EXHIBIT 10.35
_______________________________________
PHYSICIANS RESOURCE GROUP, INC.
Borrower
_______________________________________
LOAN AGREEMENT
$90,000,000 REVOLVING CREDIT LOAN
Dated as of March 14, 1997
________________________________________
NATIONSBANK OF TENNESSEE, N.A., AGENT
THE BANKS SIGNATORY HERETO
Lenders
_______________________________________
TABLE OF CONTENTS
RECITALS 1
I. DEFINITIONS 1
1.1 Terms Defined in This Agreement 1
1.2 Terms Generally 18
II. LOANS AND LETTERS OF CREDIT 18
2.1 Amount of Revolving Credit Loan 18
2.2 Use of Proceeds of Revolving Credit Loan 18
2.3 Revolving Credit Loan Notes 19
2.4 Separate Commitments of Lender 19
2.5 Advances of Loans 19
2.6 Interest 22
2.7 Alternate Rate of Interest if LIBOR Unavailable 23
2.8 Change in Circumstances 23
2.9 Change in Legality of LIBOR Loans 26
2.10 Principal Repayment 26
2.11 Prepayment of LIBOR Loans 26
2.12 Prepayment of Base Rate Loans 27
2.13 Reduction of Commitment 27
2.14 Periodic Commitment Fee Based on Use of Facilities 28
2.15 Letters of Credit 28
2.16 Up-Front Fee 35
III. CONDITIONS PRECEDENT 35
3.1 Conditions to Initial Advance and Issuance 35
3.2 Conditions to Subsequent Loans and Issuances 38
IV. REPRESENTATIONS AND WARRANTIES 39
4.1 Capacity 39
4.2 Authorization 39
4.3 Binding Obligations 39
4.4 No Conflicting Law or Agreement 39
4.5 No Consent Required 39
4.6 Financial Statements 40
4.7 Fiscal Year 40
4.8 Litigation 40
4.9 Taxes; Governmental Charges 40
4.10 Title to Properties 40
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4.11 No Default 40
4.12 Casualties; Taking of Properties 41
4.13 Compliance with Laws 41
4.14 Compliance with Fraud and Abuse Laws 41
4.15 ERISA 41
4.16 Full Disclosure of Material Facts 41
4.17 Accuracy of Projections 41
4.18 Investment Company Act 42
4.19 Personal Holding Company 42
4.20 Solvency 42
4.21 Chief Executive Office 42
4.22 Subsidiaries 42
4.23 Ownership of Patents, Licenses, Etc 42
4.24 Environmental Compliance 42
4.25 Labor Matters 42
4.26 OSHA Compliance 43
4.27 Regulation U 43
4.28 Affiliate Transactions 43
4.29 Subordinated Debentures 43
V. AFFIRMATIVE COVENANTS 43
5.1 Payment of Obligations 43
5.2 Maintenance of Existence and Business 43
5.3 Financial Statements and Reports 44
5.4 Taxes and Other Encumbrances 46
5.5 Payment of Funded Debt 46
5.6 Compliance with Laws 46
5.7 Maintenance of Property 46
5.8 Compliance with Contractual Obligations 47
5.9 Further Assurances 47
5.10 Security Interest; Setoff 47
5.11 Insurance 47
5.12 Accounts and Records 48
5.13 Official Records 48
5.14 Banking Relationships 48
5.15 Right of Inspection 48
5.16 ERISA Information and Compliance 49
5.17 Indemnity; Expenses 49
5.18 Assistance in Litigation 50
5.19 Name Changes 50
5.20 Estoppel Letters 50
5.21 Environmental Matters 50
5.22 Opinions of Counsel 51
5.23 Borrower Entities 52
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VI. NEGATIVE COVENANTS 52
6.1 Debts, Guaranties, and Other Obligations 52
6.2 Change of Management 53
6.3 Change of Ownership 53
6.4 Encumbrances 53
6.5 Investments 53
6.6 Prepayments 54
6.7 Sales and Leasebacks 54
6.8 Change of Control 54
6.9 Nature of Business 54
6.10 Further Acquisitions, Mergers, Etc 54
6.11 Advances 54
6.12 Disposition of Assets 55
6.13 Inconsistent Agreements 55
6.14 Fictitious Names 55
6.15 Subsidiaries and Affiliates 55
6.16 Place of Business 55
6.17 Adverse Action With Respect to Plans 55
6.18 Transactions With Affiliates 55
6.19 Constituent Document Amendments 56
6.20 Adverse Transactions 56
6.21 Use of Lenders' Name 56
6.22 Margin Securities 56
6.23 Accounting Changes 56
6.24 Distributions 56
6.25 Action Outside Ordinary Course 56
6.26 Modification of Subordinated Debenture Documents 56
6.27 Non-Scheduled Payment of Subordinated Debentures 56
VII. FINANCIAL COVENANTS 57
7.1 Funded Debt to Consolidated Adjusted EBITDA 57
7.2 Funded Debt to Capital 57
7.3 Fixed Charge Coverage 57
7.4 Current Ratio 57
7.5 Net Worth 57
7.6 Capital Expenditures 57
7.7 Senior Funded Debt to Consolidated Adjusted EBITDA 57
VIII. EVENTS OF DEFAULT 58
8.1 Events of Default 58
8.2 Remedies 60
IX. AGENT 61
9.1 Appointment of Agent 61
9.2 Powers and Duties of Agent 61
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9.3 Indemnification of Agent 63
9.4 No Representations by Agent 63
9.5 Independent Investigations by Lenders 63
9.6 Notice of Default 64
9.7 Funding of Advances Pursuant to Borrowing Notices 64
9.8 Agent in its Individual Capacity 64
9.9 Holders 64
9.10 Successor Agent 65
9.11 Sharing of Payments, etc 65
9.12 Separate Liens on Collateral 65
9.13 Payments Between Agent and Lenders 66
9.14 Assignments and Participations 66
9.15 Bankruptcy Provisions 66
9.16 Foreclosure of Collateral 67
9.17 Procedures for Notices and Approvals 67
9.18 Other Relationships With Borrower 67
X. GENERAL PROVISIONS 68
10.1 Notices 68
10.2 Renewal, Extension, or Rearrangement 70
10.3 Application of Payments 70
10.4 Counterparts 70
10.5 Negotiated Document 70
10.6 Consent to Jurisdiction; Exclusive Venue 70
10.7 Not Partners; No Third Party Beneficiaries 70
10.8 No Reliance on Lenders' Analysis 70
10.9 No Marshaling of Assets 71
10.10 Impairment of Collateral 71
10.11 Business Days 71
10.12 Standard of Care; Limitation of Damages 71
10.13 Incorporation of Schedules 71
10.14 Indulgence Not Waiver 71
10.15 Cumulative Remedies 71
10.16 Amendment and Waiver in Writing 71
10.17 Assignment 72
10.18 Entire Agreement 72
10.19 Severability 72
10.20 Time of Essence 72
10.21 Applicable Law 72
10.22 Captions Not Controlling 72
10.23 Waiver of Right to Jury Trial 72
10.24 Facsimile Signatures 72
v
EXHIBITS
1.1 Form of Acquisition Certificate
2.3 Form of Revolving Credit Note
2.5.1(b) Form of Borrowing Notice
3.1.1(c) Form of Subsidiary Guaranty
3.1.1(d) Form of Stock Pledge and Security Agreement
3.1.1(j) Form of Borrower's Counsel Opinions
SCHEDULES
1.1 Initial Borrower Entities
4.8 Litigation
4.28 Affiliate Transactions
6.2 Management Staffing
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LOAN AGREEMENT
This Loan Agreement is entered into as of the 24th day of March, 1997, by
and among PHYSICIANS RESOURCE GROUP, INC. ("Borrower"), a Delaware corporation;
the banks that have executed this Agreement below (collectively "Lenders"); and
NATIONSBANK OF TENNESSEE, N.A., in its capacity as Agent for Lenders ("Agent").
RECITALS
WHEREAS, Lenders have agreed to extend a revolving credit facility to
Borrower, on certain terms and conditions; and
WHEREAS, Agent has agreed to serve as administrative and collateral agent,
on certain terms and conditions, with respect to the credit facility to be
extended to Borrower; and
WHEREAS, Borrower, Lenders and Agent wish to provide for the terms and
conditions of the revolving credit facility to be granted to Borrower and the
terms and conditions of Agent's service as administrative and collateral agent
hereunder;
NOW, THEREFORE, as an inducement to cause Lenders to extend credit to
Borrower; as an inducement for Agent to serve under this Agreement; and for
other valuable consideration, the receipt and sufficiency of which are
acknowledged, it is agreed as follows:
I. DEFINITIONS
1.1 Terms Defined in This Agreement. As used below in this Agreement,
the following capitalized terms shall have the following meanings, unless the
context expressly requires otherwise:
"ACQUIRED DEBT" means Debt that is outstanding as of the date of
determination and which was previously a loan obligation or a Capital Lease of
an Acquired Practice at the time the Practice was acquired by a Borrower Entity;
provided, however, if any portion of such Debt is subject to the unqualified and
noncontingent written obligation of a Provider to repay the Debt, with interest,
in accordance with its terms, then "Acquired Debt" shall only include the
portion of such Debt that is not subject to the Provider's obligation of
repayment.
"ACQUIRED PRACTICE" means a Practice that is either (i) owned by a Borrower
Entity as of the date hereof or (ii) acquired by a Borrower Entity after the
date hereof through a Permitted Acquisition.
"ACQUISITION EBITDA" means, with respect to a Practice acquired by a
Borrower Entity and covered by a Service Agreement, the pro forma income to the
Borrower Entities that would have arisen under the applicable Service Agreement
if the Service
Agreement had been in effect, and the acquisition had occurred, prior to the
beginning of the relevant financial period, with Service Agreement income
determined based upon the actual financial performance of the Acquired Practice
over the relevant financial period, as adjusted only to reflect changes in
payments to owner or stockholder Providers (whether characterized as
professional fees or management fees) and demonstrable reductions in expenses
arising under Borrower's established programs for the purchase of services and
supplies. Acquisition EBITDA of a Practice must be based upon financial
information that Agent regards as accurate and reliable (which is confirmed as
to Acquired Practices owned by Borrower Entities as of the date hereof). In
assessing the accuracy and reliability of financial information for this
purpose, unqualified audited financial statements prepared by a regional or
national accounting firm shall be acceptable in any case, and shall be required
in the cases of acquisitions (i) of publicly held companies or their assets, and
(ii) in which the Acquisition EBITDA of the target would exceed fifteen percent
(15%) of the Consolidated Adjusted EBITDA of the Borrower Entities for the
previous fiscal year. If audited financial statements are not required to be
provided under the preceding sentence, other sources of financial information
will be considered for approval on a case-by-case basis, in Agent's reasonable
discretion.
"AFFILIATE" means, with respect to any Person, another Person that,
directly or indirectly, (i) has an equity interest in that Person in an amount
of more than twenty percent (20%) of such Person, (ii) has common ownership with
that Person, where the common owner owns more than twenty percent (20%) of each
Person so affiliated, (iii) Controls that Person, or (iv) shares common Control
with that Person.
"AGENT" means NationsBank of Tennessee, N.A., in its capacity as described
in Article IX of this Agreement, its lawful corporate successors and any
successor agent appointed pursuant to Article IX hereof.
"AGREEMENT" means this Loan Agreement (including all schedules and exhibits
hereto), as the same may be amended from time to time.
"ALTERNATE BASE RATE" means the greater of (i) the Federal Funds Rate plus
one-half percent (1/2%), and (ii) the rate announced by Agent as its "prime
rate" (which rate is not necessarily the lowest rate offered on any particular
type of loan), in each case as it may change from time to time.
"APPLICABLE COMMITMENT FEE," "APPLICABLE LIBO RATE MARGIN" and "APPLICABLE
BASE RATE MARGIN" mean, with respect to Loans advanced under and the commitment
fee respecting the Revolving Credit Loan, (i) until the earlier of the first
Pricing Tier Determination Date that occurs after June 30, 1997, or the first
draw under the Revolving Credit Loan, the rates defined as Tier 4 below, and
(ii) upon such event described in (i) and thereafter, the rates established by
Agent from time to time upon each Pricing Tier Determination Date pursuant to
the percentage rates per annum set forth opposite the appropriate test in the
pricing grid below (ratio values shall be rounded to the nearest one-hundredth,
with any value of .005 rounded upward):
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FUNDED DEBT TO BASE RATE MARGIN LIBOR COMMITMENT
CONSOLIDATED ADJUSTED MARGIN FEE
EBITDA
Tier 1 0% 1.00% .25%
Less than 1.00
Tier 2 0% 1.125% .30%
Greater than or equal to 1.00
and less than 2.00
Tier 3 .375% 1.375% .325%
Greater than or equal to 2.00
and less than 2.50
Tier 4 .625% 1.625% .375%
Greater than or equal to 2.50
and less than 3.00
Tier 5 1.125% 2.125% .50%
Greater than or equal to 3.00
The Funded Debt to Consolidated Adjusted EBITDA ratio shall be established by
Agent on each Pricing Tier Determination Date on the basis of the then current
consolidated quarterly financial statements of and schedules prepared by
Borrower delivered to Agent pursuant to this Agreement. Notwithstanding the
foregoing, during the existence and continuation of an Event of Default, the
Applicable Commitment Fee, Applicable LIBO Rate Margin, and Applicable Base Rate
Margin shall automatically become those provided for in Tier 5 above.
"BANKING DAY" means a Business Day, subject to the following additional
convention. As to notices or payments received on a Business Day at or before
11:00 a.m. Charlotte, North Carolina time, the Banking Day shall correspond to
the Business Day of receipt. As to notices or payments received on a Business
Day after 11:00 a.m. Charlotte, North Carolina time, the Banking Day of receipt
shall be deemed to be the next following Business Day.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as it may be
amended from time to time.
"BASE RATE LOAN" means a Loan for which Borrower has elected the
application of an interest rate based upon the Alternate Base Rate.
"BORROWER" means Physicians Resource Group, Inc., a Delaware corporation,
and its successors and assigns. This definition does not abrogate the
requirement set forth below restricting Borrower's ability to assign any rights
under this Agreement.
3
"BORROWER ENTITIES" means Borrower and all Subsidiaries in existence from
time to time.
"BORROWING NOTICE" has the meaning assigned in Section 2.5.1(b) hereof.
"BUSINESS DAY" means any day on which Agent and national banks located in
Charlotte, North Carolina are open for the conduct of ordinary business;
provided however, that when used in connection with determining the LIBO Rate,
the term "Business Day" shall exclude any day on which banks are not open for
dealings in U.S. Dollar deposits in the London Interbank Market.
"CAPITAL" means Consolidated Net Worth plus Funded Debt.
"CAPITAL EXPENDITURES" means expenditures, determined according to GAAP on
a consolidated basis, that would be capitalized and depreciated over more than
one annual accounting period.
"CAPITAL LEASE" means a lease that would be characterized as a financed
sale or purchase under GAAP.
"CHANGE OF CONTROL" means the occurrence, after the date of this Agreement,
of (i) any Person or two or more Persons acting in concert acquiring beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of Borrower (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities thereof entitled to vote in the election of directors; or (ii) during
any period of up to 24 consecutive months, individuals who at the beginning of
such 24-month period were directors of Borrower ceasing for any reason to
constitute a majority of the Board of Directors thereof unless the Persons
replacing such individuals were nominated by the Board of Directors of Borrower;
or (iii) any Person or two or more Persons acting in concert acquiring by
contract or otherwise, or entering into a contract or arrangement which upon
consummation will result in its acquisition of, or control over, securities of
Borrower (or other securities convertible into such securities) representing 30%
or more of the combined voting power of all securities of Borrower entitled to
vote in the election of directors.
"CLOSING DATE" means the date of this Agreement.
"CMLTD" means scheduled maturities of long-term Debt arising for the 12
months following a date of determination.
"COLLATERAL" means all Property now or hereafter securing the Obligations.
4
"COMMITMENT" means the amount of each Lender's commitment to fund the
Revolving Credit Loan. Each Lender's several Commitment for the Revolving
Credit Loan shall initially be as set forth below beside their signatures to
this Agreement.
"CONSOLIDATED ADJUSTED EBITDA" means EBITDA as calculated on a consolidated
basis according to GAAP, (i) less any non-expensed payments to Providers except
for (x) those advances permitted under Section 6.11(i) of this Agreement and (y)
non-expensed advances for fixed asset purchases or working capital on terms and
conditions satisfactory to, and approved in advance by, Agent, (ii) plus,
without duplication, any Acquisition EBITDA for the relevant accounting period
(for example, if Consolidated Adjusted EBITDA is being calculated for the
Borrower Entities for the four fiscal quarters ending December 31, 1997, and a
Permitted Acquisition occurred on July 1, 1997, Acquisition EBITDA would be
included for the first six months of 1997, resulting in inclusion of the
acquired entity for the entire fiscal year), (iii) reduced by the Non-Owned
Portion of any EBITDA arising from a Partially-Owned Subsidiary, and (iv)
reduced by any positive EBITDA arising from Permitted Unpledged Investments and
Subsidiaries. Additionally, EBITDA arising from the operations of Partially-
Owned Subsidiaries shall not exceed 20% of the total Consolidated Adjusted
EBITDA and EBITDA from Permitted Minority Interest Investment Entities shall not
exceed 3% of the total Consolidated Adjusted EBITDA.
"CONSOLIDATED CAPITAL EXPENDITURES" means expenditures of the Borrower
Entities, determined according to GAAP on a consolidated basis, that would be
capitalized and depreciated over more than one period of twelve (12) months.
"CONSOLIDATED CURRENT RATIO" means current assets, determined on a
consolidated basis according to GAAP, divided by current liabilities, determined
on a consolidated basis according to GAAP.
"CONSOLIDATED NET WORTH" means shareholders' equity, determined on a
consolidated basis according to GAAP.
"CONTROL" or "CONTROLLED" means that a Person has the direct or indirect
power to conduct or govern the policies of another Person, whether this power
exists as a matter of right or through economic compulsion.
"DEBT" means, with respect to any Person, all obligations, contingent or
otherwise, that would be classified under GAAP as a liability of that Person
including, but not limited to, any nonrecourse obligations secured by Property
of that Person.
"DEFAULT RATE" means the lesser of (i) two percent (2%) over the otherwise
applicable rate or, if no other rate is specified, two percent (2%) over the
Alternate Base Rate in effect from time to time, or (ii) the Maximum Lawful
Amount.
5
"EBITDA" means the sum of net income before extraordinary items plus
Interest Expense plus expenses for taxes, depreciation and amortization,
determined according to GAAP. It is agreed further that the merger expenses and
related expenses disclosed on Borrower's financial statements for periods in
fiscal year 1996 shall further be added to net income for the calculation of
EBITDA calculations covering periods in 1996.
"ENCUMBRANCE" means any interest in Property in favor of one not the owner
thereof, whether voluntary or involuntary, including, but not limited to, (i)
the lien or security interest arising from a deed of trust, mortgage, pledge,
security agreement, conditional sale, Capital Lease, consignment, or bailment
for security purposes, and (ii) reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
such title encumbrances.
"ENVIRONMENTAL LAWS" means the Environmental Protection Act, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Hazardous Materials Transportation
Act and any other federal, state or municipal law, rule or regulation relating
to air emissions, water discharge, noise emissions, solid or liquid waste
disposal, hazardous or toxic waste or materials, or other environmental or
health matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA is
a member of Borrower's controlled group, or under common control with Borrower,
within the meaning of Section 414 of the IRC, the regulations promulgated
pursuant thereto and the published revenue rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4068(f) of
ERISA; (iv) the withdrawal by Borrower or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in 4001(a)(2) of ERISA; (v) the failure by Borrower or any ERISA
Affiliate to make a material payment to a Plan required under Section 302(f)(1)
of ERISA; (vi) the adoption of an amendment to a Plan requiring the provision of
initial or additional security to such Plan, pursuant to Section 307 of ERISA;
or (vii) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, a Plan.
6
"EVENT OF DEFAULT" means the occurrence of any of the events specified in
Section 8.1 hereof, as to which any requirement for notice or lapse of time has
been satisfied.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519) or any successor publication,
published by the Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)." If
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for such
day under the caption "Federal Funds Effective Rate." If on any relevant day the
appropriate rate for such day is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such day shall be the arithmetic
mean of the rates for the last transaction in overnight federal funds arranged
prior to 9:00 a.m., New York City time, on that day by each of three leading
brokers of federal funds transactions in New York City, selected by Agent.
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet, income
statement, and statement of cash flows for Borrower dated December 31, 1995 and
the unaudited consolidated financial statements dated September 30, 1996
delivered by Borrower to Agent, and all notes thereto.
"FIXED CHARGE COVERAGE RATIO" means (i) Consolidated Adjusted EBITDA, plus
Operating Lease expense, less the greater of actual maintenance Capital
Expenditures or the amount budgeted therefor as provided in Section 7.6 hereof,
and less the amount of cash taxes paid during the period, divided by (ii) the
sum of Interest Expense plus CMLTD (including the principal sum of payments due
on Capital Leases) plus Operating Lease expense.
"FRAUD AND ABUSE LAWS" means Section 1128B(b) of the Social Security Act,
42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act, 42
U.S.C. Section 1877, as from time to time amended; any successor statute(s)
thereto; all rules and regulations promulgated thereunder; and any other Law
relating to the ownership of medical facilities by providers of medical services
or the referral of patients to medical facilities owned by providers of medical
services.
"FUNDED DEBT" means all Debt for borrowed money evidenced by a promissory
note, debenture or similar instrument including, without limitation, Capital
Leases and the Subordinated Debentures and specifically excluding, without
limitation, trade payables, accrued liabilities, income taxes and deferred
income taxes, determined on a consolidated basis.
7
"GAAP" means generally accepted accounting principles pronounced by the
Financial Accounting Standards Board or any successor thereto, as in effect from
time to time.
"GOVERNMENTAL AUTHORITY" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"HAZARDOUS SUBSTANCES" means those substances included from time to time
within the definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. (S) 9601 et seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. (S) 6901 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801 et seq.; the
Clean Water Act, 33 U.S.C. Section 1251 et. seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et. seq., and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or become
regulated under any applicable local, state, or federal law or regulation
addressing environmental hazards.
"INITIAL BORROWER ENTITIES" means Borrower and all Subsidiaries of Borrower
that own, as of the Closing Date, assets and/or engage in business transactions
(other than entering into asset purchase agreements or merger agreements that
have not been closed), except for those Subsidiaries that have been created or
acquired by Borrower within the thirty (30) days preceding the Closing Date or
that have only entered into the foregoing asset purchase agreements or merger
agreements. A list of all Initial Borrower Entities is attached hereto as
Schedule 1.1 hereto.
"INTANGIBLE ASSETS" means goodwill, patents, copyrights, franchises,
trademarks, research and development costs, organizational costs and other
intangible assets under GAAP.
"INTEREST EXPENSE" means expenses for all interest (including current
charges on Capital Leases) and letter of credit fees.
"INTEREST PAYMENT DATE" means, (i) as to Base Rate Loans, the first day of
each calendar quarter and the Maturity Date and (ii) as to any LIBOR Loan, the
last day of the Interest Period applicable to such Loan and, in addition, in the
case of a LIBOR Loan with an Interest Period of six (6) months' duration, the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 3 months after the commencement
of the Interest Period.
"INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing on
(and including) the date of such LIBOR Loan and ending on (but excluding) the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as Borrower may elect; provided,
8
however, that (x) if any Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, with respect to LIBOR Loans, such next succeeding Business
Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (y) no Interest Period with
respect to any Loan shall end later than the Maturity Date.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"ISSUING BANK" means NationsBank of Tennessee, N.A., its lawful corporate
successors, and any successor appointed pursuant to this Agreement in the event
of its resignation.
"LAW" or "LAWS" means all applicable constitutional provisions, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
"LENDERS" means the banks that are signatory hereto, their respective
successors and assigns.
"LETTER OF CREDIT DOCUMENTS" has the meaning assigned in Section 2.15.6 of
this Agreement.
"LETTER OF CREDIT LIABILITIES" has the meaning assigned in Section 2.15 of
this Agreement.
"LETTERS OF CREDIT" has the meaning assigned in Section 2.15 of this
Agreement.
"LIBO RATE" means, for any given Interest Period with respect to a given
LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars (rounded
upwards, if necessary, to the next higher 1/100 of 1%) at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term LIBO Rate shall mean, for any given Interest
Period with respect to a given LIBOR Loan, the rate per annum appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIBO RATE RESERVE PERCENTAGE" means the reserve percentage applicable
during any Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any
9
such percentage shall be so applicable) under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for Lenders
with respect to liabilities or assets consisting of or including LIBOR
Liabilities having a term equal to such Interest Period.
"LIBOR LIABILITIES" means deposit liabilities which are deemed to be
eurocurrency liabilities as such term is defined under the regulations of the
Board of Governors of the Federal Reserve Bank.
"LIBOR LOAN" means a Loan for which Borrower has elected application of an
interest rate based on the LIBO Rate.
"LOAN" means a loan advanced under the Revolving Credit Loan.
"LOAN DOCUMENTS" means, collectively, each writing delivered at any time by
any Borrower Entity to Lenders or Agent relating to the Revolving Credit Loan or
relating to any Letters of Credit.
"MANAGEMENT STOCK ACQUISITION LOANS" means loans to ▇▇▇▇▇▇ ▇▇▇▇▇ extended
on or before February 28, 1999 to enable him to purchase the aggregate amount of
up to Two Hundred Thousand (200,000) shares of (or equity securities convertible
or exchangeable for up to Two Hundred Thousand (200,000) shares of) Borrower's
common stock, which loans shall not exceed Five Million and No/100 Dollars
($5,000,000.00) in the aggregate.
"MATERIAL ADVERSE CHANGE" means any material and adverse change in the
business, Properties, financial condition or operations of the Borrower Entities
in the aggregate.
"MATERIAL ADVERSE EFFECT" means any event or condition which, singly or in
the aggregate with other events or conditions, materially and adversely affects
the business, Properties, financial condition or operations of the Borrower
Entities, in the aggregate.
"MATURITY DATE" means March 24, 2000. The Maturity Date may be extended
from time to time by the written agreement of all Lenders, Agent and Borrower.
"MAXIMUM LAWFUL AMOUNT" means the maximum lawful amount of interest, loan
charges, commitment fees or other charges that may be assessed under Tennessee
law or, if higher, under applicable federal law.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or its successor.
10
"NET PROCEEDS" means gross proceeds of a transaction less reasonable and
customary underwriter and brokerage fees and commissions, the fees and expenses
of trustees and attorneys, and other reasonable and customary closing fees and
expenses.
"NON-OWNED PORTION" means the percentage of equity interest of a Partially-
Owned Subsidiary that is not owned by one or more Borrower Entities.
"NOTE" means any of the Revolving Credit Notes referred to in Section 2.3
hereof.
"OBLIGATIONS" means the obligations of Borrower to Lenders to repay the
Revolving Credit Loan, the Reimbursement Obligations and all other obligations
of Borrower and the other Borrower Entities to Lenders and to Agent under this
Agreement and the other Loan Documents.
"OPERATING LEASES" means leases that are not Capital Leases.
"PARTIALLY-OWNED SUBSIDIARY" means a Subsidiary that is not entirely owned
by one or more Borrower Entities.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means the purchase (by asset purchase, stock
purchase, merger or otherwise, subject to the other requirements of this
definition set forth below) by a Borrower Entity of either (i) another physician
practice management company whose primary business is the ownership and
management of Practices in a manner similar to that of Borrower, or of another
company in a business substantially related thereto, or (ii) all or
substantially all of the assets of a Practice in the ordinary course of business
(it being acknowledged that medical records and certain other professional
assets that are required by Law to be owned by a Provider are not acquired in
these transactions), subject to the further satisfaction of the following
requirements, as applicable:
(a) If Borrower wishes to have pre-acquisition earnings approved as
Acquisition EBITDA hereunder or the approval of Lenders is
required under any of subsections (b), (c) or (d) of this
definition, Borrower shall have delivered to Agent and Lenders an
Acquisition Certificate in the form attached hereto as Exhibit
1.1, together with all required schedules and exhibits thereto,
within the time required by the terms of the Acquisition
Certificate.
(b) If the Total Cash Consideration to be paid by Borrower Entities in
connection with any single acquisition exceeds Fifteen Million and
No/100 Dollars ($15,000,000.00), the
11
prior written approval of the Required Lenders shall be required.
(c) Notwithstanding any other provision of this definition, if (i) the
total consideration to be paid by Borrower Entities for a single
acquisition is less than or equal to Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00), and (ii) the Total
Cash Consideration for the acquisition is less than or equal to
thirty percent (30%) of the total consideration therefor, the
approval of the Required Lenders shall not be required.
(d) If Borrower's ratio of Funded Debt to Consolidated Adjusted
EBITDA, as last reported in financial statements delivered to
Agent and Lenders pursuant to this Agreement, is greater than
2.50:1.00, the prior written approval of the Required Lenders
shall be required as to individual acquisitions for which the
Total Cash Consideration is greater than 3.0 times the Acquisition
EBITDA of the target Practice for the most recent four fiscal
quarters.
(e) If Borrower's ratio of Funded Debt to Consolidated Adjusted
EBITDA, as last reported in financial statements delivered to
Agent and Lenders pursuant to this Agreement, is greater than
3.00:1.00, the prior written approval of the Required Lenders
shall be further required as to individual acquisitions for which
the Total Cash Consideration is greater than Three Million and
No/100 Dollars ($3,000,000.00). (All approvals of the Required
Lenders under this definition shall be requested by Borrower
through the delivery of the Acquisition Certificate to Lenders and
Agent and responses of the Lenders shall be compiled by Agent).
(f) Borrower shall not enter into any acquisition unless both prior to
and giving effect to the acquisition no Event of Default shall
exist under this Agreement.
"PERMITTED ENCUMBRANCES" means all of the following:
(a) Encumbrances securing the payment of any of the Obligations.
(b) Encumbrances securing taxes, assessments, or other governmental
charges not yet due or which are being contested in good faith by
appropriate action promptly initiated and
12
diligently conducted, if Borrower has made reserve
therefor as required by GAAP.
(c) Mechanics', repairmen's, materialmen's, warehousemen's, landlords'
and other like liens arising by operation of law securing accounts
that are not delinquent.
(d) Consensual landlords' or real estate lessors' liens on real or
personal Property securing amounts not past due under leases (i)
entered into by a Borrower Entity prior to the date hereof, (ii)
entered into by a third-party predecessor in interest of a
Borrower Entity prior to the date of a Borrower Entity's
acquisition of an interest therein, or (iii) entered into by a
Borrower Entity after the date hereof, but in the case of (iii)
the aggregate annual rentals under leases including consensual
landlord liens shall not exceed One Million and No/100 Dollars
($1,000,000.00).
(e) Encumbrances on real property used by Borrower not securing
monetary obligations, provided that the Encumbrances are of a type
customarily placed on real property and do not materially impair
the value of the affected property.
(f) Pledges or deposits in the ordinary course of business to secure
nondelinquent obligations under ▇▇▇▇▇▇▇'▇ compensation or
unemployment laws or similar legislation or to secure the
performance of leases or contracts entered into in the ordinary
course of business.
(g) Encumbrances securing Acquired Debt and Purchase Money Security
Interests, to the extent permitted under Section 6.1.7 hereof.
(h) Rights for the use of Property provided for under Service
Agreements entered into in full compliance with this Agreement.
(i) In addition to any Encumbrance otherwise permitted by this
definition, consensual Encumbrances on assets of Acquired
Practices for thirty (30) days in each case after the closing of
the acquisition thereof by a Borrower Entity.
(j) Encumbrances securing Seller Debt existing as of the Closing Date,
to the extent Seller Debt is temporarily permitted to be secured
under Section 6.1.6 hereof.
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"PERMITTED MINORITY INTEREST INVESTMENT ENTITIES" means Persons in which
one or more Borrower Entities own an equity interest and which are not
Subsidiaries, as to which Borrower has delivered or caused to be delivered to
Agent for the benefit of Lenders, within thirty (30) days after the later of (i)
a Borrower Entity's acquisition of an interest in such Person, or (ii) the
Person's first transaction of business (other than the entering into of asset
purchase agreements or merger agreements that have not been closed), a security
agreement granting to Agent to secure the Obligations a first priority perfected
security interest in the Borrower Entities' interest(s) in such Person pursuant
to documentation in form and substance acceptable to Agent, with the validity
and perfection of the security interest and other matters as Agent may
reasonably require confirmed to Agent and Lenders by an opinion of Borrower's
outside counsel satisfactory to Agent and Lenders in all respects, and with all
expenses related to such documentation (including, but not limited to, filing
fees and taxes and the reasonable fees and expenses of Agent's attorneys) to be
paid by Borrower.
"PERMITTED SUBSIDIARY" means a Subsidiary as to which Borrower has
delivered or caused to be delivered to Agent for the benefit of Lenders, within
thirty (30) days after the later of (i) a Borrower Entity's acquisition of an
interest in the Subsidiary, or (ii) the Subsidiary's first transaction of
business (other than the entering into of asset purchase agreements or merger
agreements that have not been closed), (x) if the Subsidiary is a Wholly-Owned
Subsidiary, a guaranty from such Subsidiary securing the Obligations, and (y) in
all circumstances, a security agreement granting to Agent to secure the
Obligations a first priority perfected security interest in the Borrower
Entities' interest(s) in the Subsidiary pursuant to documentation in form and
substance acceptable to Agent, with the validity of the guaranty (if
applicable), the perfection of the security interest and other matters as Agent
may reasonably require confirmed to Agent and Lenders by an opinion of
Borrower's outside counsel satisfactory to Agent and Lenders in all respects,
and with all expenses related to such documentation (including, but not limited
to, filing fees and taxes and the reasonable fees and expenses of Agent's
attorneys) to be paid by Borrower.
"PERMITTED UNPLEDGED INVESTMENTS AND SUBSIDIARIES" means equity interests
owned by Borrower Entities, which interests would qualify as either Permitted
Subsidiaries or Permitted Minority Interest Investment Entities except that the
equity interests owned by Borrower Entities are not encumbered to secure the
Obligations as required by those definitions or, if so encumbered, the
encumbrances are subject to material question as to the ability of Agent to
effect freely a transfer of the encumbered equity interest by exercise of
remedies pursuant to its security interest therein, provided that (i) the equity
interests at issue must be subject to limitations on their transferability or
assignability only pursuant to restrictions included in the constituent
documents of the investment entity that were in effect before the acquisition of
an interest therein by a Borrower Entity, and (ii) the EBITDA resulting from all
such entities shall not exceed the amount equal to 1% of Consolidated Adjusted
EBITDA.
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"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization, government, governmental agency or political
subdivision thereof, or any other form of entity.
"PLAN" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Borrower or any Subsidiary and
covered by Title IV of ERISA or to which Section 412 of the IRC applies.
"PRACTICE" means a medical or optometric practice, optical practice,
ambulatory surgery center related practice or management service center at a
single location or various locations if owned by a single Seller or related
Sellers prior to acquisition by a Borrower Entity. Whenever in this Agreement
"Practice" is used in describing an acquisition by a Borrower Entity, such
reference is to the acquisition of the assets used in the operation of the
Practice that can lawfully be acquired by such Borrower Entity or to the
acquisition of the stock of a corporation or equity interest of another Person
that owns, as of the time of purchase, only those assets that can be lawfully
acquired by such Borrower Entity.
"PRICING TIER DETERMINATION DATE" means the fifth (5th) Business Day
following each date on which Borrower has delivered to Agent and Lenders
financial reports as required by Section 5.3 hereof that contain a calculation
of, and information sufficient to support the calculation of, Borrower's ratio
of Funded Debt to Consolidated EBITDA for the preceding four fiscal quarters.
"PRO RATA" OR "PRO RATA SHARE" refer to the apportionment among Lenders
according to their respective total Commitments at the time of determination;
provided, however, if at a time of determination there are principal amounts
outstanding under the Revolving Credit Loan, and if any Lender has failed to
fund in violation of this Agreement any unrepaid Loan that was funded by any
other Lender or Lenders, this apportionment shall be determined according to the
respective total principal amounts of the Revolving Credit Loan held by the
respective Lenders rather than by their Commitments.
"PROPERTY" or "PROPERTIES" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"PROVIDER" means a physician or optometrist who performs professional
services respecting a Practice that is either managed by a Borrower or the
assets of which are owned by a Borrower.
"PURCHASE MONEY SECURITY INTEREST" means an Encumbrance on specific
equipment (including the Encumbrance arising under a Capital Lease), provided
that (i) the Debt secured by any such Encumbrance is not an Acquired Debt, shall
have arisen at the time of the acquisition thereof and shall not exceed 100% of
the cost of the equipment to the entity acquiring the same, and (ii) each such
Encumbrance shall attach only to the equipment so acquired with the proceeds of
the Debt secured thereby.
15
"REIMBURSEMENT OBLIGATIONS" has the meaning assigned in Section 2.15.2 of
this Agreement.
"REQUIRED LENDERS" means Lenders holding more than sixty-six and two-thirds
percent (66 2/3%) of the total Commitments for the Revolving Credit Loan;
provided, however, if at a time of determination there are principal amounts
outstanding under the Revolving Credit Loan, and if any Lender has failed to
fund in violation of this Agreement any unrepaid Loan that was funded by any
other Lender or Lenders, this determination shall be made according to Lenders
holding the required percentage of principal amounts of the Revolving Credit
Loan rather than by the outstanding Commitments.
"REVOLVING CREDIT LOAN" means the revolving credit loan described in
Article II hereof.
"S & P" means Standard & Poor's Corporation or its successor.
"SELLER" means the owner or owners of a Practice that is acquired by a
Borrower Entity or that has entered into a firm and binding commitment letter,
asset purchase agreement, or merger agreement with a Borrower Entity.
"SELLER DEBT" means Debt incurred in favor of one or more Sellers
representing part of the purchase price of an Acquired Practice, including, but
not limited to, amounts due Sellers for the excess of accounts receivable
acquired over the amount of liabilities assumed in the acquisition.
"SENIOR FUNDED DEBT" means Funded Debt other than the Subordinated
Debentures.
"SERVICE AGREEMENT" means one of those Service Agreements now in effect or
hereafter entered into by a Borrower Entity and a Provider setting forth the
terms and conditions under which a Borrower Entity manages the administration of
the Provider's Practice.
"SOLVENT" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is (a)
greater than the then total amount of liabilities (including subordinated
liabilities) of such Person and (b) greater than the amount that will be
required to pay such Person's probable liability on such Person's then existing
debts as they become absolute and matured, (ii) such Person's capital is not
unreasonably small in relation to its business, and (iii) such Person has not
incurred and does not intend to incur, or believe or reasonably should believe
that it will incur, debts beyond its ability to pay such debts as they become
due.
"STOCK REPURCHASE PROGRAM" means Borrower's acquisition of up to Four
Million (4,000,000) shares of Borrower's own outstanding shares of common stock
at a price
16
not to exceed Twenty and No/100 Dollars ($20.00) for any share, to be
completed on or before February 28, 1999.
"SUBORDINATED DEBENTURES" has the meaning assigned in Section 6.1.11
hereof.
"SUBSIDIARY" means any present or future corporation or other entity at
least a majority of whose outstanding voting stock or other voting securities
shall at the time be owned directly or indirectly by one or more Borrower
Entities or which is owned to a lesser degree but which is sufficiently
controlled by the Borrower Entities that the owned entity is required to be
reported with the other Borrower Entities on a consolidated basis under GAAP.
"TAXES" means all taxes and assessments, whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may be
assessed, levied, confirmed or imposed on the Borrower Entities or on any of
their properties or assets or any part thereof or in respect of any of their
franchises, businesses, income or profits.
"TOTAL CASH CONSIDERATION" means all noncontingent obligations to pay cash
(whether payable over time, such as Seller Debt, or at closing) as consideration
in connection with an acquisition, whether characterized as price, deferred
price, consulting fee (if regarded as part of the purchase price rather than for
bona fide services to be provided independent of the purchase) or otherwise,
plus fifty percent (50%) of the maximum amount of contingent consideration
(including, but not limited to, "earnout notes") that could arise as a result of
the acquisition, plus the principal amount of any Acquired Debt, and further
including the amount of any Debt of an Acquired Practice that is retired by a
Borrower Entity in connection with the acquisition (provided, however, if any
portion of such retired Debt is subject to the unqualified written obligation of
a Provider to repay to a Borrower Entity the Debt, with interest, then "Total
Cash Consideration" shall only include the portion of such Debt that is not
subject to the Provider's obligation of repayment), in each case without
discount for timing of payments.
"UCC" means the Uniform Commercial Code as adopted in Tennessee, as it may
be amended from time to time.
"UNMATURED DEFAULT" means any event or condition that, but for the giving
of any required notice by Agent and/or the passing of time, would be an Event of
Default hereunder.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary that is entirely owned by one
or more Borrower Entities.
17
1.2 Terms Generally.
1.2.1 Computations; Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, such determination or calculation,
to the extent applicable and except as otherwise specified in this Agreement,
shall be made in accordance with GAAP. If a change in GAAP after the date of
this Agreement would require a change affecting the calculation of any
requirement under this Agreement, then the Required Lenders and Borrower shall
negotiate in good faith for the amendment of the affected requirements;
provided, however, until and unless such an amendment is agreed upon, the
requirements of this Agreement shall remain as written and compliance therewith
shall be determined according to GAAP as in effect prior to the change.
1.2.2 Gender and Number. Words used herein indicating gender or number
shall be read as context may require.
1.2.3 References Include Successors. References herein to specific
Laws, regulatory bodies, parties or agreements also refer to any successor
Laws, regulatory bodies, and parties, and to all modifications, extensions,
renewals and restatements of agreements.
1.2.4 References to This Agreement. "Herein," "hereof" and words of
similar import refer to this Agreement as a whole and not to any particular
provision hereof, unless otherwise expressly stated.
II. LOANS AND LETTERS OF CREDIT
Concurrently with the execution of this Agreement, Lenders agree on a
several basis, and not on a joint basis, in accordance with their respective
Commitments, to make the Revolving Credit Loan to Borrower, under the following
terms and conditions:
2.1 Amount of Revolving Credit Loan. The principal indebtedness of
Borrower to Lenders under the Revolving Credit Loan shall not exceed Ninety
Million and No/100 Dollars ($90,000,000.00).
2.2 Use of Proceeds of Revolving Credit Loan. The proceeds of the
Revolving Credit Loan shall be used by Borrower for (i) the repayment of all
amounts outstanding under the Revolving/Term Loan made by NationsBank of
Tennessee, N.A., pursuant to that Loan Agreement dated as of January 8, 1996, as
amended, (ii) Permitted Acquisitions, (iii) other Capital Expenditures, (iv)
general corporate and working capital purposes, (v) repayment of Letters of
Credit issued in accordance with this Agreement for any of the foregoing
purposes, (vi) in an aggregate amount not to exceed Fifty Million and
18
No/100 Dollars ($50,000,000.00), for the Stock Repurchase Program and/or the
extension of Management Stock Acquisition Loans, and (vii) to repay other
existing indebtedness other than indebtedness under the Subordinated Debentures.
2.3 Revolving Credit Loan Notes. Borrower's obligations under the
Revolving Credit Loan shall be evidenced by Revolving Credit Loan Notes in favor
of the respective Lenders in the form included as Exhibit 2.3 hereto payable to
each Lender in the maximum amount of its Commitment.
2.4 Separate Commitments of Lenders. Borrower acknowledges that each
Lender's commitment to fund its portion of the Revolving Credit Loan is made by
each Lender severally, and neither Agent nor any Lender shall be liable for the
failure of another Lender to timely perform under this Agreement.
2.5 Advances of Loans. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Loans under the Revolving
Credit Loan, provided that the outstanding principal balance of the Revolving
Credit Loan shall not at any time exceed the amount permitted under Section 2.1
above. Loans shall be disbursed as follows:
2.5.1 Loans Advanced Pursuant to Borrowing Notices.
2.5.1(a) Applicability. Loans under the Revolving Credit Loan
may be LIBOR Loans, Base Rate Loans, or a combination thereof, and the
funding thereof shall be subject to this Section 2.5.1.
2.5.1(b) Borrowing Notices. As long as Borrower meets the
conditions for funding stated in this Agreement, Borrower may submit
requests for Loans ("Borrowing Notices") to Agent. All requests shall
be made by telephone, subject to such security procedures as Agent may
require from time to time (provided that all such telephonic notices
shall be confirmed by written Borrowing Notices within one (1)
Business Day) and shall specify the proposed disbursement date for the
requested Loan; the amount of the Loan; the purpose of the Loan
(characterized in accordance with Section 2.2 above); the type of
Loan, i.e., LIBOR Loan or Base Rate Loan; and if a LIBOR Loan, the
designated Interest Period. Each Borrowing Notice shall irrevocably
obligate Borrower to accept the Loan requested thereby. Borrowing
Notices shall be in the form of Exhibit 2.5.1(b) hereto or such other
form as Agent may from time to time reasonably require.
2.5.1(c) Funding of Loans. Lenders shall fund their respective
portions of requested Loans on the next following Banking Day after
the Banking Day (determined with a cutoff of 11:00 a.m. Charlotte,
North Carolina time, as provided in the definition thereof) of
19
Agent's receipt of the Borrowing Notice, in the case of Base Rate
Loans, and on the third (3rd) Banking Day following the Banking Day of
Agent's receipt of the Borrowing Notice, in the case of LIBOR Loans.
All funds shall be disbursed directly into an account maintained by
Borrower with Agent. Borrower agrees that if any Lender elects to fund
any requested Loan(s) sooner after requested than is required
hereunder, the Lender may nevertheless use the entire response period
allowed hereunder upon receipt of any subsequent request, at the
Lender's sole option.
2.5.1(d) Base Rate Loan Limitations. Individual Base Rate Loans
shall be in the minimum amount of One Million and No/100 Dollars
($1,000,000.00) each and in multiples of One Million and No/100
Dollars ($1,000,000.00).
2.5.1(e) LIBOR Loan Limitations. Individual LIBOR Loans shall
be in the minimum amount of Three Million and No/100 Dollars
($3,000,000.00) each and shall be requested in increments of One
Million and No/100 Dollars ($1,000,000.00). No more than six (6) LIBOR
Loans may be outstanding under the Revolving Credit Loan.
2.5.1(f) Additional Limitation on LIBOR Interest Periods.
Notwithstanding anything to the contrary in this Agreement, if an
Unmatured Default or an Event of Default shall have occurred and be
continuing, no additional LIBOR Loans may be created or continued and
no Base Rate Loan may be converted into a LIBOR Loan.
2.5.2 Conversion of Loans. Borrower shall have the right, on prior notice
to Agent made by telephone, subject to such security procedures as Agent may
require from time to time (provided that all such telephonic notices shall be
confirmed by written Borrowing Notices within one (1) Business Day), which
notice shall be given three (3) Banking Days (determined with a cutoff of 11:00
a.m. Charlotte, North Carolina time, as provided in the definition thereof)
prior to the date of any requested conversion, to convert any Base Rate Loan or
LIBOR Loan into a Loan of another type, or to continue any LIBOR Loan for
another Interest Period, subject in each case to the following:
2.5.2(a) Application of Loans. Each conversion shall be
effected by applying the proceeds of the new LIBOR Loan and/or Base
Rate Loan, as the case may be, to the Loan (or portion thereof) being
converted.
2.5.2(b) Notices of Conversions. Each notice pursuant to this
2.5.2(b) shall be irrevocable and shall refer to this Agreement and
20
specify the identity and principal amount of the particular Loan that
Borrower requests be converted or continued; if such notice requests
conversion, the date of such conversion (which shall be a Business
Day); and if a Loan is to be converted to a LIBOR Loan or a LIBOR Loan
is to be continued, the Interest Period with respect thereto. No LIBOR
Loan shall be converted at any time other than at the end of the
Interest Period applicable thereto, except in accordance with Section
2.11 hereof. Conversion notices shall be in the form attached as
Exhibit 2.5.1(b) hereto.
2.5.3 Absence of Election. In the event that Borrower shall not give notice
to continue any LIBOR Loan for a subsequent period, such LIBOR Loan (unless
repaid) shall automatically be converted into a Base Rate Loan. If Borrower
fails to specify in any Borrowing Notice the type of borrowing or, in the case
of a LIBOR Loan, the applicable Interest Period, Borrower will be deemed to have
requested a Base Rate Loan. If Agent reasonably believes that any failure by
Borrower to specify the type of borrowing or the applicable Interest Period
shall have resulted from failure of communications equipment or clerical error,
then prior to funding any such borrowing Agent shall use reasonable efforts to
obtain confirmation from Borrower of the contents of such Borrowing Notice;
provided, however, in the absence of prompt confirmation by Borrower which
specifies the type of borrowing and/or the applicable Interest Period, Borrower
will be deemed to have requested a Base Rate Loan. Notwithstanding anything to
the contrary contained above, if an Event of Default shall have occurred and be
continuing, no LIBOR Loan may be continued and no Base Rate Loan may be
converted into a LIBOR Loan.
2.5.4 Implied Representations Upon Request for Loan. Upon making any
request for any Loan, Borrower shall be deemed to have warranted to Agent and
Lenders that all conditions to funding set forth in Article III hereof are
satisfied and that all warranties made herein are true and shall be true as of
the funding of the requested Loan, subject to exception for warranties that
speak to a specific date or for which the underlying facts have changed pursuant
to transactions permitted under this Agreement, as provided in Exhibit 2.5.1(b)
hereto.
2.5.5 Advance Not Waiver. Any Lender's making of any Loan that it is not
obligated to make under any provision of Article III hereof or any other
provision hereof shall not be construed as a waiver of such Lender's right to
withhold future Loans, declare an Event of Default, or otherwise demand strict
compliance with this Agreement, acting through Agent as permitted by the terms
hereof.
21
2.5.6 Draws by Debit Memorandum. Agent may cause Lenders to draw
amounts that may be available under the Revolving Credit Loan to pay any
Obligation that is not otherwise timely paid.
2.6 Interest. Interest shall accrue on each Loan as follows:
2.6.1 Base Rate Loans. Interest shall accrue on each Base Rate Loan at an
annual rate equal to the Alternate Base Rate plus the Applicable Base Rate
Margin, said rate to change contemporaneously with any change in the Alternate
Base Rate.
2.6.2 LIBOR Loans. Interest shall accrue on each LIBOR Loan at a rate
equal to the LIBO Rate for the selected Interest Period plus the Applicable LIBO
Rate Margin.
2.6.3 Additional Interest on LIBOR Loans. In addition to the interest
described above, Borrower shall pay to any Lender, if and so long as such Lender
shall be required under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities or assets
consisting of or including LIBOR Liabilities, additional interest on the unpaid
principal amount of each LIBOR Loan, from the date of such advance until said
principal amount is paid in full, at an interest rate per annum equal at all
times to the remainder obtained by subtracting (i) the LIBO Rate for the
Interest Period from (ii) the rate obtained by dividing the LIBO Rate by a
percentage equal to 100% minus the LIBO Rate Reserve Percentage for such
Interest Period. This additional interest shall be payable on each date on
which interest is payable and shall be effective only after the affected Lender
(or Agent on behalf of all Lenders) gives written notice thereof to Borrower.
The amount of additional interest shall be determined by each Lender, who shall
notify Borrower and Agent thereof and whose determination shall be conclusive,
absent manifest error.
2.6.4 Calculation of Interest. Interest for both Base Rate Loans and LIBOR
Loans shall be computed on the basis of a 360-day year counting the actual
number of days elapsed. Interest shall accrue on the Business Day a Loan is
extended and shall accrue through the Business Day of payment if payment is
received before 11:00 a.m. Charlotte, North Carolina time and through the next
following Business Day if received after that time.
2.6.5 Default Rate. Notwithstanding the foregoing, upon the occurrence of
an Event of Default and during the continuation of such Event of Default,
interest shall be charged at the Default Rate, regardless of whether Lenders
have elected to exercise any other remedies available to Lenders, including,
without limitation, acceleration of the maturity of the outstanding principal of
the Revolving Credit Loan.
22
2.6.6 Payment of Interest. Interest for Base Rate Loans and LIBOR
Loans shall be due and payable in arrears, without notice, on each Interest
Payment Date.
2.6.7 Usury Savings Provision. It is the intention of the parties that
all charges under or in connection with this Agreement and the Obligations,
however denominated, and including (without limitation) all interest,
commitment fees, late charges and loan charges, shall be limited to the Maximum
Lawful Amount. Such charges hereunder shall be characterized and all provisions
of the Loan Documents shall be construed as to uphold the validity of charges
provided for therein to the fullest possible extent. Additionally, all charges
hereunder shall be spread over the full permitted term of the Obligations for
the purpose of determining the effective rate thereof to the fullest possible
extent, without regard to prepayment of or the right to prepay the Obligations.
If for any reason whatsoever, however, any charges paid or contracted to be
paid in respect of the Obligations shall exceed the Maximum Lawful Amount,
then, without any specific action by Lenders, Agent or Borrower, the obligation
to pay such interest and/or other charges shall be reduced to the Maximum
Lawful Amount in effect from time to time, and any amounts collected by Lenders
that exceed the Maximum Lawful Amount shall be applied to the reduction of the
principal balance of the Obligations and/or refunded to Borrower so that at no
time shall the interest or loan charges paid or payable in respect of the
Obligations exceed the Maximum Lawful Amount. This provision shall control
every other provision herein and in any and all other agreements and
instruments now existing or hereafter arising between Borrower and Lenders with
respect to the Obligations.
2.7 Alternate Rate of Interest if LIBOR Unavailable. In the event, and
on each occasion, that on the date of commencement of any Interest Period for a
LIBOR Loan, a Lender shall have determined (i) that dollar deposits in the
amount of the requested principal amount of such LIBOR Loan are not generally
available in the London Interbank Market; (ii) that the rate at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to the Lender of making or maintaining such LIBOR Loan during such Interest
Period; or (iii) that reasonable means do not exist for ascertaining the LIBO
Rate, the Lender shall, as soon as practicable thereafter, give written or
telephonic notice of such determination to Borrower and Agent. In the event of
any such determination, any request by Borrower for a LIBOR Loan under this
Agreement shall, until the circumstances giving rise to such notice no longer
exist, be deemed to be a request for a Base Rate Loan. Each determination by a
Lender hereunder shall be conclusive absent manifest error.
2.8 Change in Circumstances.
2.8.1 Imposition of Requirements. Notwithstanding any other provision
herein, if after the date of this Agreement any change in applicable
23
Laws or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof (whether or
not having the force of Law) shall change the basis of taxation of payments to a
Lender under any LIBOR Loan made by the Lender or any other fees or amounts
payable hereunder (other than taxes imposed on the overall net income, gross
receipts or added value of a Lender by the country in which the Lender is
located, or by the jurisdiction in which a Lender has its principal office, or
by any political subdivision or taxing authority therein), or shall impose,
modify or deem applicable any reserve requirement, special deposit, insurance
charge (including FDIC insurance on LIBOR Liabilities) or similar requirement
against assets of, deposits with or for the account of, or credit extended by, a
Lender or shall impose on a Lender or the London Interbank Market any other
condition affecting this Agreement or LIBOR Loans made by a Lender, and the
result of any of the foregoing shall be to increase the cost to the Lender of
making or maintaining its LIBOR Loan or to reduce the amount of any sum received
or receivable by a Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by the affected Lender to be
material, then Borrower will pay to such Lender such additional amount or
amounts as will compensate the Lender for such additional costs of reduction.
2.8.2 Other Changes. If either (i) the introduction of, or any change in,
or in the interpretation of, any United States or foreign Law; or (ii)
compliance with any directive, guidelines or request from any central bank or
other United States or foreign Governmental Authority (whether or not having the
force of law) promulgated or made after the date hereof, affects or would affect
the amount of capital required or expected to be maintained by a Lender (or any
lending office of a Lender) or any corporation directly or indirectly owning or
controlling a Lender (or any lending office of a Lender) based upon the
existence of this Agreement, and the Lender shall have determined that such
introduction, change or compliance has or would have the effect of reducing the
rate of return on the Lender's capital or on the capital of such owning or
controlling corporation as a consequence of its obligations hereunder (including
its commitment) to a level below that which the Lender or such owning or
controlling corporation could have achieved but for such introduction, change or
compliance (after taking into account that Lender's policies or the policies of
such owning or controlling corporation, as the case may be, regarding capital
adequacy) by an amount deemed by the Lender (in its sole discretion) to be
material, then, from time to time, Borrower shall pay to the Lender such
additional amount or amounts as will compensate the Lender for such reduction
attributable to making, funding and maintaining its commitment and Loans
hereunder.
2.8.3 Computation of Amounts. A certificate of a Lender setting forth the
basis and method of computation of such amount or amounts
24
specified in Sections 2.8.1 and 2.8.2 hereof as shall be necessary to compensate
the Lender (or its participating banks) as specified above, as the case may be,
shall be delivered to Borrower and shall be conclusive absent manifest error;
provided however, that Borrower shall be responsible for compliance herewith and
the payment of increased costs only to the extent that (i) any change in Laws
giving rise to increased costs occurs after the date of this Agreement; (ii)
such increased costs are imposed by the Lender on all other Borrowers similarly
situated with Borrower; and (iii) the Lender gives notice of the change giving
rise to increased costs within ninety (90) Business Days after the Lender has,
or with reasonable diligence should have had, knowledge of the change, or else
Lender can only collect costs from and after the date of the notice. Subject to
the foregoing, Borrower shall pay the affected Lender the amount shown as due on
any such certificate within ten (10) Business Days after its receipt of such
certificate.
2.8.4 No Duty to Contest. The protection of this Section 2.8 shall be
available to a Lender regardless of any possible contention of invalidity or
inapplicability of the Law or condition that shall have been imposed. Should a
Lender assess any charge to Borrower under this Section 2.8, and provided that
Borrower pays the assessment to the Lender, Borrower may within ninety (90)
days after receiving notice of such assessment undertake, at Borrower's own
expense, any contest of the matters giving rise to the charge that may, in the
opinion of Borrower's independent counsel issued to the affected Lender, and
concurred in by counsel to the Lender, have a reasonable chance of success,
provided further that the contest would not require the assertion of any
position contrary to a position taken by the Lender generally with taxing
authorities or any other involved parties and that there does not exist any
other circumstance that would disadvantage the Lender in the event of such
contest, as the affected Lender may determine in its discretion. The affected
Lender shall offer reasonable participation to Borrower for the purpose of
enabling Borrower to pursue the contest of such issue, with all expenses,
including fees and expenses of the affected Lender's counsel, to be paid by
Borrower.
2.8.5 Replacement of Lenders Under Certain Circumstances. If any specific
additional charge is assessed under Sections 2.6.3, 2.7 or 2.8 hereof by less
than a majority in number of the Lenders, Borrower shall be entitled to request
of Agent that the Lender(s) assessing such additional charge be replaced as
Lenders hereunder by other financial institutions proposed by Borrower who do
not then assess such additional charge. Agent shall arrange the appointment of
such replacement Lender(s), who must be acceptable to both Agent and Borrower in
their reasonable discretion. The appointment of such new Lender(s) shall be
accomplished in accordance with the other provisions of this Agreement and
Borrower shall pay the applicable fee to Agent for the transfer of the interest
of the replaced Lender(s).
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2.9 Change in Legality of LIBOR Loans. Notwithstanding anything to the
contrary herein contained, if any change in any Law or in interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for a Lender to make or maintain any LIBOR Loan
or to give effect to its obligations as contemplated hereby, then, by written
notice to Borrower, the Lender may (i) declare that LIBOR Loans will not
thereafter be made by the Lender hereunder, whereupon Borrower shall be
prohibited from requesting LIBOR Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; and (ii) require that all outstanding
LIBOR Loans made by it be converted to Base Rate Loans, in which event (a) all
such LIBOR Loans shall be automatically converted to Base Rate Loans (but
without imposition of any additional charge that would normally become due under
Section 2.11 hereof) as of the effective date of such notice, and (b) all
payments and prepayments of principal that would otherwise have been applied to
repay the converted LIBOR Loans shall instead be applied to repay the Base Rate
Loans resulting from the conversion of such LIBOR Loans. Under such
circumstances, a borrowing request for a LIBOR Loan shall be regarded, as to the
Lender who has given notice under this Section 2.9, a request for a Base Rate
Loan, and as to all other Lenders, it shall be regarded as a request for a LIBOR
Loan. For purposes of this Section 2.9, a notice to Borrower by the Lender
pursuant to (a) above shall be effective, if lawful, on the last day of the then
current Interest Period; in all other cases, such notice shall be effective on
the date of receipt by Borrower.
2.10 Principal Repayment. All remaining principal outstanding under the
Revolving Credit Loan shall become due on the Maturity Date or the earlier
acceleration of the Revolving Credit Loan in accordance with the terms of this
Agreement.
2.11 Prepayment of LIBOR Loans.
2.11.1 Notice of LIBOR Loan Prepayment. Borrower may, upon three (3)
Banking Days' prior written notice to Agent (with a Banking Day cutoff of
11:00 a.m. Charlotte, North Carolina time, as provided in the definition
thereof), and upon payment of all applicable premiums set forth in Section
2.11.3 hereof, prepay any outstanding LIBOR Loans prior to any Interest
Payment Date for such LIBOR Loans, in whole or in part. Each notice of
prepayment of any LIBOR Loan shall specify the date and amount of such
prepayment and shall be irrevocable.
2.11.2 Amount of LIBOR Loan Prepayment. Each partial prepayment of
any LIBOR Loan shall be in an aggregate principal amount which is the
lesser of (i) the then outstanding principal balance of the one or more
LIBOR Loans to be prepaid, or (ii) Three Million and No/100 Dollars
($3,000,000.00) or a larger integral multiple of One Million and No/100
Dollars ($1,000,000.00). Interest on the amount prepaid accrued to the
prepayment date shall be paid on such date.
26
2.11.3 LIBOR Loan Breakage Costs. Borrower shall indemnify,
defend and hold harmless each Lender against any loss or expense that a
Lender may incur in connection with the prepayment of a LIBOR Loan, the
Borrower's failure to borrow or to pay when it stated it would do so,
including, but not limited to, the fees or charges customarily included in
"breakage costs" that may result to a Lender from the early repayment of a
LIBOR Liability, which costs may be calculated by a Lender as though
Borrower's prepayment had been match-funded with a corresponding LIBOR
Liability, whether or not the Lender manages its LIBOR Liabilities on a
loan-by-loan basis. Additionally, upon prepayment of any LIBOR Loan on a
date other than the relevant Interest Payment Date for such borrowing,
Borrower shall pay to Lenders, in addition to all other payments then due
and owing Lenders, premiums which shall be equal to an amount, if any,
reasonably determined by Agent to be the difference between the rate of
interest then applicable to the relevant LIBOR Loan and the yield Lenders
would receive upon reinvestment of so much of the relevant LIBOR Loans as
is prepaid for the remainder of the term of the relevant LIBOR Loan or
Loans. Anything in this Section 2.11.3 to the contrary notwithstanding,
the premiums payable upon any such prepayment shall not exceed the amount,
if any, determined by Agent to be the difference between the rate of
interest then applicable to the relevant LIBOR Loan and the yield that
Lenders could receive upon reinvestment in the "Floor Reinvestment" of so
much of the relevant LIBOR Loan as is prepaid for the remainder of the
term of the relevant LIBOR Loan. For purposes hereof, "Floor Reinvestment"
shall mean an investment for the time period from the date of such
prepayment to the end of the relevant Interest Period applicable to such
LIBOR Loan at an interest rate per annum equal to the Federal Funds Rate
on the date of such prepayment. All determinations, estimates,
assumptions, allocations and the like required for the determination of
such premiums shall be made by Agent in good faith and shall be presumed
correct absent manifest error.
2.12 Prepayment of Base Rate Loans. Borrower may at any time prepay any
outstanding Base Rate Loans prior to the Maturity Date in whole or in part
without premium or penalty upon at least one Business Day's prior notice to
Agent. All such prepayments shall be made in minimum amounts of Three Million
and No/100 Dollars ($3,000,000.00) and in increments of One Million and No/100
Dollars ($1,000,000.00) each.
2.13 Reduction of Commitment. Borrower may prospectively and permanently
reduce the Commitment by giving Agent written notice of a reduction to be
effective on a date certain no earlier than ten (10) Business Days after the
notice is received by Agent. The principal balance of the Revolving Credit Loan
shall be reduced, if necessary, on the effective date of the reduction in
accordance with the notice. Reductions shall be shared by Lenders Pro Rata. If
it is necessary to prepay any LIBOR Loan to accommodate the requested reduction,
Borrower shall be liable for all costs provided for elsewhere in this Agreement.
All reductions shall be in amounts of at least Three Million
27
and No/100 Dollars ($3,000,000.00) and shall be made in increments of One
Million and No/100 Dollars ($1,000,000.00).
2.14 Periodic Commitment Fee Based on Use of Facilities. Borrower shall
pay to Agent for distribution to Lenders Pro Rata an additional commitment fee
for the unused portion of the Revolving Credit Loan. This fee shall be
determined by applying the Applicable Commitment Fee (applied on the basis of a
360-day year) to the average daily unused balance of the Revolving Credit Loan.
The commitment fee shall be paid in arrears on each Interest Payment Date
applicable to Base Rate Loans. This commitment fee is not refundable. As
provided in Section 2.15.2 hereof, all outstanding Letter of Credit Liabilities
shall be treated as outstanding Loans for the purpose of determining the nonuse
fee.
2.15 Letters of Credit. Subject to the terms and conditions of this
Agreement, Lenders' respective Commitments for the Revolving Credit Loan may be
utilized, upon the request of Borrower, for the issuance by the Issuing Bank of
standby or commercial letters of credit (the "Letters of Credit") for the
account of Borrower for uses that would be permitted for the Revolving Credit
Loan; provided that in no event shall (i) the aggregate amount of all stated and
undrawn amounts under Letters of Credit (the "Letter of Credit Liabilities"),
together with the aggregate principal amount of the Loans advanced under the
Revolving Credit Loan, exceed the amount stated in Section 2.1 hereof, (ii) the
outstanding aggregate amount of all Letter of Credit Liabilities exceed Five
Million and No/100 Dollars ($5,000,000.00), or (iii) the expiration date of any
Letter of Credit extend beyond the Maturity Date applicable to the Revolving
Credit Loan. The following additional provisions shall apply to Letters of
Credit:
2.15.1 Procedure for Issuance. Borrower shall give Agent at least
three (3) Business Days' irrevocable prior notice (effective upon receipt)
specifying the Business Day (which shall be no later than thirty (30) days
preceding the Maturity Date) each Letter of Credit is to be issued and
describing in reasonable detail the proposed terms of such Letter of
Credit (including its beneficiary) and the nature of the transactions or
obligations proposed to be supported. Borrower shall be the account party
for each Letter of Credit, including Letters of Credit issuable to a
beneficiary having a claim or potential claim against a Subsidiary of
Borrower.
2.15.2 Participation Among Lenders. On each day during the period
commencing with the issuance by the Issuing Bank of any Letter of Credit
and until such Letter of Credit shall have expired or been terminated or,
if drawn upon, until the resulting obligations of reimbursement (the
"Reimbursement Obligations") have been satisfied in full by Borrower
(whether by a borrowing under this Agreement or otherwise), the Commitment
of each Lender shall be deemed to be utilized for all purposes of this
Agreement (including, but not limited to, the calculation of availability
and of the nonuse fee) in an amount equal to such Lender's Pro Rata Share
of the Letter of Credit Liabilities associated with such Letter of Credit.
Each Lender (other than the Issuing
28
Bank) agrees that, upon the issuance of any Letter of Credit, it shall
automatically be deemed to have acquired a participation in the Issuing
Bank's liability under such Letter of Credit in an amount equal to such
Lender's Pro Rata Share of such liability, and each Lender (other than the
Issuing Bank) thereby shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and shall be unconditionally
obligated to the Issuing Bank to pay and discharge when due, its Pro Rata
Share of the Issuing Bank's liability under such Letter of Credit.
2.15.3 Reimbursement Obligation. Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify Borrower of the amount to
be paid by the Issuing Bank as a result of such demand and the date on
which payment is to be made by the Issuing Bank to such beneficiary in
respect of such demand. Borrower hereby unconditionally agrees to pay and
reimburse Agent for the account of the Issuing Bank and the other Lenders
Pro Rata with respect to the amount of each demand for payment under such
Letter of Credit at or prior to the date on which payment is to be made by
the Issuing Bank to the beneficiary under such Letter of Credit, without
presentment, demand, protest or other formalities of any kind. Any amounts
not so paid or borrowed as set forth in Section 2.15.4 below shall bear
interest at the Default Rate applicable to Base Rate Loans.
2.15.4 Means of Reimbursement. Forthwith upon its receipt of a notice
referred to in Section 2.15.3 hereof, Borrower shall advise Agent whether
or not Borrower intends to obtain a Loan to finance its obligation to
reimburse the Issuing Bank for the amount of the related demand for
payment and, if it does, submit a notice of such borrowing as provided in
this Agreement. In the event that Borrower fails to so advise Agent, and
if Borrower fails to reimburse the Issuing Bank for a demand for payment
under a Letter of Credit by the date of such payment, Agent shall give
each Lender prompt notice of the amount of the demand for payment,
specifying such Lender's Pro Rata Share of the amount of the related
demand for payment, and Borrower shall be deemed in default hereunder for
breaching Section 2.15.3 above.
2.15.5 Payments by Lenders. Each Lender (other than the Issuing Bank)
shall pay to Agent for the account of the Issuing Bank in Dollars and in
immediately available funds, such Lender's Pro Rata Share of any payment
under a Letter of Credit upon notice by Agent to such Lender requesting
such payment and specifying such amount as provided in Section 2.15.4.
Each such Lender's obligation to make such payments to Agent for the
account of the Issuing Bank under this Section 2.15.5, and the Issuing
Bank's right to receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the
failure of any other Lender to make its
29
payment under this Section 2.15.5, the financial condition of Borrower,
the existence of any Unmatured Default or Event of Default or the
termination of the Commitments. Each such payment to the Issuing Bank
shall be made without any offset, abatement, withholding or reduction
whatsoever, EVEN IN THE PRESENCE OF ORDINARY NEGLIGENCE ON THE PART OF THE
ISSUING BANK; provided, nothing contained in the foregoing shall limit the
Issuing Bank's liability for its gross negligence or willful misconduct in
improperly honoring a draft drawn under a Letter of Credit.
2.15.6 Settlement Among Lenders. Upon the making of each payment by a
Lender to the Issuing Bank pursuant to Section 2.15.5 above in respect of
any Letter of Credit, such Lender shall, automatically and without any
further action on the part of Agent, the Issuing Bank or such Lender,
acquire (i) a participation in an amount equal to such payment in the
Reimbursement Obligation owing to the Issuing Bank by Borrower under this
Agreement and under the Letter of Credit Documents relating to such Letter
of Credit and (ii) a participation in a percentage equal to such Lender's
Pro Rata Share in any interest or other amounts payable by Borrower under
such Letter of Credit Documents and the other Loan Documents in respect of
such Reimbursement Obligation. Upon receipt by the Issuing Bank from or
for the account of Borrower of any payment in respect of any Reimbursement
Obligation or any such interest or other amount (including by way of set-
off or application of proceeds of any collateral security) the Issuing
Bank shall promptly pay to Agent for the account of each Lender who shall
have previously assumed a participation in such payment under clause (ii)
above, such Lender's Pro Rata Share of such payment, each such payment by
the Issuing Bank to be made in the same money and funds in which received
by the Issuing Bank. In the event any payment received by the Issuing Bank
and so paid to Lenders is rescinded or must otherwise be returned by the
Issuing Bank, each Lender shall, upon the request of the Issuing Bank
(through Agent), repay to the Issuing Bank (through Agent) the amount of
such payment paid to such Lender, with interest at the rate specified in
Section 2.15.10.
2.15.7 Letter of Credit Fee. Borrower shall pay to Agent for the
account of each Lender Pro Rata a letter of credit fee in respect of each
Letter of Credit on the daily average undrawn face amount of such Letter
of Credit for the period from and including the date of issuance of such
Letter of Credit to and including the date such Letter of Credit is drawn
in full, expires or is terminated (such fee to be non-refundable, to be
paid in arrears on the first day of each calendar quarter and on the
Maturity Date applicable to the Revolving Credit Loan and to be
calculated, for any day, after giving effect to any payments made under
such Letter of Credit on such day) in an amount equal to the Applicable
LIBO Rate Margin(s) in effect during the relevant period (or such margin
plus two percentage points (2%), upon and during the continuation of an
Event of Default hereunder). All calculations of Letter of
30
Credit fees shall be based on a 360 day year counting the actual number of
elapsed days. The Issuing Bank shall also receive a facing fee of one-
eighth of one percent (1/8%) of the face amount of any Letter of Credit
upon the issuance thereof.
2.15.8 Letter of Credit Information. Upon the request of any Lender
from time to time, the Issuing Bank shall deliver any information
reasonably requested by such Lender with respect to each Letter of Credit
then outstanding.
2.15.9 Conditions Relating to Letters of Credit. The issuance by the
Issuing Bank of each Letter of Credit shall be subject, in addition to the
conditions precedent set forth in Article III hereof, to the conditions
precedent that (i) such Letter of Credit shall be in such form, contain
such terms and support such transactions as shall be satisfactory to the
Issuing Bank consistent with its then current practices and procedures
with respect to letters of credit of the same type and (ii) Borrower shall
have executed and delivered such applications, agreements and other
instruments relating to such Letter of Credit as the Issuing Bank shall
have reasonably requested consistent with its then current practices and
procedures with respect to letters of credit of the same type; provided
that in the event of any conflict between any such application, agreement
or other instrument and the provisions of this Agreement, the provisions
of this Agreement shall control. Without limiting the foregoing, it is
agreed that (i) an "Event of Default" under any reimbursement agreement
respecting a Letter of Credit shall be deemed to mean an Event of Default
under this Agreement, and (ii) no Borrower Entity shall be required to
provide any collateral to secure its obligations regarding any Letter of
Credit except as required herein.
2.15.10 Payments Among Lenders. In the event that any Lender fails to
pay any amount required to be paid pursuant to this Section 2.15 when due,
such Lender shall pay interest to the Issuing Bank (through Agent) on such
amount from and including such due date to but excluding the date such
payment is made (i) during the period from and including such due date to
but excluding the date three Business Days thereafter, at a rate per annum
equal to the Federal Funds Rate (as in effect from time to time) and (ii)
thereafter, at a rate per annum equal to the Alternate Base Rate plus
2.0%.
2.15.11 Modifications. The issuance by the Issuing Bank of any
modification or supplement to any Letter of Credit shall be subject to the
same conditions applicable under this Section 2.15 to the issuance of new
Letters of Credit, and no such modification or supplement shall be issued
unless either (x) the respective Letter of Credit as affected by such
action would have complied with such conditions had it originally been
issued in such modified or supplemented form or (y) each Lender or the
Required Lenders, as may be
31
required under Article IX hereof, shall have consented to such
modification or supplement.
2.15.12 Absolute Obligations of Borrower. The obligations of Borrower
under this Section 2.15 shall be unconditional and absolute and shall not
be affected, modified or impaired, upon the happening at any time or from
time to time of any event, including any of the following, whether or not
with notice to or the consent of Borrower:
2.15.12(a) the compromise, settlement, release, modification,
amendment (whether material or otherwise) or termination of any or all of
the obligations, conditions covenants or agreements of any Person in
respect of any of the Loan Documents;
2.15.12(b) the occurrence, or the failure by Agent, any Lender or
any other Person to give notice to Borrower of the occurrence, of any
Event of Default or any default under any of the other Loan Documents;
2.15.12(c) the waiver of the payment, performance or observance
of any of the obligations, conditions, covenants or agreements of any
Person contained in any of the Loan Documents;
2.15.12(d) the extension of the time for performance of any other
obligations, covenants or agreements of any Person under or arising out of
any of the Loan Documents;
2.15.12(e) the taking or the omission of any of the actions
referred to in any of the Loan Documents;
2.15.12(f) any failure, omission or delay on the part of Agent,
any Lender, Borrower or the beneficiary of any Letter of Credit to
enforce, assert or exercise any right, remedy, power or privilege
conferred by this Agreement or any of the Loan Documents, or any other act
or acts on the part of Agent, any Lender, Borrower or the beneficiary of
any Letter of Credit;
2.15.12(g) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets of, the
marshaling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other
similar proceedings which affect, Borrower or any other party to any of
the Loan Documents;
32
2.15.12(h) any lack of validity or enforceability of this
Agreement, any Letter of Credit or any other Loan Document, or any
allegation of invalidity or unenforceability or any contest of such
validity or enforceability;
2.15.12(i) the existence of any claim, set-off, defense or other
right which Borrower may have at any time against Agent, any Lender or any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom the Lender or any such beneficiary or transferee may be
acting), or any other Person, whether in connection with this Agreement or
any of the other Loan Documents or any of the transactions contemplated by
any Loan Document or any unrelated transaction;
2.15.12(j) any statement in any certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any such statement being untrue
or inaccurate in any respect whatsoever;
2.15.12(k) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand or certificate which does not comply with
the terms of such Letter of Credit;
2.15.12(l) the release or discharge by operation of law of
Borrower form the performance or observance of any obligation, covenant or
agreement contained in any of the Loan Documents; or
2.15.12(m) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
2.15.13 Indemnity. Without affecting Borrower's liability under any other
provision of this Agreement, Borrower agrees to indemnify the Issuing Bank,
Agent and each of the Lenders and their respective affiliates, directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, damages or expenses incurred by any of
them in connection with or by reason of any actual or threatened investigation,
litigation or other proceeding relating to (a) the execution and delivery of any
Letter of Credit; (b) the use of the proceeds of any drawing under any Letter of
Credit; or (c) the transfer or substitution of, or payment or failure to pay
under, any Letter of Credit, including the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or other
proceeding, AND EVEN IN THE PRESENCE OF ORDINARY NEGLIGENCE BY THE INDEMNIFIED
PARTY, but excluding damages, losses, liabilities or expenses to the extent, but
only to the extent, incurred by reason of the willful misconduct or gross
negligence of the Issuing Bank in
33
determining whether a document presented under any Letter of Credit
complies with the terms of such Letter of Credit. It shall not be a
condition to any such indemnification that the Issuing Bank, Agent or any
Lender shall be a party to any such investigations, litigation or other
proceeding. Nothing in this Paragraph 2.15 is intended to limit Borrower's
payment obligations under this Agreement.
2.15.14 Assumption of Risk. Borrower assumes all risks of the ac or
omissions of any beneficiary of any Letter of Credit with respect to the
use of the Letter of Credit. None of Agent, any Lender nor any of their
respective affiliates, officers, directors, employees, attorneys or agents
shall be liable or responsible for: (a) the use which may be made of the
Letter of Credit or for any acts or omissions of any beneficiary of any
Letter of Credit in connection with such Letter of Credit; (b) the
validity, sufficiency or genuineness of documents presented to the Issuing
Bank, or of any endorsement on such documents, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Bank against presentation
of documents which do not comply with the terms of any Letter of Credit,
including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (d) any delay and/or loss in transit
of any messages, letters or documents or delay, mutilation or other errors
arising in the transmission of any telecommunication; or (e) any other
circumstances whatsoever in making or failing to make payment under any
Letter of Credit, EVEN IN THE PRESENCE OF ORDINARY NEGLIGENCE BY THE
ISSUING BANK; provided that Borrower shall have a claim against the
Issuing Bank to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered by Borrower which Borrower
proves were caused by the Issuing Bank's willful misconduct or gross
negligence in determining whether a document presented under any Letter of
Credit complied with the terms of such Letter of Credit. In furtherance
and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility
for further investigation, regardless of any notice or information to the
contrary.
2.15.15 Resignation of Issuing Bank. The Issuing Bank may resign from its
service as such upon at least fifteen (15) Business Days written notice to
Lenders, Agent and Borrower, upon which Borrower and the Required Lenders shall
appoint a replacement Issuing Bank from among the Lenders. The notice of
resignation shall state the material reason(s) that caused the Issuing Bank to
wish to resign from that capacity. Even after such resignation, the Issuing Bank
shall remain subject to the obligations and entitled to the benefits of the
status of Issuing Bank with respect to Letters of Credit that remain
outstanding.
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2.16 Up-Front Fee. Concurrently with the execution hereof, Borrower shall
pay an up-front fee to the respective Lenders in the amount of thirty-five basis
points (.35%) of each Lender's Commitment.
III. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance and Issuance. Lenders shall not be
obligated to make their initial Loan pursuant to this Agreement, and the Issuing
Bank shall not be obligated to issue any Letters of Credit, unless and until
Borrower satisfies the following conditions:
3.1.1 Loan Documents. Borrower shall have delivered to Agent the
following documents, fully executed and in form and substance acceptable to
Agent and Lenders:
3.1.1(a) Loan Agreement. This Agreement.
3.1.1(b) Revolving Credit Loan Notes. The Revolving Credit
Notes issued by Borrower payable to the order of the respective
Lenders in the maximum principal amounts of the Lenders' respective
Commitments.
3.1.1(c) Guaranty of Subsidiaries. Unconditional Continuing
Guaranty executed by all Subsidiaries of Borrower that are Initial
Borrower Entities, in the form attached hereto as Exhibit 3.1.1(c).
3.1.1(d) Pledge of Equity Interests. Security Agreement in the
form attached hereto as Exhibit 3.1.1(d), irrevocable proxies, blank
stock powers, original stock certificates, financing statements, and
such other documents as are necessary to grant to Agent to secure the
Obligations a first priority perfected security interest in all of
the equity interests of all of the Initial Borrower Entities other
than Borrower and in all equity interests in other Persons owned by
any Borrower Entity.
3.1.1(e) Charters. Certified Copies of the Borrower Entities'
corporate charters and all amendments thereto, issued by the
Secretaries of State for their states of domicile.
3.1.1(f) Bylaws. Certified Copies of Bylaws for each of the
Borrower Entities.
3.1.1(g) Certificates of Good Standing. Certificates of good
standing or existence, as applicable, issued as to the Borrower
Entities by the Secretaries of State for the states of their
domicile.
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3.1.1(h) Foreign Qualification. Certificates of Qualification issued by the
Secretaries of State for each state in which a Borrower Entity is required to
qualify as a foreign corporation.
3.1.1(i) Resolutions. Secretary Certifications including certified copies
of resolutions authorizing the execution of all applicable Loan Documents on
behalf of the Borrower Entities and certifying as to the incumbency of
authorized officers.
3.1.1(j) Opinions of Borrower's Counsel. Opinions of Texas and Tennessee
counsel to the Borrower Entities addressed to Agent and Lenders in substantially
the form attached hereto as Exhibit 3.1.1(j) and otherwise acceptable to
Lenders, Agent and their counsel.
3.1.1(k) Solvency Certification. Prior to the initial draw to be used for
the purpose of funding either the Stock Repurchase Program or Management Stock
Acquisition Loans, Borrower's chief financial officer shall issue to Lenders and
Agent a certification on behalf of Borrower as to the continued solvency of
Borrower giving effect to the Stock Repurchase Program and the Management Stock
Acquisition Loans, which certification shall include financial projections, the
basis of material assumptions, the basis of valuations and such other matters as
may be required.
3.1.1(l) UCC Searches. A current UCC search on the name of Borrower issued
by the Texas Secretary of State and like searches on all Borrower Entities that
are encumbering stock or other equity interests to secure the Obligations, from
such public offices as Agent may require.
3.1.1(m) Closing Statement and Funding of Expenses. Loan Closing
Statement describing expenses due in connection with the closing of the
Revolving Credit Loan and payment thereof in immediately available funds.
3.1.1(n) Certification of Termination of Facility. A certificate of
NationsBank of Tennessee, N.A., confirming the repayment and termination of its
existing Revolving/Term loan facility.
3.1.1(o) Compliance Certificate. A Compliance Certificate confirming
compliance with all provisions of this Agreement, including, but not limited to,
the financial covenants contained herein, giving effect to the closing of the
Revolving Credit Loan.
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3.1.1(p) Other Documents. Such other documents as Lenders or Agent
may reasonably require.
3.1.2 Additional Conditions. Borrower shall have satisfied the following
additional conditions:
3.1.2(a) Warranties. All warranties made in the Loan Documents must
be true in all material respects and shall be true in all material respects
taking into account the funding of the requested Loan.
3.1.2(b) Covenants. All covenants made in the Loan Documents must
have been complied with in all material respects and shall have been complied
with, taking into account the funding of the requested Loan.
3.1.2(c) Absence of Unmatured Default. No Event of Default or
Unmatured Default shall exist under this Agreement.
3.1.2(d) No Adverse Change. There must be no Material Adverse Change
since September 30, 1996.
3.1.2(e) General Diligence. The satisfaction of Agent and Lenders and
their counsel, in their reasonable discretion, regarding their completion of
diligence with respect to Borrower and the Revolving Credit Loan, including such
investigation of the Properties, agreements, leases and other matters as they
may require.
3.1.2(f) Corporate Matters. The satisfaction of Agent and Lenders, in
their reasonable discretion, regarding the corporate structure, constituent
documents, management, shareholder agreements and other corporate matters as to
all Borrower Entities, and including, but not limited to, the execution of
appropriate employment agreements.
3.1.2(g) Financial Information. The satisfaction of Agent and
Lenders, in their reasonable discretion, as to the financial information
presented in the financial statements of Borrower and its predecessors, as
applicable, for the fiscal years ending December 31, 1993, 1994 and the
Financial Statements. These financial statements must be audited by independent
public accountants of recognized national standing, except that the most recent
quarterly financial statements may be company-prepared.
3.1.2(h) Projections. The satisfaction of Agent and Lenders as of the
Closing Date, in their reasonable discretion, with three-year
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financial projections to be delivered to them by Borrower,
including pro forma balance sheets and statements of income and
cash flow in accordance with GAAP.
3.1.2(i) Absence of Litigation. There must be no action, suit,
proceeding or investigation against any Borrower Entity before or
through any Governmental Authority which, if adversely determined,
would likely have a Material Adverse Effect.
3.1.2(j) Additional Opinion Requirements. Prior to the initial
draw to be used for the purpose of funding either the Stock Repurchase Program
or Management Stock Acquisition Loans, Borrower shall deliver to Lenders and
Agent an opinion letter or letters of Borrower's outside tax counsel confirming
the absence of adverse tax consequences to Borrower of the making of Management
Stock Acquisition Loans and confirming the legality of the Stock Repurchase
Program, the noncontravention thereof with other agreements, laws, etc., and
related matters. All such opinions shall be in form and substance acceptable to
Agent.
3.2 Conditions to Subsequent Loans and Issuances. Lenders shall not be
obligated to make any Loan following the initial advance, and the Issuing Bank
shall not be obligated to issue any Letters of Credit, unless all of the
following conditions are satisfied as of the time of the request and of funding
or issuance:
3.2.1 Conditions to Initial Advance. All of the conditions in Section
3.1 hereof must have been satisfied as of the date of the initial advance
hereunder.
3.2.2 Permitted Subsidiaries. All of the documents required in Section
3.1 for Initial Subsidiaries shall have been received by Agent as to any
additional Permitted Subsidiaries, within the time required in this Agreement.
3.2.3 Warranties. All warranties made in the Loan Documents must be
true in all material respects and shall be true in all material respects taking
into account the funding of the requested Loan.
3.2.4 Covenants. All covenants made in the Loan Documents must have
been complied with in all material respects and shall have been complied with in
all material respects taking into account the funding of the requested Loan.
3.2.5 Absence of Unmatured Default. No Event of Default or Unmatured
Default shall exist under this Agreement.
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3.2.6 Material Adverse Change. There shall not have occurred a Material
Adverse Change.
IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent that as of the
Closing Date:
4.1 Capacity. Each Borrower Entity is a corporation or other entity as
set forth in Schedule 1.1 hereof, and is duly organized, validly existing and in
good standing under the laws of the state of its domicile as set forth in
Schedule 1.1. Each Borrower Entity is qualified or authorized to do business in
all jurisdictions in which its ownership of property or conduct of business
requires such qualification or authorization or where the failure to be so
qualified or authorized would not have a Material Adverse Effect. Each Borrower
Entity has the power and authority to own its Properties and to carry on its
business as now being conducted and as proposed to be conducted after the
execution hereof, to execute and deliver this Agreement and the other Loan
Documents, and to perform its obligations hereunder and under the other Loan
Documents.
4.2 Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Borrower Entity executing such
documents has been duly authorized by all requisite action.
4.3 Binding Obligations. This Agreement is and the other Loan Documents,
when executed and delivered to Agent and Lenders, will be, legal, valid and
binding upon each Borrower Entity who is a party thereto, enforceable in
accordance with its respective terms, subject only to principles of equity and
laws applicable to creditors generally, including bankruptcy laws.
4.4 No Conflicting Law or Agreement. The execution, delivery and
performance of this Agreement and the other Loan Documents by each Borrower
Entity does not constitute a breach of or default under, and will not violate or
conflict with, any provisions of the corporate charter or other constituent
documents of a Borrower Entity; any contract, financing agreement, lease, or
other agreement to which a Borrower Entity is a party or by which its Properties
may be affected, the violation of which would have a Material Adverse Effect; or
any Law to which a Borrower Entity is subject or by which its Properties may be
affected, the violation of which would have a Material Adverse Effect; nor will
the same result in the creation or imposition of any Encumbrance upon any
Property of any Borrower Entity, other than those contemplated by the Loan
Documents.
4.5 No Consent Required. The execution, delivery, and performance of this
Agreement and the other Loan Documents by the Borrower Entities do not require
the consent or approval of or the giving of notice to any Person except for
those consents which
39
have been duly obtained and are in full force and effect on the date hereof and
others, if any, which by their omission would not result in a Material Adverse
Effect.
4.6 Financial Statements. The Financial Statements are complete and
correct, have been prepared in accordance with GAAP, and present fairly the
financial condition and results of operations of the Borrower Entities as of the
date and for the period stated therein, subject to year-end adjustments. No
Material Adverse Change has occurred since the date of the Financial Statements.
Borrower acknowledges that Lenders have advanced (or shall advance) the
Revolving Credit Loan in reliance upon the Financial Statements.
4.7 Fiscal Year. Borrower's fiscal year ends on December 31 of each
year.
4.8 Litigation. Except as disclosed on Schedule 4.8 hereto, (i) there is
no litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature pending against any
Borrower Entity or any of its Properties which, if adversely determined, would
likely have a Material Adverse Effect, and (ii) there is no litigation,
arbitration, legal or administrative proceeding, tax audit, investigation, or
other action or proceeding of any nature threatened in writing against a
Borrower Entity which, if adversely determined, would have a Material Adverse
Effect. No Borrower Entity is subject to any outstanding court, arbitral or
administrative order, writ or injunction. To the best of Borrower's knowledge,
information and belief, no facts exist under which third parties have unasserted
claims against any Borrower Entity which, if adversely determined, would have a
Material Adverse Effect.
4.9 Taxes; Governmental Charges. Each Borrower Entity has filed or
caused to be filed or has lawfully extended the deadline for filing all tax
returns and reports required to be filed, other than those which, if not filed,
would not have a Material Adverse Effect. Each Borrower Entity has paid, or
made adequate provision for the payment of, all Taxes that have or may have
become due pursuant to such returns or otherwise, or pursuant to any assessment
received by it, except such Taxes, if any, as are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided.
To the best of Borrower's knowledge, there is no proposed material tax
assessment against any Borrower Entity. No extension of time for the assessment
of federal, state or local taxes of any Borrower Entity is in effect or has been
requested. Each Borrower Entity has timely made all required remittances of
withholding deposits and other assessments against payroll expenditures except
for matters that would not have a Material Adverse Effect.
4.10 Title to Properties. Each Borrower Entity has good and marketable
title to its Properties, free and clear of all Encumbrances except for Permitted
Encumbrances except for matters that would not have a Material Adverse Effect.
4.11 No Default. No Borrower Entity is in default in any respect that
affects its business, Properties, operations, or condition, financial or
otherwise, under any
40
indenture, mortgage, deed of trust, obligation to equity holders, credit
agreement, note, agreement, lease, sale agreement or other instrument to which
any Borrower Entity is a party or by which its Properties are bound, which
default would have a Material Adverse Effect. To the best of Borrower's
knowledge, information and belief, no other party to any contract with any
Borrower Entity under which a default would have a Material Adverse Effect is in
default or breach thereof and no circumstances exist which, with the giving of
notice and/or the passing of time would constitute such default or breach. No
Event of Default or Unmatured Default exists under this Agreement.
4.12 Casualties; Taking of Properties. Neither the business nor the
Property of any Borrower Entity is presently impaired as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of property, cancellation of
contracts, permits, concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy, in any case as would have a Material Adverse Effect.
4.13 Compliance with Laws. No Borrower Entity is in violation of any Law
to which it, its business or any of its Properties are subject, the violation of
which would likely have a Material Adverse Effect, and there are no outstanding
citations, notices or orders of noncompliance issued to any Borrower Entity
under any such Law, the violation of which would likely have a Material Adverse
Effect. Each Borrower Entity has obtained all licenses, permits, franchises, or
other governmental authorizations necessary to the ownership of its Properties
or to the conduct of its business, except for those which, if not obtained,
would not have a Material Adverse Effect.
4.14 Compliance with Fraud and Abuse Laws. Without limiting any other
provision of this Agreement, no Borrower Entity and no Provider is in violation
of any Fraud and Abuse Law, the violation of which would have a Material Adverse
Effect.
4.15 ERISA. No ERISA Event has occurred with respect to any Plan or is
reasonably expected to occur with respect to any Plan, except for those which,
if not obtained, would not have a Material Adverse Effect.
4.16 Full Disclosure of Material Facts. Borrower has fully advised Agent
of all matters involving the financial condition, business, operations and
Properties of the Borrower Entities that would be reasonably expected to have a
Material Adverse Effect. No information, exhibit, or report furnished or to be
furnished by Borrower to Lenders in connection with this Agreement contains, as
of the date thereof, any misrepresentation of fact or failed or will fail to
state any material fact, the omission of which would render the statements
therein materially false or misleading.
4.17 Accuracy of Projections. With respect to all business plans and
other forecasts and projections furnished by or on behalf of Borrower and made
available to Agent relating to the financial condition, business, operations or
Properties of the Borrower Entities, all facts stated as such therein were true
and complete in all material respects as of
41
the time made and all estimates and assumptions were made in good faith and
believed to be reasonable at the time made. As of the Closing Date, nothing had
come to the attention of Borrower that has changed its assessment of any such
matters, except for changes that would not have a Material Adverse Effect.
4.18 Investment Company Act. No Borrower Entity is an "investment
company" under the Investment Company Act of 1940, as amended.
4.19 Personal Holding Company. No Borrower Entity is a "personal holding
company" as defined in Section 542 of the IRC.
4.20 Solvency. Each Borrower Entity is Solvent as of the date hereof and
will remain Solvent upon the consummation of the transactions contemplated
hereby.
4.21 Chief Executive Office. The address designated herein to which
notices are to be sent under this Agreement is Borrower's chief executive office
within the meaning of Tennessee Code Annotated Section 47-9-103(3)(d).
included in the Initial Borrower Entities.
4.23 Ownership of Patents, Licenses, Etc. The Borrower Entities own all
licenses, permits, franchises, registrations, patents, copyrights, trademarks,
trade names or service marks, or the rights to use the foregoing, that are
necessary for the continued operation of their business except for such
licenses, etc., which, if not held or owned, would not have a Material Adverse
Effect.
4.24 Environmental Compliance. Each Borrower Entity has duly complied
with, and their Properties are owned and operated in compliance with, all
Environmental Laws, the violation of which would have a Material Adverse Effect.
There have been no citations, notices or orders of non-compliance issued to any
Borrower Entity or, to the best of Borrower's knowledge, relating to their
business or Properties pursuant to any Environmental Law, except for those which
would not have a Material Adverse Effect. Each Borrower Entity has obtained all
required federal, state and local licenses, certificates or permits relating to
them and their Properties as required by applicable Environmental Laws, except
for those which, if not obtained, would not have a Material Adverse Effect.
4.25 Labor Matters. No Borrower Entity is subject to any collective
bargaining agreements or any decrees or orders requiring them to recognize, deal
with or employ any Person. No demand for collective bargaining has been asserted
against any Borrower Entity by any union or organization. No Borrower Entity has
experienced any strike, labor dispute, slowdown or work stoppage due to labor
dispute and, to the best knowledge of Borrower, there is no such strike,
dispute, slowdown or work stoppage threatened against any Borrower Entity. All
Borrower Entities are in compliance in all
42
material respects with the Fair Labor Standards Act of 1938,
as amended, except for those matters which would not have a Material Adverse
Effect.
4.26 OSHA Compliance. All Borrower Entities are in compliance in all
material respects with the Federal Occupational Safety and Health Act, as
amended, and all regulations under the foregoing, except for those matters which
would not have a Material Adverse Effect.
4.27 Regulation U. No Borrower Entity is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System). No proceeds of any Loan will be used to purchase or carry any
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System) in violation of applicable law,
including, without limitation, Regulation U issued by the Board of Governors of
the Federal Reserve System.
4.28 Affiliate Transactions. No Borrower Entity is a party to any
transaction, contract or agreement with any Affiliate, except for Service
Agreements, lease agreements and other agreements among Borrower and its
Subsidiaries and those other agreements described in Schedule 4.28 hereof.
4.29 Subordinated Debentures. The Obligations constitute "Senior
Indebtedness" for the purpose of the subordination provisions of the Indenture
pursuant to which the Subordinated Debentures have been issued.
V. AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement (and thereafter
where expressly stated herein):
5.1 Payment of Obligations. Borrower shall pay all amounts owed under
the Obligations when due without setoff, counterclaim or withholdings of any
kind; provided, however, if Borrower is required by law to withhold any taxes
(other than taxes based upon the income of the Lender imposed by the
jurisdiction in which the Lender is organized or from which its interest herein
has been generated) from any payments on the Obligations to any Lender(s),
Borrower shall make additional payments to such Lender(s) along with the regular
payments as they become due so that the end result is that such Lender(s)
receives the amount that the Lender(s) would have received if no such
withholdings were made.
5.2 Maintenance of Existence and Business. Except for transactions among
Borrower Entities and other transactions permitted under this Agreement, each
Borrower Entity shall maintain its fundamental existence, name, rights, and
franchises, and shall maintain its qualification and good standing in all states
in which such qualification is necessary (except to the extent that failure to
so qualify would not have a Material Adverse
43
Effect), and shall continue to operate in the same type of business as such
Borrower Entity engages in as of the date hereof.
5.3 Financial Statements and Reports. Borrower shall furnish to Agent
and Lenders or cause Agent and Lenders to receive all of the following, all of
which must be in number sufficient for all Lenders and otherwise in form and
substance satisfactory to Agent and Lenders:
5.3.1 Quarterly Financial Reports. As soon as available, and in any event
by the fiftieth (50th) day of each calendar quarter, Borrower shall deliver a
balance sheet, income statement and statement of cash flows of Borrower for
and as of the end of the preceding fiscal quarter, all prepared by Borrower
on a consolidated basis and certified by Borrower's president or chief
financial officer to be complete and correct and to present fairly, in
accordance with GAAP (excluding year-end adjustments and required footnote
disclosures), the financial condition of Borrower and its consolidated
affiliates as of the date of such statements and the results of their
operations for such period. The quarterly financial information shall further
include calculations of all financial ratios, the certification of Borrower's
president or chief financial officer as to the absence of any Event of
Default or Unmatured Default,.
5.3.2 Annual Financial Reports. As soon as available, and in any event
within one hundred (100) days after the end of each fiscal year, Borrower
shall deliver audited balance sheets of Borrower as of the end of such year
and the related audited statements of income, retained earnings and cash
flows for such year, together with supporting schedules, all such statements
prepared in accordance with GAAP on a consolidated basis and accompanied by
an unqualified audit report prepared by an independent "big six" certified
public accountant acceptable to Agent showing the financial condition of
Borrower and its consolidated affiliates at the close of such year and the
results of its operations during such year. The annual financial information
shall include calculations of all financial ratios as determined based upon
the audited financial statements and the certification of Borrower's
president or chief financial officer as to the absence of any Event of
Default or Unmatured Default.
5.3.3 Budgets. As soon as available, and in any event within sixty (60)
days after the beginning of each fiscal year, Borrower shall deliver its
Capital Expenditures budget and its operating budget for the current year.
5.3.4 Accountant Reports. Promptly upon the receipt thereof, Borrower
shall deliver a copy of each management letter submitted to Borrower or its
consolidated affiliates by their accountants in connection with any annual,
interim or special audit made by them.
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5.3.5 Owner Mailings. Promptly upon the sending thereof, Borrower
shall deliver a copy of each material statement, report or notice sent to its
shareholders.
5.3.6 SEC Filings. Promptly upon the filing thereof, should such filings
become applicable, Borrower shall deliver copies of all regular, periodic and
special reports that any Borrower Entity files with the United States Securities
and Exchange Commission or any successor thereto, or any national securities
exchanges or the National Association of Securities Dealers.
5.3.7 Change in Accounting Policies. Borrower shall promptly give written
notice of any material change in accounting policies or financial reporting
practices on the part of any Borrower Entity.
5.3.8 Notice Upon Perceived Breach. Borrower agrees to give prompt written
notice of any action or inaction by or on behalf of Agent or any Lender in
connection with this Agreement or the Obligations that Borrower believes may be
actionable against such party or a defense to payment of any or all of the
Obligations for any reason, including, but not limited to, commission of a tort
or violation of any contractual duty or duty implied by law.
5.3.9 Changes in Constituent Documents. Borrower shall give prompt written
notice of any material change in the corporate charter or bylaws of Borrower or
any Subsidiary following the encumbrance of the stock thereof in favor of Agent
as required under this Agreement, and shall provide Agent with a copy of such
change (Borrower Entities are restricted in the adoption of such amendments as
provided elsewhere in the Loan Documents, and nothing contained in this Section
shall be deemed a waiver of such restrictions).
5.3.10 Notice of Litigation. Borrower shall give prompt written notice of
any litigation, arbitration, tax audit, administrative proceeding or
investigation that may hereafter be instituted or threatened in writing in which
Borrower would be a party or which otherwise may affect any Borrower Entity or
any of their business, operations or Properties, except for (i) actions seeking
only monetary damages in an amount of less than the amount equal to three
percent (3%) of Borrower's Consolidated Adjusted EBITDA for the most recent four
(4) fiscal quarters for which Borrower has submitted financial statements to
Agent, as of the time of determination, (ii) actions seeking only monetary
damages in an unspecified amount, if Borrower believes in good faith that the
matter, if adversely determined, would not have a Material Adverse Effect, and
(iii) matters arising from premises or vehicular liability seeking only monetary
damages and which are fully covered by insurance, subject only to any applicable
deductible.
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5.3.11 Defaults and Changes. Borrower shall give prompt written notice
if Borrower learns of the occurrence of (i) any event that constitutes an
Event of Default or an Unmatured Default, together with a detailed
statement of the steps being taken as a result thereof, or (ii) any
Material Adverse Change.
5.3.12 Other Information. Borrower shall provide such other
information respecting the condition or operations, financial or otherwise,
of the Borrower Entities as Agent or any Lender may from time to time
reasonably request.
5.4 Taxes and Other Encumbrances. Each Borrower Entity shall make due
and timely payment or deposit of all federal, state and local taxes, assessments
or contributions required of it by law, and execute and deliver to Agent, on
demand, appropriate certificates attesting to the payment or deposit thereof;
provided, however, that the Borrower Entities shall not be required to pay or
discharge any such tax, assessment, charge or claim for as long as it is being
diligently contested in good faith by proper proceedings and for which
appropriate reserves are being maintained.
5.5 Payment of Funded Debt. Each Borrower Entity shall pay all of its
Funded Debt as and when the same becomes due in accordance with its terms
(unless such payment is not made due to its subordination to the Revolving
Credit Loan), unless the failure to pay would not have a Material Adverse Effect
or is being contested in good faith and appropriate reserves have been made for
payment thereof in accordance with GAAP.
5.6 Compliance with Laws. Each Borrower Entity shall observe and comply
with all Laws (including, but not limited to, Fraud and Abuse Laws), and shall
maintain all certificates, franchises, permits, licenses, and authorizations
necessary to the conduct of its business or the operation of its Properties,
except for such Laws, certificates, etc., which, if violated or not obtained and
full penalties were imposed for such violation, would not cause a Material
Adverse Effect. Each Borrower Entity shall further use its best efforts to
assure the compliance by all Providers with all applicable Laws, including, but
not limited to, medical licensure and Fraud and Abuse Laws, relating to their
providing of professional services, except for those which, if violated and full
penalties were imposed for such violation, would not cause a Material Adverse
Effect.
5.7 Maintenance of Property. All Borrower Entities shall maintain their
Property (and any Property leased by or consigned or held under title retention
or conditional sales contracts) in good and workable condition at all times,
subject to ordinary wear and tear, normal discards and replacements due to
functional and useful-life obsolescence, and shall make all repairs,
replacements, additions, and improvements to their Property reasonably necessary
and proper to ensure that the business carried on in connection with their
Property may be conducted properly and efficiently at all times.
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5.8 Compliance with Contractual Obligations. Each Borrower Entity will
perform all of its obligations in respect of all material contracts to which it
is a party and will use its best efforts to keep, and to take all action to
keep, such contracts in full force and effect and not allow any such contract to
lapse or be terminated or any rights to renew such to be forfeited or canceled,
if such lapse, etc. would have a Material Adverse Effect; provided, however,
that any such contract may lapse or be terminated or such renewal rights may be
forfeited or canceled if in the reasonable business judgment of the Borrower
Entities it is in their best interests to allow or cause such lapse,
termination, forfeiture or cancellation.
5.9 Further Assurances. The Borrower Entities shall promptly cure any
defects in the creation, issuance, or delivery of the Loan Documents. The
Borrower Entities at their expense will execute (or cause to be executed) and
deliver to Agent upon request all such other and further documents, agreements,
and instruments in compliance with or accomplishment of the covenants and
agreements applicable to them in the Loan Documents, or to evidence further and
to describe more fully any Collateral intended as security for the Obligations,
or to correct any omissions in the Loan Documents, or to state more fully the
Obligations and agreements set out in any of the Loan Documents, or to perfect,
protect, or preserve any Encumbrances created pursuant to any of the Loan
Documents, or to make any recordings, to file any notices, or to obtain any
consents, all as may be reasonably necessary or appropriate in connection
therewith. Borrower appoints Agent as Borrower's attorney-in-fact to execute
any financing statements or other instruments of perfection with respect to the
Collateral.
5.10 Security Interest; Setoff. In order to further secure the payment of
the Obligations, Borrower hereby grants to Agent and to each Lender a security
interest and right of setoff against all of Borrower's presently owned or
hereafter acquired monies, items, credits, deposits and instruments (including
certificates of deposit) presently or hereafter in the possession of any Lender
or Agent. By maintaining any such accounts or other property with a Lender or
Agent, Borrower acknowledges that Borrower voluntarily subjects the property to
the security interest arising hereunder. Subject to the provisions in Article
IX hereof, a Lender may exercise its rights under this Section without prior
notice (but with prompt notice following the setoff) following an Event of
Default. Borrower agrees that neither Lenders nor Agent shall be liable for the
dishonor of any instrument after notice of setoff shall have been duly given
resulting from a Lender's exercise of its rights under this Section.
5.11 Insurance.
5.11.1 General Insurance Requirements. In addition to the other
specific requirements set forth in this Agreement and as may be required
by other Loan Documents, the Borrower Entities shall maintain insurance
(i) on all insurable Properties now or hereafter owned by them under
coverage that insures against the risks included in fire and extended
coverage insurance and against such other risks as are customarily insured
in their industry, in an
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amount equal to not less than the actual cash value thereof and with a
deductible of no more than One Thousand and No/100 Dollars ($1,000.00),
(ii) against public liability in the amount of at least One Million and
No/100 Dollars ($1,000,000.00) per occurrence, and (iii) with respect to
worker's compensation liabilities in the amount required by law or, if
higher, the amount customary in the industry. All policies of insurance
shall be issued by insurance companies acceptable to Agent and shall be in
form and substance acceptable to Agent.
5.11.2 Practice-Related Insurance Requirements. The Borrower
Entities shall maintain insurance for claims, however characterized,
against them in connection with the provision of medical services by
Providers and/or ancillary services provided by them at Practices covered
by Service Agreements, in an amount of at least One Million and No/100
Dollars ($1,000,000.00) per occurrence with respect to Practices whose
Providers are physicians and Three Hundred Thousand and No/100 Dollars
($300,000.00) per occurrence with respect to Practices whose Providers who
are not physicians. The Borrower Entities shall further cause each Provider
to maintain medical malpractice insurance of at least One Million and
No/100 Dollars ($1,000,000.00) per occurrence. All required insurance shall
be in form and substance acceptable to Agent.
5.12 Accounts and Records. The Borrower Entities shall maintain current
books of record and account, in which full, true, and correct entries will be
made of all transactions.
5.13 Official Records. The Borrower Entities shall maintain current
corporate and official records, minute books and stock ledgers.
5.14 Banking Relationships. The Borrower Entities shall maintain their
deposit accounts with Lenders or with other FDIC-insured depository
institutions.
5.15 Right of Inspection. The Borrower Entities shall permit any officer,
employee, or agent of a Lender or Agent to visit and inspect during ordinary
business hours any of their Property, to examine their books of record and
accounts and corporate records, to take copies and extracts from such books of
record and accounts, and to discuss the affairs, finances, and accounts of the
Borrower Entities with their respective officers, accountants, and auditors, all
at such reasonable times and as often as Agent or a Lender may reasonably desire
and upon reasonable advance notice absent an Event of Default. Without limiting
Agent's right to obtain equitable relief as to any other appropriate right in
this Agreement or in other Loan Documents, Borrower agrees that the rights in
this Section may be enforced by affirmative injunction and, to the extent the
right to review records may be denied, the right may be enforced by a
restraining order prohibiting the interference by Borrower with the exercise of
rights to review of the records pursuant to this Section. Absent an Event of
Default, all expenses of such inspections, etc. shall be paid by the
48
respective Lenders, and in the presence of an Event of Default, all reasonable
expenses thereof shall be paid by Borrower.
5.16 ERISA Information and Compliance. The Borrower Entities shall comply
with ERISA and all other applicable laws governing any pension or profit sharing
plan or arrangement to which they are a party, except for matters which would
not have a Material Adverse Effect. The Borrower Entities shall (i) upon
request, provide Agent with copies of any annual report required to be filed
pursuant to ERISA with respect to any Plan or any other employee benefit plan;
(ii) notify Agent upon the occurrence of any ERISA Event or of any additional
act or condition arising in connection with any Plan which they believe might
constitute grounds for termination thereof by the PBGC or for the appointment of
a trustee to administer the Plan; and (iii) furnish to Agent, promptly upon
request, such additional information concerning any Plan or any other employee
benefit plan as Agent may request.
5.17 Indemnity; Expenses. Borrower agrees to indemnify, defend (with
counsel reasonably satisfactory to the indemnified party or parties) and hold
harmless Lenders and Agent against any loss, liability, claim or expense,
including reasonable attorneys' fees, that they may incur in connection with the
Loan Documents or the Obligations, INCLUDING THOSE EXPENSES, ETC. THAT MAY
RESULT FROM THEIR ORDINARY NEGLIGENCE, except those losses, etc. that may result
from a Lender's or Agent's gross negligence or willful misconduct. Without
limiting the foregoing, upon demand by Agent, Borrower will reimburse Lenders
and/or Agent for the following reasonable expenses if not paid by Borrower
promptly after written demand by Agent:
5.17.1 Taxes. All taxes that Lenders or Agent may be required to pay
because of the Obligations or because of Lenders' or Agent's interest in any
property securing the payment of the Obligations, excepting taxes based upon
the net income of a Lender or Agent.
5.17.2 Administration. All reasonable costs of the preparation of this
Agreement and any other related documents and the administration of the
Obligations (except for Lenders' and Agent's usual overhead incurred in the
acceptance and processing of payments, the routine review of financial
statements, certifications and reports, routine communications with
Borrower, and other ordinary activities that are not occasioned by an
Unmatured Default, Event of Default or by a request of Borrower to waive or
vary the terms of this Agreement).
5.17.3 Protection of Collateral. All costs of preserving, insuring,
preparing for sale (whether by improvement, repair or otherwise) or selling
any Collateral.
5.17.4 Costs of Collection. All court costs and other costs of
collecting any debt, overdraft or other obligation included in the
Obligations.
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5.17.5 Litigation. All reasonable costs arising from any litigation,
investigation, or administrative proceeding (whether or not Agent or a
Lender is a party thereto) that Agent or a Lender may incur as a result of
the Obligations or as a result of their association with any of the
Borrower Entities, including, but not limited to, expenses incurred by
Agent or a Lender in connection with a case or proceeding involving any
Borrower Entity under any chapter of the Bankruptcy Code or any successor
statute thereto.
5.17.6 Attorneys' Fees. Reasonable attorneys' fees incurred in
connection with any of the foregoing (except that Borrower shall only be
responsible for the fees and expenses of Agent's attorneys in connection
with the original negotiation and execution of this Agreement).
If a Lender or Agent pays any of the foregoing expenses, they shall become a
part of the Obligations and shall bear interest at the Default Rate applicable
to Base Rate Loans. This Section shall remain in full effect regardless of the
full payment of the Obligations, the purported termination of this Agreement,
the delivery of the executed original of this Agreement to Borrower, or the
content or accuracy of any representation made by Borrower to Lenders or Agent;
provided, however, Agent or any Lender may terminate this Section as to itself
by executing and delivering to Borrower a written instrument of termination
specifically referring to this Section.
5.18 Assistance in Litigation. Borrower covenants to, upon request,
cooperatively participate in any proceeding in which Borrower is not an adverse
party to Lenders or Agent and which concerns Lenders' or Agent's rights
regarding the Obligations or any Collateral.
5.19 Name Changes. Borrower shall give Agent notice no more than thirty
(30) days after any Borrower Entity changes its name or begins doing business
under any trade name.
5.20 Estoppel Letters. Borrower covenants to provide Agent, within ten
(10) days after request, an estoppel letter stating (i) the balance of the
Obligations, (ii) whether Borrower has any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the Obligations.
Such balance as presented for confirmation and the nonexistence of defenses
shall be presumed if Borrower fails to respond to such a request within the
required period.
5.21 Environmental Matters.
5.21.1 Compliance With Environmental Laws. All Borrower Entities will
(i) employ in connection with their operations, appropriate technology and
compliance procedures to maintain compliance with any applicable
Environmental Laws, the violation of which would reasonably be expected to
have a Material Adverse Effect, (ii) obtain and maintain any and all
materials
50
permits or other permits required by applicable Environmental
Laws in connection with its operations, excepting only such permits, etc.
which would not by their absence cause a Material Adverse Effect, and
(iii) dispose of any and all Hazardous Substances only at facilities and
with carriers reasonably believed to possess valid permits under any
applicable state and local Environmental Laws. All Borrower Entities shall
use their best efforts to obtain all certificates required by law to be
obtained by them from all contractors employed by them in connection with
the transport or disposal of any Hazardous Substances.
5.21.2 Remedial Work. If any investigation, site monitoring,
containment, clean-up, removal, restoration or other remedial work of any
kind or nature with respect to any Borrower Entity's Properties is
required to be performed by them under any applicable local, state or
federal law or regulation, any judicial order, or by any governmental or
non-governmental entity or Person because of, or in connection with, the
current or future presence, suspected presence, release or suspected
release of a Hazardous Substance in or into the air, soil, groundwater,
surface water or soil vapor at, on, about, under, or within any of a
Borrower Entity's Property (or any portion thereof), Borrower shall within
30 days after written demand for performance thereof (or such shorter
period of time as may be required under applicable law, regulation, order
or agreement), commence and thereafter diligently prosecute to completion,
all such remedial work.
5.21.3 Indemnification of Lenders and Agent. Borrower agrees to
indemnify, defend (with counsel reasonably satisfactory to the indemnified
party or parties) and hold harmless Lenders and Agent against any loss,
liability claim or expense, including attorneys' fees, that a Lender or
Agent may incur as a result of the violation or alleged violation of any
Environmental Law by a Borrower Entity or with respect to any other
violation of Environmental Laws with respect to any Borrower Entity's
Properties. This covenant shall survive the repayment of the Revolving
Credit Loan.
5.22 Opinions of Counsel. Borrower agrees that Agent may from time to
time, but not more frequently than once per calendar year absent an Unmatured
Default or an Event of Default, request in writing the opinion of in-house
counsel and/or outside healthcare counsel to the Borrower Entities as to the
absence, except as disclosed in the opinion, of such counsel's knowledge of any
actual, threatened or asserted violation of any Fraud and Abuse Law on the part
of any Borrower Entity and/or the Providers, and the sufficiency of
documentation then in use for the acquisition of Practices as complying with
Fraud and Abuse Laws. Absent the existence of an Unmatured Default or and Event
of Default, such opinions shall require no special diligence on the part of the
opining attorney(s), but only requiring a report of matters then known to such
attorneys, unless Agent specifically inquires about facts that Agent reasonably
believes may raise a Fraud and Abuse Law issue. Such opinions shall be in form
and substance acceptable to Agent, shall be delivered to Agent at
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Borrower's expense within fifteen (15) days of the date of request and shall
address specifically any facts inquired of in Agent's request.
5.23 Borrower Entities. All Borrower Entities shall at all times be
guarantors of the Obligations, excepting only Subsidiaries that are not required
to be guarantors under the definition of Permitted Subsidiaries in this
Agreement.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees that, without Agent's prior written
confirmation of approval by the Required Lenders:
6.1 Debts, Guaranties, and Other Obligations. No Borrower Entity shall
incur, create, assume, or in any manner become or be liable with respect to any
Debt, except the following:
6.1.1 Obligations to Lenders. The Obligations, as defined in this
Agreement.
6.1.2 Existing Liabilities. Liabilities, direct or contingent, of
Borrower Entities existing on the date of this Agreement that are reflected in
the Financial Statements, subject to additional specific limitations set forth
below.
6.1.3 Endorsements. Endorsements of negotiable or similar instruments
for collection or deposit in the ordinary course of business.
6.1.4 Trade Debt. Trade payables and accruals from time to time
incurred in the ordinary course of business.
6.1.5 Taxes. Taxes, assessments, or other governmental charges that are
not delinquent or are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if Borrower has made the reserve
therefor required by GAAP.
6.1.6 Seller Debt. Seller Debt, which must be unsecured Debt; provided,
however, as of the Closing Date, the Borrower Entities may have up to Twenty-
Six Million and No/100 Dollars ($26,000,000.00) of Seller Debt that is secured
by assets of the Borrower Entities, all of which secured Seller Debt shall be
retired or rendered unsecured on or before September 30, 1997.
6.1.7 Acquired Debt and Purchase Money Security Interests. Acquired
Debt and Debt secured by Purchase Money Security Interests, not to exceed
Twenty Million and No/100 Dollars ($20,000,000.00) in the aggregate.
52
6.1.8 Accounting Accruals. Liabilities arising from reserves and
accruals required by GAAP that do not reflect liquidated and mature
obligations to third parties, including, but not limited to, current deferred
income taxes.
6.1.9 Debt Among Borrower Entities. Debt incurred to other Borrower
Entities incurred in the ordinary course of business.
6.1.10 Certain Subordinated Debt. Subordinated Debentures in the amount
not exceeding One Hundred Forty-Three Million, Seven Hundred Fifty Thousand
and No/100 Dollars ($143,750,000.00) issued pursuant to that certain Indenture
dated as of December 11, 1996, between Borrower and U.S. Trust Company of New
York, N.A. (the "Subordinated Debentures").
6.2 Change of Management. Borrower shall not allow or suffer any change
of management effecting a material change in the duties or change in the
personnel presently staffing the positions of chief executive officer, president
or chief financial officer, as set forth in Schedule 6.2 hereto.
Notwithstanding the foregoing, should any of the named managers cease such
active participation in Borrower's management due to their death or disability,
Lenders shall allow Borrower a period of sixty (60) days thereafter in which a
management succession plan may be presented so that the Required Lenders may, in
their discretion, elect to accept new management in lieu of prior management,
subject to such revisions of this Agreement as they may require.
6.3 Change of Ownership. Borrower shall not cause or suffer to exist a
change of ownership or suffer the issuance of new stock or other event that
would result in the ownership of more than 30% of the stock of Borrower by any
Person not presently a shareholder thereof.
6.4 Encumbrances. No Borrower Entity shall create, incur, assume, or
permit to exist any Encumbrance on any of its Property (now owned or hereafter
acquired) except for Permitted Encumbrances, and shall not undertake a
commitment of any kind in favor of any Person (other than Lender) (i) requiring
that any or all of such Borrower Entity's Property be or remain unencumbered, or
(ii) requiring that a Borrower Entity grant an Encumbrance (other than a
Permitted Encumbrance) in favor of any Person (other than Lenders or Agent for
the benefit of Lenders) on a Borrower Entity's Property under any circumstances
whatsoever. No Borrower Entity shall sign or file under the Uniform Commercial
Code a financing statement that names such Borrower Entity as debtor or the
equivalent or sign any security agreement authorizing any secured party
thereunder to file any such financing statement, except to secure Permitted
Encumbrances.
6.5 Investments. No Borrower Entity shall make investments (including
but not limited to acquisitions or purchases of the obligations or stock of, or
any other or additional interest) in any person, firm, partnership, joint
venture or corporation except: (a) those specific investments in existence as
of the Closing Date, (b) general obligations of, or
53
obligations unconditionally guaranteed as to principal and interest by, the
United States of America maturing within fifteen (15) months of the date of
purchase, (c) commercial paper having a rating of not less than "A2" or "P2"
from Moody's or S & P, respectively, (d) Permitted Acquisitions, (e)
certificates of deposit and bankers acceptances issued by a Lender or another
banking institution with a minimum net worth of Five Hundred Million and No/100
Dollars ($500,000,000.00) and having a letter of credit rating of not less than
"A" from Moody's or S & P, respectively, (f) municipal bonds rated "A" or better
by Moody's or S & P, (g) Permitted Minority Investment Entities, (h) Borrower's
common stock acquired pursuant to the Stock Repurchase Program (provided that no
such stock may be acquired at a time that an Event of Default exists or under
circumstances whereby the acquisition of such stock would create an Event of
Default or an Unmatured Event of Default), (i) Permitted Unpledged Investments
and Subsidiaries, and (j) such other investments as Agent may approve, in its
reasonable discretion.
6.6 Prepayments. No Borrower Entity shall prepay the Subordinated
Debentures, except from the Net Proceeds of an equity issuance or from
additional subordinated debt at least as subordinated as the Subordinated
Debentures and otherwise in form and substance acceptable to the Required
Lenders .
6.7 Sales and Leasebacks. No Borrower Entity shall enter into any
arrangement, directly or indirectly, with any Person other than another Borrower
Entity by which such Borrower Entity shall sell or transfer any of its Property,
whether now owned or hereafter acquired, and by which a Borrower Entity shall
then or thereafter rent or lease as lessee such Property or any part thereof or
other Property that it intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
6.8 Change of Control. Borrower shall not suffer or permit the
occurrence of a Change of Control.
6.9 Nature of Business. No Borrower Entity shall suffer or permit any
material changes to be made in the character of its business as carried on at
the Closing Date, except for the accomplishment of Permitted Acquisitions.
6.10 Further Acquisitions, Mergers, Etc. Except for transactions
involving only Borrower Entities, no Borrower Entity shall enter into any
agreement to merge, consolidate, or otherwise reorganize or recapitalize, or
sell, assign, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of their Property (whether now
owned or hereafter acquired), except for (i) Permitted Acquisitions and (ii) the
"unwinding" of Practice acquisitions and other dispositions in the ordinary
course of business which, in the aggregate with asset dispositions addressed by
Section 6.12 hereof, do not exceed in value the amount of Ten Million and No/100
Dollars ($10,000,000.00) in any fiscal year.
6.11 Advances. No Borrower Entity shall extend any loans to any other
Persons, except for loans to other Borrower Entities in the ordinary course of
business and
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advances to Providers made in the ordinary course of business arising from (i)
expenses advanced by Borrower Entities, which expenses are reimbursable to the
Borrower Entities under the terms of the applicable Service Agreements, (ii)
amounts due from Providers due to the difference between the calculation of fees
due under certain Service Agreements on an accrual basis and the duty of
remittance of those fees by Providers on a cash basis, provided that the amount
outstanding under this subsection (ii) shall be reviewed annually by Agent and
may be subject to limitations in amount, as Agent may reasonably require, based
upon such reviews, and (iii) Management Stock Acquisition Loans.
6.12 Disposition of Assets. No Borrower Entity shall dispose of any of
its assets other than in the "unwinding" of Practice acquisitions and otherwise
in the ordinary course of their present business upon terms standard in the
industry, and in any event, in no fiscal year shall the Borrower Entities
collectively dispose of assets which, in the aggregate with transactions
addressed by Section 6.10 hereof, exceed in value the amount of Ten Million and
No/100 Dollars ($10,000,000.00).
6.13 Inconsistent Agreements. No Borrower Entity shall enter into any
agreement containing any provision which would be violated or breached by the
performance by Borrower of the Obligations.
6.14 Fictitious Names. Borrower shall not use any name other than the
name used in executing this Agreement or any assumed or fictitious name.
6.15 Subsidiaries and Affiliates. No Borrower Entity shall create or
acquire any direct or indirect Subsidiary or Affiliate or divest itself of any
material assets by transferring them to any existing Subsidiary or Affiliate
other than Permitted Subsidiaries; nor shall Borrower enter into any
partnership, joint venture, or similar arrangement, or otherwise make any
material change in its corporate structure, except that Borrower may acquire and
create Permitted Subsidiaries from time to time in the ordinary course of
business and may own Permitted Unpledged Investments and Subsidiaries.
6.16 Place of Business. Borrower shall not transfer its executive
offices, or maintain records with respect to accounts at any locations other
than at the address for notices specified herein and at the locations of
Practices affiliated with Borrower, except as Agent may approve, in its
reasonable discretion.
6.17 Adverse Action With Respect to Plans. No Borrower Entity shall take
any action to terminate any Plan which would reasonably result in a material
liability of a Borrower Entity to any Person.
6.18 Transactions With Affiliates. Except with regard to Management Stock
Acquisition Loans, to the extent applicable, no Borrower Entity shall enter into
any transaction with any Affiliate except in the ordinary course of business and
on fair and reasonable terms no less favorable to the Borrower Entity than they
would obtain in a comparable arms length transaction with a Person not an
Affiliate.
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6.19 Constituent Document Amendments. No Borrower Entity shall amend its
corporate charter or bylaws in any material respect, except as necessary to
accomplish corporate transactions that do not require Agent's specific approval
or transactions for which such approval is necessary and has been granted.
6.20 Adverse Transactions. No Borrower Entity shall enter into any
transaction that materially and adversely affects or, to the best of its
knowledge, is likely to materially and adversely affect the Collateral or
Borrower's ability to repay the Obligations.
6.21 Use of Lenders' Name. No Borrower Entity shall, without the prior
written consent of the applicable Lender, use the name of a Lender or the name
of any Affiliates of a Lender in connection with any of their business or
activities, except in connection with internal business matters, as required in
making required securities law disclosures, in dealings with Providers in the
ordinary course of business, in Permitted Acquisitions, in dealings with
governmental agencies and financial institutions and to trade creditors of the
Borrower Entities solely for credit reference purposes.
6.22 Margin Securities. No Borrower Entity shall own, purchase or acquire
(or enter into any contract to purchase or acquire) any "margin security" as
defined by any regulation of the Federal Reserve Board as now in effect or as
the same may hereafter be in effect.
6.23 Accounting Changes. Borrower shall not change its fiscal year or
make any other significant change in consolidated or consolidating accounting
treatment and reporting practices, except as required or permitted by GAAP. Any
change in fiscal year shall be subject to Agent's prior written approval.
6.24 Distributions. Except in favor of other Borrower Entities and for
the repurchases pursuant to the Stock Repurchase Program, no Borrower Entity
shall declare or pay any dividends or other distributions of cash or other
property (except for dividends paid in its own stock) or redeem any of its own
outstanding stock or the stock of any other Borrower Entity.
6.25 Action Outside Ordinary Course. No Borrower Entity shall take any
other action outside the ordinary course of their business.
6.26 Modification of Subordinated Debenture Documents. Borrower shall not
cause or permit the Subordinated Debentures or the related Indenture to be
modified, directly or indirectly, in any manner that (a) would accelerate the
stated maturity of any principal or interest due thereunder or (b) might
terminate or impair the subordination of the Subordinated Debentures to the
Obligations.
6.27 Non-Scheduled Payment of Subordinated Debentures. Borrower will not
(a) give any notice of election to redeem any or all of the Subordinated
Debentures; (b) take any action to defease the Subordinated Debentures; or (c)
otherwise make or permit to be
56
made any payment (other than regularly scheduled payments of interest made in
accordance with the terms of the Subordinated Debentures as they exist as of the
date hereof or as they may hereafter be amended with the prior written approval
of the Required Lenders) with respect to the Subordinated Debentures, if an
Event of Default then exists or if the taking of such action (including any
borrowing of funds to enable Borrower to take such an action) would result in
the occurrence of an Event of Default under this Agreement.
VII. FINANCIAL COVENANTS
7.1 Funded Debt to Consolidated Adjusted EBITDA. Borrower shall maintain
a ratio of Funded Debt to Consolidated Adjusted EBITDA, measured as of the end
of each fiscal quarter for the previous four consecutive fiscal quarters, of no
greater than 3.50:1.00 through December 31, 1998 and 3:00:1:00 as of March 31,
1999 and thereafter.
7.2 Funded Debt to Capital. Borrower shall maintain a ratio of Funded
Debt to Capital, measured as of the end of each fiscal quarter, of no greater
than .50:1.00
7.3 Fixed Charge Coverage. Borrower shall maintain a Fixed Charge
Coverage Ratio measured as of the end of each fiscal quarter for the previous
four consecutive fiscal quarters of at least 1.75:1.00 for each fiscal quarter
ending through December 31, 1997, and 2.00:1.00 as of each quarter-end
thereafter.
7.4 Current Ratio. Borrower shall maintain a Consolidated Current Ratio
of not less than 2.00:1.00, tested as of the end of each fiscal quarter.
7.5 Net Worth. Borrower shall maintain a Consolidated Net Worth as of
the end of each fiscal quarter in an amount at least equal to the sum of Two
Hundred Seventy-Five Million and No/100 Dollars ($275,000,000.00), plus the Net
Proceeds of all equity issued after the date hereof, plus seventy-five percent
(75%) of the amount of net income for the fourth quarter ending December 31,
1996 and for each fiscal year thereafter, without adjustment for net losses, and
less amounts expended to acquire Borrower's own stock pursuant to the Stock
Repurchase Program.
7.6 Capital Expenditures. The Borrower Entities' Consolidated Capital
Expenditures during any fiscal year shall not exceed 115% of the amount to be
budgeted for such fiscal year and subject to the Required Lenders' approval
annually in advance.
7.7 Senior Funded Debt to Consolidated Adjusted EBITDA. Borrower shall
maintain a ratio of Senior Funded Debt to Consolidated Adjusted EBITDA, measured
as of the end of each fiscal quarter for the previous four consecutive fiscal
quarters, of no greater than 2.00:1.00.
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VIII. EVENTS OF DEFAULT
8.1 Events of Default. Any of the following events shall be considered
an Event of Default under this Agreement:
8.1.1 Payments. Borrower's failure to make payment of any installment of
principal included in the Obligations when due or any payment of interest or
expenses included in the Obligations within three (3) days of when due.
8.1.2 Representations and Warranties. The making of any representation or
warranty by Borrower or any other party in any Loan Document that was incorrect
in any material respect as of the date thereof.
8.1.3 Negative Covenants. The failure of any Borrower Entity to comply
with any of the requirements of Article VI hereof.
8.1.4 Financial Covenants. The failure of any Borrower Entity to comply
with any of the requirements of Article VII hereof.
8.1.5 Reporting Requirements. The failure of any Borrower Entity or
any other party to timely perform any covenant in the Loan Documents requiring
the furnishing of notices, financial reports or other information to Agent or
Lenders within five (5) days of when due.
8.1.6 Other Covenants. The failure of any Borrower Entity to observe or
perform any covenant contained in any Loan Document, which covenant is not
subject to any specific provision in this Article VIII; provided, however, as to
any such breach that is reasonably susceptible to being cured, the occurrence of
such breach shall not constitute an Event of Default hereunder if such breach is
fully cured within thirty (30) days (or ten (10) days, if such breach may be
cured by the payment of a specific sum of money) after the earlier of the
Borrower Entity's knowledge of the facts giving rise thereto or Agent's written
notice thereof to Borrower given in accordance with the provisions hereof.
8.1.7 Involuntary Bankruptcy or Receivership Proceedings. The appointment
of a receiver, custodian, liquidator, or trustee for any Borrower Entity, or for
any of their Property, by the order or decree of any court or agency or
supervisory authority having jurisdiction; or any Borrower Entity's adjudication
as being bankrupt or insolvent; or the sequestering of any of the Property of
any Borrower Entity by court order or the filing of a petition against any
Borrower Entity under any state or federal bankruptcy, reorganization, debt
arrangement, insolvency, readjustment of debt,
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dissolution, liquidation, or receivership law of any jurisdiction, whether now
or hereafter in effect, unless dismissed (in the case of involuntary proceedings
only) within sixty (60) days.
8.1.8 Voluntary Petitions. Any Borrower Entity's filing of a petition in
voluntary bankruptcy or to seek relief under any provision of any bankruptcy,
reorganization, debt arrangement, insolvency, receivership, readjustment of
debt, assignment of assets or general arrangement for the benefit of creditors,
dissolution, or liquidation law of any jurisdiction, whether now or hereafter in
effect, or their consent to the filing of any petition against them under any
such law.
8.1.9 Discontinuance of Business. Any Borrower Entity's discontinuance of
its usual business or its dissolution, except pursuant to transactions permitted
under this Agreement.
8.1.10 Default on Other Funded Debt. Any Borrower Entity's failure to
make any payment when due on any Debt in excess of Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00).
8.1.11 Undischarged Judgments. Existence of a final judgment or judgments
for the payment of money in excess of two percent (2%) of the consolidated gross
revenues of the Borrower Entities for the previous fiscal year by any court or
other Governmental Authority against any Borrower Entity, which is not paid,
discharged or bonded within thirty (30) days after entry.
8.1.12 Insolvency. Borrower shall no longer be Solvent on a consolidated
basis.
8.1.13 Attachment. The issuance of an attachment or other process against
any Property of any Borrower Entity, unless removed (by bond or otherwise)
within twenty (20) days, unless the issuance thereof would not have a Material
Adverse Effect.
8.1.14 Insurance. Any Borrower Entity's failure to maintain any insurance
required herein or in any other Loan Document.
8.1.15 Contest. Any Borrower Entity's challenge or contest of the
validity or enforceability of this Agreement or any other Loan Document or the
validity, priority or perfection of any security interest created hereunder or
under any other Loan Document in any action, suit or proceeding, or should they
cease to be in full force and effect.
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8.1.16 Fraud and Abuse Laws. Receipt by a Borrower Entity of a notice from
a Governmental Authority that it (i) intends to disallow requested
reimbursements, demand adjustment or repayment of past reimbursements in excess
of two percent (2%) of the consolidated gross revenues of the Borrower Entities
for the previous fiscal year respecting amounts submitted for reimbursement or
collected by a Borrower Entity or a Provider, or (ii) intends to impose civil
money penalties or to seek to exclude any Borrower Entity or a Provider from
participation in the Medicare or Medicaid programs due to a failure to comply
with Fraud and Abuse Laws, if the consolidated gross revenues to the Borrower
Entities arising from the affected Borrower Entity or Provider exceed one-half
percent (1/2%) of the consolidated gross revenues of the Borrower Entities for
the previous fiscal year.
8.1.17 Subordinated Debentures. The occurrence of an Event of Default
under the Subordinated Debentures.
8.2 Remedies. Upon the happening of any Event of Default:
8.2.1 Default Rate. The Required Lenders may instruct Agent to declare
that the Obligations thereafter bear interest at the Default Rate.
8.2.2 Termination of Commitments. As provided in Article III hereof,
Lenders shall not be obligated to advance any additional Loans and the Issuing
Bank will not be obligated to issue any Letters of Credit, and additionally, the
Required Lenders may terminate the obligation of Lenders to advance any
additional Loans and the obligation of the Issuing Bank to issue
Letters of Credit by causing Agent to give written notice thereof to Borrower,
which formal termination shall remain in effect notwithstanding any subsequent
cure of the Event of Default and whether or not the Revolving Credit Loan is
accelerated unless the Revolving Credit Loan is reinstated in writing by the
Required Lenders.
8.2.3 Acceleration. The Required Lenders may declare the entire principal
amount of all Obligations then outstanding, including interest accrued thereon,
to be immediately due and payable without presentment, demand, protest, notice
of protest, or dishonor or other notice of default of any kind, all of which are
hereby expressly waived.
8.2.4 Setoff. Subject to Section 9.11 hereof, any Lender may exercise its
lien upon and right of setoff against any monies, items, credits, deposits or
instruments that such Lender may have in its possession and which belong to
Borrower or to any other person or entity liable for the payment of any or all
of the Obligations.
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8.2.5 Cash Security for Letters of Credit. Agent shall, at the
direction of the Required Lenders, demand that Borrower immediately deposit
cash to a deposit account maintained with Agent and pledged to Agent for
the benefit of Lenders to secure the Obligations in the amount of all
Letter of Credit Liabilities.
8.2.6 Other Remedies. Agent shall, at the direction of the Required
Lenders, exercise any right that Lenders have under any other document
evidencing or securing the Obligations or otherwise available to Lenders or
Agent at law or equity.
8.2.7 Attorney-in-Fact. Borrower hereby irrevocably appoints Agent as
Borrower's attorney-in-fact to take any action to facilitate Agent's
exercise of remedies hereunder.
IX. AGENT
9.1 Appointment of Agent. Lenders hereby appoint Agent to act as
specified in this Article IX.
9.2 Powers and Duties of Agent.
9.2.1 Powers and Duties of Agent; Standard of Care. Agent shall
perform all duties expressly imposed upon Agent in this Agreement and those
other duties reasonably incidental thereto, subject to the approval of the
Required Lenders as provided in this Agreement. Agent's duties hereunder
are administrative and ministerial in nature, and Agent's capacity is that
of an independent contractor for Lenders. Agent is not a trustee or other
fiduciary for Lenders, and Agent has no duties whatsoever to Lenders except
as expressly set forth in this Agreement. Agent shall have no liability to
Lenders for any action or inaction relating to this Agreement or the other
Loan Documents, EVEN FOR MATTERS ARISING FROM ITS ORDINARY NEGLIGENCE,
except for actual losses caused by its gross negligence or reckless or
willful misconduct.
9.2.2 Matters Reserved to all Lenders. Absent the prior approval of
all Lenders, Agent shall not increase any Lender's Commitment; forgive or
reduce any principal, interest or fees due a Lender or Agent (unless the
affected party so agrees); extend scheduled maturities or payment dates;
release Collateral release the guarantor Subsidiaries, except for the
release of stock of (and other equity interests in) and guaranties executed
by Subsidiaries in the course of transactions undertaken by Borrower
Entities for which the consent of the Required Lenders is not required
under the other provisions of this Agreement (including, but not limited
to, transactions for the "unwinding"
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of Practice acquisitions to the extent expressly permitted under Sections 6.10
and 6.12 of this Agreement, respecting which Agent may issue releases without
obtaining the approval of any Lenders).
9.2.3 Limitations on Agent's Duties. Agent shall not be obligated to
take any action hereunder or under any other Loan Document (i) if such action
would, in the opinion of Agent, be contrary to applicable law, this Agreement or
the other Loan Documents, (ii) if it shall not first be specifically indemnified
to its satisfaction pursuant to Section 9.3 hereof against any and all liability
and expense that may be incurred by it by reason of taking or continuing to take
any such action, (iii) if it would likely subject Agent to a tax in any
jurisdiction where it is not then subject to a tax, (iv) if it would likely
require Agent to qualify to do business in any jurisdiction where it is not then
so qualified, unless Agent receives security or indemnity satisfactory to it
against any tax or other liability in connection with such qualification or
resulting from the taking of such action in connection therewith, or (v) if it
would likely subject Agent to in personam jurisdiction in any location where it
is not then so subject.
9.2.4 Agent's Right to Require Instructions in Performance of Duties.
If Agent, in its sole and absolute discretion, requests instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or any other Loan Document for which the
approval of the Required Lenders or all Lenders is not otherwise required, Agent
shall be entitled, at its option, to refrain from such action, or to continue
such inaction, unless and until Agent shall have received such instructions, and
Agent shall incur no liability by reason of so acting or refraining from action.
No Lender shall have any right of action whatsoever against Agent as a result of
Agent's acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of the Required Lenders in such a
case.
9.2.5 Agent's Reliance on Others in Performance of Duties. Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, consent, certificate, telex, teletype or
facsimile message, order or other documentary, teletransmission or telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person. Agent may consult with legal counsel
(including counsel for Borrower), accountants and other experts selected by it
with respect to all matters pertaining to this Agreement and the other Loan
Documents and its duties hereunder and thereunder and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel (including counsel for Borrower), accountants or
experts.
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9.2.6 Sharing of Information. Except as otherwise expressly provided in
this Agreement, Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information concerning the business, prospects, operations, properties,
financial or other condition or creditworthiness of the Borrower Entities or
any other Person that may come into its possession, whether before the
Closing Date or at any time or times thereafter. All notices to be given to
Borrower by a Lender hereunder shall be concurrently given to Agent.
9.3 Indemnification of Agent. To the extent Agent is not reimbursed by
or on behalf of Borrower, and without limiting the obligation of Borrower to do
so, Lenders will Pro Rata reimburse and indemnify Agent, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including
at any time following the indefeasible repayment in full of the Revolving Credit
Loan) be imposed on, incurred by or asserted against Agent in any way relating
to or arising out of this Agreement or any other Loan Document or the
transactions contemplated thereby or any action taken or omitted by Agent under
or in connection with any of the foregoing, and in particular will reimburse
Agent for out-of-pocket expenses promptly upon demand by Agent therefor, EVEN IF
INCURRED DUE TO THE ORDINARY NEGLIGENCE OF AGENT; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
finally determined by a court of competent jurisdiction and not subject to any
appeal or pursuant to arbitration to have resulted from Agent's gross negligence
or reckless or willful misconduct. Agent may offset any amounts due Agent by
any Lender against obligations of Agent to that Lender.
9.4 No Representations by Agent. Each Lender acknowledges that neither
Agent nor any of its officers, directors, employees, attorneys, accountants or
agents has made any representation or warranty to it regarding the Borrower
Entities, the Revolving Credit Loan, the Collateral or otherwise relating to
this Agreement. Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any other
Loan Document or in any document, instrument, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection, priority or
sufficiency of this Agreement or any other Loan Document or the financial
condition of the Borrower Entities or any other Person, or be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Loan Document, or the
financial condition of the Borrower Entities or any other Person or the
existence or possible existence of any Unmatured Default or Event of Default.
9.5 Independent Investigations by Lenders. Each Lender acknowledges
that, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it has deemed and may deem
appropriate, (i) it has made its own appraisal of and investigation into the
business, prospects, operations, properties,
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financial and other condition and creditworthiness of the Borrower Entities in
connection with its decision to enter into this Agreement and extend credit to
Borrower hereunder, and (ii) it will continue to make its own credit analysis,
appraisals and decisions in taking or not taking action hereunder.
9.6 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Default or Event of Default, other
than any Unmatured Default or Event of Default arising out of the failure to pay
any principal, interest, fees or other amounts payable to Agent for the account
of the Lenders, unless Agent has received written notice from Borrower or a
Lender describing such Unmatured Default or Event of Default and stating that
such notice is a "notice of default." In the event that Agent receives such a
notice, Agent shall promptly give notice thereof to the Lenders; provided,
however, that if any such notice has also been furnished to the Lenders, Agent
shall have no obligation to notify the Lenders with respect thereto. Each
Lender shall promptly give Agent such a notice upon its actual knowledge of an
Unmatured Default or an Event of Default; provided, however, that the failure of
any Lender to deliver such notice in the absence of gross negligence or reckless
or willful misconduct shall not affect its rights hereunder or under the other
Loan Documents.
9.7 Funding of Advances Pursuant to Borrowing Notices. Promptly
following receipt of notice from Agent that a Borrowing Notice has been
submitted, and provided that all conditions to funding are believed to have been
satisfied, each Lender shall, provided that it received timely notice of the new
Loan, transfer to a designated account with Agent that Lender's Pro Rata Share
of the requested funding. The transfer of funds shall occur within the time
required for funding under this Agreement. Should any Lender fail to timely
fund its Pro Rata Share of a requested Loan, Agent may, but shall be under no
obligation whatsoever to, advance to Borrower the defaulted Lender's Pro Rata
Share of the requested Loan. If such an advance is made, it shall be deemed an
advance by Agent for the account of the defaulting Lender and shall bear
interest at the rate applicable to the Loan, payable upon demand.
9.8 Agent in its Individual Capacity. With respect to its Commitments,
and the Loans made by it, Agent shall have the same rights and powers under the
Loan Documents as any other Lender or holder of a Note and may exercise the same
as though it were not performing the duties specified herein; and the terms
"Lenders," "Required Lenders," and any similar terms shall, unless the context
clearly otherwise indicates, include Agent in its individual capacity as a
Lender. Agent may accept deposits from, lend money to and generally engage in
any kind of banking, trust, financial advisory or other business with the
Borrower Entities or any of their respective Affiliates as if it were not
performing the servicing duties specified herein, and may accept fees and other
consideration from Borrower for services in connection with this Agreement and
otherwise without having to disclose or account for the same to Lenders.
9.9 Holders. Agent may deem and treat the payee of any Note as the
holder thereof and Lender hereunder for all purposes hereof unless and until a
written notice
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of the assignment, transfer or endorsement thereof purportedly executed by the
payee, as the case may be, shall have been filed with Agent. Any request,
authority or consent of any Person that, at the time of making such request or
giving such authority or consent, is the holder of any Note according to Agent's
information, shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
9.10 Successor Agent. Agent may resign at any time upon sixty (60) days'
prior written notice to Borrower and the Lenders. Agent may be removed upon
Agent's insolvency, liquidation or the appointment of a receiver for Agent, by
action of the Required Lenders, at any time upon sixty (60) days' prior written
notice to Borrower and Agent. Such resignation or removal, as the case may be,
shall take effect upon the appointment of a successor Agent as provided herein.
The Required Lenders will, with Borrower's approval (which shall not be
unreasonably withheld), appoint from among the Lenders a successor Agent. If no
successor Agent shall have been appointed within such sixty (60) day period, (i)
if no Unmatured Default or Unmatured Default then exists, Borrower may appoint a
successor Agent from among the Lenders, and (ii) otherwise, Agent may appoint,
after consulting with the Lenders and Borrower, a successor agent from among the
Lenders, which Agent, however selected, shall serve as Agent until such time, if
any, as the Required Lenders and Borrower shall have appointed a successor Agent
as provided hereinabove. Upon the written acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Agent's resignation as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
9.11 Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to the Obligations which results in its
receiving more than its Pro Rata Share of the aggregate payments with respect to
all of the Obligations, then (a) such Lender shall be deemed to have
simultaneously purchased from the other Lenders a share in the Obligations so
that the amount of the Obligations held by each of the Lenders shall continue to
equal their respective Pro Rata Shares, and (b) such other adjustments shall be
made from time to time as shall be equitable to insure that the Lenders share
such payments ratably. If any Lender remits payments to other Lenders under
this Section 9.11 and later is required to refund the same as a preferential
payment or otherwise, the other Lenders who shared in the payment shall
similarly arrange their interests in the Obligations to reverse the distribution
to them as to allow the originally remitting Lender to refund such payment. No
Lender shall exercise its banker's lien, set-off or other right to accomplish
such payment absent Agent's prior confirmation that the exercise of such right
would be consistent with the instructions of the Required Lenders then in effect
regarding the outstanding Event of Default.
9.12 Separate Liens on Collateral. Each Lender agrees with the other
Lenders that, with the exception of security interests in deposit accounts and
like property in
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the possession of a Lender as expressly provided for in this Agreement, it will
not take or permit to exist any Encumbrance in its favor on any of the
Collateral or other property of any of Borrowers other than Encumbrances
securing the Obligations due to all Lenders pursuant to the Loan Documents.
9.13 Payments Between Agent and Lenders. All payments by Agent to any
Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to the
receiving party's address specified for notices in this Agreement. If any of
the Lenders fail to pay when due any sum payable to Agent, then, except as
otherwise provided in Section 9.7 hereof, such sum shall bear interest until
paid at the interest rate per annum for overnight borrowing by the payee from
the Federal Reserve Bank for the period commencing on the date such payment was
due and ending on, but excluding, the date such payment is made.
9.14 Assignments and Participations. Any Lender may assign all of its
interest in the Revolving Credit Loan or any portion(s) thereof in the minimum
amount of Ten Million and No/100 Dollars ($10,000,000.00) and in increments of
One Million and No/100 Dollars ($1,000,000.00) each, subject to the prior
written approval of Agent (and of Borrower, provided that no Event of Default
then exists), which approval shall not be unreasonably withheld. The assignment
shall be evidenced by documents in form and substance acceptable to Agent, and
the acquiring Lender shall expressly assume full responsibility as a Lender
hereunder, including, but not limited to, assumption of the applicable portion
of the Commitment. Upon consummation of such assignment, the assigning Lender
shall be deemed released from its obligations under the Loan Documents to the
extent of such assignment. An assignment fee of Three Thousand and No/100
Dollars ($3,000.00) shall be paid to Agent as a condition to any assignment of
an interest in the Revolving Credit Loan (including assignments, if any, among
banks that are already Lenders). Lenders may sell participation interests in
their interests in the Revolving Credit Loan as long as the terms of such
participations establish that no participant will be regarded as a Lender under
this Agreement and permit the participants to vote in determining the vote of
the Lender which sold the applicable participation only with respect to matters
for which the unanimous vote of all Lenders is required under this Agreement.
Lenders may disclose financial information in their possession to prospective
purchasers of interests in the Revolving Credit Loan and to prospective
participants.
9.15 Bankruptcy Provisions. Should any of the Borrower Entities become
a party to a case under the Bankruptcy Code, each Lender shall be entitled to
file its own claim, to the extent such a filing may be necessary. Agent shall
review each claim before being filed by a Lender to assure that the claim is
filed on a basis consistent with Agent's records and Agent's legal positions
taken pursuant to this Agreement. Should any of the Borrower Entities become a
party to a reorganization proceeding under the Bankruptcy Code, each Lender
shall be recognized as the holder of a separate claim for the purpose of the
approval or rejection of a plan under 11 U.S.C. (S) 1126, may freely vote such
claim, and the provisions of that Section shall control the other provisions of
this Agreement that otherwise require the consent of the Required Lenders or all
Lenders in certain circumstances. Agent
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shall continue to administer the Revolving Credit Loan on behalf of Lenders, as
they may be amended by any adopted Plan of Reorganization.
9.16 Foreclosure of Collateral. In the event of a foreclosure of any
Collateral, Agent may issue a credit bid for the account of all Lenders, up to
the amount of the then outstanding Obligations. Any Property acquired at such a
foreclosure (or acquired by Agent through a conveyance in lieu of foreclosure)
shall be held and administered by Agent for the benefit of all Lenders pursuant
to the terms of this Article IX.
9.17 Procedures for Notices and Approvals. All notices given among
Lenders and Agent with respect to this Agreement or the other Loan Documents
shall be given in the manner provided in this Agreement.
9.18 Other Relationships With Borrower. Each Lender is free to engage
in deposit relationships and other business relationships with the Borrower
Entities, provided that such relationship does not violate any restriction set
forth in this Agreement.
9.19 Foreign Tax Matters. Each Lender which is a foreign person (i.e., a
Person other than a United States Person for United States Federal income tax
purposes) hereby agrees that:
9.19.1 Delivery of Forms. Such Lender shall, no later than the Closing
Date (or, in the case of a Lender which becomes a party hereto after the Closing
Date, the date upon which such Lender becomes a party hereto) deliver to the
Agent and Borrower:
9.19.1(a) two accurate and complete signed originals of Form 4224, or
9.19.1(b) two accurate and complete signed originals of Form 1001,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such lending office or offices under this Loan Agreement free
from withholding of United States Federal income tax.
9.19.2 Change of Office. At any time such a Lender changes its lending
office or offices or selects an additional lending office, it shall, at the same
time or reasonably promptly thereafter, deliver to Agent and Borrower in
replacement for, or in addition to, the forms previously delivered by it
hereunder;
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9.19.2(a) if such changed or additional lending office is located in
the United States, two accurate and complete signed originals of Form 4224,
or
9.19.2(b) otherwise, two accurate and complete signed originals of
Form 1001,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such changed or additional lending office under this Loan
Agreement free from withholding of United States federal income tax.
9.19.3 Additional Documentation. Each such Lender shall, promptly upon
Agent's or Borrower's reasonable request to that effect, deliver to the Agent
and Borrower such other forms or similar documentation as may be required from
time to time by any applicable law, treaty, rule or regulation in order to
establish such Lender's tax status for withholding purposes.
9.20 Responses to Requests. With respect to any consent or approval
requested by Borrower or Agent under a provision of this Agreement, Lenders
shall endeavor to provide to Agent written notice of their approval or
disapproval within seven (7) Business Days of receipt of the request; provided,
however, if any Lender fails to give such notice within seven (7) Business Days,
the request shall be regarded as disapproved by such Lender.
X. GENERAL PROVISIONS
10.1 Notices. All communications relating to this Agreement or any of the
other Loan Documents shall be in writing and shall effective when be delivered
by mail, overnight courier, special courier, telecopier or otherwise to the
following addresses:
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if to Borrower:
Physicians Resource Group, Inc.
Attn: President
▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
Physicians Resource Group, Inc.
Attn: General Counsel
▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
And With a Copy To:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent:
NationsBank of Tennessee, N.A., Agent
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
Boult, Cummings, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender:
As set forth beside such Lender's signature hereto.
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Any party may change its address for receipt of notice by written direction
to the other parties hereto.
10.2 Renewal, Extension, or Rearrangement. All provisions of this
Agreement relating to Obligations shall apply with equal force and effect to
each and all promissory notes executed hereafter which in whole or in part
represent a renewal, extension for any period, increase, or rearrangement of any
part of the Obligations originally represented by any part of such other
Obligations.
10.3 Application of Payments. Amounts received with respect to the
Obligations, except for payments or prepayments expressly provided for elsewhere
in this Agreement, shall be applied (i) first, to any expenses due Lenders or
Agent, (ii) second, to any fee due Agent, (iii) third, to accrued and unpaid
interest under any of the Obligations, (iv) fourth, to any commitment fees due
Lenders, and (iii) fifth, to reduce the unpaid principal portion of the
Obligations, in such manner as determined by Agent.
10.4 Counterparts. This Agreement may be executed in counterparts with
all signatures or by counterpart signature pages, and it shall not be necessary
that the signatures of all parties be contained on any one counterpart. Each
counterpart shall be deemed an original, but all of them together shall
constitute one and the same instrument.
10.5 Negotiated Document. This Agreement and the other Loan Documents
have been negotiated by the parties with full benefit of counsel and should not
be construed against any party as author.
10.6 Consent to Jurisdiction; Exclusive Venue. Each party hereto hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Borrower,
Lenders or Agent may be a party and which concerns this Agreement or the
Obligations. It is further agreed that venue for any such action shall lie
exclusively with courts sitting in Davidson County, Tennessee, unless Lenders
and Agent agree to the contrary in writing.
10.7 Not Partners; No Third Party Beneficiaries. The relationship of
Lenders and Borrower is that of lenders and borrower only, and neither is a
fiduciary, partner or joint venturer of the other for any purpose. This
Agreement has been executed for the sole benefit of Lenders, and no third party
is authorized to rely upon Lenders' rights or duties hereunder.
10.8 No Reliance on Lenders' Analysis. Borrower acknowledges and
represents that, in connection with the Obligations, Borrower has not relied
upon any financial projection, budget, assessment or other analysis by Lenders
or Agent upon any representation by Lenders as to the risks, benefits or
prospects of Borrower's business activities or present or future capital needs
incidental thereto, all such considerations having been examined fully and
independently by Borrower.
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10.9 No Marshaling of Assets. Lenders and Agent may proceed against
collateral securing the Obligations and against parties liable therefor in such
order as they may elect, and neither Borrower nor any surety or guarantor for
Borrower nor any creditor of Borrower shall be entitled to require Lenders or
Agent to marshal assets. The benefit of any rule of law or equity to the
contrary is hereby expressly waived.
10.10 Impairment of Collateral. Lenders or Agent (acting as permitted
under this Agreement) may release any Collateral securing the Obligations or
release any party liable therefor. The defenses of impairment of collateral and
impairment of recourse and any requirement of diligence in collecting the
Obligations are hereby waived.
10.11 Business Days. If any payment date under the Obligations falls on
a day that is not a Business Day, or if the last day of any notice period falls
on such a day, the payment shall be due and the notice period shall end on the
next following Business Day.
10.12 Standard of Care; Limitation of Damages. Lenders and Agent shall
be liable to Borrower only for matters arising from this Agreement or otherwise
related to the Obligations resulting from such Lender's or Agent's gross
negligence or willful misconduct, AND NOT FOR MATTERS ARISING FROM THEIR
ORDINARY NEGLIGENCE, and liability for all other matters is hereby waived.
Lenders and Agent shall not in any event be liable to Borrower for special or
consequential damages arising from this Agreement or otherwise related to the
Obligations.
10.13 Incorporation of Schedules. All Schedules and Exhibits referred to
in this Agreement are incorporated herein by this reference.
10.14 Indulgence Not Waiver. Lenders' or Agent's indulgence in the
existence of a default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lenders' or Agent's rights to declare a default or
otherwise demand strict compliance with this Agreement.
10.15 Cumulative Remedies. The remedies provided Lenders and Agent in
this Agreement are not exclusive of any other remedies that may be available to
Lenders and Agent under any other document or at law or equity.
10.16 Amendment and Waiver in Writing. No provision of this Agreement
can be amended or waived, except by a statement in writing signed by the party
or parties against whom enforcement of the amendment or waiver is sought.
Provisions of this Agreement may be amended or waived by the agreement of
Borrower and the Required Lenders (which consent of the Required Lenders may be
evidenced by the confirmation thereof issued by Agent to Borrower), except that
(i) no amendment or waiver regarding matters expressly requiring the unanimous
consent of Lenders under Section 9.2.2 of this Agreement may be entered into
absent the written consent of all Lenders, (ii) the amendment of Section 9.2.2
hereof, this subsection (ii), the definition of Pro Rata or Pro Rata Share and
the definition of Required Lenders under this Agreement shall require the
written consent of
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all Lenders, and (iii) no amendment or waiver may affect the rights or duties of
the Agent or the Issuing Bank without their written consent.
10.17 Assignment. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Borrower and Lenders, except
that Borrower shall not assign any rights or delegate any obligations arising
hereunder without the prior written consent of Lenders. Any attempted assignment
or delegation by Borrower without the required prior consent shall be void.
10.18 Entire Agreement. This Agreement and the other written agreements
among Borrower, Lenders and Agent represent the entire agreement between the
parties concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein. Provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provision in this Agreement shall control.
10.19 Severability. Should any provision of this Agreement be declared
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
10.20 Time of Essence. Time is of the essence of this Agreement, and all
dates and time periods specified herein shall be strictly observed.
10.21 APPLICABLE LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEMENT OF THIS
AGREEMENT AND ALL OTHER DOCUMENTS EXECUTED WITH RESPECT TO THE OBLIGATIONS SHALL
BE DETERMINED ACCORDING TO THE LAWS OF TENNESSEE APPLICABLE TO CONTRACTS
EXECUTED AND PERFORMED ENTIRELY WITHIN THAT STATE.
10.22 Captions Not Controlling. Captions and headings have been included
in this Agreement for the convenience of the parties, and shall not be construed
as affecting the content of the respective Sections.
10.23 Waiver of Right to Jury Trial. THE PARTIES HERETO HEREBY KNOWINGLY
AND VOLUNTARILY, WITH BENEFIT OF COUNSEL, WAIVE THE RIGHT TO HAVE ANY DISPUTE
ARISING FROM OR RELATED TO THIS AGREEMENT OR THE OBLIGATIONS TRIED BY A JURY,
WITH THE RESULT THAT ANY SUCH DISPUTE WOULD BE TRIED BY A JUDGE RATHER THAN A
JURY. BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO AGENT
AND LENDERS IN ENTERING INTO THIS AGREEMENT AND CONFIRMS THAT NO REPRESENTATIVE
OF AGENT OR LENDERS HAS MADE ANY STATEMENT OR SUGGESTION THAT THIS PROVISION
WILL NOT BE ENFORCED IN ACCORDANCE WITH ITS TERMS.
10.24 Facsimile Signatures. This Agreement may be executed by facsimile
signatures, and shall be effective when Agent has received telecopy
transmissions of the
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signature pages executed by all parties hereto; provided, however, that all
parties shall deliver original executed documents to Agent promptly following
the execution hereof.
Executed as of the date first written above.
PHYSICIANS RESOURCE GROUP, INC.
By: /s/▇▇▇ ▇ ▇▇▇▇
______________________________
Title: PRESIDENT
______________________________
SIGNATURE PAGE TO LOAN AGREEMENT DATED AS OF MARCH 14, 1997,
PHYSICIANS RESOURCE GROUP, INC., BORROWER.
73
NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as Agent
By:
--------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as a Lender
Commitment in Dollars: $50,000,000.00
Commitment as Percentage of Total: 55.6%
By:
----------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Address: ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax number: 615/▇▇▇-▇▇▇▇
Voice number: 615/749-3918
SIGNATURE PAGE TO LOAN AGREEMENT DATED AS OF MARCH 14, 1997,
PHYSICIANS RESOURCE GROUP, INC., BORROWER.
74
BANK ONE TEXAS,
a Texas banking corporation, as a Lender
Commitment in Dollars: $20,000,000.00
Commitment as Percentage of Total: 22.22%
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Address: 910 ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax number: 713/▇▇▇-▇▇▇▇
Voice number: 713/751-3863
SIGNATURE PAGE TO LOAN AGREEMENT DATED AS OF MARCH 14, 1997
PHYSICIANS RESOURCE GROUP, INC., BORROWER
75
AMSOUTH BANK OF TENNESSEE,
a Tennessee banking corporation, as a Lender
Commitment in Dollars: $20,000,000.00
Commitment as Percentage of Total: 22.22%
By: /s/ ▇▇▇▇▇ ▇. Wind
-------------------------------------
▇▇▇▇▇ ▇. Wind
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax number: 615/▇▇▇-▇▇▇▇
Voice number: 615/291-5257
SIGNATURE PAGE TO LOAN AGREEMENT DATED AS OF MARCH 14, 1997
PHYSICIANS RESOURCE GROUP, INC., BORROWER
76