited if a fiscal year end audit
for such Person has been prepared during such 12 month period, (vi)
the representations and warranties made by the Credit Parties in any
Credit Document shall be true and correct in all material respects at
and as if made as of the date of such Acquisition (after giving effect
thereto) except to the extent such representations and warranties
expressly relate to an earlier date, (vii) the proceeds of Acquisition
Loans used to finance such Acquisition shall not exceed $15,000,000
and the aggregate consideration for all such Acquisitions shall not
exceed $50,000,000 per fiscal year of the Borrower, (viii) if such
transaction involves the purchase of an interest in a partnership
between the Borrower (or a subsidiary of the Borrower) as a general
partner and entities unaffiliated with the Borrower as the other
partners, such transaction shall be effected by having such equity
interest acquired by a corporate holding company directly wholly-owned
by the Borrower newly formed for the sole purpose of effecting such
transaction and (ix) after giving effect to such Acquisition, the
Revolving Committed Amount shall be at least $5,000,000 greater than
the sum of the Revolving Loans outstanding plus LOC Obligations
outstanding or (b) subject to the terms of Section 7.13 and Section
7.15, the Acquisition by InSight Health Corp. of the MD Assets on or
before November 18, 1997.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made by any Consolidated Party in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(iii) Investments consisting of Capital Stock, obligations, securities
or other property received by any Consolidated Party in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing Date
and set forth in Schedule 1.1B; (v) Guaranty Obligations permitted by
Section 8.1; (vi) transactions permitted by Section 8.9; (vii)
advances or loans to directors, officers, employees, agents, customers
or suppliers made in the ordinary course of business for reasonable
business and which do not exceed $1,000,000 in the aggregate at any
one time outstanding for all of the Consolidated Parties; (viii)
Investments in any Credit Party; (ix) Permitted Acquisitions; and (x)
Investments in Joint Ventures not to exceed $5,000,000.
15
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale or loss on
account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within 60 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases and Synthetic Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien attaches
to such Property concurrently with or within 90 days after the
acquisition thereof;
(viii) leases or subleases granted to others not interfering in
any material respect with the business of any Consolidated Party;
(ix) any interest of title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by
this Credit Agreement;
(x) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(xi) normal and customary rights of setoff upon deposits of cash
in favor of banks or other depository institutions;
(xii) Liens existing as of the Closing Date and set forth on
Schedule 1.1C; provided that no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date (other than a substitution of like
Property);
(xiii) Liens on any Property owned by any Subsidiary of the
Borrower which is a Joint Venture;
16
(xiv) extensions, renewals or replacements of Liens referred to
in clause (i) through (xiii) above.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Primary Real Properties" shall have the meaning assigned such
term in Section 7.15.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form of Exhibit 1.1A to be executed in favor of
the Agent by each of the Credit Parties, as amended, modified,
restated or supplemented from time to time.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its
customers.
"Principal Amortization Payment" means a principal payment on the
Acquisition Loans as set forth in Section 2.3(c) or on the Tranche A
Term Loans as set forth in Section 2.4(d).
"Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.
"Principal Office" means the principal office of NationsBank,
presently located at Charlotte, North Carolina.
"Pro Forma Basis" means, with respect to any transaction, that
such transaction shall be deemed to have occurred (for purposes of
calculating compliance in respect of such transaction with each of the
financial covenants set forth in Section 7.11 as of the most recent
fiscal quarter end preceding the date of such transaction with respect
to which the Agent has received the Required Financial Information) as
of the first day of the four fiscal-quarter period ending as of such
fiscal quarter end. As used herein, "transaction" shall mean (i) any
incurrence or assumption of Indebtedness as referred to in Section
8.1(g), (ii) any merger or consolidation as referred to in Section
8.4, (iii) any Asset Disposition as referred to in Section 8.5 or (iv)
any Permitted Acquisition as referred to in Section 8.6 and clause
(ix) of the definition of "Permitted Investment" set forth in this
Section 1.1. With respect to any transaction of the type described in
clause (i) above regarding Indebtedness which has a floating or
formula rate, the implied rate of interest for such Indebtedness for
the applicable period for purposes of this definition shall be
determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination.
With respect to any transaction of the type described in clause (ii)
or (iv) above, any Indebtedness incurred by the Borrower or any of its
Subsidiaries in order to consummate such transaction (A) shall be
deemed to have been incurred on the first day of the applicable period
four fiscal-quarter period and (B) if such Indebtedness has a floating
or formula rate, then the implied rate of interest for such
Indebtedness for the applicable period for purposes of this definition
shall be determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant date of
determination. In connection with any calculation of the financial
covenants set forth in Section 7.11 upon giving effect to a
transaction on a Pro Forma Basis for purposes of Section 8.1(g),
Section 8.4, Section 8.5 or Section 8.6 and clause (ix) of the
definition of "Permitted Investment" set forth in this Section 1.1, as
applicable:
(A) for purposes of any such calculation in respect of any
incurrence or assumption of Indebtedness as referred to in
Section 8.1(g), any Indebtedness which is retired in connection
with such incurrence or assumption shall be excluded and deemed
to have been retired as of the first day of the applicable
period;
17
(B) for purposes of any such calculation in respect of any
Asset Disposition as referred to in Section 8.5, (1) income
statement items (whether positive or negative) attributable to
the Property disposed of in such Asset Disposition shall be
excluded and (2) any Indebtedness which is retired in connection
with such Asset Disposition shall be excluded and deemed to have
been retired as of the first day of the applicable period;
(C) for purposes of any such calculation in respect of any
merger or consolidation as referred to in Section 8.4 or any
Permitted Acquisition as referred to in Section 8.6 and clause
(ix) of the definition of "Permitted Investment" set forth in
this Section 1.1, (1) any Indebtedness incurred by the Borrower
or any of its Subsidiaries in connection with such transaction
shall be deemed to have been incurred as of the first day of the
applicable period and (2) income statement items (whether
positive or negative) attributable to the Property acquired in
such transaction or to the Investment comprising such
transaction, as applicable, shall be included to the extent
relating to the relevant period; and
(D) for purposes of any such calculation, the principles set
forth in the second paragraph of Section 1.3 shall be applicable.
"Pro Forma Compliance Certificate" means a certificate of the
chief financial officer of the Borrower delivered to the Agent in
connection with (i) any incurrence, assumption or retirement of
Indebtedness as referred to in Section 8.1(g), (ii) any merger or
consolidation as referred to in Section 8.4, (iii) any Asset
Disposition as referred to in Section 8.5 or (iv) any Permitted
Acquisition as referred to in Section 8.6 and clause (ix) of the
definition of "Permitted Investment" set forth in this Section 1.1, as
applicable, and containing reasonably detailed calculations, upon
giving effect to the applicable transaction on a Pro Forma Basis, of
the Interest Coverage Ratio, the Fixed Charge Coverage Ratio, the
Leverage Ratio and the minimum Consolidated EBITDA covenant as of the
most recent fiscal quarter end preceding the date of the applicable
transaction with respect to which the Agent shall have received the
Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Real Properties" shall have the meaning assigned such term in
Section 7.15.
"Recapitalization" means the recapitalization of the Borrower
pursuant to and as evidenced by the terms of the Investment Documents
(including without limitation the making by the Sponsor of a preferred
equity investment of at least $25 million in cash (less fees and
expenses) in the Borrower and the termination of the Supplemental
Service Fee (as defined in the GE Investment Agreement) in exchange
for 7,000 shares of Series C Preferred Stock in the Borrower) pursuant
to the GE Investment Agreement, the refinancing of the existing Funded
Indebtedness of the Borrower described on Schedule 6.15 in an
aggregate principal amount not to exceed $80 million (plus per diem
interest on such principal amount), the termination of the Master Debt
Restructuring Agreement pursuant to the terms of the GE Payoff Letter.
"Register" shall have the meaning given such term in Section
11.3(c).
"Registration Rights Agreements" means a collective reference to
the GE Registration Rights Agreement and the Sponsor Registration
Rights Agreement.
"Regulation G, T, U, or X" means Regulation G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section
7.1(a) or (b) for
18
the fiscal period or quarter ending as of such Calculation Date, and
(ii) the certificate of the chief financial officer of the Borrower
required by Section 7.1(c) to be delivered with the financial
statements described in clause (i) above.
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the
Agent) and holding in the aggregate more than least 50% of (i) the sum
of (a) the Revolving Commitments (and Participation Interests
therein), (b) the Acquisition Loan Commitments (and Participation
Interests therein) and/or, after conversion of any portion of the
Acquisition Loans to a term loan, the outstanding term loan portion of
the Acquisition Loans and (c) the outstanding Tranche A Term Loans
(and Participation Interests therein) or (ii) if the Commitments have
been terminated, the outstanding Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any
Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding, (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding and (iv) any payment
or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, the Subordinated Notes.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of
the Revolving Committed Amount, (i) to make Revolving Loans in
accordance with the provisions of Section 2.1(a) and (ii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.2(c).
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" shall have the meaning assigned to
such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes
of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Revolving Unused Fee" shall have the meaning assigned to such
term in Section 3.5(a)(i).
"Revolving Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a)(i).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or
later acquired, which has been or is to be sold or
19
transferred by such Consolidated Party to such Person or to any other
Person from whom funds have been, or are to be, advanced by such
Person on the security of such Property.
"Secondary Real Properties" shall have the meaning assigned such
term in Section 7.15.
"Security Agreement" means the security agreement dated as of the
Closing Date in the form of Exhibit 1.1B to be executed in favor of
the Agent by each of the Credit Parties, as amended, modified,
restated or supplemented from time to time.
"Senior Leverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the twelve month period ending
on such date, the ratio of (a) all Funded Indebtedness other than
Subordinated Indebtedness of the Consolidated Parties on a
consolidated basis on the last day of such period (but net of cash) to
(b) Consolidated EBITDA for such period.
"Series B Certificate of Designation" means the Certificate of
Designation, Preferences and Rights of Convertible Preferred Stock,
Series B of the Borrower, to be filed with the Delaware Secretary of
State on or prior to the Closing Date.
"Series C Certificate of Designation" means the Certificate of
Designation, Preferences and Rights of Series C Preferred of the
Borrower, to be filed with the Delaware Secretary of State on or prior
to the Closing Date.
"Signal Medical" means Signal Medical Services, Inc., a Delaware
corporation.
"Single Employer Plan" means any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize
upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course
of business, (ii) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature in their ordinary course,
(iii) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such
Person's Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in
which such Person is engaged or is to engage, (iv) the fair value of
the Property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person and (v) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become
absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Sponsor" means TC Group, L.L.C., a Delaware Limited Liability
Company, and its Affiliates.
"Sponsor Investment Agreement" means that certain Securities
Purchase Agreement dated as of October 14, 1997 by and among the
Sponsor and the Borrower.
"Sponsor Registration Rights Agreement" means that certain
Registration Rights Agreement dated as of a date on or before the
Effective Date by and between the Borrower and the Sponsor.
"Sponsor Warrant Agreement" means that certain Warrant Agreement
dated as of a date on or before the Effective Date by and between the
Borrower and the Sponsor.
"Standby Letter of Credit Fee" shall have the meaning assigned to
such term in Section 3.5(b)(i).
20
"Subordinated Indebtedness" means any Indebtedness incurred by
the Borrower which by its terms is specifically subordinated in right
of payment to the prior payment of the obligations of the Credit
Parties under this Credit Agreement and the other Credit Documents on
terms and conditions satisfactory to the Required Lenders.
"Subordinated Note" means any one of the [__]% Notes due 2008,
issued by the Borrower in favor of the Subordinated Noteholders
pursuant to the Subordinated Note Indenture, as such Subordinated
Notes may be amended, modified, restated or supplemented and in effect
from time to time.
"Subordinated Note Indenture" means the Indenture dated as of the
Amendment No. 4 Effective Date, by and between the Borrower and State
Street Bank and Trust Company in its capacity as trustee for the
Subordinated Noteholders, as such Subordinated Note Indenture may be
amended, modified, restated or supplemented and in effect from time to
time. "Subordinated Noteholder" means any one of the holders from time
to time of the Subordinated Notes.
"Subordination Agreement" means a subordination agreement in
substantially the form of Exhibit 1.1C by and between the Agent and
GE, pursuant to which the Agent agrees to the subordination, on the
terms and conditions set forth more fully therein, of the security
interest of the Agent in any Collateral consisting of Property (i)
leased by any Credit Party under any Capital Lease or Operating Lease
with respect to which GE is the lessor or (ii) subject to any other
conditional sale or other financing arrangement to which GE is a
party.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
or not at such time, any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association,
joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease.
"Taxes" means such term as is defined in Section 3.11.
"Total Leverage Ratio" means, as of the end of any fiscal quarter
of the Consolidated Parties for the twelve month period ending on such
date, the ratio of (a) all Funded Indebtedness (including without
limitation Subordinated Indebtedness) of the Consolidated Parties on a
consolidated basis on the last day of such period (but net of cash) to
(b) Consolidated EBITDA for such period.
"Trade Letter of Credit Fee" shall have the meaning assigned to
such term in Section 3.5(b)(ii).
"Tranche A Term Loan" shall have the meaning assigned to such
term in Section 2.4(a).
"Tranche A Term Loan Commitment" means, with respect to each
Lender, the commitment of such Lender to make its portion of the
Tranche A Term Loan in a principal amount equal to such Lender's
Tranche A Term Loan Commitment Percentage of the Tranche A Term Loan
Committed Amount.
"Tranche A Term Loan Commitment Percentage" means, for any
Lender, the percentage identified as its Tranche A Term Loan
Commitment Percentage on Schedule 2.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
"Tranche A Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.4(a).
21
"Tranche A Term Note" or "Tranche A Term Notes" means the
promissory notes of the Borrower in favor of each of the Lenders
evidencing the Tranche A Term Loans provided pursuant to Section
2.4(f), individually or collectively, as appropriate, as such
promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time. "Unused Acquisition
Loan Committed Amount" means, for any period, the amount by which (a)
the then applicable Acquisition Loan Committed Amount exceeds (b) the
daily average sum for such period of the outstanding aggregate
principal amount of all Acquisition Loans.
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily average sum for such period of (i) the
outstanding aggregate principal amount of all Revolving Loans plus
(ii) the outstanding aggregate principal amount of all LOC
Obligations.
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening
of such a contingency.
"Warrant Agreements" means a collective reference to the GE
Warrant Agreement and the Sponsor Warrant Agreement.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100%
of whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at June 30, 1997); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Agent or the
Required Lenders shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made under the financial covenants set forth in
Section 7.11 (including without limitation for purposes of the definitions of
"Applicable Percentage" and "Pro Forma Basis" set forth in Section 1.1), (i)(A)
income statement items (whether positive or negative) attributable to the
Property disposed of in any Asset Disposition as contemplated by Section 8.5, as
applicable, shall be excluded to the extent relating to any period occurring
prior to the date of such transaction and (B) Indebtedness which is retired in
connection with any such Asset Disposition shall be excluded and deemed to have
been retired as of the first day of the applicable period and (ii) income
statement items (whether positive or negative) attributable to any Property
acquired in any Investment transaction (including without limitation any
Permitted Acquisition) contemplated by Section 8.6 shall be included to the
extent relating to any period applicable in such calculations occurring after
the date of such transaction (and, notwithstanding the
22
foregoing, during the first four fiscal quarters following the date of such
transaction, shall be included on an annualized basis).
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Revolving Commitment Percentage of revolving
credit loans requested by the Borrower in Dollars ("Revolving Loans")
from time to time from the Amendment No. 4 Effective Date until the
Maturity Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein for the purposes hereinafter
set forth; provided, however, that the sum of the aggregate principal
amount of outstanding Revolving Loans shall not exceed TWENTY-FIVE
MILLION DOLLARS ($25,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.4, the "Revolving
Committed Amount"); provided, further, (A) with regard to each Lender
individually, such Lender's outstanding Revolving Loans shall not
exceed such Lender's Revolving Commitment Percentage of the Revolving
Committed Amount, and (B) the aggregate principal amount of
outstanding Revolving Loans plus LOC Obligations outstanding shall not
exceed the Revolving Committed Amount. Revolving Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than 16
Eurodollar Loans shall be outstanding hereunder at any time. For
purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin
on the same date, although borrowings, extensions and conversions may,
in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period. Revolving Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 12:00
Noon (Charlotte, North Carolina time) on the Business Day prior
to the date of the requested borrowing in the case of Base Rate
Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify (A)
that a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing
shall be comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month, or (II) the type of Revolving Loan requested, then
such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Agent shall give notice to each affected Lender
promptly upon receipt of each Notice of Borrowing pursuant to
this Section 2.1(b)(i), the contents thereof and each such
Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan and Base Rate
Loan that is a Revolving Loan shall be in a minimum aggregate
principal amount of $1,000,000 and integral multiples of $100,000
in excess thereof (or the remaining amount of the Revolving
Committed Amount, if less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available
to the Agent for the account of the Borrower as specified in
Section 3.15(a), or in such other manner as the Agent may specify
in writing, by 2:00 P.M.
23
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds
immediately available to the Agent. Such borrowing will then be
made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall
be due and payable in full on the Maturity Date, unless accelerated
sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per
annum rate equal to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per
annum rate equal to the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in an original principal amount equal to such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount and
in substantially the form of Exhibit 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participate in
the issuance by the Issuing Lender of, standby and trade Letters of
Credit in Dollars from time to time from the Amendment No. 4 Effective
Date until the date five (5) days prior to the Maturity Date as the
Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the LOC Obligations outstanding shall not
at any time exceed EIGHT MILLION DOLLARS ($8,000,000) (the "LOC
Committed Amount") and (ii) the sum of the aggregate principal amount
of outstanding Revolving Loans plus LOC Obligations outstanding shall
not at any time exceed the Revolving Committed Amount. No Letter of
Credit shall (x) have an original expiry date more than one year from
the date of issuance or (y) as originally issued or as extended, have
an expiry date extending beyond the Maturity Date. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and
expiry dates of each Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter
of Credit shall be submitted by the Borrower to the Issuing Lender at
least three (3) Business Days prior to the requested date of issuance.
The Issuing Lender will, at least quarterly and more frequently upon
request, disseminate to each of the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since
the date of the prior report, and including therein, among other
things, the beneficiary, the face amount and the expiry date, as well
as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a
Participation Interest from the applicable Issuing Lender in such
Letter of Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based
on the respective Revolving Commitment Percentages of the Lenders) and
shall absolutely, unconditionally and irrevocably assume and be
obligated to
24
pay to the Issuing Lender and discharge when due, its pro rata share
of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Lender's Participation Interest
in any Letter of Credit, to the extent that the Issuing Lender has not
been reimbursed as required hereunder or under any such Letter of
Credit, each such Lender shall pay to the Issuing Lender its pro rata
share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant
to the provisions of subsection (d) below. The obligation of each
Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter
of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender that
the Borrower intends to otherwise reimburse the Issuing Lender for
such drawing, the Borrower shall be deemed to have requested that the
Lenders make a Revolving Loan in the amount of the drawing as provided
in subsection (e) below on the related Letter of Credit, the proceeds
of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Lender on
the day of drawing under any Letter of Credit (either with the
proceeds of a Revolving Loan obtained hereunder or otherwise) in same
day funds. If the Borrower shall fail to reimburse the Issuing Lender
as provided hereinabove, the unreimbursed amount of such drawing shall
bear interest at a per annum rate equal to the Adjusted Base Rate plus
2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Agent for the account of the Issuing Lender in Dollars and
in immediately available funds, the amount of such Lender's pro rata
share of such unreimbursed drawing. Such payment shall be made on the
day such notice is received by such Lender from the Issuing Lender if
such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not
pay such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from
the date of such drawing until such Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within
two (2) Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the
Federal Funds Rate and thereafter at a rate equal to the Base Rate.
Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of
each such payment by a Lender to the Issuing Lender, such Lender
shall, automatically and without any further action on the part of the
Issuing Lender or such Lender, acquire a Participation Interest in an
amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of
Credit, the Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested by the Borrower to be made
in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of
Section 2.1(b)(i) with respect thereto) shall be immediately made to
the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective
Revolving Commitment Percentages of the Lenders (determined
25
before giving effect to any termination of the Commitments pursuant to
Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each
such Lender hereby irrevocably agrees to make its pro rata share of
each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing
may not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.3 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi)
any termination of the Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any Credit Party), then each such Lender hereby agrees
that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) from
the Issuing Lender such Participation Interests in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share
in such LOC Obligations ratably (based upon the respective Revolving
Commitment Percentages of the Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay to the Issuing Lender, to the extent not paid
to the Issuer by the Borrower in accordance with the terms of
subsection (d) above, interest on the principal amount of
Participation Interests purchased for each day from and including the
day upon which such borrowing would otherwise have occurred to but
excluding the date of payment for such Participation Interests, at the
rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Designation of Consolidated Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of
Credit issued hereunder may contain a statement to the effect that
such Letter of Credit is issued for the account of a Consolidated
Party other than the Borrower, provided that notwithstanding such
statement, the Borrower shall be the actual account party for all
purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same
as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP
may be incorporated therein and deemed in all respects to be a part
thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify
and save each Lender harmless from and against, any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that such Lender
may incur or be subject to as a consequence, direct or indirect,
of (A) the issuance of any Letter of Credit or (B) the failure of
such Lender to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) for the form,
26
validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, that may prove to be invalid or ineffective
for any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in
cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (E) for
any consequences arising from causes beyond the control of such
Lender, including, without limitation, any Government Acts. None
of the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken
or omitted by any Lender (including the Issuing Lender), under or
in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
such Lender under any resulting liability to the Borrower or any
other Credit Party. It is the intention of the parties that this
Credit Agreement shall be construed and applied to protect and
indemnify each Lender (including the Issuing Lender) against any
and all risks involved in the issuance of the Letters of Credit,
all of which risks are hereby assumed by the Borrower (on behalf
of itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable for
any failure by such Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of such Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection
(d) above. The obligations of the Borrower under this subsection
(h) shall survive the termination of this Credit Agreement. No
act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the
Lenders (including the Issuing Lender) to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in
this subsection (h), the Borrower shall have no obligation to
indemnify any Lender (including the Issuing Lender) in respect of
any liability incurred by such Lender (A) arising solely out of
the gross negligence or willful misconduct of such Lender, as
determined by a court of competent jurisdiction, or (B) caused by
such Lender's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit, as determined by a court
of competent jurisdiction, unless such payment is prohibited by
any law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood
and agreed that the obligations of the Issuing Lender hereunder to the
Lenders are only those expressly set forth in this Credit Agreement
and that the Issuing Lender shall be entitled to assume that the
conditions precedent set forth in Section 5.3 have been satisfied
unless it shall have acquired actual knowledge that any such condition
precedent has not been satisfied; provided, however, that nothing set
forth in this Section 2.2 shall be deemed to prejudice the right of
any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this
Section 2.2 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any
letter of credit application), this Credit Agreement shall control.
27
2.3 Acquisition Loans.
(a) Acquisition Loan Commitment. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower such Lender's Acquisition Loan Commitment
Percentage of revolving credit loans requested by the Borrower in
Dollars ("Acquisition Loans") from time to time from the Amendment No.
4 Effective Date until June 12, 2000, or such earlier date as the
Acquisition Loan Commitments shall have been terminated as provided
herein for the purpose of financing the purchase price of, and fees and
expenses in connection with, Permitted Acquisitions and capital
expenditures; provided, however, that the sum of the aggregate
principal amount of outstanding Acquisition Loans shall not exceed
SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (as such aggregate maximum
amount may be reduced or increased from time to time as provided in
Section 3.4, the "Acquisition Loan Committed Amount"); provided,
further, (A) with regard to each Lender individually, such Lender's
outstanding Acquisition Loans shall not exceed such Lender's
Acquisition Loan Commitment Percentage of the Acquisition Loan
Committed Amount, and (B) the aggregate principal amount of outstanding
Acquisition Loans shall not exceed the Acquisition Loan Committed
Amount. Acquisition Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request; provided,
however, that no more than 16 Eurodollar Loans shall be outstanding
hereunder at any time. For purposes hereof, Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period.
Acquisition Loans, other than any term portion of the Acquisition
Loans, hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Acquisition Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request an
Acquisition Loan borrowing by written notice (or telephonic
notice promptly confirmed in writing) to the Agent not later than
12:00 Noon (Charlotte, North Carolina time) on the Business Day
prior to the date of the requested borrowing in the case of Base
Rate Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of Eurodollar Loans. Each
such request for borrowing shall (A) be irrevocable, (B) specify
(1) that an Acquisition Loan is requested, (2) the date of the
requested borrowing (which shall be a Business Day), (3) the
aggregate principal amount to be borrowed, (4) whether the
borrowing shall be comprised of Base Rate Loans, Eurodollar Loans
or a combination thereof, and if Eurodollar Loans are requested,
the Interest Period(s) therefor and (C) be accompanied by a
certificate of the chief financial of the Borrower describing in
reasonable detail the Permitted Acquisition to which such
requested borrowing relates. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month, or (II) the type of Acquisition Loan requested, then
such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Agent shall give notice to each affected Lender
promptly upon receipt of each Notice of Borrowing pursuant to
this Section 2.3(b)(i), the contents thereof and each such
Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan
that is an Acquisition Loan shall be in a minimum aggregate
principal amount of $1,000,000 and integral multiples of $100,000
in excess thereof (or the remaining amount of the Acquisition
Loan Committed Amount, if less).
(iii) Advances. Each Lender will make its Acquisition Loan
Commitment Percentage of each Acquisition Loan borrowing
available to the Agent for the account of the Borrower as
specified in Section 3.15(a), or in such other manner as the
Agent may specify in writing, by 2:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of
Borrowing in Dollars and in funds immediately available to the
Agent. Such borrowing will then be made available to the Borrower
by the Agent by crediting the account of the Borrower on the
books of
28
such office with the aggregate of the amounts made available to
the Agent by the Lenders and in like funds as received by the
Agent.
(c) Repayment.
(i) The principal amount of all Acquisition Loans
advanced during the period from the Amendment No. 4
Effective Date to and including June 12, 1999 shall be
repaid in twenty (20) consecutive quarterly installments as
follows, unless accelerated sooner pursuant to Section 9.2:
Principal Amortization
Principal Amortization Payment Dates Payment
------------------------------------ -----------------------
September 30, 1999, December 31, 1999, 3.75%
March 31, 2000 and June 30, 2000
September 30, 2000, December 31, 2000, 4.375%
March 31, 2001and June 30, 2001
September 30, 2001, December 31, 2001, 5.0%
March 31, 2002 and June 30, 2002
September 30, 2002, December 31, 2002, 5.625%
March 31, 2003 and June 30, 2003
September 30, 2003, December 31, 2003, 6.25%
March 31, 2004 and the Maturity Date
(ii) The principal amount of all Acquisition Loans advanced
during the period from June 12, 1999 to and including June 12,
2000 shall be repaid in sixteen (16) consecutive quarterly
installments as follows, unless accelerated sooner pursuant to
Section 9.2:
Principal Amortization
Principal Amortization Payment Dates Payment
------------------------------------ -----------------------
September 30, 2000, December 31, 2000, 5.0%
March 31, 2001and June 30, 2001
September 30, 2001, December 31, 2001, 6.25%
March 31, 2002 and June 30, 2002
September 30, 2002, December 31, 2002, 6.25%
March 31, 2003 and June 30, 2003
September 30, 2003, December 31, 2003, 7.5%
March 31, 2004 and the Maturity Date
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Acquisition
Loans shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate
equal to the Adjusted Base Rate.
29
(ii) Eurodollar Loans. During such periods as Acquisition
Loans shall be comprised in whole or in part of Eurodollar Loans,
such Eurodollar Loans shall bear interest at a per annum rate
equal to the Adjusted Eurodollar Rate.
Interest on Acquisition Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Acquisition Notes. The Acquisition Loans made by each
Lender shall be evidenced by a duly executed promissory note of
the Borrower to such Lender in an original principal amount equal
to such Lender's Acquisition Loan Commitment Percentage of the
Acquisition Loan Committed Amount and in substantially the form
of Exhibit 2.3(e).
2.4 Tranche A Term Loan.
(a) Tranche A Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein each Lender severally agrees to make available to the Borrower on
the Amendment No. 4 Effective Date such Lender's Tranche A Term Loan
Commitment Percentage of a term loan in Dollars (the "Tranche A Term Loan")
in the aggregate principal amount of FIFTY MILLION DOLLARS ($50,000,000)
(the "Tranche A Term Loan Committed Amount") for the purposes hereinafter
set forth. The Tranche A Term Loan may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request;
provided, however, that no more than 16 Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar Loans
with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings, extensions
and conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new Eurodollar Loan
with a single Interest Period. Amounts repaid on the Tranche A Term Loan
may not be reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate
Notice of Borrowing to the Agent not later than 12:00 Noon (Charlotte,
North Carolina time) on the Amendment No. 4 Effective Date, with respect to
the portion of the Tranche A Term Loan initially consisting of a Base Rate
Loan, or on the third Business Day prior to the Amendment No. 4 Effective
Date, with respect to the portion of the Tranche A Term Loan initially
consisting of one or more Eurodollar Loans, which Notice of Borrowing shall
be irrevocable and shall specify (i) that the funding of a Tranche A Term
Loan is requested and (ii) whether the funding of the Tranche A Term Loan
shall be comprised of Base Rate Loans, Eurodollar Loans or a combination
thereof, and if Eurodollar Loans are requested, the Interest Period(s)
therefor. If the Borrower shall fail to deliver such Notice of Borrowing to
the Agent by 12:00 Noon. (Charlotte, North Carolina time) on the third
Business Day prior to the Amendment No. 4 Effective Date, then the full
amount of the Tranche A Term Loan shall be disbursed on the Amendment No. 4
Effective Date as a Base Rate Loan. Each Lender shall make its Tranche A
Term Loan Commitment Percentage of the Tranche A Term Loan available to the
Agent for the account of the Borrower at the office of the Agent specified
in Schedule 2.1(a), or at such other office as the Agent may designate in
writing, by 2:00 P.M. (Charlotte, North Carolina time) on the Amendment No.
4 Effective Date in Dollars and in funds immediately available to the
Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Tranche A Term Loan shall be in an aggregate principal amount
that is not less than $2,500,000 and integral multiples of $500,000 (or the
then remaining principal balance of the Tranche A Term Loan, if less).
(d) Repayment of Tranche A Term Loan. The principal amount of the
Tranche A Term Loan shall be repaid in nineteen (19) consecutive quarterly
installments as follows, unless accelerated sooner pursuant to Section 9.2:
30
Tranche A Term Loan
Principal Amortization Payment Dates Principal Amortization
Payment
------------------------------------ -----------------------
September 30, 1998, December 31, 1998, $1,875,000
March 31, 1999 and June 30, 1999
September 30, 1999, December 31, 1999, $1,875,000
March 31, 2000 and June 30, 2000
September 30, 2000, December 31, 2000, $1,875,000
March 31, 2001and June 30, 2001
September 30, 2001, December 31, 2001, $1,875,000
March 31, 2002 and June 30, 2002
September 30, 2002, December 31, 2002, $2,500,000
March 31, 2003 and June 30, 2003
September 30, 2003, December 31, 2003, $2,500,000
March 31, 2004 and the Maturity Date
(e) Interest. Subject to the provisions of Section 3.1, the Tranche A
Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Tranche A Term
Loan shall be comprised in whole or in part of Base Rate Loans, such
Base Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the Tranche A Term
Loan shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Adjusted Eurodollar Rate.
Interest on the Tranche A Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(f) Tranche A Term Notes. The portion of the Tranche A Term Loan made
by each Lender shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in an original principal amount equal to such
Lender's Tranche A Term Loan Commitment Percentage of the Tranche A Term
Loan and substantially in the form of Exhibit 2.4(f).
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Adjusted Base Rate plus 2%).
31
3.2 Extension and Conversion.
Subject to the terms of Section 5.2, the Borrower shall have the option, on
any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "Interest Period" set forth in Section 1.1 and shall be in
such minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii), with respect to Acquisition Loans, Section 2.3(b)(ii), or, with
respect to the Tranche A Term Loan, Section 2.4(c), (iv) no more than 16
Eurodollar Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period) and (v) any
request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the Agent specified in specified
in Schedule 2.1(a), or at such other office as the Agent may designate in
writing, prior to 12:00 Noon (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. Each request for extension
or conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (b), (c) and
(d) of Section 5.3. In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any such
conversion or extension is not permitted or required by this Section, then such
Eurodollar Loan shall be automatically converted into a Base Rate Loan at the
end of the Interest Period applicable thereto. The Agent shall give each Lender
notice as promptly as practicable of any such proposed extension or conversion
affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time, but otherwise without premium
or penalty; provided, however, that each partial prepayment of Loans shall
be in a minimum principal amount of $1,000,000 and integral multiples of
$500,000. Subject to the foregoing terms, amounts prepaid under this
Section 3.3(a) shall be applied as the Borrower may elect; provided that if
the Borrower fails to specify a voluntary prepayment then such prepayment
shall be applied first to Revolving Loans, second to the outstanding
revolving loan portion of the Acquisition Loans and third pro rata to the
outstanding term loan portion of the Acquisition Loans and the Tranche A
Term Loan (in each case ratably to the remaining Principal Amortization
Payments thereof), in each case first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(a) shall be subject to Section 3.12 and
be accompanied by interest on the principal amount prepaid through the date
of prepayment.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time, the sum of the
aggregate principal amount of outstanding Revolving Loans plus LOC
Obligations outstanding shall exceed the Revolving Committed Amount,
the Borrower immediately shall prepay the Revolving Loans and (after
all Revolving Loans have been repaid) cash collateralize the LOC
Obligations, in an amount sufficient to eliminate such excess.
(ii) Excess Cash Flow. Within 90 days after the end of each
fiscal year (commencing with the fiscal year ending June 30, 1998),
the Borrower shall prepay the Loans in an amount equal to (w) 50% of
the Excess Cash Flow earned during such prior fiscal year less (x) the
amount of any
32
voluntary prepayments of the Tranche A Term Loan, (to the extent
accompanied by a reduction in the Revolving Committed Amount) the
Revolving Loans or (to the extent accompanied by a reduction in the
Acquisition Loan Committed Amount) the Acquisition Loans pursuant to
Section 3.3(a) during such prior fiscal year less (z) the amount of
any mandatory prepayments of the Tranche A Term Loan, (to the extent
accompanied by a reduction in the Revolving Committed Amount) the
Revolving Loans or (to the extent accompanied by a reduction in the
Acquisition Loan Committed Amount) the Acquisition Loans pursuant to
Section 3.3(b)(iii), (iv) or (v) during such prior fiscal year. Any
payments of Excess Cash Flow shall be applied as set forth in clause
(vii) below.
(iii) Asset Dispositions. Immediately upon the occurrence of any
Asset Disposition Prepayment Event, the Borrower shall prepay the
Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of
the related Asset Disposition not applied (or caused to be applied) by
the Consolidated Parties during the related Application Period to the
purchase, acquisition or construction of Eligible Assets as
contemplated by the terms of Section 8.5(e) (such prepayment to be
applied as set forth in clause (vii) below).
(iv) Debt Issuances. Immediately upon receipt by any Consolidated
Party of proceeds from any Debt Issuance (excluding Indebtedness
permitted pursuant to Section 8.1), the Borrower shall prepay the
Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of
such Debt Issuance to the Lenders (such prepayment to be applied as
set forth in clause (vii) below).
(v) Issuances of Equity. Immediately upon receipt by a
Consolidated Party of proceeds from any Equity Issuance other than an
Excluded Equity Issuance, the Borrower shall prepay the Loans in an
aggregate amount equal to 50% of the Net Cash Proceeds of such Equity
Issuance (such prepayments shall be applied as set forth in clause
(vii) below).
(vi) Acquisition Purchase Price Reductions. Immediately upon
receipt by a Consolidated Party of proceeds from a post-closing
purchase price reduction in respect of any Acquisition financed in
whole or in part with the proceeds of any Acquisition Loans, the
Borrower shall prepay the Loans to the Lenders in an aggregate amount
equal to 100% of such purchase price reduction (such prepayments shall
be applied as set forth in clause (vii) below).
(vii) Application of Mandatory Prepayments. All amounts required
to be paid pursuant to this Section 3.3(b) shall be applied as
follows: (A) with respect to all amounts prepaid pursuant to Section
3.3(b)(i), to Revolving Loans and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of LOC Obligations,
(B) with respect to all amounts prepaid pursuant to Section
3.3(b)(ii), Section 3.3(b)(iv) or Section 3.3(b)(v), pro rata to the
Tranche A Term Loan and, if applicable, any term loan portion of the
Acquisition Loans (in each case ratably to the remaining Principal
Amortization Payments thereof), (C) with respect to all amounts
prepaid pursuant to Section 3.3(b)(iii) (other than in respect of any
Asset Disposition (x) involving Property described on Schedule
3.3(b)(vii) or (y) involving Sale and Leaseback Transactions of the
real property portion of the MD Assets as permitted by Section 8.13),
pro rata to (1) Revolving Loans and (after all Revolving Loans have
been repaid) to a cash collateral account in respect of LOC
Obligations (with a corresponding reduction in the Revolving Committed
Amount in an amount equal to all amounts applied pursuant to this
clause (1)), (2) any term loan portion of the Acquisition Loans
(ratably to the remaining Principal Amortization Payments thereof) and
(3) the Tranche A Term Loan (ratably to the remaining Principal
Amortization Payments thereof), (D) with respect to all amounts
prepaid pursuant to Section 3.3(b)(iii) in respect of any Asset
Disposition involving Property described on Schedule 3.3(b)(vii), to
Revolving Loans and (after all Revolving Loans have been repaid) to a
cash collateral account in respect of LOC Obligations (without any
33
reduction in the Revolving Committed Amount), (E) with respect to all
amounts prepaid pursuant to Section 3.3(b)(iii) in respect of any
Asset Disposition involving the Sale and Leaseback Transaction of the
real property portion of the MD Assets as permitted by Section 8.13,
to Acquisition Loans and (after all Acquisition Loans have been
repaid) as provided in (C) above, (F) with respect to all amounts
prepaid pursuant to Section 3.3(b)(iv) in respect of a Debt Issuance
of Subordinated Notes occurring within 90 days after the Amendment No.
4 Effective Date, to Acquisition Loans (without any reduction in the
Acquisition Loan Committed Amount) and (after all Acquisition Loans
have been repaid) to Revolving Loans (without any reduction in the
Revolving Committed Amount) and (G) with respect to all amounts
prepaid pursuant to Section 3.3(b)(vi), first, to any revolving loan
portion of the Acquisition Loans (ratably to the remaining Principal
Amortization Payments thereof) and then to any term loan portion of
the Acquisition Loans (ratably to the remaining Principal Amortization
Payments thereof). Within the parameters of the applications set forth
above, prepayments shall be applied first to Base Rate Loans and then
to Eurodollar Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(b) shall be subject to Section 3.12
and be accompanied by interest on the principal amount prepaid through
the date of prepayment.
3.4 Termination and Reduction of Committed Amounts.
(i) Voluntary Reductions.
(A) The Borrower may from time to time permanently reduce or
terminate the Revolving Committed Amount in whole or in part (in
minimum aggregate amounts of $2,500,000 or in integral multiples of
$500,000 in excess thereof (or, if less, the full remaining amount of
the then applicable Revolving Committed Amount)) upon five Business
Days' prior written notice to the Agent; provided, however, no such
termination or reduction shall be made which would cause the aggregate
principal amount of outstanding Revolving Loans plus LOC Obligations
outstanding to exceed the Revolving Committed Amount, unless,
concurrently with such termination or reduction, the Revolving Loans
are repaid to the extent necessary to eliminate such excess. The Agent
shall promptly notify each affected Lender of receipt by the Agent of
any notice from the Borrower pursuant to this Section 3.4(i).
(B) The Borrower may from time to time permanently reduce or
terminate the Acquisition Loan Committed Amount in whole or in part
(in minimum aggregate amounts of $2,500,000 or in integral multiples
of $500,000 in excess thereof (or, if less, the full remaining amount
of the then applicable Acquisition Loan Committed Amount)) upon five
Business Days' prior written notice to the Agent; provided, however,
no such termination or reduction shall be made which would cause the
aggregate principal amount of outstanding Acquisition Loans to exceed
the Acquisition Loan Committed Amount, unless, concurrently with such
termination or reduction, the Acquisition Loans are repaid to the
extent necessary to eliminate such excess. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any notice from
the Borrower pursuant to this Section 3.4(ii).
(ii) Mandatory Reductions.
(A) On any date that the Revolving Loans are required to be
prepaid pursuant to the terms of Section 3.3(b)(iii) the Revolving
Committed Amount automatically shall be permanently reduced by the
amount of such required prepayment and/or reduction.
(B) The Acquisition Loan Committed Amount automatically shall be
(A) permanently reduced on June 12, 1999 by an amount equal to the
principal amount of all Acquisition Loans advanced during the period
from the Amendment No. 4 Effective Date to and including June 12, 1999
and (B) terminated on June 12, 2000.
(iii) Maturity Date. The Revolving Commitments of the Lenders, the LOC
Commitment of the Issuing Lender and the Acquisition Loan Commitments of
the Lenders automatically shall terminate on the Maturity Date.
(iv) General.
(A) The Borrower shall pay to the Agent for the account of the
Lenders in accordance with the terms of Section 3.5(a)(i), on the date
of each termination or reduction of the Revolving
34
Committed Amount, the Revolving Unused Fee accrued through the date of
such termination or reduction on the amount of the Revolving Committed
Amount so terminated or reduced.
(B) The Borrower shall pay to the Agent for the account of the
Lenders in accordance with the terms of Section 3.5(a)(ii), on the
date of each termination or reduction of the Acquisition Loan
Committed Amount, the Acquisition Loan Unused Fee accrued through the
date of such termination or reduction on the amount of the Acquisition
Loan Committed Amount so terminated or reduced.
3.5 Fees.
(a) Unused Fees.
(i) Revolving Credit Facility Unused Fee. In consideration of the
Revolving Commitments of the Lenders hereunder, the Borrower agrees to pay
to the Agent for the account of each Lender a fee (the "Revolving Unused
Fee") on such Lender's Revolving Commitment Percentage of the Unused
Revolving Committed Amount computed at a per annum rate for each day during
the applicable Revolving Unused Fee Calculation Period (hereinafter
defined) at a rate equal to the Applicable Percentage in effect from time
to time. The Revolving Unused Fee shall commence to accrue on the Effective
Date and shall be due and payable in arrears on the last business day of
each March, June, September and December (and any date that the Revolving
Committed Amount is reduced as provided in Section 3.4 and the Maturity
Date) for the immediately preceding quarter (or portion thereof) (each such
quarter or portion thereof for which the Revolving Unused Fee is payable
hereunder being herein referred to as an "Revolving Unused Fee Calculation
Period"), beginning with the first of such dates to occur after the
Effective Date.
(ii) Acquisition Loan Unused Fee. In consideration of the Acquisition
Loan Commitments of the Lenders hereunder, the Borrower agrees to pay to
the Agent for the account of each Lender a fee (the "Acquisition Loan
Unused Fee") on such Lender's Acquisition Loan Commitment Percentage of the
Unused Acquisition Loan Committed Amount computed at a per annum rate for
each day during the applicable Acquisition Loan Unused Fee Calculation
Period (hereinafter defined) at a rate equal to the Applicable Percentage
in effect from time to time. The Acquisition Loan Unused Fee shall commence
to accrue on the Effective Date and shall be due and payable in arrears on
the last business day of each March, June, September and December (and any
date that the Revolving Committed Amount is reduced as provided in Section
3.4 and the Maturity Date) for the immediately preceding quarter (or
portion thereof) (each such quarter or portion thereof for which the
Acquisition Loan Unused Fee is payable hereunder being herein referred to
as an "Acquisition Loan Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Effective Date.
(b) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In consideration of the
issuance of standby Letters of Credit hereunder, the Borrower promises to
pay to the Agent for the account of each Lender a fee (the "Standby Letter
of Credit Fee") on such Lender's Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each such standby
Letter of Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable Percentage. The
Standby Letter of Credit Fee will be payable quarterly in arrears on the
last Business Day of each March, June, September and December for the
immediately preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In consideration of the
issuance of trade Letters of Credit hereunder, the Borrower promises to pay
to the Agent for the account of each Lender a fee (the "Trade Letter of
Credit Fee") equal to the Applicable Percentage on such Lender's Revolving
Commitment Percentage of the amount of each drawing under any such trade
Letter of
35
Credit. The Trade Letter of Credit Fee will be payable on each date of
drawing under a trade Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby Letter of Credit
Fee payable pursuant to clause (i) above and the Trade Letter of Credit Fee
payable pursuant to clause (ii) above, the Borrower promises to pay to the
Issuing Lender for its own account without sharing by the other Lenders (a)
a standby letter of credit fronting fee equal to 0.25% on the average daily
maximum amount available to be drawn under each such standby Letter of
Credit (such fee to be payable quarterly in arrears on the last Business
Day of each March, June, September and December for the immediately
preceding quarter (or a portion thereof)), (b) a trade letter of credit
drawing fee equal to 0.25% on the amount of each drawing under any such
trade Letter of Credit (such fee to be payable on each date of drawing
under a trade Letter of Credit) and (c) the customary charges from time to
time of the Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and drawings
under, such Letters of Credit (collectively, the "Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to the Agent, for
its own account and NationsBanc Montgomery Securities, Inc., as applicable,
the fees referred to in the Agent's Fee Letter (collectively, the "Agent's
Fees").
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy), then, upon notice from
such Lender to the Borrower, the Borrower shall be obligated to pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction. Any Lender claiming compensation under this Section 3.6 shall furnish
to the Borrower and the Agent a statement setting forth in reasonable detail the
additional amount or amounts payable to it hereunder and the calculations used
to determine such amount or amounts, which statement shall be conclusive and
binding on the parties hereto in the absence of manifest error. In determining
such amount, such Lender may use any reasonable averaging and attribution
methods.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
36
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 Requirements of Law.
(a) If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net income of
such Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting this Credit Agreement or its
Notes or any of such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 3.9 shall furnish to the Borrower and the Agent
a statement setting forth in reasonable detail the additional amount or amounts
payable to it hereunder and the calculations used to determine such amount or
amounts, which statement shall be conclusive and binding on the parties hereto
in the absence of manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
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3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made or Continued instead as Base Rate Loans,
and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by the Borrower to or for the account of any
Lender or the Agent hereunder or under any other Credit Document shall be
made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each
Lender and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or
its Applicable Lending Office) or the Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any
Lender or the Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.11) such Lender or the
Agent receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law,
and (iv) the Borrower shall furnish to the Agent, at its address referred
to in Section 11.1, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 3.11) paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
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(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of
this Credit Agreement in the case of each Lender listed on the signature
pages hereof and on or prior to the date on which it becomes a Lender in
the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only so long as such
Lender remains lawfully able to do so), shall provide the Borrower and the
Agent with (i) Internal Revenue Service Form 1001 or 4224, as appropriate,
or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Credit Agreement is effectively connected with
the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from or a reduced
rate of tax on payments pursuant to this Credit Agreement or any of the
other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under Section 3.11(a) or 3.11(b) with respect to Taxes
imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the Borrower shall furnish to the Agent the original or a certified copy of
a receipt evidencing such payment.
(h) Any Lender claiming compensation under this Section 3.11 shall
furnish to the Borrower and the Agent a statement setting forth in
reasonable detail the additional amount or amounts payable to it hereunder
and the calculations used to determine such amount or amounts, which
statement shall be conclusive and binding on the parties hereto in the
absence of manifest error.
(i) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.12 Compensation.
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a
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Eurodollar Loan on the date for such borrowing, Conversion, Continuation,
or prepayment specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of Section
3.3) prepayment of principal of any Loan or reimbursement obligations
arising from drawings under Letters of Credit, each payment of interest on
the Loans or reimbursement obligations arising from drawings under Letters
of Credit, each payment of Revolving Unused Fees, each payment of
Acquisition Loan Unused Fees, each payment of the Standby Letter of Credit
Fee, each payment of the Trade Letter of Credit Fee, each reduction of the
Revolving Committed Amount and each conversion or extension of any Loan,
shall be allocated pro rata among the Lenders in accordance with the
respective principal amounts of their outstanding Loans and Participation
Interests.
(b) Advances. No Lender shall be responsible for the failure or delay
by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified by any
Lender prior to the date of any requested borrowing that such Lender does
not intend to make available to the Agent its ratable share of such
borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such borrowing,
and the Agent in reliance upon such assumption, may (in its sole discretion
but without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the
date such corresponding amount is recovered by the Agent at a per annum
rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate. Nothing contained in this Section 3.13(b)
shall be deemed to constitute a waiver by the Borrower of its rights in
respect of any claim for breach of contract relating to the wrongful
failure (as determined by a court of competent jurisdiction) of any Lender
to make any Loan on the date of the requested borrowing.
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make
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such other adjustments from time to time, as shall be equitable to the end that
all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately available
funds, without setoff, deduction, counterclaim or withholding of any kind,
at the Agent's office specified in Schedule 2.1(a) not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received
after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower maintained with the Agent (with
notice to the Borrower). The Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it
fails so to specify, or if such application would be inconsistent with the
terms hereof, the Agent shall distribute such payment to the Lenders in
such manner as the Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of
Section 3.13(a)). The Agent will distribute such payments to such Lenders,
if any such payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to the end
of such Business Day and otherwise the Agent will distribute such payment
to such Lenders on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause
the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day. Except as
expressly provided otherwise herein, all computations of interest and fees
shall be made on the basis of actual number of days elapsed over a year of
360 days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing,
but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with respect
to the Collateral under or pursuant to the terms of the Collateral
Documents;
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SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of each
of the Lenders in connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Credit Party Obligations owing
to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above;
and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Loans and LOC Obligations held by such Lender bears to the aggregate then
outstanding Loans and LOC Obligations) of amounts available to be applied
pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii)
to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent in a
cash collateral account and applied (A) first, to reimburse the Issuing
Lender from time to time for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in
the manner provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section 11.3(c),
and a subaccount for each Lender, in which Register and subaccounts (taken
together) shall be recorded (i) the amount, type and Interest Period of
each such Loan hereunder, (ii) the amount of any principal or interest due
and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Agent hereunder from or for the
account of the Borrower and each Lender's share thereof. The Agent will
make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such
subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
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3.17 Mandatory Assignment.
In the event that any Lender delivers to the Borrower, a demand for payment
in accordance with Section 3.6, 3.9 or 3.11 then, provided that no Default or
Event of Default has occurred and is continuing at such time, the Borrower may,
at its own expense (such expense to include the administrative fee payable to
the Agent under Section 11.3(b)), and with the consent of the Agent (such
consent not to be unreasonably withheld), require such Lender to transfer and
assign in whole, without recourse (in accordance with and subject to the terms
and conditions of Section 11.3), all of its interests, rights and obligations
under this Credit Agreement to an Eligible Assignee which shall assume such
assigned obligations; provided that (i) such assignment shall not conflict with
any law, rule or regulation or order of any court or any Governmental Authority
and (ii) the Borrower or such assignee shall have paid to the assigning Lender
in immediately available funds the principal of and interest accrued to the date
of such payment on the Loans made by it hereunder and all other amounts owed to
it hereunder.
SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided the prompt payment of the Credit Party Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Credit Party Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Credit Party
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor of the Credit Party Obligations for amounts
paid under this Section 4 until such time as the Lenders (and any Affiliates of
Lenders entering into Hedging Agreements) have been paid in full, all
Commitments under this Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents or Hedging Agreements. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
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(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Sections
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
agrees that such Guarantor shall have no right of recourse to security for the
Credit Party Obligations, except through the exercise of rights of subrogation
pursuant to Section 4.2 and through the exercise of rights of contribution
pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the
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Security Agreements and the other Collateral Documents and that the Lenders may
exercise their remedies thereunder in accordance with the terms thereof.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors; provided, however, that, for purposes of calculating the
Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (d) "Contribution Share" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Borrower and all of the Guarantors other than the maker of
such Excess Payment exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Borrower and the Guarantors hereunder) of
the Borrower and all of the Guarantors other than the maker of such Excess
Payment; provided, however, that, for purposes of calculating the Contribution
Shares of the Guarantors in respect of any Excess Payment, any Guarantor that
became a Guarantor subsequent to the date of any such Excess Payment shall be
deemed to have been a Guarantor on the date of such Excess Payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor in connection with such Excess
Payment. This Section 4.6 shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under applicable law against the Borrower in respect of any payment of
Guaranteed Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.4.
4.7 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
45
SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Amendment shall be subject
to satisfaction of the following conditions (in form and substance acceptable to
the Lender):
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of (i) this Amendment, (ii) a new Revolving Note for each Lender,
(iii) a new Acquisition Note for each Lender and (iv) a new Tranche A Term
Note for each Lender, each in form and substance acceptable to the Agent in
its sole discretion.
(b) Corporate Documents. Receipt by the Agent of all documents it may
reasonably request relating to the existence and good standing of each
Credit Party, the corporate or other necessary authority for and the
validity of the Credit Documents, and any other matters relevant thereto,
all in form and substance acceptable to the Agent.
(c) Opinions of Counsel. The Agent shall have received, in each case
dated as of the Amendment No. 4 Effective Date a legal opinion of
McDermott, Will & Emery, general counsel for the Credit Parties,
substantially in the form of Schedule 5.1(c); and
(d) Corporate Structure. The corporate capital and ownership structure
of the Consolidated Parties, after consummation of the transactions
contemplated by this Credit Agreement shall be as described in Schedule
5.1(d).
(e) Government Consent. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents (including
Hart-Scott-Rodino clearance) and approvals necessary or desirable in
connection with the related financings and other transactions contemplated
hereby and expiration of all applicable waiting periods without any action
being taken by any authority that could restrain, prevent or impose any
material adverse conditions on such transactions or that could seek or
threaten any of the foregoing, and no law or regulation shall be applicable
which in the judgment of the Agent could have such effect.
(f) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party that
could reasonably be expected to have a Material Adverse Effect.
(g) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Amendment No. 4 Effective Date stating that (A) each
Consolidated Party is in compliance with all existing material financial
obligations, (B) all governmental, shareholder and third party consents and
approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (C) no action, suit,
investigation or proceeding is pending or threatened in any court or before
any arbitrator or governmental instrumentality that purports to affect any
Consolidated Party or any transaction contemplated by the Credit Documents,
if such action, suit, investigation or proceeding could reasonably be
expected to have a Material Adverse Effect and (D) immediately after giving
effect to this Amendment, the other Credit Documents and all the
transactions contemplated therein to occur on such date, (1) each of the
Credit Parties is Solvent, (2) no Default or Event of Default exists, (3)
all representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (4) the Credit
Parties are in compliance with each of the financial covenants set forth in
Section 7.11.
(h) Material Adverse Effect. No material adverse change shall have
occurred since June 30, 1997 in the condition (financial or otherwise),
business, management or prospects of the Consolidated Parties taken as a
whole.
46
(i) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Agent as of the Amendment No.
4 Effective Date, including, without limitation, payment to the Agent of
any fees set forth in the Fee Letter which are payable on such date.
(j) Subordinated Debt. (i) The Borrower shall have entered into the
Subordinated Note Indenture with the Subordinated Noteholders, (ii) the
Borrower shall have executed the Subordinated Notes, (iii) the Agent shall
have received a copy, certified by an officer of the Borrower as true and
complete, of the Subordinated Note Indenture as originally executed and
delivered and a form of Subordinated Note, and no amendment or modification
thereof shall have been entered into on or prior to the Amendment No. 4
Effective Date which shall not have been approved by each of the Lenders
and (iv) the Borrower shall have received proceeds from the sale of
Subordinated Notes in an aggregate principal amount of $100,000,000.
(k) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Consolidated Parties.
5.2 Conditions to all Extensions of Credit.
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit are subject to
satisfaction of the following conditions in addition to satisfaction of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any Revolving
Loan, any Acquisition Loan or any portion of the Tranche A Term Loan, an
appropriate Notice of Borrowing or Notice of Extension/Conversion or (ii)
in the case of any Letter of Credit, the Issuing Lender shall have received
an appropriate request for issuance in accordance with the provisions of
Section 2.2(b);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any Credit Party an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded; and
(d) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal
amount of outstanding Revolving Loans plus LOC Obligations outstanding
shall not exceed the Revolving Committed Amount, and (ii) the LOC
Obligations shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c) and (d) above.
47
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The audited consolidated balance sheet of the Consolidated Parties
as of June 30, 1997 and the audited consolidated statements of earnings and
statements of cash flows for the year ended June 30, 1996 have heretofore
been furnished to the Agent. Such audited financial statements (including
the notes thereto) (i) have been audited by Arthur Andersen, (ii) have been
prepared in accordance with GAAP consistently, applied throughout the
periods covered thereby and (iii) present fairly (on the basis disclosed in
the footnotes to such financial statements) the consolidated financial
condition, results of operations and cash flows of the Consolidated Parties
as of such date and for such period. The unaudited interim balance sheets
of the Consolidated Parties as at the end of, and the related unaudited
interim statements of earnings and of cash flows for, each fiscal month and
quarterly period ended after June 30, 1997 and prior to the Amendment No. 4
Effective Date have heretofore been furnished to the Agent. Such unaudited
interim financial statements for each such quarterly period, (i) have been
prepared by independent certified public accountants in accordance with
GAAP consistently applied throughout the periods covered thereby, subject
to audit, normal year-end adjustments and the absence of notes and (ii)
present fairly (on the basis disclosed in the footnotes to such financial
statements) the consolidated financial condition, results of operations and
cash flows of the Consolidated Parties as of such date and for such
periods.
(b) The pro forma consolidated balance sheet, statement of earnings
and statement of cash flow of the Consolidated Parties for the two most
recent fiscal years preceding the Closing Date prepared by Arthur Andersen
in accordance with GAAP consistently applied throughout the periods covered
thereby, have heretofore been furnished to the Agent. Such pro forma
balance sheet is based upon reasonable assumptions and upon information not
known to be incorrect or misleading in any material respect.
(c) Except as otherwise disclosed in Schedule 6.1(c), the financial
statements delivered to the Lenders pursuant to Section 7.1(a) and (b), (i)
have been prepared in accordance with GAAP (except as may otherwise be
permitted under Section 7.1(a) and (b)) and (ii) present fairly (on the
basis disclosed in the footnotes to such financial statements) the
consolidated financial condition, results of operations and cash flows of
the Consolidated Parties as of such date and for such periods.
6.2 No Material Change.
Since the later of (i) June 30, 1997 and (ii) the then most recent fiscal
year end with respect to which the Agent has received the Required Financial
Information, (a) there has been no Material Adverse Effect and (b) except as
otherwise permitted under this Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the Capital Stock in a
Consolidated Party nor has any of the Capital Stock in a Consolidated Party been
redeemed, retired, purchased or otherwise acquired for value.
6.3 Organization and Good Standing.
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.
48
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No material consent
or authorization of, filing with, notice to or other similar act by or in
respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of any Credit Party in connection with the
borrowings or other extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of the Credit Documents to
which such Credit Party is a party, except for (i) consents, authorizations,
notices and filings described in Schedule 6.4, all of which have been obtained
or made or have the status described in such Schedule 6.4 and (ii) filings to
perfect the Liens created by the Collateral Documents. This Credit Agreement has
been, and each other Credit Document to which any Credit Party is a party will
be, duly executed and delivered on behalf of the Credit Parties. This Credit
Agreement constitutes, and each other Credit Document to which any Credit Party
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Credit Party enforceable against such party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any material
Requirement of Law or any other material law, regulation (including, without
limitation, Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, (c) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 No Default.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
6.7 Ownership.
Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
6.9 Litigation.
Except as disclosed in Schedule 6.9, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
might have a Material Adverse Effect.
49
6.10 Taxes.
Each Consolidated Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party that if made would have or could
reasonably be expected to have a Material Adverse Effect.
6.11 Compliance with Law.
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Material Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer
Plans as of the valuation date most closely preceding the date on which
this representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241
of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or
has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under
any agreement or other instrument pursuant to which any Consolidated Party
or any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
50
(e) Neither any Consolidated Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Code apply has been administered in compliance in all material respects of
such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code. The representation by the Credit
Parties in the preceding sentence is made in reliance upon and subject to
the accuracy of the Lenders' representation in Section 11.14 with respect
to their source of funds and is subject, in the event that the source of
the funds used by the Lenders in connection with this transaction is an
insurance company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995), compliance
with the regulations issued under Section 401(c)(1)(A) of ERISA, or the
issuance of any other prohibited transaction exemption or similar relief,
to the effect that assets in an insurance company's general asset account
do not constitute assets of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA of a "plan" within the meaning of Section
4975(e)(1) of the Code.
6.13 Subsidiaries.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries (including Subsidiaries which are Joint Ventures) of each
Consolidated Party. Information on Schedule 6.13 includes jurisdiction of
incorporation, the number of shares of each class of Capital Stock outstanding,
the number and percentage of outstanding shares of each class owned (directly or
indirectly) by such Consolidated Party; and the number and effect, if exercised,
of all outstanding options, warrants, rights of conversion or purchase and all
other similar rights with respect thereto. The outstanding Capital Stock of all
such Subsidiaries is validly issued, fully paid and non-assessable and is owned
by each such Consolidated Party, directly or indirectly, free and clear of all
Liens (other than those arising under or contemplated in connection with the
Credit Documents). Other than as set forth in Schedule 6.13, no Consolidated
Party has outstanding any securities convertible into or exchangeable for its
Capital Stock nor does any such Person have outstanding any rights to subscribe
for or to purchase or any options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to its Capital Stock. Schedule
6.13 may be updated from time to time by the Borrower by giving written notice
thereof to the Agent.
6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation G or Regulation U, or for
the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Agent, the Borrower will furnish to the
Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans was
or will be incurred for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U or any "margin security" within
the meaning of Regulation T. "Margin stock" within the meaning of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Consolidated Parties. None of the transactions
contemplated by this Credit Agreement (including, without limitation, the
direct or indirect use of the proceeds of the Loans) will violate or result
in a violation of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or regulations issued pursuant thereto,
or Regulation G, T, U or X.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of
51
a "subsidiary" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference
to any Lender) have the respective meanings assigned thereto in Regulation
O issued by the Board of Governors of the Federal Reserve System.
(d) Each Consolidated Party has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its
respective Property and to the conduct of its respective businesses as
presently conducted unless the failure to do so would not have a Material
Adverse Effect.
(e) No Consolidated Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any state,
city, town, municipality, county or any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which violation could reasonably be expected to have a
Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions unless the failure to do so would not have a Material Adverse
Effect.
6.15 Purpose of Loans and Letters of Credit.
The proceeds of the Revolving Loans and Tranche A Term Loan shall be used
solely by the Borrower (i) to refinance on the Amendment No. 4 Effective Date
existing Indebtedness under the Existing Credit Agreement and (ii) for working
capital and general corporate purposes (other than Permitted Acquisitions and
capital expenditures) of the Borrower and its Wholly Owned Subsidiaries on and
after the Amendment No. 4 Effective Date. The proceeds of the Acquisition Loans
shall be used solely by the Borrower to finance the purchase price of, and fees
and expenses in connection with, Permitted Acquisitions and capital expenditures
on and after the Amendment No. 4 Effective Date. The Letters of Credit shall be
used only for or in connection with appeal bonds, reimbursement obligations
arising in connection with surety and reclamation bonds, reinsurance, domestic
or international trade transactions and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 Environmental Matters.
Except as disclosed and described in Schedule 6.16 attached hereto,
Environmental Laws and liabilities thereunder, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. Each of the
Properties owned, leased or operated by the Consolidated Parties is in
compliance with all Environmental Laws except where liability under such
Environmental Laws could not reasonably be expected to have a Material Adverse
Effect.
6.17 Intellectual Property.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Material Adverse Effect. Set forth on Schedule 6.17 is a
list of all Intellectual Property owned by each Consolidated Party or that any
Consolidated Party has the right to use. Except as provided on Schedule 6.17, no
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does any Credit Party know of any such
claim, and to the Credit Parties' knowledge the use of such Intellectual
Property by any Consolidated Party does not infringe on the rights of any
52
Person, except for such claims and infringements that in the aggregate, could
not have a Material Adverse Effect. Schedule 6.17 may be updated from time to
time by the Borrower by giving written notice thereof to the Agent.
6.18 Solvency.
Each Credit Party is and, after consummation of the Recapitalization and
the other transactions contemplated by this Credit Agreement, will be Solvent.
6.19 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.20 Location of Collateral.
Set forth on Schedule 6.20(a)(i) is a list of all Primary Real Properties
with street address, county and state where located. Set forth on Schedule
6.20(a)(ii) is a list of all Secondary Real Properties with street address,
county and state where located. Set forth on Schedule 6.20(b) is a list of all
locations where any tangible personal property of a Consolidated Party is
located, including county and state where located. Set forth on Schedule 6.20(c)
is the chief executive office and principal place of business of each
Consolidated Party. Schedule 6.20(a), 6.20(b) and 6.20(c) may be updated from
time to time by the Borrower giving written notice thereof to the Agent.
6.21 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein, in light of the circumstances under which such
information is or is to be used, not misleading. It is understood by the Agent
and the Lenders that all of the estimates and assumptions on which any
projections and forecasts are based may not prove to be correct and that actual
future financial performance may vary from such projections or forecasts.
6.22 No Burdensome Restrictions.
No Consolidated Party is a party to any agreement or instrument or subject
to any other obligation or any charter or corporate restriction or any provision
of any applicable law, rule or regulation which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
6.23 Brokers' Fees.
Except as disclosed on Schedule 6.23, no Consolidated Party has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents.
6.24 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.
6.25 Nature of Business.
As of the Closing Date, the Consolidated Parties are engaged in the
business of providing diagnostic imaging services and ancillary services to the
healthcare industry.
6.26 Year 2000 Compliance.
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The Borrower has (i) conducted a review and assessment of its and of its
Subsidiaries' reporting systems and operations that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications may not
be able to recognize and properly perform date-sensitive functions after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent and the
Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement of
the Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and of
cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited
by independent certified public accountants of recognized national standing
reasonably acceptable to the Agent and whose opinion shall be to the effect
that such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not be
limited as to the scope of the audit or qualified as to the status of the
Consolidated Parties as a going concern.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
90 days after the end thereof) a consolidated and consolidating balance
sheet and income statement of the Consolidated Parties, as of the end of
such fiscal quarter, together with related consolidated and consolidating
statements of operations and retained earnings and of cash flows for such
fiscal quarter in each case setting forth in comparative form consolidated
and consolidating figures for the corresponding period of the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of the chief financial officer of the Borrower
to the effect that such quarterly financial statements fairly present in
all material respects the financial condition of the Consolidated Parties
and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower substantially in the form of
Exhibit 7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each such
fiscal period and (ii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Credit Parties propose to take with
respect thereto.
(d) Annual Budgets and Plan. By the end of each fiscal year of the
Borrower, beginning with the fiscal year ending June 30, 1998, an annual
budget and plan for the Consolidated Parties containing, among other
things, pro forma financial statements for the next fiscal year.
(e) Compliance With Certain Provisions of the Credit Agreement. Within
90 days after the end of each fiscal year of the Borrower, a certificate
containing information regarding (i) the calculation of Excess
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Cash Flow and (ii) the amount of all Asset Dispositions, Debt Issuances and
Equity Issuances that were made during the prior fiscal year.
(f) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(g) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants to
any Consolidated Party in connection with any annual, interim or special
audit of the books of such Person.
(h) Reports. Promptly upon transmission or receipt thereof, (i) copies
of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state
or local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
(i) Notices. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent immediately of (i) the occurrence of an event
or condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties propose to
take with respect thereto, and (ii) the occurrence of any of the following
with respect to any Consolidated Party (A) the pendency or commencement of
any litigation, arbitral or governmental proceeding against such Person
which if adversely determined is likely to have a Material Adverse Effect,
(B) the institution of any proceedings against such Person with respect to,
or the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal, state or
local law, rule or regulation, including but not limited to, Environmental
Laws, the violation of which could reasonably be expected to have a
Material Adverse Effect, or (C) any notice or determination concerning the
imposition of any withdrawal liability by a Multiemployer Plan against such
Person or any ERISA Affiliate, the determination that a Multiemployer Plan
is, or is expected to be, in reorganization within the meaning of Title IV
of ERISA or the termination of any Plan.
(j) ERISA. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent promptly (and in any event within five business
days) of: (i) of any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or could reasonably lead to, an ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Borrower or any of its ERISA Affiliates, or of a determination
that any Multiemployer Plan is in reorganization or insolvent (both within
the meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that could
reasonably be expected to have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice and
a statement by the chief financial officer of the Borrower briefly setting
forth the details regarding such event, condition, or notice, and the
action, if any, which has been or is being taken or is proposed to be taken
by the Credit Parties with respect thereto. Promptly upon request, the
Credit Parties shall furnish the Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested, including,
but not limited to, copies of each annual report/return (Form 5500 series),
as well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the meaning
of Section 3(39) of ERISA).
55
(k) Year 2000 Compliance. Promptly upon the discovery or determination
that any computer application that is material to its or any of its
Subsidiaries' business and operations will not be "Year 2000 Compliant"
(that is, be able to properly perform date-sensitive functions for all
dates before and after January 1, 2000), except to the extent that such
failure could not reasonably be expected to have a Material Adverse Effect.
(l) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the Required
Lenders may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority if the failure to do so could reasonably be expected to
have a Material Adverse Effect.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.
7.6 Insurance.
(a) Each Credit Party will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance
and business interruption insurance) in such amounts, covering such risks
and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice (or as otherwise required
by the Collateral Documents). The Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with
respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agent, that it will use good faith efforts to
give the Agent thirty (30) days prior written notice before any such policy
or policies shall be altered or canceled, and that no act or default of any
Consolidated Party or any other Person shall affect the rights of the Agent
or the Lenders under such policy or policies. The present insurance
coverage of the
56
Consolidated Parties is outlined as to carrier, policy number, expiration
date, type and amount on Schedule 7.6.
(b) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Agent generally describing the
nature and extent of such damage or destruction. In case of any loss,
damage to or destruction of the Collateral of any Credit Party or any part
thereof, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for
that purpose, at such Credit Party's cost and expense, will promptly repair
or replace the Collateral of such Credit Party so lost, damaged or
destroyed; provided, however, that such Credit Party need not repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed
to the extent the failure to make such repair or replacement (i) is
desirable to the proper conduct of the business of such Credit Party in the
ordinary course and otherwise in the best interest of such Credit Party;
and (ii) would not materially impair the rights and benefits of the Agent
or the Lenders under the Collateral Documents, any other Credit Document or
any Hedging Agreement. In the event a Credit Party shall receive any
proceeds of such insurance in a net amount in excess of $500,000, such
Credit Party will immediately pay over such proceeds to the Agent, for
payment on the Credit Party Obligations; provided, however, that the Agent
agrees to release such insurance proceeds to such Credit Party for
replacement or restoration of the portion of the Collateral of such Credit
Party lost, damaged or destroyed if, but only if, (A) no Default or Event
of Default shall have occurred and be continuing at the time of release,
(B) written application for such release is received by the Agent from such
Credit Party within 30 days of receipt of such proceeds and (C) the Agent
has received evidence reasonably satisfactory to it that the Collateral
lost, damaged or destroyed has been or will be replaced or restored to its
condition immediately prior to the loss, destruction or other event giving
rise to the payment of such insurance proceeds.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 6.15.
7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Agent, and its representatives, may conduct an annual audit of the
Collateral, at the expense of the Borrower.
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7.11 Financial Covenants.
The Credit Parties hereby agree that:
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties, shall be
greater than or equal to:
(i) for the period from the Amendment No. 4 Effective Date to and
including June 29, 2001, 2.0 to 1.0;
(ii) for the period from June 30, 2001 to and including June 29,
2002, 2.25 to 1.0;
(iii) for the period from June 30, 2002 to and including June 29,
2003, 2.50 to 1.0;
(iv) for the period from June 30, 2003 to and including June 29,
2004, 2.75 to 1.0; and
(v) for the period from June 30, 2004 and thereafter, 3.0 to 1.0.
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties, shall
be greater than or equal to 1.1 to 1.0.
(c) Total Leverage Ratio. The Total Leverage Ratio, as of the last day
of each fiscal quarter of the Consolidated Parties, shall be less than or
equal to:
(i) for the period from the Amendment No. 4 Effective Date to and
including June 29, 2001, 4.5 to 1.0;
(ii) for the period from June 30, 2001 to and including June 29,
2002, 4.0 to 1.0;
(iii) for the period from June 30, 2002 to and including June 29,
2003, 3.5 to 1.0; and
(iv) for the period from June 30, 2003 and thereafter, 3.0 to
1.0.
(d) Senior Leverage Ratio. The Senior Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, shall be less than
or equal:
(i) for the period from the Amendment No. 4 Effective Date to and
including June 29, 2001, 3.0 to 1.0;
(ii) for the period from June 30, 2001 to and including June 29,
2002, 2.5 to 1.0; and
(iii) for the period from June 30, 2002 and thereafter, 2.0 to
1.0.
(e) Certain Calculation Procedures. The parties hereto acknowledge and
agree that, notwithstanding any other provision hereof to the contrary, for
purposes of all calculations made in determining compliance with the
financial covenants set forth in this Section 7.11, (i)(A) income statement
items (whether positive or negative) attributable to the Property disposed
of in any Asset Disposition as contemplated by Section 8.5, as applicable,
shall be excluded to the extent relating to any period occurring prior to
the date of such transaction and (B) Indebtedness which is retired in
connection with any such Asset Disposition shall be excluded and deemed to
have been retired as of the first day of the applicable period and (ii)
income statement items (whether positive or negative) attributable to any
Property acquired in any Investment transaction (including without
limitation any Permitted Acquisition) contemplated by Section 8.6 shall be
included to the extent relating to any period applicable in such
calculations occurring after the date of such transaction (and,
notwithstanding the foregoing, during the first four fiscal quarters
following the date of such transaction, shall be included on an annualized
basis).
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7.12 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person
which is not a Joint Venture becomes a Subsidiary of any Credit Party, the
Borrower shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person and
shall (a) cause such Person to execute a Joinder Agreement in substantially the
same form as Exhibit 7.12, (b) cause all of the Capital Stock of such Person
owned by the Consolidated Parties to be delivered to the Agent (together with
undated stock powers signed in blank) and pledged to the Agent pursuant to an
appropriate pledge agreement(s) in substantially the form of the Pledge
Agreement and otherwise in form acceptable to the Agent and (c) cause such
Person to (i) if such Person owns or leases any real property located in the
United States of America or deemed to be material by the Agent or the Required
Lenders in its or their sole reasonable discretion, deliver to the Agent with
respect to such real property documents, instruments and other items of the
types required to be delivered pursuant to Section 5.2(c) all in form, content
and scope reasonably satisfactory to the Agent and (ii) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder) and other items of the types
required to be delivered pursuant to Section 5.2(b), all in form, content and
scope reasonably satisfactory to the Agent.
7.13 Pledged Assets.
Each Credit Party will, and will cause each of its Subsidiaries which is
not a Joint Venture to, cause (i) all of its owned real and personal property
located in the United States, (ii) to the extent deemed to be material by the
Agent or the Required Lenders in its or their sole reasonable discretion, all of
its other owned real and personal property and (iii) all of its leased real
property located in the United States, to be subject at all times to first
priority (subject to Permitted Liens), perfected and, in the case of real
property (whether leased or owned), title insured Liens in favor of the Agent
pursuant to the terms and conditions of the Collateral Documents or, with
respect to any such property acquired subsequent to the Closing Date, such other
additional security documents as the Agent shall reasonably request. With
respect to any real property (whether leased or owned) located in the United
States of America acquired by any direct or indirect Subsidiary of the Borrower
which is not a Joint Venture subsequent to the Closing Date, such Person will
cause to be delivered to the Agent with respect to such real property: (i) if
the value of such real property is greater than or equal to $1,000,000,
documents, instruments and other items of the types required to be delivered
pursuant to Section 7.15(a)(i)-(iv) in form acceptable to the Agent and (ii) if
the value of such real property is greater than $250,000 but less than
$1,000,000, documents, instruments and other items of the types required to be
delivered pursuant to Section 7.15(a)(ii) and (iv) in a form acceptable to
Agent. Without limiting the generality of the above, the Credit Parties will
cause 100% of the Capital Stock in each direct or indirect Subsidiary of the
Borrower which is not a Joint Venture to be subject at all times to a first
priority (subject to Permitted Liens), perfected Lien in favor of the Agent
pursuant to the terms and conditions of the Collateral Documents or such other
security documents as the Agent shall reasonably request.
If, subsequent to the Closing Date, a Credit Party shall (a) acquire any
intellectual property, securities, instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents or (b) acquire or lease any real property, the
Borrower shall promptly (and in any event within three (3) Business Days) after
any Executive Officer of a Credit Party acquires knowledge of same notify the
Agent of same. Each Credit Party shall, and shall cause each of its Subsidiaries
to, take such action (including but not limited to the actions set forth in
Sections 5.2(a) and Section 7.15 (as qualified by this Section 7.13)) at its own
expense as requested by the Agent to ensure that the Agent has a first priority
(subject to Permitted Liens), perfected Lien to secure the Credit Party
Obligations in (i) all owned real property and personal property of the Credit
Parties located in the United States, (ii) to the extent deemed to be material
by the Agent or the Required Lenders in its or their sole reasonable discretion,
all other owned real and personal property of the Credit Parties and (iii) all
leased real property located in the United States, subject in each case only to
Permitted Liens. Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in the Security Agreements.
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7.14 Upstreaming of Income from Joint Ventures.
The Credit Parties will cause each of the Joint Ventures to distribute to
the Borrower from time to time (and in any event at least once during each
fiscal year of the Borrower) the Borrower's share of the net income before taxes
for such period (as determined in accordance with GAAP) of such Joint Venture.
7.15 Further Assurances.
(a) Within 90 days after the Amendment No. 4 Effective Date, the
Credit Parties shall have delivered to the Agent:
(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "Mortgage Instrument"
and collectively the "Mortgage Instruments") encumbering the fee
interest and/or leasehold interest of any Credit Party in each real
property asset designated in Schedule 6.20(a)(i) (each a "Primary Real
Property" and collectively the "Primary Real Properties");
(ii) in the case of each leasehold interest of any Credit Party
in each real property asset designated in Schedule 6.20(a)(ii) (each a
"Secondary Real Property" and collectively "Secondary Real
Properties") or Primary Real Property (each Primary Real Property or
Secondary Real Property a "Real Property" and collectively the "Real
Properties"), (a) such estoppel letters, consents and waivers from the
landlords on such real property as may be required by the Agent, which
estoppel letters shall be in the form and substance reasonably
satisfactory to the Agent and (b) evidence that the applicable lease,
a memorandum of lease with respect thereto, or other evidence of such
lease in form and substance reasonably satisfactory to the Agent, has
been or will be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of the Agent, so as to enable
the Mortgage Instrument encumbering such leasehold interest to
effectively create a valid and enforceable first priority lien
(subject to Permitted Liens) on such leasehold interest in favor of
the Agent (or such other Person as may be required or desired under
local law) for the benefit of Lenders;
(iii) ALTA mortgagee title insurance policies issued by Chicago
Title Insurance Company (the "Mortgage Policies"), in amounts
reasonably satisfactory to the Agent, assuring the Agent that each of
the Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Primary Real Property, free
and clear of all defects and encumbrances except Permitted Liens,
which Mortgage Policies shall be in form and substance reasonably
satisfactory to the Agent and shall provide for affirmative insurance
and such reinsurance as the Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the Agent;
and
(iv) Evidence satisfactory to the Agent that each of the Real
Properties, and the uses of the Real Properties, are in compliance in
all material respects with all applicable laws, regulations and
ordinances including without limitation health and environmental
protection laws, erosion control ordinances, storm drainage control
laws, doing business and/or licensing laws, zoning laws (the evidence
submitted as to zoning should include the zoning designation made for
each of the Real Properties, the permitted uses of each such Real
Properties under such zoning designation and zoning requirements as to
parking, lot size, ingress, egress and building setbacks) and laws
regarding access and facilities for disabled persons including, but
not limited to, the federal Architectural Barriers Act, the Fair
Housing Amendments Act of 1988, the Rehabilitation Act of 1973 and the
Americans with Disabilities Act of 1990.
(b) On or before January 31,1998, the Credit Parties shall deliver to
the Agent (i) evidence satisfactory to the Agent that the good standing
status of each Subsidiary identified in Schedule 6.13 as not being in good
standing in any listed jurisdiction has been reinstated to good standing
status in each such jurisdiction and (ii) evidence satisfactory to the
Agent that each Subsidiary identified in Schedule 6.13 as
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having incomplete tax data available for any listed jurisdiction is in good
tax standing in each such jurisdiction.
(c) On or before February 16, 1998, the Credit Parties shall deliver
to the Agent all documents and information of the types described in
Section 7.15(a) with respect to the real property portion of the MD Assets.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set forth in
Schedule 8.1 (and renewals, refinancings and extensions thereof on terms
and conditions no less favorable to such Person than such existing
Indebtedness);
(c) (i) purchase money Indebtedness (including Capital Leases and
Synthetic Leases) hereafter incurred by the Borrower or any of its
Subsidiaries which is not a Joint Venture other than Open MRI or Central
Coast to finance the purchase of fixed assets provided that (A) the total
of all such Indebtedness for all such Persons taken together shall not
exceed an aggregate principal amount of $10,000,000 (excluding any such
Indebtedness of the Borrower or any of its Subsidiaries other than Open MRI
or Central Coast referred to in subsection (b) above) at any one time
outstanding; (B) such Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and (C) no such Indebtedness shall
be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(ii) purchase money Indebtedness (including Capital Leases and
Synthetic Leases) hereafter incurred by Open MRI to finance the purchase of
fixed assets provided that (A) the total outstanding principal of all such
Indebtedness (including any such Indebtedness of Open MRI referred to in
subsection (b) above), taken together with the aggregate original equipment
cost of all Property leased by Open MRI under Operating Leases, shall not
exceed at any time an aggregate principal amount of $20,000,000; (B) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (C) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at
the time of such refinancing;
(iii) purchase money Indebtedness (including Capital Leases and
Synthetic Leases) hereafter incurred by Central Coast to finance the
purchase of fixed assets provided that (A) the total outstanding principal
of all such Indebtedness shall not exceed at any time an aggregate
principal amount of $6,000,000 (including any such Indebtedness of Central
Coast referred to in subsection (b) above); (B) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed; and
(C) no such Indebtedness shall be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time of such
refinancing;
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(d) obligations of the Borrower or any of its Subsidiaries in respect
of Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for speculative
purposes;
(e) intercompany Indebtedness arising out of loans and advances
permitted under Section 8.6;
(f) Indebtedness in an aggregate principal amount not to exceed
$100,000,000 arising under the Subordinated Note Indenture and the
Subordinated Notes, and Guaranty Obligations with respect to such
Indebtedness;
(g) in addition to the Indebtedness otherwise permitted by this
Section 8.1, other unsecured Indebtedness hereafter incurred by the
Borrower provided that (A) the loan documentation with respect to such
Indebtedness shall not contain covenants or default provisions relating to
any Consolidated Party that are more restrictive than the covenants and
default provisions contained in the Credit Documents, (B) the Borrower
shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to the
incurrence of such Indebtedness and to the concurrent retirement of any
other Indebtedness of any Consolidated Party, no Default or Event of
Default would exist hereunder and (C) the aggregate principal amount of
such Indebtedness shall not exceed $2,500,000 at any time.
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
8.4 Consolidation, Merger, Dissolution, etc.
Except in connection with an Asset Disposition permitted by the terms of
Section 8.5, the Credit Parties will not permit any Consolidated Party to
enter into any transaction of merger or consolidation or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution); provided
that, notwithstanding the foregoing provisions of this Section 8.4, (a) the
Borrower may merge or consolidate with any of its Wholly Owned Subsidiaries
provided that (i) the Borrower shall be the continuing or surviving
corporation, (ii) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may
request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.13 after giving effect to such transaction and (iii) the
Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to
such transaction, no Default or Event of Default would exist, (b) any
Credit Party other than the Borrower may merge or consolidate with any
other Credit Party other than the Borrower provided that (i) the Credit
Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request so as to cause the
Credit Parties to be in compliance with the terms of Section 7.13 after
giving effect to such transaction and (ii) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect on a Pro Forma Basis to such transaction, no
Default or Event of Default would exist, (c) any Consolidated Party which
is not a Credit Party may be merged or consolidated with or into any Credit
Party provided that (i) such Credit Party shall be the continuing or
surviving corporation, (ii) the Credit Parties shall cause to be executed
and delivered such documents, instruments and certificates as the Agent may
request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.13 after giving effect to such transaction and (iii) the
Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to
such transaction, no Default or Event of Default would exist, (d) any
Consolidated Party which is not a Credit Party may be merged or
consolidated with or into any other Consolidated Party which is not a
Credit Party provided the Borrower shall have delivered to the Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving effect on a
Pro Forma Basis to such transaction, no Default or Event of Default would
exist, (e) the Borrower or any Wholly
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Owned Subsidiary of the Borrower may merge with any Person other than a
Consolidated Party in connection with a Permitted Acquisition if (i) the
Borrower or such Wholly Owned Subsidiary shall be the continuing or
surviving corporation, (ii) the Credit Parties shall cause to be executed
and delivered such documents, instruments and certificates as the Agent may
request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.13 after giving effect to such transaction and (iii) the
Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to
such transaction, no Default or Event of Default would exist and (f) any
Wholly Owned Subsidiary of the Borrower may dissolve, liquidate or wind up
its affairs at any time.
8.5 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party to make any Asset
Disposition (including, without limitation, any Sale and Leaseback Transaction)
other than Excluded Asset Dispositions unless (a) the consideration paid in
connection therewith is cash or Cash Equivalents, (b) if such transaction is a
Sale and Leaseback Transaction, such transaction is permitted by the terms of
Section 8.13, (c) such transaction does not involve the sale or other
disposition of a minority equity interest in any Consolidated Party, (d) the
aggregate net book value of all of the assets sold or otherwise disposed of by
the Consolidated Parties in all such transactions after the Closing Date shall
not exceed $2,500,000, (e) if the book value of the assets disposed of pursuant
to such Asset Disposition exceeds $1,000,000, the Borrower shall have delivered
to the Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, no Default or Event of Default
would exist hereunder, and (f) no later than 15 days prior to such Asset
Disposition, the Agent and the Lenders shall have received a certificate of an
officer of the Borrower specifying the anticipated or actual date of such Asset
Disposition, briefly describing the assets to be sold or otherwise disposed of
and setting forth the net book value of such assets, the aggregate consideration
and the Net Cash Proceeds to be received for such assets in connection with such
Asset Disposition, and thereafter the Borrower shall, within the period of 30
days following the consummation of such Asset Disposition (with respect to any
such Asset Disposition, the "Application Period"), apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset Disposition to
(i) the purchase, acquisition or, in the case of improvements to real property,
construction of Eligible Assets or (ii) to the prepayment of the Loans in
accordance with the terms of Section 3.3(b)(iii).
Upon a sale of assets or the sale of Capital Stock of a Consolidated Party
permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of the Agent's security interest, if any, in such assets or Capital Stock,
including, without limitation, amendments or terminations of UCC financing
statements, if any, the return of stock certificates, if any, and the release of
such Subsidiary from all of its obligations, if any, under the Credit Documents.
8.6 Investments.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party which is not a
Joint Venture to, directly or indirectly, declare, order, make or set apart any
sum for or pay any Restricted Payment, except (a) to make dividends payable
solely in the same class of Capital Stock of such Person and, in connection with
any such stock dividend, to make cash dividends in respect of fractional shares,
(b) to make dividends or other distributions payable to any Credit Party
(directly or indirectly through Subsidiaries), (c) as permitted by Section 8.8,
(d) pursuant to the terms of either of the Investment Agreements, any payments
made in connection with the Recapitalization, (e) to purchase, redeem or
otherwise acquire shares of its Capital Stock, or warrants or options to acquire
any such shares, with the proceeds received from the substantially concurrent
issue of its Capital Stock and (f) provided that no Default or Event of Default
has occurred and is continuing at such time or would be directly or indirectly
caused as a result thereof, to make interest payments in respect of Indebtedness
arising under the Subordinated Note Indenture and the Subordinated Notes,
including payment of accrued interest and premium, if any, payable in connection
with a redemption of the Subordinated Notes permitted under Section 8.8.
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8.8 Prepayments of Indebtedness, etc.
The Credit Parties will not permit any Consolidated Party which is not a
Joint Venture to, (a) if any Default or Event of Default has occurred and is
continuing or would be directly or indirectly caused as a result thereof (i)
after the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Indebtedness if such amendment or
modification would add or change any terms in a manner adverse to the issuer of
such Indebtedness, or shorten the final maturity or average life to maturity or
require any payment to be made sooner than originally scheduled or increase the
interest rate applicable thereto or change any subordination provision thereof,
or (ii) except for the exchange of the Subordinated Notes for notes with
identical terms registered pursuant to the registration rights agreement set
forth in the Subordinated Note Indenture, make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), refund, refinance or exchange of any other
Indebtedness (including without limitation any Indebtedness arising under the
Subordinated Note Indenture and the Subordinated Notes), (b) except for the
exchange of the Subordinated Notes for notes with identical terms registered
pursuant to the registration rights agreement set forth in the Subordinated Note
Indenture, make (or give any notice with respect thereto) any voluntary or
optional payment or prepayment, redemption, acquisition for value or defeasance
of (including without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of any Indebtedness arising under the Subordinated
Note Indenture and the Subordinated Notes or (c) make interest payments in
respect of the Indebtedness arising under the Subordinated Note Indenture in
violation of the subordination provisions of the Subordinated Note Indenture.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
advances of working capital to any Credit Party, (b) transfers of cash and
assets to any Credit Party, (c) transactions permitted by Section 8.1, Section
8.4, Section 8.5, Section 8.6, or Section 8.7, (d) transactions contemplated by
the Investment Agreements, including any and all payments required to be paid
pursuant to the terms thereof, (e) normal compensation and reimbursement of
expenses of officers and directors and (f) except as otherwise specifically
limited in this Credit Agreement, other transactions which are entered into in
the ordinary course of such Person's business on terms and conditions
substantially as favorable to such Person as would be obtainable by it in a
comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without providing prior written notice to the Agent and the
Lenders.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the Subordinated Note Indenture
and the Subordinated Notes, in each case as in effect as of the Amendment No. 4
Effective Date, (iii) applicable law, (iv) any document or instrument governing
Indebtedness incurred pursuant to Section 8.1(c), provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith or (v) any Permitted Lien or any document or
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instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Borrower or any Wholly Owned Subsidiary
of the Borrower) to own any Capital Stock of any Subsidiary of the Borrower
which is not a Joint Venture, (ii) permit any Subsidiary of the Borrower
which is not a Joint Venture to issue Capital Stock (except to the Borrower
or to a Wholly-Owned Subsidiary of the Borrower), (iii) permit, create,
incur, assume or suffer to exist any Lien on any Capital Stock, in each
case except (A) as a result of or in connection with a dissolution, merger
or disposition of a Subsidiary permitted under Section 8.4 or Section 8.5
or (B) for Permitted Liens and (iv) notwithstanding anything to the
contrary contained in clause (ii) above, permit any Subsidiary of the
Borrower which is not a Joint Venture to issue any shares of preferred
Capital Stock.
8.13 Sale Leasebacks.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, become or remain liable as lessee or as guarantor or other
surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any Property (whether real, personal or mixed), whether now owned
or hereafter acquired, (a) which such Consolidated Party has sold or
transferred or is to sell or transfer to a Person which is not a
Consolidated Party or (b) which such Consolidated Party intends to use for
substantially the same purpose as any other Property which has been sold or
is to be sold or transferred by such Consolidated Party to another Person
which is not a Consolidated Party in connection with such lease; provided,
however, notwithstanding the foregoing, so long as the Net Proceeds from
the sale of any real property are applied to the prepayment of the Loans in
accordance with the terms of Sections 3.3(b)(iii) and 3.3(b)(vii), InSight
Health Corp. may, on or before July 31, 1998, enter into a Sale and
Leaseback Transaction with respect to the real property portion of the MD
Assets.
8.14 Capital Expenditures.
(a) The Credit Parties will not permit Consolidated Capital Expenditures
(excluding capital expenditures incurred by Open MRI and its Subsidiaries) to
exceed $20,000,000 per fiscal year.
(b) The Credit Parties will not permit the consolidated capital
expenditures of Open MRI and its Subsidiaries, as determined in accordance with
GAAP, to exceed $15,000,000 per fiscal year.
8.15 No Further Negative Pledges.
The Credit Parties will not permit any Consolidated Party which is not a
Joint Venture to enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some
other obligation, except (a) pursuant to this Credit Agreement and the other
Credit Documents, (b) pursuant to the Subordinated Note Indenture and the
Subordinated Notes, in each case as in effect as of the applicable date of
effectiveness, (c) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 8.1(c), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith and (d) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
8.16 Operating Lease Obligations.
(a) The Credit Parties will not permit the aggregate obligations of the
Consolidated Parties other than Open MRI which are not Joint Ventures for the
payment of rental under Operating Leases (other than in respect of
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Operating Leases existing as of the Closing Date and described in Schedule 8.16
(and renewals, refinancings and extensions thereof)) for any fiscal year to
exceed at any time an aggregate principal amount of $2,500,000.
(b) The Credit Parties will not permit the aggregate original equipment
cost of all Property leased by Open MRI under Operating Leases, taken together
with the outstanding principal of all purchase money Indebtedness (including
Capital Leases and Synthetic Leases) of Open MRI permitted under Section
8.1(c)(ii), to exceed at any time an aggregate amount of $20,000,000.
8.17 No Foreign Subsidiaries.
None of the Credit Party will create, acquire or permit to exist any direct
or indirect Foreign Subsidiary.
8.18 Joint Venture Operations.
The Credit Parties will not permit, as of as of the last day of each fiscal
quarter, the portion of Consolidated EBITDA attributable to the Borrower and its
Subsidiaries which are not Joint Ventures for the four quarters then ended to be
less than 75% of Consolidated EBITDA for such period.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.9, 7.11 or 8.1
through 8.18, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Section 7.1(a), (b), (c) or (d),
Section 7.12 or Section 7.13 and such default shall continue
unremedied for a period of at least 5 days after the earlier of a
responsible officer of a Credit Party becoming aware of such default
or notice thereof by the Agent; or
(iii) default in the due performance or observance by it of any
other term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1
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hereof) contained in this Credit Agreement or the other Credit
Documents (subject to applicable grace or cure periods, if any) and
such default shall continue unremedied for a period of at least 30
days after the earlier of a responsible officer of a Credit Party
becoming aware of such default or notice thereof by the Agent; or
(d) Failure of Full Force and Effect. Except as a result of or in
connection with a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.4 or Section 8.5, any Credit Document shall
fail to be in full force and effect or to give the Agent and/or the
Lenders the Liens, rights, powers and privileges purported to be
created thereby, or any Credit Party shall so state in writing; or
(e) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(f) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) having an outstanding principal amount in excess of
$1,000,000 in the aggregate, (A) any Consolidated Party shall (1)
default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness, or (2)
the occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or
agent on behalf of such holders) to cause (determined without regard
to whether any notice or lapse of time is required), any such
Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior
to the stated maturity thereof; or
(g) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability
of $1,000,000 or more in the aggregate (to the extent not paid or
fully covered by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition could reasonably be expected to have a Material
Adverse Effect: (i) any "accumulated funding deficiency," as such term
is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Plan, or any
lien shall arise on the assets of any Consolidated Party or any ERISA
Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event shall
occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination
of such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event
shall occur with respect to a Multiemployer Plan or Multiple Employer
Plan, which is, in the reasonable opinion of the Agent, likely to
result in (A) the termination of such Plan for purposes of Title IV of
ERISA, or (B) any Consolidated Party or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency or
(within the meaning of Section 4245 of ERISA) such Plan; or (iv) any
prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject any Consolidated Party or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any person against
any such liability; or
(j) Indemnification Claim under Investment Agreements. The
Borrower shall be required to make any indemnification payment of
$1,000,000 or more under Article VIII of either of the Investment
Agreements (to the extent not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage and has the
ability to perform) and any such indemnification payment shall remain
unpaid for at least 60 days from the date of demand thereof;
(k) Ownership. There shall occur a Change of Control; or
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(l) Subordinated Note Indenture. (i) There shall occur and be
continuing any Event of Default under and as defined in the
Subordinated Note Indenture or (ii) any of the Credit Party
Obligations for any reason shall cease to be "Designated Senior
Indebtedness" under and as defined in the Subordinated Note Indenture.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Borrower to the Agent and/or
any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
(c) Cash Collateral. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event
of Default under Section 9.1(e), it will immediately pay) to the Agent
additional cash, to be held by the Agent, for the benefit of the Lenders,
in a cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Agent and/or any of the Lenders
hereunder automatically shall immediately become due and payable without the
giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of
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any Credit Document, or any other document referred to or provided for therein
or for any failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any condition
or to inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or Affiliates; (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Credit Document;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
10.3 Defaults.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received written notice
from a Lender or the Borrower specifying such Default or Event of Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent shall give prompt notice thereof to the Lenders. The Agent shall (subject
to Section 10.2 hereof) take such action with respect to such Default or Event
of Default as shall reasonably be directed by the Required Lenders, provided
that, unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
10.4 Rights as a Lender.
With respect to its Commitment and the Loans made by it, NationsBank (and
any successor acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on,
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incurred by or asserted against the Agent (including by any Lender) in any way
relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document (including any of the foregoing arising from the negligence of
the Agent; provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
costs or expenses payable by the Borrower under Section 11.5, to the extent that
the Agent is not promptly reimbursed for such costs and expenses by the
Borrower. The agreements in this Section 10.5 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Borrower, with the consent of
the Required Lenders (such consent not to be unreasonably withheld) shall have
the right to appoint a successor Agent from among the Lenders. If no successor
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a commercial bank organized
under the laws of the United States of America having combined capital and
surplus of at least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
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if to the Borrower or the Guarantors:
c/o Insight Health Services Corp.
4400 MacArthur Boulevard
Suite 800
Newport Beach, CA 92660
Attn: Thomas V. Croal, CFO
Telephone: (714) 476-0733
Telecopy: (714) 851-5981
with a copy to:
TC Group, L.L.C.
1001 Pennsylvania Avenue
Washington, DC 20004-2505
Attn: David Dupree
Telephone: (202) 626-1250
Telecopy: (202) 347-1818
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services - Mike Roof
Telephone: (704) 388-3916
Telecopy: (704) 386-9923
with a copy to:
NationsBank, N. A.
700 Louisiana Street
Houston, Texas 77002
Attn: Scott Singhoff
Telephone: (713) 247-6961
Telecopy: (713) 247-6360
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
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11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written consent
of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
Approved Fund (as referred to in the definition of "Eligible
Assignee") or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial assignment
shall be in an amount at least equal to $5,000,000 (or, if less, the
remaining amount of the Commitment being assigned by such Lender) or
an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit 11.3(b) hereto, together with any Note subject to such
assignment and a processing fee of $3,500; provided that no such fee
shall be payable in the case of an assignment by a Lender to (A) an
Affiliate of such Lender or (B) an Approved Fund (as referred to in
the definition of "Eligible Assignee") which is an Affiliate of such
Lender.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 11.3(b), the assignor, the Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall deliver
to the Borrower and the Agent certification as to exemption from deduction
or withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of
this Credit Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
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(e) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under
this Credit Agreement (including all or a portion of its Commitment and its
Loans); provided, however, that (i) such Lender's obligations under this
Credit Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 11.2, and (iv) the
Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to its Loans and its Notes and to
approve any amendment, modification, or waiver of any provision of this
Credit Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender
from its obligations hereunder.
(g) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants).
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Borrower or any other Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
(including the cost of internal counsel) with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under the Credit
Documents. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
attorneys' fees and expenses and the cost of internal counsel), in connection
with the enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Credit Documents and the other documents to be delivered
hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and each
Lender and each of their Affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation, or proceeding or preparation of
defense in connection therewith) the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans
(including any of the foregoing arising from the negligence of the Indemnified
Party), except to the extent such claim, damage, loss, liability, cost, or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have
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resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 11.5 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower agrees not to assert any claim against the Agent, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of any Loan or the time of payment
of any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit, or extend or waive any Principal
Amortization Payment of any Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(v) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any Default
or Event of Default or mandatory reduction in the Commitments shall
not constitute a change in the terms of any Commitment of any Lender),
(v) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially all
of the Collateral,
(vi) except as the result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4,
release the Borrower or substantially all of the other Credit Parties
from its or their obligations under the Credit Documents,
(vii) except amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the Borrower or all
or substantially all of the other Credit Parties of any of its or
their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
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(b) without the consent of the Agent, no provision of Section 10 may
be amended;
(c) without the consent of the Issuing Lender, no provision of Section
2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the courts
of the State of North Carolina in Mecklenburg County, or of the United
States for the Western District of North Carolina, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Credit Parties further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section 11.1,
such service to become effective three (3) days after such mailing. Nothing
herein shall affect the right of the Agent or any Lender to serve process
in any other manner permitted by law or to commence legal proceedings or to
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
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(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS,
THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination; Acknowledgement.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Borrower,
the Guarantors and the Agent, and the Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Agent and each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit shall
be outstanding, all of the Credit Party Obligations have been irrevocably
satisfied in full and all of the Commitments hereunder shall have expired
or been terminated.
(c) This Amendment shall become effective at such time the conditions
set forth in Section 5.1 hereof have been satisfied, and thereafter the
Credit Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Guarantors, the Agent and each Lender and their respective
successors and assigns.
(d) At such time as this Amendment shall have become effective
pursuant to the terms of Section 11.13(c), (i) the Commitments under the
Existing Credit Agreement (as defined therein) automatically shall be
terminated and replaced with the Commitments hereunder, (ii) the
Commitments of Heller Financial, Inc., Strata Funding, Ltd., Merrill Lynch
Senior Floating Rate Fund, Inc., Indosuez Capital Funding II, Limited, Van
Kampen American Capital Prime Rate Income Trust, ML CLO XV Pilgrim America
(Cayman) Ltd. and Amara-1 Finance Ltd. (collectively, the "Terminating
Lenders") shall be terminated (iii) any right of the Lenders to receive
compensation under Section 3.12 of the Existing Credit Agreement shall be
terminated and (iv) the promissory notes executed in connection with the
Existing Credit Agreement shall be canceled, returned to the Borrower and
replaced with the Notes executed in connection with this Amendment. The
Terminating Lenders join in the execution of this Amendment solely for the
purposes of acknowledging and consenting to the termination of their
Commitments under the Existing Credit Facility and waiver of any right to
receive compensation under Section 3.12 of the Existing Credit Agreement.
(e) Each Credit Party hereby acknowledges that the Credit Party
Obligations under this Credit Agreement are secured by the Collateral
pursuant to the Collateral Documents.
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11.14 Source of Funds.
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or
its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied
with all of the requirements of the regulations issued under Section
401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
which such Lender has identified in writing to the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.15 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.16 Confidentiality.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any Affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or Affiliate
of any Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Credit Agreement, (g) in connection with any litigation to
which such Lending Party or any of its Affiliates may be a party, (h) to the
extent necessary in connection with the exercise of any remedy under this Credit
Agreement or any other Credit Document, and (i) subject to provisions
substantially similar to those contained in this Section 11.16, to any actual or
proposed participant or assignee; provided, however, that in the event that any
Lending Party is requested to disclose any confidential information pursuant to
clause (c), (d), (e) or (g) above, then such Lending Party shall, to the extent
lawfully permitted, use reasonable best efforts to promptly notify the Borrower.
[Signature Page to Follow]
77
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Fourth Amendment and Restatement of Credit Agreement to be duly executed
and delivered as of the date first above written.
BORROWER: INSIGHT HEALTH SERVICES CORP.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
GUARANTORS: INSIGHT HEALTH CORP.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
RADIOLOGY SERVICES CORP.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
OPEN MRI, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH CORP.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
RADIOSURGERY CENTERS, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MTS ENTERPRISES, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
QUEST FINANCIAL SERVICES, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES CORP.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
DIAGNOSTEMPS, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
DIAGNOSTIC SOLUTIONS CORP.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF NORTH TEXAS, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF ARLINGTON, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF DALLAS, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
NDDC, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
SIGNAL MEDICAL SERVICES, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MISSISSIPPI MOBILE TECHNOLOGY, INC.
By:
-----------------------------------
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:
-----------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
-----------------------------------
Name:
Title:
BANKBOSTON, N.A.
By:
-----------------------------------
Name:
Title:
BANQUE PARIBAS
By:
-----------------------------------
Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
[Signatures continue]
DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By:
-----------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
-----------------------------------
Name:
Title:
BANK POLSKA KASA OPIEKI, S.A.
By:
-----------------------------------
Name:
Title:
TERMINATING LENDERS: STRATA FUNDING LTD.
By:
-----------------------------------
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By:
-----------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING II, LIMITED
By: Indosuez Capital Luxembourg, as
Collateral Manager
By:
-----------------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:
-----------------------------------
Name:
Title:
ML CLO XV PILGRIM AMERICA (CAYMAN) LTD.
By:
-----------------------------------
Name:
Title:
AMARA-1 FINANCE LTD.
By:
-----------------------------------
Name:
Title:
HELLER FINANCIAL, INC.
By:
-----------------------------------
Name:
Title:
Schedule 1.1A
JOINT VENTURES
Schedule 1.1B
INVESTMENTS
Schedule 1.1C
LIENS
Schedule 1.1D
GE EQUIPMENT
1 1990 GE 5X Sigma MR System, Order No. 861-101631
1 1994 GE CT9800 Upgraded to HiSpeed Advantage, Order No. 970-062282
Schedule 2.1(a)
LENDER ADDRESSES AND COMMITMENTS
Schedule 3.3(b)(vii)
SPECIAL ASSET DISPOSITIONS
Schedule 5.1(c)
FORM OF LEGAL OPINION (GENERAL EXTERNAL COUNSEL)
Schedule 5.1(f)
CORPORATE STRUCTURE
Schedule 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
Schedule 6.9
LITIGATION
Schedule 6.12
ERISA
Schedule 6.13
SUBSIDIARIES
Schedule 6.15
INDEBTEDMNESS TO BE REFINANCED
Schedule 6.16
ENVIRONMENTAL DISCLOSURES
Schedule 6.17
INTELLECTUAL PROPERTY
Schedule 6.20(a)(i)
PRIMARY REAL PROPERTIES
Schedule 6.20(a)(ii)
SECONDARY REAL PROPERTIES
Schedule 6.20(b)
COLLATERAL LOCATIONS
Schedule 6.20(c)
CHIEF EXECUTIVE OFFICES/
PRINCIPAL PLACES OF BUSINESS
Schedule 6.23
BROKER'S FEES
Schedule 7.6
INSURANCE
Schedule 8.1
INDEBTEDNESS
Schedule 8.16
EXISTING OPERATING LEASES
Exhibit 1.1A
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
October 14, 1997 among INSIGHT HEALTH SERVICES CORP., a Delaware corporation
(the "Borrower"), certain Subsidiaries of the Borrower (individually a
"Guarantor", and collectively the "Guarantors"; together with the Borrower,
individually a "Pledgor", and collectively the "Pledgors") and NATIONSBANK,
N.A., in its capacity as agent (in such capacity, the "Agent") for the lenders
from time to time party to the Credit Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "Credit Agreement") among the Borrower, the Guarantors, the Lenders and the
Agent, the Lenders have agreed to make Loans and issue Letters of Credit upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Pledgors shall
have executed and delivered this Pledge Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement.
For purposes of this Pledge Agreement, the term "Lender" shall include any
Affiliate of any Lender which has entered into a Hedging Agreement with the
Borrower.
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
(a) Pledged Shares. 100% (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding shares of
capital stock owned by such Pledgor of each Subsidiary set forth on
Schedule 2(a) attached hereto, in each case together with the
certificates (or other agreements or instruments), if any, representing
such shares, and all options and other rights, contractual or
otherwise, with respect thereto (collectively, together with the shares
of capital stock described in Section 2(b) and 2(c) below, the "Pledged
Shares"), including, but not limited to, the following:
(y) all shares or securities representing a dividend
on any of the Pledged Shares, or representing a distribution
or return of capital upon or in respect of the Pledged Shares,
or resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants,
rights or options issued to the holder of, or otherwise in
respect of, the Pledged Shares; and
(z) without affecting the obligations of the Pledgors
under any provision prohibiting such action hereunder or under
the Credit Agreement, in the event of any consolidation or
merger involving the issuer of any Pledged Shares and in which
such issuer is not the surviving corporation, all shares of
each class of the capital stock of the successor corporation
formed by or resulting from such consolidation or merger.
-1-
(b) Additional Shares. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of capital
stock owned by such Pledgor of any Person which is not a Joint Venture
and hereafter becomes a Subsidiary, including, without limitation, the
certificates representing such shares.
(c) Other Equity Interests. Any and all other Capital Stock in
each Pledgor in any Subsidiary which is not a Joint Venture.
(d) Proceeds. All proceeds and products of the foregoing,
however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral security
for the Pledgor Obligations. Upon delivery to the Agent, such additional shares
of stock shall be deemed to be part of the Pledged Collateral of such Pledgor
and shall be subject to the terms of this Pledge Agreement whether or not
Schedule 2(a) is amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Pledgor Obligations"):
(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under the
Credit Agreement, the Notes, this Pledge Agreement and the other Credit
Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt performance and
observance by such Guarantor of all obligations of such Guarantor under
the Credit Agreement, this Pledge Agreement and the other Credit
Documents to which such Guarantor is a party, including, without
limitation, its guaranty obligations arising under Section 4 of the
Credit Agreement; and
(c) All other indebtedness, liabilities and obligations of any
kind or nature, now existing or hereafter arising, owing from any
Pledgor to any Lender or the Agent, howsoever evidenced, created,
incurred or acquired, whether primary, secondary, direct, contingent,
or joint and several, including, without limitation, all liabilities
arising under Hedging Agreements and all obligations and liabilities
incurred in connection with collecting and enforcing the Pledgor
Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously
with or prior to the execution and delivery of this Pledge Agreement,
all certificates representing the Pledged Shares of such Pledgor and
(ii) promptly upon the receipt thereof by or on behalf of a Pledgor,
all other certificates and instruments constituting Pledged Collateral
of a Pledgor. Prior to delivery to the Agent, all such certificates and
instruments constituting Pledged Collateral of a Pledgor shall be held
in trust by such Pledgor for the benefit of the Agent pursuant hereto.
All such certificates shall be delivered in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, substantially in the form provided in
Exhibit 4(a) attached hereto.
(b) Additional Securities. If such Pledgor shall receive by
virtue of its being or having been the owner of any Pledged Collateral,
any (i) stock certificate, including without limitation, any
certificate representing a stock dividend or distribution in connection
with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock splits,
spin-off or split-off, promissory notes or other instrument; (ii)
option or right, whether as an addition to, substitution for, or an
exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or
-2-
(iv) distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then such Pledgor shall receive such stock
certificate, instrument, option, right or distribution in trust for
the benefit of the Agent, shall segregate it from such Pledgor's other
property and shall deliver it forthwith to the Agent in the exact form
received together with any necessary endorsement and/or appropriate
stock power duly executed in blank, substantially in the form provided
in Exhibit 4(a), to be held by the Agent as Pledged Collateral and as
further collateral security for the Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall execute and
deliver to the Agent such UCC or other applicable financing statements
as may be reasonably requested by the Agent in order to perfect and
protect the security interest created hereby in the Pledged Collateral
of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are
duly authorized and validly issued, are fully paid and nonassessable
and are not subject to the preemptive rights of any Person. All other
shares of stock constituting Pledged Collateral will be duly authorized
and validly issued, fully paid and nonassessable and not subject to the
preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any
Lien, other than Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-302 of the Uniform Commercial Code as
in effect in the State of New York (the "UCC") with respect to the
Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of its
rights and remedies hereunder will not violate any law or governmental
regulation or any material contractual restriction binding on or
affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action
by, and no notice or filing with any Governmental Authority or with the
issuer of any Pledged Stock is required either (i) for the pledge made
by a Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement or (ii) for the exercise by the Agent
or the Lenders of their rights and remedies hereunder (except as may be
required by laws affecting the offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates
a valid security interest in favor of the Agent for the benefit of the
Lenders, in the Pledged Collateral. The taking possession by the Agent
of the certificates representing the Pledged Shares and all other
certificates and instruments constituting Pledged Collateral will
perfect and establish the first priority of the Agent's security
interest in the Pledged Shares and, when properly perfected by filing
or registration, in all other Pledged Collateral represented by such
Pledged Shares and instruments securing the Pledgor Obligations. Except
as set forth in this Section 5(e), no action is necessary to perfect or
otherwise protect such security interest.
(f) No Other Shares. No Pledgor owns any shares of stock other
than as set forth on Schedule 2(a) attached hereto.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated, such Pledgor shall:
-3-
(a) Books and Records. Mark its books and records (and shall
cause the issuer of the Pledged Shares of such Pledgor to mark its
books and records) to reflect the security interest granted to the
Agent, for the benefit of the Lenders, pursuant to this Pledge
Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral of such Pledgor or any
interest therein, except as permitted under the Credit Agreement and
the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its
expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including without limitation any and all action necessary to satisfy
the Agent that the Agent has obtained a first priority perfected
security interest in any capital stock); (ii) enable the Agent to
exercise and enforce its rights and remedies hereunder in respect of
the Pledged Collateral of such Pledgor; and (iii) otherwise effect the
purposes of this Pledge Agreement, including, without limitation and if
requested by the Agent, delivering to the Agent irrevocable proxies in
respect of the Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such
Pledgor other than pursuant hereto or as may be permitted under the
Credit Agreement.
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Pledgors on a joint and several basis
promptly upon timely notice thereof and demand therefor, shall constitute
additional Pledgor Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Agent or the Lenders on behalf of any Pledgor,
and no such advance or expenditure therefor, shall relieve the Pledgors of any
default under the terms of this Pledge Agreement, the other Credit Documents or
any Hedging Agreement. The Lenders may make any payment hereby authorized in
accordance with any bill, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by a Pledgor in appropriate proceedings
and against which adequate reserves are being maintained in accordance with
GAAP.
8. Events of Default. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default shall be an Event of Default
hereunder (an "Event of Default").
-4-
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuation thereof, the Agent and the Lenders
shall have, in respect of the Pledged Collateral of any Pledgor, in
addition to the rights and remedies provided herein, in the Credit
Documents, in the Hedging Agreements or by law, the rights and remedies
of a secured party under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an
Event of Default and during the continuation thereof, without limiting
the generality of this Section and the Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged
Collateral, or any part thereof, in one or more parcels, at public or
private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem
commercially reasonable, for cash, credit or for future delivery or
otherwise in accordance with applicable law. To the extent permitted by
law, any Lender may in such event, bid for the purchase of such
securities. Each Pledgor agrees that, to the extent notice of sale
shall be required by law and has not been waived by such Pledgor, any
requirement of reasonable notice shall be met if notice, specifying the
place of any public sale or the time after which any private sale is to
be made, is personally served on or mailed, postage prepaid, to such
Pledgor, in accordance with the notice provisions of Section 11.1 of
the Credit Agreement at least 10 days before the time of such sale. The
Agent shall not be obligated to make any sale of Pledged Collateral of
such Pledgor regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default
and during the continuation thereof, the Pledgors recognize that the
Agent may deem it impracticable to effect a public sale of all or any
part of the Pledged Shares or any of the securities constituting
Pledged Collateral and that the Agent may, therefore, determine to make
one or more private sales of any such securities to a restricted group
of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor
acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which
might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Agent shall have
no obligation to delay sale of any such securities for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act of 1933. Each
Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis
in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such
offer may be advertised without prior registration under the Securities
Act of 1933), or (ii) made privately in the manner described above
shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering"
under the Securities Act of 1933, and the Agent may, in such event, bid
for the purchase of such securities.
(d) Retention of Pledged Collateral. In addition to the rights
and remedies hereunder, upon the occurrence of an Event of Default, the
Agent may, after providing the notices required by Section 9-505(2) of
the UCC or otherwise complying with the requirements of applicable law
of the relevant jurisdiction, retain all or any portion of the Pledged
Collateral in satisfaction of the Pledgor Obligations. Unless and until
the Agent shall have provided such notices, however, the Agent shall
not be deemed to have retained any Pledged Collateral in satisfaction
of any Pledgor Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Agent or the Lenders are legally entitled, the Pledgors shall be
jointly and severally liable for the deficiency, together with interest
thereon at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans, together with
the costs
-5-
of collection and the reasonable fees of any attorneys employed by the
Agent to collect such deficiency. Any surplus remaining after the full
payment and satisfaction of the Pledgor Obligations shall be returned
to the Pledgors or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the
Agent, on behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuance of an Event of
Default:
(i) to demand, collect, settle, compromise,
adjust and give discharges and releases concerning the Pledged
Collateral of such Pledgor, all as the Agent may reasonably
determine;
(ii) to commence and prosecute any actions at
any court for the purposes of collecting any of the Pledged
Collateral of such Pledgor and enforcing any other right in
respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security
interests, or other encumbrances levied or placed on or
threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any
payment under any of the Pledged Collateral to make payment of
any and all monies due and to become due thereunder directly
to the Agent or as the Agent shall direct;
(vi) to receive payment of and receipt for any
and all monies, claims, and other amounts due and to become
due at any time in respect of or arising out of any Pledged
Collateral of such Pledgor;
(vii) to sign and endorse any drafts,
assignments, proxies, stock powers, verifications, notices and
other documents relating to the Pledged Collateral of such
Pledgor;
(viii) to settle, compromise or adjust any suit,
action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Agent
may deem reasonably appropriate;
(ix) execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, pledge agreements, affidavits, notices
and other agreements, instruments and documents that the Agent
may determine necessary in order to perfect and maintain the
security interests and liens granted in this Pledge Agreement
and in order to fully consummate all of the transactions
contemplated therein;
(x) to exchange any of the Pledged Collateral
of such Pledgor or other property upon any merger,
consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in connection
therewith, deposit any of the Pledged Collateral of such
Pledgor with any committee, depository, transfer agent,
registrar or other designated agency upon such terms as the
Agent may determine; and
-6-
(xi) to do and perform all such other acts and
things as the Agent may reasonably deem to be necessary,
proper or convenient in connection with the Pledged Collateral
of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect
or any Letter of Credit shall remain outstanding and (ii) until all of
the Commitments shall have been terminated. The Agent shall be under no
duty to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Pledge Agreement, and shall not be liable for any failure to do so
or any delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in
its individual capacity or its capacity as attorney-in-fact except acts
or omissions resulting from its gross negligence or willful misconduct.
This power of attorney is conferred on the Agent solely to protect,
preserve and realize upon its security interest in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations. If any
Pledgor fails to perform any agreement or obligation contained herein,
the Agent itself may perform, or cause performance of, such agreement
or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgors on a joint and several basis
pursuant to Section 13 hereof.
(c) Assignment by the Agent. The Agent may from time to time
assign the Pledgor Obligations and any portion thereof and/or the
Pledged Collateral and any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Agent under this
Pledge Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral
while being held by the Agent hereunder, the Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood
and agreed that Pledgors shall be responsible for preservation of all
rights in the Pledged Collateral of such Pledgor, and the Agent shall
be relieved of all responsibility for Pledged Collateral upon
surrendering it or tendering the surrender of it to the Pledgors. The
Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, which shall be no less than
the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Agent shall not have
responsibility for (i) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters; or (ii) taking any necessary
steps to preserve rights against any parties with respect to any
Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the
continuance of an Event of Default, all rights of a Pledgor to
exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (i) of
this Section shall cease and all such rights shall thereupon
become vested in the Agent which shall then have the sole
right to exercise such voting and other consensual rights.
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(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing and subject to Section 4(b) hereof,
each Pledgor may receive and retain any and all dividends
(other than stock dividends and other dividends constituting
Pledged Collateral which are addressed hereinabove) or
interest paid in respect of the Pledged Collateral to the
extent they are allowed under the Credit Agreement.
(ii) Upon the occurrence and during the
continuance of an Event of Default:
(A) all rights of a Pledgor to receive the
dividends and interest payments which it would
otherwise be authorized to receive and retain
pursuant to paragraph (i) of this Section shall cease
and all such rights shall thereupon be vested in the
Agent which shall then have the sole right to receive
and hold as Pledged Collateral such dividends and
interest payments; and
(B) all dividends and interest payments
which are received by a Pledgor contrary to the
provisions of paragraph (A) of this Section shall be
received in trust for the benefit of the Agent, shall
be segregated from other property or funds of such
Pledgor, and shall be forthwith paid over to the
Agent as Pledged Collateral in the exact form
received, to be held by the Agent as Pledged
Collateral and as further collateral security for the
Pledgor Obligations.
(g) Release of Pledged Collateral. The Agent may release any
of the Pledged Collateral from this Pledge Agreement or may substitute
any of the Pledged Collateral for other Pledged Collateral without
altering, varying or diminishing in any way the force, effect, lien,
pledge or security interest of this Pledge Agreement as to any Pledged
Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority lien on all Pledged
Collateral not expressly released or substituted.
11. Rights of Required Lenders. All rights of the Agent hereunder, if
not exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 3.15(b)
of the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses of the Agent
or the Lenders, (a) as required under Section 11.5 of the Credit Agreement and
(b) as necessary to protect the Pledged Collateral or to exercise any rights or
remedies under this Pledge Agreement or with respect to any Pledged Collateral.
All of the foregoing costs and expenses shall constitute Pledgor Obligations
hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Pledgor Obligations remain outstanding or any Credit Document or
Hedging Agreement is in effect or any Letter of Credit shall remain
outstanding, and until all of the Commitments thereunder shall have
terminated (other than any obligations with respect to the indemnities
and the representations and warranties set forth in the Credit
Documents). Upon such payment and
-8-
termination, this Pledge Agreement shall be automatically terminated
and the Agent and the Lenders shall, upon the request and at the
expense of the Pledgors, forthwith release all of its liens and
security interests hereunder and shall executed and deliver all UCC
termination statements and/or other documents reasonably requested by
the Pledgors evidencing such termination. Notwithstanding the
foregoing all releases and indemnities provided hereunder shall
survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Pledgor Obligations is rescinded or
must otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the
Pledgor Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; provided, however,
that none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Pledge
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Security Agreement may
be brought in the courts of the State of North Carolina, or of the
United States for the Western District of North Carolina, and, by
execution and delivery of this Security Agreement, each Pledgor hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1 of
the Credit Agreement, such service to become effective 30 days after
such mailing. Nothing herein shall affect the right of the Agent to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Pledgor in any other
jurisdiction.
-9-
(b) Each Pledgor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. Severability. If any provision of any of the Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.
24. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the Hedging Agreements, the delivery of the Notes and
the making of the Loans and the issuance of the Letters of Credit under the
Credit Agreement.
25. Other Security. To the extent that any of the Pledgor Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Agent and the Lenders have the right, in their sole discretion, to
determine which rights, security, liens, security interests or remedies the
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Agent's and the Lenders' rights or the Pledgor Obligations
under this Pledge Agreement, under any other of the Credit Documents or under
any Hedging Agreement.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Pledgors and in
consideration of the undertakings of each of the Pledgors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Pledgors with respect to the payment and performance of all of the
Pledgor Obligations arising under this Pledge Agreement, the other
Credit Documents and the Hedging Agreements, it being the intention of
the parties hereto that all the Pledgor Obligations shall be the joint
and several obligations of each of the Pledgors without preferences or
distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of
any applicable state or federal law relating to fraudulent conveyances
or transfers) then the obligations of each Guarantor hereunder shall be
-10-
limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the
Bankruptcy Code).
[The remainder of this page is intentionally left blank.]
-11-
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: INSIGHT HEALTH SERVICES CORP.,
a Delaware corporation
By:
Name:
Title:
GUARANTORS: INSIGHT HEALTH CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
RADIOLOGY SERVICES CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
OPEN MRI, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
[Signatures Continued]
RADIOSURGERY CENTERS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MTS ENTERPRISES, INC.
-12-
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
QUEST FINANCIAL SERVICES, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
DIAGNOSTEMPS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
[Signatures Continued]
DIAGNOSTIC SOLUTIONS CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF NORTH TEXAS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF ARLINGTON, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
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Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF DALLAS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
NDDC, INC..
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
[Signatures Continued]
Accepted and agreed to in Charlotte, North Carolina as of the date
first above written.
NATIONSBANK, N.A., as Agent
By:
Name:
Title:
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Schedule 2(a)
to
Pledge Agreement
dated as of October 14, 1997
in favor of NationsBank, N.A.
as Agent
PLEDGED STOCK
Pledgor: Insight Health Services Corp.
Name of Subsidiary Number of Shares Certificate Percentage
Number Ownership
Subsidiaries
Pledgor:
Name of Subsidiary Number of Shares Certificate Percentage
Number Ownership
Subsidiaries
-1-
Exhibit 4(a)
to
Pledge Agreement
dated as of October 14, 1997
in favor of NationsBank, N.A.
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to the following shares of capital stock of _____________________, a ___________
corporation:
No. of Shares Certificate No.
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
---------------,
a ______________ corporation
By:
Name:
Title:
-1-
Exhibit 1.1B
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as
of October 14, 1997 among INSIGHT HEALTH SERVICES CORP., a Delaware corporation
(the "Borrower"), certain Subsidiaries of the Borrower (individually a
"Guarantor" and collectively the "Guarantors"; together with the Borrower,
individually an "Obligor", and collectively the "Obligors") and NATIONSBANK,
N.A., in its capacity as agent (in such capacity, the "Agent") for the lenders
from time to time party to the Credit Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement, dated as of the
date hereof (as amended, modified, extended, renewed or replaced from time to
time, the "Credit Agreement"), among the Borrower, the Guarantors, the Lenders
and the Agent, the Lenders have agreed to make Loans and issue Letters of Credit
upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Obligors shall
have executed and delivered this Security Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit
Agreement, and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper, Deposit
Accounts, Documents, Equipment, Farm Products, Fixtures, General
Intangibles, Instruments, Inventory and Proceeds. For purposes of this
Security Agreement, the term "Lender" shall include any Affiliate of
any Lender which has entered into a Hedging Agreement with the
Borrower.
(b) In addition, the following terms shall have the following
meanings:
"Copyright Licenses": any written agreement, naming any
Obligor as licensor, granting any right under any Copyright including,
without limitation, any thereof referred to in Schedule 1(b) hereto.
"Copyrights": (a) all registered United States copyrights in
all Works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations,
recordings and applications in the United States Copyright office
including, without limitation, any thereof referred to in Schedule 1(b)
hereto, and (b) all renewals thereof including, without limitation, any
thereof referred to in Schedule 1(b) hereto.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to an Obligor of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any thereof referred to in Schedule 1(b) hereto.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 1(b) hereto,
and (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any
thereof referred to in Schedule 1(b) hereto.
-1-
"Secured Obligations": the collective reference to the
following:
(a) In the case of the Borrower, the prompt
performance and observance by the Borrower of all obligations
of the Borrower under the Credit Agreement, the Notes, this
Security Agreement and the other Credit Documents to which the
Borrower is a party;
(b) In the case of the Guarantors, the
prompt performance and observance by such Guarantor of all
obligations of such Guarantor under the Credit Agreement, this
Security Agreement and the other Credit Documents to which
such Guarantor is a party, including, without limitation, its
guaranty obligations arising under Section 4 of the Credit
Agreement; and
(c) All other indebtedness, liabilities and
obligations of any kind or nature, now existing or hereafter
arising, owing from any Obligor to any Lender or the Agent,
howsoever evidenced, created, incurred or acquired, whether
primary, secondary, direct, contingent, or joint and several,
including, without limitation, all liabilities arising under
Hedging Agreements and all obligations and liabilities
incurred in connection with collecting and enforcing the
Secured Obligations.
"Trademark License": means any agreement, written or oral,
providing for the grant by or to an Obligor of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 1(b) hereto.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 1(b) hereto, and (b) all renewals
thereof.
"Work": any work which is subject to copyright protection
pursuant to Title 17 of the United States Code.
2. Grant of Security Interest in the Collateral. To secure the prompt
payment and performance in full when due, whether by lapse of time, acceleration
or otherwise, of the Secured Obligations, each Obligor hereby grants to the
Agent, for the benefit of the Lenders, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Obligor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Copyrights;
(d) all Copyright Licenses;
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
-2-
(h) all Fixtures;
(i) all General Intangibles;
(j) all Instruments;
(k) all Inventory;
(l) all Patents;
(m) all Patent Licenses;
(n) all Trademarks;
(o) all Trademark Licenses;
(p) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks, and related
data processing software (owned by such Obligor or in which
it has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise
necessary or helpful in the collection thereof or
realization thereupon; and
(q) to the extent not otherwise included,
all Proceeds and products of any and all of the
foregoing.
The Obligors and the Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest created hereby in the
Collateral (i) constitutes continuing collateral security for all of the Secured
Obligations, whether now existing or hereafter arising and (ii) is not to be
construed as an assignment of any Copyrights, Copyright Licenses, Patents,
Patent Licenses, Trademarks or Trademark Licenses.
3. Provisions Relating to Accounts.
(a) Anything herein to the contrary notwithstanding, each of
the Obligors shall remain liable under each of the Accounts to observe
and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account. Neither the Agent nor any
Lender shall have any obligation or liability under any Account (or any
agreement giving rise thereto) by reason of or arising out of this
Security Agreement or the receipt by the Agent or any Lender of any
payment relating to such Account pursuant hereto, nor shall the Agent
or any Lender be obligated in any manner to perform any of the
obligations of an Obligor under or pursuant to any Account (or any
agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party under any
Account (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.
(b) Once during each calendar year (upon reasonable notice) or
at any time after the occurrence and during the continuation of an
Event of Default, the Agent shall have the right, but not the
obligation, during normal business hours, to make test verifications of
the Accounts in any manner and through any medium that it reasonably
considers advisable, and the Obligors shall furnish all such assistance
and information as the Agent may require in connection with such test
verifications. At any time and from time to time, upon the Agent's
request and at the expense of the Obligors, the Obligors shall cause
independent public accountants or others satisfactory to the Agent to
furnish to the Agent reports showing reconciliations, aging
-3-
and test verifications of, and trial balances for, the Accounts. The
Agent in its own name or in the name of others may communicate with
account debtors on the Accounts to verify with them to the Agent's
satisfaction the existence, amount and terms of any Accounts.
4. Representations and Warranties. Each Obligor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Secured Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated:
(a) Chief Executive Office; Books & Records. Each Obligor's
chief executive office and chief place of business is (and for the
prior four months have been) located at the locations set forth on
Schedule 4(a) hereto, and each Obligor keeps its books and records at
such locations.
(b) Location of Collateral. The location of all Collateral
owned by each Obligor is as shown on Schedule 4(b) hereto.
(c) Ownership. Each Obligor is the legal and beneficial owner
of its Collateral and has the right to pledge, sell, assign or transfer
the same. Each Obligor's legal name is as shown in this Security
Agreement and no Obligor has in the past four months changed its name,
been party to a merger, consolidation or other change in structure or
used any tradename except as set forth in Schedule 4(c) attached
hereto.
(d) Security Interest/Priority. This Security Agreement
creates a valid security interest in favor of the Agent, for the
benefit of the Lenders, in the Collateral of such Obligor and, when
properly perfected by filing, shall constitute a valid perfected
security interest in such Collateral, to the extent such security can
be perfected by filing under the UCC, free and clear of all Liens
except for Permitted Liens.
(e) Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
(f) Accounts. (i) Each Account of the Obligors and the papers
and documents relating thereto are genuine and in all material respects
what they purport to be, (ii) each Account arises out of (A) a bona
fide sale of goods sold and delivered by such Obligor (or is in the
process of being delivered) or (B) services theretofore actually
rendered by such Obligor to, the account debtor named therein, (iii) no
Account of an Obligor is evidenced by any Instrument or Chattel Paper
unless such Instrument or Chattel Paper has been theretofore endorsed
over and delivered to the Agent and (iv) no surety bond was required or
given in connection with any Account of an Obligor or the contracts or
purchase orders out of which they arose.
(g) Inventory. No Inventory is held by an Obligor pursuant to
consignment, sale or return, sale on approval or similar arrangement.
(h) Copyrights, Patents and Trademarks.
(i) Schedule 1(b) hereto includes all
Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses owned by the Obligors in
their own names as of the date hereof.
(ii) To the best of each Obligor's
knowledge, each Copyright, Patent and Trademark of such
Obligor is valid, subsisting, unexpired, enforceable and has
not been abandoned.
(iii) Except as set forth in Schedule 1(b)
hereto, none of such Copyrights, Patents and Trademarks is the
subject of any licensing or franchise agreement.
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(iv) No holding, decision or judgment has
been rendered by any Governmental Authority which would limit,
cancel or question the validity of any Copyright, Patent or
Trademark.
(v) No action or proceeding is pending
seeking to limit, cancel or question the validity of any
Copyright, Patent or Trademark, or which, if adversely
determined, would have a material adverse effect on the value
of any Copyright, Patent or Trademark.
(vi) All applications pertaining to the
Copyrights, Patents and Trademarks of each Obligor have been
duly and properly filed, and all registrations or letters
pertaining to such Copyrights, Patents and Trademarks have
been duly and properly filed and issued, and all of such
Copyrights, Patents and Trademarks are valid and enforceable.
(vii) No Obligor has made any assignment or
agreement in conflict with the security interest in the
Copyrights, Patents or Trademarks of each Obligor hereunder.
5. Covenants. Each Obligor covenants that, so long as any of the
Secured Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated, such Obligor shall:
(a) Other Liens. Defend the Collateral against the claims and
demands of all other parties claiming an interest therein, keep the
Collateral free from all Liens, except for Permitted Liens, and not
sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein, except as permitted under the
Credit Agreement.
(b) Preservation of Collateral. Keep the Collateral in good
order, condition and repair and not use the Collateral in violation of
the provisions of this Security Agreement or any other agreement
relating to the Collateral or any policy insuring the Collateral or any
applicable statute, law, bylaw, rule, regulation or ordinance.
(c) Instruments/Chattel Paper. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, immediately deliver such Instrument
or Chattel Paper to the Agent, duly indorsed in a manner satisfactory
to the Agent, to be held as Collateral pursuant to this Security
Agreement.
(d) Change in Location. Not, without providing 30 days prior
written notice to the Agent and without filing such amendments to any
previously filed financing statements as the Agent may require, (a)
change the location of its chief executive office and chief place of
business (as well as its books and records) from the locations set
forth on Schedule 4(a) hereto, (b) change the location of its
Collateral from the locations set forth for such Obligor on Schedule
4(b) hereto, or (c) change its name, be party to a merger,
consolidation or other change in structure or use any tradename other
than as set forth on Schedule 4(c) attached hereto.
(e) Inspection. Upon reasonable notice, and during reasonable
hours, at all times allow the Agent or its representatives to visit and
inspect the Collateral as set forth in Section 7.10 of the Credit
Agreement.
(f) Perfection of Security Interest. Execute and deliver to
the Agent such agreements, assignments or instruments (including
affidavits, notices, reaffirmations and amendments and restatements of
existing documents, as the Agent may reasonably request) and do all
such other things as the Agent may reasonably deem necessary or
appropriate (i) to assure to the Agent its security interests
hereunder, including (A) such financing statements (including renewal
statements) or amendments thereof or supplements thereto or other
instruments as the Agent may from time to time reasonably request in
order to perfect and maintain the security interests granted hereunder
in accordance with the UCC, (B) with regard to Copyrights, a Notice
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of Grant of Security Interest in Copyrights in the form of Schedule
5(f)(i), (C) with regard to Patents, a Notice of Grant of Security
Interest in Patents for filing with the United States Patent and
Trademark Office in the form of Schedule 5(f)(ii) attached hereto and
(D) with regard to Trademarks, a Notice of Grant of Security Interest
in Trademarks for filing with the United States Patent and Trademark
Office in the form of Schedule 5(f)(iii) attached hereto, (ii) to
consummate the transactions contemplated hereby and (iii) to otherwise
protect and assure the Agent of its rights and interests hereunder. To
that end, each Obligor agrees that the Agent may file one or more
financing statements disclosing the Agent's security interest in any
or all of the Collateral of such Obligor without, to the extent
permitted by law, such Obligor's signature thereon, and further each
Obligor also hereby irrevocably makes, constitutes and appoints the
Agent, its nominee or any other person whom the Agent may designate,
as such Obligor's attorney in fact with full power and for the limited
purpose to sign in the name of such Obligor any such financing
statements, or amendments and supplements to financing statements,
renewal financing statements, notices or any similar documents which
in the Agent's reasonable discretion would be necessary, appropriate
or convenient in order to perfect and maintain perfection of the
security interests granted hereunder, such power, being coupled with
an interest, being and remaining irrevocable so long as the Credit
Agreement is in effect or any amounts payable thereunder or under any
other Credit Document, any Letter of Credit or any Hedging Agreement
shall remain outstanding, and until all of the Commitments thereunder
shall have terminated. Each Obligor hereby agrees that a carbon,
photographic or other reproduction of this Security Agreement or any
such financing statement is sufficient for filing as a financing
statement by the Agent without notice thereof to such Obligor wherever
the Agent may in its sole discretion desire to file the same. In the
event for any reason the law of any jurisdiction other than New York
becomes or is applicable to the Collateral of any Obligor or any part
thereof, or to any of the Secured Obligations, such Obligor agrees to
execute and deliver all such instruments and to do all such other
things as the Agent in its sole discretion reasonably deems necessary
or appropriate to preserve, protect and enforce the security interests
of the Agent under the law of such other jurisdiction (and, if an
Obligor shall fail to do so promptly upon the request of the Agent,
then the Agent may execute any and all such requested documents on
behalf of such Obligor pursuant to the power of attorney granted
hereinabove). If any Collateral is in the possession or control of an
Obligor's agents and the Agent so requests, such Obligor agrees to
notify such agents in writing of the Agent's security interest therein
and, upon the Agent's request, instruct them to hold all such
Collateral for the Lenders' account and subject to the Agent's
instructions. Each Obligor agrees to mark its books and records to
reflect the security interest of the Agent in the Collateral.
(g) Treatment of Accounts. Not grant or extend the time for
payment of any Account, or compromise or settle any Account for less
than the full amount thereof, or release any person or property, in
whole or in part, from payment thereof, or allow any credit or discount
thereon, other than as normal and customary in the ordinary course of
an Obligor's business.
(h) Covenants Relating to Copyrights.
(i) Employ the Copyright for each Work with
such notice of copyright as may be required by law to secure
copyright protection.
(ii) Not do any act or knowingly omit to do
any act whereby any material Copyright may become invalidated
and (A) not do any act, or knowingly omit to do any act,
whereby any material Copyright may become injected into the
public domain; (B) notify the Agent immediately if it knows,
or has reason to know, that any material Copyright may become
injected into the public domain or of any adverse
determination or development (including, without limitation,
the institution of, or any such determination or development
in, any court or tribunal in the United States or any other
country) regarding an Obligor's ownership of any such
Copyright or its validity; (C) take all necessary steps as it
shall deem appropriate under the circumstances, to maintain
and pursue each application (and to obtain the relevant
registration) and to maintain each registration of each
material Copyright owned by an Obligor including, without
limitation, filing of applications for renewal where
necessary; and (D) promptly notify the Agent of any material
infringement of any material Copyright of an Obligor of which
it becomes aware and take such actions as it shall
-6-
reasonably deem appropriate under the circumstances to
protect such Copyright, including, where appropriate, the
bringing of suit for infringement, seeking injunctive relief
and seeking to recover any and all damages for such
infringement.
(iii) Not make any assignment or agreement
in conflict with the security interest in the Copyrights of
each Obligor hereunder.
(i) Covenants Relating to Patents and Trademarks.
(i) (A) Continue to use each Trademark on
each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures
and price lists in order to maintain such Trademark in full
force free from any claim of abandonment for non-use, (B)
maintain as in the past the quality of products and services
offered under such Trademark, (C) employ such Trademark with
the appropriate notice of registration, (D) not adopt or use
any mark which is confusingly similar or a colorable imitation
of such Trademark unless the Agent, for the ratable benefit of
the Lenders, shall obtain a perfected security interest in
such mark pursuant to this Security Agreement, and (E) not
(and not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any Trademark may
become invalidated.
(ii) Not do any act, or omit to do any act,
whereby any Patent may become abandoned or dedicated.
(iii) Notify the Agent and the Lenders
immediately if it knows, or has reason to know, that any
application or registration relating to any Patent or
Trademark may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation,
the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark
Office or any court or tribunal in any country) regarding an
Obligor's ownership of any Patent or Trademark or its right to
register the same or to keep and maintain the same.
(iv) Whenever an Obligor, either by itself
or through an agent, employee, licensee or designee, shall
file an application for the registration of any Patent or
Trademark with the United States Patent and Trademark Office
or any similar office or agency in any other country or any
political subdivision thereof, an Obligor shall report such
filing to the Agent and the Lenders within five Business Days
after the last day of the fiscal quarter in which such filing
occurs. Upon request of the Agent, an Obligor shall execute
and deliver any and all agreements, instruments, documents and
papers as the Agent may request to evidence the Agent's and
the Lenders' security interest in any Patent or Trademark and
the goodwill and general intangibles of an Obligor relating
thereto or represented thereby.
(v) Take all reasonable and necessary steps,
including, without limitation, in any proceeding before the
United States Patent and Trademark Office, or any similar
office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability.
(vi) Promptly notify the Agent and the
Lenders after it learns that any Patent or Trademark included
in the Collateral is infringed, misappropriated or diluted by
a third party and promptly sue for infringement,
misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such
infringement, misappropriation or dilution, or take such other
actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
-7-
(vii) Not make any assignment or agreement
in conflict with the security interest in the Patents or
Trademarks of each Obligor hereunder.
(j) New Patents, Copyrights and Trademarks. Promptly provide
the Agent with (i) a listing of all applications, if any, for new
Copyrights, Patents or Trademarks (together with a listing of the
issuance of registrations or letters on present applications), which
new applications and issued registrations or letters shall be subject
to the terms and conditions hereunder, and (ii) (A) with respect to
Copyrights, a duly executed Notice of Security Interest in Copyrights,
(B) with respect to Patents, a duly executed Notice of Security
Interest in Patents, (C) with respect to Trademarks, a duly executed
Notice of Security Interest in Trademarks or (D) such other duly
executed documents as the Agent may request in a form acceptable to
counsel for the Agent and suitable for recording to evidence the
security interest in the Copyright, Patent or Trademark which is the
subject of such new application.
(k) Insurance. Insure, repair and replace the Collateral of
such Obligor as set forth in the Credit Agreement. All insurance
proceeds shall be subject to the security interest of the Agent
hereunder.
6. Advances by Lenders. On failure of any Obligor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Obligors on a joint and several basis
promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Agent or the Lenders on behalf of any Obligor,
and no such advance or expenditure therefor, shall relieve the Obligors of any
default under the terms of this Security Agreement, the other Credit Documents
or any Hedging Agreement. The Lenders may make any payment hereby authorized in
accordance with any bill, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by an Obligor in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.
7. Events of Default.
The occurrence of an event which under the Credit Agreement would
constitute an Event of Default shall be an Event of Default hereunder (an "Event
of Default").
8. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during continuation thereof, the Lenders shall have, in
addition to the rights and remedies provided herein, in the Credit
Documents, in the Hedging Agreements or by law (including, but not
limited to, the rights and remedies set forth in the Uniform Commercial
Code of the jurisdiction applicable to the affected Collateral), the
rights and remedies of a secured party under the UCC (regardless of
whether the UCC is the law of the jurisdiction where the rights and
remedies are asserted and regardless of whether the UCC applies to the
affected Collateral), and further, the Agent may, with or without
judicial process or the aid and assistance of others, (i) enter on any
premises on which any of the Collateral may be located and, without
resistance or interference by the Obligors, take possession of the
Collateral, (ii) dispose of any Collateral on any such premises, (iii)
require the Obligors to assemble and make available to the Agent at the
expense of the Obligors any Collateral at any place and time designated
by the Agent which is reasonably convenient to both parties, (iv)
remove any
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Collateral from any such premises for the purpose of effecting sale or
other disposition thereof, and/or (v) without demand and without
advertisement, notice, hearing or process of law, all of which each of
the Obligors hereby waives to the fullest extent permitted by law, at
any place and time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, by one or more contracts,
in one or more parcels, for cash, upon credit or otherwise, at such
prices and upon such terms as the Agent deems advisable, in its sole
discretion (subject to any and all mandatory legal requirements). In
addition to all other sums due the Agent and the Lenders with respect
to the Secured Obligations, the Obligors shall pay the Agent and each
of the Lenders all reasonable documented costs and expenses incurred
by the Agent or any such Lender, including, but not limited to,
reasonable attorneys' fees and court costs, in obtaining or
liquidating the Collateral, in enforcing payment of the Secured
Obligations, or in the prosecution or defense of any action or
proceeding by or against the Agent or the Lenders or the Obligors
concerning any matter arising out of or connected with this Security
Agreement, any Collateral or the Secured Obligations, including,
without limitation, any of the foregoing arising in, arising under or
related to a case under the Bankruptcy Code. To the extent the rights
of notice cannot be legally waived hereunder, each Obligor agrees that
any requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Borrower in
accordance with the notice provisions of Section 11.1 of the Credit
Agreement at least 10 days before the time of sale or other event
giving rise to the requirement of such notice. The Agent and the
Lenders shall not be obligated to make any sale or other disposition
of the Collateral regardless of notice having been given. To the
extent permitted by law, any Lender may be a purchaser at any such
sale. To the extent permitted by applicable law, each of the Obligors
hereby waives all of its rights of redemption with respect to any such
sale. Subject to the provisions of applicable law, the Agent and the
Lenders may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place of
such sale, and such sale may, without further notice, to the extent
permitted by law, be made at the time and place to which the sale was
postponed, or the Agent and the Lenders may further postpone such sale
by announcement made at such time and place.
(b) Remedies relating to Accounts. Upon the occurrence of an
Event of Default and during the continuation thereof, whether or not
the Agent has exercised any or all of its rights and remedies
hereunder, each Obligor will promptly upon request of the Agent
instruct all account debtors to remit all payments in respect of
Accounts to a mailing location selected by the Agent. In addition, the
Agent or its designee may notify any Obligor's customers and account
debtors that the Accounts of such Obligor have been assigned to the
Agent or of the Agent's security interest therein, and may (either in
its own name or in the name of an Obligor or both) demand, collect
(including without limitation by way of a lockbox arrangement),
receive, take receipt for, sell, sue for, compound, settle, compromise
and give acquittance for any and all amounts due or to become due on
any Account, and, in the Agent's discretion, file any claim or take any
other action or proceeding to protect and realize upon the security
interest of the Lenders in the Accounts. Each Obligor acknowledges and
agrees that the Proceeds of its Accounts remitted to or on behalf of
the Agent in accordance with the provisions hereof shall be solely for
the Agent's own convenience and that such Obligor shall not have any
right, title or interest in such Accounts or in any such other amounts
except as expressly provided herein. The Agent and the Lenders shall
have no liability or responsibility to any Obligor for acceptance of a
check, draft or other order for payment of money bearing the legend
"payment in full" or words of similar import or any other restrictive
legend or endorsement or be responsible for determining the correctness
of any remittance. Each Obligor hereby agrees to indemnify the Agent
and the Lenders from and against all liabilities, damages, losses,
actions, claims, judgments, costs, expenses, charges and reasonable
attorneys' fees suffered or incurred by the Agent or the Lenders (each,
an "Indemnified Party") because of the maintenance of the foregoing
arrangements except as relating to or arising out of the gross
negligence or willful misconduct of an Indemnified Party or its
officers, employees or agents. In the case of any investigation,
litigation or other proceeding, the foregoing indemnity shall be
effective whether or not such investigation, litigation or proceeding
is brought by an Obligor, its directors, shareholders or creditors or
an Indemnified Party or any other Person or any other Indemnified Party
is otherwise a party thereto.
(c) Access. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuance
thereof, the Agent shall have the right to enter and remain upon the
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various premises of the Obligors without cost or charge to the Agent,
and use the same, together with materials, supplies, books and records
of the Obligors for the purpose of collecting and liquidating the
Collateral, or for preparing for sale and conducting the sale of the
Collateral, whether by foreclosure, auction or otherwise. In addition,
the Agent may remove Collateral, or any part thereof, from such
premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Agent or
the Lenders to exercise any right, remedy or option under this Security
Agreement, any other Credit Document, any Hedging Agreement or as
provided by law, or any delay by the Agent or the Lenders in exercising
the same, shall not operate as a waiver of any such right, remedy or
option. No waiver hereunder shall be effective unless it is in writing,
signed by the party against whom such waiver is sought to be enforced
and then only to the extent specifically stated, which in the case of
the Agent or the Lenders shall only be granted as provided herein. To
the extent permitted by law, neither the Agent, the Lenders, nor any
party acting as attorney for the Agent or the Lenders, shall be liable
hereunder for any acts or omissions or for any error of judgment or
mistake of fact or law other than their gross negligence or willful
misconduct hereunder. The rights and remedies of the Agents and the
Lenders under this Security Agreement shall be cumulative and not
exclusive of any other right or remedy which the Agent or the Lenders
may have.
(e) Retention of Collateral. The Agent may, after providing
the notices required by Section 9-505(2) of the UCC or otherwise
complying with the requirements of applicable law of the relevant
jurisdiction, to the extent the Agent is in possession of any of the
Collateral, retain the Collateral in satisfaction of the Secured
Obligations. Unless and until the Agent shall have provided such
notices, however, the Agent shall not be deemed to have retained any
Collateral in satisfaction of any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Agent or the Lenders are legally entitled, the Obligors shall be
jointly and severally liable for the deficiency, together with interest
thereon at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans, together with
the costs of collection and the reasonable fees of any attorneys
employed by the Agent to collect such deficiency. Any surplus remaining
after the full payment and satisfaction of the Secured Obligations
shall be returned to the Obligors or to whomsoever a court of competent
jurisdiction shall determine to be entitled thereto.
9. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Obligor hereby designates and appoints the
Agent, on behalf of the Lenders, and each of its designees or agents,
as attorney-in-fact of such Obligor, irrevocably and with power of
substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuance of an Event of
Default:
(i) to demand, collect, settle, compromise, adjust,
give discharges and releases, all as the Agent may reasonably
determine;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any Collateral and
enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Agent may deem reasonably appropriate;
(iv) receive, open and dispose of mail addressed to
an Obligor and endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other
instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such
Obligor on behalf of and in the name of such Obligor, or
securing, or relating to such Collateral;
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(v) sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in
respect of, any Collateral or the goods or services which have
given rise thereto, as fully and completely as though the Bank
were the absolute owner thereof for all purposes;
(vi) adjust and settle claims under any insurance
policy relating thereto;
(vii) execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, security agreements, affidavits, notices
and other agreements, instruments and documents that the Agent
may determine necessary in order to perfect and maintain the
security interests and liens granted in this Security
Agreement and in order to fully consummate all of the
transactions contemplated therein;
(viii) institute any foreclosure proceedings that the
Agent may deem appropriate; and
(ix) do and perform all such other acts and things as
the Agent may reasonably deem to be necessary, proper or
convenient in connection with the Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Secured Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect
or any Letter of Credit shall remain outstanding and (ii) until all of
the Commitments shall have been terminated. The Agent shall be under no
duty to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Security Agreement, and shall not be liable for any failure to do
so or any delay in doing so. The Agent shall not be liable for any act
or omission or for any error of judgment or any mistake of fact or law
in its individual capacity or its capacity as attorney-in-fact except
acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Agent solely to
protect, preserve and realize upon its security interest in the
Collateral.
(b) Performance by the Agent of Obligations. If any Obligor
fails to perform any agreement or obligation contained herein, the
Agent itself may perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Obligors on a joint and several basis
pursuant to Section 11 hereof.
(c) Assignment by the Agent. The Agent may from time to time
assign the Secured Obligations and any portion thereof and/or the
Collateral and any portion thereof, and the assignee shall be entitled
to all of the rights and remedies of the Agent under this Security
Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while
being held by the Agent hereunder, the Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood
and agreed that the Obligors shall be responsible for preservation of
all rights in the Collateral, and the Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Obligors. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and
prudent agent in the industry, it being understood that the Agent shall
not have responsibility for taking any necessary steps to preserve
rights against any parties with respect to any of the Collateral.
10. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Agent or
any of the Lenders in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth
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in Section 3.15(b) of the Credit Agreement, and each Obligor irrevocably waives
the right to direct the application of such payments and proceeds and
acknowledges and agrees that the Agent shall have the continuing and exclusive
right to apply and reapply any and all such payments and proceeds in the Agent's
sole discretion, notwithstanding any entry to the contrary upon any of its books
and records.
11. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Security
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Security Agreement or relating to the
Collateral, or to protect the Collateral or exercise any rights or remedies
under this Security Agreement or with respect to the Collateral, then the
Obligors agree to promptly pay upon demand any and all such reasonable
documented costs and expenses of the Agent or the Lenders, all of which costs
and expenses shall constitute Secured Obligations hereunder.
12. Continuing Agreement.
(a) This Security Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Secured Obligations remain outstanding or any Credit Document or
Hedging Agreement is in effect or any Letter of Credit shall remain
outstanding, and until all of the Commitments thereunder shall have
terminated (other than any obligations with respect to the indemnities
and the representations and warranties set forth in the Credit
Documents). Upon such payment and termination, this Security Agreement
shall be automatically terminated and the Agent and the Lenders shall,
upon the request and at the expense of the Obligors, forthwith release
all of its liens and security interests hereunder and shall execute and
deliver all UCC termination statements and/or other documents
reasonably requested by the Obligors evidencing such termination.
Notwithstanding the foregoing all releases and indemnities provided
hereunder shall survive termination of this Security Agreement.
(b) This Security Agreement shall continue to be effective or
be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Agent or any
Lender as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Secured Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Secured Obligations.
13. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
14. Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; provided, however,
that none of the Obligors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Obligor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Security
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
15. Notices. All notices required or permitted to be given under this
Security Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
-12-
16. Counterparts. This Security Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
17. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.
18. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Security Agreement may
be brought in the courts of the State of North Carolina, or of the
United States for the Western District of North Carolina, and, by
execution and delivery of this Security Agreement, each Obligor hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Obligor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1 of
the Credit Agreement, such service to become effective 30 days after
such mailing. Nothing herein shall affect the right of the Agent to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Obligor in any other
jurisdiction.
(b) Each Obligor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Security Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
19. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. Severability. If any provision of any of the Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
21. Entirety. This Security Agreement, the other Credit Documents and
the Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.
22. Survival. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Credit Documents and the Hedging Agreements, the delivery of the Notes
and the making of the Loans and the issuance of the Letters of Credit under the
Credit Agreement.
23. Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by an Obligor), or by a
guarantee, endorsement or property of any other Person, then the Agent and the
Lenders shall have the right to proceed against such other property, guarantee
or endorsement upon the occurrence of any Event of Default, and the Agent and
the Lenders have the right, in their sole discretion, to determine which rights,
security, liens, security
-13-
interests or remedies the Agent and the Lenders shall at any time pursue,
relinquish, subordinate, modify or take with respect thereto, without in any way
modifying or affecting any of them or any of the Agent's and the Lenders' rights
or the Secured Obligations under this Security Agreement, under any other of the
Credit Documents or under any Hedging Agreement.
24. Joint and Several Obligations of Obligors.
(a) Each of the Obligors is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Obligors and in
consideration of the undertakings of each of the Obligors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Obligors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Obligors with respect to the payment and performance of all of the
Secured Obligations arising under this Security Agreement, the other
Credit Documents and the Hedging Agreements, it being the intention of
the parties hereto that all the Obligations shall be the joint and
several obligations of each of the Obligors without preferences or
distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of
any applicable state or federal law relating to fraudulent conveyances
or transfers) then the obligations of each Guarantor hereunder shall be
limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the
Bankruptcy Code).
25. Rights of Required Lenders. All rights of the Agent hereunder, if
not exercised by the Agent, may be exercised by the Required Lenders.
[remainder of page intentionally left blank]
-14-
Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: INSIGHT HEALTH SERVICES CORP.,
a Delaware corporation
By:
Name:
Title:
GUARANTORS: INSIGHT HEALTH CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
RADIOLOGY SERVICES CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
OPEN MRI, INC.
By:
Name: Thomas V. Croal
Title Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
RADIOSURGERY CENTERS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
[Signatures Continued]
MTS ENTERPRISES, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
QUEST FINANCIAL SERVICES, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
DIAGNOSTEMPS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
DIAGNOSTIC SOLUTIONS CORP.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF NORTH TEXAS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
[Signatures Continued]
MAXUM HEALTH SERVICES
OF ARLINGTON, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
MAXUM HEALTH SERVICES
OF DALLAS, INC.
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
NORTH DALLAS DIAGNOSTIC CENTER, INC..
By:
Name: Thomas V. Croal
Title: Executive Vice President,
Chief Financial Officer and Secretary
Accepted and agreed to in Charlotte, North Carolina as of the date
first above written.
NATIONSBANK, N.A., as Agent
By:
Name:
Title:
SCHEDULE 1(b)
INTELLECTUAL PROPERTY
SCHEDULE 4(a)
CHIEF EXECUTIVE OFFICE
SCHEDULE 4(b)
LOCATIONS OF COLLATERAL
SCHEDULE 4(c)
MERGERS, CONSOLIDATIONS, CHANGE IN STRUCTURE OR USE OF TRADENAMES
SCHEDULE 5(f)(i)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
October 14, 1997 (as the same may be amended, modified, extended or restated
from time to time, the "Security Agreement") by and among the Obligors party
thereto (each an "Obligor" and collectively, the "Obligors") and NationsBank,
N.A., as Agent (the "Agent") for the lenders referenced therein (the "Lenders"),
the undersigned Obligor has granted a continuing security interest in and
continuing lien upon, the copyrights and copyright applications shown below to
the Agent for the ratable benefit of the Lenders:
COPYRIGHTS
----------
Date of
Copyright No. Description of Copyright Copyright
------------ ------------------------ ---------
Copyright Applications
----------------------
Copyright Description of Copyright Date of Copyright
Applications No. Applied For Applications
- ---------------- ------------------------ -----------------
The Obligors and the Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing copyrights and
copyright applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any copyright or copyright application.
Very truly yours,
__________________________________
[Obligor]
By: _______________________________
Name: _____________________________
Title: ____________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By: ___________________________
Name: _________________________
Title: ________________________
SCHEDULE 5(f)(ii)
-----------------
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
October 14, 1997 (the "Security Agreement") by and among the Obligors party
thereto (each an "Obligor" and collectively, the "Obligors") and NationsBank,
N.A., as Agent (the "Agent") for the lenders referenced therein (the "Lenders"),
the undersigned Obligor has granted a continuing security interest in and
continuing lien upon, the patents and patent applications shown below to the
Agent for the ratable benefit of the Lenders:
PATENTS
-------
Description of Patent Date of
Patent No. Item Patent
---------- --------------------- -------
Patent Applications
-------------------
Patent Description of Patent Date of Patent
Applications No. Applied For Applications
- --------------- --------------------- --------------
The Obligors and the Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing patents and
patent applications (i) may only be terminated in accordance with the terms of
the Security Agreement and (ii) is not to be construed as an assignment of any
patent or patent application.
Very truly yours,
________________________________
[Obligor]
By: ____________________________
Name: __________________________
Title: _________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By:____________________________
Name: _________________________
Title: ________________________
SCHEDULE 5(f)(iii)
------------------
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
October 14, 1997 (the "Security Agreement") by and among the Obligors party
thereto (each an "Obligor" and collectively, the "Obligors") and NationsBank,
N.A., as Agent (the "Agent") for the lenders referenced therein (the "Lenders"),
the undersigned Obligor has granted a continuing security interest in and
continuing lien upon, the trademarks and trademark applications shown below to
the Agent for the ratable benefit of the Lenders:
TRADEMARKS
----------
Description of Trademark Date of
Trademark No. Item Trademark
------------- ------------------------ ---------
Trademark Applications
----------------------
Trademark Description of Trademark Date of Trademark
Applications No. Applied For Applications
- ---------------- ------------------------ -----------------
The Obligors and the Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing trademarks and
trademark applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any trademark or trademark application.
Very truly yours,
__________________________________
[Obligor]
By: ______________________________
Name: ____________________________
Title: ___________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By: ___________________________
Name: _________________________
Title: ________________________
Exhibit 1.1C
FORM OF SUBORDINATION AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of _________ __, 1997, is
entered into by NATIONSBANK, N.A., in its capacity as agent (the "Agent") for
the lending institution (the "Lenders") from time to time party to that certain
Credit Agreement, dated as of October 13, 1997 (as the same may be amended,
modified, supplemented, extended, restated, refinanced, replaced or refunded
from time to time, the "Credit Agreement") by and among InSight Health Services
Corp., a Delaware corporation (the "Borrower"), certain subsidiaries of the
Borrower as guarantors (the "Guarantors"), for the benefit of GENERAL ELECTRIC
COMPANY (together with its affiliates, "GE").
RECITALS:
GE has entered into, and may from time to time hereafter enter into,
certain equipment lease or other financing transactions with the Borrower and/or
the Guarantors under the GE Agreements hereinafter defined pursuant to which (i)
GE, as lessor, agrees to lease to the Borrower and/or such Guarantors, as
lessees, the leased equipment, under either a capital lease or an operating
lease, or GE and the Borrower and/or such Guarantors are party to any other
financing arrangement in respect of equipment, and (ii) the Borrower and/or such
Guarantors have granted GE a first priority security interest in such equipment.
The Lenders have agreed to make certain extensions of credit to the
Borrower pursuant to the Credit Agreement provided that the Agent, on behalf of
the Lenders, is granted liens and security interest in certain personal property
of the Borrower and the Guarantors, including without limitation, the GE
Collateral.
GE has agreed to enter into this Agreement in order to consent to the
security interest in favor of the Agent in the GE Collateral arising pursuant to
the GE Collateral Documents defined in the Credit Agreement, provided that such
security interest is subordinated by the Agent on the terms set forth in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Agent hereby agrees as follows
for the benefit of GE:
SECTION 1
Definitions
1.1 For the purposes hereof:
(l) "GE Collateral" shall mean any present or future
collateral subject to a GE Agreement (including without limitation
equipment subject of any capital or operating lease between GE, on the
one hand, and either the Borrower ort any of the Guarantors , on the
other hand). subject to a financing arrangement between the Borrower or
any of the Guarantors, on the one hand, and GE, on the other hand, and
evidenced by a GE Equipment Agreement.
(m) "GE Agreements" means, collectively, any present or future
operating leases, capital leases, purchase money financing arrangements
and other agreements pursuant to which GE sells, leases or otherwise
transfers equipment to the Borrower or any of the Guarantors.
(n) "GE Obligations" means all of the principal, interest,
premium, penalties, fees, expenses, indemnities and other liabilities
and obligations payable by Borrower and/or any Guarantor under all GE
Agreements.
1.2 The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified. All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.
SECTION 2
Consent to Second Lien
2.1 GE hereby consents to the granting by the Borrower and the
Guarantors of a second priority security interest in the GE Collateral and
agrees that the granting thereof shall not constitute a default under the GE
Agreements or any other documents executed in connection with the transactions
evidenced by the GE Agreements.
SECTION 3
Subordination of Liens
3.1 Notwithstanding anything to the contrary contained in the Credit
Documents, the Agent hereby (a) acknowledges that the GE Collateral is (and/or
will be from time to time) subject to Liens on and security interests in favor
of each of the Agent (arising under the Credit Documents) and GE (arising under
the GE Agreements), (b) hereby expressly subordinates its interest in and to any
present or future GE Collateral to the prior interests of GE arising under the
GE Agreements, and (c) agrees that any Lien or security interest of GE is and
shall remain prior to any Lien or security interest in or to any present or
future GE Collateral and that the Agent's Lien and security interest in and to
any present or future GE Collateral shall at all times remain subordinated to
any such Lien or security interest of GE in the GE Collateral.
3.2 Until such time as all GE Obligations shall have been paid
irrevocably in full and the GE Agreements shall have been terminated, the Agent
agrees that it will not commence or continue any foreclosure or liquidation
proceedings or remedies in respect of any of the GE Collateral. In the event
that any of the GE Collateral, or any collections or other proceeds thereof,
shall be received by the Agent at any time for any reason, such GE Collateral
and/or proceeds shall be held in trust for the benefit of, and promptly remitted
to GE.
3.3 Notwithstanding anything to the contrary contained in this
Agreement, the Agent may file UCC financing statements and continuation
statements to preserve its Liens and security interests in the GE Collateral and
may file such claims and proofs of claim and take such other action as may be
necessary to enforce its claim in any bankruptcy, insolvency, reorganization,
liquidation or similar proceeding. The Agent agrees not to initiate, prosecute,
encourage, or cooperate with any other Person to initiate or prosecute any
claim, action or other proceeding (a) challenging the enforceability of GE's
claim, (b) challenging the perfection or enforceability of any Liens or security
interests in GE Collateral securing any GE Obligations or (c) asserting any
claims which the Borrower or any Guarantor may hold with respect to GE or the GE
Obligations.
3.4 No right of GE to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act by
GE, or by any noncompliance by the Borrower or any Guarantor with the terms and
provisions and covenants herein, regardless of any knowledge thereof such holder
may have or otherwise be charged with.
SECTION 4
Modification of GE Obligations; Reliance
4.1 The Agent consents that, without the necessity of any reservation of
rights against the Agent, and without notice to or further assent by the Agent,
the GE Obligations and any document or instrument evidencing or
governing the terms of any GE Obligations or any collateral security documents
or guaranties or documents relating to the GE Obligations may be amended,
modified, supplemented or terminated, in whole or in part, as GE may deem
advisable from time to time, and any GE Collateral at any time securing payment
of any of the GE Obligations may be sold, exchanged, waived, surrendered or
released, in each case all without notice to or further assent by the Agent,
which will remain bound under this Agreement, and all without impairing,
abridging, releasing or affecting the subordination provided for herein,
notwithstanding any such renewal, extension, modification, acceleration,
compromise, amendment, supplement, termination, sale, exchange, waiver,
surrender or release. The Agent waives any and all notice of the creation,
modification, renewal, extension or accrual of any of the GE Obligations.
SECTION 5
Miscellaneous
5.1 No failure to exercise, and no delay in exercising on the part of
GE, from time to time, any rights, power and privileges under the GE
Obligations, or any right, power or privilege under this Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided in this Agreement and in any agreement relating to any of the
GE Obligations and all other agreements, instruments and documents referred to
in any of the foregoing are cumulative and shall not be exclusive of any rights
or remedies provided by law.
5.2 Except as otherwise expressly provided herein, all notices and
other communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the business day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third business day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address set forth below, or at such other address as
such party may specify by written notice to the other parties hereto:
if to the Borrower or the Guarantors:
c/o Insight Health Services Corp.
4400 MacArthur Boulevard
Suite 800
Newport Beach, CA 92600
Attn: Thomas V. Croal, CFO
Telephone: (714) 476-0733
Telecopy: (714) 851-5981
with a copy to:
TC Group, L.L.C.
1001 Pennsylvania Avenue
Washington, DC 20004-2505
Attn: David Dupree
Telephone: (202) 626-1250
Telecopy: (202) 347-1818
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 388-1108
Telecopy: (704) 388-9436
with a copy to:
NationsBank, N. A.
700 Louisiana Street
Houston, Texas 77002
Attn: Scott Singhoff
Telephone: (713) 247-6961
Telecopy: (713) 247-6360
if to GE:
General Electric Company
20825 Swenson Drive, Suite 100
Waukesha, Wisconsin
Attn: Richard S. Berger
Telephone: (414) 798-4500
Telecopy: (414) 798-4573
5.3 This Agreement and the rights and obligations of the parties under
this Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York applicable to contracts made and to be
performed in such state, and shall be binding upon and inure to the benefit of
GE, the Agent and their respective successors, transferees and assigns.
5.4 This Agreement may be executed by the parties hereto in any number
of separate counterparts all of which taken together shall constitute one and
the same instrument.
5.5 The subordination provisions contained herein are for the benefit
of GE and its successors and assigns as holder from time to time of GE
Obligations and may not be rescinded or canceled or modified in any way, nor,
unless otherwise expressly provided for herein, may any provision of this
Agreement be waived or changed without the express prior written consent thereto
of GE.
5.6 This Agreement shall (i) become effective as of the date hereof at
such time as a counterpart hereof shall have been executed by each of the Agent,
GE, the Borrower, the Guarantors and (ii) shall remain in effect until such time
as all GE Obligations shall have been paid irrevocably in full and the
agreements evidencing any GE Obligations shall have been terminated.
IN WITNESS WHEREOF, the Agent has caused this Agreement to be executed
by its duly authorized officer as of the day and year first above written.
NATIONSBANK, N.A.,
in its capacity as Agent for the Lenders
under the Credit Agreement
By: __________________________________
Title: _______________________________
Acknowledged and accepted:
GENERAL ELECTRIC COMPANY,
By: ___________________________
Title:_________________________
[Signatures Continued]
Each of the undersigned agrees to comply with the provisions of this Agreement
applicable to it.
INSIGHT HEALTH SERVICES CORP.
By: ___________________________
Title: ________________________
Date: _________________________
INSIGHT HEALTH CORP.
By: ___________________________
Title: ________________________
Date: _________________________
RADIOLOGY SERVICES CORP.
By: ___________________________
Title: ________________________
Date: _________________________
OPEN MRI, INC.
By: ___________________________
Title: ________________________
Date: _________________________
MAXUM HEALTH CORP.
By: ___________________________
Title: ________________________
Date: _________________________
RADIOSURGERY CENTERS, INC.
By: ___________________________
Title: ________________________
Date: _________________________
MTS ENTERPRISES, INC.
By: ___________________________
Title: ________________________
Date: _________________________
QUEST FINANCIAL SERVICES, INC.
By: ___________________________
Title: ________________________
Date: _________________________
MAXUM HEALTH SERVICES CORP.
By: ___________________________
Title: ________________________
Date: _________________________
DIAGNOSTEMPS, INC.
By: ___________________________
Title: ________________________
Date: _________________________
DIAGNOSTIC SOLUTIONS CORP.
By: ___________________________
Title: ________________________
Date: _________________________
MAXUM HEALTH SERVICES
OF NORTH TEXAS, INC.
By: ___________________________
Title: ________________________
Date: _________________________
MAXUM HEALTH SERVICES
OF ARLINGTON, INC.
By: ___________________________
Title: ________________________
Date: _________________________
MAXUM HEALTH SERVICES
OF DALLAS, INC.
By: ___________________________
Title: ________________________
Date: _________________________
NORTH DALLAS DIAGNOSTIC CENTER, INC..
By: ___________________________
Title: ________________________
Date: _________________________
Exhibit 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Lenders
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Insight Health Services Corp. (the "Borrower"), refers
to the Credit Agreement dated as of October 14, 1997 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), among the
Borrower, the Guarantors, the Lenders and NationsBank, N. A., as Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. [The Borrower hereby
gives notice pursuant to Section 2.1 of the Credit Agreement that it requests a
Revolving Loan advance under the Credit Agreement, and in connection therewith
sets forth below the terms on which such Loan advance is requested to be made]
[The Borrower hereby gives notice pursuant to Section 2.3 of the Credit
Agreement that it requests an Acquisition Loan advance under the Credit
Agreement, and in connection therewith sets forth below the terms on which such
Loan advance is requested to be made]:
(A) Date of Borrowing (which is a Business Day) _______________________
(B) Principal Amount of Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.3, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c) and (d) of such Section, are true and correct.
INSIGHT HEALTH SERVICES CORP.
By: ____________________________________
Name: __________________________________
Title: _________________________________
Exhibit 2.1(e)
FORM OF REVOLVING NOTE
$_________________ June 12, 1998
FOR VALUE RECEIVED, INSIGHT HEALTH SERVICES CORP., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 101 North Tryon Street,
Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of October 14, 1997 among the Borrower,
the Guarantors, the Lenders and the Agent (as it may be as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date, in
Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Revolving Loans made by the
Lender to the Borrower pursuant to the Credit Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates selected in accordance with Section
2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or
in part only by registration of such transfer on the Register maintained by or
on behalf of the Borrower as provided in Section 11.3(c) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
INSIGHT HEALTH SERVICES CORP.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
SCHEDULE A TO THE
REVOLVING NOTE
OF ______________
DATED JUNE 12, 1998
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
- ---- ---- ------- --------- -------- -------- --------
Exhibit 2.3(e)
FORM OF ACQUISITION LOAN NOTE
$_________________ June 12, 1998
FOR VALUE RECEIVED, INSIGHT HEALTH SERVICES CORP., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 101 North Tryon Street,
Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of October 14, 1997 among the Borrower,
the Guarantors, the Lenders and the Agent (as it may be as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date, in
Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Acquisition Loans made by
the Lender to the Borrower pursuant to the Credit Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates selected in accordance with Section
2.3(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or
in part only by registration of such transfer on the Register maintained by or
on behalf of the Borrower as provided in Section 11.3(c) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
INSIGHT HEALTH SERVICES CORP.
By:
Name:
Title:
SCHEDULE A TO THE
ACQUISITION LOAN NOTE
OF ______________
DATED JUNE 12, 1998
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
- ---- ---- -------- --------- -------- -------- --------
Exhibit 2.4(f)
FORM OF TRANCHE A TERM NOTE
$_________________ June 12, 1998
FOR VALUE RECEIVED, INSIGHT HEALTH SERVICES CORP., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 101 North Tryon Street,
Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of October 14, 1997 among the Borrower,
the Guarantors, the Lenders and the Agent (as it may be as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date, in
Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________), and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with Section 2.4(e)
of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or
in part only by registration of such transfer on the Register maintained by or
on behalf of the Borrower as provided in Section 11.3(c) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
INSIGHT HEALTH SERVICES CORP.
By:
Name:
Title:
SCHEDULE A TO THE
TRANCHE A TERM NOTE
OF _____________
DATED JUNE 12, 1998
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
- ---- ---- -------- --------- -------- -------- --------
Exhibit 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Lenders
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Insight Health Services Corp. (the "Borrower"), refers
to the Credit Agreement dated as of October 14, 1997 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), among the
Borrower, the Guarantors, the Lenders and NationsBank, N. A., as Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice pursuant to Section 3.2 of the Credit Agreement that it requests an
extension or conversion of a [Revolving Loan] [Acquisition Loan] [Tranche A Term
Loan] outstanding under the Credit Agreement, and in connection therewith sets
forth below the terms on which such extension or conversion is requested to be
made:
(A) Loan Type/Tranche _______________________
(B) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(C) Principal Amount of Extension or Conversion _______________________
(D) Interest rate basis _______________________
(E) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.3, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c) and (d) of such Section, are true and correct.
INSIGHT HEALTH SERVICES CORP.
By:
Name:
Title:
Exhibit 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of Insight Health Services Corp.
(the "Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Credit Agreement dated as of October 14, 1997 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the Guarantors, the Lenders and
NationsBank, N. A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and
have been prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from normal
year-end audit adjustments.
b. Since ___________ (the date of the last similar certification,
or, if none, the Closing Date) no Default or Event of Default
has occurred under the Credit Agreement;
c. Consolidated Capital Expenditures for the current fiscal
year as of the date hereof are $__________________; and
d. Capital expenditures for Open MRI and its Subsidiaries for the
current fiscal year as of the date hereof are
$_________________.
Delivered herewith are detailed calculations demonstrating compliance
by the Credit Parties with the financial covenants contained in Section 7.11 of
the Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
INSIGHT HEALTH SERVICES CORP.
By:
Name:
Title:
Attachment to Officer's Certificate
Computation of Financial Covenants
Exhibit 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
19__, is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N. A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), dated as of October 14,
1997, by and among Insight Health Services Corp., a Delaware corporation (the
"Borrower"), the Guarantors, the Lenders and NationsBank, N. A., as Agent. All
of the defined terms in the Credit Agreement are incorporated herein by
reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.12 of the Credit Agreement to cause the
Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent,
for the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby
(i) jointly and severally together with the other Guarantors, guarantees to each
Lender and the Agent, as provided in Section 4 of the Credit Agreement, the
prompt payment and performance of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Security Agreement, and shall have all the obligations of an "Obligor" (as such
term is defined in the Security Agreement) thereunder as if it had executed the
Security Agreement. The Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Security Agreement. Without limiting generality of the foregoing terms of
this paragraph 2, the Subsidiary hereby grants to the Agent, for the benefit of
the Lenders, a continuing security interest in, and a right of set off against
any and all right, title and interest of the Subsidiary in and to the Collateral
(as such term is defined in Section 2 of the Security Agreement) of the
Subsidiary. The Subsidiary hereby represents and warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth on Schedule 1 attached hereto and the Subsidiary
keeps its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the
location of all Collateral owned by the Subsidiary is as shown on
Schedule 2 attached hereto.
(iii) The Subsidiary's legal name is as shown in this
Agreement and the Subsidiary has not in the past four months changed
its name, been party to a merger, consolidation or other change in
structure or used any tradename except as set forth in Schedule 3
attached hereto.
(iv) The patents and trademarks listed on Schedule 4 attached
hereto constitute all of the registrations and applications for the
patents and trademarks owned by the Subsidiary.
3. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement, and shall have all the obligations of a "Pledgor" thereunder
as if it had executed the Pledge Agreement. The Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all the terms, provisions and
conditions contained in the Pledge Agreement. Without limiting the generality of
the foregoing terms of this paragraph 3, the Subsidiary hereby pledges and
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assigns to the Agent, for the benefit of the Lenders, and grants to the Agent,
for the benefit of the Lenders, a continuing security interest in any and all
right, title and interest of the Subsidiary in and to Pledged Shares (as such
term is defined in Section 2 of the Pledge Agreement) listed on Schedule 5
attached hereto and the other Pledged Collateral (as such term is defined in
Section 2 of the Pledge Agreement).
4. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
5. The Subsidiary hereby waives acceptance by the Agent and the Lenders
of the guaranty by the Subsidiary under Section 4 of the Credit Agreement upon
the execution of this Agreement by the Subsidiary.
6. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
7. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, and the Agent, for the benefit of
the Lenders, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
NATIONSBANK, N. A., as Agent
By:
Name:
Title:
Schedule 1
TO FORM OF JOINDER AGREEMENT
[Chief Executive Office and
Chief Place of Business of Subsidiary]
Schedule 2
TO FORM OF JOINDER AGREEMENT
[Types and Locations of Collateral]
Schedule 3
TO FORM OF JOINDER AGREEMENT
[Tradenames]
Schedule 4
TO FORM OF JOINDER AGREEMENT
[Patents and Trademarks]
Schedule 5
TO FORM OF JOINDER AGREEMENT
[Pledged Shares]
Exhibit 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October 14, 1997,
as amended and modified from time to time thereafter (the "Credit Agreement")
among Insight Health Services Corp., the other Credit Parties party thereto, the
Lenders party thereto and NationsBank, N.A., as Agent. Terms defined in the
Credit Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Credit Documents. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the Loans owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Agent exchange such Notes for new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment retained by the
Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
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6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and unused fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By:
Name:
Title:
_____________________, as Assignee
By:
Name:
Title:
Notice address of Assignee:
Assignee
==========================
Attn: _____________________
Telephone: (___) ________
Telecopy: (___) ________
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CONSENTED TO:
NATIONSBANK, N.A., *
as Agent
By:
Name:
Title:
Insight Health Services Corp.*
By:
Name:
Title:
- ----------
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
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SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment* :
(e) Revolving Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(f) Revolving Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(g) Revolving Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(h) Revolving Committed Amount as of Effective Date $_____________
(i) Dollar Amount of Assignor's Revolving Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (g)) $_____________
(j) Dollar Amount of Assignee's Revolving Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (f)) $_____________
(k) Tranche A Term Loan Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(l) Tranche A Term Loan Commitment Percentage of Assignee after
giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(m) Tranche A Term Loan Commitment Percentage of Assignor after
giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(n) Outstanding Balance of Tranche A Term Loan as of Effective Date $_____________
(o) Principal Amount of Assignor's portion of the Tranche A Term
Loan after giving effect to this Assignment and Acceptance on
Effective Date (the amount set forth
in (n) multiplied by the percentage set forth in (m)) $_____________
(p) Principal Amount of Assignee's portion of the Tranche A Term
Loan after giving effect to this Assignment and Acceptance on
Effective Date (the amount set forth in (n)
multiplied by the percentage set forth in (l)) $_____________
- --------
* This date should be no earlier than five Business Days after delivery of this
Assignment and Acceptance to the Agent.
4
(q) Acquisition Loan Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(r) Acquisition Loan Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(s) Acquisition Loan Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(t) Acquisition Loan Committed Amount as of Effective Date $_____________
(u) Dollar Amount of Assignor's Acquisition Loan Commitment
Percentage as of the Effective Date (the amount set
forth in (t) multiplied by the percentage set forth in (s)) $_____________
(v) Dollar Amount of Assignee's Acquisition Loan Commitment
Percentage as of the Effective Date (the amount set
forth in (t) multiplied by the percentage set forth in (r)) $_____________
5