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EXHIBIT 10.27
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 16, 1998
AMONG
PROMEDCO MANAGEMENT COMPANY
THE LENDERS REFERRED TO HEREIN
AND
NATIONSCREDIT COMMERCIAL CORPORATION,
AS AGENT
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TABLE OF CONTENTS
Page
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ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. CERTAIN DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.03. OTHER DEFINITIONAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE II - REVOLVING CREDIT LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.01. REVOLVING CREDIT LOANS AND COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.02. REVOLVING CREDIT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.03. INTEREST ON THE REVOLVING CREDIT LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.04. ADVANCING REVOLVING CREDIT LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.05. MANDATORY REPAYMENTS AND PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.06. OPTIONAL PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.07. APPLICATION OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.08. REDUCTION OF COMMITMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III - CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.01. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.02. CONDITIONS TO ACQUISITION LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.03. CONDITIONS TO EACH LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE IV - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.01. CORPORATE EXISTENCE AND POWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION . . . . . . . . . . . . . . . . . 28
SECTION 4.03. BINDING EFFECT; LIENS OF SECURITY DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.04. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.05. LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.06. OWNERSHIP OF PROPERTY, LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.07. NO DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.08. NO BURDENSOME RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.09. LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.10. SUBSIDIARIES; OTHER EQUITY INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.11. INVESTMENT COMPANY ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.12. MARGIN REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.13. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.14. COMPLIANCE WITH ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.15. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.16. EMPLOYMENT, SHAREHOLDERS AND SUBSCRIPTION AGREEMENTS . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.17. FULL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.18. PRIVATE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.19. COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS; NO HAZARDOUS MATERIALS . . . . . . . . . . . . . 33
SECTION 4.20. REAL PROPERTY INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.21. THIRD PARTY REIMBURSEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.22. ADDITIONAL REPRESENTATIONS; SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE V - AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.02. PAYMENT OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.03. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.04. MAINTENANCE OF PROPERTY; INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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SECTION 5.05. COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.07. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.08. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.09. LENDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.10. HEDGING FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.11. HAZARDOUS MATERIALS; REMEDIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.12. COLLATERAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.13. COLLECTIONS; RIGHT TO NOTIFY ACCOUNT DEBTORS . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.14. ENFORCEMENT OF COVENANTS NOT TO COMPETE . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.15. LANDLORD AND WAREHOUSEMAN WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.16. ADDITIONAL SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.17 ACCREDITATION AND LICENSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI - NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.01. DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.02. NEGATIVE PLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.03. CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.04. RESTRICTED PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.05. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.06. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.07. PURCHASE OF ASSETS, INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.08. TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.09. AMENDMENTS OR WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.10. FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.11. MANAGEMENT COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.12. LEASE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.13. CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.14. TOTAL DEBT COVERAGE RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.15. DEBT TO CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.16. SENIOR DEBT TO EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.17. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.18. MINIMUM NET WORTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.19. TRANSITION RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.18 CHANGES RELATING TO SUBORDINATED DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VII -EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VIII - FEES, EXPENSES AND INDEMNITIES; GENERAL PROVISIONS RELATING TO PAYMENTS . . . . . . . . . . 55
SECTION 8.01. FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.02. COMPUTATION OF INTEREST AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.03. GENERAL PROVISIONS REGARDING PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.04. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.05. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.06. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.07. FUNDING LOSSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.08. MAXIMUM INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE IX - THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.01. APPOINTMENT AND AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.02. AGENT AND AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.03. ACTION BY AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.04. CONSULTATION WITH EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.05. LIABILITY OF AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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SECTION 9.06. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.07. CREDIT DECISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.08. SUCCESSOR AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE X - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.01. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.02. NO WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.03. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.04. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.05. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.06. SUCCESSORS AND ASSIGNS; REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.07. COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.08. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.09. GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.10. NOTICE OF BREACH BY AGENT OR LENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.11. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.12. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.13. SPECIAL PROVISION RELATING TO THIS AMENDMENT AND RESTATEMENT . . . . . . . . . . . . . . . 65
EXHIBIT A - Revolving Credit Note
EXHIBIT B - Notice of Borrowing
EXHIBIT C - Company Security Agreement
EXHIBIT D - Pledge Agreement
EXHIBIT E - Subsidiary Guaranty Agreement
EXHIBIT F - Subsidiary Security Agreement
EXHIBIT G - Professional Service Provider Security Agreement
EXHIBIT H - Borrowing Base Certificate
EXHIBIT I - Opinion of counsel to the Company
EXHIBIT J - Opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Special Counsel to the Agent
EXHIBIT K - Option Agreement
SCHEDULE 3.01(n) - Schedule of Management
SCHEDULE 4.10 - Schedule of Subsidiaries
SCHEDULE 4.16 - Employment, Shareholders' and Subscription Agreements
SCHEDULE 4.19 - Environmental Matters
SCHEDULE 4.20 - Real Property Interests
SCHEDULE 5.04 - Required Insurance
SCHEDULE 6.01 - Outstanding Debt
SCHEDULE 6.04 - Existing Additional Acquisition Liabilities
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April
16, 1998, among PROMEDCO MANAGEMENT COMPANY (F/K/A PROMEDCO, INC.), the LENDERS
listed on the signature pages hereof and NATIONSCREDIT COMMERCIAL CORPORATION,
as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. The following terms have
the following meanings:
"Account Debtor" shall mean any Person who may become
obligated to any Credit Party under, with respect to, or on account of a
Receivable of such Credit Party (including without limitation any guarantor of
the payment or performance of a Receivable or any Third Party Payor).
"Acquisition" means the purchase by the Company of any
physician practice or physician practice group or a majority of the assets of a
physician practice or physician practice group or of any other business the
purchase of which the Required Lenders shall consent to in their sole and
absolute discretion, with the proceeds of an Acquisition Loan provided pursuant
to Section 2.01(c).
"Acquisition Availability" has the Meaning specified in
Section 2.01(c).
"Acquisition Loans" means, collectively, the Revolving Credit
Loans of the Lenders to be made to the Company pursuant to Section 2.01(c).
"Additional Acquisition Liabilities" means the Existing
Additional Acquisition Liabilities and the Future Additional Acquisition
Liabilities.
"Adjusted LIBOR" means a rate per annum (rounded upward, if
necessary to the next higher 1/16 of 1%) equal to the rate obtained by dividing
(a) LIBOR (similarly rounded) by (b) a percentage equal to 1 minus the Reserve
Requirement in effect from time to time.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Company (a "CONTROLLING
PERSON") or (ii) any Person (other than the Company or any of its Subsidiaries)
which is controlled by or is under common control with a Controlling Person. As
used herein, the term "control" of a Person means the possession, directly
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or indirectly, of the power to vote 10% or more of any class of voting
securities of such Person or to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means NationsCredit in its capacity as agent for the
Lenders hereunder, and its successors in such capacity.
"Agreement Date," "date hereof," "even date herewith," "date
of this Agreement" and words of similar import mean the date as of which this
Agreement was originally executed, or June 12, 1996.
"AmSouth Bank" means AmSouth Bank, an Alabama banking
corporation, and its successors.
"Applicable Margin" means for any Revolving Credit Loan held
by AmSouth Bank, BankBoston or any assignee thereof, (i) in the case of Loans
bearing interest based on Adjusted LIBOR, 3.25% per annum, in the case of Loans
bearing interest based on the Index Rate, 3.25% per annum, and in the case of
Loans bearing interest based on the Prime Rate, 1.75% per annum, in each case,
from and including the Initial Restatement Effective Date, to but excluding the
first day of the month in which the Company shall first deliver financial
statements to the Lenders pursuant to Section 5.01(a) subsequent to the Initial
Restatement Effective Date that relate to a month ended on the last day of a
fiscal quarter of the Company (the "Initial Adjustment Date"), and (ii)
commencing on the Initial Adjustment Date and on the first day of each month
thereafter following the month in which the Company shall deliver financial
statements to the Lenders pursuant to Section 5.01(a) that relate to a month
ended on the last day of a fiscal quarter of the Company, the per annum
interest rate margin shall be that set forth hereafter below the applicable
rate determination option that is opposite the Leverage Ratio determined from
such statements for the fiscal quarter covered thereby:
LEVERAGE RATIO INDEX RATE ADJUSTED LIBOR PRIME
less than or equal to 1.00 1.375% 1.375% 0.000%
greater than 1.00 but less than or equal to 2.00 1.500% 1.500% 0.000%
greater than 2.00 but less than or equal to 2.50 1.750% 1.750% 0.250%
greater than 2.50 but less than or equal to 3.00 2.000% 2.000% 0.500%
greater than 3.00 but less than or equal to 3.50 2.250% 2.250% 0.750%
greater than 3.50 but less than or equal to 4.00 2.750% 2.750% 1.250%
greater than 4.00 3.250% 3.250% 1.750%
Notwithstanding the foregoing, so long as a Default shall have occurred and be
continuing, the Applicable Margins shall be the highest rates specified in the
table above.
"Authorized Signatory" means a Person designated as such by
the Company to the Agent in writing.
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"Availability Termination Date" means December 31, 1998, or
such later date to which the Lenders and the Company may mutually agree to
extend the Company's ability to incur Revolving Loans.
"BankBoston" means BankBoston, N.A. a national banking
association, and its successors.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Blue Cross/Blue Shield" means any and all contracts or
agreements in force between any Credit Party and any Blue Cross/Blue Shield
plan.
"Borrowing Base" means, on any date, a dollar amount equal to
80% of Eligible Receivables determined as of such date.
"Borrowing Base Certificate" means a certificate, duly
executed by the chief financial officer or treasurer of the Company,
appropriately completed and substantially in the form of EXHIBIT I.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Chicago, Nashville, Boston or New York
City are authorized by law to close.
"Capital Lease" of any Person means any lease of any property
(whether real, personal or mixed) by such Person as lessee which would, in
accordance with GAAP, be required to be accounted for as a capital lease on the
balance sheet of such Person.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended from time to time, and regulations promulgated thereunder.
"CHAMPUS Receivable" means a Receivable payable pursuant to
CHAMPUS.
"CHAMPUS" means, collectively, the Civilian Health and Medical
Program of the Uniformed Service, a program of medical benefits covering former
and active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program
including (a) all federal statutes (whether set forth in 10 U.S.C. Sections
1071-1106 or elsewhere) affecting such program; and (b) all rules, regulations
(including 32 C.F.R. Section 199), manuals, orders and administrative,
reimbursement and other guidelines of all governmental authorities promulgated
in connection with such program (whether or not having the force of law), in
each case as the same may be amended, supplemented or otherwise modified from
time to time.
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"CHAMPVA Receivable" means a Receivable payable pursuant to
CHAMPVA.
"CHAMPVA" means, collectively, the Civilian Health and Medical
Program of the Department of Veteran Affairs, a program of medical benefits
covering retirees and dependents of former members of the armed services
administered by the United States Department of Veteran Affairs, and all laws,
rules, regulations, manuals, orders, guidelines or requirements pertaining to
such program including (a) all federal statutes (whether set forth in 38 U.S.C.
Section 1713 or elsewhere) affecting such program or, to the extent applicable
to CHAMPVA, CHAMPUS; and (b) all rules, regulations (including 38 C.F.R.
Section 17.54), manuals, orders and administrative, reimbursement and other
guidelines of all governmental authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, supplemented or otherwise modified from time to time.
"Class" defines a Revolving Credit Loan by reference to the
subfacility under which it is made. A Revolving Credit Loan is either a Working
Capital Loan or an Acquisition Loan.
"Closing Date" means July 15, 1996.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means all property mortgaged, pledged or
otherwise purported to be subjected to a Lien pursuant to the Security
Documents.
"Commitment" means the Revolving Credit Commitment.
"Commitment Termination Date" shall have the meaning assigned
to it in Section 2.05.
"Common Stock" means the company's common stock, par value
___, per share.
"Company" means ProMedCo Management Company, a Delaware
corporation, which is the successor by merger to ProMedCo, Inc., a Texas
corporation.
"Company Account" means the account specified on the signature
pages hereof into which all Loans to the Company shall be made available, or
such other account as the Company shall from time to time specify by notice to
the Lenders.
"Company Security Agreement" means the Security Agreement
dated as of the Original Agreement Date between the Company and the Agent,
substantially in the form of EXHIBIT C.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of expenditures by the Company and its Consolidated
Subsidiaries for plant, property and
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equipment during such period but excluding any such expenditures made for the
replacement or restoration of assets to the extent financed by condemnation
awards or proceeds of insurance received with respect to the loss or taking of
or damage to the asset or assets being replaced or restored.
"Consolidated Capitalization" means at any time of
determination, the sum of (a) the Consolidated Total Debt at such time, and (b)
the Consolidated Net Worth at such time.
"Consolidated Free Cash Flow" means, for any period, EBITDA
for such period minus the following amounts:
(a) all cash payments of income taxes by the Company and
its Consolidated Subsidiaries during such period;
(b) Consolidated Capital Expenditures for such period, to
the extent that such Consolidated Capital Expenditures are not
financed during such period (and are not anticipated to be financed in
any future period) with the proceeds of Debt of the Company; and
(c) any net gain in respect of asset sales during such
period.
"Consolidated Net Income" means, for any period, net income of
the Company and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means as of the date of any
determination thereof, the amount of the shareholder's equity of the Company
and its Consolidated Subsidiaries as would be shown on the consolidated balance
sheet of the Company and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that the Company shall be
deemed to have received $4,000,000 of Net Proceeds in connection with the
issuance of its common stock in the acquisition of Western Medical Management
Corporation, Inc., which amount shall be included in the calculation of
Consolidated Net Worth.
"Consolidated Senior Debt" means at any date the principal
amount of the Obligations and any Debt other than debt that is subordinated to
the Obligations on terms and conditions satisfactory to the Agent and the
Required Lenders.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Company in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Total Debt" means at any date the Debt of the
Company and its Consolidated Subsidiaries, determined on a consolidated basis
at such date.
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"Credit Party" means any of the Company, any Subsidiary or any
party to a Service Agreement.
"Debt" of a Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all Capital Leases of such Person, (v) all obligations
of such Person to purchase securities (or other property) which arise out of or
in connection with the issuance or sale of the same or substantially similar
securities (or property), (vi) all non-contingent obligations of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (vii) all equity securities of such Person
subject to repurchase or redemption otherwise than at the sole option of such
Person, (viii) all obligations of such Person to make payments or advances with
respect to Program Loans (ix) all Debt secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise an obligation of such Person, and
(ix) all Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning set forth in Section 2.03(e),
provided that with respect to any Obligation for which a rate of interest is
not otherwise specified herein, the Default Rate shall be the Prime Rate plus
3.75% per annum.
"EBITDA" means, for any period, the consolidated net income of
the Company and its Consolidated Subsidiaries for such period, after all
expenses and other proper charges except depreciation, interest, amortization
and income taxes, determined in accordance with GAAP eliminating without
duplication: (i) all intercompany items, (ii) all earnings attributable to
equity interests in Persons that are not Subsidiaries unless actually received
by the Company or a Consolidated Subsidiary, (iii) all income arising from the
forgiveness, adjustment, or negotiated settlement of any indebtedness, (iv) any
extraordinary items of income or expense, (v) any increase or decrease in
income arising from any change in the Company's method of accounting, subject
to Section 1.02, and (vi) any interest income other than interest income
received in connection with Program Loans.
"Eligible Receivables" means, at any date of determination
thereof, the aggregate amount of all Receivables at such date due to the
Company and each of its Subsidiaries other than the following (determined
without duplication):
(a) any Receivable due from an Account Debtor that is not
both domiciled in the United States of America and (if not a natural
person) organized under the laws of the United States of America or
any political subdivision thereof and any Receivable that is not
denominated and payable in U.S. dollars;
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(b) any Receivable that does not comply with all
applicable legal requirements, including, without limitation, all
laws, rules, regulations and orders of any governmental or judicial
authority (including any Receivable due from an Account Debtor located
in the States of Indiana, New Jersey or Minnesota, unless the Company
or the applicable Subsidiary (at the time the Receivable was created
and at all times thereafter) (i) had filed and has maintained
effective a current notice of business activities report with the
appropriate office or agency of the State of Indiana, New Jersey or
Minnesota, as applicable, or (ii) was and has continued to be exempt
from filing such report and has provided Agent with satisfactory
evidence thereof);
(c) any Receivable in respect of which there is any
unresolved dispute with the Account Debtor, but only to the extent of
such dispute;
(d) any Receivable payable more than 30 days after the
date of the issuance of the original invoice therefor;
(e) any Receivable that remains unpaid for more than 120
days from the date of the original issuance of the invoice therefor;
(f) any unbilled Receivable;
(g) any Receivable arising outside the ordinary course of
business of the Credit Party whose activities gave rise thereto;
(h) (i) that portion of any Receivable in respect of
which there has been, or should have been, established by the Company
a contra account whether in respect of contractual allowances, audit
adjustments, anticipated discounts or otherwise, or (ii) which is a
Private Receivable and is due from an Account Debtor to whom the
Company owes a trade payable, but only to the extent of such account
or trade payable or (iii) which Receivable is subject to any right of
recession, set-off, recoupment, counterclaim or defense, whether
arising out of transactions concerning the provision of medical
services or otherwise, provided that this clause (iii) shall not apply
to adjustments in the ordinary course with respect to Government
Receivables;
(i) any Receivable that is not subject to a first
priority perfected Lien under the Security Documents and any
Receivable evidenced by an "instrument" (as defined in the UCC) not in
the possession of the Agent;
(j) any Receivable due from any Third Party Payor (i) as
to which on such date Receivables representing more than 25% of
aggregate amount of all Receivables of such Third Party Payor have
remained unpaid for more than 120 days from the original due date
specified at the time of the original issuance of the original invoice
therefor, (ii) in respect of which a credit loss has been recognized
or reserved by any Credit Party, (iii) in respect of which the Agent
shall have notified the Company that such Third Party Payor does not
have a satisfactory credit standing as determined in good faith by the
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Agent, (iv) that is a Subsidiary or Affiliate of the Company, (v)
that, except in the case of a Government Receivable, is the United
States of America or any state government or any department, agency or
instrumentality thereof, unless the Company has complied in all
respects with the Federal Assignment of Claims Act of 1940 or the
corresponding provision of any applicable state law, or (vi) that is
the subject of a case or proceeding of the type described in clauses
(g) and (h) of Section 7.01 or that is not Solvent;
(k) any Receivables other than Government Receivables due
from a Third Party Payor at any time, to the extent that the aggregate
outstanding amount of Receivables due from such Third Party Payor and
its affiliates at such time exceeds 10% of the aggregate amount of all
Receivables due to the Company at such time, but only to the extent of
such excess;
(l) if such Receivable is a Private Receivable, the Third
Party Payor thereon has not received such notice of the assignment
thereof to the Agent as the Agent shall reasonably require; and
(m) the Credit Party owning such Receivable has not
executed a Security Agreement or such other documents as the Agent
shall require assigning its rights to such Receivables to the Agent as
security for the Obligations.
"Employment Contracts" means the employment contracts
delivered by the Company to NationsCredit on the Closing Date pursuant to
Section 3.01(n), and listed on Schedule 4.16 from time to time.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and governmental restrictions, whether
now or hereafter in effect, relating to human health, the environment or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Materials or wastes into the environment, including 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, Hazardous Materials or wastes or the clean-up or
other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.
"ERISA Group" means the Company, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Company or any Subsidiary, are treated as a single employer under Section 414
of the Code.
"Event of Default" has the meaning set forth in Section 7.01.
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"Excess Cash Flow" means, for any period, an amount equal to:
(i) EBITDA for such period, MINUS (ii) the sum of: (x) Consolidated Capital
Expenditures (to the extent such Consolidated Capital Expenditures are
permitted pursuant to Section 6.13 and except to the extent financed by the
proceeds of Debt of the Company permitted by Section 6.01), (y) Total Debt
Service (exclusive of amortization of debt discount or premium) and all
prepayments of the Loans hereunder that result in a permanent reduction of the
Commitment, and (z) all cash payments of income taxes by the Company and its
Subsidiaries, all as determined for such period, PLUS (iii) any interest income
for such period.
"Existing Additional Acquisition Liabilities" means those
obligations (actual or contingent) of the Company and/or any of its
Subsidiaries to pay additional consideration in respect of acquisitions
existing on the Agreement Date and described on Schedule 6.04, whether arising
under the acquisition agreement relating thereto or any Service Agreement, in
the amounts and upon the terms described on Schedule 6.04.
"Financing Documents" means this Agreement, the Notes, the
Subsidiary Guaranty Agreement, the Option Agreement and the Security Documents.
"Fiscal Year" means a fiscal year of the Company.
"Future Additional Acquisition Liabilities" means those
obligations (actual or contingent), of the Company and/or any of its
Subsidiaries to pay additional consideration in respect of acquisitions,
whether arising under the acquisition agreement relating thereto, or any
Service Agreement, that are not described on Schedule 6.04.
"GAAP" has the meaning set forth in Section 1.02.
"Government Receivables" means, collectively, any and all
Receivables which are (a) Medicare Receivables, (b) Medicaid Receivables, (c)
CHAMPUS Receivables, (d) CHAMPVA Receivables, or (e) any other Receivable
payable by a governmental authority approved by the Required Lenders.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"HCFA" shall mean the Health Care Financing Administration, an
agency of HHS, and any successor thereto.
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"HHS" means the United States Department of Health and Human
Services or any successor thereto.
"Hazardous Materials" means (i) any "hazardous substance" as
defined in CERCLA; (ii) asbestos; (iii) polychlorinated biphenyls; (iv)
petroleum, its derivatives, by-products and other hydrocarbons; and (v) any
other toxic, radioactive, caustic or otherwise hazardous substance regulated
under Environmental Laws.
"Hazardous Materials Contamination" means contamination
(whether now existing or hereafter occurring) of the improvements, buildings,
facilities, personalty, soil, groundwater, air or other elements on or of the
relevant property by Hazardous Materials, or any derivatives thereof, or on or
of any other property as a result of Hazardous Materials, or any derivatives
thereof, generated on, emanating from or disposed of in connection with the
relevant property.
"Healthcare Law" means, collectively, any and all federal,
state or local laws, rules, regulations, manuals, orders, guidelines and
requirements pertaining to Government Receivables, including without limitation
all laws, rules, regulations, manuals, orders, guidelines and requirements
pertaining to CHAMPUS, CHAMPVA, Medicaid or Medicare
"Indemnitees" has the meaning set forth in Section 8.05.
"Index Rate" means for any day in any calendar month, the rate
of interest equivalent to the money market yield for the Interest Determination
Date falling in such month on the one month commercial paper rate for
dealer-placed commercial paper of issuers whose corporate bonds are rated "AA"
or its equivalent by a nationally recognized rating agency, as such rate is
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York and published weekly by the Board of Governors of the Federal Reserve
System in its H.15 report, or any successor publication published by the Board
of Governors of the Federal Reserve System or, if such rate for such date is
not yet published in such statistical release, the rate for that date will be
the rate set forth in the weekly statistical release designated as such, or any
successor publication, published by the Board of Governors of the Federal
Reserve System.
"Initial Restatement Effective Date" means November 13, 1997.
"Interest Determination Date" means June 3, 1996 and the first
Business Day of each calendar month thereafter.
"Inventory" means inventory as defined in Article 9 of the
UCC.
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, time deposit or otherwise.
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"Lender" shall mean NationsCredit, the other Lenders named on
the signature pages of the Agreement, and each other Person that becomes a
holder of a Note pursuant to Section 10.06, and their respective successors,
and "Lenders" means all of the foregoing.
"Leverage Ratio" shall mean, for any fiscal quarter of the
Company, the ratio of Consolidated Senior Debt as of the last day of such
quarter, to EBITDA for the four fiscal quarters ended on the last day of such
quarter.
"LIBOR" means, with respect to any Interest Determination
Date, (i) the London Interbank Offered Rate for deposits in U.S. dollars for a
period of time comparable to the period from and including such Interest
Determination Date to and including the next succeeding Interest Determination
Date which is published in The Wall Street Journal (Eastern Edition) under the
caption "Money Rates - London Interbank Offered Rates (LIBOR)" on such Interest
Determination Date; or (ii) if The Wall Street Journal does not publish such
rate, the offered rate for deposits in U.S. dollars for a period of time
comparable to the period from and including such Interest Determination Date to
and including the next succeeding Interest Determination Date which appears on
the Dow ▇▇▇▇▇ Markets Page 3750 as of 10:00 a.m., New York time, on such
Interest Determination Date, provided that if at least two rates appear on the
Dow ▇▇▇▇▇ Markets Page 3750, the "London Interbank Offered Rate" applicable to
such period shall be the arithmetic mean of such rates; or (iii) if The Wall
Street Journal does not publish such rate and no such rate appears on the Dow
▇▇▇▇▇ Markets Page 3750 at such time, the rate per annum at which deposits in
U.S. dollars are offered by the principal London office of The Chase Manhattan
Bank, N.A. to leading banks in the London interbank market at approximately
11:00 a.m., London time, on such Interest Determination Date in an amount
approximately equal to the principal amount of the Loans for a period of time
comparable to the period from and including such Interest Determination Date to
and including the next succeeding Interest Determination Date, in each case as
determined by the Agent whose determination shall be conclusive absent manifest
error.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this Agreement
and the other Financing Documents, the Company or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement relating to such
asset.
"Loans" means the Revolving Credit Loans.
"Lockbox Accounts" has the meaning set forth in the Security
Agreements.
"Lockbox Agreement" means, collectively, the Lockbox
Agreements each in form and substance satisfactory to Lender, entered into
among the Agent, the Company and its Subsidiaries and the Lockbox Banks
pursuant to the Security Agreements.
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"Lockbox Bank" means, collectively, the banks or other
depository institutions at which Lockbox Accounts are established and
maintained.
"Margin Stock" has the meaning assigned thereto in Regulation
G, U or X of the Federal Reserve Board, as the same may be amended,
supplemented or modified from time to time.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any
of (a) the financial condition, operations, business, properties or prospects
of the Company and its Subsidiaries, taken as a whole, (b) the rights and
remedies of the Agent or the Lenders under the Financing Documents, or the
ability of the Company or any Subsidiary to perform its obligations under the
Financing Documents to which it is a party, as applicable, (c) the legality,
validity or enforceability of any Financing Document, or (d) the existence,
perfection or priority of any security interest granted in the Financing
Documents.
"Material Plan" means at any time a Plan having Unfunded
Liabilities.
"Maximum Lawful Rate" has the meaning set forth in Section
2.03.
"Medicaid" means, collectively, the healthcare assistance
program established by Title XIX of the Social Security Act (42 U.S.C. Sections
1396 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in Title XIX of
the Social Security Act or elsewhere) affecting such program; (b) all state
statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and administrative, reimbursement, guidelines and requirements of all
government authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Medicaid Receivable" means a Receivable payable pursuant to a
Medicaid Provider Agreement.
"Medicaid Certification" means certification of a facility by
HCFA or a state agency or entity under contract with HCFA that such healthcare
facility fully complies with all the conditions of Medicaid.
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"Medicaid Provider Agreement" means an agreement entered into
between a state agency or other entity administering Medicaid in such state and
a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicaid patients.
"Medicare" means, collectively, the health insurance program
for the aged and disabled established by Title XVIII of the Social Security Act
(42 U.S.C. Sections 1395 et seq.) and any statutes succeeding thereto, and all
laws, rules, regulations, manuals, orders or guidelines pertaining to such
program including (a) all federal statutes (whether set forth in Title XVIII of
the Social Security Act or elsewhere) affecting such program; and (b) all
applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement, guidelines and requirements of all governmental
authorities promulgated in connected with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"Medicare Receivable" means a Receivable payable pursuant to
Medicare Provider Agreement.
"Medicare Certification" mean certification of a facility by
HCFA or a state agency or entity under contract with HCFA that such healthcare
facility fully complies with all conditions for such facility's participation
in Medicare.
"Medicare Provider Agreement" means an agreement entered into
between a state agency or other entity administering Medicare in such state and
a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicare patients.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.
"NationsCredit" means NationsCredit Commercial Corporation, a
Delaware corporation, and its successors.
"Net Proceeds of Capital Stock" means any consideration
received by the Company or any of its Consolidated Subsidiaries in respect of
the issuance of capital stock (including, without limitation, by way of
conversion of Debt into such capital stock), after deducting therefrom all
reasonable and customary costs and expenses incurred by such Person or such
Subsidiary directly in connection with the issuance of such capital stock.
"Note" means a Revolving Credit Note.
"Notice of Borrowing" has the meaning set forth in Section
2.04.
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"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Company to the Lenders
or to any Lender, the Agent or any indemnified party hereunder arising under
the Financing Documents.
"Officers' Certificate" means a certificate executed on behalf
of a Person by its chairman of the board (if an officer), chief executive
officer or president or one of its vice presidents and by its chief financial
officer or treasurer.
"Option Agreement" means the Option Agreement, dated the
Original Agreement Date, in substantially the form of EXHIBIT K.
"Options" means the rights to acquire Common Stock of the
Company issued to NationsCredit pursuant to the Option Agreement.
"Original Agreement Date" means June 12, 1996.
"Payment Account" means, with respect to each Lender, the
account specified on the signature pages hereof into which all payments by or
on behalf of the Company to such Lender under the Financing Documents shall be
made, or such other account as such Lender shall from time to time specify by
notice to the Company.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Contest" means a contest maintained in good faith
by appropriate proceedings promptly instituted and diligently conducted and
with respect to which such reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; provided that
compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge.
"Permitted Liens" means Liens permitted pursuant to Section
6.02.
"Permitted Refinancing" means any refunding or refinancing of
an item of Debt at a market rate of interest; provided, that (i) the principal
amount thereof shall not be increased except, in the case of a public debt
offering for accrued interest thereon (in an amount not to exceed 6 months
interest), (ii) the time for repayment therefor shall not be reduced, (iii) the
security thereof shall not be increased, and (iv) the terms thereof shall not
otherwise be materially altered.
"Person" means any natural person, corporation, limited
partnership, limited liability company, professional association, general
partnership, joint stock company, joint venture, association, company, trust,
bank, trust company, land trust, business trust or other
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19
organization, whether or not a legal entity, and any government agency or
political subdivision thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge Agreement dated as of the
Original Agreement Date between the Company and the Agent, substantially in the
form of EXHIBIT D.
"Prime Rate" means the rate publicly announced from time to
time by NationsBank of North Carolina, N.A. as its "prime rate". Changes in the
Prime Rate shall be effective as of the opening of business on the date of each
announced change therein.
"Private Receivables" mean, collectively, any and all
Receivables that are not Government Receivables.
"Professional Service Provider Security Agreement" means any
Professional Service Provider Security Agreement between the Agent and any
professional service provider that has entered into a Service Agreement with
the Company, which agreement shall be in substantially the form of EXHIBIT G
hereto.
"Program Loans" shall mean loans made, or commitments to make
loans, to physician groups or professional associations, on terms and
conditions satisfactory to the Required Lenders, for the purpose of funding
loans or advances to members of such groups or associations or other physicians
in connection with the affiliation of such professional association or group
with the Company and the execution of a management services agreement between
the Company or one of its Subsidiaries and such association or group.
"Quarterly Date" means the first Business Day of each January,
April, July and October occurring after the Agreement Date.
"Receivable" means, as at any date of determination thereof,
the unpaid portion of the obligation, as stated in the respective invoice, of a
patient of any Credit Party in respect of Inventory or medical services
rendered in the ordinary course of business, which amount has been earned by
performance under the terms of the related contract and recognized as revenue
on the books of the Company, net of any credits, rebates or offsets owed to the
patient or any Third Party Payor in respect thereof and also net of any
commissions payable to Persons other than a Credit Party or any employee
thereof.
"Receivables Report" has the meaning given such term in
Section 5.01(m).
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"Required Lenders" means at any time, Lenders who hold Notes
evidencing at least 51% of the aggregate unpaid principal amount of the Loans
or, if no Loans are outstanding, having at least 51% of the aggregate amount of
the Commitments, provided that so long as there are at least 2 unaffiliated
lenders hereunder, Required Lenders must also include at least two Lenders who
are not affiliates of one another.
"Reserve Requirement" means at any time the then current
maximum rate for which reserves (including any marginal, supplemental or
emergency reserve) are required to be maintained under Regulation D by member
banks of the Federal Reserve System in New York City with deposits comparable
in amount to those of NationsBank of North Carolina, N.A. against "Eurocurrency
liabilities", as that term is used Regulation D. Adjusted LIBOR shall be
adjusted automatically on and as of the effective date of any change in the
Reserve Requirement.
"Restatement Effective Date" means the date upon which all of
the conditions to the effectiveness of this Agreement under Section 10.13 have
been satisfied.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Company's capital stock (except dividends
payable solely in shares of its capital stock of the same class or payment of
cash in lieu of fractional shares), (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the
Company's capital stock or (b) any option, warrant or other right to acquire
shares of the Company's capital stock, and (iii) any payment in respect of
subordinated Debt.
"Revolving Credit Commitment" means (i) as to each of
NationsCredit, AmSouth Bank and BankBoston, initially such Lender's Revolving
Credit Commitment as set forth on the signature pages to the Agreement, less
any amount assigned to another person that becomes a Lender after the date
hereof (a "SUBSEQUENT LENDER") and (ii) for any Subsequent Lender, the amount
of Revolving Credit Commitment assigned to such Lender, in each case as such
amount may be reduced from time to time in accordance with this agreement.
"Revolving Credit Loan" shall have the meaning assigned to it
in Section 2.01(a).
"Revolving Credit Note" shall have the meaning assigned to it
in Section 2.03 and each Revolving Credit Note shall be substantially in the
form of EXHIBIT A hereto.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder.
"Security Agreements" means, collectively, the Company
Security Agreement and the Subsidiary Security Agreement.
"Security Documents" means the Security Agreements, the
Professional Service Provider Security Agreements, the Pledge Agreement and any
other agreement pursuant to which the Company or any of its Subsidiaries or
Affiliates or any other Credit Party provides a Lien on
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its assets in favor of the Agent for the benefit of the Lenders, and all
supplementary assignments, security agreements, pledge agreements,
acknowledgments or other documents delivered or to be delivered pursuant to the
terms hereof or of any other Security Document.
"Service Agreement" means an agreement between the Company
and/or one or more of its Subsidiaries and one or more physician practice
groups pursuant to which the Company and/or such Subsidiary agrees to provide
certain management services to the group.
"Solvent" shall mean, with respect to any Person, such Person:
(i) owns property whose fair salable value is greater than the amount required
to pay all of such Person's liabilities (including contingent debts), (ii) is
able to pay all of its liabilities as such liabilities mature, and (iii) has
capital sufficient to carry on its business and transactions and all business
and transactions to which it is about to engage.
"Subsidiary" means any Person of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Company.
"Subsidiary Guaranty Agreement" means the guaranty agreement
between the Subsidiaries listed on Exhibit A thereto and the Agent,
substantially in the form of EXHIBIT E.
"Subsidiary Security Agreement" means the Security Agreement
between the Subsidiaries listed on Exhibit A thereto and the Agent,
substantially in the form of EXHIBIT F.
"Temporary Cash Investment" means any Investment in: (i)
direct obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by Standard & Poor's Rating Group and P-1 by ▇▇▇▇▇'▇
Investors Service, Inc., (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any State
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000 and which issues (or the parent of which issues) certificates of
deposit or commercial paper with a rating described in clause (ii) above, (iv)
repurchase agreements with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above, provided in each case that such Investment
matures within one year from the date of acquisition thereof by the Company or
any of its Subsidiaries or (v) any open ended, redeemable money market or
mutual fund that invests only in the foregoing, the sponsor of which is
nationally recognized as a responsible sponsor.
"Third Party Payor" means any governmental entity, insurance
company, health maintenance organization, preferred provider organization or
similar entity that is obligated to make payments with respect to a Receivable.
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"Total Debt Service" means, for any period, the sum of: (i)
Total Interest Expense, and (ii) the aggregate amount of all scheduled
principal payments on all Debt, including the portion of any payment under
Capital Leases that is allocable to principal.
"Total Interest Expense" means, for any period, the aggregate
interest charges incurred by the Company and its Consolidated Subsidiaries and
required to be paid in cash for such period, whether expensed or capitalized,
including the cash portion of any obligation under Capital Leases allocable to
interest expense in accordance with GAAP, less any interest income earned by
the Company and its Consolidated Subsidiaries for such period other than
interest income received in respect of Program Loans..
"UCC" has the meaning set forth in the Security Agreements.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"Working Capital Availability" has the meaning specified in
Section 2.01(b).
"Working Capital Loans" means Revolving Credit Loans made to
the Company pursuant to Section 2.01(b).
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time ("GAAP"), applied on a basis consistent (except for changes concurred
in by the Company's independent public accountants) with the most recent
audited consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if the Company notifies
the Lenders that the Company wishes to amend any covenant in Article VI or the
definition of "Excess Cash Flow" or any related definition to eliminate the
effect of any change in GAAP on the operation of such covenant or the
determination of "Excess Cash Flow" (or if the Agent notifies the Company that
the Required Lenders wish to amend Article VI or the definition of "Excess Cash
Flow" or any related definition for such purpose), then the Company's
compliance with such covenant or "Excess Cash Flow", as the case may be, shall
be determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Company and the Required
Lenders.
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SECTION 1.03. OTHER DEFINITIONAL PROVISIONS. References in
this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing and other means of reproducing words
in a visible form. References to any agreement or contract are to such
agreement or contract as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof. References to any Person include
the successors and assigns of such Person. References "from" or "through" any
date mean, unless otherwise specified, "from and including" or "through and
including", respectively.
ARTICLE II
REVOLVING CREDIT LOANS
SECTION 2.01. REVOLVING CREDIT LOANS AND COMMITMENTS. (a) Upon
the terms and subject to the conditions set forth herein, from time to time
prior to the Availability Termination Date, each Lender severally and not
jointly agrees to make revolving credit loans ("REVOLVING CREDIT LOANS") from
time to time to the Company in an aggregate principal amount at any time
outstanding not to exceed such Lender's Revolving Credit Commitment. Such
Revolving Credit Loans shall constitute either Working Capital Loans or
Acquisition Loans. All Loans made by the Lenders hereunder shall be made pro
rata in the proportion that each such Lender's Revolving Credit Commitment
bears to the Revolving Credit Commitments.
(b) (i) Working Capital Loans shall be available for
the working capital needs of the Company and its Subsidiaries and shall not
exceed in aggregate principal amount at any time outstanding the least of (the
"WORKING CAPITAL AVAILABILITY"):
(A) $10,000,000,
(B) prior to the Availability Termination Date,
an amount equal to the Borrowing Base, and
(C) the Revolving Credit Commitment then in
effect, less the aggregate outstanding principal
amount of Acquisition Loans.
(ii) Each borrowing of Working Capital Loans shall
be in an aggregate amount of $100,000 or an integral multiple of $10,000 in
excess thereof. No more than two borrowings of Working Capital Loans shall be
made within any week beginning on Monday of such week and ending on the last
Business Day of such week.
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(c) (i) Acquisition Loans shall be available in the
sole good faith discretion of the Agent and the Required Lenders for the
purpose of financing Acquisitions by the Company, in an aggregate principal
amount not to exceed at any time outstanding (the "ACQUISITION AVAILABILITY")
the Revolving Credit Commitment then in effect, less the aggregate outstanding
principal amount of Working Capital Loans.
(ii) Acquisition Loans may be made in such amounts
and at such times as the Agent and the Required Lenders shall agree in good
faith and upon such terms and conditions as the Agent and the Required Lenders
shall require.
(iii) In connection with the Agent's and Required
Lenders' approval of any Acquisition and any borrowing of Acquisition Loans,
the Company agrees to provide the Agent and the Lenders, as soon as practicable
following the execution thereof, with copies of any term sheet or commitment
letter agreed to in connection with such Acquisition. As promptly as
practicable following receipt of such term sheet and/or commitment, the Agent
and the Required Lenders agree to notify the Company whether they can consent
to the proposed Acquisition as the basic terms thereof are outlined in the
documents provided. Such indication shall be subject to approval of the
definitive documentation and the results of any due diligence performed in
connection therewith. At the time of such approval, the Agent shall notify the
Company of any due diligence materials that it wishes to review. Promptly upon
the completion of the definitive documentation and as soon as the due diligence
materials required are available, the Company shall furnish a copy of such
documentation and/or such materials to the Agent and the Agent and the Required
Lenders agree to review the same promptly and respond to the Company as
promptly as practicable as to whether they approve the Acquisition.
(d) Within the foregoing limits, to but excluding the
Availability Termination Date, the Company may borrow under this Section 2.01,
prepay or repay Revolving Credit Loans as required under Section 2.05(b) or to
the extent permitted by Section 2.06, and reborrow pursuant to this Section
2.01.
SECTION 2.02. REVOLVING CREDIT NOTES. The Revolving Credit
Loans of each Lender shall be evidenced by a single Revolving Credit Note,
substantially in the form of EXHIBIT A (each such note, a "REVOLVING CREDIT
NOTE"), dated the Restatement Effective Date in an aggregate principal amount
equal to the amount of such Lender's Revolving Credit Commitment, duly executed
and delivered and payable to such Lender. Each Lender shall record the date and
amount of each Revolving Credit Loan made by it, whether such Revolving Credit
Loan was a Working Capital Loan or an Acquisition Loan, and the date and amount
of each payment of principal made by the Company with respect thereto, and
prior to any transfer of its Revolving Credit Note shall endorse on Schedule A
thereto (or any continuation thereof) forming a part thereof appropriate
notations to evidence the foregoing information with respect to each such
Revolving Credit Loan then outstanding; provided that the failure of any Lender
to make any such recordation or endorsement shall not affect the obligations of
the Company hereunder or under the Revolving Credit Notes. Each Lender is
hereby irrevocably authorized by the Company so to endorse its Revolving Credit
Note and to attach to and make a part of its Revolving Credit Note a
continuation of any such schedule as and when required.
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SECTION 2.03. INTEREST ON THE REVOLVING CREDIT LOANS. (a) The
Company shall pay interest on the Revolving Credit Loans to the Lenders monthly
in arrears on the first (1st) day of each calendar month immediately succeeding
the month for which such interest accrues, commencing with the first (1st) day
of the calendar month following the calendar month in which the Closing Date
occurs. In all cases accrued interest on all of the Revolving Credit Loans
shall be payable by the Company to the Lenders on the Commitment Termination
Date. Interest that accrues at the Default Rate shall be payable upon demand by
the Lenders. If any interest on any of the Revolving Credit Loans accrues or
remains payable after the Commitment Termination Date, such interest shall be
payable by the Company upon demand by the Lenders.
(b) (i) Except as provided in paragraphs (c)
below, the Company shall be obligated to pay interest to the Lenders on the
outstanding principal balance of each Revolving Credit Loan from the date such
Revolving Credit Loan is made until such Revolving Credit Loan is repaid in
full.
(ii) Subject to Section 2.03(e), interest on
all Revolving Credit Loans held by NationsCredit, or any Lender to
whom NationsCredit has assigned its Note or any portion thereof in
accordance with the terms of Section 10.06, outstanding during any
month shall accrue at a floating rate per annum equal, at the
Company's option, to one of: (i) the Index Rate plus three and
one-quarter percentage points (3.25%), (ii) Adjusted LIBOR plus three
and one-quarter percentage points (3.25%), or (iii) the Prime Rate
plus one-half of a percentage point (0.50%).
(iii) Subject to Section 2.03(e), prior to
December 31, 1998, interest on all Revolving Credit Loans held by
AmSouth Bank or BankBoston, or any other Lender to whom AmSouth Bank
or BankBoston has assigned its Note or any portion thereof in
accordance with the terms of Section 10.06, outstanding during any
month shall accrue at a floating rate per annum equal, at the
Company's option, to one of: (A) the Index Rate, (B) the Adjusted
LIBOR, or (C) the Prime Rate, in each case ((A),(B), and (C)) plus the
Applicable Margin. Subject to Section 2.03(e), from and after
December 31, 1998 interest on all such Revolving Credit Loans
outstanding during any month shall accrue at a floating rate per annum
equal, at the Company's option, to one of: (i) the Index Rate plus
three and one-quarter percentage points (3.25%), (ii) Adjusted LIBOR
plus three and one-quarter percentage points (3.25%), or (iii) the
Prime Rate plus one-half of a percentage point (0.50%).
(iv) On the Closing Date, continuing through
the last day of the calendar month in which the Closing Date occurs
and thereafter unless the Company shall have selected another rate or
shall be deemed to have selected another rate as provided below, the
Revolving Credit Loans shall bear interest based on the Prime Rate.
Thereafter, provided that no Default or Event of Default has occurred
and is then continuing, and subject to the terms and conditions set
forth herein, the Company may by written notice (or by telephonic
notice confirmed promptly in writing) delivered to the Agent not later
than the Second Business Day preceding the beginning of each calendar
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month, elect whether the interest payable to the Lenders for such
calendar month shall be based on the Prime Rate, Adjusted LIBOR or the
Index Rate (each such notice being referred to as a "NOTICE OF
FLOATING RATE ELECTION"). In the event that the Company shall fail to
deliver any Notice of Floating Rate Election on the date required
above, provided that no Default or Event of Default shall have
occurred and be continuing, the Company shall be deemed to have
delivered a Notice of Floating Rate Election that elects to continue
in effect for the calendar month the interest rate determination
mechanism in effect for the previous month.
(c) The Agent shall be entitled to rely upon and
shall be fully protected under this Agreement in relying on any Notice of
Floating Rate Election believed by the Agent to be genuine and to assume that
the persons giving the same on behalf of the Company were duly authorized
unless the responsible individual acting thereon for the Agent shall have
actual notice to the contrary.
(d) All computations of interest hereunder or
under the other Loan Documents for Revolving Credit Loans shall be made by the
Agent on the basis of a 360 day year for the actual number of days occurring in
the period for which such interest is payable. Each determination by the Agent
of an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(e) So long as any Event of Default shall have
occurred and be continuing, the interest rate applicable to the Loans or other
Obligations of the Company or any of its Subsidiaries under the Financing
Documents may be increased by the Required Lenders, at their option, by up to
two percentage points (2%) per annum above the rate otherwise applicable (the
"DEFAULT RATE").
SECTION 2.04. ADVANCING REVOLVING CREDIT LOANS. (a) Except
as provided in the last sentence of this Section 2.04(a), each Revolving Credit
Loan shall be made on notice by the Company to the Lenders, given no later than
11:00 a.m. (New York time) on the Business Day of the proposed Revolving Credit
Loan. Such notice (each a "NOTICE OF BORROWING") shall be substantially in the
form of EXHIBIT B hereto, shall be duly completed and executed by an Authorized
Signatory, and shall specify therein the requested date and amount of such
Revolving Credit Loan, and such other information as may be required by the
Agent. Each Notice of Borrowing shall be given in writing (by telecopy, telex
or cable) or by telephone and confirmed immediately in writing.
Notwithstanding the foregoing, no Notice of Borrowing that requests an
Acquisition Loan shall be effective until the Agent notifies the Company that
the Agent and the Required Lenders have consented to the proposed Acquisition
after having been provided such information respecting the proposed Acquisition
as is required to be delivered pursuant to Section 3.02 and such time to review
the same as the Agent and the Required Lenders shall reasonably deem necessary.
(b) Not later than 1:00 P.M. (New York City time) on the date of
each borrowing specified in a Notice of Borrowing, each Lender shall make
available its ratable share of such borrowing of Loans, in immediately
available funds, to the Company Account.
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(c) The failure of any Lender to make a Loan on any date shall
not relieve any other Lender of its obligation, if any, hereunder to make its
Loan on that date. Neither the Agent nor any Lender shall be responsible for
the failure of any other Person to make any Loan hereunder on the date required
therefor.
SECTION 2.05. MANDATORY REPAYMENTS AND PREPAYMENTS. (a) The
Revolving Credit Commitment of each Lender shall terminate at the opening of
business on January 2, 2004 (the "COMMITMENT TERMINATION DATE"), and there
shall become due and the Company shall pay on the Commitment Termination Date,
the entire outstanding principal amount of each Revolving Credit Loan, together
with accrued and unpaid interest thereon to but excluding the Termination Date.
(b) If at any time (i) the aggregate unpaid principal
balance of the Working Capital Loans exceeds the Working Capital Availability,
or (ii) the aggregate unpaid principal balance of the Acquisition Loans exceeds
the Acquisition Availability, then, on the next succeeding Business Day, the
Company shall prepay Working Capital Loans and/or Acquisition Loans in an
aggregate principal amount equal to such excess.
(c) Commencing on April 1, 1999 (the "AMORTIZATION
COMMENCEMENT DATE") and continuing on each Quarterly Date thereafter, the
Company shall repay the Revolving Credit Loans in equal quarterly installments
of principal equal to 5% of the aggregate principal amount of the Revolving
Credit Loan outstanding on the Amortization Commencement Date.
(d) There shall become due and payable, and the Company
shall prepay, on the 90th day following the last day of each Fiscal Year,
beginning with the Fiscal Year ending December 31, 1999, an aggregate principal
amount of Revolving Credit Loans equal to fifty percent (50%) of the Excess
Cash Flow for such Fiscal Year.
SECTION 2.06. OPTIONAL PREPAYMENTS. The Company may prepay the
Revolving Credit Loans in whole or in part (in minimum principal amounts of
$100,000 or in any larger integral multiple of $10,000, or the total remaining
amount outstanding) upon at least three Business Days' prior irrevocable
written notice to the Lenders, without premium or penalty. The aggregate
principal amount of the Revolving Credit Loans designated for prepayment in any
notice of optional prepayment given pursuant to this section shall become due
and payable on the date fixed for prepayment as specified in such notice.
SECTION 2.07. APPLICATION OF PAYMENTS. Each payment or
prepayment of the principal of the Revolving Credit Loans shall be applied pro
rata to the Revolving Credit Loans of each Lender according to their respective
outstanding principal amounts, and shall be applied to the Class of Loan
required under this Agreement or, if not so required, as directed by the
Company. The principal amount of each payment on Revolving Credit Loans
pursuant to Section 2.05(d) shall be applied to reduce the remaining payments
required by Section 2.05(c) in inverse order of the maturity thereof. The
principal amount of each payment on Revolving Credit Loans pursuant to Section
2.06 shall be applied to reduce the remaining payments required by Section
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2.05(c) (i) 50% in inverse order of the maturity thereof, and (ii) 50% in the
order of maturity thereof. Except as provided in the definition of Excess Cash
Flow, no payment of the principal amount of Acquisition Loans pursuant to
Section 2.05(b), 2.05(c) or 2.06 shall reduce the amount of any payment
required by 2.05(d). Each payment of less than all outstanding aggregate
principal amount of Revolving Credit Loans of any Class shall be applied by the
Lender receiving such payment, pro rata to all Revolving Credit Loans of such
Class held by such Lender in according to their respective outstanding
principal amounts.
SECTION 2.08. REDUCTION OF COMMITMENTS. (a) The Revolving
Credit Commitment shall reduce: (i) to the amount of the aggregate outstanding
principal amount of the Revolving Credit Loans on the Availability Termination
Date, and after such date by the amount of each payment made pursuant to
Section 2.06, and (ii) by the amount of each payment required pursuant to
Section 2.05(c) or (d).
(b) The Company shall have the right at any time to terminate in
whole this Agreement, or from time to time, irrevocably to reduce in part the
amount of the Revolving Credit Commitment, in each case without penalty or
premium, upon at least 15 days' prior written notice to the Agent. Such notice
shall be irrevocable on the part of the Company and shall specify the effective
date of such reduction or termination, whether a termination or reduction is
being made, and, in the case of any reduction, the amount thereof shall be in
an amount of Two Million Five Hundred Thousand Dollars ($2,500,000) or an
integral multiple thereof. Upon any such reduction, the Company shall
simultaneously prepay any outstanding Revolving Credit Loans to the extent
necessary so that the aggregate outstanding principal amount of the Revolving
Credit Loans does not exceed the amount of the Revolving Credit Commitment
after giving effect to any partial reduction thereof. The aforesaid prior
notice requirement shall not apply to the Agent's exercise of remedies under
Section 7.01. In the event the Company exercises its rights under this
paragraph to prepay the Revolving Credit Loans and terminate this Agreement,
the Company agrees that such prepayment shall be accompanied by the payment by
the Company of all accrued and unpaid interest and all fees and other remaining
Obligations. The amount of the Revolving Credit Commitment may not be
reinstated if it is reduced or if this Agreement is terminated by the Company.
ARTICLE III
CONDITIONS
SECTION 3.01. CONDITIONS TO CLOSING. The obligation of each
Lender to make Loans on the Closing Date shall be subject to the satisfaction
of the following conditions precedent:
(a) receipt by the Agent of counterparts hereof signed by
each of the parties hereto (or, in the case of any party as to which
an executed counterpart shall not have been received, receipt by the
Agent in form satisfactory to it of telegraphic, telex or other
written confirmation from such party of execution of a counterpart
hereof by such party);
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(b) receipt by NationsCredit of a duly executed Revolving
Credit Note for its account, in the form provided for herein;
(c) receipt by the Agent of duly executed counterparts of
each Security Document required to be effective on the Closing Date
(including the Lockbox Agreements), together with evidence
satisfactory to it in its sole good faith discretion of the
effectiveness, priority and perfection of the security contemplated
thereby and the lien search reports and any additional documents
reasonably requested by the Agent;
(d) receipt by the Agent of a duly executed counterpart
of the Option Agreement, substantially in the form of EXHIBIT K;
(e) receipt by the Agent of duly executed counterparts of
the Subsidiary Guaranty in the form of EXHIBIT E, duly executed by
each Subsidiary of the Company;
(f) receipt by the Agent of the initial Borrowing Base
Certificate, in the form of EXHIBIT H, duly executed and completed by
the Company;
(g) receipt by the Agent of an opinion of counsel for the
Company and its Subsidiaries, substantially in the form of EXHIBIT I,
and covering such additional matters relating to the transactions
contemplated hereby as NationsCredit may reasonably request (by its
execution and delivery of this Agreement, the Company authorizes and
directs such counsel to deliver such opinions to the Agent);
(h) receipt by the Agent of an opinion of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, special counsel for the Agent, substantially in the form
of EXHIBIT J, and covering such additional matters relating to the
transactions contemplated hereby as NationsCredit may reasonably
request;
(i) receipt by NationsCredit, including in its capacity
as Agent, of all fees and any other amounts due and payable hereunder
(including fees and expenses payable pursuant to Section 8.04) of
which the Company has received notice;
(j) receipt by NationsCredit of any information it may
request concerning the financial condition, results of operations,
liabilities (contingent and otherwise, including with respect to
environmental liabilities and employee and retiree benefits) and
prospects of, and the financial reporting and accounting systems and
the management information systems of, the Company;
(k) satisfaction of NationsCredit in its sole good faith
discretion as to the absence of any event, act, condition or
occurrence of whatever nature that constitutes, or that is reasonably
likely to result in, a Material Adverse Effect;
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(l) receipt by NationsCredit of a certificate signed by
the chief financial officer or treasurer of the Company to the effect
that, both before and immediately after the making of the Loans, and
the other transactions contemplated to take place on the Closing Date,
(i) no Default shall have occurred and be continuing and (ii) the
representations and warranties of the Company and each of its
Subsidiaries made in or pursuant to the Financing Documents executed
by such Person are true in all material respects;
(m) receipt by NationsCredit of (i) the financial
statements and balance sheet referred to in Sections 4.04(a), (b) and
(c), and (ii) payment instructions with respect to each wire transfer
to be made by the Agent on the Closing Date setting forth the amount
of such transfer, the purpose of such transfer, the name and number of
the account to which such transfer is to be made, the name and ABA
number of the bank or other financial institution where such account
is located and the name and telephone number of an individual that can
be contacted to confirm receipt of such transfer;
(n) receipt by the Agent of evidence satisfactory to it
in its sole good faith discretion of the effectiveness of employment
contracts between the Company and the Persons listed on SCHEDULE
3.01(n); and
(o) receipt by the Agent of all documents it may
reasonably request relating to the existence of the Company and its
Subsidiaries, the corporate authority for and the validity of the
Financing Documents, and any other matters relevant hereto, all in
form and substance satisfactory to the Agent in its sole good faith
discretion.
The documents referred to in this Section shall be delivered to the Agent no
later than the Closing Date. The certificates and opinions referred to in this
Section shall be dated the Closing Date.
SECTION 3.02. CONDITIONS TO ACQUISITION LOANS. The obligation
of any Lender to make an Acquisition Loan on the occasion of any borrowing is
subject to the satisfaction of the following additional conditions:
(a) receipt by the Lenders of a Notice of Borrowing in
accordance with Section 2.04;
(b) receipt by the Agent of all documents, instruments
and agreements to be delivered in connection with the Acquisition
and/or any financing therefor;
(c) completion of, and satisfaction of the Agent and the
Lenders with, such legal and/or business due diligence review of the
Acquisition, the terms thereof, and the target thereof as the Agent
and the Lenders reasonably shall deem relevant;
(d) evidence satisfactory to the Agent that all property
to be acquired in the Acquisition, including all property of any
Person that, following such Acquisition, is to
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become a Subsidiary, will be pledged to the Agent and the Lenders as
security for the Obligations and that the Liens granted pursuant
thereto will constitute perfected Liens, subject only to Permitted
Liens, and that any Person that will become a Subsidiary as a result
of such Acquisition has executed a guaranty of the Obligations in form
and substance satisfactory to the Agent and the Required Lenders and
otherwise complied with the requirements of Section 6.07;
(e) receipt by the Agent and the Lenders of such
historical financial statements and information and such market
information respecting the target of the Acquisition as the Agent and
the Lenders reasonably shall deem relevant;
(f) receipt by the Agent and the Lenders of pro forma
financial statements showing the target and the Company on a
consolidated basis after giving effect to such Acquisition as of the
date of the closing thereof and a certificate of the chief financial
officer or treasurer of the Company demonstrating that the Company,
both before and after giving effect to the Acquisition, will be in
compliance with the financial and other covenants contained herein and
in the other Loan Documents; and
(g) such other information respecting the Acquisition,
the target or the Company as the Agent and the Lenders reasonably
shall deem relevant.
SECTION 3.03. CONDITIONS TO EACH LOAN. The obligation of any
Lender to make a Loan on the occasion of any borrowing thereof (including on
the Closing Date) is subject to the satisfaction of the following additional
conditions:
(a) receipt by the Agent of a Notice of Borrowing in
accordance with Section 2.04;
(b) the fact that, immediately before and after such
borrowing, (i) in the case of all borrowings, no Default shall have
occurred and be continuing, and (ii) in the case of a borrowing of
Working Capital Loans, the aggregate outstanding principal amount of
Working Capital Loans shall be less than the Working Capital
Availability; and
(c) the fact that the representations and warranties of
the Company contained in the Financing Documents shall be true in all
material respects on and as of the date of such borrowing, except for
such changes therein as are expressly permitted by the terms of this
Agreement.
Each borrowing hereunder shall be deemed to be a representation and warranty by
the Company on the date of such borrowing as to the facts specified in clauses
(b) and (c) of this Section.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants as to itself and each of
its Subsidiaries that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. The Company and
each Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of its organization, and the Company
and each other Credit Party has all corporate powers, if applicable, and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and as will be conducted (including,
without limitation, accreditations and certifications as a provider of health
care services eligible to receive payment and compensation and to participate
under Medicare, Medicaid, CHAMPUS or CHAMPVA). The Company and each Subsidiary
is qualified to do business as a foreign corporation in each jurisdiction in
which the failure of the Company or such Subsidiary to be so qualified could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the Company and each
of its Subsidiaries of the Financing Documents to which it is a party are
within the Company's or such Subsidiary's (as the case may be) corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official (other than the filing of UCC-1 financing statements, which have been
made and are in full force and effect) and do not contravene, or constitute a
default under, any provision of applicable law or regulation (including
specifically any applicable rule or regulation relating to the eligibility of
any Credit Party to receive payment and to participate as an accredited and
certified provider of health care services under Medicare, Medicaid, CHAMPUS,
CHAMPVA or any Blue Cross/Blue Shield or equivalent program or relating to the
licenses and permits required therein or in connection therewith) or of the
certificate of incorporation or by-laws of the Company or any of its
Subsidiaries or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any of its Subsidiaries or result in the
creation or imposition of any Lien (other than the Liens created by the
Security Documents) on any asset of the Company or any of its Subsidiaries.
SECTION 4.03. BINDING EFFECT; LIENS OF SECURITY DOCUMENTS. (a)
Each of the Financing Documents to which the Company is a party (other than the
Notes,) constitutes a valid and binding agreement of the Company, and each of
the Notes, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Company, in each case
enforceable in accordance with its respective terms, subject to: (i) the effect
of any applicable bankruptcy, fraudulent transfer, moratorium, insolvency,
reorganization or other similar laws affecting the rights of creditors
generally; and (ii) the effect of general principles of equity whether applied
by a court of equity or law.
(b) Each of the Financing Documents to which any
Subsidiary of the Company is a party constitutes a valid and binding agreement
of such Subsidiary enforceable in
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accordance with its terms, subject to: (i) the effect of any applicable
bankruptcy, fraudulent transfer, moratorium, insolvency, reorganization or
other similar laws affecting the rights of creditors generally; and (ii) the
effect of general principles of equity whether applied by a court of equity or
law.
(c) The Security Documents create valid security
interests in, the Collateral purported to be covered thereby, which security
interests are and will remain perfected security interests, prior to all other
Liens other than Permitted Liens. Each of the representations and warranties
made by the Company or any of its Subsidiaries in the Security Documents is
true and correct.
SECTION 4.04. FINANCIAL INFORMATION.
(a) (i) The unaudited consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of June 30, 1995 and the related
unaudited consolidated statements of operations and cash flows for the fiscal
year then ended, (ii) the unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of December 31, 1995 and the related
unaudited consolidated statements of operations and cash flows for the 6 months
then ended, and (iii) the unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of April 30, 1996 and the related
unaudited consolidated statements of operations and cash flows for the four (4)
months then ended, copies of each of which ((i), (ii) and (iii)) have been
delivered to each of the Lenders, fairly present, in conformity with GAAP
applied on a consistent basis the consolidated financial position of the
Company and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments). As of the date of the latest such
balance sheet and the date hereof, neither the Company nor any of its
Subsidiaries had or has any material liabilities, contingent or otherwise,
including liabilities for taxes, long-term leases or forward or long-term
commitments, which are not properly reflected on such balance sheet.
(b) The information contained in the most recently
delivered Borrowing Base Certificate is complete and correct and the amounts
shown therein as "Eligible Receivables" have been determined as provided in the
Financing Documents.
(c) Since April 30, 1996, there has been no event, act,
condition or occurrence of whatever nature that constitutes, or that could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 4.05. LITIGATION. There is no action, suit or
proceeding pending against, or to the knowledge of the Company threatened
against or affecting, the Company or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
There is no action, suit or proceeding pending against, or to the knowledge of
the Company threatened against or affecting, any party to any of the Financing
Documents before any court or arbitrator or any governmental body, agency or
official which in any manner draws into question the validity of any of the
Financing Documents. There is no pending investigation of any Credit Party by
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HCFA or any other governmental authority, which investigation is not otherwise
conducted in the ordinary course of business and no criminal, civil or
administrative action, audit, or investigation by a fiscal intermediary or by
or on behalf of any governmental authority exists or, to the best knowledge of
the Company, is threatened with respect to any Credit Party which could
reasonably be expected to materially and adversely affect such Credit Party's
right to receive Medicare, Medicaid, CHAMPUS or CHAMPVA reimbursement to which
such Credit Party would otherwise be entitled, or right to participate in the
Medicare, Medicaid, CHAMPUS or CHAMPVA programs, or otherwise have a Material
Adverse Effect on the receipt of Medicare, Medicaid, CHAMPUS or CHAMPVA
reimbursement by such Credit Party, and, to the best knowledge of the Company,
no Credit Party is subject to any pending but unassessed Medicare, Medicaid,
CHAMPUS or CHAMPVA claim payment adjustments, except to the extent that such
Credit Party is contesting such assessment in good faith by appropriate
proceedings diligently pursued and has established and will maintain adequate
reserves for such adjustments in accordance with GAAP.
SECTION 4.06. OWNERSHIP OF PROPERTY, LIENS. On and as of the
Restatement Effective Date, the Company and each Subsidiary is the lawful owner
of, has good and marketable title to and is in lawful possession of, or has
valid leasehold interests in, all properties and other assets (real or
personal, tangible, intangible or mixed) purported to be owned or leased (as
the case may be) by such Person on the balance sheet referred to in Section
4.04(a), and none of such Person's properties and assets is subject to any
Liens, except Permitted Liens. The Company and its Subsidiaries conduct their
business without infringement or claim of infringement of any material license,
patent, trademark, trade name, service ▇▇▇▇, copyright, trade secret or other
intellectual property right of others and there is no infringement or claim of
infringement by others of any material license, patent, trademark, trade name,
service ▇▇▇▇, copyright, trade secret or other intellectual property right of
the Company or any of its Subsidiaries.
SECTION 4.07. NO DEFAULT. No Default has occurred and is
continuing and neither the Company nor any of its Subsidiaries is in default
under or with respect to any material contract, agreement, lease or other
material instrument to which it is a party or by which its property is bound or
affected. Neither the Company nor any other Credit Party has received
notification from any governmental authority that any such governmental
authority has taken or intends to take action to revoke, terminate or adversely
amend any license, certificate, accreditation or permit of such Person to
operate a healthcare facility or to participate under Medicare, Medicaid,
CHAMPUS or CHAMPVA.
SECTION 4.08. NO BURDENSOME RESTRICTIONS. No contract, lease,
agreement or other instrument to which the Company or any of its Subsidiaries
is a party or by which any of its property is bound or affected, no charge,
corporate restriction, judgment, decree or order and no provision of applicable
law or governmental regulation is reasonably likely to have or result in a
Material Adverse Effect.
SECTION 4.09. LABOR MATTERS. There are no strikes or other
labor disputes pending or, to the best knowledge of the Company, threatened,
against the Company or any of its
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Subsidiaries. Hours worked and payments made to the employees of the Company
and its Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable law dealing with such matters. All payments due from
the Company or any of its Subsidiaries, or for which any claim may be made
against any of them, on account of wages and employee and retiree health and
welfare insurance and other benefits have been paid or accrued as a liability
on their books, as the case may be. The consummation of the transactions
contemplated by the Financing Documents will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which it is a party or by which it is bound.
SECTION 4.10. SUBSIDIARIES; OTHER EQUITY INVESTMENTS. Other
than as set forth on SCHEDULE 4.10, the Company has no Subsidiaries on
Restatement Effective Date. Each such Subsidiary is, and, in the case of any
additional corporate Subsidiaries formed after the Restatement Effective Date,
each of such additional corporate Subsidiaries will be at each time that this
representation is made or deemed to be made after the Restatement Effective
Date, a wholly-owned Subsidiary that is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as then conducted. Neither the Company nor any of its Subsidiaries is
engaged in any joint venture or partnership with any other Person.
SECTION 4.11. INVESTMENT COMPANY ACT. The Company is not an
"investment company" as defined in the Investment Company Act of 1940, as
amended. The consummation of the transactions contemplated by the Financing
Documents do not and will not violate any provision of such Act or any rule,
regulation or order issued by the Securities and Exchange Commission
thereunder.
SECTION 4.12. MARGIN REGULATIONS. None of the proceeds from
the Loans have been or will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any Margin Stock or for any other purpose which might cause any of the loans
under this Agreement to be considered a "purpose credit" within the meaning of
Regulation G, U or X of the Board of Governors of the Federal Reserve Board.
SECTION 4.13. TAXES. The Company's federal tax identification
number is ▇▇-▇▇▇▇▇▇▇ and the federal tax identification number for each
Subsidiary is accurately listed for such Subsidiary on Schedule 4.10. All
Federal, state and local tax returns, reports and statements required to be
filed by or on behalf of the Company and its Subsidiaries have been filed with
the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, and all taxes
(including real property taxes) and other charges shown to be due and payable
have been timely paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for nonpayment thereof, except any of
the foregoing as may be subject to a Permitted Contest. All state and local
sales and use taxes required to be paid by the Company or any of its
Subsidiaries have been paid, except any of the foregoing as may be subject to a
Permitted Contest. All Federal and state returns have been filed
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by the Company and its Subsidiaries for all periods for which returns were due
with respect to employee income tax withholding, social security and
unemployment taxes, and the amounts shown thereon to be due and payable have
been paid in full or adequate provisions therefor have been made.
SECTION 4.14. COMPLIANCE WITH ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section 412 of the Code in respect
of any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
reasonably be expected to result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Code or (iii) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.15. BROKERS. No broker, finder or other intermediary
has brought about the obtaining, making or closing of the transactions
contemplated by the Financing Documents, and the Company has and will have no
obligation to any Person in respect of any finder's or brokerage fees in
connection herewith or therewith.
SECTION 4.16. EMPLOYMENT, SHAREHOLDERS AND SUBSCRIPTION
AGREEMENTS. Except for the agreements described in SCHEDULE 4.16 (which
schedule may be updated from time to time by the Company with the consent of
the Agent which consent shall not be unreasonably withheld), true and complete
copies of which have been delivered to the Lenders, there are no (i) employment
agreements covering the management of the Company or any of its Subsidiaries,
(ii) collective bargaining agreements or other labor agreements covering any
group of employees of the Company or its Subsidiaries, or (iii) agreements
regarding the Company or any of its Subsidiaries, their respective assets or
operations or any investment therein to which any of its stockholders is a
party.
SECTION 4.17. FULL DISCLOSURE. None of the information
(financial or otherwise) furnished by or on behalf of the Company to the Agent
or any Lender in connection with the consummation of the transactions
contemplated by any of the Financing Documents contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading in the light of the
circumstances under which such statements were made. All financial projections
delivered to the Lenders have been prepared on the basis of the assumptions
stated therein. Except as previously disclosed to the Agent in writing, such
projections represent the Company's best estimate of the Company's future
financial performance and such assumptions are believed by the Company to be
fair in light of current business conditions at the time such projections were
delivered to the Agent.
SECTION 4.18. PRIVATE OFFERING. Neither the Company nor any
Person acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy
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any of the same from, or otherwise approached or negotiated in respect thereof
with, any Person other than the Lenders and not more than five other
institutional investors. Neither the Company nor any Person acting on its
behalf has taken, or will take, any action which would subject the issuance or
sale of the Notes to Section 5 of the Securities Act.
SECTION 4.19. COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS; NO
HAZARDOUS MATERIALS. Except as provided on SCHEDULE 4.19:
(a) Other than generation in compliance with all
applicable Environmental Laws, no Hazardous Materials are located on
any properties now or previously owned, leased or operated by the
Company or any of its Subsidiaries or have been released into the
environment, or deposited, discharged, placed or disposed of at, on,
under or near any of such properties except such of the foregoing as
could not reasonably be expected to have a Material Adverse Effect. No
portion of any such property is being used in, or has been used at any
previous time, for the disposal, storage, treatment, processing or
other handling of Hazardous Materials (other than processing or
handling incidental to the generation of Hazardous Materials in
compliance with all applicable Environmental Laws), nor is any such
property affected by any Hazardous Materials Contamination except for
such of the foregoing as could not reasonably be expected to have a
Material Adverse Effect.
(b) No asbestos or asbestos-containing materials are
present on any of the properties now or previously owned, leased or
operated by the Company or any of its Subsidiaries except such of the
foregoing as could not reasonably be expected to have a Material
Adverse Effect.
(c) No polychlorinated biphenyls are located on or in any
properties now or previously owned, leased or operated by the Company
or any of its Subsidiaries, in the form of electrical transformers,
fluorescent light fixtures with ballasts, cooling oils or any other
device or form except such of the foregoing as could not reasonably be
expected to have a Material Adverse Effect.
(d) No underground storage tanks are located on any
properties now or previously owned, leased or operated by the Company
or any of its Subsidiaries, or were located on any such property and
subsequently removed or filled except such of the foregoing as could
not reasonably be expected to have a Material Adverse Effect.
(e) Except as disclosed on SCHEDULE 4.19 (as such
schedule may be updated from time to time by the Company with the
consent of the Agent which consent shall not be unreasonably
withheld), no notice, notification, demand, request for information,
complaint, citation, summons, investigation, administrative order,
consent order and agreement, litigation or settlement with respect to
Hazardous Materials or Hazardous Materials Contamination is in
existence or, to the Company's knowledge, proposed, threatened or
anticipated with respect to or in connection with the operation of any
properties now or previously owned, leased or operated by the Company
or any of its
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Subsidiaries. All such properties and their existing and prior uses
comply and at all times have complied with any applicable governmental
requirements relating to environmental matters or Hazardous Materials
except for such noncompliances as could not reasonably be expected to
have a Material Adverse Effect. Except as disclosed on SCHEDULE 4.19
there is no condition on any of such properties which is in violation
of any applicable governmental requirements relating to Hazardous
Materials, and neither the Company nor any of its Subsidiaries has
received any communication from or on behalf of any governmental
authority that any such condition exists. Except disclosed on SCHEDULE
4.19 (as such schedule may be updated from time to time by the Company
with the consent of the Agent which consent shall not be unreasonably
withheld), none of such properties nor any property to which the
Company has, directly or indirectly, transported or arranged for the
transportation of any material is listed or, to the Company's
knowledge, proposed for listing on the National Priorities List
promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or
on any similar federal, state or foreign list of sites requiring
investigation or cleanup, nor, to the knowledge of the Company, is any
such property anticipated or threatened to be placed on any such list.
(f) There has been no environmental investigation, study,
audit, test, review or other analysis conducted of which the Company
has knowledge in relation to the current or prior business of the
Company or any property or facility now or previously owned, leased or
operated by the Company or any of its Subsidiaries which has not been
delivered to the Lenders at least five days prior to the date hereof.
(g) For purposes of this Section 4.19, the terms
"Company" and "Subsidiary" shall include any business or business
entity (including a corporation) which is, in whole or in part, a
predecessor of the Company or any Subsidiary.
SECTION 4.20. REAL PROPERTY INTERESTS. Except for the
ownership, leasehold or other interests set forth in SCHEDULE 4.20, the Company
and its Subsidiaries have, as of the Closing Date, no ownership, leasehold or
other interest in real property.
SECTION 4.21. THIRD PARTY REIMBURSEMENT . If any Credit Party
is or has been audited by Medicare, Medicaid, CHAMPUS, CHAMPVA or similar
governmental Third Party Payors, (i) none of such audits provides for
adjustments in reimbursable costs or asserts claims for reimbursement or
repayment by such Credit Party of costs and/or payments theretofore made by
such governmental Third Party Payor that, if adversely determined, could
reasonably be expected to have or result in a Material Adverse Effect and (ii)
none of the Credit Parties have had requests or assertions of claims for
reimbursement or repayment by it of costs and/or payments heretofore made by
any other Third Party Payor that, if adversely determined, could reasonably be
expected to have or result in a Material Adverse Effect, except in either case
to the extent described on SCHEDULE 4.21.
SECTION 4.22. ADDITIONAL REPRESENTATIONS; SCHEDULES. All
certifications, information, statements, conclusions and the like contained in
any Borrowing Base Certificate, Receivable Report, certificate, financial
statement or other instrument delivered by or on behalf
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of the Company or any Subsidiary pursuant to any of the Financing Documents
(including but not limited to any such made in or in connection with any
amendment to any of such documents) shall constitute representations and
warranties made under this Agreement. Wherever a representation and warranty
made under this Agreement refers to a schedule or an amended schedule, it shall
be deemed to refer to the schedule attached hereto or, if one or more amended
schedules have been furnished, the amended schedule most recently so furnished
prior to the date as of which the representation and warranty is made, and the
later delivery of an amended schedule shall not retroactively effect a
correction of any representation and warranty which was incorrect or untrue
when made.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company agrees that, so long as any Lender has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER REPORTS. The
Company will maintain a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in accordance with GAAP, and will deliver to each of the Lenders:
(a) as soon as practicable and in any event within 45
days after the end of each month, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at the end of such month
and the related consolidated statements of operations and cash flows
for such month, and for the portion of the Fiscal Year ended at the
end of such month setting forth in each case in comparative form the
figures for the corresponding periods of the previous Fiscal Year and
the figures for such month and for such portion of the Fiscal Year
ended at the end of such month that are set forth in the annual
operating and capital expenditure budgets and cash flow forecast
delivered pursuant to Section 5.01(j), all in reasonable detail and
certified by the chief financial officer of the Company as fairly
presenting the financial condition and results of operations of the
Company and its Consolidated Subsidiaries and as having been prepared
in accordance with GAAP applied on a basis consistent with the audited
financial statements of the Company, subject to changes resulting from
audit and normal year-end adjustments;
(b) as soon as available and in any event within 100 days
after the end of each Fiscal Year, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such Fiscal
Year and the related consolidated statements of operations,
stockholders' equity and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous
Fiscal Year and the figures for such Fiscal Year that are set forth in
the annual operating and capital expenditure budgets and cash flow
forecast delivered pursuant to Section 5.01(j), certified (solely with
respect to
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such consolidated statements) without qualification by ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & Co. or other independent public accountants of nationally
recognized standing;
(c) (i) together with each delivery of financial
statements pursuant to (a) and (b) above, an Officers' Certificate of
the Company stating that the officers executing such certificate have
reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of the Company during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting
period, and that such officers do not have knowledge of the existence
as at the date of such Officers' Certificate, of any Default, or, if
any such Default existed or exists, specifying the nature and period
of existence thereof and what action the Company has taken or is
taking or proposes to take with respect thereto; (ii) together with
each delivery of financial statements for each month and Fiscal Year,
a compliance certificate of the chief financial officer or treasurer
of the Company (x) providing details of all transactions between the
Company and any Person referred to in Section 6.08, (y) demonstrating
in reasonable detail compliance during and at the end of such
accounting period with the covenants contained in Sections 6.11
through 6.18, provided, however, that such Officers' Certificate shall
be required to calculate compliance with Sections 6.12, 6.14, 6.16 and
6.17 only quarterly and (z) if not specified in the financial
statements delivered pursuant to (a) or (b) above, as the case may be,
specifying the aggregate amount of interest paid or accrued and the
aggregate amount of depreciation and amortization charged, during such
accounting period; and (iii) beginning with the delivery of the fiscal
year end 1998 financial statements, together with each delivery of
financial statements pursuant to (b) above, a statement setting forth
in reasonable detail the computation of Excess Cash Flow, if any, for
such Fiscal Year, certified by the chief financial officer or
treasurer of the Company as having been prepared from such financial
statements in accordance with this Agreement;
(d) together with each delivery of financial statements
pursuant to (b) above, a written statement by the independent public
accountants giving the report thereon (i) stating that their audit
examination has included a review of the terms of this Agreement as it
relates to accounting matters, (ii) stating whether, in connection
with their audit examination, any Default has come to their attention,
and if such a condition or event has come to their attention,
specifying the nature and period of existence thereof, and (iii)
stating that based on their audit examination nothing has come to
their attention which causes them to believe that the information
contained in the certificates delivered therewith pursuant to (c)
above is not correct and that the matters set forth in the compliance
certificate delivered therewith pursuant to clause (ii) of (c) above
for the applicable Fiscal Year are not stated in accordance with the
terms of this Agreement;
(e) promptly upon receipt thereof, copies of all reports
submitted to the Company by independent public accountants in
connection with each annual, interim or special audit of the financial
statements of the Company made by such accountants,
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including the comment letter submitted by such accountants to
management in connection with their annual audit;
(f) promptly upon their becoming available, copies of (i)
all financial statements, reports, notices and proxy statements sent
or made available generally by the Company to its security holders,
(ii) all regular and periodic reports and all registration statements
and prospectuses filed by the Company with any securities exchange or
with the Securities and Exchange Commission or any governmental
authority succeeding to any of its functions and (iii) all press
releases and other statements made available generally by the Company
to the public concerning material developments in the business of the
Company;
(g) promptly upon any officer of the Company obtaining
knowledge (i) of the existence of any Default, or becoming aware that
the holder of any Debt of the Company or any Subsidiary that singly,
or when aggregated with all other Debt of the Company or its
Subsidiaries the holders of which have taken similar action, equals or
exceeds $50,000 in principal amount outstanding has given any notice
or taken any other action with respect to a claimed default
thereunder, (ii) of any change in the Company's certified accountant
or any resignation, or decision not to stand for re-election, by any
member of the Company's board of directors, (iii) that any Person has
given any notice to the Company or any Subsidiary or taken any other
action with respect to a claimed default under any agreement or
instrument (other than the Financing Documents) to which the Company
or any of its Subsidiaries is a party or by which any of their assets
are bound the indebtedness or obligation under which either singly or
when aggregated with all other claims of Persons taking similar
action, is equal to or greater than $50,000 or (iv) of the institution
of any litigation or arbitration involving an alleged liability of the
Company or any of its Subsidiaries equal to or greater than $50,000 or
any adverse determination in any litigation or arbitration proceedings
that singly or when aggregated with all other outstanding litigation
or arbitration claims involve a potential liability of the Company or
any of its Subsidiaries equal to or greater than $50,000, an Officers'
Certificate of the Company specifying the nature and period of
existence of any such condition or event, or specifying the notice
given or action taken by such holder or Person and the nature of such
claimed default (including any Default), event or condition, and what
action the Company or any affected Subsidiary has taken, is taking or
proposes to take with respect thereto;
(h) if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under Title IV
of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy
of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to
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terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any amendment
to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or the chief
accounting officer of the Company setting forth details as to such
occurrence and action, if any, which the Company or applicable member
of the ERISA Group is required or proposes to take;
(i) copies of any material reports or notices (but
excluding tax returns) related to taxes and any other material reports
or notices received by the Company from, or filed by the Company with,
any Federal, state or local governmental agency or body regulating the
activities of the Company;
(j) within 30 days after the conclusion of each Fiscal
Year, the Company's annual operating and capital expenditure budgets
and cash flow forecast for the following Fiscal Year presented on a
monthly basis, which shall be in a format reasonably consistent with
projections, budgets and forecasts theretofore provided to the
Lenders;
(k) together with each Notice of Borrowing and on the
seventh Business Day of each month, a Borrowing Base Certificate as of
the close of business of the last Business Day of the preceding month;
(l) within five Business Days after any request therefor,
such information in such detail concerning the amount, composition and
manner of calculation of the Borrowing Base as any Lender may
reasonably request;
(m) within twenty days after the end of each month, a
report, in form and substance acceptable to the Required Lenders, as
to all accounts receivable of the Company outstanding as of the last
day of such month (a "RECEIVABLES REPORT"), which shall set forth in
summary form an aging of such Receivables and such other information
as the Agent shall reasonably request;
(n) together with the next delivery of a Receivables
Report after the Company becomes aware thereof, notice of any dispute
between any Third Party Payor and the Company, any Subsidiary or any
other Credit Party, with respect to any amounts due and owing that
singly, or when aggregated with all other similar disputes with other
Third Party Payors of the Company, the Subsidiaries and the other
Credit Parties, equals or exceeds $100,000, with an explanation in
reasonable detail of the reason for the dispute, all claims related
thereto and the amount in controversy; and
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(o) with reasonable promptness, such other information
and data with respect to the Company or any of its Subsidiaries or any
other Credit Party as from time to time may be reasonably requested by
any Lender.
SECTION 5.02. PAYMENT OF OBLIGATIONS. The Company (i) shall
pay and discharge, and cause each of its Subsidiaries to pay and discharge, at
or before maturity, all of their respective material obligations and
liabilities, including tax liabilities, except where the same may be the
subject of a Permitted Contest, (ii) shall maintain, and cause each of its
Subsidiaries to maintain, in accordance with GAAP, appropriate reserves for the
accrual of any of the same and (iii) shall not breach or permit any of its
Subsidiaries to breach, in any material respect, or permit to exist any default
under, the terms of any material lease, commitment, contract, instrument or
obligation to which it is a party, or by which its properties or assets are
bound, subject to Permitted Contests.
SECTION 5.03. CONDUCT OF BUSINESS AND MAINTENANCE OF
EXISTENCE. The Company will continue, and will cause each of its Subsidiaries
to continue, to engage in business of the same general type as now conducted by
the Company and its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Subsidiary to preserve, renew and keep in
full force and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business; provided that nothing contained in this Section shall be deemed to
prohibit any merger or consolidation that is otherwise permitted under Section
6.06.
SECTION 5.04. MAINTENANCE OF PROPERTY; INSURANCE. (a) The
Company will keep, and will cause each of its Subsidiaries to keep, all
property necessary in its business in good working order and condition,
ordinary wear and tear excepted.
(b) The Company will maintain, and will cause each of its
Subsidiaries to maintain, (i) physical damage insurance on all real and
personal property on an all risks basis (including the perils of flood and
quake where reasonably required and available at a reasonable cost), covering
the repair and replacement of all such property and consequential loss coverage
for business interruption and extra expense, covering such risks, for amounts
not less than those, and with deductible amounts not greater than those, set
forth in Part I of SCHEDULE 5.04, (ii) public liability insurance (including
products/completed operations liability and professional injury liability
coverage) covering such risks, for amounts not less than those, and with
deductible amounts not greater than those, set forth in Part II of SCHEDULE
5.04 and (iii) such other insurance coverage in such amounts and with respect
to such risks as the Required Lenders may reasonably request. All such
insurance shall be provided by insurers having an A.M. Best policyholders
rating of not less than B+ or such other insurers as the Required Lenders may
approve in writing. The Company and each of its Subsidiaries will cause each
other Credit Party to comply with the insurance requirements specified in the
Service Agreement to which such Credit Party is a party.
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(c) On or prior to the Closing Date, the Company shall
cause the Agent to be named as an additional insured and loss payee on each
insurance policy required to be maintained pursuant to this Section 5.04. The
Company will deliver to the Lenders (i) on the Closing Date, a certificate from
the Company's insurance broker dated such date showing the amount of coverage
as of such date, and certifying that, in the opinion of such broker, such
amounts are reasonable and customary for companies of established repute
engaged in the same or a similar business, that such policies will include
effective waivers (whether under the terms of any such policy or otherwise) by
the insurer of all claims for insurance premiums against all loss payees and
additional insureds and all rights of subrogation against all loss payees and
additional insureds, and that if all or any part of such policy is canceled,
terminated or expires, the insurer will forthwith give notice thereof to each
additional insured and loss payee and that no cancellation, reduction in amount
or material change in coverage thereof shall be effective until at least 30
days after receipt by each additional insured and loss payee of written notice
thereof, (ii) upon the request of the Agent from time to time full information
as to the insurance carried, (iii) within five days of receipt of notice from
any insurer, a copy of any notice of cancellation, nonrenewal or material
change in coverage from that existing on the Closing Date and (iv) forthwith,
notice of any cancellation or nonrenewal of coverage by the Company or any of
its Subsidiaries.
SECTION 5.05. COMPLIANCE WITH LAWS. The Company will comply,
and cause each of its Subsidiaries to comply with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including Environmental Laws and ERISA and the rules and regulations
thereunder), except for such noncompliances that, individually or when
aggregated with all other noncompliances, could not reasonably be expected to
have a Material Adverse Effect.
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The
Company will keep, and will cause each of its Subsidiaries and the other Credit
Parties to keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each of its
Subsidiaries and the other Credit Parties to permit, representatives of any
Lender, at the Lenders' expense, to visit and inspect any of their respective
properties, to examine and make abstracts or copies from any of their
respective books and records, to conduct a collateral audit and analysis of
their respective inventories and accounts receivable and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
SECTION 5.07. USE OF PROCEEDS. The proceeds of Working Capital
Loans shall be used by the Company solely for working capital needs of the
Company and its Subsidiaries. The proceeds of Acquisition Loans shall be used
by the Company solely to fund Acquisitions consented to by the Agent and the
Lenders in their sole good faith discretion. None of such proceeds will be used
in violation of any applicable law or regulation.
SECTION 5.08. FURTHER ASSURANCES. The Company will, and the
Company will cause each of its Subsidiaries and each other Credit Party to, at
the Company's cost and expense,
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cause to be promptly and duly taken, executed, acknowledged and delivered all
such further acts, documents and assurances (x) as may from time to time be
necessary or as the Required Lenders may from time to time reasonably request
in order to carry out the intent and purposes of the Financing Documents and
the transactions contemplated thereby, including all such actions to establish,
preserve, protect and perfect the estate, right, title and interest of the
Lenders to the Collateral (including Collateral acquired after the date
hereof), including first priority Liens thereon, subject only to Permitted
Liens and (y) as the Lenders may from time to time reasonably request, to
establish, preserve, protect and perfect first priority Liens in favor of the
Lenders on any and all assets of the Company and its Subsidiaries and on the
Receivables of the other Credit Parties, now owned or hereafter acquired, that
are not Collateral on the date hereof. The Company shall promptly give notice
to the Agent of the acquisition after the Restatement Effective Date by the
Company or any Subsidiary of any real property (including leaseholds in respect
of real property), trademark, copyright or patent.
SECTION 5.09. LENDERS' MEETINGS. Within 45 days after the end
of each Fiscal Year, the Company will conduct a meeting of the Lenders to
discuss such Fiscal Year's results and the financial condition of the Company
at which shall be present the chief executive officer and the chief financial
officer of the Company and such other officers of the Company as the Company's
chief executive officer shall designate. Such meetings shall be held at a time
and place convenient to the Lenders and to the Company.
SECTION 5.10. HEDGING FACILITIES. If the aggregate principal
amount of Revolving Credit Loans outstanding reaches at any time an amount
equal to or greater than $15,000,000, the Lenders may require that the Company,
at its sole cost and expense, enter into and thereafter maintain in full force
and effect interest rate cap agreements in such amounts and on such terms as
shall reasonably be requested by the Agent.
SECTION 5.11. HAZARDOUS MATERIALS; REMEDIATION. The Company
will (i) promptly give notice to the Lenders in writing of any complaint,
order, citation, notice or other written communication from any Person with
respect to, or if the Company becomes aware of, (x) the existence or alleged
existence of a violation of any applicable Environmental Law or the incurrence
of any liability, obligation, loss, damage, cost, expense, fine, penalty or
sanction or the requirement to commence any remedial action resulting from or
in connection with any air emission, water discharge, noise emission, Hazardous
Material or any other environmental, health or safety matter at, upon, under or
within any of the properties now or previously owned, leased or operated by the
Company or any of its Subsidiaries, or due to the operations or activities of
the Company, any Subsidiary or any other Person on or in connection with any
such property or any part thereof or (y) any release on any of such properties
of Hazardous Materials in a quantity that is reportable under any applicable
Environmental Law; (ii) promptly comply, subject to Permitted Contests, with
any governmental requirements requiring the removal, treatment or disposal of
such Hazardous Materials or Hazardous Materials Contamination and provide
evidence satisfactory to the Required Lenders of such compliance; and (iii)
provide the Lenders, within 30 days after demand therefor by the Required
Lenders, with a bond, letter of credit or similar financial assurance
evidencing to the satisfaction of the Required Lenders that sufficient funds
are available to pay the cost of removing, treating and disposing of such
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Hazardous Materials or Hazardous Materials Contamination and discharging any
assessment which may be established on any such property as a result thereof
where the projected cost thereof exceeds $100,000.
SECTION 5.12. COLLATERAL REPORTS. The Company shall keep, and
shall cause each of its Subsidiaries and the other Credit Parties to keep,
accurate and complete records of its accounts receivable in at least so much
detail as to enable the Company to provide the Receivables Reports and other
information described in Section 5.01.
SECTION 5.13. COLLECTIONS; RIGHT TO NOTIFY ACCOUNT DEBTORS. At
any time following the occurrence of an Event of Default and during the
continuance thereof, in addition to the Lenders' rights under the Security
Documents, the Company hereby authorizes the Agent, at any time, to (i) notify
any or all account debtors that the accounts receivable of the Company and its
Subsidiaries and the other Credit Parties have been assigned to the Agent and
that the Agent has a security interest therein and (ii) direct such account
debtors to make all payments due from them to the Company upon such accounts
receivable directly to the Agent or to a lockbox designated by the Agent. The
Agent shall promptly furnish the Company with a copy of any such notice sent.
Any such notice, in the Agent's sole discretion, may be sent on the Company's,
such Subsidiaries' or such other Credit Parties' stationery, in which event the
Company shall, or shall cause such Subsidiary or other Credit Party to, if
requested by the Agent, co-sign such notice with the Agent. At any subsequent
time that no Events of Default are continuing, the Agent will withdraw such
notice at the Company's request.
SECTION 5.14. ENFORCEMENT OF COVENANTS NOT TO COMPETE. The
Company and each of its Subsidiaries shall preserve, protect and defend, to the
extent permitted by applicable law, all of its rights, if any, with respect to
any covenant not to compete contained in any of the material contracts of such
Person or contained in any employment agreement with any employee whose annual
salary and other compensation payable by the Company and any Subsidiary of
either thereof is $100,000 or more.
SECTION 5.15. LANDLORD AND WAREHOUSEMAN WAIVERS. Upon the
request of the Agent, the Company shall use its best efforts to deliver to the
Agent waivers of contractual and statutory landlord's, landlord's mortgagee's
and warehouseman's Liens in form and substance satisfactory to the Agent under
each existing lease, warehouse agreement or similar agreement to which the
Company or any Subsidiary is a party; provided that such waivers will in any
event be incorporated when the existing lease, warehouse agreement or similar
agreement is amended, renewed or extended and the Company will obtain waivers
of both contractual and statutory landlord's, landlord's mortgagee's and
warehouseman's Liens in form and substance satisfactory to the Agent in
connection with each new lease, warehouse agreement or similar agreement
entered into by the Company or any Subsidiary.
SECTION 5.16. ADDITIONAL SUBSIDIARIES. Promptly after the
creation or acquisition of any Subsidiary by the Company, the Company shall
execute and deliver or cause to be executed and delivered, (i) a Subsidiary
Guaranty Agreement and a Subsidiary Security Agreement from such Subsidiary,
(ii) one or more Professional Service Provider Security
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Agreements, and (iii) such other related documents as the Lender may request,
all in form and substance reasonably satisfactory to the Agent.
SECTION 5.17. ACCREDITATION AND LICENSING. The Company shall,
and shall cause each other Credit Party to, keep itself fully licensed with all
licenses required to operate such Person's business under applicable law and
maintain such Person's qualification for participation in, and payment under,
Medicare, Medicaid, CHAMPUS, CHAMPVA and any other federal, state or local
governmental program or private program providing for payment or reimbursement
for services rendered by such Person, except to the extent that the loss or
relinquishment of such qualification would not or could not reasonably be
expected to have or result in a Material Adverse Effect; provided, however,
that nothing in this Agreement shall require the Company or any other Credit
Party to participate in the CHAMPUS or CHAMPVA programs if it elects not to
accept patients covered by such programs. The Company will promptly furnish the
Agent with copies of all reports and correspondence relating to any loss or
revocation (or threatened loss or revocation) of any qualification described in
this Section.
ARTICLE VI
NEGATIVE COVENANTS
The Company agrees that, so long as any Lender has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 6.01. DEBT. The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to, any Debt, except for:
(a) Debt of the Company outstanding on the date of this
Agreement as set forth in SCHEDULE 6.01 and any Permitted Refinancing
thereof;
(b) The Existing Additional Acquisition Liabilities;
(c) Debt of the Company under the Financing Documents;
(d) Debt of the Company or any of its Subsidiaries
incurred or assumed for the purpose of financing all or any part of
the cost of acquiring any fixed asset (including through Capital
Leases), in an aggregate principal amount at any time outstanding not
greater than $500,000;
(e) Debt of the Company or any of its Subsidiaries to a
wholly-owned Subsidiary of the Company, or of any Subsidiary of the
Company to the Company;
(f) Purchase money Debt of the Company incurred in
connection with an acquisition in accordance with terms and conditions
of Section 6.07, which Debt shall be
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subordinated in all respects to any and all Debt of the Company to the
Agent and the Lenders, upon terms and conditions satisfactory to the
Lenders and the incurrence of which Debt does not result in a Default
or an Event of Default.
(g) Debt constituting liabilities under letters of
credit, surety bonds or similar instruments issued in the ordinary
course of business to secure bids, purchase orders, statutory
obligations such as workers compensation insurance or sales tax bonds,
operating leases and similar obligations (but not Debt), provided that
the aggregate outstanding obligation (whether fixed or contingent,
drawn or undrawn) of the Company and its Subsidiaries under all such
instruments shall not at any time exceed $50,000; and
(h) Other Debt of the Company and its Subsidiaries in an
aggregate principal amount (whether fixed or contingent, drawn or
undrawn) not to exceed at any time $50,000.
SECTION 6.02. NEGATIVE PLEDGE. Neither the Company nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) any Lien on any asset securing Debt permitted under
Section 6.01(d) incurred or assumed for the purpose of financing all
or any part of the cost of acquiring such asset, provided that such
Lien attaches to such asset concurrently with or within 90 days after
the acquisition thereof, and provided further that the principal
amount of the Debt secured shall not be less than 70% of the value of
the asset subject to such Lien;
(b) Liens existing on the date of this Agreement securing
Debt permitted by Section 6.01(a);
(c) Liens arising in the ordinary course of its business
which (i) do not secure Debt, (ii) do not secure any obligation in an
amount exceeding $50,000 and (iii) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(d) Liens arising in connection with Debt incurred
pursuant to Section 6.07; provided, however such Lien shall be
subordinate to any Lien under paragraph (e) below upon terms and
conditions satisfactory to the Lenders; and
(e) Liens created by the Security Documents.
SECTION 6.03. CAPITAL STOCK. The Company will not permit any
Subsidiary to, issue any shares of capital stock except shares of capital stock
issued by any Subsidiary to the Company which are delivered to the Agent in
pledge for the benefit of the Agent and the Lenders.
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SECTION 6.04. RESTRICTED PAYMENTS. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Payment or make any payment in
respect of any Additional Acquisition Liabilities; provided that the foregoing
shall not restrict or prohibit:
(i) dividends or distributions by the Company at such
times or in such amounts as are necessary to permit purchases of
shares of (or options to purchase shares of) Common Stock from
employees of the Company or of any Subsidiary upon their death,
termination or retirement, so long as, (x) before and after giving
effect to any such dividend or distribution for such purpose, no
Default shall have occurred and be continuing and (y) such purchases
or payments after the date hereof do not exceed in any one Fiscal Year
$75,000;
(ii) payments of Additional Acquisition Liabilities, so
long as, at the time of such payment, no Default shall have occurred
and be continuing, and prior to making such payment, the Company shall
have delivered to the Agent a certificate showing that, after giving
effect to such proposed payment, no Default will exist; and
(iii) scheduled payments of interest with respect to the
subordinated Debt, provided that no Default or Event of Default shall
have occurred and be continuing or would result after giving effect to
any payment pursuant to this clause (iii).
SECTION 6.05. ERISA. The Company will not, and will not permit
any of its Subsidiaries to:
(a) engage in any transaction in connection with which
the Company or any of its Subsidiaries could be subject to any
material liability arising from either a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975
of the Code;
(b) terminate any Plan in a manner, or take any other
action, which could result in any material liability of any member of
the ERISA Group to the PBGC;
(c) fail to make full payment when due of all amounts
which, under the provisions of any Plan, it is required to pay as
contributions thereto, or permit to exist any accumulated funding
deficiency, whether or not waived, with respect to any Plan;
(d) permit the present value of all benefit liabilities
under all Plans to exceed the fair market value of the assets of such
Plans; or
(e) fail to make any payments to any Multiemployer Plan
that it may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
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SECTION 6.06. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Company will not, and will not permit any of its Subsidiaries to, (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer, directly or indirectly, any of its or their assets, other
than (w) sales of any asset or group of related assets, the value of which does
not exceed $20,000, (x) sales of inventory in the ordinary course of their
respective businesses, (y) dispositions of Temporary Cash Investments and (z)
other dispositions for cash and fair value of assets that the board of
directors of the Company determines in good faith are no longer used or useful
in the business of the Company and its Subsidiaries, provided that immediately
after any such disposition, the aggregate fair market value of all such assets
disposed of pursuant to this clause (z) after the Original Agreement Date does
not exceed $250,000 and the aggregate fair market value of all such assets
disposed of during the Fiscal Year in which such disposition is made does not
exceed $100,000.
SECTION 6.07. PURCHASE OF ASSETS, INVESTMENTS. The Company
will not, and will not permit any Subsidiary to, acquire any assets other than
in the ordinary course of business, or to make, acquire or own any Investment
in any Person other than (a) Temporary Cash Investments, (b) Investments in
Subsidiaries, and (c) (i) acquisitions of a physician practice or physician
practice group or the assets of a physician practice or physician practice
group or an Investment (that constitutes a loan or advance for working capital
or capital expenditure purposes made pursuant to a Service Agreement in the
ordinary course of business, but not a Program Loan unless the Required Lenders
shall, in their sole discretion, give their prior written consent) in a
physician practice or physician practice group which acquisition the chief
financial officer or treasurer shall certify to the Agent meets the following
criteria:
(v) the physician practice or group to be acquired will not
represent more than 33% of the pro forma consolidated revenues of the
Company,
(w) the purchase price is not more than eight (8) times greater
than any first year management fees reasonably projected to be paid by
the physician practice to the Company or any of its Subsidiaries,
(x) the sole consideration for such purchase is (1) the issuance
of Common Stock and/or a seller note upon terms and conditions
satisfactory to the Lenders and that is subordinate to the Obligations
on terms and conditions satisfactory to the Lenders and/or (2) cash on
hand of the Company, provided that the aggregate amount of cash on
hand used in any one acquisition shall not exceed $3,000,000 and the
aggregate amount of cash on hand used in all such acquisitions in any
one Fiscal Year shall not exceed $5,000,000 (cash on hand of the
Company expressly excludes the proceeds of any Revolving Credit
Loans);
(y) the Service Agreement and other agreements executed in
connection with such acquisition contain terms that are substantially
similar (except for price and payment terms) to the terms of
acquisitions made by the Company through the Closing Date, and
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(z) the Company shall provide to the Agent a certificate
immediately prior to such Acquisition demonstrating to the Agent's
reasonable satisfactions that both before and after giving effect to
such acquisition no Default will have occurred and be continuing,
or (ii) Acquisitions approved by the Required Lenders in their sole good faith
discretion. Without limiting the generality of the foregoing, the Company will
not, and will not permit any Subsidiary to, (i) acquire or create any
Subsidiary without the consent of the Required Lenders (except that such
consent shall not be required to create a corporate subsidiary that is wholly
owned by the Company and that is formed solely for the purpose of an
acquisition permitted pursuant to the preceding sentence) and arrangements
satisfactory to the Required Lenders for (w) a pledge of the stock of such
Subsidiary to the Agent for the benefit of the Lenders, (x) such Subsidiary to
execute a joinder to the Subsidiary Guaranty Agreement, (y) such Subsidiary to
execute a joinder to the Subsidiary Security Agreement and all financing
statements and other documents and instruments required thereunder, and (z)
cause each professional association party to a Service Agreement with such
Subsidiary to execute a Professional Service Provider Security Agreement and
all financing statements, documents and instruments required in connection
therewith, or (ii) engage in any joint venture or partnership with any other
Person.
SECTION 6.08. TRANSACTIONS WITH AFFILIATES. The Company will
not, and will not permit any Subsidiary to, directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Company, on terms that are less favorable to the Company or such
Subsidiary, as the case may be, than those which might be obtained at the time
from a Person who is not an Affiliate of the Company.
SECTION 6.09. AMENDMENTS OR WAIVERS. Without the prior written
consent of the Required Lenders, the Company will not, nor will it permit any
Subsidiary to, agree to (i) any amendment to or waiver of or in respect of the
certificate of incorporation or Bylaws of the Company or any Financing Document
or (ii) any other material amendment to or waiver of any material contract
constituting a part of the Collateral.
SECTION 6.10. FISCAL YEAR. The Company shall not change its
fiscal year from a fiscal year ending December 31.
SECTION 6.11. MANAGEMENT COMPENSATION. The Company shall not,
and shall not permit any Subsidiary to, directly or indirectly, pay or become
obligated to pay, any compensation for services in any form to or for the
account of any Person listed on Schedule 4.16, except as expressly provided in
the Employment Contracts. In addition to the foregoing, the aggregate amount of
bonuses paid to such Persons in any Fiscal Year shall not exceed $1,000,000 and
the aggregate outstanding amount of any deferred compensation payable to any
such Person or any other employee shall not at any time exceed $500,000. The
limitation set forth in the preceding sentence shall not apply to payments in
the form of stock or stock options.
SECTION 6.12. INTEREST COVERAGE. The Company shall not permit
the ratio, calculated on the last day of any fiscal quarter for the number of
consecutive fiscal quarters then
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most recently ended since the Closing Date (considered as a single account
period, but not to exceed four quarters), of (i) Consolidated Free Cash Flow to
(ii) Total Interest Expense to be less than the ratio set forth below opposite
the period in which such last day shall fall:
PERIOD RATIO
from the Closing Date through 1.75
and including June 30, 1998
July 1, 1998 through and including
December 31, 1998 2.00
January 1, 1999 and thereafter 2.25
SECTION 6.13. CAPITAL EXPENDITURES. The aggregate amount of
Consolidated Capital Expenditures for any period of four consecutive fiscal
quarters shall not exceed 2.50% of net revenues for such period through and
including March 31, 1998, and thereafter 2.00% of such net revenues. Any
amounts permitted to be spent for Capital Expenditures for any such period in
excess of the amounts actually expended during such period may be carried
forward to the next period of four fiscal quarters as permitted Capital
Expenditures during such period.
SECTION 6.14. TOTAL DEBT SERVICE COVERAGE RATIO. The Company
shall not permit the ratio, calculated on the last day of any fiscal quarter
for the number of consecutive fiscal quarters then most recently ended since
the Closing Date (considered as a single account period, but not to exceed four
quarters), of (i) Consolidated Free Cash Flow to (ii) Total Debt Service, to be
less than 1.20:1.00.
SECTION 6.15. DEBT TO CAPITALIZATION. At no time shall the
ratio of (i) Consolidated Total Debt to (ii) Consolidated Capitalization exceed
66.7%.
SECTION 6.16. SENIOR DEBT TO EBITDA. The Company shall not
permit the ratio of (i) the sum, at such time, of (a) Consolidated Senior Debt
minus (b) the amount by which cash plus Temporary Cash Investments of the
Company and its Consolidated Subsidiaries exceeds $2,000,000, to (ii) EBITDA
for the four consecutive fiscal quarters then most recently ended (considered
as a single accounting period), to exceed the limit set forth below opposite
the period in which such fiscal quarter shall fall:
Period Ratio
------ -----
from the Closing Date through and including
December 31, 1998 4.50
from January 1, 1999 through and
including December 31, 1999 3.75
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from January 1, 2000 through and including
December 31, 2000 3.25
from January 1, 2001 and thereafter 2.75
SECTION 6.17. [Reserved]
SECTION 6.18. MINIMUM NET WORTH. At no time shall Consolidated
Net Worth be less than the sum of:
(i) $3,300,000, plus
(ii) 75% of the positive amount of Consolidated Net Income
for each fiscal period ended after the Closing Date,
plus
(iii) 100% of the Net Proceeds of Capital Stock received
following the Agreement Date.
SECTION 6.19. TRANSITION RULES. Except as otherwise
specifically provided herein, in calculating compliance with the financial
covenants for the period from the Closing Date through the first anniversary
thereof, compliance will be measured from the Closing Date to the date that
such compliance shall be required to be measured. For any test that requires
measurement over an entire year, results for the period from the Closing Date
through such date shall be annualized. In delivering pro forma covenant
calculations at any time for or including any entity that is the target of an
acquisition (whether such information is required pursuant to Section 3.02,
Section 6.04 or Section 6.07 or otherwise) or when including an acquisition
target that has not been under management by the Company or one of its
Subsidiaries for an entire fiscal quarter in calculating financial covenant
compliance, the Company shall use the actual EBITDA for the target over the
relevant period, as if such target had been a Subsidiary of the Company during
such period. To the extent such target has been under management by the Company
or one of its Subsidiaries for one or more entire fiscal quarters but less than
one year, the Company shall calculate EBITDA and net revenues with respect to
the target based on the annualized actual performance of the target during the
most recently ended number of complete quarters that such target has been under
management of the Company or one of its Subsidiaries. For the purposes of
calculating compliance with Sections 6.14, 6.15 and 6.16, Existing Additional
Acquisition Liabilities shall be excluded from:
(i) in the case of Section 6.14, Total Debt
Service,
(ii) in the case of Section 6.15, Consolidated
Total Debt and Consolidated Total Capitalization (to the
extent that such amounts would otherwise be included in
Consolidated Total Debt), and
(iii) in the case of Section 6.16, Consolidated
Senior Debt.
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SECTION 6.20. CHANGES RELATING TO SUBORDINATED DEBT. Neither
the Company nor any of its Subsidiaries shall change or amend the terms of any
subordinated Debt (or any indenture or agreement in connection therewith) if
the effect of such amendment is to: (a) increase the interest rate on such
subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such subordinated Debt other than to extend such dates; (c)
change any default or event of default or covenant other than to delete or make
less restrictive any default or covenant provision therein, or add any covenant
with respect to such subordinated Debt; (d) change the redemption or prepayment
provisions of such subordinated Debt other than to extend the dates therefor or
to reduce the premiums payable in connection therewith; (e) grant any security,
collateral or guaranty to secure payment of such subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such subordinated Debt in a manner adverse to the Company, any
Subsidiary, the Agent or any Lender.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. If any one or more of the
following events (each an "EVENT OF DEFAULT") shall occur and be continuing for
any reason whatsoever (whether voluntary or involuntary, by operation of law or
otherwise):
(a) the Company shall fail to pay any principal amount
due hereunder when due, or shall fail to pay any interest or premium
on any Note, or any fees or any other amount payable hereunder within
3 days following the due date therefor;
(b) the Company shall fail to observe or perform any
covenant contained in Section 5.13 or Article VI hereof, or Section
3(B) of the Pledge Agreement or the Company, or any of its
Subsidiaries shall fail to perform or observe any covenant contained
in Section 5 or Sections 4(A), (E) or (I) of the Security Agreements;
(c) the Company or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in the
Financing Documents (other than those covered by clause (a) or (b)
above) for 30 days after notice thereof has been given to the Company
by the Agent;
(d) any representation, warranty, certification or
statement made by the Company or any of its Subsidiaries in any
Financing Document or in any certificate, financial statement or other
document delivered pursuant to the Financing Documents shall prove to
have been incorrect in any respect (or in any material respect if such
representation, warranty, certification or statement is not by its
terms already qualified as to materiality) when made (or deemed made);
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(e) the Company or any of its Subsidiaries shall fail to
make any payment in respect of any Debt (other than the Notes) the
aggregate outstanding principal amount of which Debt, either singly or
when aggregated with all other Debt with respect to which the Company
or any of its Subsidiaries has failed to make a payment equals or
exceeds $100,000 (such Debt, hereinafter "MATERIAL DEBT");
(f) any event or condition shall occur which (i) results
in the acceleration of the maturity of any Material Debt of the
Company or any of its Subsidiaries, or (ii) enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of
such Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof, or (iii) results in a violation of, or a default
under, any provision of the certificate of incorporation of the
Company;
(g) Company or any of its Subsidiaries shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidation,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Company or any of its Subsidiaries seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 90
days; or an order for relief shall be entered against the Company or
any of its Subsidiaries under the federal bankruptcy laws as now or
hereafter in effect;
(i) any one or more members of the ERISA Group shall fail
to pay when due an amount or amounts aggregating in excess of $100,000
which it shall have become liable to pay under Title IV of ERISA; or
notice of intent to terminate a Material Plan shall be filed under
Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $100,000;
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(j) a judgment or order for the payment of money which
when aggregated with other such judgments or orders equals or exceeds
$100,000, shall be rendered against, the Company or any of its
Subsidiaries and such judgment or order shall continue unsatisfied and
unstayed for a period of 10 days or any judgment shall be rendered
against the Company or any Subsidiary that exceeds by more than
$2,000,000 any insurance coverage applicable thereto;
(k) except as the result of any transfer made pursuant to
the Pledge Agreement, the Company shall fail at any time to be the
record and beneficial owner of 100% of the issued and outstanding
capital stock any Subsidiary, free and clear of any Lien other than
inchoate tax Liens and Liens in favor of the Agent and the Lenders;
any person or group of persons (within the meaning of Rule 13d-3
promulgated by the Securities and Exchanges Commission under the
Securities Exchange Act of 1934, as amended), other than the current
owners, other employees and other than doctors who acquire Common
Stock as consideration for acquisitions, shall have acquired
beneficial ownership (within the meaning of such Rule 13d-3) of 5% or
more of the Common Stock of the Company; or both ▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇ shall cease to perform the functions of Chief
Executive Officer and Chief Operating Officer, respectively, of the
Company and a successor shall not have been appointed by the Company
and approved by the Required Lenders within 90 days thereafter; or the
Persons listed on SCHEDULE 7.01(k), in the aggregate, shall cease to
own beneficially at least 51% of the shares (determined assuming the
exercise of all options or warrants to purchase Common Stock and
adjusted for stock splits, combinations and similar events) of each
class of Common Stock; or, during any period of twelve consecutive
calendar months, individuals who were directors of the Company on the
first day of such period shall cease to constitute a majority of the
board of directors of the Company;
(l) (i) the auditor's report or reports on the audited
statements delivered pursuant to Section 5.01 shall include any
material qualification (including with respect to the scope of audit)
or exception, or (ii) the Company shall fail to deliver to the Agent
on or prior to July 30, 1996, either (A) consolidated financial
statements for the Company for the fiscal period ended June 30,1996,
with an audit report thereon without qualification as to opinion or
scope of review by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or other nationally
recognized accounting firm, or (B) a financial due diligence review
performed by such accountants, in each case (A) or (B), which
financial statements, audit, report and/or due diligence review
(including the results thereof) shall be satisfactory to the Agent and
the Lenders in their sole good faith discretion;
(m) the Lien created by any of the Security Documents
shall at any time fail to constitute a valid and perfected Lien on any
portion of the Collateral purported to be secured thereby which is
deemed material by the Agent, subject to no prior or equal Lien except
Permitted Liens, or the Company or any of its Subsidiaries shall so
assert in writing;
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(n) the Company or any of its Subsidiaries shall be
prohibited or otherwise materially restrained from conducting the
business theretofore conducted by it by virtue of any determination,
ruling, decision, decree or order of any court or governmental
authority of competent jurisdiction and such determination, ruling,
decision, decree or order remains unstayed and in effect for any
period of 10 days beyond any period for which any business
interruption insurance policy of the Company and its Subsidiary shall
provide full coverage to the such person of any losses and lost
profits;
(o) any of the Financing Documents shall for any reason
fail to constitute the valid and binding agreement of any party
thereto to the extent described in Section 4.03, or any such party
shall so assert in writing; or
(p) any default under the Service Agreement, dated as of
February __, 1998, among ProMedCo of the Coastal Bend, Inc., a Texas
corporation, ▇▇▇▇▇▇-▇▇▇▇▇ Clinic, P.A., a Texas professional
corporation, and TCS-Corpus Christi, P.A., a Texas professional
corporation (the "▇▇▇▇▇ Service Agreement'), the ▇▇▇▇▇ Service
Agreement is terminated or any action, proceeding or investigation is
commenced which challenges the legality, validity or binding effect of
the ▇▇▇▇▇ Service Agreement or any provision thereof.
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent shall if requested by the Required Lenders, (i) by
notice to the Company terminate the Commitments and they shall thereupon
terminate and/or (ii) by notice to the Company declare the Notes (together with
accrued interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company; provided
that in the case of any of the Events of Default specified in clause (g) or (h)
above with respect to the Company, without any notice to the Company or any
other act by the Agent or the Lenders, the Commitments shall thereupon
terminate and the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company.
ARTICLE VIII
FEES, EXPENSES AND INDEMNITIES;
GENERAL PROVISIONS RELATING TO PAYMENTS
SECTION 8.01. FEES. (a) Participation Fees. On the earlier
of: (i) the Closing Date and (ii) July 15, 1996, the Company shall pay to each
Lender a fee in an amount equal to 2.0% of the sum of such Lender's Revolving
Credit Commitment. Such fee shall be fully earned and nonrefundable on the
date of the execution hereof, whether or not any funding hereunder shall occur.
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(b) Unused Commitment Fee. The Company shall pay to each
Lender a fee on the daily average amount by which the amount of such Lender's
Revolving Credit Commitment exceeds the aggregate outstanding principal amount
of its Loans, (i) from and including the Agreement Date, to but excluding the
Initial Restatement Effective Date, at the rate of 0.50% per annum, and (ii)
from and including the Initial Restatement Effective Date and thereafter, at
the rate of 0.375% per annum. Accrued fees under this Section shall be payable
quarterly in arrears on each Quarterly Date prior to the Availability
Termination Date and on such date.
(c) Administrative Fee. On the Initial Restatement
Effective Date and on each anniversary thereof the Company shall pay to the
Agent an administration fee in the amount of $30,000.
SECTION 8.02. COMPUTATION OF INTEREST AND FEES. Commitment
fees pursuant to Section 8.01(b) and all interest hereunder and under the Notes
shall be calculated on the basis of a 360-day year for the actual number of
days elapsed.
SECTION 8.03. GENERAL PROVISIONS REGARDING PAYMENTS. All
payments (including prepayments) to be made by the Company under any Financing
Document, including payments of principal of and premium and interest on the
Notes, fees, expenses and indemnities, shall be made without set-off or
counterclaim and in immediately available funds. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension. The Company shall make all payments in immediately
available funds to each Lender's Payment Account before 11:00 A.M. (New York
City time) on the date when due. Each payment (including prepayments) by the
Company on account of principal of and interest on any Loans shall be made pro
rata according to the respective outstanding principal amounts of Loans held by
each Lender. All amounts payable by the Company hereunder or under any other
Financing Document not paid within 5 days of the date when due (other than
payments of principal and interest on the Notes, which shall bear interest as
set forth therein) shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
SECTION 8.04. EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to pay on demand
(i) all costs and expenses of preparation of this Agreement, the other
Financing Documents and of the Company's performance of and compliance with all
agreements and conditions contained herein and therein, (ii) the fees, expenses
and disbursements of counsel to, and independent appraisers and consultants
retained by, the Lenders in connection with the negotiation, preparation,
execution and administration of this Agreement, the other Financing Documents
and any amendments hereto or thereto and waivers hereof and thereof, (iii) all
reasonable costs and expenses of creating, perfecting and/or maintaining the
Liens pursuant to the Financing Documents, including filing and recording fees
and expenses, the costs of any bonds required to be posted in respect of future
filing and recording fees and expenses, title investigations and fees and
expenses of such local counsel as the Agent shall request (iv) the fees,
expenses and disbursements of independent accountants or other experts retained
by the Agent in connection with accounting and collateral
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audits or reviews of the Company, its Subsidiaries and its and their affairs,
provided that, in the absence of the occurrence and continuance of an Event of
Default such audits and/or reviews shall be limited to one per year (it being
expressly agreed that audits and/or reviews conducted during an Event of
Default shall not be limited) and (v) if an Event of Default occurs, all
out-of-pocket expenses incurred by the Agent and each Lender, including fees
and disbursements of counsel based upon time spent), in connection with such
Event of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom. Notwithstanding the foregoing, the fees,
expenses and disbursements of accountants, appraisers, attorney's and
consultants, and the costs of lien and title searches, in each case, to the
extent (but only to the extent) incurred in connection with the initial funding
of the Loan, shall not exceed $40,000.
SECTION 8.05. INDEMNITY. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to indemnify, pay
and hold harmless the Agent and each Lender and any subsequent holder of any of
the Notes, and the officers, directors, employees and agents of the Agent, each
Lender and such holders (collectively called the "INDEMNITEES") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including the fees and disbursements of counsel for
such Indemnitee) in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitee shall be designated a party
thereto and including any such proceeding initiated by or on behalf of the
Company or any Subsidiary, and the expenses of investigation by engineers,
environmental consultants and similar technical personnel and any commission,
fee or compensation claimed by any broker (other than any broker retained by
NationsCredit) asserting any right to payment for the transactions contemplated
hereby, which may be imposed on, incurred by or asserted against such
Indemnitee as a result of or in connection with the transactions contemplated
hereby or by the other Financing Documents (including (i)(A) as a direct or
indirect result of the presence on or under, or escape, seepage, leakage,
spillage, discharge, emission or release from, any property now or previously
owned, leased or operated by the Company or any of its Subsidiaries of any
Hazardous Materials or any Hazardous Materials Contamination, (B) arising out
of or relating to the offsite disposal of any materials generated or present on
any such property or (C) arising out of or resulting from the environmental
condition of any such property or the applicability of any governmental
requirements relating to Hazardous Materials, whether or not occasioned wholly
or in part by any condition, accident or event caused by any act or omission of
the Company or any of its Subsidiaries, and (ii) proposed and actual extensions
of credit under this Agreement) and the use or intended use of the proceeds of
the Notes, except that the Company shall have no obligation hereunder to an
Indemnitee with respect to any liability resulting from the gross negligence or
willful misconduct of such Indemnitee. To the extent that the undertaking set
forth in the immediately preceding sentence may be unenforceable, the Company
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all such indemnified
liabilities incurred by the Indemnitees or any of them. Without limiting the
generality of any provision of this Section, to the fullest extent permitted by
law, the Company hereby waives all rights for contribution or any other rights
of recovery with respect to liabilities, losses, damages, costs and expenses
arising under or relating to Environmental Laws that it might have by statute
or otherwise against any Indemnitee; except to
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the extent that any thereof are finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of such Indemnitee.
SECTION 8.06. TAXES. The Company agrees to pay all
governmental assessments, charges or taxes (except income or other similar
taxes imposed on any Lender or any holder of a Note), including any interest or
penalties thereon, at any time payable or ruled to be payable in respect of the
existence, execution or delivery of this Agreement, the other Financing
Documents, or the issuance of the Notes, and to indemnify and hold each Lender
and each and every holder of the Notes harmless against liability in connection
with any such assessments, charges or taxes.
SECTION 8.07. FUNDING LOSSES. If the Company fails to borrow
any Loans after notice has been given to any Lender in accordance with Section
2.04 or make any payment when due (including pursuant to a notice of optional
prepayment), the Company shall reimburse each Lender within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective participant in the related Loan), including any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or failure to borrow;
provided that such Lender shall have delivered to the Company a certificate
calculating in reasonable detail the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 8.08. MAXIMUM INTEREST. (a) In no event shall the
interest charged with respect to the Note or any other obligations of the
Company or any Subsidiary under the Financing Documents exceed the maximum
amount permitted under the laws of the State of Georgia or of any other
applicable jurisdiction.
(b) Notwithstanding anything to the contrary herein or
elsewhere, if at any time the rate of interest payable for the account of any
Lender hereunder or under the Note or other Financing Document (the "STATED
RATE") would exceed the highest rate of interest permitted under any applicable
law to be charged by such Lender (the "MAXIMUM LAWFUL RATE"), then for so long
as the Maximum Lawful Rate would be so exceeded, the rate of interest payable
for the account of such Lender shall be equal to the Maximum Lawful Rate;
provided, that if at any time thereafter the Stated Rate is less than the
Maximum Lawful Rate, the Company shall, to the extent permitted by law,
continue to pay interest for the account of such Lender at the Maximum Lawful
Rate until such time as the total interest received by such Lender is equal to
the total interest which such Lender would have received had the Stated Rate
been (but for the operation of this provision) the interest rate payable.
Thereafter, the interest rate payable for the account of such Lender shall be
the Stated Rate unless and until the Stated Rate again would exceed the Maximum
Lawful Rate, in which event this provision shall again apply.
(c) In no event shall the total interest received by any
Lender exceed the amount which such Lender could lawfully have received had the
interest been calculated for the full term hereof at the Maximum Lawful Rate
with respect to such Lender.
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(d) In computing interest payable with reference to the
Maximum Lawful Rate applicable to any Lender, such interest shall be calculated
at a daily rate equal to the Maximum Lawful Rate divided by the number of days
in the year in which such calculation is made.
(e) If any Lender has received interest hereunder in
excess of the Maximum Lawful Rate with respect to such Lender, such excess
amount shall be applied to the reduction of the principal balance of its Loans
or to other amounts (other than interest) payable hereunder, and if no such
principal or other amounts are then outstanding, such excess or part thereof
remaining shall be paid to the Company.
ARTICLE IX
THE AGENT
SECTION 9.01. APPOINTMENT AND AUTHORIZATION. Each Lender
irrevocably appoints and authorizes the Agent to enter into each of the
Security Documents on its behalf and to take such action as agent on its behalf
and to exercise such powers under the Financing Documents as are delegated to
the Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 9.02. AGENT AND AFFILIATES. NationsCredit shall have
the same rights and powers under the Financing Documents as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Agent, and NationsCredit and its affiliates may lend money to and generally
engage in any kind of business with the Company or any Subsidiary or affiliate
of the Company as if it were not the Agent hereunder.
SECTION 9.03. ACTION BY AGENT. The obligations of the Agent
hereunder are only those expressly set forth herein and under the other
Financing Documents. Without limiting the generality of the foregoing, the
Agent shall not be required to take any action with respect to any Default,
except as expressly provided in Article VII.
SECTION 9.04. CONSULTATION WITH EXPERTS. The Agent may consult
with legal counsel (who may be counsel for the Company), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.05. LIABILITY OF AGENT. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or not taken by it in connection with the Financing Documents (i) with
the consent or at the request of the Required Lenders or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with any Financing Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Company; (iii) the satisfaction of any condition
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specified in Article III, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness, sufficiency or genuineness of
any Financing Document or any other instrument or writing furnished in
connection therewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
SECTION 9.06. INDEMNIFICATION. Each Lender shall, ratably in
accordance with its Revolving Credit Commitment (whether or not the Revolving
Credit Commitments have been terminated), indemnify the Agent (to the extent
not reimbursed by the Company) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except such
as result from the Agent's gross negligence or willful misconduct) that the
Agent may suffer or incur in connection with the Financing Documents or any
action taken or omitted by the Agent hereunder or thereunder.
SECTION 9.07. CREDIT DECISION. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges 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 credit decisions
in taking or not taking any action under the Financing Documents.
SECTION 9.08. SUCCESSOR AGENT. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Company. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor Agent which, absent the occurrence and continuance of a Default, must
be reasonably acceptable to the Company. If no successor Agent shall have been
so appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be an institution organized or licensed under the laws of the United
States of America or of any State thereof. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights 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 Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. SURVIVAL. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the other Financing Documents and the execution, sale and
delivery of the Notes. The indemnities and agreements
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set forth in Articles VIII and IX shall survive the payment of the Notes and
the termination of this Agreement.
SECTION 10.02. NO WAIVERS. No failure or delay by the Agent or
any Lender in exercising any right, power or privilege under any Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein and
therein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.03. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including prepaid
overnight courier, telex, facsimile transmission or similar writing) and shall
be given to such party at its address or telecopy or telex number set forth on
the signature pages hereof (or, in the case of any such Lender who becomes a
Lender after the date hereof, in a notice delivered to the Company and the
Agent by the assignee Lender forthwith upon such assignment) or at such other
address or telecopy or telex number as such party may hereafter specify for the
purpose by notice to the Agent and the Company. Each such notice, request or
other communication shall be effective (i) if given by telex or telecopy, when
such telex or telecopy is transmitted to the telex or telecopy number specified
in this Section and the appropriate answerback is received (in the case of
telex) or telephonic confirmation of receipt thereof is obtained (in the case
of telecopy) or (ii) if given by mail, prepaid overnight courier or any other
means, when received at the address specified in this Section or when delivery
at such address is refused.
SECTION 10.04. SEVERABILITY. In case any provision of or
obligation under this Agreement or the Notes or any other Financing Document
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 10.05. AMENDMENTS AND WAIVERS. Any provision of this
Agreement or the other Financing Documents may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Company
and the Required Lenders (and, if the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Lenders, (i) increase or decrease any Revolving
Credit Commitment of any Lender (except for a ratable decrease in the Revolving
Credit Commitments of all Lenders) or subject any Lender to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or
fees hereunder, (iii) postpone the date fixed for any payment of principal of
any Loan, or of interest on any Loan or any fees hereunder or for any
termination of any Commitment, (iv) release any guarantor, or permit the
modification, release or substitution of all or any substantial portion of the
Collateral, or (iv) change the definition of Required Lenders or amend this
Section.
SECTION 10.06. SUCCESSORS AND ASSIGNS; REGISTRATION. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns (including any
transferee of any Note), except that the
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Company may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Lenders.
(b) The terms and provisions of this Agreement shall
inure to the benefit of any transferee or assignee of any Note to which the
Company, in the absence of the occurrence and continuance of an Event of
Default (in which case no consent shall be required), shall have consented
(such consent not to be unreasonably withheld) and, in the event of such
transfer or assignment, the rights and privileges herein conferred upon the
assigning Lender shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. Any assignment
shall be for an equal percentage of such assignor Lender's Loans and its
Revolving Credit Commitment, and any such assignee Lender shall, upon its
registration in the Note Register referred to below, become a "Lender" for all
purposes hereunder. Upon any such assignment, the assignor Lender shall be
released from its Revolving Credit Commitment to the extent assigned to and
assumed by the assignee Lender. Notwithstanding the foregoing, in the absence
of the occurrence and continuance of an Event of Default, NationsCredit
covenants for the benefit of the Company that it will not assign its Revolving
Credit Commitment below $15,000,000 except that NationsCredit retains the
unrestricted right to transfer, sell or assign any or all of its interest and
obligations in the Revolving Credit Commitment and the Obligations without
respect to this sentence in the following cases: (i) the transfer, sale or
assignment to any Affiliate of NationsCredit, (ii) any transfer, sale or
assignment to any Person to the extent required to comply with any order,
directive or request from any regulating authority, or (iii) any transfer, sale
or assignment to any Person in connection with the sale by NationsCredit of all
or any substantial portion of its corporate finance portfolio.
(c) Upon any assignment of any Note(s), the assigning
Lender shall surrender its Note(s) to the Company for exchange or registration
of transfer, and the Company will promptly execute and deliver in exchange
therefor a new Note or Note(s) of the same tenor and registered in the name of
the assignor Lender (if less than all of such Lender's Notes are assigned) and
the name of the assignee Lender.
(d) The Company shall maintain a register (the "NOTE
REGISTER") of the Lenders and all assignee Lenders that are the holders of all
the Notes issued pursuant to this Agreement. The Company will allow any Lender
to inspect and copy such list at the Company's principal place of business
during normal business hours. Prior to the due presentment for registration of
transfer of any Note, the Company may deem and treat the Person in whose name a
Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and premium and interest on such Note and for
all other purposes whatsoever, and the Company shall not be affected by notice
to the contrary.
(e) Each Lender (including any assignee Lender at the
time of such assignment) represents that it (i) is acquiring its Note solely
for investment purposes and not with a view toward, or for sale in connection
with, any distribution thereof, (ii) has received and reviewed such information
as it deems necessary to evaluate the merits and risks of its investment in the
Note, (iii) is an "accredited investor" within the meaning of Rule 501(a) under
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the Securities Act and (iv) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment in the Note, including a complete loss of its investment.
(f) Each Lender understands that the Note is being
offered only in a transaction not involving any public offering within the
meaning of the Securities Act, and that, if in the future such Lender decides
to resell, pledge or otherwise transfer the Note, the Note may be resold,
pledged or transferred only (i) to the Company, (ii) to a person who such
Lender reasonably believes is a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer to
whom notice is given that such resale, pledge or transfer is being made in
reliance on Rule 144A under the Securities Act or (iii) pursuant to an
exemption from registration under the Securities Act.
(g) Each Lender understands that the Note will, unless
otherwise agreed by the Company and the holder thereof, bear a legend to the
following effect:
THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT
THIS SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) TO THE COMPANY, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER THAT IS AWARE THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT.
(h) If the Note becomes mutilated and is surrendered by
the Lender with respect thereto to the Company, or if any Lender claims that
its Note has been lost, destroyed or wrongfully taken, the Company shall
execute and deliver to such Lender a replacement Note, upon the affidavit of
such Lender attesting to such loss, destruction or wrongful taking with respect
to such Note and such lost, destroyed, mutilated, surrendered or wrongfully
taken Note shall be deemed to be canceled for all purposes hereof. Such
affidavit shall be accepted as satisfactory evidence of the loss, wrongful
taking or destruction thereof and no indemnity shall be required as a condition
of the execution and delivery of a replacement Note. Any costs and expenses of
the Company in replacing any such Note shall be for the account of such Lender.
SECTION 10.07. COLLATERAL. Each of the Lenders represents to
the Agent and each of the other Lenders that it in good faith is not relying
upon any Margin Stock as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 10.08. HEADINGS. Headings and captions used in the
Financing Documents (including the Exhibits and Schedules hereto and thereto)
are included herein and
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therein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
SECTION 10.09. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA. THE COMPANY HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA AND OF ANY GEORGIA COURT SITTING IN THE CITY OF ATLANTA,
GEORGIA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
10.03. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 10.10. NOTICE OF BREACH BY AGENT OR LENDER. The
Company agrees to give the Agent and the Lenders notice of any action or
inaction by the Agent or any Lender or any agent or attorney of the Agent or
any Lender in connection with this Agreement or any other Financing Document or
the obligations of the Company under this Agreement or any other Financing
Document that may be actionable against the Agent or any Lender or any agent or
attorney of the Agent or any Lender or a defense to payment of any obligations
of the Company under this Agreement or any other Financing Document for any
reason, including commission of a tort or violation of any contractual duty or
duty implied by law. The Company agrees, to the fullest extent that it may
lawfully do so, that unless such notice is given promptly (and in any event
within ten (10) days after the Company has knowledge, or with the exercise of
reasonable diligence could have had knowledge, of any such action or inaction),
the Company shall not assert, and the Company shall be deemed to have waived,
any claim or defense arising therefrom to the extent that the Agent or any
Lender could have mitigated such claim or defense after receipt of such notice.
SECTION 10.11. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY AND TO THE FULLEST EXTENT PERMITTED BY
LAW WAIVES ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE CONSEQUENTIAL OR
SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING ARISING
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OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
SECTION 10.12. COUNTERPARTS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement and the other Financing Documents constitute the entire
agreement and understanding among the parties hereto and supersede any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof.
SECTION 10.13. SPECIAL PROVISION RELATING TO THIS AMENDMENT
AND RESTATEMENT. (a) This Agreement shall be effective upon receipt by the
Agent of the following items which shall be in form and substance satisfactory
to the Agent:
(i) counterparts of this Agreement duly executed by the
Borrower, AmSouth Bank and BankBoston;
(ii) receipt by NationsCredit of a duly executed Amended
and Restated $35,000,000 Revolving Credit Note for its
account, in the form provided for herein;
(iii) receipt by AmSouth Bank of a duly executed Amended
and Restated $15,000,000 Revolving Credit Note for its
account, in the form provided for herein;
(iv) receipt by BankBoston of a duly executed $20,000,000
Revolving Credit Note for its account, in the form provided
for herein;
(v) counterparts of the Agreement Regarding Security
Documents duly executed by each Subsidiary in favor of the
Agent;
(vi) counterparts of the Agreement Regarding Professional
Service Provider Security Agreements duly executed by each
physician or physician practice group party to a Service
Agreement;
(vii) an opinion of counsel to the Company and the
Subsidiaries as to the due execution and enforceability of
this Agreement, the Notes and the Agreement Regarding Security
documents;
(viii) a certificate of the Company and each Subsidiary as
to the due authorization, execution and delivery of this
Second Amended and Restated Agreement, the Financing Documents
executed in connection therewith, the truth of the
representation and warranties hereunder and the fact that
immediately before and after the effectiveness of this Second
Amended and Restated Agreement, no Default shall have occurred
and be continuing;
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(ix) receipt by NationsCredit and by BankBoston of its
commitment fee in the amount of $50,000 and $150,000,
respectively, which fee will be fully earned and
non-refundable on the date of this Agreement;
(x) receipt by NationsCredit of the fees and expenses due
to their counsel from the Company, which amount will be
$_____________ plus expenses in respect of this Second
Amendment and Restatement for counsel to NationsCredit plus
other amounts due with respect to other matters arising under
this Agreement both prior to and concurrent with this Second
Amendment and Restatement; and
(xi) such other documents as the Agent or the Lenders
shall request.
(b) This Agreement may be executed in any number of
counterparts, all of which shall be deemed to constitute but one original and
shall be binding upon all parties, their successors and permitted assigns.
(c) This Agreement shall amend and restate and replace
that certain prior Amended and Restated Credit Agreement, dated as of November
13, 1997, among the Company, the Lenders signatories thereto and the Agent,
which amended and restated and replaced that certain Credit Agreement, dated as
of June 12, 1996, among the Company, the Lenders signatories thereto and the
Agent (the "Prior Credit Agreement"). This Agreement is not intended nor shall
it be construed to be a novation or an accord and satisfaction of the
Obligations or any other indebtedness, liabilities or obligations of the
Company or its Subsidiaries under this Agreement or the other Financing
Documents. References to the Prior Credit Agreement contained in any Financing
Document shall be deemed to be a reference to such agreement as amended and
restated hereby.
(d) The following Schedules and Exhibits to the Prior
Credit Agreement are being added or replaced by this Amendment and Restatement:
Schedule 4.10
(e) The Company hereby acknowledges that, the Company
Security Agreement and the Pledge Agreement are and shall remain in full force
and effect, and hereby ratifies, confirms and approves the Company Security
Agreement and the Pledge Agreement and all of the terms and provisions thereof,
and agrees that each of the Company Security Agreement and the Pledge Agreement
constitutes the valid and binding obligation of the Company, enforceable by the
Agent and the Lenders in accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
PROMEDCO MANAGEMENT COMPANY
By:
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Name:
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Title:
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Address:
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Attn:
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Telecopy:
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LENDERS:
Revolving Loan Commitment: NATIONSCREDIT COMMERCIAL
$35,000,000 CORPORATION
By:
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Name:
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Title:
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Address:
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Attn:
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Telecopy:
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70
Revolving Loan Commitment: AMSOUTH BANK
$15,000,000
By:
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Name:
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Title:
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Address:
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Attn:
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Telecopy:
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Revolving Loan Commitment: BANKBOSTON
$20,000,000
By:
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Name:
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Title:
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Address:
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Attn:
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Telecopy:
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AGENT:
NATIONSCREDIT COMMERCIAL
CORPORATION
By:
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Name:
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Title:
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Address:
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Attn:
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Telecopy:
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