Exhibit 10.7
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CREDIT AGREEMENT
Dated as of November 17, 1997
among
NATIONAL SURGERY CENTERS, INC.,
as Borrower,
CERTAIN SUBSIDIARIES,
as Guarantors,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTIES HERETO
Arranged by
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS.................................................. 1
1.1 Certain Defined Terms......................................... 1
1.2 Other Interpretive Provisions................................. 22
1.3 Accounting Principles......................................... 23
ARTICLE II THE CREDITS................................................. 23
2.1 Amounts and Terms of Commitments.............................. 23
2.2 Loan Accounts................................................. 24
2.3 Procedure for Borrowing....................................... 24
2.4 Conversion and Continuation Elections......................... 25
2.5 Voluntary Termination or Reduction of Commitments............. 26
2.6 Optional Prepayments.......................................... 27
2.7 Mandatory Prepayments of Loans................................ 27
2.8 Repayment..................................................... 27
2.9 Interest...................................................... 27
2.10 Fees......................................................... 28
(a) Fee Letter.............................................. 28
(b) Commitment Fees......................................... 28
(c) Up-front Fees........................................... 29
2.11 Computation of Fees and Interest............................. 29
2.12 Payments by the Company...................................... 29
2.13 Payments by the Banks to the Agent........................... 30
2.14 Sharing of Payments, Etc..................................... 30
2.15 Increases to Commitments..................................... 31
2.16 Extension of the Termination Date............................ 34
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...................... 34
3.1 Taxes.......................................................... 34
3.2 Illegality..................................................... 35
3.3 Increased Costs and Reduction of Return........................ 36
3.4 Funding Losses................................................. 36
3.5 Inability to Determine Rates................................... 37
3.6 Reserves on Offshore Rate Loans................................ 37
3.7 Certificates of Banks.......................................... 38
3.8 Substitution of Banks.......................................... 38
3.9 Survival....................................................... 38
ARTICLE IV CONDITIONS PRECEDENT......................................... 38
4.1 Conditions of Initial Loans.................................... 38
(a) Credit Agreement and Notes................................. 38
(b) Resolutions; Incumbency.................................... 39
(c) Legal Opinions............................................. 39
(d) Payment of Fees............................................ 39
(e) Certificate................................................ 39
(f) Other Documents............................................ 39
4.2 Conditions to All Borrowings................................... 40
(a) Notice of Borrowing or Conversion/Continuation............. 40
(b) Continuation of Representations and Warranties............. 40
(c) No Existing Default........................................ 40
ARTICLE V REPRESENTATIONS AND WARRANTIES................................ 40
5.1 Corporate Existence and Power.................................. 40
5.2 Corporate Authorization; No Contravention...................... 41
5.3 Governmental Authorization..................................... 41
5.4 Binding Effect................................................ 41
5.5 Litigation.................................................... 41
5.6 No Default.................................................... 42
5.7 ERISA Compliance.............................................. 42
5.8 Use of Proceeds; Margin Regulations........................... 43
5.9 Title to Properties........................................... 43
5.10 Taxes......................................................... 43
5.11 Financial Condition........................................... 43
5.12 Environmental Matters......................................... 44
5.13 Regulated Entities............................................ 44
5.14 No Burdensome Restrictions.................................... 44
5.15 Copyrights, Patents, Trademarks and Licenses, etc............. 44
5.16 Subsidiaries.................................................. 44
5.17 Insurance..................................................... 45
5.18 Full Disclosure............................................... 45
5.19 Health Care Regulatory Matters................................ 45
ARTICLE VI AFFIRMATIVE COVENANTS........................................ 47
6.1 Financial Statements.......................................... 47
6.2 Certificates; Other Information............................... 48
6.3 Notices....................................................... 48
6.4 Preservation of Corporate Existence, Etc...................... 49
6.5 Maintenance of Property....................................... 50
6.6 Insurance..................................................... 50
6.7 Payment of Obligations........................................ 50
6.8 Compliance with Laws.......................................... 50
6.9 Compliance with ERISA......................................... 51
6.10 Inspection of Property and Books and Records.................. 51
6.11 Environmental Laws............................................ 51
6.12 Use of Proceeds............................................... 51
6.13 Financial Covenants........................................... 51
(a) Minimum Interest Coverage Ratio........................... 51
(b) Maximum Consolidated Funded Debt to Cash Flow Ratio....... 52
(c) Minimum EBITDA............................................ 52
6.14 Further Assurances............................................ 52
ARTICLE VII NEGATIVE COVENANTS.......................................... 52
7.1 Limitation on Liens............................................ 52
7.2 Disposition of Assets.......................................... 54
7.3 Consolidations and Mergers..................................... 55
7.4 Loans and Investments.......................................... 55
7.5 Limitation on Indebtedness..................................... 55
7.6 Transactions with Affiliates................................... 56
7.7 Use of Proceeds................................................ 56
7.8 Contingent Obligations......................................... 57
7.9 Joint Ventures................................................. 57
7.10 Lease Obligations.............................................. 58
7.11 Restricted Payments............................................ 58
7.12 ERISA.......................................................... 59
7.13 Accounting Changes............................................. 59
7.14 Business Activities............................................ 59
7.15 Take or Pay Contracts.......................................... 59
7.16 Modification of Certain Agreements............................. 59
ARTICLE VIII EVENTS OF DEFAULT.......................................... 59
8.1 Event of Default.............................................. 59
(a) Non-payment............................................... 59
(b) Representation or Warranty................................ 60
(c) Specific Defaults......................................... 60
(d) Other Defaults............................................ 60
(e) Cross-default............................................. 60
(f) Insolvency; Voluntary Proceedings......................... 60
(g) Involuntary Proceedings................................... 60
(h) ERISA..................................................... 61
(i) Monetary Judgments........................................ 61
(j) Non-monetary Judgments.................................... 61
(k) Change of Control......................................... 61
(l) Loss of Licenses.......................................... 61
(m) Adverse Change............................................ 62
8.2 Remedies...................................................... 62
8.3 Rights Not Exclusive.......................................... 62
8.4 Certain Financial Covenant Defaults........................... 63
ARTICLE IX THE AGENT................................................... 63
9.1 Appointment and Authorization................................. 63
9.2 Delegation of Duties.......................................... 63
9.3 Liability of Agent............................................ 63
9.4 Reliance by Agent............................................. 64
9.5 Notice of Default............................................. 64
9.6 Credit Decision............................................... 65
9.7 Indemnification............................................... 65
9.8 Agent in Individual Capacity.................................. 66
9.9 Successor Agent............................................... 66
9.10 Withholding Tax.............................................. 67
ARTICLE X MISCELLANEOUS................................................ 68
10.1 Amendments and Waivers....................................... 68
10.2 Notices...................................................... 69
10.3 No Waiver; Cumulative Remedies............................... 70
10.4 Costs and Expenses........................................... 70
10.5 Indemnity.................................................... 70
10.6 Payments Set Aside........................................... 71
10.7 Successors and Assigns....................................... 71
10.8 Assignments, Participations, etc............................. 71
10.9 Confidentiality.............................................. 73
10.10 Setoff....................................................... 74
10.11 Automatic Debits of Fees..................................... 74
10.12 Notification of Addresses, Lending Offices, Etc.............. 74
10.13 Counterparts................................................. 74
10.14 Severability................................................. 74
10.15 No Third Parties Benefited................................... 75
10.16 Governing Law and Jurisdiction............................... 75
10.17 Waiver of Jury Trial......................................... 75
10.18 Entire Agreement............................................. 75
ARTICLE XI GUARANTY.................................................... 76
11.1 The Guaranty................................................. 76
11.2 Guaranty Unconditional....................................... 76
11.3 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances.............................................. 77
11.4 Waiver....................................................... 77
11.5 Subrogation.................................................. 77
11.6 Stay of Acceleration......................................... 77
11.7 Subordination of Indebtedness................................ 77
SCHEDULES
Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 5.7 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 5.19 Health Care Regulatory Matters
Schedule 7.1 Permitted Liens
Schedule 7.5 Permitted Indebtedness
Schedule 7.8 Contingent Obligations
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Counsel to the Company and the Guarantors
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of November 17, 1997, among National
Surgery Centers, Inc., a Delaware corporation (the "Company"), those
Subsidiaries of the Company that have executed a counterpart hereof as a
"Guarantor" (the "Guarantors"), the several financial institutions from time to
time party to this Agreement (collectively, the "Banks" and individually each, a
"Bank"), and Bank of America National Trust and Savings Association, as agent
for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a revolving
credit facility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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I.1 Certain Defined Terms. Unless otherwise specified, the following terms
have the following meanings:
"AAAHC" means the Accreditation Association for Ambulatory Health Care.
"Acquisition" means the acquisition by the Company or any of its Subsidiaries of
a Permitted Business (or any interest therein) that has commenced operations
prior to such acquisition, including any transaction, or series of related
transactions, by the Company or any of its Subsidiaries involving the sale,
transfer, lease, contribution or other conveyance of assets or capital stock,
limited liability company interests, partnership units or other equity or
ownership interests of any Person (including, where applicable, accounts
receivable or other intangible assets of such Person) to the Company or any of
its Subsidiaries.
"Affected Bank" see Section 3.8.
"Affiliate" means, as to any Person, any other Person (other than a Subsidiary
or a Minority Owned Person) which, directly or indirectly, controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the management and
policies of the subject Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder, and any
successor agent arising under Section 9.9.
"Agent-Related Persons" means BofA and any successor agent arising under Section
9.9, together with their respective Affiliates (including, in the case of BofA,
the Arranger), and the officers, directors, employees, agents and attorneys-in-
fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on Schedule
10.2 in relation to the Agent, or such other address as the Agent may from time
to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means, with respect to any Fiscal Quarter, the Applicable
Margin set forth below applicable to the Debt to EBITDA Ratio on the last day of
such Fiscal Quarter indicated as follows:
Applicable Margin
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Debt to EBITDA Offshore Rate
Ratio Base Rate Loans
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Greater than 2.50:1 0.650% 1.650%
Greater than 2.00:1
and less than or
equal to 2.50:1 0.350% 1.350%
Greater than 1.50:1
and less than or
equal to 2.00:1 0.000% 1.000%
Greater than 1.00:1
and less than or
equal to 1.50:1 0.000% 0.750%
Less than or
equal to 1.00:1 0.000% 0.625%
provided, that the Applicable Margin shall be adjusted, to the extent
applicable, 60 days (or, in the case of the last Fiscal Quarter of any Fiscal
Year, 105 days) after the end of each Fiscal Quarter based on the Debt to EBITDA
Ratio determined as of the last day of such Fiscal Quarter; provided, further,
that if the Company fails to deliver the financial statements required by
Section 6.1 and the related certificate required by Section 6.2 by the 60th day
(or, if applicable, the 105th day) after the end of any Fiscal Quarter, the
Applicable Margin shall be deemed to be, until such financial statements are
delivered, the Applicable Margin which applies when the Debt to EBITDA Ratio is
greater than 2.50:1.
Solely for the purpose of determining the Applicable Margin and for no other
purpose, the Debt to EBITDA Ratio shall be calculated as of the last day of each
Fiscal Quarter on a pro forma basis as if any Acquisitions had occurred, or any
resulting Indebtedness been incurred, as of the first day of the four-Fiscal
Quarter period then ended, using for the pro forma calculation, where
applicable, the actual historical financial results of the acquired Person or
assets in respect of the preceding four-Fiscal Quarter period; provided that the
pro forma EBITDA of any Person acquired pursuant to any such Acquisition may be
adjusted to take into account salaries and other expenses which will be
eliminated upon the completion of such Acquisition.
"Arranger" means BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Delaware corporation.
"Assignee" see subsection 10.8(a).
"Attorney Costs" means and includes all reasonable fees and disbursements of any
law firm or other external counsel, the reasonable allocated cost of internal
legal services and all reasonable disbursements of internal counsel.
"Bank" see the preamble.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
(S)101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate for such date; and (b) the rate of interest in effect
for such day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by BofA
based upon various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest at a rate based on the Base
Rate.
"BofA" means Bank of America National Trust and Savings Association, a national
banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the same Type
made to the Company on the same day by the Banks under Article II, and, other
than in the case of Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, New York City or San Francisco are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capitalized Lease Liabilities" means the portion of all monetary obligations of
the Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is required to be shown on the Company's
consolidated balance sheet in respect of any lease or similar arrangement
classified as a capital lease, and, for purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"Change of Control" means (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (within
the meaning of Rules 13d-3 and 13d5 under the Exchange Act) of 30% or more of
the outstanding shares of voting stock of the Company or (ii) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the board of directors of the Company (together with any new
directors whose election or appointment by such board of directors or whose
nomination for election by the stockholders of the Company was approved by a
majority of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the board of directors of the Company then in office.
"Closing Date" means the date on which all conditions precedent set forth in
Section 4.1 are satisfied or waived by all Banks (or, in the case of subsection
4.1(e), waived by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986.
"Commitment", as to each Bank, has the meaning specified in Section 2.1.
"Commitment Date" see subsection 2.15(b).
"Commitment Increase" see subsection 2.15(a).
"Company" see the preamble.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C.
"CON" means a certificate of need or other license or permit issued by a state
health facilities planning board or similar agency or body required for the
construction, expansion, or investment in a health facility or a Permitted
Business.
"Consolidated Interest Expense" means, for any period, the aggregate interest
expense of the Company and its Subsidiaries, in each case for such period, as
determined on a consolidated basis in accordance with GAAP and in any event
including, without duplication, all commissions, discounts and other fees and
charges owed with respect to letters of credit and banker's acceptances, net
costs under interest rate protection agreements and the portion of any
Capitalized Lease Liabilities allocable to consolidated interest expense.
"Consolidated Net Income" means, for any period, all amounts which, in
conformity with GAAP, would be included under net income on a consolidated
income statement of the Company and its Subsidiaries, in each case for such
period; provided that (i) the net income (but not loss) of any Subsidiary, or of
any other Person accounted for by the equity method of accounting, shall be
excluded to the extent and for the period of time that the declaration or
payment of dividends or similar distributions by such Subsidiary or other Person
of such net income is not permitted without prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Subsidiary or Person or the
stockholders of such Subsidiary or Person, provided, further, that,
notwithstanding any of the foregoing, such net income shall be included to the
extent and for the period of time that such dividends or similar distributions
are paid in cash; (ii) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded; and (iii) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Total Assets" means, as of any date of determination thereof, the
total amount of all of the consolidated assets of the Company and its
Subsidiaries determined in accordance with GAAP.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability for the payment of money of that Person, with or without recourse, (a)
with respect to any Indebtedness, lease, dividend, letter of credit or other
obligation for the payment of money (the "primary obligations") of another
Person (the "primary obligor"), including any obligation of that Person (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or discharge
of any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of
any such primary obligation against loss in respect thereof (each, a "Guaranty
Obligation"); (b) with respect to any Surety Instrument issued for the account
of that Person or as to which that Person is otherwise liable, for reimbursement
of drawings or other payments made hereunder; (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered, or (d) in respect of any Swap Contract. The amount of any Contingent
Obligation shall, in the case of Guaranty Obligations, be deemed equal to the
stated or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof, and in the case of other
Contingent Obligations, shall be equal to the maximum reasonably anticipated
liability in respect thereof.
"Contractual Obligation" means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section 2.4, the
Company (a) converts Loans of one Type to another Type, or (b) continues as
Loans of the same Type, but with a new Interest Period, Offshore Rate Loans
having Interest Periods expiring on such date.
"Debt" means the outstanding principal amount of all Indebtedness of the Company
and its Subsidiaries of the nature referred to in clauses (a), (b), (c), (d),
(e), (f) and (h) of the definition of "Indebtedness", and all amounts then due
under Swap Contracts.
"Debt to EBITDA Ratio" means, as of the last day of any Fiscal Quarter, the
ratio of
(a) the amount of Debt of the Company and its Subsidiaries outstanding on such
date
to
(b) the aggregate EBITDA of the Company and its Subsidiaries for the four
consecutive Fiscal Quarters then ended.
"Default" means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute an Event of Default.
"Development" means the acquisition, construction, equipping, installation or
development by the Company or any of its Subsidiaries of a Permitted Business
(or an interest therein) that has not commenced operations prior to such
acquisition, construction, equipping, installation or development, including any
transaction, or series of related transactions, by the Company or any
of its Subsidiaries involving the sale, transfer, lease, contribution or other
conveyance of assets or capital stock, limited liability company interests,
partnership units or other equity or ownership interests of any Person
(including, where applicable, accounts receivable or other intangible assets of
such Person) to the Company or any of its Subsidiaries.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"Earnout" means, with respect to any Person, any obligation with respect to such
Person, whether contingent or otherwise, to pay a deferred purchase price for
property or services based on contractually-agreed performance criteria.
"EBITDA" means, for any period, the sum of
(a) Consolidated Net Income before extraordinary items (as defined by GAAP) for
such period,
plus
(b) Consolidated Interest Expense for such period, in each case deducted in
determining Consolidated Net Income for such period, if any,
plus
(c) all United States Federal, state, local and foreign income taxes of the
Company and its Subsidiaries, in each case deducted in determining Consolidated
Net Income for such period, if any,
plus
(d) all amortization of assets (including goodwill and other intangible assets
(including noncompetition agreements)) of the Company and its Subsidiaries, in
each case deducted in determining Consolidated Net Income for such period,
plus
(e) all depreciation of assets of the Company and its Subsidiaries, in each
case deducted in determining Consolidated Net Income for such period.
provided that, if the Majority Banks consent in their sole discretion, EBITDA
shall be determined on a pro forma basis giving effect to the Acquisition of an
acquired company or assets as if such Acquisition had occurred on the first day
of such period. The Company shall provide to the Majority Banks a computation
(in form and substance reasonably satisfactory to the Majority Banks) of its
proposed pro forma EBITDA together with reasonable details showing the
supporting information therefor.
"EBT" means, for any period, the sum of Consolidated Net Income for such period
(before extraordinary items, as defined by GAAP, for such period) and all United
States Federal, state, local and foreign income taxes of the Company and its
Subsidiaries, in each case deducted in determining Consolidated Net Income for
such period.
"Eligible Assignee" means (i) a commercial bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $100,000,000; (ii) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD; and (iii)
a Person organized under the laws of the United States or a state thereof that
is primarily engaged in the business of commercial banking and that is (A) a
Subsidiary of a Bank, (B) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (C) a Person of which a Bank is a Subsidiary.
"Environmental Claims" means all written claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case relating to environmental,
health and safety matters.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the definition of
"Offshore Rate".
"Event of Default" means any of the events or circumstances specified in Section
8.1.
"Exchange Act" means the Securities and Exchange Act of 1934.
"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 Bank of New York (including any such successor,
"H.15(519)") on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Agent 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 the Agent.
"Fee Letter" see subsection 2.10(a).
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months ending on
December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "1988 Fiscal Year") refer to the Fiscal Year ending on
the December 31 occurring during such calendar year.
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Funded Debt" means, as of any date of determination, (i) the Loans and (ii) all
other Indebtedness of the Company and its Subsidiaries (on a consolidated basis,
eliminating intercompany items) that matures more than one year from the date of
determination, or matures within one year of such date but is renewable or
extendable, at the option of the debtor to a date more than one year from such
date (in each case including amounts of Funded Debt required to be paid or
prepaid within one year from the date of determination).
"GAAP" means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within
the U.S. accounting profession), which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranteed Obligations" means all Obligations whether or not (a) for the
payment of money or the performance or nonperformance of any act, (b) arising or
accruing before or after the filing by or against the Company of a petition
under the Bankruptcy Code or (c) allowable under Section 502(b)(2) of the
Bankruptcy Code.
"Guarantor" see the preamble.
"Guaranty Obligation" has the meaning specified in the definition of "Contingent
Obligation."
"HCFA" means the Health Care Financing Administration of HHS and any Person
succeeding to the functions thereof.
"Health Facility License" means a license or permit to provide surgical or other
health-related services or otherwise operate a Subsidiary, including any permit,
where applicable, under Medicare Regulations, Medicaid Regulations or applicable
state laws.
"HHS" means the Department of Health and Human Services and any Person
succeeding to the functions thereof.
"Increase Date" see subsection 2.15(a).
"Increasing Bank" see subsection 2.15(c).
"Indebtedness" of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary terms); (c) all
noncontingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all Capitalized Lease Liabilities; (g) all net
obligations with respect to Swap Contracts; (h) all
indebtedness referred to in clauses (a) through (g) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (i) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above.
"Indemnified Liabilities" see Section 10.5.
"Indemnified Person" see Section 10.5.
"Independent Auditor" see subsection 6.1(a).
"Ineligible Securities" see subsection 7.7(c).
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other similar arrangement in
respect of its creditors generally or any substantial portion of its creditors;
undertaken under U.S. Federal, state or foreign law, including the Bankruptcy
Code.
"Interest Payment Date" means, as to any Offshore Rate Loan, the last day of
each Interest Period applicable to such Loan and, as to any Base Rate Loan, the
last Business Day of each calendar quarter and each date such Loan is converted
into another Type of Loan, provided, however, that if any Interest Period for an
Offshore Rate Loan exceeds three months, the date that falls on each three-month
anniversary of the beginning of such Interest Period shall also be an Interest
Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period commencing on
the Borrowing Date of such Loan or on the Conversion/Continuation Date on which
the Loan is converted into or continued as an Offshore Rate Loan, and ending
either on the date one, two, three or six months thereafter as selected by the
Company in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is not a Business
Day, that Interest Period shall be extended to the following Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
"JCAHO" means the Joint Commission on Accreditation of Health Organizations.
"Joint Venture" means a single-purpose corporation, partnership, joint venture
or other similar legal arrangement (whether created by contract or conducted
through a separate legal entity) now or hereafter formed by the Company or any
of its Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"Lending Office" means, as to any Bank, the office or offices of such Bank
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule 10.2, or such other office or
offices as such Bank may from time to time notify the Company and the Agent.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Company under Article II,
and may be a Base Rate Loan, or an Offshore Rate Loan (each, a "Type" of Loan),
and includes any Revolving Loan.
"Loan Documents" means this Agreement, any Notes, the Fee Letter and all other
documents delivered to the Agent or any Bank in connection herewith.
"Majority Banks" means at any time at least two Banks then holding, in the
aggregate, in excess of 50% of the Commitments, or, if the Commitments have been
terminated, Banks then having in excess of 50% of the then aggregate unpaid
principal amount of the Loans.
"Majority Ownership Interest" means the ownership, either directly or
indirectly, of more than 50% of the capital stock, limited liability company
interests, partnership units or other equity or ownership interests of a Person.
"Margin Stock" means "margin stock" as such term is defined in Regulation G, T,
U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of the Company and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Company or any Material
Subsidiary to perform its respective obligations under any Loan Document; or (c)
a material adverse effect upon the legality, validity, binding effect or
enforceability against the Company or any Material Subsidiary of any Loan
Document.
"Material Subsidiary" means and includes any Subsidiary where either:
(i) the portion of the Company's EBT which such Subsidiary contributed during
the preceding four Fiscal Quarters exceeded 5%; or
(ii) the portion of Consolidated Total Assets which were attributable to such
Subsidiary as at the end of the preceding Fiscal Quarter exceeded 5%.
"Medicaid" means the medical assistance program established by Title XIX of the
Social Security Act (42 U.S.C. (S)(S) 1396, et seq.) and any successor thereto.
"Medicaid Certification" means certification by a state agency that the health
facility fully complies in all material respects with all the requirements for
participation in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into between a state
agency or other such entity administering the Medicaid program and a health
facility under which the agency agrees to pay for services provided by the
health facility to qualified Medicaid beneficiaries in accordance with the terms
of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all Federal statutes (whether
set forth in Title XIX of the Social Security Act or elsewhere) affecting the
medical assistance program established by Title XIX of the Social Security Act
(42 U.S.C. (S)(S) 1396, et seq.), (ii) all applicable provisions of all federal
rules, regulations, manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities (whether or not having the force of
law) promulgated pursuant to or in connection with the statutes described in
clause (i), (iii) all state statutes and plans for medical assistance enacted in
connection with the statutes and provisions described in clauses (i) and (ii),
and (iv) all applicable provisions of all rules, regulations, manuals, orders
and administrative, reimbursement and other guidelines of all Governmental
Authorities (whether or not having the force of law) promulgated pursuant to or
in connection with any of the foregoing.
"Medicare" means the health insurance program established by Title XVIII of the
Social Security Act (42 U.S.C. (S)(S) 1395, et seq.) and any successor thereto.
"Medicare Certification" means certification by HCFA or a state agency or entity
under contract with HCFA that the health facility complies with all the
requirements for participation set forth in the Medicare Regulations.
"Medicare Provider Agreement" means an agreement entered into between HCFA or a
state agency under contract with HCFA and a health facility under which HCFA
agrees to pay for services provided by the health facility to qualified Medicare
beneficiaries in accordance with the terms of the agreement and Medicare
Regulations.
"Medicare Regulations" means, collectively, all Federal statutes (whether set
forth in Title XVIII of the Social Security Act or elsewhere) affecting the
health insurance program for the aged and disabled established by Title XVIII of
the Social Security Act (42 U.S.C. (S)(S) 1395, et seq.), together with all
applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all Governmental
Authorities including HHS, HCFA, the Office of the Inspector General of HHS, or
any Person succeeding to the functions of any of the foregoing (whether or not
having the force of law).
"Minority Owned Person" means, with respect to the Company or any Subsidiary of
the Company, any Person of which less than 50% of the voting stock, limited
liability company interests, partnership units or other equity or ownership
interests is owned or controlled directly or indirectly by the Company, or one
or more Subsidiaries of the Company, or a combination thereof.
"Multiemployer Plan" means a "multiemployer plan", within the meaning of Section
4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes, is
making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.
"New Bank" see subsection 2.15(e).
"Note" means a promissory note executed by the Company in favor of a Bank
pursuant to subsection 2.2(b), in substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially the form of
Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations, covenants and
duties arising under any Loan Document owing by the Company to any Bank, the
Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to Offshore Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward, if necessary, to the next 1/16th of 1%) determined by the Agent
as follows:
LIBOR
Offshore Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
where:
"Eurodollar Reserve Percentage" means for any day for any Interest Period the
maximum reserve percentage (expressed as a decimal, rounded upward, if
necessary, to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from time to time by the FRB
for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum determined by the Agent (rounded
upward, if necessary, to the next 1/16th of 1%) as the rate of interest at which
dollar deposits in the approximate amount of BofA's Offshore Rate Loan for such
Interest Period would be offered by BofA to major banks in the London interbank
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore Rate Loans
then outstanding as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the Offshore
Rate.
"Organization Documents" means, with respect to any Person other than an
individual, where applicable, the certificate or articles of incorporation,
organization or formation, the bylaws or limited liability company agreement,
any certificate of designation or instrument relating to the rights of preferred
shareholders of the corporation, any shareholder rights agreement, all
applicable resolutions of the board of directors (or any committee thereof) of
such Person, the partnership agreement establishing the partnership, the joint
venture agreement establishing the Joint Venture, the instrument establishing
the trust, or any other constitutive documents.
"Originating Bank" see section 10.8(d).
"Other Taxes" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
"Participant" see subsection 10.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Company sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.
"Permitted Acquisition" means, with respect to the Company or any Subsidiary of
the Company, an Acquisition by the Company or such Subsidiary of the Company, as
the case may be, and as to which;
(a) the Person whose equity or ownership interests are to be acquired or the
Person whose assets are the subject of the Acquisition is not an Affiliate of
the Company or of any Subsidiary of the Company;
(b) if required by law or the Organization Documents of the Person whose equity
or ownership interests or property is the subject of such Acquisition, the
Acquisition has been approved by the board of directors (or similar governing
body) of the Person in whom equity or ownership interests are to be acquired or
of the Person whose assets were the subject of the Acquisition, or by any
committee thereof or authorized officers as provided by such board of directors,
and such board or persons have not commenced any litigation to oppose such
Acquisition;
(c) the Company has received all necessary approvals relating to such
Acquisition as are customary and usual for similar transactions, including,
where applicable, the approval of the Company's board of directors;
(d) unless otherwise established by the consent of the Banks prior to such
Acquisition, the Company or any of its Subsidiaries, after giving effect to such
Acquisition, will have a Majority Ownership Interest in the Person owning the
Permitted Business subject to such Acquisition;
(e) at the time of such Acquisition, the Company is in compliance with all
financial covenants required under the Loan Documents, including those specified
in Section 6.13 (provided, that none of the cashflow generated prior to the date
of such Acquisition by any Person that was not a Subsidiary, or a Minority Owned
Person of the Company or of any
Subsidiary of the Company, prior to the date of the Acquisition may be taken
into account in determining compliance with such financial covenants);
(f) if the written consent of the Majority Banks is required under clauses (g)
or (h) hereof, the Banks have received written notice of such Acquisition at
least 30 days' prior to the consummation of such Acquisition, such notice to
indicate (i) the location of the property or the Person whose equity or
ownership interests are to be acquired, (ii) the price which the Company or any
of its Subsidiaries has agreed to pay for such property or equity or ownership
interests and (iii) a brief description of such property or Person;
(g) the Majority Banks, in their sole and absolute discretion, have delivered
to the Company their written consent to any Acquisition, whether or not financed
hereunder, for which total consideration to be paid exceeds $10,000,000,
including Earnout provisions, if any;
(h) the Majority Banks, in their sole and absolute discretion, have delivered
to the Company their written consent to any Acquisition, whether or not financed
hereunder, for which total consideration paid exceeds $5,000,000 and the
purchase multiple exceeds pretax income multiplied by eight; and
(i) where the Company owns 100% of the Person whose equity or ownership
interests are acquired upon the consummation of the Acquisition, such Person has
become a party to this Agreement as a Guarantor, provided that the obligations
of such Person as a Guarantor under Article XI of this Agreement shall terminate
if such Person thereafter ceases, in accordance with the terms of this
Agreement, to be a Wholly-Owned Subsidiary of the Company.
"Permitted Business" means either (a) any business which provides surgical
services but not long-term care, or (b) any activity, business or service
ancillary, complementary or related to surgical services other than long-term
care.
"Permitted Development" means, with respect to the Company or any Subsidiary of
the Company, a Development as to which:
(a) the Company has received all necessary approvals relating to such
Development as are customary and usual for similar transactions, including,
where applicable, the approval of the Company's board of directors;
(b) unless otherwise established by the consent of the Banks prior to such
Development, the Company or any of its Subsidiaries, after giving effect to such
Development, will have a Majority Ownership Interest in the Person owning the
Permitted Business subject to such Development;
(c) at all times during the Development, the Company is in compliance with all
financial covenants required under the Loan Documents, including those specified
in Section 6.13;
(d) if the written consent of the Majority Banks is required under clauses (e)
or (f) hereof, the Banks have received written notice of such Development at
least 30 days' prior to the consummation of such Development, such notice to
indicate (i) the location of the property or the Person to be developed, (ii)
the price which the Company or any of its Subsidiaries has agreed to pay for
such property or the equity or ownership interests of such Person and (iii) a
brief description of such property or Person;
(e) the Majority Banks, in their sole and absolute discretion, have delivered
to the Company their written consent to any Development which will be financed
hereunder, and for which total consideration to be paid exceeds $5,000,000; and
(f) the Majority Banks, in their sole and absolute discretion, have delivered
to the Company their written consent to any Development, which will not be
financed hereunder, and for which total consideration to be paid exceeds
$10,000,000.
"Permitted Investment" means, with respect to the Company or any Subsidiary of
the Company, any Acquisition or Development which, (i) in the case of an
Acquisition, meets all the requirements of the definition of "Permitted
Acquisition" in Section 1.1 except for clause (d) thereof or, (ii) in the case
of a Development, meets all the requirements of the definition of "Permitted
Development" in Section 1.1 except for clause (b) thereof.
"Permitted Liens" see Section 7.1.
"Permitted Transaction" means, as the context may require, a Permitted
Acquisition or a Permitted Development.
"Person" means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, limited
liability company, or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time of
such Bank's Commitment divided by the combined Commitments of all Banks.
"Replacement Bank" see Section 3.8.
"Reportable Event" means, any of the events set forth in Section 4043(b) of
ERISA, other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the president of the
Company, or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants, the
chief financial officer or the treasurer of the Company, or any other officer
having substantially the same authority and responsibility.
"Revolving Loan" see Section 2.1.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Subordinated Debt" means all unsecured Indebtedness of the Company or its
Subsidiaries for borrowed money which is subordinated, upon terms reasonably
satisfactory to the Banks, in right of payment to the payment in full in cash of
all Obligations, including certain Indebtedness set forth in Schedule 7.5.
"Subsidiary" of a Person means any corporation, limited liability company,
association, partnership, joint venture or other business entity of which more
than 50% of the voting stock, limited liability company interests, partnership
units or other equity or ownership interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof. Unless
the context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
"Swap Contract" means any agreement (including any master agreement and any
agreement, whether or not in writing, relating to any single transaction) that
is an interest rate swap agreement, basis swap, forward rate agreement,
commodity swap, commodity option, equity or equity index swap or option, bond
option, interest rate option, forward foreign exchange agreement, rate cap,
collar or floor agreement, currency swap agreement, cross-currency rate swap
agreement, swaption, currency option or any other, similar agreement (including
any option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and the Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by
each Bank's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as the case may be, is
organized or maintains a lending office.
"Termination Date" means the earlier to occur of:
(a) November 17, 2000 (as such date may be extended pursuant to Section 2.16);
and
(b) the date on which the Commitments terminate in accordance with the
provisions of this Agreement.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Plan's benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan's
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any corporation in which (other than directors'
qualifying shares required by law) 100% of the capital stock of each class
having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Company, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
I.2 Other Interpretive Provisions. Unless the context otherwise clearly
requires:
(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.
(ii) The term "including" is not limiting and means "including without
limitation."
(iii) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to" and
"until" each mean "to but excluding", and the word "through" means "to and
including."
(d) Unless otherwise expressly provided herein, (i) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The table of contents, captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of negotiations
among and have been reviewed by counsel to the Agent, the Company and the other
parties, and are the products of all parties. Accordingly, they shall not be
construed against the Banks or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
I.3 Accounting Principles. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
ARTICLE II
THE CREDITS
-----------
II.1 Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Closing Date to the Termination Date, in an aggregate amount not
to exceed at any time outstanding amount set forth on Schedule 2.1 (such amount,
as the same may be reduced under Section 2.5 or as a result of one or more
assignments under Section 10.8, or increased under Section 2.15, the Bank's
"Commitment"); provided that, after giving effect to any Borrowing of Revolving
Loans, the aggregate principal amount of all outstanding Revolving Loans shall
not at any time exceed the combined Commitments. Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, the
Company may borrow under this Section 2.1, prepay under Section 2.6 and reborrow
under this Section 2.1.
II.2 Loan Accounts. (a) The Loans made by each Bank shall be evidenced by one
or more loan accounts or records maintained by such Bank in the ordinary course
of business. The loan accounts or records maintained by the Agent and each Bank
shall be conclusive absent manifest
error of the amount of the Loans made by the Banks to the Company and the
interest and payments thereon. Any failure so to record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Company
hereunder to pay when due any amount owing with respect to the Loans.
(b) Upon the request of any Bank made through the Agent, the Loans made by such
Bank may be evidenced by one or more Notes, in addition to loan accounts. Each
such Bank may endorse on the schedules annexed to its Note(s) the date, amount,
type, interest rate and maturity of each Loan made by such Bank to the Company
and the amount of each payment of principal made by the Company with respect
thereto. Each such Bank is irrevocably authorized by the Company to endorse its
Note(s) and each Bank's record shall be conclusive absent manifest error;
provided, however, that the failure of a Bank to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any such Note to such Bank.
II.3 Procedure for Borrowing. (a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent in the form of a
Notice of Borrowing, which notice must be received by the Agent (i) in the case
of Base Rate Loans, prior to 10:00 a.m. (Chicago time) on the requested
Borrowing Date and (ii) in the case of Offshore Rate Loans, prior to 12:00 noon
on the third Business Day prior to the requested Borrowing Date, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate minimum amount
of $1,000,000 or any multiple of $500,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) in the case of Offshore Rate Loans, the duration of the Interest Period
applicable to such Loans included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any Borrowing comprised
of Offshore Rate Loans, such Interest Period shall be one month.
provided, however, that with respect to the Borrowing, if any, to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Agent not later
than 12:00 noon (Chicago time) one Business Day before the Closing Date and such
Borrowing will consist of Base Rate Loans only.
(b) The Agent will promptly notify each Bank of the Agent's receipt of any
Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office by 12:00 noon (Chicago
time) on the Borrowing Date requested by the Company in funds immediately
available to the Agent. The proceeds of all such Loans will then be made
available to the Company by the Agent at such office by crediting the account of
the Company on the books of BofA with the aggregate of the amounts made
available to the Agent by the Banks and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, there may not be more than seven
different Interest Periods in effect.
II.4 Conversion and Continuation Elections. (a) The Company may, upon
irrevocable written notice to the Agent in accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans, or as of the
last day of the applicable Interest Period, in the case of Offshore Rate Loans,
to convert any such Loans (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $500,000 in excess thereof)
into Loans of the other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to continue
any Offshore Rate Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $1,000,000, or that is in an integral
multiple of $500,000 in excess thereof) as Offshore Rate Loans;
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/ Continuation to be
received by the Agent not later than 12:00 noon (Chicago time) at least (i)
three Business Days in advance of the Conversion/Continuation Date, if the Loans
(or parts thereof) are to be converted into or continued as Offshore Rate Loans;
and (ii) one Business Day in advance of the Conversion/Continuation Date, if the
Loans (or parts thereof) are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans (or parts thereof) to be converted or
continued;
(C) the Types of Loans resulting from the proposed conversion or continuation;
and
(D) other than in the case of conversions into Base Rate Loans, the duration of
the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Offshore Rate
Loans, the Company has failed to select timely a new Interest Period to be
applicable to such Offshore Rate Loans, or if any Default or Event of Default
then exists, the Company shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans effective as of the expiration date of
such Interest Period.
(d) The Agent will promptly notify each Bank of the Agent's receipt of a Notice
of Conversion/Continuation, or, if no timely notice is provided by the Company,
the Agent will promptly notify each Bank of the details of any automatic
conversion. All conversions and continuations shall be made ratably according to
the respective outstanding principal amounts of the Loans with respect to which
the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise agree, during the existence of a
Default or Event of Default, the Company may not elect to have a Loan converted
into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans, there may
not be more than seven different Interest Periods in effect.
II.5 Voluntary Termination or Reduction of Commitments. The Company may, upon
not less than three Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $1,000,000 or any multiple of $1,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal amount of the Loans would
exceed the amount of the combined Commitments then in effect. Once reduced in
accordance with this Section, the Commitments may not be increased (including
increases under Section 2.15). Any reduction of the Commitments shall be applied
to each Bank according to its Pro Rata Share. All accrued commitment fees to,
but not including the effective date of any reduction or termination of
Commitments, shall be paid on the effective date of such reduction or
termination.
II.6 Optional Prepayments. Subject to Section 3.4, the Company may, at any time
or from time to time, prior to 10:00 a.m. (Chicago time) on any Business Day,
ratably prepay Loans, without premium or penalty (other than as contemplated by
Section 3.4(d)), in whole or in part, in minimum amounts of $500,000 or any
multiple of $500,000 in excess thereof. Such notice of prepayment shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Agent will promptly notify each Bank of the Agent's receipt of any such
notice, and of such Bank's Pro Rata Share of such prepayment. If any such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 3.4.
II.7 Mandatory Prepayments of Loans. Subject to Section 3.4, on each date when
any reduction in any Bank's Commitment pursuant to Section 2.5 shall become
effective, the Company shall make a mandatory prepayment of the principal amount
of all applicable Loans equal to the excess, if any, of the aggregate principal
amount of such Loans over such Commitment as so reduced. Pursuant to such
mandatory prepayment, Base Rate Loans shall be prepaid first, followed by
Offshore Rate Loans in the manner elected by the Company or, if no such election
is made, in the inverse order of maturity.
II.8 Repayment. The Company shall repay to the Banks on the Termination Date
the aggregate principal amount of Revolving Loans outstanding on such date.
II.9 Interest. (a) Each Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal to
the Offshore Rate or the Base Rate, as the case may be (and subject to the
Company's right to convert to the other Type of Loans under Section 2.4), plus
the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date therefor. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.6 or 2.7 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the continuance of
any Event of Default, interest shall be paid on demand of the Agent at the
request or with the written consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, while any Event of Default
is continuing or after acceleration, the Company shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Loans, at a rate per annum which is
determined by adding 2% per annum to the sum of the Offshore Rate or the Base
Rate, as the case may be, and the Applicable Margin then in effect for such
Loans and, in the case of Obligations not subject to an Applicable Margin, at a
rate per annum equal to the Base Rate plus 2% per annum; provided, however,
that, on and after the expiration of any Interest Period applicable to any
Offshore Rate Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Loan shall, during the
continuation of such Event of Default or after acceleration, bear interest at a
rate per annum equal to the sum of the Applicable Margin, the Base Rate and 2%
per annum.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Company to any Bank hereunder shall be subject to the limitation that payments
of interest shall not be required for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by such Bank would be contrary to the provisions of any
law applicable to such Bank limiting the highest rate of interest that may be
lawfully contracted for, charged or received by such Bank, and in such event the
Company shall pay such Bank interest at the highest rate permitted by applicable
law.
II.10 Fees. (a) Fee Letter. The Company shall pay the fees as required by the
letter agreement ("Fee Letter") among the Company and the Arranger and Agent
dated September 11, 1997.
(b) Commitment Fees. The Company shall pay to the Agent for the account of each
Bank a commitment fee on the average daily unused portion of such Bank's
Revolving Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter at the applicable rate per annum set forth
in the table below. Such commitment fee shall accrue from the Closing Date to
the Termination Date and shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter commencing on December 31, 1997
through the Termination Date, with the final payment to be made on the
Termination Date; provided that, in connection with any reduction or termination
of Commitments under Section 2.5, the accrued commitment fee calculated with
respect to such portion of the Commitments as is reduced or terminated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The commitment fees provided in this subsection shall accrue at all times
after the Closing Date, including at any time during which one or more
conditions in Article IV are not met.
Debt to EBITDA Ratio Commitment Fee
--------------------- ---------------
Greater than 2.50:1 0.400%
Greater than 2.00:1 and
less than or equal to
2.50:1 0.350%
Greater than 1.50:1 and
less than or equal to
2.00:1 0.300%
Greater than 1.00:1 and
less than or equal to
1.50:1 0.250%
Less than or equal to 1.00:1 0.200%
provided, that the Commitment Fee shall be adjusted, to the extent applicable,
60 days (or, in the case of the last Fiscal Quarter of any Fiscal Year, 105
days) after the end of each Fiscal Quarter based on the Debt to EBITDA Ratio
determined as of the last day of such Fiscal Quarter; provided, further, that if
the Company fails to deliver the financial statements required by Section 6.1
and the related certificate required by Section 6.2 by the 60th day (or, if
applicable, the 105th day) after the end of any Fiscal quarter, the Commitment
Fee shall be deemed to be, until such financial statements are delivered, the
Commitment Fee which applies when the Debt to EBITDA Ratio is greater than
2.50:1.
(c) Up-front Fees. The Company agrees to pay to each Bank at the Closing Date an
up-front fee of 0.15% of that Bank's Commitment.
II.11 Computation of Fees and Interest. (a) All computations of interest for
Base Rate Loans when the Base Rate is determined by BofA's "reference rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be conclusive and
binding on the Company and the Banks absent manifest error. The Agent will, at
the request of the Company or any Bank, deliver to the Company or the Bank, as
the case may be, a statement showing the quotations used by the Agent in
determining any interest rate and the resulting interest rate.
II.12 Payments by the Company. (a) All payments to be made by the Company shall
be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Company shall be made to the
Agent for the account of the Banks at the Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later than 2:00 p.m.
(Chicago time) on the date specified herein. The Agent will promptly distribute
to each Bank its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Agent later than 3:00 p.m. (Chicago time) shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue.
(b) Subject to the provisions set forth in the definition of "Interest Period"
herein, whenever any payment is due on a day other than a Business Day, such
payment shall be made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
(c) Unless the Agent receives notice from the Company prior to the date on which
any payment is due to the Banks that the Company will not make such payment in
full as and when required, the Agent may assume that the Company has made such
payment in full to the Agent on such date in immediately available funds and the
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Company has not made such payment in full to
the Agent, each Bank shall repay to the Agent on demand such amount distributed
to such Bank, together with interest thereon at the Federal Funds Rate for each
day from the date such amount is distributed to such Bank until the date repaid.
II.13 Payments by the Banks to the Agent. (a) Unless the Agent receives notice
from a Bank on or prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, at least one Business Day prior to the date of such
Borrowing, that such Bank will not make available as and when required hereunder
to the Agent for the account of the Company the amount of that Bank's Pro Rata
Share of the Borrowing, the Agent may assume that each Bank has made such amount
available to the Agent in immediately available funds on the Borrowing Date and
the Agent may (but shall not be so required), in reliance upon such assumption,
make available to the Company on such date a corresponding amount. If and to the
extent any Bank shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Company such amount, that Bank shall on the Business Day
following such Borrowing Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice of the Agent submitted to any Bank with respect to amounts owing under
this subsection (a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such Bank's
Loan on the date of Borrowing for all purposes of this Agreement. If such amount
is not made available to the Agent on the Business Day following the Borrowing
Date, the Agent will notify the Company of such failure to fund and, upon demand
by the Agent, the Company shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date shall not
relieve any other Bank of any obligation hereunder to make a Loan on such
Borrowing Date, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank on any Borrowing Date.
II.14 Sharing of Payments, Etc. If, other than as expressly provided elsewhere
herein, any Bank shall obtain on account of the Loans made by it any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its Pro Rata Share, such Bank shall immediately (a)
notify the Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.10) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation. The Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
II.15 Increases to Commitments. (a) The Company may, at any time, by notice to
the Agent, request that the aggregate amount of the Commitments be increased by
an amount not to exceed $20,000,000 in excess of the aggregate amount of the
Commitments as of the date of this Agreement (the "Commitment Increase") to be
effective as of a date (the "Increase Date") specified in the related notice to
the Agent that is (i) prior to the scheduled Termination Date and (ii) at least
15 Business Days after the date of such notice; provided, however, that (1) in
no event shall the aggregate amount of the Commitments at any time exceed
$80,000,000 without the consent of all Banks and (2) no Event of Default or
Default shall have occurred and be continuing as of the date of such request or
as of the applicable Increase Date, or shall occur as a result of the Commitment
Increase.
(b) The Agent shall promptly notify the Banks of the request by the Company for
the Commitment Increase, which notice shall include (A) the proposed amount of
the requested Commitment Increase, (B) the proposed Increase Date, (C) the date
by which Banks wishing to participate in the Commitment Increase must commit to
an increase in the amount of their respective Commitments (the "Commitment
Date"), which date shall be no later than five Business Days prior to the
Increase Date and (D) the fees, if any, to be paid by the Company to the Banks
and other financial institutions participating in the proposed Commitment
Increase.
(c) Each Bank that is willing to participate in such requested Commitment
Increase (each, an "Increasing Bank") shall give written notice to the Agent no
later than 10:00 a.m. (Chicago time) on the Commitment Date of the amount by
which it is willing to increase its Commitment, which amount shall not exceed
the amount of the requested Commitment Increase. It shall be in each Bank's sole
discretion whether to offer to increase its Commitment in connection with the
proposed Commitment Increase. If the Banks notify the Agent that they are
willing to increase the amount of their respective Commitments by an aggregate
amount that exceeds the amount of the requested Commitment Increase, the
Commitment Increase shall be allocated among the Banks willing to participate
therein in the manner specified by the Company and the Agent.
(d) Promptly following the Commitment Date, the Agent shall notify the Company
as to the amount, if any, by which the Banks are willing to participate in the
requested Commitment Increase. If the aggregate amount by which the Banks are
willing to participate in the requested Commitment Increase on the Commitment
Date is less than the requested Commitment Increase, then the Company may extend
offers to one or more financial institutions acceptable to the Agent and willing
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Banks on the Commitment Date; provided, however, that
the Commitment of each such financial institution shall be in a minimum
aggregate amount of the lesser of (x) $5,000,000 or (y) the remaining
uncommitted amount of the requested Commitment Increase.
(e) On the Increase Date, each financial institution that accepts an offer to
participate in the requested Commitment Increase as a Bank in accordance with
subsection 2.15(d) shall become a Bank party to this Agreement as of the
Increase Date (each a "New Bank") and the Commitment of each Increasing Bank for
the requested Commitment Increase shall be increased as of the Increase Date by
the amount set forth in its notice delivered to the Agent in accordance with
subsection 2.15(c) (or by the amount allocated to such Bank pursuant to the last
sentence of subsection 2.15(c)); provided, however, that the Agent shall have
received on or before noon (Chicago time) on the Increase Date the following,
each dated such date, and in sufficient copies for each Bank:
(i) (A) a certificate of a duly authorized officer of the Company stating that
no Default or Event of Default has occurred and is continuing, or would result
from the Commitment Increase, (B) certified copies of resolutions of the board
of directors of the Company or committee thereof or authorized officers as
provided by the board of directors approving the Commitment Increase and the
corresponding modifications to this Agreement and the Notes, (C) opinions of
counsel to the Company, in form and substance reasonably satisfactory to the
Agent and, as to legal matters, its counsel and (D) such other approvals,
certificates or documents as any Bank through the Agent may reasonably request
in connection with the Commitment Increase;
(ii) a counterpart of this Agreement duly executed by each New Bank; and
(iii) confirmation from each Increasing Bank of the increase in the amount of
its Commitment, in a writing satisfactory to the Company and the Agent.
(f) On the Increase Date, upon fulfillment of the conditions set forth in
subsection 2.15(e) the Agent shall notify the Banks and the Company, on or
before 1:00 p.m. (Chicago time), by facsimile of the occurrence of the
Commitment Increase to be effected on the Increase Date and the Company and the
Agent shall amend Schedule 2.1 to reflect the increased Commitments on such
date. Each Increasing Bank and each New Bank shall, before 2:00 p.m. (Chicago
time) on the Increase Date, make available to the Agent in immediately available
funds, (A) in the case of any New Bank, an amount equal to such New Bank's
ratable portion of the Loans then outstanding (calculated based on its Pro Rata
Share after giving effect to the Commitment Increase) and (B) in the case of any
Increasing Bank, an amount equal to the excess of (1) such Increasing Bank's
ratable portion of the Loans then outstanding (calculated based on its Pro Rata
Share after giving effect to the relevant Commitment Increase) over (2) such
Increasing Bank's ratable portion of the Loans then outstanding (calculated
based on its Pro Rata Share without giving effect to the relevant Commitment
Increase). After the Agent's receipt of such funds from each such Increasing
Bank and each such New Bank, the Agent will promptly thereafter cause to be
distributed like funds to the other Banks in an amount to each other Bank such
that the aggregate amount owing to each Bank after giving effect to such
distribution equals such Bank's Pro Rata Share of the Loans then outstanding
(calculated after giving effect to the Commitment Increase). If the Increase
Date shall occur on a date that is not the last day of the Interest Period for
all Borrowings of Offshore Rate Loans then outstanding, (x) the Company shall
pay any amounts owing pursuant to Section 3.4 as a result of the distributions
to Banks under this
subsection 2.15(f) and (y) for each outstanding Borrowing of Offshore Rate
Loans, the respective Loans made by the Increasing Banks and the New Banks
pursuant to this subsection 2.15(f) shall be deemed to be funded at the
applicable Offshore Rate for such Loan.
2.16 Extension of the Termination Date. Unless the Commitments shall have been
terminated in their entirety or an Event of Default or Default has occurred and
is continuing, not earlier than the 90th day prior to the date which is one year
prior to the then-scheduled Termination Date, the Company may request the Agent
and the Banks to extend the Termination Date for an additional one-year period.
The Termination Date may be so extended on not more than two occasions. The
Agent and the Banks have no obligation to extend the Termination Date and any
decision to extend the Termination Date must be agreed to by the Agent and all
Banks. Any decision to extend the Termination Date shall be in the sole and
absolute discretion of the Agent and the Banks and shall be evidenced by a
writing executed by each of them. The failure of any Person to respond to a
request for such an extension within 30 days of such request shall be deemed a
decision not to so extend.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
III.1 Taxes. (a) Any and all payments by the Company to each Bank or the
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank and the Agent
for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section) paid by such
Bank or the Agent and any liability (including penalties, interest, additions to
tax and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date such Bank or the
Agent makes written demand therefor.
(c) If the Company shall be required by law to deduct or withhold any Taxes or
Other Taxes from or in respect of any sum payable hereunder to any Bank or the
Agent, then:
(i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Bank or the
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable law;
and
(iv) the Company shall also pay to each Bank or the Agent for the account of
such Bank, at the time interest is paid, all additional amounts which the
respective Bank specifies as necessary to preserve the after-tax yield such Bank
would have received if such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the Company of Taxes or
Other Taxes, the Company shall furnish the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(e) If the Company is required to pay additional amounts to any Bank or the
Agent pursuant to subsection (c) of this Section, then such Bank shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
III.2 Illegality. (a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore Rate
Loan, the Company shall, upon its receipt of notice of such fact and demand from
such Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans of
that Bank then outstanding, together with interest accrued thereon and amounts
required under Section 3.4, either on the last day of the Interest Period
thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans
to such day, or immediately, if the Bank may not lawfully continue to maintain
such Offshore Rate Loan. If the Company is required to so prepay any Offshore
Rate Loan, then concurrently with such prepayment, the Company may borrow from
the affected Bank, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans has
been so terminated or suspended, the Company may elect, by giving notice to the
Bank through the Agent, that all Loans which would otherwise be made by the Bank
as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the affected Bank
shall designate a different Lending Office with respect to its Offshore Rate
Loans if such designation will avoid the need for giving such notice or making
such demand and will not, in the judgment of the Bank, be illegal or otherwise
disadvantageous to the Bank.
III.3 Increased Costs and Reduction of Return. (a) If any Bank determines
that, due to either (i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Offshore Rate) in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans, then the
Company shall be liable for, and shall from time to time, upon demand (with a
copy of such demand to be sent to the Agent), pay to the Agent for the account
of such Bank, additional amounts as are sufficient to compensate such Bank for
such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any Capital
Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Bank to the Company through the Agent, the Company shall pay to
the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
III.4 Funding Losses. The Company shall reimburse each Bank and hold each Bank
harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely basis any payment of
principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a Loan after the
Company has given (or is deemed to have given) a Notice of Borrowing or a Notice
of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment in accordance with any
notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Section 2.7) or other payment
(including after acceleration thereof) of an Offshore Rate Loan on a day that is
not the last day of the relevant Interest Period, provided that this Section 3.4
shall not apply in respect of any Bank which, under Section 2.13(a), does not
make an amount available to the Agent on the Business Day following any
Borrowing Date; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate Loan to a
Base Rate Loan on a day that is not the last day of the relevant Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under subsection 3.3(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
III.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to subsection 2.9(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans, as the case may
be, hereunder shall be suspended until the Agent upon the instruction of the
Majority Banks revokes such notice in writing. Upon receipt of such notice, the
Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Company does not revoke such Notice, the Banks
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans.
III.6 Reserves on Offshore Rate Loans. The Company shall pay to each Bank, as
long as such Bank shall be required under regulations of the FRB to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities"),
additional costs on the unpaid principal amount of each Offshore Rate Loan equal
to the actual costs of such reserves allocated to such Loan by the Bank (as
determined by the Bank in good faith, which determination shall be conclusive
absent manifest error), payable on each date on which interest is payable on
such Loan, provided the Company shall have received at least 15 Business Days'
prior written notice (with a copy to the Agent) of such additional interest from
the Bank. If a Bank fails to give notice 15 Business Days prior to
the relevant Interest Payment Date, such additional interest shall be payable 15
Business Days from receipt of such notice.
III.7 Certificates of Banks. Any Bank claiming reimbursement or compensation
under this Article III shall deliver to the Company (with a copy to the Agent) a
certificate setting forth in reasonable detail the amount payable to the Bank
hereunder and such certificate shall be conclusive and binding on the Company
absent manifest error.
III.8 Substitution of Banks. Upon the receipt by the Company from any Bank (an
"Affected Bank") of a claim for compensation under Section 3.3, the Company may:
(i) request the Affected Bank to use its best efforts to obtain a replacement
bank or financial institution satisfactory to the Company to acquire and assume
all or a ratable part of all of such Affected Bank's Loans and Commitment (a
"Replacement Bank"); (ii) request one more of the other Banks to acquire and
assume all or part of such Affected Bank's Loans and Commitment; or (iii)
designate a Replacement Bank. Any such designation of a Replacement Bank under
clause (i) or (iii) above shall be subject to the prior written consent of the
Agent (which consent shall not be unreasonably withheld).
III.9 Survival. The agreements and obligations of the Company in this Article
III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
IV.1 Conditions of Initial Loans. The obligation of each Bank to make its
initial Loan hereunder is subject to the condition that the Agent has received
on or before the Closing Date all of the following, in form and substance
reasonably satisfactory to the Agent and each Bank, and in sufficient copies for
each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes executed by each
party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the boards of directors of the Company and each
Subsidiary party hereto as a Guarantor authorizing the transactions contemplated
hereby, certified as of the Closing Date by the Secretary or an Assistant
Secretary of such Person; and
(ii) A certificate of the Secretary or Assistant Secretary of each of the
Company and each Subsidiary party hereto as a Guarantor certifying the names and
true signatures of the officers of the Company or such Subsidiary, as
applicable, authorized to execute, deliver and perform, as applicable, this
Agreement and all other Loan Documents to be delivered by it hereunder;
(c) Legal Opinions.
(i) an opinion of ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, counsel to the Company and the Guarantors
and addressed to the Agent and the Banks, substantially in the form of Exhibit
D; and
(ii) a favorable opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the Agent.
(d) Payment of Fees. Evidence of payment by the Company of all accrued and
unpaid reasonable fees, costs and expenses to the extent then due and payable on
the Closing Date, together with reasonable Attorney Costs of BofA to the extent
invoiced at least two Business Days prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute BofA's reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and BofA); including any such costs,
fees and expenses arising under or referenced in Sections 2.10 and 10.4(a);
(e) Certificate. A certificate signed by a Responsible Officer, dated as of the
Closing Date, stating that:
(i) the representations and warranties contained in Article V are true and
correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists; and
(iii) there has occurred since December 31, 1996, no event or circumstance that
has resulted or could reasonably be expected to result in a Material Adverse
Effect; and
(f) Other Documents. Such other approvals, opinions, documents or materials as
the Agent or any Bank may reasonably request.
IV.2 Conditions to All Borrowings. The obligation of each Bank to make any Loan
to be made by it (including its initial Loan) or to continue or convert any Loan
under Section 2.4 is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Conversion/Continuation Date:
(a) Notice of Borrowing or Conversion/Continuation. The Agent shall have
received a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
(b) Continuation of Representations and Warranties. The representations and
warranties in Article V shall be true and correct on and as of such Borrowing
Date with the same effect as if made on and as of such Borrowing Date (except to
the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist or shall
result from such Borrowing or such continuation or conversion.
Each Notice of Borrowing submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date that the conditions in this Section
4.2 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
V.1 Corporate Existence and Power. The Company and each of its Subsidiaries:
(a) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization;
(b) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute,
deliver and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license and where failure to do so would have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law in respect of the conduct of
its business and the ownership of its properties; except to the extent that the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.
V.2 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Company and its Subsidiaries of this Agreement and each other
Loan Document to which such Person is a party have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's Organization Documents;
(b) conflict with or result in any breach or contravention of, or the creation
of any Lien under, any document evidencing any Contractual Obligation to which
such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject; or
(c) violate any Requirement of Law.
V.3 Governmental Authorization. No approval, consent, exemption, authorization,
or other action by, or notice to, or filing with, any Governmental Authority is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company or any of its Subsidiaries of the
Agreement or any other Loan Document.
V.4 Binding Effect. This Agreement and each other Loan Document to which the
Company or any of its Subsidiaries is a party constitute the legal, valid and
binding obligations of the Company and any of its Subsidiaries to the extent it
is a party thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
V.5 Litigation. Except as specifically disclosed in Schedule 5.5, there are no
actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which: (a) purport to affect
or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby or thereby; or (b) if determined adversely to
the Company or its Subsidiaries, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
V.6 No Default. No Default or Event of Default exists or would result from the
incurring of any Obligations by the Company. As of the Closing Date, neither the
Company nor any Subsidiary is in default under or with respect to any material
Contractual Obligation in any respect which, individually or together with all
such defaults, would reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Closing Date, create an
Event of Default under subsection 8.1(e).
V.7 ERISA Compliance. Except as specifically disclosed in Schedule 5.7:
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law. Each Plan which is
intended to qualify under Section 401(a) of the Code has received or applied for
a favorable determination letter from the IRS, if required, and to the best
knowledge of the Company, nothing has occurred which would cause the loss of
such qualification so received or cause such application to be denied. The
Company and each ERISA Affiliate has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or would reasonably be expected to result
in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
exceeding $5,000,000 under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability exceeding $5,000,000 (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Company nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
V.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to be
used solely for the purposes set forth in and permitted by Section 6.12 and
Section 7.7. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
V.9 Title to Properties. The Company and each Subsidiary have good record and
marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
V.10 Taxes. The Company and its Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
V.11 Financial Condition. (a) The audited consolidated financial statements of
the Company and its Subsidiaries dated December 31, 1996, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the Fiscal Year ended on that date, and the unaudited consolidated
financial statements of the Company and its Subsidiaries dated September 30,
1997, and the related unaudited consolidated statements of income and cash flows
for the nine-month fiscal period ended on that date:
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, subject to
ordinary, good faith year-end audit adjustments;
(ii) fairly present the financial condition of the Company and its Subsidiaries
as of the date thereof and results of operations for the period covered thereby;
and
(iii) except as specifically disclosed in Schedule 5.11, show all material
indebtedness and other liabilities, direct or contingent, of the Company and its
consolidated Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Contingent Obligations.
(b) Since September 30, 1997, there has been no Material Adverse Effect.
V.12 Environmental Matters. To the best of the Company's knowledge, its
business, operations and properties are in compliance with existing
Environmental Laws. There are no pending or, to the best of the Company's
knowledge, threatened Environmental Claims against the Company or any property
owned by the Company, except as specifically disclosed in Schedule 5.12.
Notwithstanding anything to the contrary in this Section 5.12, the
representations made in this Section 5.12 shall be untrue only if the aggregate
effect of any noncompliance with such representations would reasonably be
expected to have a Material Adverse Effect.
V.13 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. The Company is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
V.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary is a
party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect.
V.15 Copyrights, Patents, Trademarks and Licenses, etc. The Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks,
trade names, copyrights, contractual franchises, authorizations and other rights
that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person, except as such use
otherwise would not reasonably be expected to have a Material Adverse Effect. To
the best knowledge of the Company, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Company or any Subsidiary infringes upon any
rights held by any other Person, except as such infringement would not
reasonably be expected to have a Material Adverse Effect. Except as specifically
disclosed in Schedule 5.5, no claim or litigation regarding any of the foregoing
is pending or, to the knowledge of the Company, threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
V.16 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries other
than those specifically disclosed in part (a) of Schedule 5.16 hereto and has no
equity investments in any other corporation or entity other than those
specifically disclosed in part (b) of Schedule 5.16.
V.17 Insurance. Except as specifically disclosed in Schedule 5.17, the
properties of the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Company or such Subsidiary operates.
V.18 Full Disclosure. None of the representations or warranties made by the
Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
V.19 Health Care Regulatory Matters.
(a) Except as disclosed on Schedule 5.19 and except where noncompliance does not
and would not reasonably be expected to have a Material Adverse Effect on the
condition (financial or otherwise), operations, assets, business, properties or
prospects of the Company and its Subsidiaries on a consolidated basis, each
Subsidiary, including any Person who becomes a Subsidiary pursuant to any
Permitted Acquisition or Permitted Development, has:
(i) where required by applicable law, obtained all required CONs for the
operation of any Permitted Business created by such Subsidiary or investment in
such Subsidiary;
(ii) obtained and maintains in good standing all Health Facility Licenses
necessary to operate such Subsidiary as a Permitted Business;
(iii) obtained and maintains, where appropriate, Medicaid Certification and
Medicare Certification with respect to such Subsidiary to the extent required
for reimbursement under the Medicaid Regulations or the Medicare Regulations, as
the case may be; and
(iv) entered into and maintains in good standing, where appropriate, its
Medicaid Provider Agreement and its Medicare Provider Agreement with respect to
such Subsidiary to the extent required for reimbursement under the Medicaid
Regulations or the Medicare Regulations, as the case may be.
(b) The Company and its Subsidiaries, including any Person who becomes a
Subsidiary, will use their best efforts to maintain any certifications received
from the JCAHO or the AAAHC or any such other applicable accrediting body to the
extent required, and to obtain such certifications from the JCAHO or the AAAHC
or any such other applicable accrediting body not obtained as at the Effective
Date, if failure to maintain or obtain such certifications would reasonably be
expected to constitute a Material Adverse Effect.
(c) Except as disclosed on Schedule 5.19, all necessary steps have been or are
being taken to secure the renewal of any Health Facility License, Medicaid
Provider Agreement or Medicare Provider Agreement issued with respect to any
Subsidiary that is to expire within 60 days after the date of execution and
delivery of this Agreement by the Banks, and there is no reasonable basis known
to the Company or its Subsidiaries that any such renewal will not be obtained.
(d) Except as disclosed on Schedule 5.19, there are no proceedings pending, or,
to the best knowledge of the Company or any Subsidiary after due inquiry,
threatened by any Governmental Authority seeking to modify, revoke or suspend
any Health Facility License, or, to the extent required for reimbursement,
Medicaid Provider Agreement, Medicare Provider Agreement, Medicare Certification
or Medicaid Certification with respect to any Subsidiary, nor is there pending
any governmental investigation or inquiry which might result in fines or
penalties which could materially adversely affect any Subsidiary. Since the date
of the most recent Medicare Certification and Medicaid Certification with
respect to each Subsidiary (where applicable), to the best knowledge of the
Company or any of its Subsidiaries after due inquiry, neither the Company nor
any Subsidiary has taken any action that would materially adversely affect the
Certification or the Medicare Provider Agreement or Medicaid Provider Agreement
with respect to such Subsidiary.
(e) Neither the Company, any Subsidiary, any Affiliate nor any officer or
director of the foregoing has engaged in any of the following: (i) knowingly and
wilfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment under Medicare or
Medicaid; (ii) knowingly and wilfully making or causing to be made
any false statement or representation of a material fact for use in determining
rights to any benefit or payment under Medicare or Medicaid; (iii) failing to
disclose knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment under Medicare or Medicaid
on its own behalf or on behalf of another, with intent to secure such benefit or
payment fraudulently; (iv) knowingly and wilfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind or offering to pay such remuneration (1)
in return for referring an individual to a Person for the furnishing or
arranging for the furnishing of any item or service for which payment may be
made in whole or in part by Medicare or Medicaid or (2) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service or item for which payment may
be made in whole or in part by Medicare or Medicaid. With respect to this
subsection 5.19(e), knowledge by a Responsible Officer of the Company or of a
Subsidiary of any events described in this subsection 5.19(e) shall not be
imputed to the Company or such Subsidiary unless such knowledge was obtained or
learned by such Responsible Officer in his or her official capacity as a
Responsible Officer of the Company or such Subsidiary. No activity of the
Company, any Subsidiary, any Affiliate or any director or officer of the
foregoing shall be considered to be a breach of this subsection 5.19(e) unless
the Company, a Subsidiary or an Affiliate of the foregoing has received
notification, written or oral, by a Governmental Authority of competent
jurisdiction as to any such violation.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
VI.1 Financial Statements. The Company shall deliver to the Agent, in form and
detail satisfactory to the Agent and the Majority Banks, with sufficient copies
for each Bank:
(a) as soon as available, but not later than 105 days after the end of each
Fiscal Year, a copy of the audited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such year and the related consolidated
statements of income, stockholders' equity and cash flows for such year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
and accompanied by the opinion of Ernst & Young LLP or another nationally-
recognized independent public accounting firm (the "Independent Auditor") which
report shall state that such consolidated financial statements present fairly
the financial position for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years (such opinion shall not be qualified or
limited because of a restricted or limited examination by the Independent
Auditor of any material portion of the Company's or any Subsidiary's records),
it being
understood that the delivery by the Company of its Form 10K as filed with the
SEC shall satisfy the requirements of this Section 6.1(a); and
(b) as soon as available, but not later than 60 days after the end of each
Fiscal Quarter of each Fiscal Year, a copy of the consolidated balance sheet of
the Company and its Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for the period commencing on
the first day and ending on the last day of such Fiscal Quarter, and certified
by a Responsible Officer as fairly presenting, in accordance with GAAP (subject
to ordinary, good faith year-end audit adjustments), the financial position and
the results of operations of the Company and the Subsidiaries for the periods
indicated, it being understood that the delivery by the Company of its Form 10Q
as filed with the SEC shall satisfy the requirements of this Section 6.1(b).
VI.2 Certificates; Other Information. The Company shall furnish to the Agent,
with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements referred to in
subsection 6.1(a), a certificate of the Independent Auditor stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to in
subsections 6.1(a) and (b), a Compliance Certificate executed by a Responsible
Officer;
(c) promptly, copies of all financial statements and reports that the Company
sends to its stockholders generally, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Company or any Subsidiary may make to, or file with, the SEC; and
(d) promptly, such additional information regarding the business, financial or
corporate affairs of the Company or any Subsidiary as the Agent, at the
reasonable request of any Bank, may from time to time reasonably request.
VI.3 Notices. The Company shall promptly notify the Agent and each Bank:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or may result in a Material Adverse Effect,
including (i) breach or non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary, (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any Subsidiary
and any Governmental Authority or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting the Company or
any ERISA Affiliate (but in no event more than 10 days after such event), and
deliver to the Agent and each Bank a copy of any notice with respect to such
event that is filed with a Governmental Authority and any notice delivered by a
Governmental Authority to the Company or any ERISA Affiliate with respect to
such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any Pension Plan;
(iii) the adoption of, or the commencement of contributions to, any Plan subject
to Title IV of ERISA by the Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan subject to Title IV of ERISA, if
such amendment results in a material increase in contributions or Unfunded
Pension Liability.
(d) of any material change in accounting policies or financial reporting
practices by the Company or any of its consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a written statement by a
Responsible Officer setting forth details of the occurrence referred to therein,
and stating what action the Company or any affected Subsidiary proposes to take
with respect thereto and at what time. Each notice under subsection 6.3(a) shall
describe with particularity any and all clauses or provisions of this Agreement
or other Loan Document that have been breached or violated.
VI.4 Preservation of Corporate Existence, Etc. The Company shall, and shall
cause each Material Subsidiary to:
(a) subject to Section 7.3, preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all governmental rights,
privileges, qualifications, permits, licenses and franchises, the
nonpreservation or maintenance of which would reasonably be expected to have a
Material Adverse Effect except in connection with transactions permitted by
Section 7.3 and sales of assets permitted by Section 7.2;
(c) subject to Sections 7.2 and 7.3, use reasonable efforts, in the ordinary
course of business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which would reasonably be expected to
have a Material Adverse Effect.
VI.5 Maintenance of Property. The Company shall maintain, and shall cause each
Subsidiary to maintain, and preserve all its property which is used or useful in
its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so would not reasonably be expected to
have a Material Adverse Effect, except as permitted by Section 7.2. The Company
and each Subsidiary shall use the standard of care typical in the industry in
the operation and maintenance of its facilities.
VI.6 Insurance. The Company shall maintain, and shall cause each Subsidiary to
maintain, with financially sound and reputable independent insurers, insurance
with respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
VI.7 Payment of Obligations. The Company shall, and shall cause each Subsidiary
to, pay and discharge as the same shall become due and payable, all their
respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP are
being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property, where such Lien is not otherwise permitted by Section 7.1; and
(c) all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
VI.8 Compliance with Laws. The Company shall comply, and shall cause each
Subsidiary to comply, in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), noncompliance with which would
reasonably be expected to have a Material Adverse Effect, except such as may be
contested in good faith or as to which a bona fide dispute may exist.
VI.9 Compliance with ERISA. The Company shall, and shall cause each of its ERISA
Affiliates to: (a) maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law; (b) cause each Plan which is qualified under Section 401(a) of the Code to
maintain such qualification; and (c) make all required contributions to any Plan
subject to Section 412 of the Code.
VI.10 Inspection of Property and Books and Records. The Company shall maintain
and shall cause each Subsidiary to maintain proper books of record and account,
in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of the
Company and such Subsidiary. The Company shall permit, and shall cause each
Subsidiary to permit, representatives and independent contractors of the Agent,
once each Fiscal Year, to visit and inspect any of their respective properties,
to examine their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and independent
public accountants, all at the expense of the Banks and at such reasonable times
during normal business hours as may be reasonably desired, upon reasonable
advance notice to the Company; provided, however, when an Event of Default
exists, the Agent or any Bank may do any of the foregoing at the expense of the
Company as often as may reasonably be desired by the Agent or any Bank, at any
time during normal business hours and without advance notice.
VI.11 Environmental Laws. The Company shall, and shall cause each Subsidiary to,
conduct its operations and keep and maintain its property in compliance with all
Environmental Laws, noncompliance with which would reasonably be expected to
have a Material Adverse Effect.
VI.12 Use of Proceeds. The Company shall use the proceeds of the Loans only for
(i) the financing of the general corporate needs of the Company or any
Subsidiary and (ii) the financing of Permitted Transactions and Permitted
Investments.
VI.13 Financial Covenants. The Company shall maintain the following covenants
(all calculations to be made on a consolidated basis, in accordance with GAAP,
and by reference to the most recently audited financial statements):
(a) Minimum Interest Coverage Ratio. The Company shall not permit, as at the
end of any Fiscal Quarter, its ratio of EBITDA to Consolidated Interest Expense
to be less than 3.0:1, calculated by reference to the four Fiscal Quarter period
then ending.
(b) Maximum Consolidated Funded Debt to Cash Flow Ratio. The Company shall not
permit, as at the end of any Fiscal Quarter, its ratio of Funded Debt
outstanding as at the end of such Fiscal Quarter to EBITDA for the period of
four Fiscal Quarters ending on such date to exceed 3.0:1.
(c) Minimum EBITDA. The Company shall not permit, at the end of any Fiscal
Quarter, EBITDA for the period of four Fiscal Quarters then ending to be less
than $20,000,000.
6.14 Further Assurances. The Company will, and will cause each Wholly-Owned
Subsidiary to, take such actions as are reasonably necessary or as the Agent
(acting at the request of any Bank) may reasonably request from time to time to
ensure that the Obligations are guaranteed by all Wholly-Owned Subsidiaries of
the Company pursuant to Article XI.
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
VII.1 Limitation on Liens. The Company shall not, and shall not suffer or permit
any Subsidiary to, directly or indirectly, make, create, incur, assume or suffer
to exist any Lien upon or with respect to any part of its property, whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):
(a) any Lien existing on property of the Company or any Subsidiary on the
Closing Date and set forth in Schedule 7.1 securing Indebtedness outstanding on
such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges or levies
which are not delinquent, are being contested in good faith or remain payable
without penalty, or to the extent that non-payment thereof is permitted by
Section 6.7, provided that no notice of lien has been filed or recorded under
the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent, are being contested in good faith or remain payable
without penalty;
(e) Liens incidental to the conduct of business or the ownership of properties
and assets (other than any Lien imposed by ERISA) incurred in the ordinary
course of business and not in connection with the borrowing of money (including
Liens in connection with workers' compensation, unemployment insurance and other
social security legislation);
(f) Liens on the property of the Company or any of its Subsidiaries securing (i)
the nondelinquent performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, (ii) contingent obligations on surety
bonds (excluding appeal bonds and other bonds posted in connection with court
proceedings or judgments) and (iii) other nondelinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
(g) Liens consisting of judgment, award or judicial attachment Liens and Liens
securing contingent obligations on appeal bonds and other bonds posted in
connection with court proceedings or judgments, provided that the time for the
appeal or petition for rehearing of which shall not have expired, or the
enforcement of such Liens is effectively stayed and all such Liens
in the aggregate at any time outstanding for the Company and its Subsidiaries do
not exceed $1,000,000;
(h) easements, rights-of-way, restrictions, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties and
other similar encumbrances which are necessary for the conduct of the activities
of the Company and its Subsidiaries or which customarily exist on properties of
entities engaged in similar activities and similarly situated, in the aggregate,
are not substantial in amount, and which do not in any case materially detract
from the value of the property subject thereto or interfere with the ordinary
conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries after the date of
this Agreement, provided, however, that such Liens existed at the time the
respective corporations became Subsidiaries and were not created in anticipation
thereof;
(j) purchase money security interests on any property acquired or held by the
Company or its Subsidiaries in the ordinary course of business or in connection
with a Permitted Transaction or a Permitted Investment, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring such property, provided that (i) any such Lien attaches to such
property concurrently with or within 60 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such transaction and
(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such property;
(k) Liens securing obligations in respect of capital leases on assets subject to
such leases, provided that such capital leases are otherwise permitted
hereunder;
(l) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of setoff or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the FRB and
(ii) such deposit account is not intended by the Company or any Subsidiary to
provide collateral to the depository institution; and
(m) Liens securing Indebtedness of a Subsidiary to the Company or to another
Subsidiary.
VII.2 Disposition of Assets. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all in
the ordinary course of business;
(b) the sale of assets to the extent that such assets are exchanged for credit
against the purchase price of similar replacement assets, or the net proceeds of
such sale are reasonably promptly applied to the purchase price of such
replacement assets;
(c) dispositions of inventory/equipment by the Company or any Subsidiary to the
Company or any Subsidiary pursuant to reasonable business requirements;
(d) dispositions of Subsidiaries or any interest therein, provided that no such
disposition may occur without the prior written consent of the Majority Banks
where, (i) in the case of the disposition of all or any portion of the ownership
interest in a Material Subsidiary, the Company would own 50% or less of such
Material Subsidiary after giving effect to such disposition, or (ii) the Company
intends to dispose of a portion of its ownership interest in a Subsidiary and
such portion accounted for more than 5% of EBT for the preceding four-Fiscal
Quarter period; and
(e) dispositions not otherwise permitted hereunder which are made for fair
market value; provided that, (i) at the time of any disposition, no Event of
Default shall exist or shall result from such disposition, (ii) at least 85% of
the aggregate sales price from such disposition shall be paid in cash or
equivalents, and (iii) unless the Company receives the prior written consent of
the Majority Banks, the assets subject to such disposition shall not account for
more than 5% of the Company's Consolidated Total Assets as at the end of the
preceding Fiscal Quarter.
VII.3 Consolidations and Mergers. The Company shall not, and shall not suffer or
permit any Subsidiary to, merge, consolidate with or into, any Person, except
that any Subsidiary may merge or consolidate with or into the Company, provided
that the Company shall be the continuing or surviving corporation, or with any
one or more Subsidiaries; provided further that, if any transaction shall be
between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary
shall be the continuing or surviving corporation.
VII.4 Loans and Investments. The Company shall not, and shall not permit any
Subsidiary to, purchase or acquire, or make any commitment therefor, any capital
stock, equity interest or any obligations or other securities of, or any
interest in, any Person, or make or commit to make any Acquisitions, or make or
commit to make any advance, loan, extension of credit or capital contribution to
or any other investment in, any Person including any Affiliate of the Company,
except for:
(a) investments in cash and cash equivalents in the ordinary course of business;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit by the Company to any of its Subsidiaries or by any of
its Subsidiaries to another of its Subsidiaries;
(d) without duplication, Permitted Transactions;
(e) investments in a Person who becomes a Subsidiary pursuant to a Permitted
Acquisition or Permitted Development which are not made in connection with or
otherwise in contemplation of such Permitted Acquisition or Permitted
Development; and
(f) Permitted Investments not otherwise permitted hereunder, provided that the
aggregate net book value of such investments does not exceed 15% of Consolidated
Total Assets as at the end of the immediately preceding Fiscal Quarter.
VII.5 Limitation on Indebtedness. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 7.8;
(c) Indebtedness existing on the Closing Date and set forth in Schedule 7.5;
(d) Indebtedness secured by Liens permitted by Section 7.1(i), provided that the
aggregate amount of assets subject to such Liens does not exceed 10% of
Consolidated Total Assets as at the end of the immediately preceding Fiscal
Quarter;
(e) Indebtedness incurred in connection with leases permitted pursuant to
Section 7.10;
(f) any other unsecured Indebtedness of the Company not otherwise permitted
hereunder and incurred after the Closing Date, provided that, as at the time of
creation, assumption, or incurrence thereof and after giving effect thereto and
to the application of the proceeds thereof, Indebtedness of the Company does not
exceed 5% of Consolidated Total Assets at the end of the immediately preceding
Fiscal Quarter;
(g) Indebtedness (i) issued in exchange for, or the proceeds from the issuance
and sale of which are used substantially concurrently to repay, redeem, defease,
refinance, discharge or otherwise retire for value, in whole or in part, or (ii)
constituting an amendment, modification or supplement to, or a deferral or
renewal of, any Indebtedness described in subsections 7.1(a) through (g);
provided that the incurring of Indebtedness under this subsection (g) shall not
(1) accelerate the date of any required repayment, repurchase or redemption of
any Indebtedness described in subsections 7.1(a) through (g), (2) include the
repayment, repurchase or redemption of subordinated Indebtedness by or with any
Indebtedness other than subordinated Indebtedness
or (3) involve the repayment, repurchase or redemption of Indebtedness of the
Company by or with Indebtedness of any Subsidiary of the Company; and
(h) Indebtedness secured by Liens permitted by Section 7.1(j) and (m).
VII.6 Transactions with Affiliates. The Company shall not, and shall not suffer
or permit any Subsidiary to, enter into any transaction with any Affiliate of
the Company, except upon fair and reasonable terms no less favorable to the
Company or such Subsidiary than would obtain in a comparable arms'-length
transaction with a Person not an Affiliate of the Company or such Subsidiary.
VII.7 Use of Proceeds. (a) The Company shall not use any portion of the
Revolving Loan proceeds, directly or indirectly, other than in connection with
(i) the financing of the general corporate needs of the Company or any
Subsidiary and (ii) the financing of Permitted Transactions or Permitted
Investments.
(b) The Company shall not, and shall not suffer or permit any Subsidiary to, use
any portion of the Loan proceeds, directly or indirectly, (i) to purchase or
carry Margin Stock, (ii) to repay or otherwise refinance indebtedness of the
Company or others incurred to purchase or carry Margin Stock, (iii) to extend
credit for the purpose of purchasing or carrying any Margin Stock or (iv) to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Exchange Act.
(c) The Company shall not, directly or indirectly, use any portion of the Loan
proceeds (i) knowingly to purchase Ineligible Securities from the Arranger
during any period in which the Arranger makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by the
Arranger or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of the Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. (S) 24, Seventh).
VII.8 Contingent Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of business;
(b) Swap Contracts entered into in the ordinary course of business as bona fide
hedging transactions;
(c) guaranties of the Company given in respect of leases entered into by its
Subsidiaries;
(d) guaranties of the Company given in respect of the Indebtedness of
Subsidiaries of the Company to the extent permitted under Section 7.5;
(e) Contingent Obligations of the Company and its Subsidiaries existing as of
the Closing Date and listed in Schedule 7.8;
(f) any Earnout incurred in connection with a Permitted Transaction or a
Permitted Investment; and
(g) guaranties of the Company given in respect of the Indebtedness of any
Minority Owned Person of the Company, provided that the net book value of such
guaranties does not exceed 7% of Consolidated Total Assets as at the end of the
immediately preceding Fiscal Quarter.
VII.9 Joint Ventures. The Company shall not, and shall not suffer or permit
any Subsidiary to enter into any Joint Venture, other than (a) in the ordinary
course of business and (b) in connection with a Permitted Transaction or a
Permitted Investment.
VII.10 Lease Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in existence on the Closing Date
and any renewal, extension or refinancing thereof;
(b) operating leases entered into by the Company or any Subsidiary after the
Closing Date in the ordinary course of business;
(c) leases entered into by the Company or any Subsidiary after the Closing Date
pursuant to sale-leaseback transactions permitted under subsection 7.2(d); and
(d) capital leases other than those permitted under clauses (a) and (c) of this
Section, entered into by the Company or any Subsidiary after the Closing Date to
finance the acquisition of equipment; provided that the aggregate assets subject
to such capital leases shall not exceed 7% of Consolidated Total Assets as at
the end of the immediately preceding Fiscal Quarter.
VII.11 Restricted Payments. The Company shall not, and shall not suffer or
permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock or other ownership
interests, or purchase, redeem or otherwise acquire for value any shares of its
capital stock or other ownership interests, or any warrants, rights or options
to acquire such shares or other ownership interests, now or hereafter
outstanding; except that the Company and any Subsidiary may:
(a) declare and make dividend payments or other distributions payable solely in
its common stock;
(b) purchase, redeem or otherwise acquire shares of its common stock or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock;
(c) any Subsidiary may declare or make any such dividend payment or other
distribution, provided that any such dividend payment or other distribution
shall be proportionate to the ownership interests of the Persons in whose favor
such dividend payment or other distribution is declared or made (but need not be
proportionate as between different classes of equity or ownership interests);
and
(d) any Subsidiary may purchase or acquire its own capital stock or other equity
or ownership interests from a Person other than the Company or another
Subsidiary of the Company.
VII.12 ERISA. The Company shall not, and shall not suffer or permit any of its
ERISA Affiliates to: (a) engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan which has resulted or
could reasonably expected to result in liability of the Company in an aggregate
amount in excess of $5,000,000; or (b) engage in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
VII.13 Accounting Changes. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
VII.14 Business Activities. The Company will not, and will not permit any of
its Subsidiaries to, engage in any business activity except Permitted
Businesses.
VII.15 Take or Pay Contracts. The Company will not, and will not permit any of
its Subsidiaries to, enter into or be a party to any arrangement for the
purchase of materials, supplies, other property or services if such arrangement
by its express terms requires that payment be made by the Company or such
Subsidiary regardless of whether such materials, supplies, other property or
services are delivered or furnished to it.
VII.16 Modification of Certain Agreements. The Company will not consent to any
amendment, supplement or other modification of any of the terms or provisions
(including with respect to any instruments evidencing any Subordinated Debt, any
provision in respect of acceleration, covenant, default, subordination, sinking
fund, repayment, required repurchase, interest rate or redemption thereof or
relating thereto) contained in any document or instrument evidencing or
applicable to any Subordinated Debt, other than any amendment, supplement or
other modification which extends the date or reduces the amount of any required
repayment or redemption, if such amendment, supplement or other modification
does not otherwise have an adverse effect on the rights of the Banks.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
VIII.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Company fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Loan, or (ii) within 5 days after
the same becomes due, any interest, fee or any other amount payable hereunder or
under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any term,
covenant or agreement contained in any of Section 6.1, 6.2, 6.3, 6.9, or 6.13 or
in Article VII; or
(d) Other Defaults. The Company or any Subsidiary party thereto fails to
perform or observe any other term or covenant contained in this Agreement or any
other Loan Document, and such default shall continue unremedied for a period of
20 days after the date upon which written notice thereof is given to the Company
by the Agent or any Bank; or
(e) Cross-Default. The Company or any Material Subsidiary (i) fails to make
any payment in respect of any Indebtedness or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $1,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded;
(f) Insolvency; Voluntary Proceedings. The Company or any Material
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any action to effectuate or authorize any of the
foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company or any Material Subsidiary, or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of the Company's or any Material Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Material Subsidiary admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) the Company or any Material Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $5,000,000; or (iii) the Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$5,000,000; or
(i) Monetary Judgments. One or more non-interlocutory judgments, non-
interlocutory orders, decrees or arbitration awards is entered against the
Company or any Material Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $500,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 10
days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against the Company or any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(k) Change of Control. There occurs any Change of Control; or
(l) Loss of Licenses. Any Governmental Authority revokes or fails to renew
any material license, permit or franchise of the Company or any Material
Subsidiary, or the Company or any Material Subsidiary for any reason loses any
material license, permit or franchise, or the Company or any Material Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any material license, permit or franchise, and such revocations,
failure to renew, loss or imposition has or would reasonably be expected to have
a Material Adverse Effect; or
(m) Adverse Change. There occurs a Material Adverse Effect; or
(n) Guarantor Defaults. Any Guarantor fails in any material respect to perform
or observe any term, covenant or agreement in Article XI; or, except as
specifically provided in Article XI, Article XI is for any reason partially
(including with respect to future advances) or wholly revoked or invalidated, or
otherwise ceases to be in full force and effect, or any Guarantor or any other
Person contests in any manner the validity or enforceability thereof or denies
that it has any further liability or obligation thereunder, and such failure,
revocation, invalidation, cessation, contest or denial has or would reasonably
be expected to have a Material Adverse Effect.
VIII.2 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans to be terminated,
whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 8.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
VIII.3 Rights Not Exclusive. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
VIII.4 Certain Financial Covenant Defaults. In the event that, after taking
into account any extraordinary charge to earnings taken or to be taken as of the
end of any fiscal period of the Company (a "Charge"), and if solely by virtue of
such Charge, there would exist an Event of Default due to the breach of Section
6.13 as of such fiscal period end date, such Event of Default shall be deemed to
arise upon the earlier of (a) the date after such fiscal period end date on
which the Company announces publicly it will take, is taking or has taken such
Charge (including an announcement in the form of a statement in a report filed
with the SEC) or, if such announcement is made prior to such fiscal period end
date, the date that is such fiscal period end date, and (b) the date the Company
delivers to the Agent its audited annual or unaudited quarterly financial
statements in respect of such fiscal period reflecting such Charge as taken.
ARTICLE IX
THE AGENT
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IX.1 Appointment and Authorization. Each Bank hereby irrevocably (subject to
Section 9.9) appoints, designates and authorizes the Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and any other instruments and agreements referred to herein or therein
and to exercise such powers and perform such duties hereunder and thereunder as
are expressly delegated to or required of it by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
IX.2 Delegation of Duties. The Agent may execute any of its duties under this
Agreement or any other Loan Document by or through its agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
IX.3 Liability of Agent. None of the Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Company or any of the Company's Subsidiaries
or Affiliates.
IX.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Banks as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Majority Banks and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 4.1, each Bank that has executed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by the Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Bank.
IX.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
IX.6 Credit Decision. Each Bank acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken,
including any review of the affairs of the Company and its Subsidiaries, shall
be deemed to constitute any representation or warranty by any Agent-Related
Person to any Bank. Each Bank represents to the Agent that it has, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company and its Subsidiaries hereunder. Each Bank also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may come
into the possession of any of the Agent-Related Persons.
IX.7 Indemnification. Whether or not the transactions contemplated hereby are
consummated, the Banks shall indemnify upon demand the Agent-Related Persons (to
the extent not reimbursed by or on behalf of the Company and without limiting
the obligation of the Company to do so), pro rata, from and against any and all
Indemnified Liabilities; provided, however, that no Bank shall be liable for the
payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Agent-Related Person's gross negligence
or willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Agent upon demand for its ratable share of any costs or out-of-
pocket expenses (including Attorney Costs) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Company. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of the Agent.
IX.8 Agent in Individual Capacity. BofA and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Company and its Subsidiaries
and Affiliates as though BofA were not the Agent hereunder and without notice to
or consent of the Banks. The Banks acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive information regarding the Company
or its Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BofA shall have the
same rights and powers under this Agreement as any other Bank and may exercise
the same as though it were not the Agent, and the terms "Bank" and "Banks"
include BofA in its individual capacity.
IX.9 Successor Agent. The Agent may, and at the request of the Majority Banks
shall, resign as Agent upon 30 days' notice to the Banks and the Company. If
the Agent resigns under this Agreement, the Majority Banks shall appoint from
among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and obtaining the Company's
consent, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article IX and Sections 10.4 and 10.5
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Banks shall perform all of the duties of the
Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
IX.10 Withholding Tax. (a) If any Bank is a "foreign corporation, partnership
or trust" within the meaning of the Code and such Bank claims exemption from, or
a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code,
such Bank agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed IRS Forms 1001 and W-8
before the payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt from
United States withholding tax because it is effectively connected with a United
States trade or business of such Bank, two properly completed and executed
copies of IRS Form 4224 before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable year of such Bank
during which interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or other laws
of the United States as a condition to exemption from, or reduction of, United
States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax under a
United States tax treaty by providing IRS Form 1001 and such Bank sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank, such Bank agrees to notify the Agent of
the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax by filing
IRS Form 4224 with the Agent sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of the Company to another
Bank, such other Bank agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax,
the Agent may withhold from any interest payment to such Bank an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
Attorney Costs). The obligation of the Banks under this subsection shall survive
the payment of all Obligations and the resignation or replacement of the Agent.
ARTICLE X
MISCELLANEOUS
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X.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Banks
(or by the Agent at the written request of the Majority Banks) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Banks and the Company and acknowledged by the Agent, do any of
the following:
(a) except as otherwise expressly permitted under this Agreement, increase or
extend the Commitment of any Bank (or reinstate any Commitment terminated
pursuant to Section 8.2);
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on any
Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) except as otherwise expressly permitted under this Agreement, change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans which is required for the Banks or any of them to take any action
hereunder;
(e) amend this Section, or Section 2.14, or any provision herein providing for
------------
consent or other action by all Banks; or
(f) release any Subsidiary from its respective obligations under Article XI or
amend or waive Article XI as it applies to any Subsidiary; and, provided
further, that (i) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Majority Banks or all the Banks, as the
case may be, affect the rights or duties of the Agent under this Agreement or
any other Loan Document, and (ii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto.
X.2 Notices. (a) All notices, requests and other communications shall be in
writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be promptly confirmed by a telephone call to the recipient
at the number specified on Schedule 10.2, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified for notices on Schedule 10.2; or, as
directed to the Company or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for overnight (next
day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day
after the date deposited into the U.S. mail, or if delivered, upon delivery;
except that notices pursuant to Article II or IX shall not be effective until
actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive certain notices
by telephone or facsimile is solely for the convenience and at the request of
the Company. The Agent and the Banks shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Company to give such
notice and the Agent and the Banks shall not have any liability to the Company
or other Person on account of any action taken or not taken by the Agent or the
Banks in reliance upon such telephonic or facsimile notice. The obligation of
the Company to repay the Loans shall not be affected in any way or to any extent
by any failure by the Agent and the Banks to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Agent and the Banks of a
confirmation which is at variance with the terms understood by the Agent and the
Banks to be contained in the telephonic or facsimile notice.
X.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
X.4 Costs and Expenses. The Company shall:
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(a) whether or not the transactions contemplated hereby are consummated, pay or
reimburse BofA (including in its capacity as Agent) within five Business Days
after demand (subject to subsection 4.1(e)) for reasonable costs and expenses
incurred by BofA (including in its capacity as Agent) in connection with the
development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
BofA (including in its capacity as Agent) with respect thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank within five Business
Days after demand (subject to subsection 4.1(e)) for reasonable costs and
expenses (including reasonable Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence of
an Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).
X.5 Indemnity. Whether or not the transactions contemplated hereby are
consummated, the Company shall indemnify and hold the Agent-Related Persons, and
each Bank and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted against
any such Indemnified Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Indemnified Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
X.6 Payments Set Aside. To the extent that the Company makes a payment to the
Agent or the Banks, or the Agent or the Banks exercise their right of setoff,
and such payment or the proceeds of such setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the Agent or
such Bank in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any Insolvency Proceeding or otherwise, then (a) to
the extent of such recovery the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each
Bank severally agrees to pay to the Agent upon demand its pro rata share of any
amount so recovered from or repaid by the Agent.
X.7 Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
X.8 Assignments, Participations, etc. (a) Any Bank may, with the written
consent of the Company at all times other than during the existence of an Event
of Default and the Agent, which consents shall not be unreasonably withheld, at
any time assign and delegate to one or more Eligible Assignees (provided that no
written consent of the Company or the Agent shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee that is an
Affiliate of such Bank) (each an "Assignee") all, or any ratable part of all, of
the Loans, the Commitments and the other rights and obligations of such Bank
hereunder, in a minimum amount of $5,000,000; provided, however, that the
Company and the Agent may continue to deal solely and directly with such Bank in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have been
given to the Company and the Agent by such Bank and the Assignee; (ii) such Bank
and its Assignee shall have delivered to the Company and the Agent an Assignment
and Acceptance in the form of Exhibit E ("Assignment and Acceptance") together
with any Note or Notes subject to such assignment and (iii) the assignor Bank or
Assignee has paid to the Agent a processing fee in the amount of $3,500.
(b) From and after the date that the Agent notifies the assignor Bank that it
has received (and provided its consent with respect to) an executed Assignment
and Acceptance and payment of the above-referenced processing fee, (i) the
Assignee thereunder shall become a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the Agent that it
has received an executed Assignment and Acceptance and payment of the processing
fee, (and provided that it consents to such assignment in accordance with
subsection 10.8(a)), the Company shall execute and deliver to the Agent, new
Notes evidencing such Assignee's assigned Loans and Commitment and, if the
assignor Bank has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Revolving Loans retained by the
assignor Bank (such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank). Immediately upon each Assignee's making its processing
fee payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce the Commitment
of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more commercial banks or other
Persons not Affiliates of the Company (a "Participant") participating interests
in any Loans, the Commitment of that Bank and the other interests of that Bank
(the "Originating Bank") hereunder and under the other Loan Documents; provided,
however, that (i) the Originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the Originating Bank shall remain solely responsible for
the performance of such obligations, (iii) the Company and the Agent shall
continue to deal solely and directly with the Originating Bank in connection
with the originating Bank's rights and obligations under this Agreement and the
other Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks as described in the first proviso to Section
10.1. In the case of any such participation, the Participant shall be entitled
to the benefit of Sections 3.1, 3.3 and 10.5 as though it were also a Bank
hereunder, and if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement and the Note held by it in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR (S)203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
X.9 Confidentiality. Each Bank agrees to take and to cause its Affiliates to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Company and provided to it by the Company or any Subsidiary, or by the Agent
on such Company's or Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a nonconfidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates.
X.10 Set-off. In addition to any rights and remedies of the Banks provided by
law, if an Event of Default exists or the Loans have been accelerated, each Bank
is authorized at any time and from time to time, without prior notice to the
Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the Company against any and
all Obligations owing to such Bank, now or hereafter existing, irrespective of
whether or not the Agent or such Bank shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Bank agrees promptly to notify the Company and the Agent
after any such set-off and application made by such Bank; provided, however,
that the failure to give such notice shall not affect the validity of such set-
off and application.
X.11 Automatic Debits of Fees. With respect to any commitment fee, arrangement
fee, or other fee, or any other cost or expense (including reasonable Attorney
Costs) due and payable to the Agent, BofA or the Arranger under the Loan
Documents, the Company hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the aggregate amount
debited from all such deposit accounts does not exceed such fee or other cost or
expense. If there are insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such debits will be
reversed (in whole or in part, in BofA's sole discretion) and such amount not
debited shall be deemed to be unpaid. No such debit under this Section shall be
deemed a setoff.
X.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall notify
the Agent in writing of any changes in the address to which notices to the Bank
should be directed, of addresses of any Lending Office, of payment instructions
in respect of all payments to be made to it hereunder and of such other
administrative information as the Agent shall reasonably request.
X.13 Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.
X.14 Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any way
affect or impair the legality or enforceability of the remaining provisions of
this Agreement or any instrument or agreement required hereunder.
X.15 No Third Parties Benefited. This Agreement is made and entered into for
the sole protection and legal benefit of the Company, the Banks, the Agent and
the Agent-Related Persons, and their permitted successors and assigns, and no
other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents.
X.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF
ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND THE
BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
X.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION 10.17 AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
X.18 Entire Agreement. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the Company, the Banks and
the Agent, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
ARTICLE XI
GUARANTY
--------
XI.1 The Guaranty. Subject to Section 11.3, the Guarantors hereby, jointly
and severally, unconditionally and irrevocably guarantee to the Banks and the
Agent, and to each of them, the due and punctual payment, observance and
performance of all of the Guaranteed Obligations when and as due, whether at
maturity, by acceleration, mandatory prepayment or otherwise, according to the
terms hereof and thereof, and the Guarantors hereby, jointly and severally,
unconditionally and irrevocably agree to cause payment or performance of the
Guaranteed Obligations to be made punctually as and when the same shall become
due upon demand. This Guaranty shall be of payment and performance and not of
collection merely.
XI.2 Guaranty Unconditional. Subject to Section 11.3, the obligations of the
Guarantors under this Article XI shall be continuing, unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release in
respect of any Guaranteed Obligation, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any Loan Document;
(iii) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any Guaranty Obligation or
other liability of any third party, for any Guaranteed Obligation;
(iv) any change in the corporate existence, structure or ownership of the
Company or any other Guarantor (unless such Guarantor ceases to be a Wholly-
Owned Subsidiary after giving effect to such change as described in Section
11.3), or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting the Company or any other Guarantor or its assets or any resulting
release or discharge of any Guaranteed Obligation;
(v) the existence of any claim, setoff or other right which such Guarantor may
have at any time against the Company, the Agent, any Bank or any other
Person, whether or not arising in connection with the Loan Documents;
(vi) any invalidity or unenforceability relating to or against the Company or
any other Guarantor for any reason of the whole or any provision of any Loan
Document, or any provision of applicable law purporting to prohibit the payment
or performance by the Company of the Guaranteed Obligations; or
(vii) any other act or omission to act or delay of any kind by the Company, any
other Guarantor, the Agent, any Bank or any other Person or any other
circumstance whatsoever that might, but for the provisions of this Section 11.2,
constitute a legal or equitable discharge of the obligations of such Guarantor
under this Article XI.
XI.3 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. The obligations of each Guarantor under this Article XI shall
remain in full force and effect until either (a) all of the Commitments shall
have been terminated, and all of the Guaranteed Obligations shall have been paid
in full in cash or (b) such Guarantor ceases, in accordance with the terms of
this Agreement, to be a Wholly-Owned Subsidiary of the Company, whichever occurs
first. If at any time all or any part of any payment previously applied to any
Guaranteed Obligation is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of the Company or otherwise,
the obligations of the Guarantors under this Article XI with respect to such
payment shall be reinstated at such time as though such payment had become due
but not been made at such time.
XI.4 Waiver. Each Guarantor irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Company or any other Person or any collateral.
XI.5 Subrogation. Each Guarantor irrevocably waives any claim or right which
such Guarantor may now or hereafter acquire against the Company or any other
Person that arises from the existence, payment or performance of such
Guarantor's obligations under this Article XI, including (without limitation)
any right of subrogation, contribution, reimbursement or indemnification.
XI.6 Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Company under any Loan Document is stayed upon the
insolvency, bankruptcy or reorganization of the Company, all such amounts
otherwise subject to acceleration under the terms of the Loan Documents shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Agent made at the request of the Majority Banks.
XI.7 Subordination of Indebtedness. Any indebtedness of the Company for
borrowed money now or hereafter owed to any Guarantor is hereby subordinated in
right of payment to the payment of the Guaranteed Obligations, and if a default
in the payment of any amount owing under the Loan Documents shall have occurred
and be continuing, any such indebtedness of the Company owed to any Guarantor,
if collected or received by such Guarantor, shall be held in trust by such
Guarantor for the Banks and be paid over to the Agent for application in
accordance with this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in Chicago by their proper and duly authorized officers
as of the day and year first above written.
NATIONAL SURGERY CENTERS, INC.
By: ______________________
Title: ___________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: _________________________
Title: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: _________________________
Title: ______________________
CORESTATES BANK, N.A.,
By: _________________________
Title: ______________________
FIRSTAR BANK MILWAUKEE, N.A.,
By: _________________________
Title: ______________________
▇▇▇▇▇▇ TRUST & SAVINGS BANK,
By: _________________________
Title: ______________________
SUNTRUST BANK, NASHVILLE, N.A.,
By: _________________________
Title: ______________________
The undersigned are executing a counterpart to the Credit Agreement, dated as of
November __, 1997, among National Surgery Centers, Inc., certain guarantors,
certain banks, and Bank of America National Trust and Savings Association, as
agent, as amended from time to time, for purposes of becoming a "Guarantor"
thereunder:
KPSC, INC., NSC AUBURN, INC., NSC PORT ST. LUCIE, INC., NSC BROWNSVILLE, INC.,
NORTHERN ROCKIES SURGICENTER, INC., NSC KENT, INC., NSC HOUSTON, INC., NSC
CHANNEL ISLANDS, INC., NSC FAYETTEVILLE, INC., NSC ▇▇▇▇▇▇, INC., NSC GREENSBORO
WEST, INC., NSC GREENSBORO, INC., NSC ▇▇▇▇▇▇, INC., NSC SEATTLE, INC., NSC
CONNECTICUT, INC., NSC PROVO, INC., NSC MANAHAWKIN, INC., NSC ELIZABETHTOWN,
INC., NATIONAL SURGERY CENTERS - BAKERSFIELD, INC., NSC LAS VEGAS, INC., NSC -
LAS VEGAS EAST, INC., WALK-IN AND OUT SURGERY CENTER, INC., NATIONAL SURGERY
CENTERS - SANTA ▇▇▇▇▇▇, INC., NSC PHOENIX, INC., NSC DALLAS, INC., ENDOSCOPY
CENTER AFFILIATES, INC., NSC MIAMI, INC., NSC - SARASOTA, INC., NSC ATLANTA,
INC., NSC OKLAHOMA CITY, INC., NSC MIDWEST CITY, INC., CONNECTICUT SURGICAL
CENTER, INC., and EYE MICROSURGERY CENTER, INC.,
By: _________________________
Title: ______________________
SCHEDULE 2.1
------------
COMMITMENTS
-----------
AND PRO RATA SHARES
-------------------
Pro Rata
Bank Commitment Share
---- ---------- -----
Bank of America National
Trust and Savings
Association $25,000,000 41.7%
CoreStates Bank, N.A. $8,750,000 12.075%
Firstar Bank Milwaukee, N.A. $8,750,000 12.075%
▇▇▇▇▇▇ Trust and Savings Bank $8,750,000 12.075%
SunTrust Bank, Nashville, N.A. $8,750,000 12.075%
TOTAL $60,000,000 100%
SCHEDULE 10.2
-------------
OFFSHORE AND DOMESTIC LENDING OFFICES,
--------------------------------------
ADDRESSES FOR NOTICES
---------------------
NATIONAL SURGERY CENTERS, INC.
------------------------------
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
-----------------------
Bank of America National Trust
and Savings Association
Agency Management Services #33499
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Assistant Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
NOTICE OF BORROWING
-------------------
Date: ________________, ____
To: Bank of America National Trust and Savings Association as Agent for the
Banks parties to the Credit Agreement dated as of October __, 1997 (as extended,
renewed, amended or restated from time to time, the "Credit Agreement") among
National Surgery Centers, Inc., certain Banks which are signatories thereto and
Bank of America National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, National Surgery Centers, Inc. (the "Company"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.3 of the
Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
________________________, _____.
2. The aggregate amount of the proposed Borrowing is
$_____________________.
3. The Borrowing is to be comprised of $___________ of [Base Rate] [Offshore
Rate] Loans.
[4. The duration of the Interest Period for the Offshore Rate Loans included in
the Borrowing shall be _____ months].
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Borrowing, before and
after giving effect thereto and to the application of the proceeds therefrom:
(a) the representations and warranties of the Company contained in Article V of
the Credit Agreement are true and correct as though made on and as of such date
(except to the extent such representations and warranties relate to an earlier
date, in which case they are true and correct as of such date);
(b) no Default or Event of Default has occurred and is continuing, or would
result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal amount of all
outstanding Revolving Loans to exceed the combined Commitments of the Banks.
NATIONAL SURGERY CENTERS, INC.
By: _________________________
Title: ______________________
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: ________________, ______
To: Bank of America National Trust and Savings Association, as Agent for the
Banks parties to the Credit Agreement dated as of October __, 1997 (as extended,
renewed, amended or restated from time to time, the "Credit Agreement") among
National Surgery Centers, Inc., certain Banks which are signatories thereto and
Bank of America National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, National Surgery Centers, Inc. (the "Company"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.4 of the
Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The Conversion/Continuation Date is ____________, ____.
2. The aggregate amount of the Loans to be [converted] [continued] is
$______________.
3. The Loans are to be [converted into] [continued as] [Offshore Rate] [Base
Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the Loans included
in the [conversion] [continuation] shall be [____ days] [____ months].
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the proposed Conversion/Continuation Date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Company contained in Article V of
the Credit Agreement are true and correct as though made on and as of such date
(except to the extent such representations and warranties relate to an earlier
date, in which case they are true and correct as of such date); provided,
however, that this condition shall not apply to the conversion of an outstanding
Offshore Rate Loan to a Base Rate Loan unless such Offshore Rate Loan shall have
become due and payable, whether according to scheduled maturity or earlier as
provided in the Credit Agreement or elsewhere;
(b) no Default or Event of Default has occurred and is continuing, or would
result from such proposed [conversion] [continuation]; and
(c) the proposed [conversion][continuation] will not cause the aggregate
principal amount of all outstanding Revolving Loans to exceed the combined
Commitments of the Banks.
NATIONAL SURGERY CENTERS, INC.
By: ________________________
Title: _____________________
-2-
EXHIBIT C
NATIONAL SURGERY CENTERS, INCORPORATED
COMPLIANCE CERTIFICATE
Financial
Statement Date: ____________, ___
Reference is made to that certain Credit Agreement dated as of October ___, 1997
(as extended, renewed, amended or restated from time to time, the "Credit
Agreement") among National Surgery Centers, Inc., a Delaware corporation (the
"Company"), the several financial institutions from time to time parties to this
Credit Agreement (the "Banks") and Bank of America National Trust and Savings
Association, as agent for the Banks (in such capacity, the "Agent"). Unless
otherwise defined herein, capitalized terms used herein have the respective
meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of the Company hereby certifies as of the
date hereof that he/she is the __________________ of the Company, and that, as
such, he/she is authorized to execute and deliver this Certificate to the Banks
and the Agent on the behalf of the Company and its consolidated Subsidiaries,
and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.1(a)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the audited
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at the end of the fiscal year ended _______________, ___ and (b) the related
consolidated statements of income or operations, [retained earnings,]
shareholders' equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, [reported on
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit] and accompanied by the opinion of
_________________ or another nationally-recognized certified independent public
accounting firm (the "Independent Auditor") which report shall state that such
consolidated financial statements are complete and correct and have been
prepared in accordance with GAAP, and fairly present, in all material respects,
the financial position of the Company and its consolidated Subsidiaries for the
periods indicated and on a basis consistent with prior periods.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.1(b)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
unaudited consolidated balance sheet of the Company and its consolidated
Subsidiaries as of the end of the fiscal quarter ended __________, ___, and (b)
the related unaudited consolidated statements of income and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
[setting forth in each case in comparative form the figures for the previous
year,] and certified by a Responsible Officer that such financial statements
were prepared in accordance with GAAP (subject only to ordinary, good faith
year-end audit adjustments and the absence of footnotes) and fairly present, in
all material respects, the financial position and the results of operations of
the Company and its consolidated Subsidiaries.
2. The undersigned has reviewed and is familiar with the terms of the Credit
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and conditions (financial or otherwise) of
the Company during the accounting period covered by the attached financial
statements.
3. To the best of the undersigned's knowledge, the Company, during such period,
has observed, performed or satisfied all of its covenants and other agreements,
and satisfied every condition in the Credit Agreement to be observed, performed
or satisfied by the Company, and the undersigned has no knowledge of any Default
or Event of Default.
4. The following financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
___________________, ____.
NATIONAL SURGERY CENTERS, INC.
By: ______________________________
Title: ___________________________
[attach calculation worksheet]
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE COMPANY AND THE GUARANTORS
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of __________, _____ is made between ______________________________
(the "Assignor") and __________________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain
Credit Agreement dated as of October __, 1997 (as amended, amended and restated,
modified, supplemented or renewed, the "Credit Agreement") among National
Surgery Centers, Inc., a Delaware corporation (the "Company"), certain
guarantors, the several financial institutions from time to time party thereto
(including the Assignor, the "Banks"), and Bank of America National Trust and
Savings Association, as agent for the Banks (the "Agent"). Any terms defined in
the Credit Agreement and not defined in this Assignment and Acceptance are used
herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has committed to
making Loans (the "Loans") to the Company in an aggregate amount not to exceed
$__________ (the "Commitment");
WHEREAS, [the Assignor has made Loans in the aggregate principal amount of
$__________ to the Company] [no Loans are outstanding under the Credit
Agreement];
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Commitment, [together with a corresponding portion of each of its
outstanding Loans] in an amount equal to $__________ (the "Assigned Amount") on
the terms and subject to the conditions set forth herein and the Assignee wishes
to accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and Acceptance, (i)
the Assignor hereby sells, transfers and assigns to the Assignee, and (ii) the
Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) __% (the "Assignee's Percentage Share") of (A) the
Commitment [and the Loans] of the Assignor and (B) all related rights, benefits,
obligations, liabilities and indemnities of the Assignor under and in connection
with the Credit Agreement and the Loan Documents.
[If appropriate, add paragraph specifying payment to Assignor by Assignee of
outstanding principal of, accrued interest on, and fees with respect to, Loans
assigned.]
(b) With effect on and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Bank
under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Article III or Sections 10.4 and 10.5 of the Credit Agreement to the extent such
rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth herein, on
the Effective Date the Assignee's Commitment will be $__________ and the
Assignee's outstanding Loans (assuming no repayments or new fundings after
______) will be $_______.
(d) After giving effect to the assignment and assumption set forth herein, on
the Effective Date the Assignor's Commitment will be $__________ and the
Assignor's outstanding Loans (assuming no repayments or new fundings after
________) will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to $__________, representing the
Assignee's Pro Rata Share of the principal amount of all Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a processing
fee in the amount specified in Section 10.8(a) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with respect
to the Commitment[,] [and] Loans shall be for the account of the Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignee. Each
of the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 6.1 of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be
________, ____ (the "Effective Date"); provided that the following conditions
precedent have been satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered by the
Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee under Section
10.8(a) of the Credit Agreement shall have been duly obtained and shall be in
full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section 9.10(a) of the Credit
Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof shall have
been paid to the Agent; and
(vi) the Assignor shall have assigned and the Assignee shall have assumed
a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Credit Agreement.
(b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Company and the Agent for acknowledgment by the
Agent, a Notice of Assignment substantially in the form attached hereto as
Schedule 1.
[6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks pursuant to the terms of
the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the Assignor in
its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Bank, the Agent and the Company
that under applicable law and treaties no tax will be required to be withheld by
the Bank with respect to any payments to be made to the Assignee hereunder, (b)
agrees to furnish (if it is organized under the laws of any jurisdiction other
than the United States or any State thereof) to the Agent and the Company prior
to the time that the Agent or Company is required to make any payment of
principal, interest or fees hereunder, duplicate executed originals of either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 (wherein the Assignee claims entitlement to the benefits of a tax treaty
that provides for a complete exemption from U.S. federal income withholding tax
on all payments hereunder) and agrees to provide new Forms 4224 or 1001 upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by the Assignee, and (c) agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and apart from any
agreements or undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; (iii) this Assignment and
Acceptance has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignee, enforceable against the Assignee
in accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws
of general application relating to or affecting creditors' rights and to general
equitable principles; and (iv) it is an Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Company or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and Acceptance
shall be in writing and signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof and any waiver of any breach of the provisions of
this Assignment and Acceptance shall be without prejudice to any rights with
respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any setoff or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF ILLINOIS. The Assignor and the
Assignee each irrevocably submits to the nonexclusive jurisdiction of any State
or Federal court sitting in Illinois over any suit, action or proceeding arising
out of or relating to this Assignment and Acceptance and irrevocably agrees that
all claims in respect of such action or proceeding may be heard and determined
in such Illinois State or Federal court. Each party to this Assignment and
Acceptance hereby irrevocably waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum to the maintenance of such action or
proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT
AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the Assignor and the
Assignee, provided that such provisions are not inconsistent with the Credit
Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance to be executed and delivered by their duly authorized officers as
of the date first above written.
[ASSIGNOR]
By:
--------
Title:
-----
By:
--------
Title:
-----
Address:
[ASSIGNEE]
By:
--------
Title:
-----
By:
--------
Title:
-----
Address:
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
-----------------------------------
_______________, 19__
Bank of America National Trust
and Savings Association, as Agent
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Global Agency #5596
National Surgery Centers, Inc.
[address]
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of October __, 1997 (as amended,
amended and restated, modified, supplemented or renewed from time to time the
"Credit Agreement") among National Surgery Centers, Inc. (the "Company"),
certain guarantors, the Banks referred to therein and Bank of America National
Trust and Savings Association as agent for the Banks (the "Agent"). Terms
defined in the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the assignment by
__________________ (the "Assignor") to _______________ (the "Assignee") of
_____% of the right, title and interest of the Assignor in and to the Credit
Agreement (including, without limitation, the right, title and interest of the
Assignor in and to the Commitments of the Assignor[,] [and] all outstanding
Loans made by the Assignor) pursuant to the Assignment and Acceptance Agreement
attached hereto (the "Assignment and Acceptance"). Before giving effect to such
assignment the Assignor's Commitment is $ ___________[,] [and] the aggregate
amount of its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent and, if
applicable, National Surgery Centers, Incorporated to such assignment, the
Assignee will be bound by the terms of the Credit Agreement as fully and to the
same extent as if the Assignee were the Bank originally holding such interest in
the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: __________________________
Address: _______________________________
_______________________________
_______________________________
Attention: _____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answer-back): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: ___________________________
4. You are entitled to rely upon the representations, warranties and covenants
of each of the Assignor and Assignee contained in the Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
--------
Title:
________________________
By:
--------
Title:
________________________
[NAME OF ASSIGNEE]
By:
--------
Title:
________________________
By:
--------
Title:
________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
NATIONAL SURGERY CENTERS, INC.
By:
--------
Title:
__________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: __________________________
Its: _________________________
EXHIBIT F
---------
FORM OF PROMISSORY NOTE
-----------------------
$___________ _________, 199__
FOR VALUE RECEIVED, the undersigned, National Surgery Centers, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to the order of
___________________ (the "Bank") the principal sum of ____________ Dollars
($___________) or, if less, the aggregate unpaid principal amount of all Loans
made by the Bank to the Company pursuant to the Credit Agreement, dated as of
October __, 1997 (such Credit Agreement, as it may be amended, restated,
supplemented or otherwise modified from time to time, being hereinafter called
the "Credit Agreement"), among the Company, certain guarantors, the Bank, the
other banks parties thereto, and Bank of America National Trust and Savings
Association, as Agent for the Banks, on the dates, at the place and in the
amounts provided in the Credit Agreement. The Company further promises to pay
interest on the unpaid principal amount of the Loans evidenced hereby from time
to time at the rates, on the dates, at the place and otherwise as provided in
the Credit Agreement.
The Bank is authorized to endorse the amount of and the date on which each Loan
is made, the maturity date therefor and each payment of principal and interest
with respect thereto on the schedules annexed hereto and made a part hereof, or
on continuations thereof which shall be attached hereto and made a part hereof;
provided, that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Company under the Credit Agreement and this Promissory Note (the "Note").
This Note is one of the Notes referred to in, and is entitled to the benefits
of, the Credit Agreement, which Credit Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for voluntary and mandatory prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
Terms defined in the Credit Agreement are used herein with their defined
meanings therein unless otherwise defined herein. This Note shall be governed
by, and construed and interpreted in accordance with, the internal laws of the
State of Illinois.
NATIONAL SURGERY CENTERS, INC.
By:
___________________________
Title:
________________________
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
------------------------------------------------
(2) (3) (4)
Amount Maturity Amount of
of Date of Base (5)
(1) Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
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Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
--------------------------------------------------------
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Notation
Date Rate Loan Rate Loan Loan Repaid Made By
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